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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                ----------------

                                    Form 10-K

(Mark One)

(X)  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934

                   For the fiscal year ended December 31, 1997
                                       or

( )  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

                         Commission File Number: 0-22993
                                ----------------

                            INDUS INTERNATIONAL, INC.
          (Exact name of Registrant issuer as specified in its charter)

           Delaware                                              94-3273443
(State or other jurisdiction of                               (I.R.S.) Employer
 incorporation or organization)                              Identification No.)

60 Spear Street, San Francisco, California                           94105
(Address of principal executive offices)                          (Zip code)

                                 (415) 904-5000
              (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:
                          Common Stock, $.001 par value
                                (Title of Class)
                                ----------------

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 (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes X 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 or any amendment to this
Form 10-K. (X)

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant,  based upon the closing  sale price of the Common Stock on March 11,
1998 as reported on the Nasdaq National Market, was approximately  $9.13. Shares
of Common Stock held by each officer and director and by each person who owns 5%
or more of the outstanding  Common Stock have been excluded in that such persons
may by deemed to be affiliates.  This  determination  of affiliate status is not
necessarily a conclusive determination for other purposes.

The number of shares  outstanding of the  registrant's  Common Stock,  $.001 par
value was 30,244,163 at March 11, 1998.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the  Registrant's  Annual Report to Stockholders  for the year ended
December 31, 1997 are  incorporated  by  reference  into Parts II and IV of this
Form 10-K.  Portions of the Proxy Statement for Registrant's 1998 Annual Meeting
of Stockholders to be held May 5, 1998 are incorporated by reference in Part III
hereof, to the extent stated herein.

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<PAGE>


<TABLE>
                                                         TABLE OF CONTENTS


<CAPTION>
<S>                                                                                                                            <C>
PART I..........................................................................................................................3
   ITEM 1.  DESCRIPTION OF BUSINESS.............................................................................................3
   ITEM 2.  PROPERTIES.........................................................................................................16
   ITEM 3.  LEGAL PROCEEDINGS..................................................................................................16
   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................................................................16

PART II........................................................................................................................17
   ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..............................................17
   ITEM 6.  SELECTED FINANCIAL INFORMATION.....................................................................................17
   ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION...............................19
   ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........................................................................19
   ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE...............................19

PART III.......................................................................................................................19
   ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT................................................................19
   ITEM 11.  EXECUTIVE COMPENSATION............................................................................................19
   ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....................................................19
   ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................................................................20

PART IV........................................................................................................................20
   ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K..................................................20

SIGNATURES.....................................................................................................................24
</TABLE>

                                                                2

<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

Merger

         The  Indus  Group,  Inc.,  a  California  corporation  entered  into an
agreement and plan of merger and  reorganization  (the "Merger") on June 5, 1997
with TSW International, Inc., a Georgia corporation, pursuant to which The Indus
Group,  Inc.  and TSW  International,  Inc.  each became  subsidiaries  of a new
Delaware  corporation  named Indus  International,  Inc.  (the  "Company" or the
"Combined  Company")  which  was  formed  for the  purpose  of the  transactions
contemplated   under  the  Merger.  The  transaction  was  accounted  for  as  a
pooling-of-interests  for financial reporting purposes and structured to qualify
as a tax-free reorganization.  The stockholders of each of The Indus Group, Inc.
and TSW  International,  Inc.  approved the  transaction and the transaction was
effective August 25, 1997.

         As a result of the  Merger,  the  Company has  broadened  its  vertical
market  expertise  and  opportunities,   enhanced  its  international  presence,
broadened its product offerings and been able to more fully realize the benefits
of a regional services infrastructure.  In addition, the Merger provides: (i) an
enhanced  competitive  position as a result of higher visibility of the Company;
(ii) an increase in the sales and  marketing  capabilities;  (iii) an ability to
provide  solutions  to  enterprise  customers  of all  sizes as a result  of the
integration  of software  solutions;  and (iv) cost  synergies  and economies of
scale in operation.

         On December 31, 1997, the Company's subsidiaries, The Indus Group, Inc.
and TSW International, Inc., each merged with and into the Company (the "Roll-up
Merger"). The Company, as the surviving corporation,  assumed all obligations of
the two subsidiaries, in connection with the Roll-up Merger.

