1125011--3/16/2006--KANBAY_INTERNATIONAL

related topics

{regulation, government, change}

{condition, economic, financial}

{property, intellectual, protect}

{operation, international, foreign}

{acquisition, growth, future}

{operation, natural, condition}

{customer, product, revenue}

{competitive, industry, competition}

{product, market, service}

{tax, income, asset}

{cost, operation, labor}

RISKS RELATED TO OUR BUSINESS Our revenues are highly dependent on a small number of clients, including a single client from whom we receive more than 50% of our revenues and which is also our largest stockholder, and the loss of any one of our major clients could significantly impact our business. A significant or prolonged economic downturn in, increased regulation of and restrictions imposed on the financial services industry may result in our clients reducing or postponing spending on the services we offer. Our failure to anticipate rapid changes in technology may negatively impact demand for our services in the marketplace. The IT services market is highly competitive, and our competitors may have advantages that could allow them to better use economic incentives to secure contracts with our existing and prospective clients and attract skilled IT professionals. Our executive officers and directors and their respective affiliates, including HSBC, which own a large percentage of our common stock, have substantial voting control over Kanbay and their interests may differ from other stockholders. If we do not effectively manage our anticipated rapid growth, we may not be able to develop or implement new systems, procedures and controls that are required to support our operations, market our services and manage our relationships with our clients. Our services may infringe on the intellectual property rights of others, which may subject us to legal liability, harm our reputation, prevent us from offering some services to our clients or distract management. We have a limited ability to protect our intellectual property rights, and unauthorized use of our intellectual property could result in the loss of clients. Our engagements with clients may not be profitable. Our profitability is dependent on our billing and utilization rates, and our ability to control these factors is only partially within our control. We are investing substantial cash assets in new facilities, and our profitability could be reduced if our business does not grow proportionately. Our ability to raise capital in the future may be limited and our failure to raise capital when needed could prevent us from growing. RISKS RELATED TO OUR INDIAN AND INTERNATIONAL OPERATIONS Wage pressures in India may reduce our profit margins. Terrorist attacks or a war or regional conflicts could adversely affect the Indian economy, disrupt our operations and cause our business to suffer. Disruptions in telecommunications or severe weather conditions could harm our global delivery model, which could result in client dissatisfaction and a reduction of our revenues. Our net income would decrease if the Government of India reduces or withdraws tax benefits and other incentives it provides to us or adjusts the amount of our income taxable in India or if we repatriate our earnings from India. Restrictions on immigration may affect our ability to compete for and provide services to clients in the United States, which could adversely affect our ability to meet growth and revenue projections. Currency exchange rate fluctuations will affect our operating results.

Full 10-K form ▸

1125011--3/16/2006--KANBAY_INTERNATIONAL_INC