<PAGE>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                    FORM 10-K

  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
              of 1934 for the fiscal year ended December 31, 2000

                         Commission File Number 0-28840

                                 IMRglobal Corp.
             (Exact name of Registrant as specified in its charter)

              Florida                                     59-2911475
  (State or Other Jurisdiction of           (I.R.S. Employer Identification No.)
  Incorporation or Organization)

              100 South Missouri Avenue, Clearwater, Florida 33756
              (Address of principal executive offices and zip code)

                                  727-467-8000
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:
                                      None

           Securities registered pursuant to Section 12(g) of the Act:

                  Title of Class                        Name of Exchange
                  --------------                        ----------------
     Common Stock, par value $0.10 per share        The Nasdaq Stock Market

      Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. |X| Yes |_| No

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K. |X|

      The aggregate market value of the Company's common stock, par value $.10
per share (the "Common Stock") held by non-affiliates of the registrant as of
March 7, 2001, was approximately $224.4 million based upon the closing price of
$6.00 per share as reported on the Nasdaq National Market for that date. The
shares of Common Stock held by each current executive officer and director and
by each person who is known to the Company to own 5% or more of the outstanding
Common Stock have been excluded from this computation on the basis that such
persons may be deemed to be affiliates. This determination of affiliate status
is not a conclusive determination for other purposes.

      As of March 7, 2001, there were 44,036,341 shares of the registrant's
Common Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the Registrant's Proxy Statement for the 2001 Annual Meeting
of Shareholders are incorporated by reference into Part III hereof.
<PAGE>

                                IMRglobal Corp.

                                   Form 10-K
                        For Year Ended December 31, 2000

                               Table of Contents

                                                                            Page
                                                                            ----

Part I
     Item   1.  Business....................................................   1
     Item   2.  Properties..................................................  10
     Item   3.  Legal Proceedings...........................................  11
     Item   4.  Submission of Matters to a Vote of Security Holders.........  11

Part II
     Item   5.  Market for Registrant's Common Equity and Related
                   Shareholder Matters......................................  12
     Item   6.  Selected Consolidated Financial Data........................  13
     Item   7.  Management's Discussion and Analysis of Financial Condition
                   and Results of Operations................................  14
     Item  7A.  Quantitative and Qualitative Disclosure
                   About Market Risks.......................................  35
     Item   8.  Financial Statements and Supplementary Data. ...............  35
     Item   9.  Changes in and Disagreements with Independent Auditors on
                   Accounting and Financial Disclosure......................  73

Part III
     Item 10.   Directors and Executive Officers of the Registrant..........  73
     Item 11.   Executive Compensation......................................  73
     Item 12.   Security Ownership of Certain Beneficial Owners
                   and Management...........................................  73
     Item 13.   Certain Relationships and Related Transactions..............  73

Part IV
     Item 14.   Exhibits, Financial Statement Schedules and
                   Reports on Form 8-K......................................  74
     Signatures ............................................................  77


                                       i
<PAGE>

                                     PART I

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      Some of the information in this report contains forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act. These statements express or are based on expectations
about future events. Forward-looking statements include

      o     Our belief that financial services, healthcare, government,
            utilities, retail and manufacturing/distribution industries will be
            the dominant users of our solutions;

      o     Our belief that companies in certain industries will need our
            services as they do not lend themselves to "off the shelf"
            solutions;

      o     Our belief that component-based architecture will be the dominant
            development technology over the next several years;

      o     Our estimation that our future tax rates may increase for our India
            operations.

      Other forward-looking statements can be identified by the use of
forward-looking language such as "will likely result," "may," "are expected to,"
"is anticipated," "believes," "estimated," "projected," "intends to" or other
similar words. Our actual results are likely to differ, and could differ
materially, from the results expressed in, or implied by, these forward-looking
statements. There are many factors that could cause these forward-looking
statements to be incorrect, including but not limited to the risks described
below under "Risk Factors That May Affect Future Results". Additionally, there
can be no assurance that our proposed merger with CGI will be consummated. When
considering these forward-looking statements, you should keep in mind these risk
factors and the other cautionary statements in this annual report on Form 10-K,
and should recognize that those forward-looking statements speak only as of the
date made. We do not undertake any obligation to update any forward-looking
statement included in this annual report.

Item 1. Business

Merger

      On February 21, 2001, we announced the execution of a Merger Agreement
with CGI Group, Inc., a major IT outsourcing company headquartered in Montreal,
Quebec. Pursuant to the merger agreement and subject to its terms and
conditions, CGI Florida Corporation will be merged with and into IMRglobal
Corp., and IMRglobal Corp. will become a wholly owned subsidiary of CGI Group,
Inc. The merger agreement has been approved by our Board of Directors and is
subject to approval by our shareholders, certain regulatory approvals, and
satisfaction of other closing conditions.

General

      We are a leading global provider of end-to-end information technology
solutions to Fortune 500 and Global 2000 companies in key vertical industries.
Those industries include financial services, healthcare, government, utilities,
retail and manufacturing/distribution. Our services include business consulting,
e-business, software development, application maintenance and professional
services.


                                       1
<PAGE>

      In today's global market place where there is significant consolidation,
deregulation and privatization, and increasing competition, companies are being
forced to change their traditional business models to stay competitive. These
changes require sophisticated, highly customized, Web-enabling information
technology solutions that will transform companies' current infrastructure to
better serve their respective clients. Simultaneously, companies cannot afford
to discard the value that has been invested into their legacy systems. Depending
on our client's specific needs, we provide a comprehensive suite of products and
end-to-end services that address their business requirements quickly and cost
effectively. We offer our solutions and services either on a fixed price, fixed
time or a time and material basis.

      We offer our clients a full life-cycle approach to solving their business
requirements. We start with planning and design where we provide IT strategy
formulation and business consulting services to help clients design the solution
that specifically addresses their business requirements. Our development and
integration services build and integrate the new solution using our
component-based architecture or other Web-enabling technologies. After
development, we provide ongoing application management and support of the new
solution. A detailed description of our solutions and services is provided in
following sections.

      A major part of our business strategy was to identify and penetrate those
industries that we believe would be dominant users of our unique suite of
solutions and services. Based on our research, we targeted the financial
services, healthcare, government, utilities, retail and
manufacturing/distribution industries. Within the financial services industry,
we focused mainly on the insurance sector. We believe companies in these
targeted industries are facing the most significant changes either through
globalization, increased competition, deregulation and privatization or economic
pressures. Due to the scope and the pace of these changes, we believe that the
IT solutions needed for these industries rarely lend themselves to "off the
shelf" packages or services.

      In addition, the costs to develop and maintain customized solutions are
both expensive and time consuming. Many companies in these targeted industries
do not possess the required resources to successfully complete these types of
projects. Over the past three years, we have worked to address the needs of
these industries through our acquisition program and our research and
development efforts and we spent $6.2 million, $6.6 million, and $3.5 million,
on research and development efforts in 1998, 1999 and 2000, respectively. As a
result, we have developed or acquired industry specific IT solutions, which are
described in the following sections.


                                       2
<PAGE>

      Our acquisition efforts have allowed us to expand our specific industry
expertise in our targeted markets and/or provide significant expertise in new
technologies. Our most recent acquisitions are summarized below:

<TABLE>
<CAPTION>
    Acquisition                 Acquisition Date         Location               Acquisition Highlights
    -----------                 ----------------         --------               ----------------------
<S>                             <C>                  <C>                     <C>
Intuitive Group Ltd.            January 2000         London, England         o   Provides electronic
                                                                                 Customer Relationship
                                                                                 Management ("eCRM")
                                                                                 technology.
                                                                             o   Expand life insurance
                                                                                 industry expertise.

Neverdahl-Loft and              December 1999        Lincoln, Nebraska       o   Expand life insurance
Associates, Inc.                                                                 Industry expertise

Orion Consulting, Inc.            June 1999          Cleveland, Ohio         o   Expand healthcare &
                                                                                 government industry expertise.

                                                                             o   Healthcare claims adjudication
                                                                                 technology.

Professional Partners and         April 1999         Howell, New Jersey      o   Expand property & casualty
Lakewood Software                                                                insurance industry expertise.
Partners, Inc. ("PLP")
</TABLE>

      Through our acquisition and research and development programs, we have
assembled a number of vertical industry solutions that combine the functionality
of customized software with the speed of implementation of a packaged solution.
These solutions usually require a relatively low level of customization and
lower maintenance costs and are easily modified to meet changing business
requirements.

      Examples of some of our specific market solutions include:

      o     Our Internet focused eCRM solutions have been specifically developed
            to address needs in the insurance industry in both Europe and North
            America. This eCRM solution accumulates pertinent client information
            and timely disseminates this information to insurance industry
            employees as they talk to their clients.

      o     Our insurance solution includes a suite of component-based
            applications that support definition of new products, acquisition of
            new businesses, and the administration, billing, processing and
            paying of claims and commissions. We customize these applications
            for clients in property and casualty, life and reinsurance sectors
            of the insurance business.

      o     Our healthcare solution allows health insurance companies to analyze
            data and identify trends and anomalies in healthcare claims, which
            can then be targeted for further investigation. This allows our
            clients to screen their incoming claims and to identify erroneous
            reimbursement claims more efficiently.

      o     Our retail solution includes our Price Change Management System
            which is currently integrated and jointly marketed through our
            alliance with RETEK, a leading provider of Web-architect software
            for the global retail industry and its trading partners.


                                       3
<PAGE>

      Our vertical solutions represent a rapidly growing part of our business at
this time. We have continued to focus on developing component-based solutions
because we believe that they provide significant benefits to our clients
including a faster deployment time and generally lower total cost than fully
customized solutions. In addition, we believe that our component-based solutions
are more reliable and better tailored to the specific needs of our clients than
pre-packaged products. During 2000, we significantly upgraded our
component-based solutions to the life insurance market and property and casualty
insurance markets. These solutions have resulted in several contracts in 2000
and early 2001, each with a revenue value of at least $1 million.

      We provide all of our solutions and services on an outsourcing basis.
Outsourcing is the use by a client of third party providers to perform
activities traditionally handled by that company's internal staff. We believe
that outsourcing has proven effective in helping in-house IT departments manage
costs while reducing the time needed to complete projects. We augment the
benefits of outsourcing by providing our clients with a global network of
centers with highly trained and qualified technology professionals. We utilize
the time differences between our development centers in our global network to
create a 24-hour "virtual workday" during which our technology professionals can
work on projects for our clients.

      One of the competitive advantages, and an important part of our strategy,
is to offer our solutions and services on a fixed-price, fixed-time basis. We
believe that a high percentage of projects started by internal IT departments
are not completed on time or on budget, and many are not completed at all. By
offering fixed pricing, we enable our clients to reduce their exposure to
increased costs and by using our "on-site, off-site" delivery model, which
utilizes one or more of our worldwide delivery centers, we can maintain
consistent quality and reduce the project delivery time. For large-scale
development projects we can deliver projects faster by using multiple delivery
centers. Over the past three years, we have successfully delivered over 100
fixed-price projects.

      In addition to fixed-price, fixed-time projects, we provide programming
and IT consulting services at clients' sites as needed, usually on a time and
material basis. We also help our clients with tactical issues such as Year 2000
conversion services and the transition to the Euro currency.

      Currently, we maintain a staff of approximately 2,200 software development
professionals to serve our clients. We maintain dedicated software development
centers in Mumbai and Bangalore and operate four other software development
centers, one in our corporate and international headquarters in Clearwater, and
others in Paris, Sydney and Tokyo. We also have approximately 20 domestic
branch/sales offices.

      We were incorporated in 1988 and we are a Florida corporation.

Industry Overview

      We believe that the industries for which we are developing solutions are
faced with dramatic business, technological and economic changes that are
forcing them to alter their traditional business methods. These changes include
de-mutualization and consolidation in the insurance sector, deregulation of the
utility industry, consolidation in the financial services industry and
privatization in the healthcare industry. Intense competition and globalization
in turn are driving the development of new products and services which must be
made available on a cost and time efficient basis. In addition, the utilization
of the Internet is forcing the majority of industries to change the way they
conduct business. First to market for Internet solutions is a key competitive
advantage for many companies. Accordingly, the integration of e-commerce into
companies has become an integral part of the competitive environment.


                                       4
<PAGE>

      These changes require the support of IT and e-business solutions. We
believe companies in our targeted industries are faced with competitive and
economic pressures to reduce the time and costs needed to develop and market new
products. As a consequence, many companies can no longer develop new
applications relying solely on their internal IT staff. Moreover, the
complexities of the industries in which our clients operate often preclude the
use of packaged solutions. We believe these industries require customized
solutions with the speed of packaged solutions, and the flexibility to
constantly integrate these solutions with updated technologies and legacy
systems.

      In addition, technology is enabling companies to increase productivity,
shorten product cycles, enhance client services and create new lines of
business. We believe that the rapid pace of these changes has overwhelmed many
internal IT departments and has created a skills gap that IT service providers
help to bridge. By outsourcing IT services, companies can focus on their core
business, access specialized technical skills and implement IT solutions more
rapidly while significantly reducing the costs of recruiting, training and
retaining IT professionals.

      The IT services industry has evolved into a highly fragmented environment
with several large, national service providers, a small number of international
providers and a large number of regional service providers. We believe that in
light of recent globalization trends, IT service providers with an increasing
global presence will be better able to address the IT needs of the large Fortune
500 and Global 2000 sized companies.

Our Delivery Process

      Our proprietary Total Software Quality Management ("TSQM") process is
based in part on software standards published by the Institute of Electrical &
Electronic Engineers and the Software Engineering Institute ("SEI") software
engineering process models and ISO 9001 quality processes. To position itself
for future business from companies in the European Community, as well as from
international affiliates of its North American clients, IMRglobal's facilities
in India and the U.K. have achieved ISO 9001/9002/9003 certification. IMRglobal
is pursuing company-wide ISO 9001/9002/9003 and SEI certification.

      During each stage of a project, we utilize TSQM to monitor progress and
quality, including deviations from project plans that could adversely affect
on-time delivery, compliance with project specifications and project financial
performance. The project team collects, analyzes and reports on key quality
metrics to verify compliance with quality standards used in project execution
and the project team serves as a custodian of information regarding the methods,
techniques and tools that have been utilized to perform specific tasks. Through
this process of constant re-evaluation of our performance on each project, we
continuously refine and enhance the TSQM software engineering process as a means
to leverage the benefit of our cumulative project experience.

      The responsibilities for completion of each TSQM phase are allocated among
on-site and off-site teams to optimize cost savings and accelerate project
delivery. The actual tasks allocated to each team member are determined
principally by the amount of client interaction required at the client site to
complete the project successfully. The front-end phase, which may include
business area analysis, development of a technical strategy, requirements
definition, requirements analysis, high-level design and technical architecture
is completed by the on-site project manager and the project team through
interaction with the client. The implementation phase, which may include
programming, unit testing and system testing, is largely performed


                                       5
<PAGE>

off-site via satellite link. The off-site teams at our North American, European
and Australian offices coordinate the efforts of the on-site and off-site teams
and monitor and manage the quality of the over-all project. Working regular
business hours, the on-site and off-site teams together use most hours of the
clock to deliver projects in fewer elapsed calendar days. Due to the time
differences between India, Asia, Europe and North America, we create a virtual
"second shift" for our clients allowing for more rapid completion of projects.

      Our off-site software development centers provide significant
opportunities to reduce costs and manage the risks of a project. The software
development center is often able to use the excess capacity of a client's
existing computing facilities during off-peak hours. This allows additional
projects to be undertaken without substantial client investment in new hardware
and software. The costs of satellite communications and infrastructure acquired
by us at an off-site center will be spread among multiple-clients and projects.
If the scope of a project is unexpectedly expanded, we generally are able to
draw upon our development centers' resources to increase project personnel. In
addition, for larger projects with critically short time frames, the resource
availability of an off-site facility allows us to overlap various development
phases to accelerate delivery time.

Solutions & Services

      We provide a broad range of IT solutions and services, including; (a)
business-consulting; (b) IT strategy formulation; (c) e-business services and
solutions; (d) application development; (e) application management and support;
and (f) professional services. We deliver each of these services independently
or as a comprehensive package.

      o Business Consulting. We have been significantly increasing our industry
business expertise in each of our targeted markets by hiring people with
extensive experience in particular industries and by acquiring companies that
focus exclusively on a particular vertical industry. We provide specific
industry business experience such as helping our healthcare clients by
simplifying complex business issues, evaluating their financial and operational
performance and supplying advice in the ever-changing healthcare industry. Our
healthcare consultants have a national reputation as experts in the Health
Insurance Portability and Accountability Act ("HIPAA") and healthcare payment
methodologies and help our clients to improve the quality of their services,
increase productivity and reduce costs.

      o IT Strategy Formulation. By combining specific industry business
expertise with our technological experience, we are able to assist our clients
in formulating effective IT strategies that best match their business
objectives. Specific areas would include portfolio optimization, program
management, software evaluation and infrastructure strategy.

      o e-business Services and Solutions. We help clients design and implement
solutions involving the Internet and electronic commerce. Currently, our fastest
growing e-business solution is our eCRM solution being offered to the insurance
industry. Other e-business services include the development of Internet
strategies, management of Web content and training. Our senior e-commerce
consultants assist clients in understanding the opportunities, procedures and
technological challenges associated with conducting electronic commerce. Our
technical staff concurrently designs, develops and implements the underlying
technologies supporting the e-business initiative, using state-of-the-market
development technologies. The scope of e-business projects includes: Web
retaining, client extranets, online service centers, supply chain optimization,
electronic data interface, corporate intranets, back office integration, sales
force extranets and knowledge base management.


                                       6
<PAGE>

      Our e-business services underwent a dramatic change in the second half of
2000, as many internet companies experienced severe cash flow problems and many
went out of business. Accordingly, our clients now utilize our e-business
solutions as part of their overall IT strategy as opposed to a stand alone
solution.

      o Application Development. Using an approach similar to the popular
Lego(R)-building block approach, we utilize reusable, industry-specific software
components to quickly build vertical, industry specific applications for our
clients. These pre-built, pre-tested software components, along with components
customized for company-specific purposes, are assembled in significantly less
time than building an application from scratch and provide clients a solution
that fits their business better than a packaged solution. This approach can be
used to deliver projects on an accelerated basis for selected platforms,
avoiding the functional shortcomings of traditional standardized, pre-packaged
software solutions or the time and cost of developing completely new custom
solutions.

      o Application Management and Support. We have four distinct processes for
our application management and support services:

      1) Corrective maintenance requires software failures to be diagnosed and
fixed as they occur. These failures can directly affect business operations and
require the highest level of support. Quick fixes and poor documentation often
result in increased code complexity and increased future maintenance costs.

      2) Adaptive maintenance requires software modification to support changing
business requirements or changing technical environments. This includes user
enhancements, operating system upgrades and other outside improvements.
Enhancement backlogs are generally the biggest source of concern for IT
management.

      3) Preventive maintenance involves modifications to application systems to
improve performance, without changing the basic system.

      4) Preventive maintenance identifies and eliminates the maintenance
problems that create the need for corrective maintenance.

      o Professional Services. We also provide professional services on a time
and materials basis. In addition to staffing our client's short-term needs, our
objective is to leverage professional staffing engagements to learn more about
the client's business and IT system needs and position ourselves to provide
additional services.


                                       7
<PAGE>

Clients and Representative Projects

      The Company provides solutions and services to large businesses, primarily
Fortune 500 and comparably sized companies with intensive information processing
needs. Prior to 1998, the Company's marketing efforts were directed to clients
on the basis of IT needs rather than industry group. Beginning in 1998, the
Company began to redirect its marketing efforts to key vertical markets
including insurance, financial services, healthcare & government, retail,
manufacturing and distribution and utilities. Companies and clients in these
industries have historically provided the greater source of business
opportunities for the Company.

<TABLE>
<CAPTION>
                  Insurance                   Financial Services                Healthcare & Government
                  ---------                   ------------------                -----------------------
          <S>                              <C>                             <C>
          John Hancock Mutual Life              Barclays Bank                    Blue Cross/Blue Shield

                CGU Insurance                  American Express                 Foundation Health System

               Pearl Assurance             Schroders International            American Medical Association

               ING/Realiastar              Banque National de Paris              Medical Mutual of Ohio

                     CNA                         Sakura Bank                Ohio Housing & Urban Development

<CAPTION>
                   Retail                Manufacturing & Distribution                  Utilities
                   ------                ----------------------------                  ---------
                <S>                           <C>                             <C>
                 Blockbuster                  Arrow Electronics                        Ameritech

                   Target                       Fleming Foods                             SAUR

                  Fingerhut                        Michelin                    Southern California Edison

                 Winn Dixie                        Renault                       Tampa Electric Company

                   Eckerd                            CGM
</TABLE>

      During the year ended December 31, 2000, the Company's top two clients
accounted for approximately 12% of total revenue and the top five clients
accounted for approximately 20% of total revenue. During the year ended December
31, 1999, the Company's top two clients accounted for approximately 11% of total
revenue and the top five clients accounted for approximately 20% of total
revenue. The volume of work performed for specific clients is likely to vary
from year to year, and a significant client in one year may not use the
Company's services in a subsequent year.

Sales and Marketing

      We market and sell our services directly through our professional staff
and senior management operating at our United States and international regional
offices and sales branch offices. We focus our marketing efforts on large
corporations within our targeted industries that have significant IT budgets and
recurring staffing or software development needs. Marketing personnel identify
prospects and enter the information into a database that is consistently
maintained. Direct sales representatives utilize those records to initiate the
sales cycle from prospect qualification to closing. As a result, we can
pre-qualify sales opportunities and minimize the time that direct sales
representatives spend on prospect qualification.


                                       8
<PAGE>

      Our marketing programs include direct mail campaigns, advertising,
seminars, conferences and other activities. The sales executive and technical
support teams define the scope, deliverables, assumptions and execution
strategies for a proposed project. They also develop project estimates, prepare
pricing margin, and cash flow analyses, and finalize sales proposals. Management
reviews and approves all proposals and the sales staff presents the proposal to
the prospective client. Sales personnel are actively involved throughout the
execution phase of every project, as we believe successful project
implementations will lead to more sales opportunities at that client.

