<TABLE>
<CAPTION>
Computer Horizons Corp. and Subsidiaries

                                         SELECTED FINANCIAL DATA

                                                              Year Ended December 31,
                                          1991         1992          1993          1994          1995
--------------------------------------------------------------------------------------------------------
                                                  (dollars in thousands, except per share data)
<S>                                   <C>           <C>           <C>           <C>           <C>       
Summary Income Statement
Revenues                                 $94,543      $102,206      $121,550      $152,192      $200,050
  Direct costs                            68,098        74,200        87,800       108,189       140,344
  Selling, administrative                                                                               
      and general                         21,668        23,536        26,256        32,992        42,131
Income from operations                     4,777         4,470         7,494        11,011        17,575
  Interest expense--net                     (693)         (578)         (584)         (638)         (365)
  Equity in net earnings of
    joint venture                                                                                    361
Income before income taxes                 4,084         3,892         6,910        10,373        17,571
  Income taxes                             1,818         1,866         3,206         4,687         7,664
--------------------------------------------------------------------------------------------------------
Net Income                               $ 2,266       $ 2,026       $ 3,704       $ 5,686       $ 9,907
========================================================================================================
Earnings per share:
  Primary                                  $0.17         $0.15         $0.25         $0.40         $0.64
========================================================================================================
  Fully diluted                            $0.17         $0.15         $0.24         $0.40         $0.63
========================================================================================================
Weighted average number of
 shares outstanding:
  Primary                             13,203,000    13,624,000    14,994,000    14,258,000    15,576,000
========================================================================================================
  Fully diluted                       13,241,000    13,844,000    15,496,000    14,301,000    15,657,000
========================================================================================================
<PAGE>
<CAPTION>
                                   SELECTED FINANCIAL DATA (Continued)

                                                              Year Ended December 31,
                                          1991         1992          1993          1994          1995
--------------------------------------------------------------------------------------------------------
                                                  (dollars in thousands, except per share data)
<S>                                   <C>           <C>           <C>           <C>           <C>       
Analysis (%)
Revenues                                   100.0%        100.0%        100.0%        100.0%        100.0%
  Gross margin                              28.0%         27.4%         27.8%         28.9%         29.8%
  Selling, administrative
    and general                             22.9%         23.0%         21.6%         21.7%         21.1%
Income from operations                       5.1%          4.4%          6.2%          7.2%          8.8%
  Interest expense--net                     -0.7%         -0.6%         -0.5%         -0.4%         -0.2%
  Equity in net earnings of
    joint venture                                                                                    0.2%
Income before income taxes                   4.3%          3.8%          5.7%          6.8%          8.8%
  Income taxes                               1.9%          1.8%          2.6%          3.1%          3.8%

Net Income                                   2.4%          2.0%          3.0%          3.7%          5.0%

Revenue growth YOY                          -4.9%          8.1%         18.9%         25.2%         31.4%
Net income growth YOY                      -32.0%        -10.6%         82.8%         53.5%         74.2%
Return on equity, average                   11.1%          8.3%         14.1%         20.5%         23.5%
Effective tax rate                          44.5%         47.9%         46.4%         45.2%         43.6%

At year-end
Total assets                              $37,220      $ 41,249      $ 40,600      $ 49,150      $ 76,037
Working capital                            18,972        20,317        17,531        20,484        38,894
Long-term debt                              8,572         7,144         5,843         4,288         3,299
Shareholders' equity                       21,711        26,856        25,689        29,917        54,267

Stock price                                 $2.03         $1.96         $3.48         $6.00        $25.33
P/E multiple                                   12            13            14            15            39

Employees*                                  1,251         1,414         1,603         2,150         2,511
Clients (during year)*                        395           402           458           455           462
Offices (worldwide)                            25            29            30            33            39
===========================================================================================================================
*Does not include Birla Horizons International.
</TABLE>
<PAGE>
Computer Horizons Corp. and Subsidiaries
--------------------------------------------------------------------------------
Management's Discussion and Analysis of Financial Condition and
Results of Operations


Results of Operations

The following table sets forth (i) certain income and expense items expressed as
a percentage  of the  Company's  consolidated  revenues and (ii) the  percentage
increase in the amount of such items in 1995 compared to 1994:
<TABLE>
<CAPTION>
                                                          Year Ended December 31,              Percentage
                                                     ----------------------------------         Increase 
                                                       1993          1994         1995          1995/1994
                                                     -----------------------------------------------------
<S>                                                   <C>          <C>           <C>              <C>  
Revenues                                              100.0%       100.0%        100.0%            31.4%
Direct costs                                           72.2%        71.1%         70.2%            29.7%
Selling, administrative and general                    21.6%        21.7%         21.1%            27.7%
Income from operations                                  6.2%         7.2%          8.8%            59.6%
Interest expense, net                                  -0.5%        -0.4%         -0.2%           -42.8%
Equity in net earnings of joint venture                                            0.2%           100.0%
Income before income taxes                              5.7%         6.8%          8.8%            69.4%
Income taxes                                            2.6%         3.1%          3.8%            63.5%
Net income                                              3.0%         3.7%          5.0%            74.2%
</TABLE>

Revenues

Consolidated  revenues in 1995  increased by 31%  compared to 1994,  and in 1994
consolidated  revenues  increased by 25% compared to 1993.  The increase in 1995
was attributable to increased solutions business and improved pricing applicable
thereto. In 1994, the increase was attributable  equally to the expansion of the
Company's  professional  software  personnel services business and the continued
development of its solutions business.

The Company  provides its services  primarily to  businesses  in five  principal
Standard Industrial Classification Code sectors. In 1995, the largest portion of
the Company's consolidated revenues was derived from financial services clients,
29% in 1995 and 26% in both 1994 and 1993. In dollars, such revenues were $57.0,
$39.9 and $31.5 million in 1995, 1994 and 1993, respectively. Financial services
clients  represent  those in insurance,  brokerage,  banking and  non-depository
credit institutions.