General

     Indus  International,  Inc.  develops,  markets,  implements  and  supports
enterprise asset management  software and service  solutions for capital intense
industries worldwide. Marketed internationally as the Indus Solution Series, the
offering  consists of business  application  systems and industry  best practice
service packages which support such functional areas as: Asset & Work Management
Systems,  Materials  &  Procurement  Systems,  Safety &  Compliance  Systems and
Financial Integration products. Indus Solutions are designed to interoperate ("a
single  customer  environment  making  productive  use of two or  more  vendor's
products which  seamlessly  integrate  without  requiring  additional  interface
programming assistance") with popular third-party applications that provide best
business practices function to its customers.  Through strategic alliances,  the
Company   works   with   Oracle   Corporation   ("Oracle"),   PeopleSoft,   Inc.
("PeopleSoft"),  and other industry-specific vendors to create a software series
that   provides   seamless   interoperability   with   corporate  and  financial
applications,  expert systems,  and other industry  specific  systems to provide
complete  enterprise-wide  solutions  that  enable the  Company's  customers  to
improve  operating  efficiencies,  reduce  costs and  comply  with  governmental
regulation.  Markets of primary focus for the Company's  products  include:  the
energy industry, continuous process industries, industrial manufacturing and the
public sector.  Segments within these capital intense markets include:  electric
and  gas  utilities,  telecommunications  providers,  petrochemical  refineries,
mining and  metals  manufacturers,  forest  products  producers,  transportation
authorities, educational systems, and governmental institutions.

     The software tools  comprising  the Indus  Solution  Series are based on an
open,  client/server   architecture  featuring  a  layered  and  object-oriented
software design that enables customers to use various operating systems, operate
on multiple hardware  platforms and interoperate with many third-party  software
applications and legacy systems.  Proprietary systems implementation methodology
tools  and  best  practice   education  tools  facilitate  rapid  and  effective
deployment   and   utilization  of  its  Enterprise   Asset   Management   (EAM)
applications.

     The Company's  Enterprise Asset  Management  solutions  include  consulting
services  provided  by  subject  matter  experts.  This  unique  approach  helps
customers implement advanced EAM maintenance  principles,  materials  management
theories,  and other  advanced  strategies  designed  to  provide a  competitive
advantage to the customer.  The service package content comprising this business
process  improvement  solution  leverages the knowledge  gained from hundreds of
customer  implementations  and the extensive  plant  experience of the Company's
employees,  and the global experience of its user community.  Regionally located
in close  proximity  to customer  sites,  the  Company's  professional  services
organization  supports the sales organization that is established along vertical
business  lines.  The  resulting  process  provides a high  quality  information
exchange  as  customers   learn  how  the  Indus   Solution   Series   addresses
industry-specific  requirements.  The  Company  also  offers a  global  customer
support  organization  with 7 x 24 multi-lingual  support.  The Company believes
this combination of enterprise software, vertically oriented consulting services
and  worldwide  customer  support  allows  customers to increase  equipment  and
production capacity,  reduce operating costs and safeguard the workforce and the
environment.

     The  Company  is a leading  provider  of  systems,  products  and  services
addressing  the highly  specialized  needs of the  Enterprise  Asset  Management
market.  As of December 31, 1997, the Company  products were licensed for use by
over 300,000 end-users representing 440 customers in 48 countries.

                                       3

<PAGE>


     Indus,  Indus Solution Series,  IndusWorld,  PassPort  Software  Solutions,
ABACUS,  ABACUS  Toolkit,  PORTAL/G,  PORTAL/95,   PORTAL/97,   VIEWPORT,  Prism
Consulting,  Enterprise MPAC,  Curator and AssetWare,  AssetCare and CareNet are
trademarks and servicemarks of the Company.  All other brand names or trademarks
are the property of their respective holders

Products and Services

     The  Company  offers  software   products  and  service   packages,   which
incorporate sophisticated enterprise asset management  methodologies,  extensive
subject  matter  expertise  and  advanced  technology  designed to  interoperate
seamlessly with other enterprise business information  systems.  Marketed as the
Indus   Solution   Series  these   business   tools  support  the  needs  of  an
organization's core decision makers in the operations and maintenance workforce,
inventory  management  and  procurement  professionals,  safety  and  compliance
engineers and related  disciplines  affected by asset care decisions  throughout
the  enterprise.  This customer  user group is supported by such Indus  Software
Solutions  as:  Asset  & Work  Management  Systems,  Materials  and  Procurement
Systems, Safety and Compliance System, which seamlessly integrate to third party
corporate  financial  systems  from  Oracle  and  PeopleSoft.  Beyond  providing
departmental   information  to  affected  workgroups   throughout  the  customer
organization,  Enterprise  Asset  Management  (EAM)  techniques  employed by the
Company integrate process control systems from vendors such as Allen-Bradley and
Johnson  Controls,   optimizing  capacity   utilization   through   just-in-time
maintenance  management  practices.  The Indus Solution Series reflects EAM best
practices,  including  Reliability  Centered Maintenance (RCM), Total Productive
Maintenance (TPM) and web-based electronic commerce, to allow customers to apply
Indus Solutions as a means to achieving a strategic and competitive advantage.