Intellectual Property

      Our business consists of software applications development and other
deliverables including written specifications and documentation in connection
with specific client engagements. Ownership of these products is generally
retained by or assigned to the client. We also develop reusable software
components and vertical industry component libraries for application
development, as well as software toolsets and proprietary methodologies. Many
are developed in one country and subsequently used in another country.
Furthermore, we maintain trademarks and service marks in our various service
offerings. To protect our intellectual properties, we rely on copyright and
trade secret laws, nondisclosure and other contractual arrangements, and
technical measures.

Competition

      The IT services market is highly competitive and is served by numerous
national, regional and local firms. Our clients generally consist of large
corporations principally in the insurance, capital markets, utilities,
healthcare, government, retail, manufacturing and distribution, and media and
communications industries. Many of our competitors are aggressively pursuing
business from these entities. In addition to in-house IT departments, market
participants include e-business, systems consulting and integration firms,
professional service companies, applications software firms, temporary
employment agencies, professional services divisions of large integrated
manufacturing and other companies, facilities management and outsourcing
companies, accounting and business consulting firms such as the "Big 5" and
related entities.

      We believe that many of our competitors have significantly greater
financial, technical and market resources and generate greater revenue than we
do. We compete by offering Web enabled vertical industry solutions,
component-based software products, a successful service delivery model,
excellent referral base, continued focus on client needs, quality of service,
competitive prices and strong project management capabilities and technical
expertise.

Human Resources

      As of March 7, 2001 we had approximately 2,400 employees, including
approximately 2,000 in our United States, U.K., France, Japan, Canada and
Australian headquarters and branch offices and approximately 400 in our software
development centers in India. Additionally, we had approximately 200 independent
contractors performing various services. None of our employees are subject to a
collective bargaining arrangement, except for approximately 300 employees in
France.

      As of March 7, 2001, approximately 375 of our United States employees were
working under the H-1B non-immigration work permitted visa classification, which
we processed for those employees through the United States Immigration and
Naturalization Service. The H-1B visa classification enables United States
employers to hire qualified foreign workers in positions which required
education at least equal to a United States baccalaureate degree in specialty
occupations such as software systems engineering and systems analysis.


                                       9
<PAGE>

      We believe that there is a shortage of, and significant competition for,
certain IT professionals particularly those with specific insurance e-business
skills. Our future success will depend in large part upon our ability to
attract, train, motivate and retain highly skilled employees with the advanced
business and technical skills necessary to perform the services we offer. We
have active recruiting programs in North America, Europe, and Asia and have
developed a recruiting system and database that facilitates the rapid
identification of skilled candidates. We also have adopted a career and
education management program working with employees to define their objectives
and career plans. Through an intensive orientation and training program, we
introduce new employees to our TSQM software engineering process and our
products and services.

Item 2. Properties

      The following table sets forth a description of our principal facilities:

<TABLE>
<CAPTION>
                                  Square Feet            Owned/
          Location                 (Approx.)      Lease Expiration Date                Function
------------------------------    ------------    ---------------------                --------
<S>                                 <C>           <C>                        <C>
Clearwater, Florida                 131,000       Owned                      Corporate headquarters and
                                                                             software development facility

Bangalore, India                     66,000       March 2007 -               Software development facility
                                                   June 2007

Cleveland, Ohio                      30,900       September 2007             Healthcare industry facility

Mumbai, India                        28,000       Owned                      Software development facility

New Delhi, India                     28,000       Owned                      Future facility

Howell, New Jersey                   14,300       January 2001 -             Insurance industry facility
                                                   September 2005

Paris, France                        14,300       May 2005 -                 France headquarters and
                                                   May 2009                  software development facility

London area (Stevenage) England      13,000       February 2014 -            U.K. headquarters and software
                                                   October 2018              development facility

Tokyo, Japan                         12,900       January 2003               Japan headquarters and
                                                                             software development facility

Toronto, Canada                      10,600       October 2002               Canada headquarters

Sidney, Australia                     8,100       May 2002                   Australian headquarters and
                                                                             software development facility
</TABLE>

      The leases for our headquarters in Bangalore and Paris and our facilities
in Toronto contain options to extend the term for an additional five years.

      We own the building at our software development facility in Mumbai, India
and we lease the land through March 2096. We own land and a building in New
Delhi, India which may be renovated to house a future facility. At this time we
are considering the sale of the New Delhi, India property.

      In addition, we lease branch offices, which are used primarily for sales
and marketing purposes, in Boston, Chicago, Dallas, Minneapolis, New York,
Kansas City, Pittsburgh, Sacramento, St. Louis and Harrisburg in the United
States, Montreal, Melbourne, Paris and Luxembourg outside the United States.


                                       10
<PAGE>

      As a result of our acquisitions in 1999 and 2000, we acquired properties
under existing leases which we do not intend to utilize. Of approximately 15
properties which have been identified as inactive leases, 4 of these properties
have been sublet, and an additional 3 properties have leases expiring in 2001
that will not be renewed. We are actively working to sublease the remaining 8
properties.

Item 3. Legal Proceedings

      We are not a party to any pending material litigation.

Item 4. Submission of Matters to a Vote of Security Holders

      No matters were submitted to a vote of the Company's shareholders during
the fourth quarter of the year ended December 31, 2000.


                                       11
<PAGE>

                                     PART II

Item 5. Market for Registrant's Common Equity and Related Shareholder Matters

      Our common stock is traded on the Nasdaq Stock Market(SM) under the symbol
"IMRS." The common stock commenced trading on Nasdaq on November 8, 1996 in
connection with the underwritten initial public offering of shares of common
stock at an initial price to the public of $6.22 per share.

      Set forth below are the high and low sales prices for shares of the common
stock for the periods indicated.

                    Fiscal Period Ended              High           Low
                    -------------------              ----           ---

              2001:

                   First Quarter (through
                      March 20, 2001)               $ 8.13          $4.13

              2000:

                   First Quarter                    $19.00          $8.50
                   Second Quarter                   $19.19         $11.13
                   Third Quarter                    $14.19         $10.19
                   Fourth Quarter                   $11.88          $2.38

              1999:

                   First Quarter                    $32.63         $12.94
                   Second Quarter                   $23.25         $13.75
                   Third Quarter                    $20.13          $8.00
                   Fourth Quarter                   $14.50          $7.00

      The number of shareholders of record of the common stock as of March 7,
2001, was 226 based on transfer agent reports. On March 20, 2001, the closing
price of our stock as reported on Nasdaq was $5.94.

      We did not declare any cash dividends in 1999 or 2000 and we do not intend
to declare or pay cash dividends in the foreseeable future. We anticipate that
all earnings and other cash resources, if any, will be retained for future
investment in our business.


                                       12
<PAGE>

Item 6. Selected Consolidated Financial Data

      The following selected financial data for the years 1996 through 2000
should be read along with the audited financial statements. The information
below should be read together with "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
                                                                                   Year Ended December 31,
                                                             ----------------------------------------------------------------------

                                                                1996           1997          1998           1999             2000
                                                             ---------      ---------      ---------      ---------       ---------

                                                                              (In thousands, except per share data)
<S>                                                          <C>            <C>            <C>            <C>             <C>
Consolidated Statements of Operations Data:
Revenue ...............................................      $  30,988      $  89,645      $ 170,318      $ 222,028       $ 256,172
Gross profit ..........................................         13,346         39,934         80,243         92,857         101,345
Income (loss) from operations .........................          5,016         16,908         28,823        (10,110)          8,754
Cumulative effect of change
   in accounting method, net of income taxes ..........             --             --             --             --          (2,707)
Net income (loss) .....................................          2,890         12,469         19,880        (11,839)            185
Diluted earnings (loss) per share .....................           0.13           0.40           0.57          (0.34)           0.00
Cash dividends ........................................          1,623             --            163             --              --
Cash dividends per share ..............................           0.07             --             --             --              --

Weighted average common stock and
   common stock equivalents
   outstanding, assuming dilution .....................         23,026         31,238         35,064         34,786          43,261

Consolidated Balance Sheet Data
   (at year end):
Cash, cash equivalents and marketable securities ......      $  30,307      $  91,452      $ 110,416      $  37,432       $  19,689
Working capital .......................................         31,371         96,977        122,783         47,091          43,552
Total assets ..........................................         50,563        138,656        223,699        303,798         318,835
Long-term debt, net of current portion ................             39            918            671            985          30,894
Shareholders' equity ..................................         41,045        114,358        174,814        234,923         231,780
Shares outstanding at period end,
   net of treasury stock ..............................         22,430         26,370         30,392         37,028          41,069
</TABLE>

o     Revenue for the year ended December 31, 1997 attributable to the 1997
      acquisition was $18.0 million.

o     Revenue for the year ended December 31, 1998 attributable to 1998
      acquisitions was $18.4 million.

o     Revenue for the year ended December 31, 1999 attributable to 1999
      acquisitions was $52.3 million.

o     Revenue for the year ended December 31, 2000 attributable to the 2000
      acquisition was $20.0 million.


                                       13
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

      Before we discuss our results of operations in detail, we set forth
relevant information about recent developments and the significant acquisitions
we have made, clarify income tax matters and explain conventions we use
throughout this section.

Current Developments

      Merger--On February 21, 2001, we announced the execution of a Merger
Agreement with CGI Group, Inc., a major IT outsourcing company headquartered in
Montreal, Quebec. The merger agreement has been approved by our Board of
Directors and is subject to approval by our shareholders, certain regulatory
approvals and satisfaction of other closing conditions. Upon completion of the
merger, holders of IMRglobal common stock will receive, for each share of
IMRglobal common stock, 1.5974 Class A Subordinate Shares of CGI Group, Inc. See
note 23, under Item 8 of this Form 10-K, for additional information. Except as
explicitly noted, the following discussion of business results, risk factors and
forward-looking statements does not take into account business changes that may
be made following the completion of the proposed merger. We currently expect the
merger to be completed in 2001.

      Results of Operation -- We achieved significant revenue and profitability
growth in each of the first three quarters of 2000. During the fourth quarter of
2000, we experienced a sharp revenue decline of nearly 30% compared to the third
quarter of 2000. This sharp revenue decline resulted in a loss for the three
months ended December 31, 2000 and offset most of our profits earned in the
first three quarters of 2000.

      The primary reasons for the fourth quarter revenue decrease were:

      o     Significant reductions in our e-business service offerings as
            clients either delayed e-business initiatives or cancelled
            e-business projects.

      o     Delays in the start up of several engagements as clients maintained
            budgetary reserves in anticipation of a slowing economy in 2001.

      o     Significant decrease in our Asian business units (Australia and
            Japan) due to the reduction in e-business opportunities and
            weakening economic conditions in Asia.

      o     The recognition of a $2.3 million client discount in the fourth
            quarter of 2000.

      Acquisitions

      Intuitive Group Limited--On January 28, 2000, we acquired 100% of the
outstanding stock of Intuitive Group Limited ("Intuitive"), headquartered in
London. Intuitive was a privately held provider of eCRM software solutions and
services for the financial services markets. Intuitive had additional offices in
Boston and Sydney. In exchange for Intuitive's common stock, Intuitive's
shareholders received approximately $18.0 million in cash. In addition, $394,000
in cash and 327,997 shares (valued at approximately $4.2 million) of our common
stock was paid to Intuitive shareholders during July 2000 based on the
achievement of certain financial objectives for the period ended March 31, 2000,
as defined in the acquisition agreement. The contingent payment resulted in a
corresponding increase in the purchase price and the resulting goodwill. We have
accounted for the Intuitive acquisition as a purchase, and as a result, the
operating results of Intuitive are reflected in the consolidated financial
results from the date of acquisition.


                                       14
<PAGE>

Conventions

      We use the following conventions throughout the discussion of our results
of operations.

      Revenue Recognition. Revenue from services provided on a fixed-price basis
is recognized using the percentage of completion method. We bear the risk of
cost over-runs and inflation with respect to our fixed-price projects. In order
to mitigate these risks, we subdivide projects into smaller phases, and we
generally reserve the right to renegotiate fixed-price and fixed-time frame
commitments in the event of any change in scope. Under the percentage of
completion method, we must estimate the percentage of completion of each project
at the end of each financial reporting period. Estimates are subject to
adjustment as projects progress to reflect changes in projected completion costs
or dates.

      Revenue from services provided on a time and material basis is recognized
in the period that the services are provided. Revenue attributable to contracts
for software licenses is recognized after the software has been delivered and
all significant uncertainties regarding client acceptance have expired. Revenue
attributable to maintenance is deferred and recognized ratably over the contract
period.

      Certain services in our healthcare practice are provided on a contingency
arrangement, based on the recovery of expenses for clients or based on providing
litigation support to clients. Previously, we had recognized this revenue, net
of an estimated percentage for claims not accepted, as the claims were delivered
to the client. Effective January 1, 2000, we adopted Staff Accounting Bulletin
("SAB") 101, Revenue Recognition in Financial Statements. Under the new
accounting method, we changed the method of accounting for these revenues to
recognize revenue upon client acceptance of claims submitted. The cumulative
effect of the change on prior years resulted in a charge to income of $2.7
million (net of income taxes of $1.7 million). This cumulative effect is
included in income for the year ended December 31, 2000.

      Cost of Revenue. Cost of revenue consists primarily of salaries and
employee benefits for personnel dedicated to client projects, as well as
facility costs at the India software development facilities.

      Selling, General and Administrative Expenses. Salaries and related taxes
and benefits for employees not dedicated to specific client projects make up the
majority of our selling, general and administrative expenses. Other significant
selling, general and administrative expenses are as follows:

      o     occupancy costs;

      o     telecommunications;

      o     marketing and promotion; and

      o     travel expenses.


                                       15
<PAGE>

Income Tax Matters

      India Operations--Our subsidiary, IMRglobal-India, is eligible for certain
favorable tax provisions provided under the Indian Income-Tax Act, including the
following:

      o     a tax holiday from corporate income taxes, expiring in 2008.

      o     an exemption from income taxes on the profits derived from exporting
            computer software or transmitting software from India. The exemption
            will be phased out over the next five years by 20% each year.

      The effective tax rate for our India operations has been less than 5% for
1998, 1999 and 2000 as a result of these exemptions. Accordingly, the effective
tax rate for our India operations may increase to approximately 35% with the
expiration of the tax holiday and tax exemption.


                                       16
<PAGE>

Results of Operations

      The following table summarizes for the years indicated, certain items from
the Company's statements of operations expressed as a percentage of revenue and
percentage change in the dollar amount of such items compared to the prior year.

<TABLE>
<CAPTION>
                                                                                                                   Percentage Change

                                                                              December 31                             Year to Year

                                                      -----------------------------------------------------------  -----------------

                                                                  % of                 % of               % of     1998-      1999-
                                                         1998    Revenue     1999     Revenue     2000    Revenue   1999       2000
                                                         ----    -------     ----     -------    ----     -------  ------     ------

<S>                                                   <C>          <C>    <C>           <C>    <C>          <C>      <C>        <C>
Revenue ...........................................   $ 170,318    100%   $ 222,028     100%   $ 256,172    100%     30%        15%
Cost of revenue ...................................      90,075     53%     129,171      58%     154,827     60%     43%        20%
                                                      ---------           ---------            ---------

    Gross profit ..................................      80,243     47%      92,857      42%     101,345     40%     16%         9%

Selling, general and administrative ...............      34,754     20%      58,457      26%      77,172     30%     68%        32%
Research & development ............................       6,247      4%       6,635       3%       3,504      1%      6%       (47)%
Goodwill and intangible amortization ..............       2,074      1%       6,705       3%      10,448      4%    223%        56%
Allowance for acquisition receivables .............          --     --           --      --        1,632      1%     --         --
Restructuring charge and impairment ...............          --     --       16,814       8%        (165)    --      --       (101)%
Acquisition costs .................................         145     --        2,168       1%          --     --    1395%      (100)%
Acquired in-process R&D ...........................       8,200      5%       3,410       2%          --     --     (58)%     (100)%
Charge associated with treasury stock purchase ....          --     --        8,778       4%          --     --      --       (100)%
                                                      ---------           ---------            ---------

    Income (loss) from operations .................      28,823     17%     (10,110)     (5)%      8,754      3%   (135)%      187%
                                                      ---------           ---------            ---------

Other income (expense):
   Interest expense ...............................        (234)    --         (108)     --       (2,682)    (1)%   (54)%     2383%
   Other income ...................................       4,561      3%       5,264       2%         294     --      15%       (94)%
                                                      ---------           ---------            ---------

      Total other income (expense) ................       4,327      3%       5,156       2%      (2,388)    (1)%    19%      (146)%
                                                      ---------           ---------            ---------

Income (loss) before provision for income taxes
   and cumulative effect of a change in
   accounting method ..............................      33,150     19%      (4,954)     (2)%      6,366      2%   (115)%     (229)%

Provision for income taxes ........................      13,270      8%       6,885       3%       3,474      1%    (48)%      (50)%
                                                      ---------           ---------            ---------

Income (loss) before cumulative effect
   of a change in accounting method ...............      19,880     12%     (11,839)     (5)%      2,892      1%   (160)%     (124)%


Cumulative effect of a change in accounting method,
   net of income taxes ............................          --     --           --      --       (2,707)    (1)%    --         --
                                                      ---------           ---------            ---------

      Net income (loss) ...........................   $  19,880     12%   $ (11,839)     (5)%  $     185     --    (160)%      102%
                                                      =========           =========            =========
</TABLE>


                                       17
<PAGE>

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

      Revenue. Revenue for the year ended December 31, 2000 increased 15% over
revenue for the year ended December 31, 1999. Approximately $20 million of this
increase was attributable to our acquisition of Intuitive. Excluding our Year
2000 service offering, our revenue increased 37% from 1999 to 2000.

      Revenue by vertical industry is as follows:

                                                                 Year Ended
                                                            --------------------
                                                              1999        2000
                                                            --------    --------

      Finance Solution Services (FSS) ..........            $ 84,371    $125,466

      Healthcare and Governmental ..............              16,086      39,112

      Commercial Services (all other industries)             121,571      91,594
                                                            --------    --------

               Total ...........................            $222,028    $256,172
                                                            ========    ========

      The reduction of $34.6 million of Year 2000 programming service revenue
that was recognized in 1999 was a major reason for the 2000 decrease in
Commercial Service revenue. The remaining decrease is attributable to our focus
on sales, marketing and research investments being targeted primarily to the
financial services and healthcare vertical industries in 2000.

      Cost of Revenue. As a percentage of revenue, cost of revenue increased
from 58% for 1999 to 60% for 2000. A portion of this increase was attributable
to less work being performed by our India software development facility which
has a significantly lower cost basis compared to our North American and European
operations. Many e-business projects did not lend themselves to our offshore
model due to the rapid evolution of this technology.

      Wage costs continue to increase at a greater rate than general inflation
in each of the countries in which we have operations. Historically, we have been
able to pass these wage increases on to our clients in the form of increased
prices for our service offerings. However, we cannot assure you that we will be
able to continue to increase our prices to our clients to offset future wage
increases.

      Gross Profit. Gross profit increased to $101.3 million for the year ended
December 31, 2000 compared to $92.9 million for the year ended December 31,
1999. Our gross profit margins, as a percentage of revenue, decreased to 40% for
the year ended December 31, 2000 compared to 42% for the year ended December 31,
1999.

      Selling, General and Administrative Expenses ("SG&A"). SG&A increased to
$77.2 million in 2000 from $58.5 million in 1999. This increase is attributable
to the following:

      o     Our aggressive expansion of our North American sales force;

      o     Inclusion of a full year of operations in 2000 for our 1999
            acquisitions; and

      o     Our January 2000 acquisition of Intuitive.

As a percentage of revenue, SG&A increased from 26% in 1999 to 30% in 2000. This
increase is primarily attributable to the increase in our North American sales
force and sales leadership during 2000.


                                       18
<PAGE>

      Research and Development Expenses ("R&D"). Research and development
decreased to 1% of revenue as management discontinued certain research
initiatives at the end of 1999. The decrease is consistent with management's
plan, and we anticipate R&D expenses to continue to be approximately 1% of
revenue.

      Goodwill and Intangible Amortization. Goodwill and intangible amortization
increased to $10.4 million and 4% of revenue for the year ended December 31,
2000 compared to $6.7 million and 3% of revenue for the year ended December 31,
1999. This increase reflects the following:

      o     Full year of amortization for our 1999 purchase acquisitions;

      o     January 2000 acquisition of Intuitive; and

      o     Payment of contingency payments in 2000 for the 1999 acquisitions of
            ECWerks and Neverdahl-Loft.

      Allowance for Acquisition Receivable. During 2000, IMRglobal recognized a
$1.6 million bad debt expense for claim recovery receivables that were acquired
in our June 15, 1999 purchase acquisition of Orion Consulting, Inc. The revenue
attributable to this $1.6 million receivable was recognized prior to our
acquisition.

      During 2000, we also recognized a cumulative effect of a change in
accounting method in connection with these claim recovery projects.

      Income (Loss) from Operations. Income from operations for the year ended
December 31, 2000 was $8.8 million compared to a loss of $10.1 million for the
year ended December 31, 1999. Excluding non-recurring charges, amortization and
depreciation, income from operations would be as follows:

                                                           1999           2000
                                                         --------      --------
      Income (loss) from operations ...........          $(10,110)     $  8,754

      Non-recurring charges:
         Allowance for acquired receivables ...                --         1,632
         Executive compensation ...............             1,921            --
         Restructuring charge .................            12,377          (165)
         Impairment of long-lived assets ......             4,437            --
         Acquisition costs ....................             2,168            --
         Acquired in-process research
            and development ...................             3,410            --
         Charge associated with treasury
            stock purchase ....................             8,778
      Depreciation and amortization ...........            11,994        16,371
                                                         --------      --------

      Income from operations, as adjusted .....          $ 34,975      $ 26,592
                                                         ========      ========
      Income from operations, as adjusted, as a
         percentage of revenue ................                16%           10%

      Other Income (Expense). We used the majority of our invested cash and
borrowed approximately $30 million for our 1999 and 2000 acquisitions.
Accordingly, investment income decreased $2.9 million in 2000 compared to 1999
while interest expense increased $2.6 million in 2000 compared to 1999. In
addition, we recognized a $1.5 million foreign currency loss in 2000 compared to
a $900,000 gain in 1999. As a result of the above, other income (expense)
decreased to a negative $2.4 million in 2000 compared to a positive $5.2 million
in 1999.