Telecommunications/utilities clients represented 25% of the Company consolidated
revenues in 1995,  23% in 1994 and 24% in 1993. In dollars,  the 1995,  1994 and
1993 amounts were $51.3, $35.0 and $28.8 million, respectively.

Consolidated  revenues  derived from  manufacturing  sector  clients were 24% of
Company  revenues  in 1995 and 28% in both  1994 and  1993.  In  dollars,  these
amounts  were  $48.8,   $42.9  and  $34.1  million  in  1995,   1994  and  1993,
respectively.  Revenues were  broad-based  within this sector,  with  particular
emphasis in  transportation,  petroleum  refining and  chemical/allied  products
manufacturing.
<PAGE>
For 1995, 1994 and 1993, the Company's services sector,  which includes business
services and computer processing services,  contributed revenues of $23.0, $22.5
and  $16.3  million  or  12%,  15%  and  13%,  respectively,  of  the  Company's
consolidated revenues.

Wholesale/retail  trade clients recognized  significantly  increased revenues in
1995 of $20.1  million as compared to $11.9 and $10.9  million in 1994 and 1993,
respectively,  representing  10%,  8%  and  9%  of  the  Company's  consolidated
revenues.

Direct Costs

Direct costs as a percentage  of  consolidated  revenues  were 70.2%,  71.1% and
72.2% for 1995, 1994 and 1993,  respectively.  The improvements are attributable
to the  Company's  continued  implementation  of tighter  controls over pricing,
wages,  costs and  benefits,  and in 1995,  improved  pricing from our solutions
business.

Selling, Administrative and General

Selling,  administrative  and general  expenses have improved as a percentage of
consolidated  revenues  in 1995 as  compared  to 1994 and  remained  essentially
stable as a  percentage  of  consolidated  revenues in 1994 as compared to 1993:
21.1%,  21.7% and 21.6% for 1995, 1994 and 1993,  respectively.  In dollars they
were $42.1, $33.0 and $26.3 million, respectively, for these years.

Profitability

Consolidated income from operations was $17.6 million in 1995, compared to $11.0
million  in 1994 and $7.5  million  in 1993.  As a  percentage  of  consolidated
revenues,  income from  operations  was 8.8%,  7.2% and 6.2% for 1995,  1994 and
1993, respectively.  The gains are attributable to increased revenues,  improved
gross margins and containment of selling,  administrative  and general expenses.
The  Company's  business  is  labor-intensive  and,  as such,  is  sensitive  to
inflationary  trends.  This sensitivity applies to client billing rates, as well
as payroll costs.

Consolidated net income for 1995 was $9.9 million,  or $.64 per share,  compared
with  $5.7  million,  or $.40 per  share in 1994 and $3.7  million,  or $.25 per
share,  in 1993. The Company's  effective tax rate for Federal,  state and local
income taxes was 43.6%,  45.2% and 46.4% for 1995, 1994 and 1993,  respectively.
After accounting for non-tax benefited charges such as goodwill amortization and
certain travel and entertainment  deduction limitations,  the Company's standard
marginal income tax rate for these periods was approximately 42%.
<PAGE>
Liquidity and Capital Resources

At December 31, 1995, the Company had a current ratio of 3.2 to 1, cash and cash
equivalents of $9.2 million and available bank lines of credit of $25.0 million.
In 1995, the Company had a maximum amount of $7.2 million  outstanding under its
lines of credit.  On June 7, 1995,  the  Company  sold  1,140,000  shares of its
common stock (1,710,000 shares after the  three-for-two  stock split declared on
December 12, 1995) in a public offering  generating  approximately $13.3 million
in cash. These proceeds were used to repay outstanding  indebtedness and provide
the Company with additional working capital.  There were no borrowings under the
Company's  lines of credit  during  the  second  half of 1995 and there  were no
outstanding   borrowings  at  December  31,  1995.   During  1995,  the  average
outstanding  amount under the Company's lines of credit was $1.7 million and the
weighted average interest rate  approximated 7%. Borrowings were used to finance
the growth in accounts  receivable  resulting  from  increased  revenues and the
effect of normal  year-end  purchase  order  expirations  and resultant  payment
delays.  During 1994, the average  outstanding  amount under the lines of credit
was $1.1 million and the weighted  average  interest rate was 6.7%. In 1994, the
borrowings  were also used to finance the  repurchase  of shares of common stock
for  approximately  $2.8 million  from the  Company's  former Vice  Chairman and
Executive Vice President, who retired effective February 15, 1995.

The Company's long-term debt consists of notes issued to financial  institutions
in the  outstanding  principal  amount of $4.3  million as of December 31, 1995,
payable in installments of $1.4 million on April 15th of each year through 1998,
bearing  interest at the rate of 9.55% per annum;  and notes  issued to the four
former  shareholders of Unified Systems  Solutions in the outstanding  amount of
$1.4 million as of December 31, 1995,  $1.0 million payable on April 1, 1996 and
$0.4 million payable on April 1, 1997, with 8.75% imputed interest.

The Company  believes that its lines of credit and  internally  generated  funds
will  permit it to continue to meet its  working  capital  obligations  at least
through 1996.
<PAGE>
[GRAPHIC -- COMPANY LOGO]
Grant Thornton LLP
--------------------------------------------------------------------------------
Report of Independent Certified Public Accountants


Board of Directors and Shareholders
Computer Horizons Corp.


We have  audited  the  accompanying  consolidated  balance  sheets  of  Computer
Horizons  Corp.  and  Subsidiaries  as of December  31,  1994 and 1995,  and the
related consolidated  statements of income,  shareholders' equity and cash flows
for each of the  three  years in the  period  ended  December  31,  1995.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated financial position of Computer Horizons
Corp.  and  Subsidiaries  as of December 31, 1994 and 1995 and the  consolidated
results of their  operations and their  consolidated  cash flows for each of the
three years in the period ended December 31, 1995, in conformity  with generally
accepted accounting principles.


