1016439--3/31/2008--INTELLIGROUP

related topics

{condition, economic, financial}

{operation, international, foreign}

{regulation, change, law}

{system, service, information}

{property, intellectual, protect}

{customer, product, revenue}

{debt, indebtedness, cash}

{competitive, industry, competition}

{personnel, key, retain}

{stock, price, share}

{capital, credit, financial}

{interest, director, officer}

If we are unable to generate new sales and maintain our profitability, our business and financial condition and results of operations may be adversely impacted. The departure of one or more key employees may have a material adverse effect on our ability to operate our business. A substantial portion of our operations are located in India and we are subject to regulatory, economic and political uncertainties in India. Our performance could be materially adversely affected by a general economic downturn or lessening demand in the information technology services industry. If we are unable to maintain access to external funding, we may be unable to continue our ongoing business or fund future growth. The information technology services industry is highly competitive and we may not be able to compete effectively. Business and financial risks to important business partners may negatively impact our financial condition. If we lose any large customer, our financial condition could be materially, negatively impacted. The fact that our common stock is not listed on a national exchange may negatively impact our ability to attract investors and to use our common stock to fund future growth. Currency fluctuations may negatively impact our financial results, and this may in turn discourage investment. We can not predict shifts in policy or political changes in governments which can regulate or impact our business operations, specifically in the United States and India. Liability claims for damages caused by disclosure of confidential information or system failures could have a material adverse effect on our business. System failure or disruptions in telecommunications could disrupt our business and result in lost customers and curtailed operations which would reduce our revenue and profitability. If our measures to protect our intellectual property rights are inadequate, our financial condition could be negatively impacted. We may be subject to increased tax liabilities, including if the spin-off of our former subsidiary, SeraNova, is determined to be taxable. We could be liable in the range of $55 million to $65 million and related penalties (if assessed) and interest could increase the amount by $40 million to $50 million as at December 31, 2007. Third parties may claim that our services or deliverables infringe upon their intellectual property rights, which could result in material costs. If accounting interpretations relating to revenue recognition change, our reported revenues could decline or we could be forced to make changes in our business practices. Some of our clients may experience unique economic conditions that are specific to their particular industry We frequently need to negotiate customer contract renewals on comparable terms to maintain our profitability. There may be circumstances in which the interests of our major shareholders could be in conflict with your interests as a shareholder.

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1016439--3/31/2008--INTELLIGROUP_INC