                                       19
<PAGE>

      Provision for Income Taxes. Our effective tax rate for 2000 would be 36%
compared to 37% for 1999 if the following items are excluded:

      o     Non-recurring charges
      o     Goodwill and intangible amortization
      o     Change in tax expense due to change in Japan's tax laws
      o     Tax benefits from closure of our Northern Ireland facility
      o     Reduction in our U.K. valuation allowance

      We calculate the effective tax rate by dividing the provision for income
taxes by income before provision for income taxes.

      Our effective tax rate has increased primarily due to the large increase
in non-deductible goodwill and intangible asset amortization. For 2000, only 15%
of our goodwill and intangible amortization is deductible. In addition, income
tax expense increased due to a change in Japanese tax laws that eliminated our
income tax benefit on goodwill amortization in Japan.

      These income tax increases were partially offset by one-time tax benefits
for the favorable write-off of our Northern Ireland operations and the reversal
of our U.K. subsidiaries net operating loss valuation allowance. The valuation
allowance was reversed based on the realization of U.K. net operating losses
through tax planning.

      We have not recorded deferred income taxes applicable to undistributed
earnings of IMRglobal's foreign subsidiaries. Those earnings are considered to
be indefinitely reinvested and, accordingly, no provision for United States
federal and state income tax has been provided thereon.

      Cumulative Effect of a Change in Accounting Method. The cumulative effect
of a change in accounting method reflects the adoption of Staff Accounting
Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements. Effective
January 1, 2000, IMRglobal changed its method of accounting for revenue
recognition for certain contract related revenue from claims dollar recovery
projects, in accordance with this pronouncement. These projects involve
identifying overpaid or erroneously paid insurance claims to be recovered from
healthcare providers by medical insurance companies. Previously, IMRglobal
recognized revenue, less an estimated percentage for claims not accepted, as
identified claims were submitted to the client. Under the new accounting method
adopted retroactive to January 1, 2000, IMRglobal now recognizes revenue upon
the earlier of collection of the findings based fee or notification of
acceptance of submitted claims from the client. The cumulative effect of the
change on prior years resulted in a charge to income of $2.7 million (net of
income taxes of $1.7 million), which is included in results of operations for
the year ended December 31, 2000.

      Earnings per Share. Diluted earnings per share increased from a loss of
($0.34) per share for the year ended December 31, 1999 to $0.004 for the year
ended December 31, 2000.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

      Revenue. Revenue increased 30% over revenue in the year ended December 31,
1998. Of this increase, approximately $52.3 million was attributable to our
acquisition of ECWerks, Fusion, PLP, Orion and Neverdahl. Revenue for the year
ended December 31, 1999 from services not related to our Year 2000 service
offering, increased to $187.5 million (including purchase acquisitions),
representing a 101% increase over revenue of $93.1 million for the year ended
December 31, 1998. Year 2000 revenue decreased to $34.6 million or 16% of total
revenue for the year ended December 31, 1999 compared to $77.2 million or 45% of
total revenue for the year ended December 31, 1998. Year 2000 revenue will be
less than 1% of our revenue in the


                                       20
<PAGE>

future. Revenue from our e-business services increased to $43.0 million or 19%
of revenue for the year ended December 31, 1999. For the year ended December 31,
1998, our e-business revenue was $3.9 million or less than 3.0% of total
revenue.

      Cost of Revenue. Cost of revenue was $129.2 million, or 58% of revenue for
the year ended December 31, 1999, compared to $90.1 million, or 53% of revenue
for the year ended December 31, 1998. The increase in cost of revenue as a
percentage of revenue reflects underutilized resources. As we completed several
large Year 2000 engagements, we were unable to allocate the available staff to
new engagements due to delays in initiating new contracts.

      Gross Profit. Gross profit increased to $92.9 million in the year ended
December 31, 1999, compared to $80.2 million in the year ended December 31,
1998. Our gross profit margin, as a percentage of revenue, decreased to 42% in
the year ended December 31, 1999 compared to 47% in the year ended December 31,
1998.

      Selling, General and Administrative Expenses ("SG&A"). SG&A expenses
increased to $58.5 million in the year ended December 31, 1999, compared to
$34.8 million in the year ended December 31, 1998. The increase in SG&A expenses
is attributable to the following:

      o     the ECWerks, Fusion, PLP, Orion and Neverdahl acquisitions;

      o     addition of sales offices;

      o     expansion of sales personnel;

      o     expansion of our delivery capacity; and

      o     converting our operations to a vertical industry focus.

      In addition to the above, we incurred $1.9 million of non-recurring
compensation costs related to certain officers in acquired companies. These
payments will not be continued after December 31, 1999.

      As a percentage of revenue SG&A expenses increased to 26% for the year
ended December 31, 1999 compared to 20% for the year ended December 31, 1998.
The increase reflects the aggressive expansion of our sales force and marketing
efforts without an immediate corresponding increase in our revenue. We also
increased our administrative infrastructure as we integrated several new
acquisitions.

      Research and Development. R&D costs increased to $6.6 million in the year
ended December 31, 1999, compared to $6.2 million in the year ended December 31,
1998. The increase is attributable to the May 1999 acquisition of Lyon and the
related component-ware R&D. We incurred 12 months of R&D expenses for this
initiative in 1999 compared to 8 months in 1998. During the fiscal fourth
quarter, as part of our 1999 restructuring plan, we terminated several R&D
projects unrelated to component-ware.

      Goodwill and Intangible Amortization. Goodwill and intangible amortization
increased to approximately $6.7 million for the year ended December 31, 1999,
from approximately $2.1 million for the year ended December 31, 1998. This
increase reflects full year amortization of goodwill attributed to our 1998
purchases of Lyon and Visual and the 1999 purchase acquisitions of ECWerks,
Fusion, PLP and Orion.

      Restructuring Charge and Impairment. In the fourth quarter of fiscal 1999,
we implemented a restructuring plan to redeploy resources to exploit our
expanding e-business practice. This plan resulted in a $12.4 million
restructuring cost in 1999. Key components of the restructuring plan included
the following:

      o     the closure of two U.K. offices, which were primarily committed to
            legacy IT systems;

      o     the reduction of our legacy IT workforce in the U.S.;


                                       21
<PAGE>

      o     the write-down of specific legacy software and hardware; and

      o     the reduction of our administrative workforce and infrastructure in
            order to increase our responsiveness to the new e-business
            opportunities.

      During 1999, we recorded a $4.4 million charge for impairment of
long-lived assets. It is our policy to periodically, but at least annually,
review the value of certain long-lived assets such as goodwill and property and
equipment for indication of impairment. During 1999, we determined that the
value of certain assets were impaired. These included goodwill for our
IMRglobal-UK operation, our investment in real property in New Delhi, India and
other property and equipment.

      Purchase Acquisitions Acquired In-Process Research and Development. The
purchased assets and assumed liabilities in connection with the acquisition of
Fusion were recorded at their estimated fair value at the acquisition date. We
received an appraisal of the intangible assets which indicated that
approximately $3.4 million of the acquired intangible assets were acquired
in-process research and development that had not yet reached technological
feasibility and had no alternative future use. To determine the value of the
in-process research and development, our appraisal considered several factors
including the following:

      o     state of development of each project;

      o     time and cost needed to complete each project;

      o     expected income for each project;

      o     expected discounted cash flow for each project;

      o     associated risks which included the inherent difficulties and
            uncertainties in completing each project and thereby achieving
            technological feasibility; and

      o     risks related to the viability of and potential changes to future
            target markets.

      During the year ended December 31, 1998, we recorded $8.2 million of
in-process research and development related to the Lyon acquisition.

      Acquisition Cost. During 1999, we completed the acquisition of Atechsys
that was accounted for as a pooling-of-interests. Acquisition costs attributable
to that merger were $2.2 million. Acquisition costs for 1998 of $145,000 were
attributable to our acquisition of RHO Transformational Technologies Pty
Limited, an Australian company.

      Charge Associated With Treasury Stock Purchase. During October 1999, we
incurred a $8.8 million charge in connection with the restructuring of the
Fusion acquisition. This acquisition was converted from an all stock transaction
to a combination of stock and cash.


                                       22
<PAGE>

      Income (Loss) From Operations. Loss from operations for the year ended
December 31, 1999 was $10.1 million compared to income from operations of $28.8
million for the year ended December 31, 1998. The 1999 loss was primarily
attributable to the following non-recurring charges:

      Restructuring charge .............................           $12.4 million
      Impairment of long-lived assets ..................             4.4 million
      Acquired in-process research and development .....             3.4 million
      Acquisition costs ................................             2.2 million
      Charge associated with treasury stock purchase ...             8.8 million
      Non-recurring compensation for former owners
         of acquired companies (included in SG&A) ......             1.9 million
                                                                   -------------

             Total .....................................           $33.1 million
                                                                   =============


      Excluding non-recurring charges, income from operations was 10% of revenue
for the year ended December 31, 1999 compared to 22% for the year ended December
31, 1998.

      Other Income. We realized net other income of approximately $5.2 million
for the year ended December 31, 1999, compared to net other income of
approximately $4.3 million in the year ended December 31, 1998. In 1999, we
recognized approximately $4.2 million in investment income primarily from the
investment of our excess cash, and we incurred approximately $108,000 of
interest expense related to credit facilities in the U.S., France and Japan.
During 1998, we recognized approximately $4.6 million in investment income
primarily from the investment of our excess cash, and we incurred approximately
$234,000 of interest expense primarily for credit facilities in India and
Australia.

      Provision for Income Taxes. The provision for income taxes decreased to
$6.9 million in the year ended December 31, 1999, from $13.3 million in the year
ended December 31, 1998. The effective tax rate based on the provision for
income taxes and excluding one-time charges for in-process research and
development and acquisition costs was 42% for 1999 and 32% for 1998. We
calculate the effective tax rate by dividing the provision for income taxes by
income before provision for income taxes.

      The higher effective tax rate for the year ended December 31, 1999 is
partially attributable to only 34% of goodwill and intangible amortization
expense being deductible for income tax purposes. Goodwill and intangible asset
amortization has increased 223% from fiscal 1998 to fiscal 1999. In addition, we
have historically enjoyed a low effective tax rate for our India operations.
Accordingly, the effective tax rate has increased as a result of recent
acquisitions in France, Canada, Japan and the United States, which have higher
income tax rates than India.

      Net Income (Loss) per Share. Our diluted loss per share for the year ended
December 31, 1999 was $0.34 compared to net income per share of $0.57 for the
year ended December 31, 1998. When we exclude non-recurring charges (net of
income taxes), fiscal 1999 net income per share was $0.41 compared to $0.80 for
fiscal 1998.


                                       23
<PAGE>

Quarterly Results of Operations

      The following table contains portions of our unaudited quarterly
statements of operations data for each of the eight quarters beginning January
1, 1999 and ending December 31, 2000. This information is derived from, and
should be read along with, our financial statements and the related notes
appearing elsewhere in this document. We believe that this table is a fair
presentation of that information but the results of operations for any quarter
are not necessarily indicative of the results to be expected for any future
period.

<TABLE>
<CAPTION>
                                                                        Quarter Ended
                           ----------------------------------------------------------------------------------------------
                                               1999                                            2000
                           ----------------------------------------------   ---------------------------------------------
                           Mar. 31     Jun. 30     Sep. 30      Dec. 31     Mar. 31      Jun. 30     Sep. 30     Dec. 31
                           --------    --------    --------    --------     --------     --------    --------    --------
                                                    (In thousands, except per share data)
<S>                        <C>         <C>         <C>         <C>          <C>          <C>         <C>         <C>
Revenue ...............    $ 51,888    $ 62,953    $ 62,159    $ 45,028     $ 58,320     $ 69,365    $ 75,208    $ 53,279
Gross profit ..........      24,149      28,578      27,100      13,030       23,578       29,796      32,520      15,451
Income (loss) from
   operations .........       5,412      12,768       6,819     (35,109)       2,682        6,628      10,410     (10,966)
Diluted earnings
  (loss) per share ....    $   0.10    $   0.21    $   0.12    $  (0.78)    $  (0.03)    $   0.09    $   0.14    $  (0.19)

<CAPTION>
                                                                        Quarter Ended
                           ----------------------------------------------------------------------------------------------
                                               1999                                            2000
                           ----------------------------------------------   ---------------------------------------------
                           Mar. 31     Jun. 30     Sep. 30      Dec. 31     Mar. 31      Jun. 30     Sep. 30     Dec. 31
                           --------    --------    --------    --------     --------     --------    --------    --------
<S>                             <C>         <C>         <C>         <C>          <C>          <C>         <C>         <C>
Revenue ...............         100%        100%        100%        100%         100%         100%        100%        100%
Gross profit ..........          47          45          44          29           40           43          43          29
Income (loss) from
   operations .........          10          20          11         (78)           5           10          14         (21)
</TABLE>


                                       24
<PAGE>

      Our income from operations has historically fluctuated from quarter to
quarter and these fluctuations may continue. Due to the high level of
acquisition activity in 1999 our income from operations has been reduced by
one-time charges for certain quarters. In addition, during the fourth quarter of
1999, we incurred restructuring charges and impairment of long-lived assets. The
impact of nonrecurring charges on income (loss) from operations is summarized as
follows:

<TABLE>
<CAPTION>
                                                         1999                                             2000
                                     --------------------------------------------     --------------------------------------------
                                      Mar. 31    Jun. 30     Sep. 30      Dec. 31     Mar. 31     Jun. 30     Sep. 30      Dec. 31
                                     --------    --------    --------    --------     --------    --------    --------    --------
<S>                                  <C>         <C>         <C>         <C>          <C>         <C>         <C>         <C>
Income (loss) from operations ...    $  5,412    $ 12,768    $  6,819    $(35,109)    $  2,682    $  6,628    $ 10,410    $(10,966)
One-time charges:
Restructuring charges ...........          --          --          --      12,377           --          --          --        (165)
Allowance for
   acquired receivables .........          --          --          --          --           --          --          --       1,632
Impairment of long-lived assets .          --          --          --       4,437           --          --          --          --
Acquired in-process research and
   development ..................       3,410          --          --          --           --          --          --          --
Acquisition costs ...............       1,936          --          --         232           --          --          --          --
Charge associated with
   treasury stock purchase ......          --          --          --       8,778           --          --          --          --
Nonrecurring compensation for
   former owners of acquired
   companies (included in SG&A) .          --          --         110       1,811           --          --          --          --
                                     --------    --------    --------    --------     --------    --------    --------    --------
Total nonrecurring charges ......       5,346          --         110      27,635           --          --          --       1,467
                                     --------    --------    --------    --------     --------    --------    --------    --------
Income (loss) from operations
   excluding nonrecurring charges    $ 10,758    $ 12,768    $  6,929    $ (7,474)    $  2,682    $  6,628    $ 10,410    $ (9,499)
                                     ========    ========    ========    ========     ========    ========    ========    ========
</TABLE>

Liquidity and Capital Resources

      At December 31, 2000, we had liquid assets including cash, cash
equivalents and marketable securities of $19.7 million compared to $37.4 million
at December 31, 1999. The decrease in liquid assets was primarily due to the
payment of approximately $18.4 million in contingent payments related to our
1998 acquisition of Lyon, our 1999 acquisitions of Neverdahl and ECWerks and our
2000 acquisition of Intuitive, and to costs incurred in the construction of the
second phase of our new corporate headquarters.

      Net cash provided by (used in) operations in 1998, 1999 and 2000 was $39.5
million, $(7.0) million and $13.8 million, respectively. This increase in cash
provided by operations in 2000 is primarily the result of depreciation and
amortization.

      Net cash used in investing activities in 1998, 1999 and 2000 was $47.3
million, $26.9 million and $46.4 million, respectively. In 2000, we expended
$31.3 million for the acquisition of Intuitive and contingency payments related
to our 1998 and 1999 acquisitions. We also expended $9.8 million on capital
additions primarily related to the completion of our corporate headquarters. In
1999, we expended $25.1 million on acquisitions and $25.6 million for capital
expenditures. In 1998, we acquired certain subsidiaries for $8.9 million in cash
and purchased property and equipment for $13.6 million.


                                       25
<PAGE>

      Net cash provided by (used in) financing activities in 1998, 1999 and 2000
was $(390,000), $(8.7) million and $20.0 million, respectively. In 2000, we
entered into a $15 million revolving credit agreement. Proceeds from long-term
debt of $21.0 million (net of repayments of $10.3 million) were used primarily
for the contingent payments related to our acquisitions and facilities
expansion. In 1999, we expended $14.8 million on treasury stock transactions
including $13.7 million related to the restructuring of the Fusion acquisition.
This utilization of cash was partially offset by net borrowings under our credit
agreements of $4.9 million.

      We maintain $45.0 million of credit facilities expiring in 2003. These
facilities bear interest at a spread over LIBOR of 0.6% to 2.0% and are
collateralized by virtually all of our assets. The interest rate may be
increased by up to an additional 1.15% based on certain financial ratios.

      IMRglobal's subsidiary in France has obtained loans from French government
agencies at 0% interest payable in annual installments through March 2002. These
loans are collateralized by furniture, fixtures and equipment located in
IMRglobal's office in France. At December 31, 2000, $357,000 was outstanding
under these loan agreements. Of this amount, $143,000 is due in 2001 and
$214,000 is due in 2002.

      We continuously review our future cash requirements, together with our
available bank lines of credit, anticipated leveraging of our global corporate
headquarters, and internally generated funds. We believe we have adequate
capital resources to meet all working capital obligations and fund the
development of our current business operations, including the following business
objectives:

      o     Payment of contingent acquisition obligations;

      o     Continued expansion of existing business; and

      o     Anticipated levels of capital expenditures.

Asset Management

      Our accounts receivable balance was $41.7 million at December 31, 2000, a
decrease of $4.3 million from December 31, 1999. The decrease was primarily due
the change in accounting method for our Health Care recovery projects, which
reduced receivables by $4.4 million. A common financial measure is the
calculation of days sales outstanding in accounts receivable ("DSO"). At
December 31, 2000, our DSO was 71 days. In addition, accounts receivable in
Canada, France, Japan and the U.K. include value added taxes that are not
included in revenue. Without value added taxes, DSO would be approximately 3
days less than the above levels.

Risk Factors That May Affect Future Results

      You should carefully consider the factors described below which may affect
our future results. The risks and uncertainties described below are not the only
ones facing us. Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our operations.

      If any of the following risks actually occur, our business, financial
condition or results of operations could be materially adversely affected. In
such case, the trading price of our common stock could decline, and you may lose
all or part of your investment.


                                       26
<PAGE>

CGI's stock price is volatile and the value of CGI's common stock issued in the
merger will depend on its market price at the time of the merger. No adjustment
will be made to the exchange ratio as a result of changes in the market price of
CGI's common stock.

      In accordance with the merger agreement, each share of IMRglobal common
stock will be exchanged for 1.5974 shares of CGI common stock. Accordingly, the
value of IMRglobal shares is related to the value of CGI shares. The market
price of CGI common stock, like that of shares of many other technology
companies, has been and may continue to be volatile. For example, from January
1, 1999 to December 31, 2000, CGI common stock traded as high as $24.50 per
share and as low as $3.50 per share. Accordingly, if the merger is completed,
CGI's common stock price could decrease from its present levels.

      Recently, the stock market in general, and the shares of technology
companies in particular, have experienced significant price fluctuations. The
market price may continue to fluctuate significantly in response to various
factors, including:

      o     quarterly variations in operating results or growth rates;

      o     the announcement of technological innovations;

      o     changes in estimates by security analysts;

      o     market conditions in the industry;

      o     announcements and actions by competitors;

      o     regulatory and judicial actions; and

      o     general economic conditions.

IF THE MERGER DOES NOT OCCUR, THE COMPANIES WILL NOT BENEFIT FROM THE EXPENSES
THEY HAVE INCURRED IN THE PURSUIT OF THE MERGER.

      The merger may not be completed. If the merger is not completed, IMRglobal
and CGI will have incurred substantial expenses for which neither company will
have received any ultimate benefit.

IF THE MERGER DOES NOT OCCUR, THE VALUE OF IMRGLOBAL SHARES OF COMMON STOCK MAY
DECREASE SUBSTANTIALLY.

      The merger may not be completed. In the absence of a merger, investors may
perceive IMRglobal as being less valuable and the stock price may decrease from
present levels.

WE FACE SIGNIFICANT COMPETITION IN THE INFORMATION TECHNOLOGY, INTERNET-RELATED
AND SOFTWARE MARKETS THAT ARE NEW, INTENSELY COMPETITIVE AND RAPIDLY CHANGING.

      We will lose clients and our business will suffer if we are unable to
successfully compete with information technology (known as "IT") consulting
firms, software integration firms, application software vendors and internal IT
departments. Many of the companies that provide these services have
significantly greater financial, technical and marketing resources, generate
greater revenue and have greater name recognition


                                       27
<PAGE>

than we do. In addition, there are relatively few barriers to entry into our
markets. We have faced, and expect to continue to face, additional competition
from new entrants into our markets. We believe that the principal competitive
factors in our markets include:

      o     quality of service, price and speed of delivery;

      o     ability to integrate strategy, technology and creative design
            services;

      o     targeted industry knowledge;

      o     Internet expertise and talent; and

      o     project management capability.

      We believe that our ability to compete also depends in part on competitive
factors outside our control, including:

      o     the ability of our competitors to hire, retain and motivate their
            personnel;

      o     the development by others of software that is competitive with our
            products and services; and

      o     our competitors' responsiveness to client needs.

OUR REVENUE GROWTH AND OPERATING PROFIT COULD BE ADVERSELY AFFECTED IF WE ARE
UNABLE TO INTEGRATE RECENTLY ACQUIRED BUSINESSES.

      We may be unable to successfully integrate newly acquired businesses,
which may result in lower than expected revenue growth and profitability. Over
the past 2 years, we have expanded our operations through the acquisition of
additional companies that complement our business. We may not be able to
continue to identify and acquire companies that have the potential to increase
our overall value at prices that are attractive to us, or at all.

      We may not be able to achieve the anticipated benefits from our recent
acquisitions unless the operations of the acquired businesses are successfully
combined with our business in a timely manner. The integration of acquisitions
requires substantial attention from management. The diversion of the attention
of management and any difficulties encountered in the transition process could
have an adverse impact on this integration and, as a result, on our business
results. In addition, the process of integrating various businesses could cause
the interruption of, or a loss of momentum in, the activities of some or all of
these businesses, which would also have an adverse affect on our business
results.

IF WE DO NOT EFFECTIVELY MANAGE OUR GROWTH, WE MAY NOT BE ABLE TO PROVIDE
QUALITY SERVICES AND MAINTAIN PROFITABILITY.