/s/GRANT THORNTON LLP

GRANT THORNTON LLP

Parsippany, New Jersey
January 26, 1996
<PAGE>
<TABLE>
<CAPTION>
                                    CONSOLIDATED STATEMENTS OF INCOME


                                                                      Year Ended December 31,
                                                             1993              1994               1995
--------------------------------------------------------------------------------------------------------
                                                                (in thousands, except per share data)
<S>            <C>                                         <C>              <C>                <C>      
Revenues (Note 9)                                          $121,550         $ 152,192          $ 200,050
--------------------------------------------------------------------------------------------------------
Costs and expenses:
   Direct costs                                               87,800          108,189            140,344
   Selling, administrative and general                        26,256           32,992             42,131
--------------------------------------------------------------------------------------------------------
                                                             114,056          141,181            182,475
--------------------------------------------------------------------------------------------------------
Income from operations                                         7,494           11,011             17,575
--------------------------------------------------------------------------------------------------------
Other income (expense):
   Interest income                                               235               53                266
   Interest expense                                             (819)            (691)              (631)
   Equity in net earnings of joint venture (Note 3)                                                  361
--------------------------------------------------------------------------------------------------------
                                                                (584)            (638)                (4)
--------------------------------------------------------------------------------------------------------
Income before income taxes                                     6,910           10,373             17,571
--------------------------------------------------------------------------------------------------------
Income taxes (Notes 1 and 6):
   Current                                                     3,116            5,044              8,138
   Deferred                                                       90             (357)              (474)
--------------------------------------------------------------------------------------------------------
                                                               3,206            4,687              7,664
--------------------------------------------------------------------------------------------------------
Net Income                                                $    3,704         $  5,686          $   9,907
========================================================================================================
Earnings per share:
   Primary                                                      $.25             $.40               $.64
========================================================================================================
   Fully diluted                                                $.24             $.40               $.63
========================================================================================================
Weighted average number of shares outstanding:
   Primary                                              14,994,000         14,258,000         15,576,000
========================================================================================================
   Fully diluted                                        15,496,000         14,301,000         15,657,000
========================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                           CONSOLIDATED BALANCE SHEETS

                                                                                             December 31,
                                                                                        1994               1995
----------------------------------------------------------------------------------------------------------------
                                                                                             (in thousands)
<S>            <C>                                                                    <C>                <C>
Assets         Current assets:
                  Cash and cash equivalents                                           $ 2,278              9,166
                  Accounts receivable, net of allowance for doubtful
                    accounts of $566,000 and $840,000 at December 31, 1994
                    and 1995, respectively                                             30,636             44,729
                  Deferred income tax benefit (Note 6)                                    771              1,245
                  Other                                                                 1,108              1,618
----------------------------------------------------------------------------------------------------------------
                        Total current assets                                           34,793             56,758
----------------------------------------------------------------------------------------------------------------



               Property and equipment:
                  Furniture, equipment and other                                        5,983              7,454
                  Less accumulated depreciation                                         3,348              4,031
----------------------------------------------------------------------------------------------------------------
                                                                                        2,635              3,423
----------------------------------------------------------------------------------------------------------------



               Other assets - net:
                  Goodwill (Note 1)                                                    11,065             13,526
                  Other (Note 3)                                                          657              2,330
----------------------------------------------------------------------------------------------------------------
                                                                                       11,722             15,856
----------------------------------------------------------------------------------------------------------------
                        Total Assets                                                  $49,150            $76,037
================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                                                                December 31,
                                                                                                           1994              1995
----------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                <C>
Liabilities and Shareholders' Equity

               Current liabilities:
                  Notes payable - banks                                               $ 3,200         $       --
                  Current portion of long-term debt (Note 4)                            1,556              2,385
                  Accrued payroll, payroll taxes and benefits                           7,305             10,812
                  Accounts payable                                                        560              1,746
                  Income taxes payable                                                    880              1,535
                  Other accrued expenses                                                  808              1,386
----------------------------------------------------------------------------------------------------------------
                        Total current liabilities                                      14,309             17,864
----------------------------------------------------------------------------------------------------------------
               Long-term debt (Note 4)                                                  4,288              3,299
----------------------------------------------------------------------------------------------------------------
               Other liabilities                                                          636                607
----------------------------------------------------------------------------------------------------------------
               Commitments (Note 8)
----------------------------------------------------------------------------------------------------------------



               Shareholders' equity:
                  Preferred   stock,   $.10  par;   authorized   and
                     unissued,   200,000  shares,  including  50,000
                     Series A
                  Common stock, $.10 par; authorized, 30,000,000
                     shares; issued 15,180,443 shares and 17,407,514
                     shares at December 31, 1994 and 1995, respectively                 1,518              1,741
                  Additional paid-in capital                                           13,196             27,416
                  Retained earnings                                                    29,851             39,758
----------------------------------------------------------------------------------------------------------------
                                                                                       44,565             68,915
                  Less shares held in treasury, at cost; 1,786,883 shares
                     at December 31, 1994 and 1995                                     14,648             14,648
----------------------------------------------------------------------------------------------------------------
                        Total shareholders' equity                                     29,917             54,267
----------------------------------------------------------------------------------------------------------------
                        Total Liabilities and Shareholders' Equity                    $49,150            $76,037
================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                           CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY


                                                  Common stock        Additional                      Treasury stock        Notes
                                              ---------------------     paid-in      Retained      -------------------   receivable,
                                              Shares         Amount     capital      earnings      Shares       Amount    officers
------------------------------------------------------------------------------------------------------------------------------------
Years Ended December 31, 1993, 1994 and 1995                                      (dollars in thousands)
<S>                                          <C>             <C>       <C>            <C>         <C>          <C>             <C>
 Balance, January 1, 1993                     3,720,374        $372     $11,273       $20,461       837,578    $  4,621       $629
   Three-for-two stock split
     declared March 1993                      1,441,398         144        (144)
   Stock options exercised                      204,500          21       1,026
   Purchases of treasury stock                                                                      599,700       5,918
   Net income for the year                                                              3,704
------------------------------------------------------------------------------------------------------------------------------------
 Balance, December 31, 1993                   5,366,272         537      12,155        24,165     1,437,278      10,539        629
   Three-for-two stock split
     declared February 1994                   1,964,497         196        (196)
   Stock options exercised                      408,807          41       1,981
   Purchases of treasury stock                                                                      349,605       4,109
   Repayment of notes
     receivable, officers                                                                                                     (629)
   Net income for the year                                                              5,686
------------------------------------------------------------------------------------------------------------------------------------
 Balance, December 31, 1994                   7,739,576         774      13,940        29,851     1,786,883      14,648         --
   Three-for-two stock split
     declared:
       April 1995                             3,002,998         300        (300)
       December 1995                          5,206,877         521        (521)
   Stock options exercised                      318,063          32       1,138
   Sale of common  stock,
     net of expenses                          1,140,000         114      13,159
   Net income for the year                                                              9,907
------------------------------------------------------------------------------------------------------------------------------------
 Balance, December 31, 1995                  17,407,514      $1,741    $ 27,416       $39,758     1,786,883    $  14,648       $--
====================================================================================================================================
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                            Year Ended December 31,
                                                                         1993         1994        1995
--------------------------------------------------------------------------------------------------------
                                                                                 (in thousands)
<S>                                                                    <C>         <C>          <C>     
Cash flows from operating activities
   Net income                                                          $ 3,704     $  5,686     $  9,907
   Adjustments to reconcile net income to net cash
     provided by (used in) operating activities:
       Deferred taxes                                                       90         (357)        (474)
       Depreciation                                                        693          754          683
       Amortization of intangibles                                         521          568          505
   Changes in assets and liabilities, net of acquisitions:
     (Increase) decrease in accounts receivable                         (3,564)      (9,770)     (14,093)
     (Increase) decrease in refundable income taxes                        321
     (Increase) decrease in other current assets                            49         (433)        (510)
     Increase (decrease) in accrued payroll, payroll taxes
       and benefits                                                      2,088        1,287        3,507
     Increase (decrease) in accounts payable                              (448)         273        1,186
     Increase (decrease) in income taxes payable                           161          705          655
     Increase (decrease) in other accrued expenses                        (267)          11          578
     Increase (decrease) in other liabilities                                           341          (29)
--------------------------------------------------------------------------------------------------------
         Net cash provided by (used in) operating activities             3,348         (935)       1,915
--------------------------------------------------------------------------------------------------------
Cash flows from investing activities
   Purchases of furniture and equipment                                   (955)      (1,353)      (1,471)
   Acquisitions, net                                                      (388)        (245)      (2,966)
   (Increase) decrease in other assets                                    (127)         254       (1,673)
   Loans to officers, net                                                               629
--------------------------------------------------------------------------------------------------------
         Net cash used in investing activities                          (1,470)        (715)      (6,110)
--------------------------------------------------------------------------------------------------------
Cash flows from financing activities
   Increase (decrease) in notes payable - banks, net                                  3,200       (3,200)
   Increase (decrease) in long-term debt, net                           (1,427)      (1,555)        (160)
   Stock options exercised                                               1,046        2,022        1,170
   Proceeds from issuance of stock                                                                13,273
   Purchases of treasury stock                                          (5,918)      (4,109)
--------------------------------------------------------------------------------------------------------
         Net cash provided by (used in) financing activities            (6,299)        (442)      11,083
--------------------------------------------------------------------------------------------------------
         Net increase (decrease) in cash and cash equivalents           (4,421)      (2,092)       6,888
Cash and cash equivalents at beginning of year                           8,791        4,370        2,278
--------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                               $ 4,370     $  2,278      $ 9,166
========================================================================================================
Cash paid during the year for:
   Interest                                                            $   828     $    713      $   597
   Income taxes                                                          2,621        4,269        6,514
========================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1
--------------------------------------------------------------------------------
Summary of Significant Accounting Policies

December 31, 1993, 1994 and 1995

Principles of Consolidation

The consolidated  financial statements include the accounts of Computer Horizons
Corp.  and  its  wholly-owned   subsidiaries  (the  "Company").   The  Company's
investment  in a joint venture (Note 3) is accounted for under the equity method
of accounting.  All material  intercompany  accounts and transactions  have been
eliminated.


Revenue Recognition

The Company recognizes revenues as professional services are performed. On fixed
fee  engagements,  revenue  and gross  profit  adjustments  are made to  reflect
revisions in estimated  total costs and contract  values.  Estimated  losses are
recorded when identified.


Recruitment Costs

Recruitment costs are charged to operations as incurred.


Cash and Cash Equivalents

Cash and cash equivalents  include all highly liquid instruments with a maturity
of three months or less at the time of purchase and consist of the  following at
December 31:
<TABLE>
<CAPTION>
                                                          1994            1995
--------------------------------------------------------------------------------
                                                             (in thousands)
<S>                                                      <C>              <C>   
Cash                                                     $2,121           $2,017
Money market funds                                                         3,549
Repurchase agreements                                       119            2,100
Demand obligations                                                         1,500
Certificates of deposit                                      38
--------------------------------------------------------------------------------
                                                         $2,278           $9,166
================================================================================
</TABLE>
<PAGE>
Concentrations of Credit Risk

Statement of Financial  Accounting  Standards No. 105 ("SFAS No. 105")  requires
the disclosure of significant  concentrations of credit risk,  regardless of the
degree of such risk.  Financial instru- ments, as defined by SFAS No. 105, which
potentially  subject  the  Company to  concentrations  of credit  risk,  consist
principally  of cash and cash  equivalents  and trade accounts  receivable.  The
Company  invests  the  majority  of its  excess  cash  in  money  market  funds,
repurchase  agreements,  demand  obligations  and  certificates  of  deposit  of
high-credit,  high-quality  financial  institutions  or companies,  with certain
limitations as to the amount that can be invested in any one entity.

The Company maintains its cash and certain cash equivalents balances principally
in three  financial  institutions  located in New  Jersey.  These  balances  are
insured by the Federal  Deposit  Insurance  Corporation  up to $100,000 for each
entity at each  institution.  At December  31, 1995,  uninsured  amounts held at
these financial institutions total approximately $3,840,000.

