Wipro (WIT) Risk Analysis

We derive approximately 62% of our IT Services segment revenue from the Americas (including the United States) and 27% of our IT Services segment revenue from Europe. Our business and financial performance is and will continue to be affected by economic conditions globally. We are also exposed to the economic, market and fiscal conditions in the U.K. and the EU. If the economy in the Americas or Europe is volatile or uncertain or conditions in the global financial market deteriorate, pricing for our services may become less attractive and our clients located in these geographies may reduce or postpone their technology spending significantly or cause our clients to request discounts on our products or services. International political crisis, including geopolitical conflicts between Russia and Ukraine or conflict in the Middle East or South Asia, could have significant negative macroeconomic consequences, such as a rise in inflation, a slow-down in GDP growth rates, instability in global credit markets and financial conditions and diminished expectations for the global economy, including on the businesses of our customers and partners and negatively impact their spending on IT services. Reduction in spending on IT services may lower the demand for our services and negatively affect our revenues and profitability. Extreme protectionism, the imposition of tariffs, and trade wars may also result in weaker global trade and economic activity, which could adversely affect our business. We have historically derived, and expect to continue to derive, a significant portion of our revenues from a limited number of clients operating across diverse industries and geographic markets. In fiscal year 2026, our five largest clients accounted for 14.3% of our total revenues, and our ten largest clients accounted for approximately 23.7% of our total revenues. As a result, our business and financial performance are significantly influenced by conditions affecting these clients and the markets in which they operate. The loss of, or a material reduction in business from, one or more significant clients whether due to market-driven factors, changes in client strategy, or conditions affecting the industries in which such clients operate could have a material adverse effect on our revenues, results of operations, cash flows, and financial condition. Our clients are concentrated in certain key industries or sectors. Any significant decrease in the growth of any one of these industries, or widespread changes in any such industry, including changes to commodity prices, may reduce or alter the demand for our services and adversely affect our revenue and profitability. For instance, fluctuations in global crude oil prices have significantly impacted the companies operating in the energy industry, impacting revenue and profitability of our Energy, Manufacturing and Resources industry sector. Furthermore, some of the industries in which our clients are concentrated, such as the financial services industry, health care industry or the energy and utilities industry, are, or may be, increasingly subject to governmental regulations, including those related to climate change, sanctions and interventions. Increased regulation, changes in existing regulation or increased governmental intervention in the industries in which our clients operate may adversely affect the growth of their respective businesses and therefore negatively impact our revenues.

Our clients include national, provincial, state and local governmental entities. Our government work carries various risks inherent in the government contracting process, which may affect our operating profitability. These risks include, but are not limited to, the following: - Government entities often reserve the right to audit our contract costs, including allocated indirect costs, and conduct inquiries and investigations of our business practices with respect to our government contracts. If the client finds that the costs are not chargeable, then we will not be allowed to bill for them, or the cost must be refunded to the client if it has already been paid to us. Findings from an audit may also result in prospective adjustments of previously agreed upon rates for our work and may affect our future margins. - If a government client discovers improper or illegal activities in the course of audits or investigations, we may become subject to various civil and criminal penalties and administrative sanctions, which may include termination of contracts, forfeiture of profits, suspension of payments, fines and suspensions or unilateral debarment from doing business with other agencies of that government. The inherent limitations of internal controls may not prevent or detect all improper or illegal activities, regardless of their adequacy, and therefore we can only mitigate, and not eliminate, this risk. - Government contracts are often subject to more extensive scrutiny and publicity than contracts with commercial clients. Negative publicity related to our government contracts, regardless of its accuracy, may further damage our business by affecting our ability to compete for new contracts among commercial and governmental entities. - Political and economic factors such as pending elections, changes in leadership among key governmental decision makers, revisions to governmental tax policies, efforts to reduce government spending, reduced tax revenues and public health crises, can affect the number and terms of new government contracts signed. - Terms and conditions of government contracts tend to be more onerous and are often more difficult to negotiate than those for commercial contracts. - Government contracts may not include a cap on direct or consequential damages, which could cause additional risk and expense in these contracts. - Agreements with government clients may be subject to periodic funding approval. Funding reductions or delays could adversely impact public sector demand for our offerings. - Participation in government contracts could subject us to stricter regulatory requirements, which may increase our cost of compliance. - Delays in acceptances of delivery milestones or release of payments could adversely affect our cashflows.

