Pandemic risk
The COVID-19 pandemic caused by the ever-morphing coronavirus has impacted societies and economies worldwide. The possible emergence of deadlier ‘variants of concern’ in the future remains a concern. We face challenges from this epidemic at different levels, including the health and safety of Mindtree Minds, impact on counterparties that may lead to reduction in their discretionary IT spends, risk of supply chain disruptions as well as increase in financial, compliance and operational risks

The Mindtree War Room, comprising senior leaders, continues to coordinate the pandemic response

The Board’s Risk Management Committee oversees our COVID-19 response

Robust risk management and crisis management capabilities enable us to ensure uninterrupted and seamless services to customers, while maintaining the health and safety of Mindtree Minds

We continue to be a pioneer in remote working and agile delivery

An extensive health, safety and people engagement program exists to support Mindtree Minds

We are actively engaging with clients/prospects for new business opportunities in healthcare and digital transformation

Multiple client accolades have been received for the smooth and seamless support provided by Mindtree

Talent attraction and retention risks
An organization’s performance depends on the availability of superior talent and their productivity. Intense competition in the IT industry for skilled resources has heightened the war for talent

Our employee-friendly policies, learning and development plans, career growth options and special engagement programs with new hires ensure a high level of connect with our Mindtree Minds

We perform cutting-edge work for clients which requires constant innovation and usage of the latest technologies. This is a key attraction for new talent

Succession planning for key personnel ensures that attrition does not impact operations

We have increased campus recruitment hiring to build our talent pool and we are further enhancing our superlative learning programs

Client concentration
Mindtree faces the risk of revenue concentration with the top customer

Strengthening our focus and connect with the next set of top customers to incrementally achieve broad-based growth

Our customer satisfaction surveys indicate a ‘very high’ relationship score with the largest customer. We also maintain a high level of connect with our top customer

Restrictions impacting global mobility of talent
Legislations impacting availability of work permits or the imposition of excessive costs for the same could lead to material impact on deliverables to clients. Constantly changing rules and restrictions in the prevailing COVID-19 situation may aggravate this risk

We work with industry bodies to engage with governments and policymakers to transfer the benefits to local economies due to the free movement of talent

In addition to recruitment of local talent, we continue to optimize different business models to improve our onsite/offshore/nearshore delivery mix, enhance global development centers and engage with customers to provide a holistic value proposition

Global immigration updates are closely tracked to ensure compliance with all regulatory changes

Competition risk
We offer services across the globe and face competition from established and upcoming Indian as well as international companies and captive offshore centers. Given that the industry is steadily evolving and changing every day, we must manage the risks of competition – both from larger players or emerging challengers – by coming up with new offerings and business models to gain market share and maintain growth momentum

To meet the continuously changing technology landscape and client expectations, we continue to revamp our business model, IT delivery processes and people skills

As an agile organization, we are capable of responding quickly and effectively to any market requirement and disruption. To help clients grow, we proactively bring innovative ideas, processes and solutions to help shape our clients’ technology roadmap

We continue to invest in making our talent future-ready and strengthen our front-end team to engage more effectively with the business ecosystem through collaboration with partners, start-ups and alliances to ensure we lead digital transformation services

Margin pressures
Mindtree’s margins and cash flows face pressure due to the mix of different types of contracts, the services performed under those contracts, attrition, subcontracting, pressures due to competitive pricing, tactical moves by competitors to gain market share, and ability to control escalating costs

Our high value and differentiated services, combined with deep domain expertise in core business areas, enable mitigation of pricing pressures

We focus on identifying new high value growth opportunities like data & intelligence, and customer success that not only provide for future cash flows, but also have a positive impact on gross margin

An extensive margin-optimization program continues to provide results

Foreign currency rate fluctuations
A major portion of our revenue is in foreign currencies and sensitive to foreign exchange rates; a significant portion of our expenses are in INR

Our treasury team manages the risk by implementing a formal Board-approved hedging strategy that is reviewed periodically in light of macro-economic changes such as actions of the US Federal Reserve, geopolitical developments, impact of the COVID-19 pandemic and other global events

We judiciously evaluate foreign exchange risk and hedge against adverse foreign exchange exposures that help minimize the impact of exchange volatility

Compliance risks
The multiplicity of laws, regulations and local statutes across the globe makes adherence to each a challenge for any IT company today. Mindtree carries the risk of non-compliance in geographies where the Company operates due to changing regulations

We have a dedicated in-house compliance team that manages compliance globally; we have also devised proper checks and systems to ensure compliance with all applicable laws

We engage specialist consultants across the globe who support the Company in adhering to any change in regulations in countries where we operate