The Company's customers are generally very large,  Fortune 500 companies in many
industries  and with wide  geographic  dispersion.  The  Company's  two  largest
customers  account  for  approximately  8% and  15% of  accounts  receivable  at
December 31, 1995. The Company  establishes  an allowance for doubtful  accounts
based upon factors surrounding the credit risk of specific customers, historical
trends, and other information.


Property and Equipment and Depreciation

Property and equipment are stated at cost.  Depreciation  is computed  using the
straight-line method over the estimated useful lives of the assets.


Goodwill

Goodwill, the cost in excess of the net assets of acquired businesses,  is being
amortized  by  the   straight-line   method  over  thirty   years.   Accumulated
amortization  is  $2,828,000  and  $3,333,000  at  December  31,  1994 and 1995,
respectively.  On  an  ongoing  basis,  management  reviews  the  valuation  and
amortization  of goodwill.  As part of this review,  the Company  estimates  the
value  and  future  benefits  of net  income  generated  to  determine  that  no
impairment has occurred.


Income Taxes

Deferred income taxes result from temporary  differences between income reported
for  financial  and income tax  purposes.  These  temporary  differences  result
primarily from the allowance for doubtful accounts provision and certain accrued
expenses which are deductible for tax purposes, only when paid.

The  Company  intends to  permanently  reinvest  the  earnings  from its foreign
corporate joint venture and, accordingly, is not providing deferred taxes on its
share of undistributed earnings.
<PAGE>
Earnings Per Share

Earnings per share are based on the weighted average number of common and common
equivalent shares outstanding.  Primary earnings per share take into account the
shares that may be issued upon exercise of stock options,  reduced by the shares
that may be repurchased with the funds received from the exercise,  based on the
average price during the year.  Fully diluted  earnings per share use the higher
of the year-end price or the average price.


Use of Estimates in Financial Statements

In  preparing  financial   statements  in  conformity  with  generally  accepted
accounting  principles,  management  makes estimates and assumptions that affect
the reported  amounts of assets and  liabilities  and  disclosures of contingent
assets and liabilities at the date of the financial  statements,  as well as the
reported  amounts of revenues and expenses during the reporting  period.  Actual
results could differ from those estimates.


Accounting Pronouncements Not Yet Adopted

SFAS No.  121,  "Accounting  for the  Impairment  of  Long-Lived  Assets and for
Long-Lived  Assets to Be Disposed  Of," is required to be  implemented  in 1996.
SFAS  No.  121  requires  that  long-lived   assets  and  certain   identifiable
intangibles  held and used by the entity be  reviewed  for  impairment  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may  not  be  recoverable.  If  the  sum  of  the  expected  future  cash  flows
(undiscounted  and without  interest)  is less than the  carrying  amount of the
asset, an impairment loss is recognized. Measurement of that loss would be based
on the fair value of the asset. The Company believes that implementation of this
statement will not have any material effect on its financial position.

SFAS No. 123, "Accounting for Stock-Based  Compensation," is also required to be
implemented in 1996 and introduces a choice of the method of accounting used for
stock-based  compensation.   Entities  may  use  the  "intrinsic  value"  method
currently  based on APB No. 25 or the new "fair value" method  contained in SFAS
No. 123. The Company  intends to implement SFAS No. 123 in 1996 by continuing to
account for stock-based  compensation  under APB No. 25. As required by SFAS No.
123,  the pro forma  effects  on net  income  and  earnings  per  share  will be
determined  as if the fair value based method had been applied and  disclosed in
the notes to the financial statements.


Note 2
--------------------------------------------------------------------------------
Acquisitions

In June 1994,  the  Company  acquired  the net assets of  Strategic  Outsourcing
Services, Inc. ("SOS"), a New Jersey-based provider of data processing services,
for approximately $250,000. In addition, the acquisition agreement also provides
for contingent  consideration  based on the future  performance of SOS,  through
1998.  The  acquisition  was accounted for as a purchase.  In 1995,  the Company
recorded contingent consideration, totaling approximately $202,000, as goodwill,
with certain  additional  amounts payable subject to future  performance.  These
contingent   consideration   payments  are  not  dependent  upon  the  continued
employment of the former shareholder.
<PAGE>
The results of  operations  of SOS are  included in the  consolidated  financial
statements  from June 1, 1994.  The  consolidated  results of operations in 1994
would  not be  materially  different  had the  acquisition  taken  place  at the
beginning of the year.

In January 1993, the Company acquired Unified Systems Solutions, Inc. ("USS"), a
New  Jersey-based  provider  of systems and network  integration  services,  for
approximately  $750,000.  The acquisition agreement also provides for contingent
consideration  based  on the  future  performance  of  USS,  through  1996.  The
acquisition  was accounted  for as a purchase.  The excess of cash over the fair
value of assets  acquired,  totaling  approximately  $509,000,  was  recorded as
goodwill  in  1994.  In  1994  and  1995,   the  Company   recorded   contingent
consideration,  totaling  approximately  $245,000 and  $390,000,  as  additional
goodwill.  These  contingent  consideration  payments are not dependent upon the
continued  employment  of the former  shareholders.  Also in 1995,  the  Company
entered  into  an  agreement  with  the  former   shareholders  of  USS  to  pay
approximately  $2,396,000,  plus interest,  in lieu of any amounts that may have
been  due for the  remaining  contingent  period  ending  March  31,  1996.  The
$2,396,000 was also recorded as goodwill in 1995.

The results of  operations  of USS are  included in the  consolidated  financial
statements from January 15, 1993. The consolidated results of operations in 1993
would  not be  materially  different  had the  acquisition  taken  place  at the
beginning of the year.


Note 3
--------------------------------------------------------------------------------
Investment in Joint Venture

In 1995,  the Company  entered into a software  development  and services  joint
venture  with the Birla Group,  a large  multinational  conglomerate  located in
India. The foreign joint venture, known as Birla Horizons International ("BHI"),
is headquartered in New Delhi,  India and currently has operations in the United
States, India and the United Kingdom.