      If we do not manage our growth effectively, the quality of our services we
offer could decline and result in a loss of future revenue from dissatisfied
clients. In order to continue to provide quality service to our clients we must
attract and retain key personnel. We expect that the number of our employees,
particularly skilled technical, marketing and management employees will
increase. Our growth places, and will continue to place, significant demands on
our employee base especially on members of senior management who have to manage
more people, and face a large number of, and increasingly complex, issues as our
company grows. For example, we must continue to develop and improve our
operational, financial, communications and other internal systems, both in the
United States and offshore to meet the demands of a larger company.


                                       28
<PAGE>

THE LOSS OF ANY LARGE CLIENTS WOULD REDUCE OUR REVENUE AND PROFITABILITY.

      If we are unable to service and meet the expectations of any of our large
clients, our clients could purchase services that we provide from a competitor
and the loss of a major client could, in turn, reduce our revenue and
profitability. Because many of our contractual engagements involve projects that
are critical to our clients' businesses, our failure to meet a client's
expectations could result in a cancellation or nonrenewal of the contract and
could damage our reputation and adversely affect our ability to attract new
business. Furthermore, we generally are not the exclusive outside source of IT
products and services to our clients. Accordingly, a client's dissatisfaction
with our performance could lead the client to purchase these services from a
competitor, thereby reducing our revenue and profitability.

      We derive and believe that we will continue to derive a significant
portion of our revenue from a limited number of large corporate clients. In the
year ended December 31, 2000, our five largest clients accounted for 20% of our
total revenue. During that period, John Hancock Mutual Life Insurance company
accounted for 8% and Michelin North American, Inc. accounted for 4% of revenue.
The volume of work performed for specific clients is likely to vary from year to
year.

SIGNIFICANT FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE RATES MAY ADVERSELY AFFECT
OUR REVENUE AND RESULTS OF OPERATION.

      We are subject to risks that, as a result of currency fluctuations, the
translation of foreign currencies into United States dollars for accounting
purposes will adversely affect our results of operations. For these countries
where we have significant sales, a stronger dollar will result in reduced
revenue and operating profit. Countries where we have significant sales include
U.K., France, Japan, Australia and Canada. In addition, we presently incur a
significant amount of our costs in local currency in India and may establish
additional offshore centers in other countries. In contrast, we presently
generate over one-half of our revenue in United States dollars. The remaining
revenue consists of British Pounds, French Francs, Japanese Yen, Australian
dollars and Canadian dollars. A significant strengthening in the Indian Rupee
against the United States Dollar or the other foreign currencies noted above,
will result in a reduction in our revenue.

      Historically, we have not hedged any material portion of our foreign
exchange transactions.

IF WE CANNOT MONITOR OUR INTERNATIONAL BUSINESS EXPOSURE IN INDIA, FRANCE, JAPAN
AND OTHER COUNTRIES WHERE WE HAVE SIGNIFICANT OPERATIONS, OUR RESULTS OF
OPERATIONS MAY DECLINE.

      Our international operations and business activities are subject to the
following risks:

      o     difficulty in managing international operations in seven different
            countries due to time differences;

      o     potential foreign tax consequences, including taxes payable on the
            repatriation of earnings from our India operations;

      o     compliance with, and unexpected changes in, a growing variety of
            foreign laws and regulations in any of the seven major countries
            where we have significant operations;

      o     compliance with employment laws in France and Japan, which are more
            stringent than employment laws in the U.S.; and

      o     unexpected changes in the local and regional political climate in
            India and the possible reactions to those changes by the
            international community, including economic sanctions.


                                       29
<PAGE>

IF WE CANNOT RECRUIT AND RETAIN HIGHLY SKILLED SOFTWARE DEVELOPMENT
PROFESSIONALS, WE MAY NOT BE ABLE TO KEEP PACE WITH THE CONTINUING CHANGES IN
INFORMATION PROCESSING TECHNOLOGY, INDUSTRY STANDARDS AND CLIENT PREFERENCES AND
AS A RESULT WE MAY NOT BE ABLE TO MANAGE AND COMPLETE EXISTING PROJECTS OR
OBTAIN NEW PROJECTS.

      If we are not successful in attracting, training, motivating and retaining
highly skilled software development professionals, particularly project
managers, software engineers and other senior technical personnel, we may not be
able to effect our growth strategy, manage and complete our existing projects,
and bid for or obtain new projects. In particular, we believe that there is a
shortage of, and significant competition for, internet software development
professionals with the advanced technological skills necessary to perform the
services offered by us. Our ability to maintain and renew existing engagements
and obtain new business depends, in large part, on our ability to hire, train
and retain technical personnel with the IT skills to keep pace with the
continuing changes in information processing technology, evolving industry
standards and changing client preferences.

COMPLIANCE WITH EXISTING UNITED STATES IMMIGRATION LAWS, OR CHANGES IN THESE
TYPES OF LAWS COULD MAKE IT DIFFICULT TO HIRE FOREIGN NATIONALS OR LIMIT OUR
ABILITY TO RETAIN H-1B EMPLOYEES IN THE UNITED STATES, AND COULD REQUIRE US TO
INCUR UNEXPECTED LABOR COSTS.

      We may not be able to bring to the United States foreign employees who are
critical to our business and who work for us pursuant to the non-immigrant work
permitted visa ("H-1B") classification in years in which the limit on the number
of new H-1B petitions that the United States Immigration and Naturalization
Services may approve in any government fiscal year has been reached. As of
December 31, 2000, approximately 375 of our United States employees were working
for us pursuant to the H-1B classification. If we are not successful in bringing
these employees in the H-1B classification to the United States, our labor costs
may increase, as we may have to subcontract our work to outside contractors at
higher rates than our current labor costs.

THE LOSS OF COMMUNICATIONS WITH OUR OFFSITE SOFTWARE DEVELOPMENT CENTERS COULD
PREVENT US FROM LEVERAGING THESE OFFSITE CENTERS AND FROM PROVIDING 24-HOUR
SERVICE TO OUR CLIENTS, AND ANY ALTERNATIVE TO THIS TYPE OF COMMUNICATION WOULD
NOT PROVIDE US WITH COST ADVANTAGES OR AN EFFECTIVE MEANS OF TRANSMISSION FOR
OUR CLIENTS.

      Any loss of our ability to transmit voice and data through satellite and
other forms of communication, at commercially reasonable prices, could have a
material adverse effect on our financial condition because a significant element
of our business strategy is to continue to leverage our offsite software
development centers in Bangalore and Mumbai, India. For example, if we were to
depend on telephone lines which are an alternative means to satellite
communications, we would incur significant costs and the transmissions would be
slower than those by satellite, particularly in India where there is minimal
infrastructure for telephone lines by comparison to the U.S. or Europe.

WE ARE EXPOSED TO GREATER BUSINESS RISKS RELATING TO THE ECONOMIC ENVIRONMENT OF
OUR OPERATIONS IN OTHER COUNTRIES, ESPECIALLY INDIA, THAN WE ARE FOR OUR
OPERATIONS IN THE UNITED STATES.

      Our business may be harmed by future changes in inflation and interest
rates in countries in which we establish operations. For example, in the past,
India has experienced significant inflation, low growth in gross domestic
product and shortages of foreign exchange. Accordingly, the Indian government
tightly regulates the flow of capital out of India. While we anticipate that we
will have access to this cash to finance our ongoing operations and expansion,
there is no guarantee that the Indian government will allow us access to these
funds for investment outside of India. At December 31, 2000 we had less than
$500,000 of our cash held in India.


                                       30
<PAGE>

WE ARE EXPOSED TO GREATER BUSINESS RISKS RELATING TO THE SOCIAL ENVIRONMENT OF
OUR OPERATIONS IN OTHER COUNTRIES, ESPECIALLY INDIA, THAN WE ARE FOR OUR
OPERATIONS IN THE UNITED STATES.

      We may be adversely affected by political or social changes in countries
in which we establish software development facilities. For example, India has
recently experienced civil unrest and terrorism and, from time to time, has been
involved in regional conflicts with Pakistan. If these instances of civil
unrest, terrorism and Pakistani conflicts continue, our India operations could
be disrupted.

THE ELIMINATION OF BENEFITS GRANTED BY THE GOVERNMENT OF INDIA COULD ADVERSELY
AFFECT OUR FINANCIAL RESULTS.

      The elimination of benefits granted by the government of India could have
a material adverse effect on our financial results. The Indian government has
exercised and continues to exercise significant influence over many aspects of
the Indian economy, and its actions concerning the economy would adversely
affect private sector entities, including us. During the past five years,
India's government has provided significant tax incentives and relaxed some
regulatory restrictions in order to encourage foreign investment in specified
sectors of the economy, including the software development industry. We have
directly benefitted from tax holidays, liberalized import and export duties and
preferential rules concerning foreign investment and repatriation.
Notwithstanding these benefits, however, India's central and state governments
remain significantly involved in the Indian economy as regulators.

IF BUSINESSES AND CONSUMERS DO NOT ADOPT THE INTERNET AS A MEANS FOR COMMERCE,
OUR E-BUSINESS CONSULTING SERVICE BUSINESS WILL FAIL AND OUR GROWTH WILL
DECLINE.

      If commerce on the Internet does not grow, or grows more slowly than
expected, our growth would decline and our business would be seriously harmed.
The future success of our e-business consulting services depends heavily on the
acceptance and use of the Internet as a means for commerce. The widespread
acceptance and adoption of the Internet for conducting business is likely only
in the event that the Internet provides businesses with greater efficiencies and
improvements. Businesses and consumers may reject the Internet as a viable
commercial medium for a number of reasons, including:

      o     potentially inadequate network infrastructure;

      o     delays in the development of Internet enabling technologies and
            performance improvements;

      o     delays in the development or adoption of new standards and protocols
            required to handle increased levels of Internet activity;

      o     delays in the development of security and authentication;

      o     insufficient technology necessary to ensure secure transmission of
            confidential information;

      o     changes in, or insufficient availability of, telecommunications
            services to support the Internet; and

      o     failure of companies to meet their clients' expectations in
            delivering goods and services over the Internet.

IF WE DO NOT KEEP PACE WITH THE LATEST TECHNOLOGICAL CHANGES, PARTICULARLY
RELATING TO E-BUSINESS AND OTHER INTERNET-RELATED SERVICES, AND OUR CLIENTS
CHOOSE TO INVEST IN LEADING TECHNOLOGY, WE MAY LOSE OUR CLIENT BASE AND OUR
REVENUES MAY DECLINE.

      Failure to respond successfully to technological developments, evolving
industry standards and changing client preferences or failure to respond in a
timely or cost-effective way, will seriously harm our business and operating
results. In addition, we must hire, train and retain technologically
knowledgeable professionals so that they can fulfill the increasingly
sophisticated needs of our clients. We expect to derive a


                                       31
<PAGE>

substantial portion of our revenue from creating e-business systems that are
based upon today's leading technologies and that are capable of adapting to
future technologies. We cannot assure you that we will be successful in
addressing these developments on a timely basis or that even if we address them,
we will be successful in the marketplace.

INCREASING GOVERNMENT REGULATION, PARTICULARLY THAT RELATING TO ELECTRONIC
COMMERCE, COULD HARM THE DEVELOPMENT OF THE INTERNET AND AS A RESULT THE DEMAND
FOR OUR SERVICES TO CREATE ELECTRONIC BUSINESS CHANNELS WOULD DECREASE.

      Any state, federal or foreign government legislation or regulation
applicable to electronic commerce could dampen the growth of the Internet and
decrease its acceptance as a communications and commercial medium. If this type
of decline occurs, companies may decide in the future not to use our services to
create electronic business channels. This decrease in the demand for our
services would seriously harm our business and operating results. Although there
are currently few of these laws and regulations, both state, federal and foreign
governments may adopt a number of these laws and regulations. New laws and
regulations may affect the following:

      o     user privacy;

      o     the pricing and taxation of goods and services offered over the
            Internet;

      o     the content of Websites;

      o     consumer protection; and

      o     the characteristics and quality of products and services offered
            over the Internet.

      For example, the Telecommunications Act of 1996 prohibits the transmission
of some types of information and content over the Internet. The scope of the
Act's prohibition is currently unsettled. In addition, although courts recently
held that substantial portions of the Communication Decency Act are
unconstitutional, federal or state governments may enact, and courts may uphold,
similar legislation in the future. Future legislation could expose companies
involved in Internet commerce to liability.

IF OUR CONTRACTS LIMITING LIABILITY ARE NOT ENFORCEABLE OR IF WE ARE NOT
SUFFICIENTLY COVERED BY INSURANCE, WE MAY BE LIABLE TO OUR CLIENTS FOR DAMAGES
TO THEIR COMPUTER SYSTEMS AND THESE CLAIMS BY OUR CLIENTS AGAINST US COULD
RESULT IN A SUBSTANTIAL COST TO US AND HARM OUR FINANCIAL CONDITION.

      Any failure in a client's system could result in a claim for substantial
damages against us, regardless of our responsibility for this type of failure.
We attempt to limit contractually our liability for damages arising from
negligent acts, errors, mistakes, or omissions in rendering our IT products and
services, but the limitations of liability set forth in our service contracts
may not be enforceable in all instances or may not otherwise protect us from
liability for damages. In addition, our general liability insurance coverage,
including coverage for errors or omissions, may not continue to be available on
reasonable terms or may not be available in sufficient amounts to cover one or
more large claims, or the insurer may disclaim coverage as to any future claim.
The successful assertion of one or more large claims against us that exceed
available insurance coverage or changes in our insurance policies, including
premium increases or the imposition of large deductible or co-insurance
requirements, could materially adversely affect our result of operations and
financial condition.


                                       32
<PAGE>

WE RISK HAVING COST OVERRUNS IN FIXED-PRICE, FIXED-TIME FRAME CONTRACTS WHICH
MAY REDUCE OUR PROFITABILITY.

      Our failure to estimate accurately the resources and time required for a
project, future rates of inflation and currency translations, or our failure to
complete our contractual obligations within the time frame committed could
reduce our profitability. As a core element of our business philosophy, our
strategy is to offer many of our IT services on fixed-price, fixed-time frame
contracts, rather than contracts in which payment to us is determined solely on
a time and materials basis. Although we use our total software quality
management software engineering process and our past project experience to
reduce the risks associated with estimating, planning and performing
fixed-price, fixed-time frame projects, we bear the risk of cost over-runs and
inflation in connection with these projects.

INCREASING WAGE COSTS IN INDIA COULD RESULT IN FLUCTUATIONS IN OUR REVENUE AND
EARNINGS.

      If wage costs in India, where approximately 20% of our employees reside,
continue to increase, our revenue and earnings may fluctuate. Wage costs in
India are presently increasing at a faster rate than in the United States.
Historically, our wage costs in India have been significantly lower than our
wage costs in the United States for comparably skilled employees. However, in
light of the current wage increases in India, we cannot assure you that this
will remain the same.

IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS FROM INFRINGEMENT
OR MISUSE, WE MAY LOSE REVENUE TO THE UNAUTHORIZED USERS OF THESE PROPERTY
RIGHTS.

      We cannot assure you that the steps we have taken to protect our
proprietary rights will be adequate to prevent misappropriation of our
proprietary rights or any of our other intellectual property. We also cannot
assure you that we will be able to detect unauthorized use and take appropriate
steps to enforce our rights. For example, we currently license the use of our
FOX products in Asia. However, we presently hold no patents or registered
copyrights for these products. The unauthorized use of our FOX technology by
potential clients or one of our competitors may result in our inability to
receive revenue from these unauthorized users. We anticipate that we will
continue to license some types of technologies to our clients. We cannot assure
you that we will be able to successfully license these technologies or protect
them from infringement or misuse.

      Moreover, we cannot assure you that the combination of copyright and trade
secret laws, nondisclosure and other contractual arrangements, and technical
measures on which we rely will not change in ways that may prevent or restrict
the transfer of software components, libraries and toolsets among the United
States, India, the U.K., France, Canada, Japan and Australia. Under the Berne
Convention, an international treaty, the governments of these countries have
agreed to extend copyright protection under their domestic laws to foreign
works, including works created or produced in the United States.

WE MAY BE LIABLE FOR INFRINGING THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS AND
ANY INFRINGEMENT CLAIM COULD RESULT IN SUBSTANTIAL COST TO US AND DIVERT
MANAGEMENT'S ATTENTION FROM OUR OPERATIONS.

      Claims that we have infringed on the intellectual property rights of
others may be asserted against us in the future. These claims may result in
litigation and we may not prevail in this type of litigation, or we may be
unable to obtain a license for the use of any infringed intellectual property
from a third party on commercially reasonable terms. Additionally, we anticipate
that in the future, we will license some types of technologies to


                                       33
<PAGE>

our clients. We cannot assure you that we will be able to prevent infringement
claims against us in connection with our licensing efforts. We expect that the
risk of infringement claims against us will increase if more of our competitors
are able to successfully obtain patents for software products and processes.
These types of claims, regardless of their outcome, could result in substantial
costs to us and divert management's attention from our operations. Any
infringement claim or litigation against us could, therefore, have a material
adverse effect on our financial results.

      In addition, we cannot assure you that the combination of contractual
arrangements and copyright and trade secret laws on which we rely will not
change in ways that may result in our infringing upon the intellectual property
rights of others.

IF WE LOSE OUR KEY PERSONNEL, PARTICULARLY MR. SATISH SANAN, OUR BUSINESS MAY
SUFFER.

      Our continued success depends in large part upon the continued
availability of key management personnel, particularly the services of Mr.
Sanan. The loss of the services of Mr. Sanan would have a material adverse
effect on us. We do not currently maintain nor do we intend to acquire key man
insurance on the life of Mr. Sanan.

OUR CHARTER DOCUMENTS, FLORIDA LAWS AND OUR AGREEMENT WITH CGI COULD DISCOURAGE
ACQUISITION PROPOSALS AND DELAY OR PREVENT A CHANGE OF CONTROL.

      The protective provisions in our charter documents, which are designed to
provide our Board of Directors with time to consider whether a hostile takeover
offer is in our shareholders' best interests, could discourage potential
acquisition proposals and could delay or prevent a change of control of our
corporation. These provisions could also diminish the opportunities for our
shareholders to participate in tender offers, including tender offers at a price
above the then current market price for our common stock. These provisions may
also inhibit fluctuations in our stock price that could result from takeover
attempts.

      In addition, Florida law also contains provisions that may delay, defer or
prevent a non-negotiated merger or other business combination. These provisions
are intended to encourage any person interested in acquiring us to negotiate
with and obtain the approval from our Board of Directors. Some of these
provisions may, however, discourage a future acquisition not approved by the
Board of Directors in which shareholders might receive an attractive value for
their shares or that a substantial number or even the majority of our
shareholders might believe to be in their best interest. As a result,
shareholders who desire to participate in this type of transaction may not have
the opportunity to do so.

      Additionally we have agreed to a "break-up fee" payable under certain
circumstances. This break-up fee is equal to $13.0 million. This may discourage
prospective acquirors from making a bid to purchase the Company.


                                       34
<PAGE>

THERE ARE SUBSTANTIAL SHARES ELIGIBLE FOR FUTURE SALE. SALES OF THESE SHARES MAY
RESULT IN LOWER MARKET PRICES FOR OUR COMMON STOCK.

      Sales of a substantial number of our shares into the public market or the
perception that these sales could occur, could materially and adversely affect
the price of our shares and could impair our ability to obtain capital through
future offerings of equity securities.

      Satish K. Sanan, our Chairman, beneficially owns approximately 12.6
million shares, which number includes shares underlying options which are
exercisable by Mr. Sanan. A significant number of these shares have been pledged
by Mr. Sanan. In the past, large numbers of shares owned by Mr. Sanan have been
sold, either by him or by the pledgee of the shares. The same may occur in the
future and those sales may have a negative effect on the price of our shares.

Item 7A. Quantitative and Qualitative Disclosure About Market Risks

      IMRglobal is exposed to market risk from changes in interest rates and
exchange rates between the U.S. dollar and the currencies of various countries
in which we operate. IMRglobal does not engage in hedging transactions and is
not a party to any leveraged derivatives.

Item 8. Financial Statements and Supplementary Data

      Financial Statements:

            Report of Independent Certified Public Accountants

            Consolidated Balance Sheets - December 31, 1999 and 2000

            Consolidated Statements of Operations - Years Ended December 31,
              1998, 1999 and 2000

            Consolidated Statements of Changes in Shareholders' Equity - Years
              Ended December 31, 1998, 1999 and 2000

            Consolidated Statements of Cash Flows - Years Ended December 31,
              1998, 1999 and 2000

            Notes to Consolidated Financial Statements

      Selected quarterly financial data is included in Item 7 under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Quarterly Results of Operations".


                                       35
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders
IMRglobal Corp.

We have audited the accompanying consolidated balance sheets of IMRglobal Corp.
as of December 31, 2000 and 1999, and the related consolidated statements of
operations, changes in shareholders' equity, and cash flows for each of the
three years in the period ended December 31, 2000. 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 auditing standards generally accepted
in the United States. 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 IMRglobal Corp. at
December 31, 2000 and 1999, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended December 31,
2000, in conformity with accounting principles generally accepted in the United
States.

As discussed in Note 1 to the financial statements, in 2000, the Company changed
its method of accounting for revenue recognition on findings based fee
contracts.


                                                               Ernst & Young LLP

Tampa, Florida
February 9, 2001


                                       36
<PAGE>

                                 IMRglobal Corp.