     A  proprietary   implementation   methodology   and  set  of  data  content
workbenches round out the service package offering available from the regionally
positioned  professional  services  solutions  centers  throughout the Americas,
Europe, Middle East and Africa and Asia Pacific theaters of operation.  Marketed
as  ABACUS  tools  and   implementation   methodology,   ABACUS   enables  rapid
implementation and configuration of Indus Software Solutions.  Workbenches are a
set of software tools which support application development,  data migration and
installation  support used by the Company and its customers to develop,  install
and configure Indus Software  Solutions.  Integration  products are also sold to
enable  Indus  Software  Solutions to  interoperate  with  corporate  financial,
payroll,   human  resources  and  customer   information   applications  systems
available,  and  other  industry-specific  programs  included  in the  company's
Business Partner Alliance program.

The Indus Software Solutions

     Core application  business systems  comprising Indus Software Solutions are
commercially  available  in two primary  product  lines  designed to reflect the
requirements  of  specific  vertical  industry   function,   and  the  technical
architecture  traditionally  employed  in these  industries.  The  result is two
efficient   transaction  engines  designed  to  support  Indus  Solution  Series
products.  Functions within the application  product lines have been tailored to
encapsulate  vertical business  processing  requirements  which are augmented by
subject matter expertise and consulting service packages which serves as another
key differentiation in delivering a total solution across the enterprise.

Indus Solution Series for the Energy Industry

     Indus  Software  Solutions  for the  Energy  Industry  provide  a series of
business  applications and business process  improvement  service packages which
meet the needs of both  integrated  electric  and gas  utilities  or stand alone
utility business units including: nuclear generating stations, non-nuclear steam
generating   facilities,   a  utility's  energy  delivery   business   including
transmission  and  distribution,  and systems  designed to manage  Department of
Energy facilities.

Specific packaged solutions in this series include:
     Indus Solutions for the Power Generation Industry
     Indus Solutions for the Nuclear Power Industry
     Indus Solutions for the Energy Delivery Industry
     Indus Solutions for Managing Department of Energy Facilities

     Core business  systems in the Energy Series include Asset & Work Management
systems,  Materials  &  Procurement  systems,  Safety &  Compliance  systems and
Financial Integration products. These robust applications designed especially to
meet the  challenges of the energy  industry in an era of  deregulation,  and in
certain cases non-utility customers desiring to employ traditional  architecture
across large complex environments,  operate on transaction engines which provide
client/server  processing  in MVS,  UNIX and Windows NT  environments  on server
platforms available from IBM, HP, and Digital Equipment utilizing the Oracle and
DB2 relational database management systems. Desktop workstation products include
Windows, Windows/95-97/NT, Macintosh and 3270 non-programmable devices.

Indus Solution Series for Industry and the Public Sector

                                       4
<PAGE>
     Indus  Software  Solutions for Industry and the Public Sector provide a set
of business  applications,  which meet the needs of capital  intense  industrial
manufacturing businesses seeking a competitive advantage through the application
of technology.  Business  applications and subject matter expertise in the areas
of  delivering  advanced  enterprise  asset  management  strategies  across  the
enterprise have been packaged to meet the needs of specific vertical  industries
in the series.

Specific  packaged software and service package solutions in the Industry Series
include:
     Indus Solutions for the Mining & Metals Industry
     Indus Solutions for the Oil,Gas & Chemical Industry
     Indus Solutions for the Forest Products Industry
     Indus Solutions for Industrial Manufacturing
     Indus Solutions for the Consumer Packaged Goods Industry

Specific packaged solutions in the Public Sector Series include:
     Indus Solutions for Transportation Authorities
     Indus Solutions for Educational Systems
     Indus Solutions for Municipal Government Facilities