The  Company and the Birla Group each made cash  contributions  of $500,000  and
each  received a 50%  interest  in the joint  venture.  The Birla Group has also
contributed the net assets of its then existing  information  technology company
to the joint  venture and the Company  will  provide it with  technological  and
management support.

The  Company's  total  investment  in BHI at  December  31,  1995  is  $861,000,
representing  the initial  cost plus equity in the  undistributed  net  earnings
since formation, and is included in other noncurrent assets.
<PAGE>
Note 4                    
--------------------------------------------------------------------------------
Long-Term Debt and Lines of Credit

Long-term debt consists of the following at December 31:
<TABLE>
<CAPTION>
                                                           1994          1995
--------------------------------------------------------------------------------
                                                             (in thousands)
<S>                                                      <C>              <C>   
9.55% senior notes                                       $5,716           $4,288
Notes payable at prime                                      128            1,396
--------------------------------------------------------------------------------
                                                          5,844            5,684
Less current maturities                                   1,556            2,385
--------------------------------------------------------------------------------
                                                         $4,288           $3,299
================================================================================
</TABLE>

In 1988, the Company  issued two senior notes  aggregating  $10,000,000  bearing
interest  at  9.55%,  payable  semiannually.  The notes  are  payable  in annual
installments of $1,428,000 from April 15, 1992 through 1997 with a final payment
of $1,432,000  due April 15, 1998, and are subject to the provisions of the loan
agreement, including, among other things, restrictions on additional borrowings,
prepayments, dividends and stock purchases (which were waived in connection with
certain purchases of treasury stock),  and maintenance of a minimum net worth of
$13,500,000.

The notes payable consist of notes to the four former shareholders of USS. Notes
for $128,000 were paid on January 15, 1995  together with interest at prime.  In
1995, a new  agreement  was signed  (Note 2) resulting in $957,000  being due in
April 1996 and $439,000 in April 1997, with 8.75% imputed interest.

Long-term  debt matures as follows:  $2,385,000 in 1996,  $1,867,000 in 1997 and
$1,432,000 in 1998.

At December 31, 1995,  the Company has two unused bank lines of credit  totaling
$25,000,000  at rates below the banks' prime lending  rates.  The maximum amount
outstanding  during the year was  $7,200,000.  The average debt  outstanding and
weighted   average   interest  rate  under  these  lines  were   $1,700,000  and
approximately 7%, respectively.
<PAGE>
Note 5
--------------------------------------------------------------------------------
Shareholders' Equity

Authorized Shares

On June 15, 1994, the Company approved an amendment to the Company's Certificate
of  Incorporation  increasing the  authorized  number of shares of the Company's
common stock from 10,000,000 to 30,000,000.


Stock Splits

The Board of Directors of the Company has  declared  three-for-two  common stock
splits in the form of 50% stock distributions as follows:
<TABLE>
<CAPTION>
                                          Shareholder of
  Date declared                             record date                         Date payable
---------------------------------------------------------------------------------------------
<S>                                      <C>                                   <C>
March 10, 1993                           March 23, 1993                        April 13, 1993
February 17, 1994                        March 1, 1994                         March 22, 1994
April 24, 1995                           May 9, 1995                           May 30, 1995
December 12, 1995                        December 22, 1995                     January 9, 1996
</TABLE>

Amounts equal to the $.10 par value of the common shares  distributed  have been
retroactively  transferred from additional  paid-in capital to common stock. All
references in the financial statements with regard to number of shares of common
stock,  common stock prices and per share  amounts have been restated to reflect
the above-mentioned stock splits.


Repurchases of Stock

In 1994, the Company  repurchased  350,000 shares of its common stock from three
officers of the Company for approximately $4,109,000.  The repurchase of 240,000
shares for  $2,792,000  was related to the  retirement  of the Vice Chairman and
Executive Vice President (Note 8). The remaining 110,000 shares were repurchased
for $1,317,000  from two other active  officers.  Approximately  $824,000 of the
repurchase  amount was used by these  officers  to repay  amounts  they owed the
Company, $629,000 in note repayments and $195,000 in accrued interest.


Stock Options and Notes Receivable, Officers

In 1994,  the  Company  adopted  a stock  option  plan  which  provides  for the
granting,  to  officers  and key  employees,  of options  for the  purchase of a
maximum  of  5,063,000  shares of common  stock  and stock  appreciation  rights
(SARs).  The exercise price per share on all options and/or SARs granted may not
be less than the fair value at the date of the option  grant.  Options  and SARs
generally  expire  five years from the date of grant and become  exercisable  in
specified amounts during the life of the respective  options.  No SARs have been
granted as of December 31, 1995.  This plan,  which  replaces the Company's 1985
Plan, will terminate on June 15, 2004.
<PAGE>
Following  is  summary  of option  transactions  during  the three  years  ended
December 31:
<TABLE>
<CAPTION>
                                                                       1993          1994          1995
--------------------------------------------------------------------------------------------------------
                                                                                 (in thousands)
<S>                                                                    <C>           <C>           <C>
Shares under option at beginning of year ($1.41-$6.11)                 1,985         1,775         1,343
Granted ($1.88-$12.25)                                                   796           488           461
Exercised ($1.41-$4.22)                                                 (689)         (920)         (467)
Canceled ($1.41-$6.06)                                                  (317)                         (3)
--------------------------------------------------------------------------------------------------------
Shares under option at end of year ($1.46-$12.25)                      1,775         1,343         1,334
========================================================================================================
Shares available for option                                              410         4,750         4,290
========================================================================================================
Shares exercisable                                                       965           664           565
========================================================================================================
</TABLE>

Certain  officers have the right to borrow from the Company against the exercise
price of options exercised. These borrowings, exclusive of accrued interest, are
shown as a reduction  in  shareholders'  equity in 1993.  Such  borrowings  were
repaid in 1994 in  connection  with the  repurchase  of common  stock from these
officers.