                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                                   December 31,
                                                                             -----------------------

                                                                                1999         2000
                                                                             ---------     ---------
<S>                                                                          <C>           <C>
                                     ASSETS

Current assets:
   Cash and cash equivalents ............................................    $  35,021     $  19,689
   Marketable securities ................................................        2,411            --
   Accounts receivable ..................................................       46,031        41,738
   Unbilled work in process .............................................        7,756        13,747
   Deferred income taxes ................................................       10,606        14,095
   Prepaid expenses and other current assets ............................        6,340         4,159
                                                                             ---------     ---------

         Total current assets ...........................................      108,165        93,428

Property and equipment, net of accumulated depreciation .................       36,973        41,521
Capitalized software costs, net of accumulated amortization .............        3,839         5,664
Deferred income taxes ...................................................        2,309            --
Related party receivable (Note 9) .......................................           --         4,809
Deposits and other assets ...............................................        9,317         9,235
Intangible assets, net of accumulated amortization:
   Goodwill .............................................................      138,535       160,698
   Acquired technology ..................................................        4,660         3,480
                                                                             ---------     ---------

         Total assets ...................................................    $ 303,798     $ 318,835
                                                                             =========     =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable .....................................................    $  10,349     $   5,151
   Accrued compensation .................................................       11,341        18,079
   Deferred revenue .....................................................        3,286         6,360
   Current debt .........................................................       10,891           700
   Other current liabilities ............................................       25,207        19,586
                                                                             ---------     ---------

         Total current liabilities ......................................       61,074        49,876

Long-term debt ..........................................................          985        30,894
Deferred income taxes ...................................................        1,594           254
Accrued compensation and other long-term liabilities ....................        5,222         6,031
                                                                             ---------     ---------

         Total liabilities ..............................................       68,875        87,055
                                                                             ---------     ---------

Commitments and contingencies (Notes 2, 10, 12 and 19)

Shareholders' equity:
   Preferred stock, $.10 par value, 10,000,000 shares authorized,
      no shares issued and outstanding ..................................           --            --
   Common stock, $.10 par value per share, 100,000,000 shares authorized,
      37,126,795 and 41,400,850 shares issued ...........................        3,713         4,140
   Additional paid-in capital ...........................................      213,748       216,639
   Retained earnings ....................................................       21,594        21,779
   Notes receivable from share sales ....................................         (703)         (469)
   Treasury stock, 99,000 and 331,360 shares at cost ....................       (1,118)       (2,661)
   Accumulated other comprehensive loss .................................       (2,311)       (7,648)
                                                                             ---------     ---------

         Total shareholders' equity .....................................      234,923       231,780
                                                                             ---------     ---------

         Total liabilities and shareholders' equity .....................    $ 303,798     $ 318,835
                                                                             =========     =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                       37
<PAGE>

                                 IMRglobal Corp.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                          Year Ended December 31,
                                                   -------------------------------------
                                                      1998         1999          2000
                                                   ---------     ---------     ---------
<S>                                                <C>           <C>           <C>
Revenue .......................................    $ 170,318     $ 222,028     $ 256,172
Cost of revenue ...............................       90,075       129,171       154,827
                                                   ---------     ---------     ---------
         Gross profit .........................       80,243        92,857       101,345

Selling, general and administrative ...........       34,754        58,457        77,172
Research and development ......................        6,247         6,635         3,504
Goodwill and intangible amortization ..........        2,074         6,705        10,448
Allowance for acquired receivables ............           --            --         1,632
Restructuring charge ..........................           --        12,377          (165)
Impairment of long-lived assets ...............           --         4,437            --
Acquisition costs .............................          145         2,168            --
Acquired in-process research and development ..        8,200         3,410            --
Charge associated with treasury stock purchase            --         8,778            --
                                                   ---------     ---------     ---------

         Income (loss) from operations ........       28,823       (10,110)        8,754
                                                   ---------     ---------     ---------

Other income (expense):
   Interest expense ...........................         (234)         (108)       (2,682)
   Other income ...............................        4,561         5,264           294
                                                   ---------     ---------     ---------

         Total other income (expense) .........        4,327         5,156        (2,388)
                                                   ---------     ---------     ---------

Income (loss) before provision for income taxes
   and cumulative effect of a change in
   accounting method ..........................       33,150        (4,954)        6,366

Provision for income taxes ....................       13,270         6,885         3,474
                                                   ---------     ---------     ---------

Income (loss) before cumulative effect of a
   change in accounting method ................       19,880       (11,839)        2,892

Cumulative effect of a change
   in accounting method, net of income taxes ..           --            --        (2,707)
                                                   ---------     ---------     ---------

         Net income (loss) ....................    $  19,880     $ (11,839)    $     185
                                                   =========     =========     =========
Earnings (loss) per share:
   Basic ......................................    $    0.69     $   (0.34)    $    0.00
                                                   =========     =========     =========

   Diluted ....................................    $    0.57     $   (0.34)    $    0.00
                                                   =========     =========     =========
   Diluted before cumulative effect of a
      change in accounting method .............    $    0.57     $   (0.34)    $    0.07
                                                   =========     =========     =========

Shares outstanding:
   Basic ......................................       28,752        34,786        39,837
                                                   =========     =========     =========

   Diluted ....................................       35,064        34,786        43,261
                                                   =========     =========     =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                       38
<PAGE>

                                 IMRglobal Corp.

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                 (In thousands)

<TABLE>
<CAPTION>

                                          Compre-                                Additional
                                          hensive           Common Stock          Paid-In      Retained
                                          Income         Shares       Amount      Capital      Earnings
                                          ------         ------       ------      -------      --------
<S>                                       <C>            <C>        <C>           <C>          <C>
Balance, December 31, 1997 ...........    $     --       26,370     $   2,637     $ 98,700     $ 13,785

Common stock issued in connection
   with business combinations ........          --        1,184           118       18,933          (69)
Employee stock purchase plan .........          --           31             3          602           --
Stock options exercised ..............          --        2,807           281          676           --
Tax benefit of stock options exercised          --           --            --       20,889           --
Dividends paid (Atechsys) ............          --           --            --           --         (163)
Notes receivable from stock sale .....          --           --            --           --           --
Net income ...........................    $ 19,880           --            --           --       19,880
Foreign currency translation
   adjustment ........................        (269)          --            --           --           --
                                          --------       ------     ---------     --------     --------

   Comprehensive income ..............    $ 19,611
                                          ========

Balance, December 31, 1998 ...........                   30,392        3,039       139,800       33,433

Common stock issued in connection
   with business combinations ........          --        6,958           695       84,372           --
Employee stock purchase plan .........          --           59             6          798           --
Stock options exercised ..............          --        1,175           118          630           --
Tax benefit of stock options exercised          --           --            --        1,661           --
Notes receivable from stock sale .....          --           --            --           --           --
Purchase and retirement of
   common stock ......................          --       (1,457)         (145)     (13,513)          --
Net loss .............................    $(11,839)          --            --           --      (11,839)
Foreign currency translation
   adjustment ........................      (1,219)          --            --           --           --
                                          --------       ------     ---------     --------     --------

   Comprehensive loss ................    $(13,058)
                                          ========

Balance, December 31, 1999 ...........                   37,127        3,713       213,748       21,594

Common stock issued in connection
   with contingency payments
   related to acquisitions ...........          --        1,160           116        9,395           --
Cash contingency payment
   related to acquisition ............          --           --            --       (8,500)          --
Employee stock purchase plan .........          --          153            15        1,250           --
Stock options exercised ..............          --        2,961           296          267           --
Tax benefit of stock options exercised          --           --            --          479           --
Purchase of treasury shares ..........          --           --            --           --           --
Reduction of notes receivable
   from share sales ..................          --           --            --           --           --
Net income ...........................    $    185           --            --           --          185
Foreign currency translation
   adjustment ........................      (5,337)          --            --           --           --
                                          --------       ------     ---------     --------     --------

   Comprehensive loss ................    $ (5,152)
                                          ========

Balance, December 31, 2000 ...........                   41,401     $  4,140     $ 216,639     $ 21,779
                                                         ======     ========     =========     ========

<CAPTION>
                                                Notes                 Accumulated
                                             Receivable                  Other
                                                from      Treasury   Comprehensive
                                            Shares Sales   Stock         Loss         Total
                                            ------------   -----         ----         -----
<S>                                           <C>         <C>         <C>           <C>
Balance, December 31, 1997 ...........        $    --     $    --     $    (764)    $ 114,358

Common stock issued in connection
   with business combinations ........             --          --           (59)       18,923
Employee stock purchase plan .........             --          --            --           605
Stock options exercised ..............             --          --            --           957
Tax benefit of stock options exercised             --          --            --        20,889
Dividends paid (Atechsys) ............             --          --            --          (163)
Notes receivable from stock sale .....           (366)         --            --          (366)
Net income ...........................             --          --            --        19,880
Foreign currency translation
   adjustment ........................             --                      (269)         (269)
                                              -------     -------     ---------     ---------

   Comprehensive income ..............


Balance, December 31, 1998 ...........           (366)         --        (1,092)      174,814

Common stock issued in connection
   with business combinations ........             --          --            --        85,067
Employee stock purchase plan .........             --          --            --           804
Stock options exercised ..............             --          --            --           748
Tax benefit of stock options exercised             --          --            --         1,661
Notes receivable from stock sale .....           (337)         --            --          (337)
Purchase and retirement of
   common stock ......................             --      (1,118)           --       (14,776)
Net loss .............................             --          --            --       (11,839)
Foreign currency translation
   adjustment ........................             --                    (1,219)       (1,219)
                                              -------     -------     ---------     ---------

   Comprehensive loss ................


Balance, December 31, 1999 ...........           (703)     (1,118)       (2,311)      234,923

Common stock issued in connection
   with contingency payments
   related to acquisitions ...........             --          --            --         9,511
Cash contingency payment
   related to acquisition ............             --          --            --        (8,500)
Employee stock purchase plan .........             --          32            --         1,297
Stock options exercised ..............             --          --            --           563
Tax benefit of stock options exercised             --          --            --           479
Purchase of treasury shares ..........             --      (1,575)           --        (1,575)
Reduction of notes receivable
   from share sales ..................            234          --            --           234
Net income ...........................             --          --            --           185
Foreign currency translation
   adjustment ........................             --          --        (5,337)       (5,337)
                                              -------     -------     ---------     ---------

   Comprehensive loss ................


Balance, December 31, 2000 ...........        $   (469)    $(2,661)    $(7,648)    $ 231,780
                                              ========     =======     =======     =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                       39
<PAGE>

                                 IMRglobal Corp.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                          Year Ended December 31,
                                                                   ----------------------------------

                                                                     1998         1999         2000
                                                                   --------     --------     --------
<S>                                                                <C>          <C>          <C>
Cash flows from operating activities:
   Net income (loss) ..........................................    $ 19,880     $(11,839)    $    185
   Adjustments to reconcile net income (loss) to cash
      provided by (used in) operating activities:
      Depreciation and amortization ...........................       5,452       11,994       16,371
      Deferred income taxes ...................................      (7,035)       3,838       (1,834)
      Tax benefit of stock options ............................      20,889        1,661          479
      Restructuring charges and impairment of long-lived assets          --       16,647         (165)
      Cumulative effect of a change in accounting method ......          --           --        2,707
      Other ...................................................          18        1,780           --
      Changes in operating assets and liabilities,
         net of effect of acquisitions:
            Accounts receivable and unbilled work-in-process ..      (7,719)        (776)      (4,256)
            Other current assets ..............................       1,292          659        1,395
            Deposits and other assets .........................      (2,789)      (3,906)         175
            Accounts payable and other liabilities ............       5,468       (3,708)      (7,857)
            Accrued compensation ..............................       8,134      (18,416)       4,948
            Income taxes ......................................      (2,907)      (3,026)         (23)
            Deferred revenue ..................................      (1,232)      (1,874)       1,632
                                                                   --------     --------     --------

         Total adjustments ....................................      19,571        4,873       13,572
                                                                   --------     --------     --------

         Net cash provided by (used in) operating activities ..      39,451       (6,966)      13,757
                                                                   --------     --------     --------

Cash flows from investing activities:
   Acquisition of interest in consolidated subsidiaries,
      net of cash received ....................................      (8,941)     (25,109)     (31,301)
   Investment in marketable securities, net ...................     (26,192)      29,198        2,411
   Additions to capitalized software costs ....................          --       (3,839)      (2,825)
   Additions to property and equipment ........................     (13,606)     (25,622)      (9,778)
   Related party loans ........................................       1,478       (1,478)      (4,900)
                                                                   --------     --------     --------

         Net cash used in investing activities ................     (47,261)     (26,850)     (46,393)
                                                                   --------     --------     --------

Cash flows from financing activities:
   Net advances (repayments) from revolving credit line .......         443        8,840      (10,258)
   Proceeds from long-term debt ...............................         384           --       31,298
   Payments on long-term debt .................................      (2,616)      (3,962)      (1,522)
   Proceeds from issuance of common stock .....................       1,562        1,215        1,860
   Purchase of treasury shares ................................          --      (14,776)      (1,575)
   Other ......................................................        (163)          --          234
                                                                   --------     --------     --------

         Net cash provided by (used in) financing activities ..        (390)      (8,683)      20,037
                                                                   --------     --------     --------

Effect of exchange rate changes ...............................           8       (1,287)      (2,733)
                                                                   --------     --------     --------

Net decrease in cash and cash equivalents .....................      (8,192)     (43,786)     (15,332)
Cash and cash equivalents at beginning of year ................      86,999       78,807       35,021
                                                                   --------     --------     --------

Cash and cash equivalents at end of year ......................    $ 78,807     $ 35,021     $ 19,689
                                                                   ========     ========     ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                       40
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies:

      Basis of Reporting--IMRglobal Corp. and subsidiaries ("IMRglobal" or the
"Company") provide consulting and technology services to a variety of industries
and clients located in North America, Europe and Asia. The consolidated
financial statements include the accounts of IMRglobal Corp., and its wholly
owned subsidiaries. All significant intercompany balances and transactions have
been eliminated.

      The Company's consolidated financial statements for 1998 and prior years
have been restated to include the financial statements of Atechsys, S.A. This
company was combined during 1999 in a transaction accounted for as a pooling of
interests (Note 2).

      Cash and Cash Equivalents--IMRglobal considers all highly liquid
investments with original maturity dates of three months or less to be cash
equivalents. IMRglobal maintains its investments at high quality financial
institutions.

      Marketable Securities--All marketable securities are classified as
available-for-sale and are available to support current operations or to take
advantage of other investment opportunities. These securities are stated at
estimated fair value based upon market quotations.

      Revenue Recognition--Fixed-price contract revenue and revenue from the
sale of software that requires significant modification is recognized using the
percentage of completion method of accounting, under which the sales value of
performance, including earnings thereon, is recognized on the basis of the
percentage that each contract's cost to date bears to the total estimated cost.
Any anticipated losses upon contract completion are accrued currently.

      Revenue attributable to contracts for software licenses that do not
require significant modification is recognized after the software has been
delivered and all significant uncertainties regarding client acceptance have
expired. Service revenue from time-and-materials services is recognized as the
services are provided. Revenue attributable to maintenance is deferred and
recognized ratably over the contract period.

      Unbilled work-in-progress represents revenue on contracts to be billed in
subsequent periods in accordance with the terms of the contract. Deferred
revenue represents amounts billed in excess of revenue earned in accordance with
the terms of the contracts.

      Effective January 1, 2000, the Company changed its method of accounting
for revenue recognition for contract related revenue from claims dollar recovery
projects, in accordance with Staff Accounting Bulletin (SAB) No. 101, Revenue
Recognition in Financial Statements. These projects involve identifying overpaid
or erroneously paid insurance claims to be recovered from healthcare providers
by medical insurance companies. Previously, the Company recognized revenue, less
an estimated percentage for claims not accepted, as identified claims were
submitted to the client. Under the new accounting method adopted retroactive to
January 1, 2000, the Company now recognizes revenue upon the earlier of
collection of the findings based fee or notification of acceptance of submitted
claims from the client. The cumulative effect of the change on prior years
resulted in a charge to income of $2.7 million (net of income taxes of $1.7
million), which is included in results of operations for the year ended December
31, 2000.


                                       41
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies (Continued):

      Per share information related to the change in accounting method for the
year ended December 31, 2000 is as follows:

          Income per share before cumulative effect of a
             change in accounting method ....................      $0.07

          Cumulative effect of a change in accounting
             method per share ...............................      $0.07

          Earnings per share ................................      $0.00

      The pro forma amounts for the year ended December 31, 1999, as reflected
below, have been adjusted for the effect of the retroactive application of the
new method of revenue recognition, net of related taxes, had the new method been
in effect during the year. The change in method of recognizing revenue does not
affect earlier years, since the Company did not perform claims dollar recovery
projects prior to 1999 (in thousands, except share data):

          As reported:
             Net loss ...............................            $(11,839)
             Basic loss per share ...................            $  (0.34)
             Diluted loss per share .................            $  (0.34)

          Pro Forma (unaudited):
             Net loss ...............................            $(14,546)
             Basic loss per share ...................            $  (0.42)
             Diluted loss per share .................            $  (0.42)

      For each of the quarters in the year ended December 31, 2000, the Company
recognized amounts in revenue that were included in the cumulative effect
adjustment as of January 1, 2000. These amounts, as well as the effect of that
revenue on income during those periods, are reflected in the table below (in
thousands):

<TABLE>
<CAPTION>
                                      March 31       June 30    September 30   December 31
                                     -----------   -----------   -----------   -----------

                                     (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
      <S>                               <C>          <C>          <C>           <C>
      Revenue recognized .........      $   498      $   773      $    199      $    298
</TABLE>

      Property and Equipment--Property and equipment is stated at cost less
accumulated depreciation. Depreciation is primarily computed using the
straight-line method and is charged to income over the estimated useful lives of
the respective assets. Expenditures for renewals and improvements that
significantly add to productive capacity or extend the useful life of an asset
are capitalized. Expenditures for maintenance and repairs are charged to
operation as incurred.


                                       42
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies (Continued):

      Goodwill--Goodwill arising from purchase business combinations is being
amortized on a straight-line basis over 10 to 20 years. IMRglobal periodically
reviews the value of its goodwill to determine if an impairment has occurred.
IMRglobal determines if the potential impairment of recorded goodwill exists by
the undiscounted value of expected future operating cash flow in relation to the
assets to which this goodwill applies. If impairment of recorded goodwill does
exist, IMRglobal adjusts the recorded goodwill to fair market value.

      Capitalized Software Costs--Capitalized software costs are recorded at
cost less accumulated amortization. Production costs for computer software that
is to be utilized as an integral part of a product or process is capitalized
when both (a) technological feasibility is established for the software and (b)
all research and development activities for the other components of the product
or process have been completed.

      Amortization is included in cost of revenue and is charged to income based
upon a revenue formula over the shorter of the remaining estimated economic life
of the product or estimated lifetime revenue of the product. Amortization of
capitalized software costs was $47,000, $0 and $700,000 for the years ended
December 31, 1998, 1999 and 2000, respectively. At December 31, 1999 and 2000
accumulated amortization for capitalized software costs was $-0- and $700,000,
respectively.

      Income Taxes--IMRglobal uses the asset and liability method of accounting
for income taxes. Under this method, deferred income taxes are recorded to
reflect the tax consequences on future years of differences between the tax
basis of assets and liabilities and their financial reporting amounts at each
year-end based on enacted tax laws and statutory tax rates applicable to the
periods in which the differences are expected to affect taxable income. A
valuation allowance is provided against the future benefit of deferred tax
assets if it is determined that it is more likely than not that the future tax
benefits associated with the deferred tax asset will not be realized.

      Foreign Currency Translation--The financial statements of IMRglobal's
foreign subsidiaries use a functional currency which is other than the U.S.
dollar and are translated into U.S. dollars in accordance with Statement of
Financial Accounting Standard No. 52, "Foreign Currency Translation." Assets and
liabilities are translated at exchange rates in effect on the reporting date.
Income and expense items are translated at the average exchange rates in effect
during the year. The resulting translation adjustments are not included in
determining net income but are included in accumulated other comprehensive
income. Foreign currency transaction gains and losses are reported in other
income (Note 18).

      Computation of Earnings per Share--Basic earnings (loss) per share is
computed by dividing income available to common stockholders by the weighted
average number of common shares outstanding during the year. Diluted earnings
per share assume the exercise of stock options for which market price exceeds
exercise price, less shares assumed purchased by the Company with related
proceeds. Options are not included in the computation of diluted loss per share
in 1999 due to their anti dilutive effect.


                                       43
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies (Continued):

      Shares used in the computation of earnings (loss) per share are summarized
as follows (in thousands):

<TABLE>
<CAPTION>
                                                                  Year Ended December 31,
                                                               ---------------------------

                                                                1998       1999      2000
                                                               ------     ------    ------
      <S>                                                      <C>        <C>       <C>
      Weighted average common stock outstanding ...........    28,752     34,786    39,837

      Stock option plans
         Options assumed exercised ........................    11,229         --     6,674
         Treasury stock which could be purchased ..........    (4,917)        --    (3,250)
                                                               ------     ------    ------

      Weighted average common stock equivalents ...........     6,312         --     3,424
                                                               ------     ------    ------

      Shares used in diluted earnings per share calculation    35,064     34,786    43,261
                                                               ======     ======    ======
</TABLE>

      Stock Based Compensation--IMRglobal follows the provisions of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB
Opinion No. 25), for stock issued under its stock option plans (Note 13).

      Use of Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
Significant estimates for IMRglobal for 1998, 1999 and 2000 include the
estimated useful life of goodwill for purchase acquisitions, estimation of
valuation allowances for income taxes, estimation of accounts receivable
allowances and estimation of costs to complete for fixed-price projects.

      Comprehensive Income--Comprehensive income is comprised entirely of
foreign currency translation adjustments. Foreign currency translation
adjustments have not been tax effected because IMRglobal considers foreign
earnings to be indefinitely reinvested.

      Reclassifications--Certain amounts in the 1998 and 1999 financial
statements have been reclassified to conform with the 2000 presentation.

2. Business Combinations:

      For all business combinations accounted for as purchases pursuant to
Accounting Principles Board Opinion No. 16, "Business Combinations" (APB Opinion
No. 16), IMRglobal's financial statements include the results of operations for
the acquired businesses from the date of acquisition. For all material business
combinations accounted for as poolings of interests pursuant to APB Opinion No.
16, IMRglobal's financial statements have been restated to include the results
of operations for all periods presented.


                                       44
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Business Combinations (Continued):

      Lyon Consultants, S.A.--During May, 1998, IMRglobal acquired 100% of the
outstanding stock of Lyon Consultants, S.A. ("Lyon"), a privately held software
engineering company headquartered in Paris, France. Lyon specializes in rapid
software application development utilizing reusable business and technical
software objects, and information technology consulting. In exchange for Lyon's
common stock, Lyon's shareholders received $16.7 million in cash and 531,353
shares (valued at $13.0 million) of IMRglobal's unregistered common stock. Of
the above purchase price, $700,000 of cash and 32,000 shares of IMRglobal's
common stock were remitted one year after the acquisition date. In addition, the
acquisition agreement, as amended, provided that if the average price of the
IMRglobal shares on NASDAQ was less than $34.05 per share for the seven trading
days prior to May 15, 2000, IMRglobal would pay the former Lyon shareholders in
cash or shares, at the option of IMRglobal the difference between the average
price on NASDAQ and $34.05 multiplied by 499,353 shares. During June 2000,
IMRglobal paid $8.5 million in cash as a final settlement of this contingency
which resulted in a reduction of additional paid-in capital. The Lyon
acquisition is accounted for as a purchase pursuant to the provisions of APB
Opinion No. 16.