     Core business  systems in the Industry and Public  Sector  Series  include:
Asset & Work  Management  systems,  Materials &  Procurement  systems,  Safety &
Compliance systems and Financial Integration products. These object-oriented and
Oracle-centric  applications  may be  modularly  implemented  or  procured  on a
turnkey basis.  The transaction  engine  supporting  core processes  within this
series utilizes  object-oriented  tools allowing each Industry and Public Sector
Solution  to  evolve  with  emerging   industry   standards.   Largely  platform
independent,  the software runs on industry-standard UNIX and Windows NT servers
including the IBM RS/6000,  HP 9000, Sun SPARCstation  and Intel-based  systems.
This  Series-II  architecture  utilizes the native  functionality  of the Oracle
database  with a graphical  user  interface  developed  in an  object-orientated
front-end able to run in both Windows and Java client domains.  Integration with
several  third party  applications  fully  extend the  solution to include  such
advantages  as fully  integrated  electronic  document  management  and workflow
capabilities,  real-time  data  collection,  and  wireless  support for cellular
equipped portable data terminals.

Product Architecture and Development Strategy for the Series-II Engine

     Commercial    Off-the-shelf    Technology.    Indus   Series-II    utilizes
industry-standard tools and technologies to develop its products, allowing Indus
Software Solutions  comprising this series to evolve along with rapidly emerging
standards.    Series-II   is   largely   platform   independent,    running   on
industry-standard  UNIX and Windows NT servers  including  the IBM  RS/6000,  HP
9000, Sun SPARCstation and Intel-based systems.  Series-II architecture utilizes
the native  functionality of the Oracle database with a graphical user interface
developed in PowerBuilder.

     Partitioned   Application   Architecture.   The  layers  of  the  Series-II
application  architecture--the  user interface,  business  logic,  data storage,
workflow and browser  interface--are  interoperable but not interdependent.  For
example,  changes to the database layer are not dependent on the user interface.
The  partitioning  built  into  Series-II   components  minimize  the  Company's
dependence on third-party  vendors and efficiently  utilizes desktop  computers,
"thin clients,"  servers and networks.  The Company  believes this  architecture
reduces its exposure to the risks of  technology  or market  shifts that require
changes  in one or  more  of the  layers,  and  enables  rapid  exploitation  of
technology advances.

     Object-oriented  Design  and  Third-party  Interoperability.   The  Company
develops  its  products  through  an  object-oriented   design  and  development
methodology by which  software  "objects"  (i.e.,  collections of properties and
methods) are used as building  blocks to model  real-world  business  processes.
Further,  the  Series-II  architecture  is designed to be an open system with an
Application  Program  Interface ("API") that enables easy  interoperability  and
extension  at the  application  level.  The  API is  available  to  third  party
developers to facilitate the integration of Indus Software  Solutions with other
client/server applications. The Company believes object-oriented development has
several  benefits  including  software  reusability,  which results in decreased
development  expense and improved  software quality,  and component  management,
which allows customers to implement and upgrade subsets of the application.

     Flexible Network Technology.  Series-II  applications can be installed in a
network configuration to allow customers to take full advantage of client/server
technology  with low cost and low maintenance  "thin  clients."  Network-centric
implementation  is attractive to clients  concerned  about the  acquisition  and
systems  management  expense  associated  with personal  computers.  Series-II's
efficient  network  architecture  is  particularly  important  to  clients  with
low-bandwidth  networks,  prevalent in  developing  markets,  which  require the
minimization of network traffic to support advanced client/server applications.

Implementation Methodology and Related Services

     Indus Software Solutions are implemented through the Company's  proprietary
ABACUS tools and implementation methodology.  ABACUS consists of software-driven
analytical   tools,   implementation   plans  and  educational   resources  that

                                       5

<PAGE>

encapsulate  the  Company's  extensive  experience  in  implementing  enterprise
management  software  solutions.  ABACUS provides a step-by-step  implementation
life cycle  framework  for all  installation,  integration,  and  education  and
business   review   activities.   In  addition,   ABACUS  enhances  the  ongoing
effectiveness  of Indus  Software  Solutions and assists  customers in improving
their business processes.

     ABACUS software tools use a time-sensitive and  track-oriented  approach to
help customers and the Company's  business  experts,  technical  specialists and
training  professionals  implement  the Company's  applications.  In addition to
interactively identifying  implementation  procedures,  ABACUS contains over 575
"best practice"  examples of how such procedures were performed by other process
industry   companies,   drawn  from  the  Company's   extensive   experience  in
implementing  enterprise  asset  management  software  solutions.   The  Company
currently  licenses  ABACUS  software tools in  conjunction  with Indus Software
Solutions which includes the use of the ABACUS ToolKit,  a version of the ABACUS
software  that allows  customers  to tailor  their  internal  project  goals and
objectives with other corporate  initiatives,  modify  implementation  plans and
associated deliverables,  supporting specific  project/progress  reporting, etc.
Versions  of ABACUS  products  have been  created  to  effectively  address  the
differences in approach and complexity between Series I & Series II architecture
as well as implementation  requirements and best practice selections of interest
to specific vertical industries.

