Terrorism, Indo-Pak hostility can hit biz: Infosys

Infosys said that terror attacks like the ones in Mumbai and the US as well as hostilities with Pakistan can affect the firm's business

India's second largest software services firm Infosys has said that terror attacks like the ones in Mumbai and the US as well as hostilities with Pakistan can affect the firm's business.

Such acts of aggression could impact the image of India in terms of investments and could disrupt communications, the Bangalore-based IT major added.

"Terrorist attacks or a war could adversely affect our business, results of operations and financial condition," Infosys said in a filing to the US Securities and Exchange Commission (SEC) earlier this week.

"Terror attacks, like attacks of September 11, 2001 in the US, attacks of July 25, 2008 in Bangalore, attacks of November 26-29, 2008 and July 13, 2011 in Mumbai and other acts of violence or war, such as the continuing conflict in Afghanistan, have the potential to directly impact our clients or us," it added.

Infosys said that to the extent such attacks affect or involve the US or Europe, the firms businesses may be significantly impacted, as the majority of its revenues are derived from clients located in the US and Europe.

"In addition, such attacks may destabilise the economic and political situation in India, may make travel more difficult, may make it more difficult to obtain work visas for many of our technology professionals who are required to work in the US or Europe, and may effectively reduce our ability to deliver our services to our clients," it feared.

Such obstacles may increase the company's expenses and negatively affect operations, it said.

"Furthermore, any attacks in India could cause a disruption in the delivery of our services to our clients, and could have a negative impact on our business, personnel, assets and results of operations, and could cause our clients or potential clients to choose other vendors for the services we provide," it added.

The IT major said that regional conflicts in South Asia could affect the business climate and the Indian economy.

"South Asia has, from time to time, experienced instances of civil unrest and hostilities among neighbouring countries, including between India and Pakistan," it said, adding that in recent months, Pakistan has been experiencing significant instability and this has heightened risks of conflict in South Asia.

Infosys added: "Military activity or terrorist attacks in the future could influence Indian economy by disrupting communications and making travel more difficult and such political tensions could create a greater perception that investments in Indian companies involve higher degrees of risk.

"This, in turn, could have a material adverse effect on the market for securities of Indian companies, including our equity shares and our ADSs, and on the market for our services."