      IMRglobal allocated the purchase price of Lyon based on the fair value of
the assets acquired and liabilities assumed. Significant portions of the
purchase price were identified as intangible assets in independent appraisals,
using proven valuation procedures and techniques. These intangible assets
include approximately $8.2 million for acquired in-process research and
development ("IPRD") for projects that did not have future alternative uses and
$2.7 million for developed technology. At the date of the acquisition, the
development of the IPRD projects had not yet reached technological feasibility
and the IPRD in progress had no alternative future use. Accordingly, these costs
were expensed as of the acquisition date. The acquired developed technology is
being amortized over a 5-year period.

      Concurrent with the acquisition of Lyon, IMRglobal entered into a
noncancellable 3 year licensing agreement with a seven year renewal option, with
Wyde S.A. ("Wyde"), an unrelated French company. Wyde provides the base
technology upon which the Lyon components have been developed. The licensing
agreement provides for the transfer of Wyde's computer code and technology to
IMRglobal if Wyde should terminate its business. The amount of the licensing
fees is dependent on the value of company work sold and the countries where the
technology is utilized. Future minimum licensing fees payable to Wyde are
$750,000 in 2001.

      RHO Transformational Technologies Pty Limited--During June, 1998,
IMRglobal acquired 100% of the outstanding shares of RHO Transformational
Technologies Pty Limited ("RHO"), a privately held software services and
engineering company headquartered in Sydney, Australia. RHO specializes in
software application conversion and maintenance services, utilizing proprietary
tools and provides these services to large global companies with Australian and
Asia Pacific operations. In exchange for RHO's common stock, RHO stockholders
received 285,000 shares of IMRglobal's common stock. The RHO acquisition was
accounted for as a pooling of interests in accordance with the provisions of APB
Opinion No. 16. Costs of approximately $145,000 related to the acquisition have
been charged to acquisition costs and are included in the statement of
operations.


                                       45
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Business Combinations (Continued):

      The financial statements for 1997 were not restated for the RHO
acquisition due to the immateriality of this transaction. The impact was a
reduction to the 1998 opening retained earnings and comprehensive income of
$69,000 and $59,000, respectively. These amounts are included in common stock
issued in connection with business combinations.

      Visual Systems Development Corporation--On October 2, 1998, IMRglobal
acquired 100% of the outstanding shares of Visual Systems Development
Corporation ("Visual"). In exchange for Visual's common stock, Visual's
shareholders received $5.5 million in cash and 400,000 shares (valued at
approximately $7 million) of IMRglobal's common stock. In addition, during
January 2000, 275,908 shares (valued at approximately $2.5 million) of
IMRglobal's unregistered common stock was issued to the Visual shareholders
based on the accomplishment of specified 1999 business and financial objectives.
The contingent payment resulted in an increase in the purchase price and the
resulting goodwill. The Visual acquisition is accounted for as a purchase
pursuant to the provisions of APB Opinion No. 16.

      Atechsys S.A. ("Atechsys") - On January 8, 1999, IMRglobal acquired 100%
of the outstanding stock of Atechsys S.A., a privately held information
technology company based in Paris, France, specializing in business and
technology consulting specific to capital markets businesses. In exchange for
Atechsys' common stock, Atechsys' shareholders received 718,859 shares of
IMRglobal common stock. The Atechsys acquisition is accounted for as a pooling
of interests combination pursuant to the provisions of APB Opinion No. 16.
Financial statements for all periods have been restated to give effect to the
business combination. Costs of approximately $2.2 million related to the
acquisition have been charged to acquisition costs and included in the statement
of operations for the year ended December 31, 1999.


                                       46
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Business Combinations (Continued):

      The Atechsys transaction has been accounted for as a pooling of interests
and accordingly, the consolidated financial statements for the periods presented
have been restated to include the accounts of Atechsys. Results of operations
for the periods prior to the merger with Atechsys are summarized below (in
thousands):

                                                             Year Ended
                                                            December 31,
                                                            ------------

                                                                1998
                                                            ------------
         Revenue:
           IMRglobal ...................................     $ 158,252
           Adjustment for pooling of interests .........        12,066
                                                             ---------

                  Combined .............................     $ 170,318
                                                             =========

         Net income:
           IMRglobal ...................................     $  18,909
           Adjustment for pooling of interests .........           971
                                                             ---------

                  Combined .............................     $  19,880
                                                             =========

         Other changes in shareholders' equity:
           IMRglobal ...................................     $  40,616
           Adjustment for pooling of interests .........           (40)
                                                             ---------

                  Combined .............................     $  40,576
                                                             =========

      ECWerks, Inc. ("ECWerks") -- On January 15, 1999, IMRglobal acquired 100%
of the outstanding stock of ECWerks, Inc., a privately held electronic commerce
business ("e-business") and technology consulting company based in Tampa,
Florida. In exchange for ECWerks' common stock, ECWerks' shareholders received
163,054 shares (valued at $3.6 million) of IMRglobal's unregistered common
stock. In addition, a contingent payment of 556,336 shares (valued at $4.3
million) of IMRglobal's common stock was issued to the ECWerks' shareholders
based on the accomplishment of specified financial goals during 1999. The
contingent payment resulted in a corresponding increase in the purchase price
and the resulting goodwill. The ECWerks acquisition is accounted for as a
purchase pursuant to the provisions of APB Opinion No. 16.

      Fusion System Japan Co., Ltd. ("Fusion")--On March 26, 1999, IMRglobal
acquired 100% of the outstanding stock of Fusion System Japan Co., Ltd., a
privately held business and technology consulting company based in Tokyo, Japan.
Fusion focused on the capital markets businesses in Japan and Asia-Pacific.
Fusion also had a subsidiary in Boston that provides IT services to clients in
the financial and commercial services industries. In exchange for Fusion's
common stock, Fusion's shareholders received 3,735,536 shares


                                       47
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Business Combinations (Continued):

(valued at approximately $39.3 million) of IMRglobal common stock. The Fusion
acquisition is accounted for as a purchase pursuant to the provisions of APB
Opinion No.16. On October 25, 1999, IMRglobal reacquired approximately 1.5
million shares of common stock issued to the Fusion stockholders in exchange for
$22.4 million. This transaction was accounted for as a treasury stock purchase
where the repurchased shares of treasury stock were immediately retired. The
excess of the $22.4 million paid to the Fusion stockholders over the fair market
value of the common stock reacquired by IMRglobal on October 25, 1999 was
included in the statement of operations for the year ended December 31, 1999 as
an $8.8 million charge associated with treasury stock purchase.

      The Company allocated the purchase price of Fusion based on the fair value
of the assets acquired and liabilities assumed. Significant portions of the
purchase price were identified as intangible assets in independent appraisals,
using proven valuation procedures and techniques. These intangible assets
include approximately $3.4 million for acquired in-process research and
development ("IPRD") for projects that did not have future alternative uses and
$3.3 million for developed technology. At the date of the acquisition the
development of IPRD projects had not yet reached technological feasibility and
the IPRD in progress had no alternative future use. Accordingly, these costs
were expensed as of the acquisition date. The acquired developed technology is
being amortized over a 5-year period.

      Professional Partners, Inc. and Lakewood Software Technology Center, Inc.
("PLP")--On April 28, 1999, IMRglobal acquired 100% of the outstanding stock of
PLP, a privately held provider of information technology services to the
Property and Casualty insurance industry. In exchange for PLP's common stock,
PLP's shareholders received $12.0 million in cash. The PLP acquisition is
accounted for as a purchase pursuant to the provisions of APB Opinion No. 16.

      Orion Consulting, Inc. ("Orion")--On June 15, 1999, IMRglobal acquired
100% of the outstanding stock of Orion Consulting, Inc., headquartered in
Cleveland, Ohio. Orion was a privately held management consulting firm primarily
serving the Health Care industry. In exchange for Orion's common stock, Orion's
shareholders received 3,028,414 shares of IMRglobal's common stock (valued at
approximately $41.4 million). The Orion acquisition has been accounted for as a
purchase pursuant to the provisions of APB Opinion No. 16.

      During 2000, IMRglobal took a charge of $1.6 million against income for
purchased accounts receivable existing at June 15, 1999 which had not been
collected in 2000.


                                       48
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Business Combinations (Continued):

      Neverdahl-Loft & Associates, Inc. ("Neverdahl")-- On December 7, 1999,
IMRglobal acquired 100% of the outstanding stock of Neverdahl, a privately held
full-service information technology consulting firm focused on the life
insurance industry headquartered in Lincoln, Nebraska. In exchange for
Neverdahl's common stock, Neverdahl's shareholders received approximately $10.0
million in cash. In addition, $2.0 million in cash was paid to the Neverdahl
shareholders for the attainment of specified financial objectives for the six
months ended June 30, 2000. The contingent payment resulted in a corresponding
increase in the purchase price and the resulting goodwill. The Neverdahl
acquisition is being accounted for as a purchase pursuant to the provisions of
APB Opinion No. 16.

      Intuitive Group Limited ("Intuitive")--On January 28, 2000, IMRglobal
acquired 100% of the outstanding stock of Intuitive Group Limited, headquartered
in London. Intuitive was a privately held provider of Customer Relationship
Management ("eCRM") software solutions and services for the financial services
markets. Intuitive had additional offices in Boston and Sydney. In exchange for
Intuitive's common stock, Intuitive's shareholders received approximately $18.0
million in cash. In addition, $394,000 in cash and 327,997 shares of IMRglobal
common stock was paid to Intuitive shareholders during July 2000 based on the
achievement of certain financial objectives for the period ended March 31, 2000,
as defined in the original agreement. The contingent payment resulted in a
corresponding increase in the purchase price and the resulting goodwill. The
Intuitive acquisition is accounted for as a purchase pursuant to the provisions
of APB Opinion No. 16.

      The following unaudited table compares IMRglobal's reported operating
results to pro forma information prepared as if the Intuitive acquisition had
taken place at the beginning of the fiscal year for each of the periods
presented (in thousands except per share amounts):

                                                               December 31,
                                                           --------------------
                                                             1999         2000
                                                           --------    --------
         As reported:
            Revenue .................................      $222,028    $256,172
            Net income (loss) .......................      $(11,839)   $    185
            Basic earnings (loss) per share .........      $  (0.34)   $   0.00
            Diluted earnings (loss) per share .......      $  (0.34)   $   0.00

         Pro forma (unaudited):
            Revenue .................................      $275,442    $258,056
            Pro forma net income (loss) .............      $(12,636)   $    536
            Pro forma basic earnings (loss)
                per share ...........................      $  (0.34)   $   0.01
            Pro forma diluted earnings (loss)
                per share ...........................      $  (0.34)   $   0.01


                                       49
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Business Combinations (Continued):

      In management's opinion, the unaudited pro forma combined results of
operations are not indicative of the actual results that would have occurred had
the acquisition been consummated at the beginning of 1999 or 2000 or of future
operations of the combined companies under the ownership and management of
IMRglobal.

3. Marketable Securities:

      IMRglobal invests only in high quality, short-term investments which it
classifies as available-for-sale. As such there were no significant differences
between amortized cost and estimated fair value at December 31, 1999.
Additionally, because investments are short-term and are generally allowed to
mature, realized gains and losses have been minimal for the years ended December
31, 1998, 1999 and 2000.

      At December 31, 1999, marketable securities consist of commercial paper
with an estimated fair value of $2.4 million. No marketable securities were held
at December 31, 2000.

4. Accounts Receivable (In thousands):

                                                                December 31,
                                                           --------------------

                                                             1999        2000
                                                           --------    --------
         Accounts receivable, trade ..............         $ 45,300    $ 39,523
         Unbilled accounts receivable- ...........
            Time-and-materials contracts .........            3,055       4,207
         Allowance for doubtful accounts .........           (2,324)     (1,992)
                                                           --------    --------

                                                           $ 46,031    $ 41,738
                                                           ========    ========

   Allowance for doubtful accounts:

                                                          December 31,
                                                  ----------------------------

                                                    1998     1999       2000
                                                  -------   -------    -------
         Beginning balance ..................     $    --   $  (288)   $(2,324)
         Purchase acquisitions ..............          --    (2,062)        --
         Charged to costs & expense .........         288      (321)    (2,473)
         Deductions ............... .........          --       347      2,805
                                                  -------   -------    -------

         Ending balance .....................     $   288   $(2,324)   $(1,992)
                                                  =======   =======    =======


                                       50
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. Costs and Estimated Earnings on Completed and Uncompleted Contracts (In
thousands):

                                                     December 31,
                                               -----------------------

                                                 1999           2000
                                               --------       --------
         Costs incurred on completed
            and uncompleted contracts ...      $ 53,915       $ 38,891
         Estimated earnings .............        42,897         21,601
                                               --------       --------

                                                 96,812         60,492

         Less billings to date ..........       (92,342)       (53,105)
                                               --------       --------

                                               $  4,470       $  7,387
                                               ========       ========

      The following is included in the accompanying balance sheets:

                                                     December 31,
                                               -----------------------

                                                 1999           2000
                                               --------       --------

         Unbilled work in process .......      $  7,756       $ 13,747
         Deferred revenue ...............        (3,286)        (6,360)
                                               --------       --------

                                               $  4,470       $  7,387
                                               ========       ========

6. Property and Equipment (In thousands):

                                                            December 31,
                                          Estimated    ----------------------
                                         Useful Life
                                           (Years)       1999          2000
                                         -----------   --------      --------

         Land .........................        --      $  2,596      $  2,626
         Buildings and improvements ...     10-40        15,001        27,202
         Computer equipment ...........       3-6        10,205        11,967
         Computer software ............      3-10         2,514         2,324
         Office furniture and equipment      3-12         7,553        10,000
         Vehicles .....................      3-20           461           852
         Construction in progress .....                   8,114            --
                                                       --------      --------
                                                         46,444        54,971
         Less accumulated depreciation
            and amortization ..........                  (9,471)      (13,450)
                                                       --------      --------

                                                       $ 36,973      $ 41,521
                                                       ========      ========


                                       51
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Property and Equipment (In thousands) (Continued):

      Depreciation of property and equipment was approximately $3.3 million,
$5.3 million and $5.2 million for the years ended December 31, 1998, 1999 and
2000, respectively.

      Equipment and furnishings held under capital lease was approximately
$45,000 and $2.8 million at December 31, 1999 and 2000, respectively.
Amortization of assets held under capital leases is included in depreciation
expense. Accumulated amortization on equipment and furnishings held under
capital lease was approximately $10,000 and $120,000 at December 31, 2000,
respectively.

7. Intangible Assets (In thousands):

                                                               December 31,
                                             Estimated   ----------------------
                                           Useful Life
                                              (Years)      1999          2000
                                           ------------  ---------    ---------

         Goodwill .........................    10-20     $ 145,804    $ 177,079
         Less accumulated amortization ....                 (7,269)     (16,381)
                                                         ---------    ---------

                                                         $ 138,535    $ 160,698
                                                         =========    =========

         Acquired technology ..............      5       $   6,000    $   6,000
         Less accumulated amortization ....                 (1,340)      (2,520)
                                                         ---------    ---------

                                                         $   4,660    $   3,480
                                                         =========    =========

8.  Other Current Liabilities (In thousands):

                                         December 31,
                                                         ----------------------

                                                            1999         2000
                                                         ---------    ---------

         Accrued costs on Year 2000 contracts ......     $     450    $      --
         Acquisition costs .........................            --        1,594
         Restructuring charges .....................         7,082        1,935
         Payroll taxes and value added taxes .......         8,351        2,019
         Income taxes ..............................         3,152          925
         Deferred income taxes .....................           483        1,168
         Employee savings plans ....................         1,373        4,665
         Suppliers .................................         1,458        4,817
         Other .....................................         2,858        2,463
                                                         ---------    ---------

                                                         $  25,207    $  19,586
                                                         =========    =========


                                       52
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. Other Current Liabilities (In thousands) (Continued):

      During 1998, IMRglobal accrued $5.1 million related to completed Year 2000
projects. IMRglobal is liable to remediate selected issues which arise in
completed projects. In 1998 management had committed to clients that personnel
would be available to remediate Year 2000 issues, if any, that arose in late
1999 and early 2000. To accomplish this goal, IMRglobal had committed specific
personnel to work on completed Year 2000 projects. IMRglobal had accrued the
amount of costs it committed to incur based on the complexity of the Year 2000
projects completed and experience level of personnel required. Changes in
accrued costs of Year 2000 contracts are summarized as follows:

                                                         Year Ended December 31,
                                                         -----------------------

                                                            1999        2000
                                                         ---------    ----------

      Beginning balance ................................   $ 5,116    $   450
      Charged to costs and expenses - change in estimate      (600)        --
      Payment of accrued costs .........................    (4,066)      (450)
                                                           -------    -------

      Ending balance ...................................   $   450    $    -0-
                                                           =======    =======

9. Related Parties:

      IMRglobal has granted a credit facility to IMRglobal's Chief Executive
Officer ("CEO") in accordance with his employment agreement. This facility is a
revolving credit arrangement for up to $5.0 million with interest at prime plus
1% (currently 10.5%) and is repayable at the earlier of May, 2004 or 180 days
after the CEO terminates employment with IMRglobal. At December 31, 2000 the
amount drawn on this facility was $4.8 million. Accrued interest related to this
facility approximates $135,000 at December 31, 2000, and is included in deposits
and other assets in the accompanying balance sheet.

      During October 1999, an additional $15.0 million in cash was advanced to
IMRglobal's CEO in a separate note agreement collateralized by the personal
assets of IMRglobal's CEO. Interest was charged at prime plus 1% . This
additional advance was repaid in full with interest on November 12, 1999.

      Interest income earned by IMRglobal on the above loans for the year ended
December 31, 1999 and 2000 was approximately $223,000 and $460,000,
respectively.

      During 1998 and 1999, IMRglobal advanced $703,000 to three officers. These
officers utilized the proceeds to acquire common stock of IMRglobal. These loans
are secured by the IMRglobal common stock investment, and are repayable in 2003
or upon the officer's termination of employment with IMRglobal.


                                       53
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. Related Parties (Continued):

      As part of the restructuring described in Note 16, one of the officers
terminated employment with IMR in December 1999. The officer's employment
separation agreement provided that if, during the period December 31, 1999
through December 31, 2000, the closing price of the Company's stock exceeded
$24.40 per share for 5 consecutive days, the employee would repay the balance
owed on the loan. If the share price did not reach $24.40 per share, the
employee could surrender his 5,000 shares, in which event the loan together with
the accrued interest would be deemed forgiven. The stock price did not exceed
$24.40 during the agreed period and IMR purchased the stock as treasury shares
effective December 31, 2000. The related write-off of approximately $126,000 is
reflected in the restructuring reserve at December 31, 2000.

      The remaining officer loans bear interest at 9.5%, which is added to the
principal portion of the note. At December 31, 2000, the principal balance of
$469,000 is included as a contra-equity account and the related accrued interest
of $92,000 is included in deposits and other assets in the accompanying balance
sheet.

      A member of IMRglobal's Board of Directors also owns approximately 10% and
is board member of a client of IMRglobal. During 2000, approximately $600,000 of
revenue was attributable to this client. At December 31, 2000, $275,000 was
included in accounts receivable and was more than 120 days overdue. A note
receivable was executed with this client during January 2001 calling for monthly
payments of $12,000 over the next two years.

10. Credit Facilities:

      Revolving Credit Loans

      IMRglobal maintains revolving credit facilities totaling approximately $45
million with various financial institutions. Of these facilities, $30 million
(the "Original Line of Credit") will expire in February 2003 and $15 million
(the "Additional Line of Credit") will expire in December 2003. The facilities
bear interest at a spread over LIBOR whereby the spread may be 0.6% to 2.0%
based on certain ratios and the specific financial institution. At December 31,
2000, the weighted average interest rate on the revolving credit facilities was
8.24%. These facilities are collateralized by virtually all of the assets of
IMRglobal, including a mortgage on the headquarters premises located in
Clearwater, Florida. The facilities also contain certain covenants which require
IMRglobal to achieve specific levels of earnings and to maintain specific
balance sheet and cash flow ratios. At December 31, 2000, IMRglobal was not in
compliance with certain of the loan covenants related to tangible net worth and
stockholders' equity. Management has obtained waivers from the banks related to
these covenants as of December 31, 2000. Additionally, the tangible net worth
covenant contained in the Original Line of Credit was amended such that the
Company expects to be in compliance with it for the remainder of 2001. Amounts
outstanding under the Additional Line of Credit have been refinanced under the
Original Line of Credit, subsequent to December 31, 2000. The amount outstanding
on these credit facilities at December 31, 2000, was $28.5 million which is due
in 2003 and included in the maturity schedule below.


                                       54
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. Credit Facilities (Continued):

      Capital Leases

            IMRglobal has leased some of the furniture, fixtures and
infrastructural computer equipment located in its headquarters premises through
transactions that are classified as capital leases. These leases are for periods
ranging from 3 years to 5 years and allow for the purchase of the asset being
leased for a nominal value at the end of the lease term. The assets are
capitalized as part of the Company's property, plant and equipment. Related
depreciation expense on these assets is included in depreciation expense.
Specific interest rates vary from transaction to transaction and range from
9.27% to 9.89%. At December 31, 2000, the amount outstanding under capitalized
leases was $2.7 million at a weighted average interest rate of 9.50%. The amount
due per year under capitalized leases are included in the maturity schedule
below.

      Term Loans

            IMRglobal's subsidiary in France has obtained loans from French
government agencies at 0% interest payable in annual installments through March
2002. These loans are collateralized by furniture, fixtures and equipment
located in IMRglobal's offices in France. At December 31, 2000, $357,000 was
outstanding under these loan agreements. Of this amount, $143,000 is due in 2001
and $214,000 is due in 2002, which is included in the maturity schedule below.