In 1994, the Company amended the  nonqualified  Directors' Stock Option Plan (i)
increasing  the  maximum  number of shares of common  stock that may be acquired
pursuant  to the  exercise  of options  granted  under the Plan from  253,000 to
563,000,  (ii)  providing  that each new  director  of the Company who is not an
employee of the Company shall  immediately  receive  options to purchase  50,625
shares of its  common  stock at its then  current  fair  market  value and (iii)
providing  that each  director  of the  Company  who is not an  employee  of the
Company shall  receive up to five annual grants to purchase  6,750 shares of its
common stock at its then current fair market value. The plan expires on March 4,
2001.  During  1995,  64,125  options  were  granted  and  one of the  directors
exercised  50,625  options at a total  value of  $136,000.  There  were  213,000
options outstanding at December 31, 1995.

In 1993, the Company issued  warrants to purchase  15,188 shares of common stock
as part of an agreement with an outside  business  consulting firm. In 1995, the
Company issued additional  warrants to the same outside business consulting firm
to purchase  6,750 shares of its common  stock.  The exercise  price is the fair
value at the date of grant.


Shareholder Rights Plan

In July 1989, the Board of Directors  declared a dividend  distribution  of .197
preferred stock purchase right on each outstanding  share of common stock of the
Company.  The rights were amended on February 13, 1990.  Each right will,  under
certain circumstances,  entitle the holder to buy one one-hundredth (1/100) of a
share of  Series  A  preferred  stock at an  exercise  price of  $30.00  per one
one-hundredth  (1/100)  share,  subject to  adjustment.  Each one  one-hundredth
(1/100)  of a share  of  Series A  preferred  stock  has  voting,  dividend  and
liquidation  rights and  preferences  substantively  equivalent  to one share of
common stock.
<PAGE>
The rights will be exercisable and transferable separately from the common stock
only if a person or group acquires 20% or more,  subject to certain  exceptions,
of the Company's outstanding common stock or announces a tender offer that would
result in the ownership of 20% or more of the common stock.  If a person becomes
the  owner  of at  least  20% of the  Company's  common  shares  (an  "Acquiring
Person"),  each holder of a right other than the  Acquiring  Person is entitled,
upon  payment  of the then  current  exercise  price  per right  (the  "Exercise
Price"),  to receive shares of common stock (or common stock equivalents) having
a market value equal to twice the Exercise Price.

Additionally,  if the Company subsequently engages in a merger or other business
combination  with the Acquiring Person in which the Company is not the surviving
corporation,  or in which the outstanding  shares of the Company's  common stock
are changed or exchanged, or if more than 50% of the Company's assets or earning
power is sold or  transferred,  a right would  entitle a Computer  Horizon Corp.
shareholder,  other than the Acquiring  Person and its  affiliates,  to purchase
upon payment of the Exercise  Price,  shares of the  Acquiring  Person  having a
market  value of twice  the  Exercise  Price.  Prior  to a  person  becoming  an
Acquiring  Person,  the rights may be redeemed at a redemption price of one cent
per right,  subject to  adjustment.  The rights are subject to  amendment by the
Board. No shareholder rights have become exercisable.  The rights will expire on
July 16, 1999.


Note 6
--------------------------------------------------------------------------------
Income Taxes

The  provision  for income taxes  consists of the  following for the years ended
December 31:
<TABLE>
<CAPTION>

                                         1993           1994             1995
--------------------------------------------------------------------------------
                                                   (in thousands)
<S>                                    <C>             <C>              <C>    
Current
   Federal                             $ 2,191         $ 3,645          $ 5,875
   State                                   925           1,399            2,263
Deferred
   Federal                                  63            (255)            (339)
   State                                    27            (102)            (135)
--------------------------------------------------------------------------------
                                       $ 3,206         $ 4,687          $ 7,664
================================================================================
</TABLE>
<PAGE>
Deferred tax assets and liabilities consist of the following at December 31:
<TABLE>
<CAPTION>
                                                             1994          1995
--------------------------------------------------------------------------------
                                                               (in thousands)
<S>                                                        <C>            <C>   
Deferred tax assets
   Accrued insurance                                       $  284         $  477
   Accrued payroll and benefits                               379            516
   Deferred lease obligations                                 124             99
   Allowance for doubtful accounts                            103            221
   Other                                                       70            140
--------------------------------------------------------------------------------
                                                              960          1,453
--------------------------------------------------------------------------------
Deferred tax liabilities
   Depreciation                                               189            208
--------------------------------------------------------------------------------
   Deferred tax assets, net                                $  771         $1,245
================================================================================
</TABLE>

A reconciliation  of income taxes, as reflected in the accompanying  statements,
with the statutory  Federal  income tax rate of 34% for the years ended December
31, 1993 and 1994 and 35% for the year ended December 31, 1995, is as follows:
<TABLE>
<CAPTION>

                                                                            1993       1994       1995
-------------------------------------------------------------------------------------------------------
                                                                                   (in thousands)
<S>                                                                        <C>         <C>       <C>   
Statutory Federal income taxes                                             $2,349      $3,527    $6,149
State and local income taxes, net of Federal tax benefit                      632         858     1,382
Amortization of goodwill                                                      155         158       180
Equity in net earnings of joint venture                                                            (126)
Other, net                                                                     70         144        79
-------------------------------------------------------------------------------------------------------
                                                                           $3,206      $4,687    $7,664
=======================================================================================================
</TABLE>

Deferred  income  taxes of  approximately  $126,000  have not been  provided  on
undistributed  earnings of a foreign  joint venture in the amount of $361,000 as
the earnings are considered to be permanently reinvested.
<PAGE>
Note 7
--------------------------------------------------------------------------------
Savings Plan and Other Retirement Plans

The Company  maintains a defined  contribution  savings plan  covering  eligible
employees.  The  Company  makes  contributions  up to a specific  percentage  of
participants'  contributions.  The Company contributed  approximately  $192,000,
$204,000 and $229,000 in 1993, 1994 and 1995, respectively.