Indus Solution Series Workbenches

     A series of best practice  workbenches assist information  engineers in the
development of business application systems and post-development  implementation
support.  From  analytical  designs  and  programming  tools  to  data  services
workbenches  for data load and system  interface  exercises,  data migration and
archiving;   these  productivity  tools  help  the  Company   demonstrate  rapid
development  of high quality,  highly  functional  applications  on  predictable
schedules and within established budgets.

     The Company also licenses  Indus Solution  Series  Workbenches to customers
desiring the ability to modify business  applications to suit internal needs and
to perform system  administration  and  maintenance  over the  application  life
cycle.

Customer Support, Software Maintenance and Training

     In  addition to the  standardized  services  offered  through  ABACUS,  the
Company offers systems integration,  customer support,  software maintenance and
training through its regionally positioned professional services capability. The
Company  provides  systems  integration  and  customer  support  on a  time  and
materials basis. The Company provides software maintenance for a fixed fee based
on the number and types of applications licensed.

     To help track and coordinate customer support and service requirements, the
Company has employed a service product  marketed as CareNet.  This customer care
system used  throughout  the global support  organization  provides the customer
support  team with a  consistent  approach  towards  an  interactive  help desk,
warranty support and  post-implementation  services which are widely used by its
customers.  Experienced  product  specialists  who have direct access to product
development   teams  and  technology   specialists'   staff  the  help  desk.  A
computerized system is used to log, track, close and analyze all customer calls.

     The Indus Institute, the Company's training division, designs, manages, and
implements   comprehensive   education  and  training  solutions  for  its  user
community. The Institute's team of training and technical professionals provides
instructional design and courseware development services,  training coordination
support,  train-the-trainer  and  end-user  programs,  computer  based  training
products, as well as technical training for customer installations worldwide. In
addition,  the Company has developed a comprehensive set of training courseware,
which it uses to  educate  and train  customers  and  internal  staff.  Subjects
covered by the courseware  range from  application  product basics to conducting
business process reviews.  Open enrollment  training courses are provided at the
Company's training centers in San Francisco,  Atlanta, Dallas,  Pittsburgh,  and
internationally  in London,  Paris and Brisbane.  In addition,  training is also
provided at customer sites at the customer's option.

Customers

     The Company  provides  enterprise  management  software  solutions to large
process industry customers primarily in the energy industry,  continuous process
industries,  industrial  manufacturing  and the public sector.  Segments  within
these   capital   intense   markets   include:   electric  and  gas   utilities,
telecommunications  providers,  petrochemical  refineries,  mining  and  metals,
forest products producers, transportation authorities,  educational systems, and
governmental institutions.

     As of December 31, 1997, the Company products were licensed for use by over
300,000 end-users representing 440 customers in 48 countries. No single customer
accounted for 10% or more of the Company's total revenues in 1997.

Sales and Marketing

<TABLE>
     The corporate marketing function is organized into vertical business areas,
which comprise capital intense facilities and process industries targeted by the
Company.  By segmenting the market into vertical business areas, the Company can
package and

                                       6

<PAGE>


deliver its products and service  offerings  effectively  to the  industries  it
serves. The vertical business segments comprising the market include:

<CAPTION>
The Energy Series
-----------------
<S>                               <C>
Indus Solutions for the           Addresses electric utilities with generating capacity comprised of fossil, hydro,
Power Generation Industry         wind, solar or geothermal power generation. Power Generation addresses a trend in
                                  the industry where disparate generation groups are being aggregated into a single
                                  business unit within the utility structure.


Indus Solutions for the           Recognizes the unique  requirements of nuclear  generating  stations in the areas
Nuclear Power Industry.           of special materials,  heath physics, safety and nuclear regulatory reporting and
                                  compliance issues.


Indus Solutions for               Focuses  on facilities  maintained by  the Department  of  Energy and  others  in
Managing Department of            facilites  management  that serve  large facility  complexes,  maintain high rise
Energy Facilities.                facilities  and the  distributed needs  of large  consumer  retailers,  insurance
                                  companies and other facility-intense organizations.