      Long-Term Debt (In thousands):

<TABLE>
<CAPTION>
                                                                                 December 31,
                                                                             -------------------

                                                                               1999        2000
                                                                             -------     -------
         <S>                                                                  <C>         <C>
         France:
            Loans from French government agencies
            at 0% interest payable in annual installments
            through March 2002; collateralized by
            property and equipment ....................................      $   553     $   357

         Japan:
            Loans from financial institutions at various interest
            rates payable in monthly installments through
            September 2002 collateralized by property
            and equipment (repaid during 2000) ........................        1,065          --

         US:
            Capital leases at various interest rates payable in
            monthly installments through 2005, collateralized
            by furniture and equipment ................................           --       2,739

            Revolving credit loans ....................................       10,258      28,498
                                                                             -------     -------

                                                                              11,876      31,594
         Less current portion .........................................       10,891         700
                                                                             -------     -------

         Long-term debt, net of current portion .......................      $   985     $30,894
                                                                             =======     =======
</TABLE>


                                       55
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. Credit Facilities (Continued):

      Maturities of long-term debt at December 31, 2000 are as follows (in
thousands):

                    2002 ...................................          $   811
                    2003 ...................................           29,140
                    2004 ...................................              544
                    2005 ...................................              399
                                                                      -------

                                                                      $30,894
                                                                      =======

11. Income Taxes:

      The provision (benefit) for income taxes is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                                               ------------------------------------

                                                                 1998          1999          2000
                                                               --------      --------      --------
         <S>                                                   <C>           <C>           <C>
         Current:
            Federal ......................................     $ 16,073      $  1,193      $     --
            State (net of federal tax benefit) ...........        1,379           142            --
            Foreign ......................................        2,853         1,712         3,098
                                                               --------      --------      --------

               Total current provision for income taxes ..       20,305         3,047         3,098

         Deferred:
            Federal ......................................       (5,445)        4,145           118
            State (net of federal tax benefit) ...........         (467)          502            13
            Foreign ......................................       (1,123)         (809)          245
                                                               --------      --------      --------

               Total deferred provision for (benefit from)
                  income taxes ...........................       (7,035)        3,838           376
                                                               --------      --------      --------

               Total provision for income taxes ..........     $ 13,270      $  6,885      $  3,474
                                                               ========      ========      ========
</TABLE>


                                       56
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. Income Taxes (Continued):

      The components of the net deferred tax asset (liability) are as follows
(in thousands):

                                                               December 31,
                                                         ----------------------

                                                           1999          2000
                                                         --------      --------
         Deferred tax assets:

            Allowance for doubtful accounts ........     $    794      $    422
            Intangibles ............................        1,964            --
            Accrued compensation ...................        5,320         7,134
            Property, equipment and accrued expenses
               associated with restructuring charge         3,248           432
            Research and development credits .......           --           338
            Depreciation methods ...................           --           250
            Net operating loss .....................       15,446        27,126
            Other ..................................          770         1,086
                                                         --------      --------

               Total deferred tax assets ...........       27,542        36,788
                                                         --------      --------

         Deferred tax liabilities:
            Cash to accrual conversion .............       (3,530)       (1,623)
            Intangibles ............................       (4,333)       (3,596)
            Other ..................................         (554)       (1,016)
                                                         --------      --------

                  Total deferred tax liabilities ...       (8,417)       (6,235)
                                                         --------      --------

         Net deferred tax asset before
            valuation allowance ....................       19,125        30,553
         Valuation allowance .......................       (8,287)      (17,880)
                                                         --------      --------
         Deferred tax asset
            net of valuation allowance .............     $ 10,838      $ 12,673
                                                         ========      ========

      The balance sheet classification of the net deferred tax asset is
summarized as follows (in thousands):

                                                          1999          2000
                                                        --------      --------

         Deferred tax asset -  current .............    $ 10,606      $ 14,095
         Deferred tax asset - noncurrent ...........       2,309            --
         Deferred tax liability - current ..........        (483)       (1,168)
         Deferred tax liability - noncurrent .......      (1,594)         (254)
                                                        --------      --------

                                                        $ 10,838      $ 12,673
                                                        ========      ========


                                       57
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. Income Taxes (Continued):

      As reflected above IMRglobal has recorded a valuation allowance of $8.3
million and $17.9 million, respectively, against the deferred tax asset which is
summarized as follows (in thousands):

                                                            December 31,
                                                        -------------------

                                                         1999        2000
                                                        -------     -------
         United States:
            Net operating loss attributable to
               stock option exercises (allocated to
               shareholders' equity) ..............     $ 5,000     $16,612

         Foreign:
            Net operating loss for UK subsidiaries        1,905          --
            Accrued compensation costs for
               Japan subsidiary ...................       1,382       1,268
                                                        -------     -------

                                                        $ 8,287     $17,880
                                                        =======     =======

      As of December 31, 2000, IMRglobal had approximately $70.1 million of U.S.
net operating loss carryforwards for regular income tax purposes which will
expire between 2013 and 2020. The net operating loss primarily resulted from the
deductible expense recognized for income tax purposes upon stock option
exercises.

      During the years ended December 31, 1998, 1999 and 2000, various
non-statutory stock options were exercised resulting in tax benefits (net of any
valuation allowance) of approximately $20.9 million, $1.7 million and $.5
million, respectively, which were directly credited to shareholders' equity.

      Under the Indian Income Tax Act of 1961 (the "Act"), a substantial portion
of IMRglobal-India's income is exempt from Indian Income Tax as profits
attributable to export operations or a tax holiday expiring in 2008. Under the
Act, there are certain alternative minimum tax provisions which impose tax on
net profits at a rate of 10.5%. Management has determined that these provisions
are not currently applicable due to the tax holiday. Accordingly, the effective
tax rate imposed on IMRglobal-India's income is substantially less than the
current statutory rate of 35%.

      Undistributed earnings of IMRglobal's foreign subsidiaries amounted to
approximately $39.2 million at December 31, 2000. These earnings are considered
to be indefinitely reinvested and, accordingly, no provision for United States
federal and state income taxes has been provided thereon. On remittance, certain
countries impose withholding taxes that, subject to certain limitations, are
then available for use as tax credits against a U.S. tax liability, if any.
Determination of the amount of unrecognized deferred United States income tax
liability or foreign tax withholding is not practicable because of the
complexities associated with its hypothetical calculation.


                                       58
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. Income Taxes (Continued):

      The following table accounts for the differences between the actual tax
provision and the amounts obtained by applying the statutory U.S. federal income
tax rates of 34% in 1998 and 35% in 1999 and 2000 to the income before income
taxes (in thousands).

<TABLE>
<CAPTION>
                                                                  Year Ended December 31,
                                                          ------------------------------------

                                                            1998          1999          2000
                                                          --------      --------      --------
         <S>                                              <C>           <C>           <C>
         Statutory tax provision ....................     $ 11,604      $ (1,734)     $  2,228
         State taxes, net of federal benefit ........          897           584            13
         Foreign and U.S. tax effects
            attributable to foreign operations ......         (273)         (515)         (401)
         Acquisition costs and compensation expense
            associated with treasury stock repurchase           --         3,920            --
         Intangible asset amortization and impairment          788         3,233         5,376
         Income exempt from taxation ................           --            --        (2,154)
         Increase (decrease) in valuation allowance .          135         1,377        (2,019)
         Other net ..................................          119            20           431
                                                          --------      --------      --------

               Total provision for income taxes .....     $ 13,270      $  6,885      $  3,474
                                                          ========      ========      ========
</TABLE>

      The components of pre-tax earnings are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                                          ------------------------------------

                                                            1998          1999          2000
                                                          --------      --------      --------
         <S>                                              <C>           <C>           <C>
         United States ..............................     $ 30,763      $  2,717      $ (3,752)
         Foreign ....................................        2,387        (7,671)       10,118
                                                          --------      --------      --------

                                                          $ 33,150      $ (4,954)     $  6,366
                                                          ========      ========      ========

</TABLE>

                                       59
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. Leases:

      IMRglobal leases office facilities and certain residential premises for
employees under noncancellable operating lease agreements. Rental expense under
these leases was approximately $2.3 million, $4.2 million, and $4.3 million in
1998, 1999 and 2000, respectively. Future minimum lease payments as of December
31, 2000 for leases with noncancellable terms in excess of one year are
approximately as follows (in thousands):

          2001.......................................    $      4,177
          2002.......................................           4,198
          2003.......................................           2,759
          2004.......................................           2,347
          2005.......................................           1,859
          Thereafter.................................           3,787
                                                          -----------

                   Total minimum payments............     $    19,127
                                                          ===========

13. Shareholders' Equity, Stock Option and Stock Purchase Plans:

      On March 9, 1998, IMRglobal declared a 3-for-2 stock split in the form of
stock dividends payable on April 3, 1998 to shareholders of record on March 20,
1998. All applicable share and per share amounts in the accompanying financial
statements have been retroactively adjusted.

      Employee Stock Option Plans--IMRglobal has the IMRglobal Corp. Stock
Incentive Plan, as amended and restated ("the Stock Plan"). Options to acquire
up to 16.0 million shares of common stock may be granted to employees under the
Stock Plan. These options give the employees the right to purchase common stock
at an exercise price at least equal to the fair market value of the stock at the
date of the option's grant. All options granted vest over periods up to 5 years
and expire 7 to 10 years from their grant date.

      During August 1999, the Board of Directors authorized the creation of the
1999 Employee Stock Incentive Plan ("the 99 Stock Plan"). The 99 Stock Plan was
primarily created to provide non-qualified stock options to employees of newly
acquired companies. This plan excludes executive officers and directors of
IMRglobal. A total of 3,000,000 shares of common stock have been authorized for
issuance under this plan.


                                       60
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. Shareholders' Equity, Stock Option and Stock Purchase Plans (Continued):

      Nonemployee Directors Stock Option Plan--During 1996, IMRglobal
established the Nonemployee Directors Stock Option Plan, whereby nonemployee
directors may be granted non-qualified options to purchase common stock. A total
of 337,500 shares of common stock have been authorized for issuance under this
plan. The exercise price of the stock option may not be less than the fair
market value of the common stock on the date of the grant. Each nonemployee
director is granted an option of 22,500 shares for each two year period they
serve on the Board. The options expire 10 years from the grant date. Beginning
with the grant date, these options vest 50% at the end of the first year and
100% at the end of the second year. As of December 31, 2000, 180,000 options are
available for future grants and 135,000 options are outstanding, of which 90,000
are exercisable.

      Stock Option Disclosures--IMRglobal applies APB Opinion No. 25 and related
interpretations in accounting for stock options. Accordingly, no compensation
cost has been recognized in connection with the issuance of these options. Had
compensation cost for IMRglobal's stock option plan been determined based on the
fair value at the grant dates for the awards under the plan consistent with the
method of SFAS Statement No. 123, IMRglobal's net income and earnings per share
for the year ended December 31, 1998, 1999 and 2000 would have been reduced to
the adjusted amounts indicated below:

<TABLE>
<CAPTION>
                                                1998           1999           2000
                                             ----------     ----------      ----------
<S>                                          <C>            <C>             <C>
      Net income (loss) (in thousands):
         As reported ...................     $   19,880     $  (11,839)     $      185
         As adjusted ...................     $   14,152     $  (20,889)     $   (5,921)

      Diluted earnings (loss) per share:
         As reported ...................     $     0.57     $    (0.34)     $     0.00
         As adjusted ...................     $     0.40     $    (0.60)     $    (0.14)
</TABLE>

      The pro forma disclosures are not likely to be representative of the
effects on reported net income for future years.

      The estimated per share fair value of options granted during 1998, 1999
and 2000 was $17.12, $10.56 and $6.62, respectively. The fair value of each
option granted is estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions for grants
in 1998, 1999 and 2000, respectively: no dividend yield for each year presented;
risk-free interest rates of 5.3%, 5.7% and 5.7%; expected lives of the options
prior to exercise of 5.5 years for all years presented. For options granted
prior to IMRglobal's initial public offering in November, 1996, volatility of
the stock price was omitted from the pricing model as permitted by SFAS No. 123.
For 1998, 1999 and 2000 option grants, a volatility measure of 92%, 88% and 95%,
respectively, was employed.


                                       61
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. Shareholders' Equity, Stock Option and Stock Purchase Plans (Continued):

      A summary of the status of IMRglobal's stock option plans as of December
31, 1998, 1999 and 2000, and changes during the years ended on those dates is
presented below:

<TABLE>
<CAPTION>
                                     1998                                1999                             2000
                           ---------------------------       -----------------------------      ----------------------------
                                          Weighted                            Weighted                          Weighted
                                           Average                             Average                           Average
   Fixed Options           Shares       Exchange Price       Shares         Exchange Price      Shares        Exchange Price
--------------------       ------       --------------       ------         --------------      ------        --------------
<S>                      <C>             <C>                <C>             <C>                <C>             <C>
Outstanding at
  beginning of year      12,544,793      $        2.96      10,807,388      $        6.01      11,812,093      $        7.97

Granted                   1,279,450      $       25.28       2,564,510      $       14.23       2,189,750               8.52

Exercised                (2,807,291)     $        0.34      (1,174,733)     $        0.93      (2,961,490)              0.41

Cancelled                  (209,564)     $       16.80        (385,072)     $       16.30      (1,638,875)             17.05
                         ----------                         ----------                         ----------

Outstanding at
  end of year            10,807,388      $        6.01      11,812,093      $        7.97       9,401,478      $        8.79
                         ==========                         ==========                         ==========

Options exercisable
  at year-end             7,375,447                          7,013,117                          4,978,028
                         ==========                         ==========                         ==========
</TABLE>


                                       62
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. Shareholders' Equity, Stock Option and Stock Purchase Plans (Continued):

      The following table summarizes certain information about stock options at
December 31, 2000:

<TABLE>
<CAPTION>
                                             Options Outstanding                         Options Exercisable
                               -------------------------------------------------   -------------------------------

                                                  Weighted-
                                                   Average          Weighted-                         Weighted-
           Range of               Number          Remaining          Average          Number           Average
       Exercise Prices         Outstanding     Contractual Life   Exercise Price    Exercisable     Exercise Price
       ---------------         -----------     ----------------   --------------    -----------     --------------
       <S>                        <C>                <C>              <C>              <C>               <C>
        $0.04 - $ 0.04               59,000          5.5               $0.04              59,000         $0.04
        $0.22 - $ 0.22            3,049,737          5.5               $0.22           2,977,737         $0.22
        $2.25 - $ 3.19              931,600          8.8               $2.93             169,857         $2.25
        $4.44 - $ 6.22              418,000          4.9               $5.87             375,750         $5.89
        $7.03 - $10.50            1,875,606          8.9               $9.79             292,338         $9.03
       $11.00 - $15.50            1,078,735          8.7              $13.15             162,903         $14.66
       $17.06 - $24.19            1,636,550          6.9              $19.80             746,893         $19.36
       $28.75 - $37.17              352,250          7.3              $33.57             193,550         $34.55
                                  ---------          ---              ------           ---------         ------

        $0.04 - $37.17            9,401,478          7.1               $8.79           4,978,028          $5.91
                                  =========                                            =========
</TABLE>

      As of December 31, 2000, options to purchase 1,853,939 shares of Common
Stock were available for future grants.

      Employee Stock Purchase Plan--IMRglobal's Employee Stock Purchase Plan
(the "Stock Purchase Plan") became effective on October 1, 1996. A total of
450,000 shares of IMRglobal's Common Stock have been reserved for issuance under
the Stock Purchase Plan. An employee electing to participate in the Stock
Purchase Plan must authorize a stated dollar amount or percentage of the
employee's regular pay to be deducted by IMRglobal from the employee's pay for
the purpose of purchasing shares of Common Stock on a quarterly basis. The price
at which employees may purchase Common Stock is 85% of the closing price of the
Common Stock on the Nasdaq National Market on the first day of the quarter or
the last day of the quarter, whichever is lower.


                                       63
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. Employee Benefit Plans:

      Defined contribution plans cover employees in the United States and
certain other countries, including Australia, France and India. Employees may
contribute to these plans and IMRglobal matches these contributions in varying
amounts. Defined contribution pension expense for the years ended December 31,
1998, 1999 and 2000 was $1.3 million, $2.5 million and $2.6 million,
respectively.

      During 1998, IMRglobal established a deferred compensation plan which
allows certain U.S. employees to defer portions of their annual compensation.
These assets are placed in a "rabbi trust" and are presented as assets of
IMRglobal as they are available to the general creditors of IMRglobal in the
event of IMRglobal's insolvency. The value of the assets at December 31, 1999
and 2000 was $6.4 million and $6.1 million, respectively, and is included in
other assets. The related liability at December 31, 1999 and 2000 was $2.8
million and $3.7 million, respectively, and is included in accrued compensation.
The assets are invested in variable life insurance products. At December 31,
2000, book value approximated fair value.

15. Concentrations of Credit Risk:

      Financial instruments which potentially subject IMRglobal to concentration
of credit risk consist principally of cash and cash equivalents, marketable
securities, trade receivables and variable rate debt. IMRglobal maintains its
cash with high credit quality financial institutions and, by policy, limits the
amount of credit exposure to any one financial institution. IMRglobal places its
cash equivalents and marketable securities in investment grade short-term debt
instruments and limits the amount of credit exposure to any one commercial
issuer.

      Concentrations of credit risk with respect to accounts receivable is
limited due to the dispersion of IMRglobal's client base across different
industries and geographies. IMRglobal's two largest clients accounted for
approximately 15%, 11% and 12% of revenue in 1998, 1999 and 2000, respectively,
and 6% and 4% of accounts receivable as of December 31, 1999 and 2000,
respectively. No other client accounted for 10% of revenue or accounts
receivable for the above periods.

      The carrying amount of IMRglobal's borrowings under its long-term credit
arrangements approximates fair value.


                                       64
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16. Restructuring Charge

      In the fourth quarter of 1999, IMRglobal implemented a restructuring plan
to redeploy resources and better align its organization with its corporate
strategy. The restructuring plan included the closure of three European offices
within our Information Technology and Software Delivery segments, the write-down
of specific mainframe software and hardware and the reduction of its global
workforce. During the third quarter of 2000, IMRglobal initiated a plan to
consolidate Canadian operations by closing three western Canada offices. The
restructuring charges are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                            Cash Paid                     Accrued
                                                               Write-       Additional       Through       Adjustment     Charge
                                              Restructuring     Down      Restructuring    December 31,   for Certain   December 31,
                                                 Charge       of Assets      Charges           2000        Reserves        2000
                                              -------------   ---------   -------------    ------------   -----------   ------------

<S>                                             <C>           <C>           <C>              <C>           <C>           <C>
Closure of European facilities:
   Severance payments
      (80 employees) ..................         $    664      $     --      $     --         $ (1,386)     $    722      $     --
   Long-term commitments ..............            4,626            --            --             (988)       (2,032)        1,606
   Goodwill ...........................              348          (348)           --               --            --            --
   Property and equipment .............            1,089        (1,089)           --               --            --            --
Closure of Canadian facilities:
   Severance payments
      (40 employees) ..................               --            --           298             (263)           --            35
   Long-term commitments ..............               --            --           271             (101)           --           170
   Property and equipment .............               --          (339)          339               --            --            --
Other severance payments ..............                                                                                        --
     (70 employees) ...................            1,809            --            --           (1,655)         (113)           41
Property and equipment ................            3,691        (3,691)           --               --            --            --
Other restructuring costs .............              150          (126)            7             (291)          343            83
                                                --------      --------      --------         --------      --------      --------

                                                $ 12,377      $ (5,593)     $    915         $ (4,684)     $ (1,080)     $  1,935
                                                ========      ========      ========         ========      ========      ========
</TABLE>

      Long-term commitments relating to real estate leases are expected to be
paid over the life of the underlying lease agreements which expire through 2013.
The remaining accrued charge is expected to be paid by December 31, 2001.

      During 2000, IMRglobal negotiated a more favorable settlement of long-term
commitments related to the European facilities than had previously been
anticipated and the payment of more generous severance payments for U.K.
employees.


                                       65
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17. Impairment of Long-Lived Assets:

      IMRglobal IMRglobal measures the potential impairment of recorded goodwill
and significant property and equipment on an annual basis. During 1999,
IMRglobal determined that certain assets were impaired and recognized impairment
charges as follows (in thousands):

<TABLE>
<CAPTION>
                                                         Amount of                  Method Used to Determine
                    Assets Impaired                      Impairment                    Fair Market Value
                    ---------------                      ----------                 ------------------------
       <S>                                           <C>                      <C>
        Goodwill related to U.K. subsidiaries        $          3,783         Discounted cash flow

        Real estate in New Delhi, India                           279         Independent appraisal

        Other property and equipment                              375         Value offered by independent third party
                                                     ----------------

                                                     $          4,437
                                                     ================
</TABLE>

      After recording the above impairment, the carrying value of our idle
facility held for future use was $1.2 million.

18. Other Income (in thousands):

                                                 Year Ended December 31,
                                            -------------------------------

                                              1998         1999       2000
                                            -------      -------     -------

      Investment income ..........          $ 4,585      $ 4,234     $ 1,323
      Foreign exchange ...........               --          901      (1,455)
      Other income (expense) .....              (24)         129         426
                                            -------      -------     -------

                                            $ 4,561      $ 5,264     $   294
                                            =======      =======     =======

19. Commitments and Contingencies:

      IMRglobal from time to time is involved in legal actions arising in the
ordinary course of business. With respect to these matters, management believes
that it has adequate legal defenses and/or provided adequate accruals for
related costs such that the ultimate outcome will not have a material adverse
effect on IMRglobal's future financial position.


                                       66
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

19.  Commitments and Contingencies (Continued):

      IMRglobal's French subsidiary, Lyon, has claimed a special tax exemption
related to research and development (R&D) for the 1993 through 1995 fiscal
years. The French taxing authorities have challenged this exemption and have
made an assessment of $786,000. Lyon contested the decision and the tax
authorities asked the French Ministry of Research to rule on the issue. The
Ministry of Research ruled that the time spent developing the concept would be
considered as R&D charges, but programming time would not. Accordingly, the
estimate was revised downward and $100,000 has been accrued as a liability in
the accompanying balance sheet as of December 31, 2000 related to this issue.