Our client contracts may have incentive-based or other pricing terms that condition some or all of our fees on our ability to meet defined performance milestones or service levels. Our failure to meet these milestones or a client's expectations in such performance-based contracts especially due to dependencies on the client not clearly articulated in the contract, may result in us not being able to raise invoice on the client for expended effort, which may lead not only to a less profitable or an unprofitable engagement but also penalties or fines impacting our revenues, operating profits and cash flows. Additionally, we may experience financial losses in contracts which are linked to our clients' future business outcomes or based on assumptions which are not realized.

Some of our client contracts contain benchmarking and most favored customer provisions. The benchmarking provisions allow a customer in certain circumstances to request a study prepared by an agreed upon third-party comparing our pricing, performance and efficiency gains for delivered contract services against the comparable services of an agreed upon list of other service providers. Based on the results of the benchmark study and depending on the reasons for any unfavorable variance, we may be required to reduce our pricing for future services to be performed for the remainder of the contract term, which could have an adverse impact on our revenues and results. Most favored customer provisions require us to give existing customers updated terms in the event we enter into more favorable agreements with certain other customers, which limits our ability to freely enter into agreements and could have an adverse impact on our revenues and results.

As we have increased the breadth of our service offerings, we have engaged in larger and more complex projects with our clients. This requires us to establish closer relationships with our clients and potentially with other technology service providers and vendors and to have a more thorough understanding of our clients' operations. Our ability to establish such relationships will depend on a number of factors, including the proficiency of our IT professionals and our management personnel. Our failure to understand and successfully implement our clients' requirements, the domain and country-specific laws and regulations which govern the products and services that we provide, or our failure to deliver services which meet the requirements specified by our clients could result in termination of client contracts, reputational harm and/or imposition of penalties or the payment of damages. This may further damage our business by affecting our ability to compete for new contracts with current and prospective clients. We may also be subject to loss of clients due to dependence on alliance partners, subcontractors or third-party product vendors. In projects where we own the end-to-end delivery, we may incur penalties on work performed by our alliance partners, subcontractors or third-party product vendors if they do not meet contractual performance thresholds. Larger projects may involve multiple engagements or stages, and there is a risk that a client may choose not to retain us for subsequent stages or may cancel or delay subsequent planned engagements. Further, we may not be able to sell additional services to existing clients. Such cancellations or delays make it difficult to plan for project resource requirements, and inaccuracies in such resource planning may have a negative impact on our profitability.

The success of our business is dependent on our ability to attract and retain talented and experienced professionals, and the ability to mobilize them around the world to meet our clients' needs. It is difficult to predict the political and economic events that could affect immigration laws, or the restrictive impact they could have on obtaining or renewing work visas for our technology professionals. Immigration laws in the countries we operate in are subject to legislative changes, as well as to variations in the standards of application and enforcement due to political forces and economic conditions. Changes in immigration laws to limit the availability of certain work visas or increase visa fees in the key markets in which we operate may impact our ability to staff projects in a timely manner and negatively affect our profitability. Travel restrictions during pandemics and due to geopolitical conflicts may also negatively impact our employees' ability to obtain work permits or cause delays in obtaining work permits and travel as required to provide services to our clients. We currently have sufficient personnel with valid non-immigrant worker visas and have increased hiring of local employees in the United States to continue services to clients. However, since a large part of our business centers around the United States, changes to U.S. immigration laws, fees and conditions for grant of work permits could make it more difficult to obtain the required non-immigrant work authorizations for our employees that allow us to compete for and provide timely and cost-effective services to our clients in the United States, which in turn could adversely affect our revenues and operating profitability. Further, under the U.K.'s Transfer of Undertakings (Protection of Employees) Regulations, 2006 ("TUPE"), as well as similar employee protection regulations in certain EU jurisdictions, outsourcing arrangements may result in the automatic transfer of employees and related employment liabilities. Dismissals connected with such transfer may, in certain circumstances, give rise to employment-related claims. These regimes may increase the cost and complexity of outsourcing for our customers and, in certain circumstances, could affect our results of operations and financial position.