In 1995, the Company instituted a Supplemental Executive Retirement Plan whereby
key executives are entitled to receive  lump-sum  payments (or, if they elect, a
ten-year  payout)  upon  reaching  the age of 65 and being in the  employ of the
Company.  The maximum commitment if all plan members remain in the employ of the
Company until age 65 is approximately $6 million. Benefits accrue and vest based
on a formula  which  includes  total  years  with the  Company  and total  years
possible until age 65. The plan is nonqualified  and not formally  funded.  Life
insurance  policies on the members are  purchased to assist in funding the cost.
The deferred  compensation expense is charged to operations during the remaining
service lives of the members and amounted to approximately $82,000 in 1995.

In addition, the Company adopted a Deferred Compensation Plan for Key Executives
that permits the  individuals to defer a portion of their annual salary or bonus
for a period  of at  least  five  years.  There is no  effect  on the  Company's
operating  results  since  any  amounts  deferred  would  have  previously  been
expensed.

Note 8                                                              
--------------------------------------------------------------------------------
Commitments

Leases

The Company  leases  office  space under  long-term  operating  leases  expiring
through 2000. As of December 31, 1995,  approximate  minimum rental  commitments
were as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Year ending                                                       (in thousands)
--------------------------------------------------------------------------------
<C>                                                                       <C>   
1996                                                                      $2,230
--------------------------------------------------------------------------------
1997                                                                       1,968
--------------------------------------------------------------------------------
1998                                                                       1,712
--------------------------------------------------------------------------------
1999                                                                       1,134
--------------------------------------------------------------------------------
2000                                                                          63
--------------------------------------------------------------------------------
                                                                          $7,107
================================================================================
</TABLE>
<PAGE>
Office  rentals are subject to  escalations  based on  increases  in real estate
taxes and  operating  expenses.  Aggregate  rent  expense for  operating  leases
approximated  $1,595,000,  $1,796,000 and $2,007,000 in the years ended December
31, 1993, 1994 and 1995, respectively.


Other

In October 1994,  the former Vice Chairman and Executive  Vice  President of the
Company announced his resignation effective February 15, 1995 to pursue personal
interests.  The Company recorded approximately $400,000 of deferred compensation
in 1994 to be paid over the next several years as a result of this  resignation.
The Company  also agreed to retain this  former  officer as a  consultant  for a
three-year  period  for  approximately  $75,000  each  year and  entered  into a
noncompetition  agreement for that period.  In connection with this resignation,
the Company  repurchased  approximately  240,000  shares of common  stock of the
Company from this former officer for approximately $2,792,000.


Note 9
--------------------------------------------------------------------------------
Business and Major Clients

The  Company  provides  a wide  range of  information  technology  services  and
solutions to major corporations.  In addition to professional services staffing,
the Company has developed the  technological  and managerial  infrastructure  to
offer  its  clients  value-added   services  including   client/server   systems
development and migration,  network and facility  management and administration,
systems and business process re-engineering and outsourcing solutions.

The Company's largest client accounted for 13%, 9% and 8%, respectively,  of the
Company's  consolidated  revenues  in 1993,  1994  and  1995.  No  other  client
accounted for more than 8% in those years.
<PAGE>
Note 10
--------------------------------------------------------------------------------
Selected Quarterly Financial Data (Unaudited)

For the years ended  December 31, 1994 and 1995,  selected  quarterly  financial
data is as follows:
<TABLE>
<CAPTION>
                                                                         Quarters
--------------------------------------------------------------------------------------------------------
                                                     First        Second           Third      Fourth
--------------------------------------------------------------------------------------------------------
                                                          (in thousands, except per share data)
1994
--------------------------------------------------------------------------------------------------------
<S>                                               <C>            <C>             <C>          <C>       
Revenues                                          $  33,171      $  36,278       $ 39,136     $   43,607
Direct costs                                         23,655         25,622         27,854         31,058
Selling, administrative and general                   7,281          7,858          8,426          9,427
Income from operations                                2,235          2,798          2,856          3,122
Interest expense--net                                  (150)          (159)          (149)          (180)
Income before income taxes                            2,085          2,639          2,707          2,942
Income taxes                                            971          1,180          1,214          1,322
Net income                                        $   1,114      $   1,459       $  1,493     $    1,620
--------------------------------------------------------------------------------------------------------
Earnings per share                                     $.08           $.10           $.10           $.11
========================================================================================================
<CAPTION>

1995
--------------------------------------------------------------------------------------------------------
<S>                                               <C>            <C>             <C>          <C>       
Revenues                                          $  43,867      $  48,397       $ 51,467     $   56,319
Direct costs                                         31,366         34,230         35,696         39,052
Selling, administrative and general                   9,294         10,222         10,922         11,693
Income from operations                                3,207          3,945          4,849          5,574
Interest expense--net                                  (175)          (165)           (36)            11
Equity in net earnings of joint venture                                 96            124            141
Income before income taxes                            3,032          3,876          4,937          5,726
Income taxes                                          1,350          1,711          2,133          2,470
Net income                                        $   1,682      $   2,165       $  2,804     $    3,256
--------------------------------------------------------------------------------------------------------
Earnings per share                                     $.12           $.15           $.17           $.20
========================================================================================================
</TABLE>
<PAGE>
The Company's  common stock is quoted on the Nasdaq National  Market,  under the
symbol CHRZ. The range of high and low closing stock prices,  as reported by the
Nasdaq  National  Market,  for each of the quarters for the years ended December
31, 1994 and 1995,  retroactively  adjusted to reflect the three-for-two  common
stock split declared by the Board of Directors in December 1995, is as follows:
<TABLE>
<CAPTION>
                               1994                              1995
--------------------------------------------------------------------------------
Quarter                  High         Low                 High          Low
--------------------------------------------------------------------------------
<S>                      <C>         <C>                 <C>          <C>   
First                    $5.56       $3.44               $ 8.44       $ 5.89
Second                    5.44        3.67                10.83         7.33
Third                     5.33        3.67                15.83        10.17
Fourth                    7.00        5.11                26.67        11.50
--------------------------------------------------------------------------------
</TABLE>

The Company plans to reinvest its earnings in future growth  opportunities  and,
therefore,  does not anticipate paying cash dividends in the near future and has
not paid any to date. As of December 31, 1995,  there were  approximately  1,200
holders of record of common stock.