A dedicated data privacy team has been created to roll out data privacy framework compliant with global privacy requirements. This includes mandatory privacy training for Mindtree Minds

Business continuity risks
Man-made or natural hazards such as spread of infectious diseases, power or telecommunications loss, severe weather or terrorist attacks may impact business operations and pose a risk to employee safety

We have a comprehensive Business Continuity Management (BCM) program that addresses floor-level, building-level, city-level and country-level disruptions; oversight is provided through periodic audits

The BCM framework includes infrastructure redundancy, a detailed Disaster Recovery Plan (DRP) to manage infrastructure outages, intra/inter-city recovery sites, work-from-home, onsite as well as split-site operations. The framework has been successfully executed during successive COVID-19 waves. Critical corporate infrastructure has been moved to cloud to provide additional resilience

Risk advisories on developing threats and extreme weather events are widely circulated to ensure the safety of Mindtree Minds

We also undertake appropriate insurance cover for hazards

Cyber security risk
As organizations move to newer areas of engagement such as social, mobile computing and cloud computing, they are getting exposed to harm or data loss, resulting from cyber-attacks by malicious actors. Hacking, ransomware, social engineering and other cyber-attacks represent threats to data security and system availability

We have leveraged leading industry standards to develop cyber security frameworks. The organization’s security posture has been revised appropriately to address emerging threats. An extensive cyber response plan is being formalized

We have implemented controls to secure our IT infrastructure, including intrusion prevention systems, firewalls, anti-malware software, content filtering gateways, data encryption, tie-up with ransomware and brute force support providers, data leakage protection systems and 24/7 monitoring

Endpoint security controls have been deployed to ensure that levels of security are similar, be it in the corporate environment or while working remotely. In addition, a comprehensive security awareness program is in place

Periodic internal and external audits provide oversight. The information security program is reviewed regularly by the Risk Management Committee of the Board

Litigation risks
Given the geographic spread and scale of Mindtree’s business activity, litigation risks can arise from commercial disputes, perceived violation of intellectual property rights and employment-related matters. Litigations may result in distractions for management, adverse media coverage and loss of reputation. Adverse rulings can result in substantive damages

We have an experienced in-house legal team and we also obtain specialist advice from external counsels wherever required

We have implemented internal controls and processes to adequately ensure compliance with contractual obligations, information security and protection of intellectual property

A robust mechanism to track and respond to notices, as well as to defend all claims and monitor litigations, has been implemented

Operating model risk
Post-pandemic, customers are focusing on investing in new and future technologies. Ability to adapt to rapidly changing customer needs, identifying incipient technological trends, developing new delivery models, workforce of the future, emerging ecosystems are matters that will affect the industry in a big way and will require development of new strategies and insights to identify opportunities and address the risks

Our strong client and technology focus ensures that operating models are future-ready

Our governance mechanisms track deliverables and customer feedback meticulously. High customer satisfaction scores are a testimony to the organization’s focus on customers and quality delivery

A Future Ways of Work (FWoW) task force has been created to evaluate and implement new trends, technologies, operating models, and delivery models that can be adopted across the organization, or offered as services to global clients while leveraging a flexible, agile, diverse, and resilient workforce

Environmental, Social and Governance (ESG) risks
ESG risks include those related to environmental management practices and duty of care, working and safety conditions, respect for human rights and effective governance. Risks of climate change, global warming, and related concerns pose a relevant risk for all businesses

Operations have been aligned to create long-term value for business and stakeholders through ESG practices that minimize environmental impact and promote the well-being and prosperity of Mindtree Minds and other stakeholders

We regard sustainability to be central to business operations and have a comprehensive sustainability program built around ecological sustainability, governance, workplace sustainability, and diversity and inclusion. The sustainability strategy focuses on environmental responsibility, climate protection, and an optimal use of natural resources through maximizing resource efficiency

As a socially responsible business, we have been able to create deep impact in the lives of the communities served through our CSR program

We provide an inclusive work environment which helps develop talent. We reward good performance, protect our people and value differences

We have a diverse and inclusive Board and follow strong corporate ethics and risk management policies

Macro-economic and geo-political risks
Stable macro-economic conditions, geo-politics and technology advancement are interconnected in today’s environment and influence each other

We track geo-political developments like trade wars, sanctions, export controls and border conflicts which may impact supply chains, lead to loss of new opportunities, and harm the IT sector’s global business environment

Macro-economic parameters, such as GDP growth, interest rate and inflation, are regularly tracked to identify uncertainties in economic conditions which may impact the countries in which we operate

We have a diversified revenue mix across different geographies and domains