Under certain circumstances, the RBI must approve the sale of equity shares underlying ADSs by a non-resident of India to a resident of India. The RBI has given general permission to effect sales of existing shares or certain other capital instruments of an Indian company by a resident to a non-resident, subject to certain conditions, including the price at which the shares may be sold. Additionally, except under certain limited circumstances, if an investor seeks to convert the Indian Rupee proceeds from a sale of equity shares in India into foreign currency and then repatriate that foreign currency from India, he or she will have to obtain additional approval from the RBI for each transaction. Required approval from the RBI or any other government agency may not be obtained on terms which are favorable to a non-resident investor or may not be obtained at all. Pursuant to the provisions of the Companies Act, 2013, where the name of a person is entered in the register of members as a registered owner of shares but such person does not hold the beneficial interest in such shares, both the registered owner and the beneficial owner of such equity shares are required to disclose to the company the nature of their interest, particulars of the person in whose name the shares stand registered in the books of company and certain other details. Investors who exchange ADSs for the underlying equity shares of the company may be subject to the provisions of the Companies Act, 2013 and to the disclosure obligations that may be necessary pursuant to the Deposit Agreement, as amended (the "Deposit Agreement"), by and among the Company, JPMorgan Chase Bank, N.A., as depositary (the "Depositary"), and all Holders (as defined in the Deposit Agreement) and Beneficial Owners (as defined in the Deposit Agreement) from time to time party thereto. Any person who fails to comply with beneficial ownership disclosure requirements under the Companies Act, 2013 may be liable for a fine of up to ? 50,000 and where failure is a continuing one, with a further fine up to ? 1,000 for each day such failure continues, subject to a maximum of ? 200,000. Such restrictions on foreign ownership of the underlying equity shares may cause our ADSs to trade at a premium or discount to the equity shares. Such restrictions may change in the future, including under the Depository Receipt Scheme, 2014 and the DR Framework, and may affect the trading value of our ADSs relative to our equity shares.