20. Supplemental Disclosure of Cash Flow Information (In thousands):

<TABLE>
<CAPTION>
                                                            Year Ended December 31,
                                                      --------------------------------

                                                        1998        1999         2000
                                                      -------     --------     -------
      <S>                                             <C>         <C>          <C>
      Cash paid during the year for interest ....     $   223     $    108     $ 2,682
                                                      =======     ========     =======
      Cash paid during the year for income taxes      $ 1,726     $  5,381     $ 6,874
                                                      =======     ========     =======
      Noncash investing and financing activities:
         Common stock issued in connection
           with acquisition of subsidiaries .....     $19,186     $ 85,067     $ 9,511
                                                      =======     ========     =======

         Deferred payments for acquisition
           of subsidiaries ......................     $ 1,478     $     --     $    --
                                                      =======     ========     =======
</TABLE>

21. Segment Information (In thousands):

      IMRglobal operates several business units located in North America, Europe
and Asia for which financial information is maintained and reported to the chief
operating decision makers of the Company. In determining the reporting segments
of the Company, management has aggregated the business units that have similar
economic characteristics, products and services and types of client.

      IMRglobal has three reporting segments. The Information Technology ("IT")
segment provides consulting and technology services to large companies in North
America, Europe and Asia. The Health Care and Government Solutions segment
provides business and consulting services to clients in the health care and
governmental industries. Software Delivery Centers consist of two Indian
facilities and one Northern Ireland facility that provide software development
services to the IT segment organizations. The Northern Ireland facility was
closed in 1999 (Note 16).

      The chief operating decision makers evaluate performance and allocate
resources based on revenue and net margin. Net margin is gross profit less
selling, general and administrative expenses. The accounting policies of the
segments are the same as those described in the summary of significant
accounting policies. IMRglobal does not allocate income taxes, other income or
expense, research and development, intangible amortization or non-recurring
charges to its reporting segments. In addition, IMRglobal accounts for services
provided by the Software Development Centers to the IT segment at current market
prices.


                                       67
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

21. Segment Information (In thousands) (Continued):

      Information regarding the reporting segments is as follows:

<TABLE>
<CAPTION>
                                                     Health Care
                                                        and        Software
                                       Information   Government    Delivery
                                        Technology   Solutions      Centers      Total
                                       -----------   -----------   ---------     -----
      <S>                               <C>           <C>          <C>          <C>
      2000

      Revenue from external clients     $ 216,662     $  39,112    $    398     $256,172
                                        =========     =========    ========     ========
      Intersegment revenue ........     $   6,475     $      --    $ 26,225     $ 32,700
                                        =========     =========    ========     ========
      Depreciation expense ........     $   4,068     $     275    $    880     $  5,223
                                        =========     =========    ========     ========
      Segment net margin ..........     $  11,814     $   9,673    $  2,686     $ 24,173
                                        =========     =========    ========     ========
      Segment assets ..............     $ 142,779     $  16,892    $ 12,804     $172,475
                                        =========     =========    ========     ========
      1999

      Revenue from external clients     $ 203,963     $  16,086    $  1,979     $222,028
                                        =========     =========    ========     ========
      Intersegment revenue ........     $      --     $      --    $ 30,115     $ 30,115
                                        =========     =========    ========     ========
      Depreciation expense ........     $   3,605     $     122    $  1,563     $  5,290
                                        =========     =========    ========     ========
      Segment net margin ..........     $  26,843     $   3,902    $  3,655     $ 34,400
                                        =========     =========    ========     ========
      Segment assets ..............     $ 124,710     $  14,967    $ 22,314     $161,991
                                        =========     =========    ========     ========
      1998

      Revenue from external clients     $ 169,005     $      --    $  1,313     $170,318
                                        =========     =========    ========     ========
      Intersegment revenue ........     $      --     $      --    $ 34,535     $ 34,535
                                        =========     =========    ========     ========
      Depreciation expense ........     $   1,983     $      --    $  1,348     $  3,331
                                        =========     =========    ========     ========
      Segment net margin ..........     $  38,073     $      --    $  7,416     $ 45,489
                                        =========     =========    ========     ========
      Segment assets ..............     $ 161,822     $      --    $ 22,884     $184,706
                                        =========     =========    ========     ========
</TABLE>


                                       68
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

21. Segment Information (In thousands) (Continued):

      Following are reconciliations of reporting segment net margin and assets
to the amounts included in the consolidated financial statements:

<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                                     ------------------------------------

                                                                        1998         1999          2000
                                                                     --------      --------      --------
      <S>                                                            <C>           <C>           <C>
      Total net margin for reportable segments .................     $ 45,489      $ 34,400      $ 24,173
      Research and development .................................       (6,247)       (6,635)       (3,504)
      Goodwill and intangible amortization .....................       (2,074)       (6,705)      (10,448)
      Restructuring charge .....................................           --       (12,377)          165
      Impairment of long-lived assets ..........................           --        (4,437)           --
      Acquired in-process research and development .............       (8,200)       (3,410)           --
      Acquisition costs ........................................         (145)       (2,168)           --
      Charge associated with treasury stock purchase ...........           --        (8,778)           --
      Allowance for acquired receivables .......................           --            --        (1,632)
      Other income (expense) ...................................        4,327         5,156        (2,388)
                                                                     --------      --------      --------
      Consolidated income (loss)
         before provision for income taxes
         and cumulative effect of
         an accounting change ..................................     $ 33,150      $ (4,954)     $  6,366
                                                                     ========      ========      ========
</TABLE>

                                                              December 31,
                                                       ------------------------

                                                          1999           2000
                                                       ---------      ---------
      Total assets for reportable segments .......     $ 161,991      $ 172,475
      Elimination of intersegment receivables ....       (14,303)       (31,913)
      Deferred income taxes ......................        12,915         14,095
      Intangible assets ..........................       143,195        164,178
                                                       ---------      ---------

      Consolidated total assets ..................     $ 303,798      $ 318,835
                                                       =========      =========


                                       69
<PAGE>

                                 IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

21. Segment Information (In thousands) (Continued):

<TABLE>
<CAPTION>
                                                                           Year Ended December 31,
                                                                     ----------------------------------

                                                                       1998         1999         2000
                                                                     --------     --------     --------
      <S>                                                            <C>          <C>          <C>
      Geographic financial information is summarized as follows:

      Revenue by geography:
         North America .........................................     $117,718     $149,435     $177,948
         Europe ................................................       44,585       46,925       52,109
         Asia Pacific ..........................................        8,015       25,668       26,115
                                                                     --------     --------     --------

               Total revenue ...................................     $170,318     $222,028     $256,172
                                                                     ========     ========     ========
</TABLE>

                                                              As of December 31,
                                                             -------------------
                                                              1999        2000
                                                             -------     -------
      Long-lived assets allocated to segments:

         Sales organizations:
            North America ............................       $28,718     $33,825
            Europe ...................................           879         995
            Asia Pacific .............................           771         986

         Software Development Centers:
            India ....................................         6,547       5,715
            Northern Ireland .........................            58          --
                                                             -------     -------

            Total long-lived assets ..................       $36,973     $41,521
                                                             =======     =======


                                       70
<PAGE>

                                IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

22. Supplemental Quarterly Information (Unaudited):

<TABLE>
<CAPTION>
                                                                                            Quarter Ended
                                                                    ------------------------------------------------------

                                                                    March 31       June 30      September 30   December 31
                                                                    --------       -------      ------------   -----------
                                                                               (In thousands except per share data)
<S>                                                                 <C>            <C>            <C>           <C>
1999

   Revenue ..............................................           $ 51,888       $ 62,953       $ 62,159      $ 45,028
   Gross profit .........................................             24,149         28,578         27,100        13,030
   Income (loss) from operations ........................              5,412         12,768          6,819       (35,109)
   Net income (loss) ....................................              3,667          8,569          5,192       (29,267)
   Diluted earnings (loss) per share ....................           $   0.10       $   0.21       $   0.12      $  (0.78)

2000

   Revenue ..............................................           $ 58,320       $ 69,365       $ 75,208      $ 53,279
   Gross profit .........................................             23,578         29,796         32,520        15,451
   Income (loss) from operations ........................              2,682          6,628         10,410       (10,966)
   Income loss before cumulative effect
      of a change in accounting method ..................              1,533          3,695          5,970        (8,306)
   Diluted earnings (loss) per share
      before cumulative effect of a
      change in accounting method .......................           $   0.04       $   0.09       $   0.14      $  (0.20)
   Cumulative effect of a change in
      accounting method .................................             (2,707)            --             --            --
   Net income (loss) ....................................             (1,174)         3,695          5,970        (8,306)
   Diluted earnings (loss) per share ....................           $  (0.03)      $   0.09       $   0.14      $  (0.19)
</TABLE>

      During the quarter ended December 31, 1999, IMRglobal incurred charges of
$25.6 million for restructuring charge (Note 16), impairment of assets (Note 17)
and charge associated with treasury stock purchase (Note 2).

      Effective the quarter ended March 31, 2000, IMRglobal incurred a charge of
$2.7 million for a change in accounting method (Note 1). Accordingly, net loss
and diluted loss per share as reported here differs from amounts reported in our
March 31, 2000 10-Q, as filed. During the quarter ended December 31, 2000,
IMRglobal incurred a $1.6 million charge related to losses on receivables
acquired in the purchase of Orion in 1999 (Note 2) and a $2.3 million charge
related to a client discount.


                                       71
<PAGE>

                                IMRglobal Corp.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

23. Events Subsequent to Auditor's Opinion Date (Unaudited):

      On February 21, 2001 CGI Group Inc. ("CGI") and IMRglobal Corp. announced
the signing of a definitive merger agreement providing for the acquisition of
IMRglobal. Under the terms of the definitive agreement, IMRglobal shareholders
will receive 1.5974 Class A Subordinate Shares of CGI for each share of
IMRglobal Common Stock.

      The IMRglobal Board of Directors has received an opinion from its
financial advisor to the effect that the exchange ratio in the merger is fair,
from a financial point of view, to IMRglobal and its shareholders. The Board of
Directors of IMRglobal has unanimously determined that the merger is fair to and
in the best interest of the shareholders of IMRglobal and has resolved to
recommend to the shareholders that they approve the merger. The chairman and CEO
of IMRglobal, who owns, directly and indirectly, 28% of the outstanding shares
of IMRglobal, has agreed to support the transaction at a special shareholders'
meeting.


                                       72
<PAGE>

Item 9. Changes in and Disagreements with Independent Auditors on Accounting and
        Financial Disclosure

      There have been no disagreements with any of IMRglobal's accountants on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.

                                    PART III

      The Company will file with the Securities and Exchange Commission a
definitive Proxy Statement, pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended, not later than 120 days after the end of its
fiscal year. Accordingly, certain information required by Part III has been
omitted under Item G of the general Instructions for Form 10-K. Only these
sections of the definitive Proxy Statement which specifically address the items
set forth herein are incorporated by reference.

Item 10. Directors and Executive Officers of the Registrant

      The information required by this Item 10 with respect to the directors and
executive officers of the Company is incorporated herein by reference to the
material under the caption "Election of Directors" and "Executive Officers" in
the Company's Proxy Statement to be filed with the Securities and Exchange
Commission (the "Commission") within 120 days after the close of the Company's
fiscal year ended December 31, 2000.

Item 11. Executive Compensation

      The information required by this Item 11 with respect to management
remuneration and transactions is incorporated herein by reference to the
material under the caption "Executive Compensation" in the Company's Proxy
Statement to be filed with the Commission within 120 days after the close of the
Company's fiscal year ended December 31, 2000.

Item 12. Security Ownership of Certain Beneficial Owners and Management

      The information required by this Item 12 with respect to security
ownership of certain beneficial owners and management is incorporated herein by
reference to the material under the caption "Stock Ownership of Certain
Beneficial Owners and Management" in the Company's Proxy Statement to be filed
with the Commission within 120 days after the close of the Company's fiscal year
ended December 31, 2000.

Item 13. Certain Relationships and Related Transactions

      The information required by this Item 13 with respect to certain
relationships and related transactions is incorporated herein by reference to
the material under the caption "Certain Relationships and Related Transactions"
in the Company's Proxy Statement to be filed with the Commission within 120 days
after the close of the Company's fiscal year ended December 31, 2000.


                                       73
<PAGE>

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

      (a)   The following documents are filed as part of this report:

            (1)   Financial Statements

                  See Part II, Item 8.

            (2)   Financial Statement Schedules

                  Financial Statement Schedules have been omitted because they
                  are not applicable or are not required or the information
                  required to be set forth therein is included in the
                  consolidated financial statements or notes thereto.

      (b)   Form 8-K

            (1)   Reports on Form 8-K filed during the quarter ended December
                  31, 2000:

                  None

      (c)   Exhibits

            The following exhibits are filed as a part of, or are incorporated
            by reference into, this Report on Form 10-K:


                                       74
<PAGE>

                                  EXHIBIT INDEX

Exhibit
Number                               Description
------   -----------------------------------------------------------------------
2.1      Agreement and Plan of Merger, dated as of February 21, 2001, between
         IMRglobal Corp., CGI Group, Inc. and CGI Florida Corporation.
         (Incorporated by reference to Exhibit 3 filed with CGI Group, Inc.'s
         Schedule 13D filed on March 2, 2001) (Commission File No. 0-28840)
3.1      Amended and Restated Articles of Incorporation of the Registrant.
         (Incorporated by reference to Exhibit 3.1 filed with IMR's Registration
         Statement on Form S-1) (Registration No. 333-12037).
3.2      Restated Bylaws of the Registrant. (Incorporated by reference to
         Exhibit 3.1 filed with IMR's Registration Statement on Form S-1)
         (Registration No. 333-12037).
4.1      See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated
         Certificate of Incorporation and Restated Bylaws of the Registrant
         defining rights of the holders of Common Stock of the Registrant.
4.2      Specimen Stock Certificate. (Incorporated by reference to Exhibit 3.1
         filed with IMR's Registration Statement on Form S-1) (Registration No.
         333-12037).
9.1      Voting Agreement, dated as of February 21, 2001, between Satish K.
         Sanan and A&S Family Limited Partnership, CGI Group, Inc. and CGI
         Florida Corporation (Incorporated by reference to Exhibit 2 filed with
         CGI Group, Inc.'s Schedule 13D filed on March 2, 2001) (Commission File
         No. 0-28840)
10.1     Master Services Agreement dated April 1, 1996 between the Registrant
         and IMR-India. (Incorporated by reference to Exhibit 10.4 filed with
         IMR's Registration Statement on Form S-1) (Registration No. 333-12037).
10.2     Master Services Agreement dated April 1, 1996 between IMR-U.K. and
         IMR-India. (Incorporated by reference to Exhibit 10.5 filed with IMR's
         Registration Statement on Form S-1) (Registration No. 333-12037).
10.3     Master Services Agreement for Information Technology Professional and
         related schedules between the Registrant and Dayton Hudson Corporation.
         (Incorporated by reference to Exhibit 10.9 filed with IMR's
         Registration Statement on Form S-1) (Registration No. 333-12037).
10.4     Master Services Agreement and related schedules between the Registrant
         and Dean Witter Discover & Co., Inc. (Incorporated by reference to
         Exhibit 10.10 filed with IMR's Registration Statement on Form S-1)
         (Registration No. 333-12037).
10.5     Master Agreement for Computer Consulting and Programming Services and
         related schedules between the Registrant and Target Stores.
         (Incorporated by reference to Exhibit 10.12 filed with IMR's
         Registration Statement on Form S-1) (Registration No. 333-12037).
10.8     Form of Employment Agreement between Registrant and Satish K. Sanan.
         (Incorporated by reference to Exhibit 10.15 with IMR's Registration
         Statement on Form S-1) (Registration No. 333-12037).
10.9     401(k) Profit Sharing Plan effective January 1, 1992 and Amendment
         thereto effective January 1, 1994. (Incorporated by reference to
         Exhibit 10.17 filed with IMR's Registration Statement on Form S-1)
         (Registration No. 333-12037).
10.10    Stock Incentive Plan effective July 15, 1996. (Incorporated by
         reference to Exhibit 10.18 filed with IMR's Registration Statement on
         Form S-1) (Registration No. 333-12037).
10.11    Form of Directors Stock Option Plan. (Incorporated by reference to
         Exhibit 10.19 filed with IMR's Registration Statement on Form S-1)
         (Registration No. 333-12037).
10.12    Form of Employee Stock Purchase Plan. (Incorporated by reference to
         Exhibit 10.20 filed with IMR's Registration Statement on Form S-1)
         (Registration No. 333-12037).
10.14    Loan Agreement between IMR-India and Canara Bank and related documents.
         (Incorporated by reference to Exhibit 10.27 filed with IMR's
         Registration Statement on Form S-1) (Registration No. 333-12037).


                                       75
<PAGE>

                                  EXHIBIT INDEX
                                   (Continued)

Exhibit
Number                               Description
------   -----------------------------------------------------------------------
10.15    Loan Agreement between IMR-India and Exim Bank of India and related
         documents. (Incorporated by reference to Exhibit 10.28 filed with IMR's
         Registration Statement on Form S-1) (Registration No. 333-12037).
10.16    Employee Stock Purchase Plan, as amended. (Incorporated herein by
         reference to Exhibit 10.29 filed with Annual Report on Form 10-K)
         (Commission File No. 0-28840).
10.17    Acquisition Agreement dated January 13, 1997 between the Registrant and
         Philip and Sheila Shipperlee relating to the acquisitions of Link Group
         Holdings Limited. (Incorporated herein by reference to Exhibit 2.1
         filed with Current Report on Form 8-K filed with the Commission on
         January 13, 1997) (Commission File No. 0-28840).
10.18    Share Purchase Agreement dated January 13, 1998 between the Registrant
         and Satish and Anne Sanan relating to the acquisition of IMR-U.K.
         (Incorporated herein by reference to Exhibit 10.30 filed with the
         Company's Registration Statement on Form S-1) (Registration No.
         333-30741).
10.19    Share Purchase Agreement dated May 15, 1998 between the Registrant and
         Jean Rene Lyon, Pierre Barberis, Marie-Amelie Barberis, Romain Barberis
         and Didier Lamour (Sellers) relating to the acquisition of Lyon
         Consultants, S.A. (Incorporated herein by reference to Exhibit 2.1
         filed with the Company's Current Report on Form 8-K filed with the
         Commission on May 28, 1998) (Commision File No. 0-28840).
10.20    Share Exchange Agreement dated March 26, 1999 between the Registrant
         and Fusion Systems Japan Co., Ltd. (Seller) relating to the acquisition
         of Fusion Systems Japan Co., Ltd. (Incorporated herein by reference to
         Exhibit 2.1 filed with the Company's Current Report on Form 8-K filed
         with the Commission on April 8, 1999) (Commission File No. 0-28840).
10.21    Agreement and Plan of Merger dated June 15, 1999 between the Registrant
         and Orion Consulting, Inc. (Seller) relating to the acquisition of
         Orion Consulting, Inc. (Incorporated herein by reference to Exhibit 2.1
         filed with the Company's Current Report on Form 8-K filed with the
         Commission on June 29, 1999) (Commission File No. 0-28840).
10.22    First Amendment to the Acquisition Agreement dated March 26, 1999
         between the Registrant and Fusion Systems Japan Co., Ltd. (Seller)
         relating to the acquisition of Fusion Systems Japan Co., Ltd.
         (Incorporated herein by reference to Exhibit 2.1 filed with the
         Company's Current Report on Form 8-K filed with the Commission on
         November 4, 1999) (Commission File No. 0-28840).
10.23    Information Management Resources, Inc. First Amended and Restated Stock
         Incentive Plan (Incorporated by reference with IMRglobal's Registration
         Statement on Form S-8) (Registration No. 333-87095).
10.24    IMRglobal Corp. 1999 Employee Stock Incentive Plan (Incorporated by
         reference with IMRglobal's Registration Statement on Form S-8)
         (Registration No. 333-86753)
10.25    First Amendment to Executive Employment Agreement between Registrant
         and Satish K. Sanan. (Incorporated herein by reference to Exhibit 10.25
         filed with the Annual Report on Form 10-K filed with the Commission
         on March 30, 2000) (Commission File no. 0-28840)
10.26    Restated Revolving Credit Agreement Between Registrant and First Union
         National Bank dated January 19, 2000. (Incorporated herein by reference
         to Exhibit 10.26 filed with the Annual Report on Form 10-K filed with
         the Commission on March 30, 2000) (Commission File no. 0-28840)
10.27    First Amendment To Restated Revolving Credit Agreement between
         Registrant and First Union National Bank dated March 17, 2000.
         (Incorporated herein by reference to Exhibit 10.27 filed with the
         Annual Report on Form 10-K filed with the Commission on March 30, 2000)
         (Commission File no. 0-28840)
10.28    Second Amendment to Restated Revolving Credit Agreement between
         Registrant and First Union National Bank dated June 14, 2000.
10.29    Loan Agreement between Registrant and AmSouth Bank dated December 8,
         2000.
21.1     List of Subsidiaries.
23.1     Consent of Ernst & Young L.L.P.
24.1     Powers of Attorney (included on signature page).

----------
+     Confidential treatment has been granted with respect to portions of these
      documents. The omitted portions of these documents have been filed
      separately with the Securities and Exchange Commission.


                                       76
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on this 26th day of
March, 2001.

                                                 IMRglobal Corp.


                                                 By: /s/ Satish K. Sanan
                                                    ----------------------------
                                                         Satish K. Sanan
                                                         Chief Executive Officer

                                POWER OF ATTORNEY

      KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Satish K. Sanan and Dilip Patel, and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments to this Report on Form 10-K,
and all documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or his or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                   Signature                          Title                                        Date
                   ---------                          -----                                        ----
<S>                                   <C>                                                      <C>
/s/ Satish K. Sanan                   Chief Executive Officer                                  March 26, 2001
-------------------------------        (Principal Executive Officer)                           --------------
      Satish K. Sanan                  and Director

/s/ Michael J. Dean                   Chief Financial Officer                                  March 26, 2001
-------------------------------        (Principal Financial and Accounting Officer)            --------------
      Michael J. Dean

/s/ Vincent Addonisio                 Executive Vice President                                 March 26, 2001
-------------------------------        Director                                                --------------
      Vincent Addonisio

/s/ Philip Shipperlee                 President - European Operations                          March 26, 2001
-------------------------------         Director                                               --------------
      Philip Shipperlee

/s/ Charles C. Luthin                 Director                                                 March 26, 2001
-------------------------------                                                                --------------
      Charles C. Luthin

/s/ Jeffery S. Slowgrove              Director                                                 March 26, 2001
-------------------------------                                                                --------------
      Jeffery S. Slowgrove
</TABLE>


                                       77