We are subject to a variety of federal, state, local and international laws, rules, and regulations, as well as industry standards, internal and external privacy policies and contractual obligations to third parties, relating to the collection, use, retention, security, disclosure, transfer, storage and other processing of personal information and other data. Most jurisdictions in which we operate have established their own privacy, data protection and cybersecurity legal frameworks with which we and our customers must comply. For example, the EU has adopted the General Data Protection Regulation ("GDPR"), which went into effect in May 2018, and together with national legislation, regulations and guidelines of the EU member states, contains numerous requirements relating to the processing of personal data of EU data subjects, including the increased jurisdictional reach of the European Commission, more robust obligations, additional requirements for data protection compliance programs by companies, and significantly increased fines and penalties and rights for data subjects to claim compensation. EU member states are tasked under the GDPR to enact, and have enacted, certain legislation that adds to or further interprets the GDPR requirements and potentially extends our obligations and potential liability for failing to meet such obligations. Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to countries outside the European Economic Area ("EEA") that have not been found to provide adequate protection to such personal data. The GDPR also introduced numerous privacy-related changes for companies operating in the EU, including greater control for data subjects (for example, the "right to be forgotten"), increased data portability for EU consumers, data breach notification requirements and increased fines. In particular, under the GDPR, fines of up to 20 million euros or 4% of the annual global revenue of the noncompliant company, whichever is greater, could be imposed for violations of certain of the GDPR's requirements. Such penalties are in addition to any civil litigation claims by customers and data subjects. The EU also has enacted directives and regulations addressing cybersecurity. For example, the Network and Information Security Directive II ("NIS2"), adopted in 2023, aims to enhance cybersecurity across critical infrastructure and essential services in the EU. It expands the scope of the 2016 NIS Directive to include additional sectors while enforcing stricter governance and accountability requirements. Additionally, the Digital Operational Resiliency Act became effective in January 2025, and aims to establish a universal framework for managing and mitigating information and communication technology risk that will apply to entities in the financial sector and their third-party cloud service providers. The EU also has enacted regulations addressing online services. For example, the EU's Data Act ("Data Act") became applicable in 2025. Compliance with the Data Act may require us to adjust contract terms with business partners and enable data sharing in certain instances. Further, the EU's Digital Services Act ("DSA") imposes requirements on digital platforms to protect consumers and their rights online. These obligations may result in additional compliance and operational costs. Data processing in the U.K. is governed by a U.K. version of the GDPR (combining the GDPR and the Data Protection Act 2018) ("U.K. GDPR"), with fines and enforcement mechanisms similar to those of the GDPR. In 2021, the European Commission issued an adequacy decision, pursuant to which personal data generally may be transferred from the EU to the U.K. without restriction; however, this adequacy decision must be renewed and is subject to modification or revocation in the interim. In 2025, the U.K. introduced the Data (Use and Access) Act, which reforms U.K. data protection laws including the U.K. GDPR and includes some additional compliance obligations. Other jurisdictions in which we operate, including China, Singapore, the Philippines, Hong Kong, Canada, and Australia, have enacted robust legal regimes relating to privacy, data protection, and cybersecurity, many of which provide for significant penalties and other sanctions for noncompliance. Certain of these regimes, including, without limitation, the GDPR and U.K. GDPR, provide for restrictions on transferring data outside of those jurisdictions to many other jurisdictions. The regulatory framework relating to cross-border data transfer has evolved significantly in recent years. For example, in 2020, the European Court of Justice ("CJEU") struck down the EU-U.S. Privacy Shield framework, which provided companies with a mechanism to comply with data protection requirements when transferring personal data from the EEA to the United States. In the same decision, the CJEU imposed additional obligations on companies when relying on standard contractual clauses approved by the European Commission for use in legitimizing personal data transfers from the EEA to the U.S. The European Commission and U.K. Information Commissioner's Office since have issued new standard contractual clauses that account for the CJEU's 2020 decision, with companies relying on that transfer mechanism required to put them in place. Several other laws and regulations enacted in recent years also provide for restrictions on cross-border data transfers, and some of these regimes provide for data localization, under which certain data is required to be maintained within the applicable country. We may be required to take additional steps to address data localization and data transfer issues, including engaging in additional contract negotiations and implementing additional data storage or processing infrastructure, and be subject to increasing costs of compliance and limitations on our customers and us. Additionally, current or modified laws or regulations relating to data transfers and data localization, and related developments, including legal challenges and judicial decisions, may serve as a basis for our data handling practices, or those of our customers and service providers, to be challenged, and may otherwise adversely affect our business, financial condition and results of operations. In the U.S., privacy laws continue to evolve and could require us to modify our data processing practices and policies and expose us to further regulatory or operational burdens. For example, the California Consumer Privacy Act ("CCPA"), as amended by the California Privacy Rights Act, imposes obligations on companies that process California residents' personal information, including obligations to provide certain disclosures to such residents, and creates new consumer rights, including relating to the access to, deletion of and sharing of personal information collected by covered businesses. The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action may increase the likelihood of, and risks associated with, data breach litigation. Numerous other states have proposed or enacted legislation similar to the CCPA. The U.S. federal government also is contemplating federal privacy legislation. Furthermore, India passed the Digital Personal Data Protection Act in August 2023 (the "DPDP Act"), the country's first comprehensive data protection law, the impacts of which potentially may be far-ranging and impactful upon our business, and which is anticipated to provide for substantial penalties. The Digital Personal Data Protection Act (DPDPA) 2023, coupled with the 2025 Rules, provides an 18-month timeline for full compliance, leading to full enforcement by May 13, 2027. We expect the DPDP Act to add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment of resources in compliance programs, and could result in increased compliance costs or changes in business practices and policies. As a general matter, the laws, rules, regulations, standards, and other actual and asserted obligations relating to privacy, data protection and cybersecurity to which we may be subject, or that otherwise apply to our business, are constantly evolving, and we expect that there will continue to be new proposed laws, regulations and industry standards concerning these matters in India, the EU, the U.K., the U.S. and other jurisdictions in which we operate, both general and in relation to technological and other developments, including AI (and including, in particular, the EU's AI Act), the use of algorithms and automated decision making, digital identity, and blockchain technologies. We also anticipate remaining to be subject to related contractual obligations that may be burdensome and which, in many cases, may provide for liability that is unlimited. We cannot fully predict the impact of laws, rules, and regulations, including those that may be modified or enacted in the future, or new or evolving industry standards, contractual obligations, or other actual or asserted obligations, relating to cybersecurity, privacy or data protection or processing on our business or operations. These laws, regulations, standards and obligations have required us to modify our relevant practices and policies and to incur substantial costs and expenses in an effort to comply, and we expect to continue to incur such costs and expenses in the future and anticipate finding it necessary or appropriate to further modify our relevant practices and policies. Any actual or perceived failure by us or our customers or service providers to comply with laws, regulations, rules, standards, contractual obligations or other actual or asserted obligations to which we are or are alleged to be subject relating to privacy, data protection or cybersecurity could result in claims, demands and litigation from private parties and regulators, regulatory investigations and other proceedings, as well as significant damage to our reputation that could cause us to lose customers and harm our ability to gain new customers. These could result in substantial costs, diversion of resources, fines, penalties and other damages, and harm to our customer relationships, our market position and our ability to attract new customers. Any of these could harm our business, financial condition and results of operations.

Since we provide services to clients throughout the world, we are subject to numerous, and sometimes conflicting, legal requirements on matters as diverse as import/export controls, content requirements, trade restrictions, tariffs, taxation, sanctions, government affairs, anti-corruption, anti-bribery, anti-money-laundering, anti-trust, whistle blowing, internal and disclosure control obligations, securities regulation, including ESG initiatives, data protection and privacy, labor relations, wage-and-hour standards, human rights and certain regulatory requirements that are specific to our clients' industries or certain regulated services we provide. Non-compliance with these regulations in the conduct of our business could result in fines, penalties, regulatory action, criminal sanctions against us or our officers, disgorgement of profits, prohibitions on doing business and adverse impact to our reputation. Gaps in compliance with these regulations in connection with the performance of our obligations to our clients could also result in exposure to monetary damages, fines and/or criminal prosecution, unfavorable publicity, restrictions on our ability to process information and allegations by our clients that we have not performed our contractual obligations. Many countries also seek to regulate the actions that companies take outside of their respective jurisdictions, subjecting us to multiple and sometimes competing legal frameworks in addition to our home country rules. Due to the varying degree of development of the legal systems of the countries in which we operate, local laws might be insufficient to defend us and preserve our rights. We could also be subjected to risks to our reputation and regulatory action on account of any unethical acts by any of our employees, partners or other related individuals. Some of our clients may operate in highly regulated sectors and/or high-risk geographies. Sanctions may be enforced on them or their key managerial personnel either before they become our clients or during the course of our work with them. Our vendors may also become subject to sanctions. While we take reasonable precautions to determine if a potential client or vendor is sanctioned, our ability to screen and ensure we do not enter into contract with any such parties depends on the data available in the public domain or third-party databases on sanctioned entities or personnel. If a client, vendor, or other business partner is subject to sanctions during the course of our work with them, such transactions may expose us to consequential sanctions, administrative action, civil and/or criminal liability, reputational harm, and or loss of any government contracts or engagements. We are subject to risks relating to compliance with a variety of national and local laws including multiple tax regimes, labor laws, and employee health, safety, wages and benefits laws. We may, from time to time, be subject to litigation or administrative actions resulting from claims against us by current or former employees individually or as part of class actions, including claims of wrongful terminations, discrimination, misclassification or other violations of labor law or other alleged conduct. We may also, from time to time, be subject to litigation resulting from claims against us by third parties, including claims of breach of non-compete and confidentiality provisions of our employees' former employment agreements with such third parties or claims of breach by us of their IP rights. Our failure to comply with applicable regulatory requirements could have a material adverse effect on our business, results of operations and financial condition. Also, regulation and monitoring of the Indian securities markets and the activities of investors, brokers and other participants may differ as compared to that of the United States. The Securities and Exchange Board of India ("SEBI") has prescribed regulations and guidelines in relation to corporate governance, disclosure requirements, insider dealing and other matters relevant to the Indian securities market. There may, however, be less publicly available information about Indian companies than is regularly made available by public companies in the United States.

The Ministry of Finance of the GoI (the "Ministry of Finance") and/or the RBI must approve our acquisition of any company organized outside of India or grant general or special permission for such acquisition. The RBI permits acquisitions of companies organized outside India by an Indian party without approval, inter alia, in the following circumstances: - if the transaction consideration is paid in cash, up to 400% of the net worth of the acquiring company as per its latest audited financial statement; or - if the acquisition is funded with cash from the acquiring company's existing foreign currency accounts or with cash proceeds from the issue of American Depositary Receipts ("ADRs"), Global Depositary Receipts, External Commercial Borrowings or Foreign Currency Convertible Bonds. However, any financial commitment exceeding U.S.$ 1 billion or its equivalent in a financial year would require prior approval of the RBI even if the total financial commitment of the Indian party is within 400% of the net worth as per its latest audited financial statements. Further, our investments in foreign operations may be subject to restrictions imposed by the RBI. We cannot assure you that any necessary approval from the RBI or the Ministry of Finance or any other Government agency can be obtained. Our failure to obtain such approvals from the GoI for acquisitions of/investments in companies organized outside India may restrict our international growth, which could negatively affect our revenue.

Currently, we benefit from tax incentives under Indian tax laws. We qualify for a deduction from taxable income on profits attributable to our status as a developer of SEZs or from operation of units located in SEZs. The tax deduction for SEZ developers is available for any 10 consecutive years out of 15 years, commencing from the year in which the SEZ is notified. The tax deduction for a unit in an SEZ is equal to 100% of profits from the export of services for the first five years after the commencement of operations in the SEZ, and thereafter is equal to 50% of profits from the export of services for a subsequent period of ten years, subject to meeting specified re-investment conditions and earmarking of specified reserves in the last five years. This tax deduction will terminate if our operations are no longer located in an SEZ, fail to comply with rules required for an SEZ or fail to meet certain conditions prescribed under the Income-tax Act, 1961 or the Income-tax Act, 2025 (collectively, "Income-tax Act") of India. While the Income-tax Act, 2025 has replaced the Income-tax Act, 1961 with effect from April 1, 2026, the change is largely in the nature of restructuring, design, and simplification of language, and the substantive provisions governing corporate taxation, including SEZ-related incentives and profit-linked deductions, remain substantially aligned with the erstwhile law. Accordingly, the overall framework for taxation continues to remain largely unchanged. In 2019, the GoI amended the Income-tax Act by enacting The Taxation Laws (Amendment) Ordinance, 2019, and has provided an option for companies to pay tax at a lower rate of 22% (plus surcharge and cess) by forgoing all the deductions available under Chapter VI-A and other profit-linked deductions under the Income-tax Act. This option, if exercised, is irrevocable. and the corresponding minimum alternate tax ("MAT") credit will lapse. We have evaluated the option and have decided to continue under the existing regime and not to avail ourselves of the lower tax rate. Effective April 1, 2026, the Income-tax Act is amended to allow utilization of MAT credit under the lower tax rate regime. We will review our position to move to the lower tax regime on a periodic basis. The Finance Act (No.2) 2024 has abolished buy-back tax previously payable by companies, effective October 1, 2024 and shifted the incidence of taxation on buy-back consideration to shareholders. With effect from April 1, 2026, capital gains arising on buy-back will be taxed in the hands of shareholders in accordance with the applicable capital gains provisions of the Income-tax Act. See "Taxation - Buyback of Securities" under Item 10 of this Annual Report on Form 20-F for further information.

If flaws in design, function or maintenance of our services were to occur, we could experience a rate of failure that would result in substantial repair, replacement or service costs and potential damage to our reputation. Although we continue to improve our services through quality control, innovation and product testing, there can be no assurances that our efforts to monitor, develop, modify and implement appropriate testing for errors and upgrading processes will be sufficient to prevent us from having to incur substantial repair, replacement or service costs, or from a disruption in our ability to provide services, either of which could have a material adverse effect on our business, results of operations or financial condition.

A significant element of our business strategy is to continue to leverage and expand our offshore development centers in Bengaluru, Chennai, Hyderabad, Kolkata, Pune, Delhi, Mumbai and other cities in India, as well as near-shore development centers outside of India. We believe that the use of a strategically located network of software development centers provides us with cost advantages, the ability to attract highly skilled personnel from various regions of India and the world, the ability to service clients on a regional and global basis and the ability to provide services to our clients 24 hours a day, seven days a week. Part of our service model is to maintain active voice and data communications between our main office in Bengaluru, our clients' offices, and our software development and support facilities. Although we maintain redundancy facilities and satellite communications links, any significant loss in our ability to transmit voice and data through satellite and telephone communications could result in a disruption in business, thereby hindering our performance or our ability to complete client projects on time. This, in turn, could lead to a reduction of our revenue.

We maintain an investment portfolio of various holdings, types and maturities. These investments are subject to general credit, liquidity, market and interest rate risks. Deterioration of the credit rating of counterparties and in the credit as well as the debt capital markets in general due to economic turmoil or other global events could result in volatility of our investment earnings and impairments to our investment portfolio, which could negatively impact our financial condition and net income. Further, fluctuations in the interest rate environment based on changes in the RBI's monetary policy could affect the interest income and thereby our profitability.

Our wage costs in India have historically been significantly lower than wage costs in the U.S. and Europe for comparably skilled professionals, and this has been one of our competitive advantages. However, wage increases in India may prevent us from sustaining this competitive advantage and may negatively affect our profit margins. We have historically experienced significant competition for employees from large multinational companies that have established and continue to establish offshore operations in India, as well as from companies within India. We may need to increase the levels of our employee compensation more rapidly than in the past to retain talent. Unless we are able to continue to increase the efficiency and productivity of our employees over the long term, wage increases may reduce our profit margins. Furthermore, any inability to increase the proportion of employees with less experience, or source talent from other low-cost locations, like Eastern Europe, China or Southeast Asia could also negatively affect our profits.