Indus Solutions for the           Includes the  Transmission and Distribution business units of utilities,  couples
Energy Delivery Industry          with the revenue cycle components from Customer Information Systems for electric,
                                  gas, water utilities.


The Industry Series
-------------------

Indus Solutions for the           Comprised of the "upstream" companies charged with prospecting and developing new
Oil, Gas & Chemical               oil  and gas  sources (both  on and offshore),  as well as "downstream" operating
Industry                          companies charged with refining, packaging and distribution processing.


Indus Solutions for               Represents  steel making, pulp and paper and others whose process involves moving
Integrated-Process Industries     from crude raw materials through secondary operations to finished goods. Specific
                                  packaged solutions in this series include:
                                       Indus Solutions for the Mining & Metals Industry
                                       Indus Solutions for the Forest Products Industry
                                       Indus Solutions for Industrial Manufacturing


Indus Solutions for the           Developed  in cooperation  with Oracle  Corporation's  complete Consumer Packaged
Consumer Packaged Goods           Goods offering, the Enterprise  Asset Management components of this best-of-breed
Industry                          solution are provided by the Company.


Indus Solutions for               Special offerings of products and support reflecting the needs of maintenance and
the Public Sector                 repair  operations  within the Public Sector have been created. Specific packaged
                                  solutions in the Public Sector Series include:
                                       Indus Solutions for Transportation Authorities
                                       Indus Solutions for Educational Systems
                                       Indus Solutions for Municipal Government Facilities
</TABLE>


     The Company  markets and sells its products  and services in three  primary
areas of the world: The Americas,  with direct sales  representatives in the US,
Canada,  and  Argentina;  Europe,  the Middle East & Africa  with  direct  sales
representatives  in  the UK and  France,  and  Asia-Pacific  with  direct  sales
representatives  in  Australia,  Hong Kong,  Singapore and the  Philippines.  In
addition to these direct  marketing and sales  resources,  the Company  utilizes
business  partner  relationships  and  channel  partner  programs  directly  and
indirectly in other parts of the world.  As of December 31, 1997,  the Company's
sales and marketing organization

                                       7
<PAGE>
consisted  of 102  employees.  The  marketing  staff is  based at the  Company's
corporate  headquarters  in San  Francisco,  while  the  sales  organization  is
decentralized throughout the three theaters of operation.

     The direct sales cycle begins with the  generation  of a sales lead, or the
receipt  of a  request  for  proposal  from a  prospect,  which is  followed  by
qualification  of the lead, an analysis of the customer's  needs,  response to a
request for proposal,  one or more  presentations to the customer  utilizing the
special  knowledge of the industry vertical  pre-sales staff,  customer internal
sign-off activities and contract  negotiation and finalization.  While the sales
cycle from customer to customer varies substantially,  the sales cycle generally
requires three to nine months.

     In  support  of  its  sales  force,  the  Company  conducts   comprehensive
industry-specific  vertical  marketing  programs which include public relations,
trade  advertising,   industry  seminars,  trade  shows  and  on-going  customer
communication programs through the IndusWorld,  the Company's international user
group. In addition,  the Company's  Account  Executive Program provides regional
support and specialized attention for each of its customers.  Account Executives
assist  in  implementing  licensed  applications  over  multi-year  engagements,
promote licensing of additional applications and encourage existing customers to
identify and help fund new applications.

Strategic Relationships

     Through its alliance and channel partner  programs,  the Company intends to
continue to develop  new  products,  to keep pace with the latest  technological
developments, and to extend its marketing, sales and support efforts by building
synergy  between the Company's  products and services and those  available  from
complementary  third party  providers.  The Company has entered  into  strategic
alliances and other formal and informal  relationships  with major  software and
hardware  vendors  and with  consulting  firms,  service  providers  and systems
integrators.  Members of the Company's  Alliance and Partner programs assist the
Company  with sales and support  activities  and with  product  localization  in
foreign countries.

Indus Alliance Program

     The Indus  Alliance  Program  is  comprised  of third  party  providers  of
complementary   software  products,   which  interoperate  with  Indus  Software
Solutions through  integration  products to provide  additional license revenues
and services to the Company  while  delivering a broad suite of  enterprise-wide
software capabilities.  Membership in this program includes Oracle for corporate
financial  systems,  PeopleSoft  for corporate  financial,  human  resources and
payroll systems, Nuclear Fuels Services/Radiation Protection Systems for jointly
developed  Nuclear  Health  Physics  Systems  marketed  as Total  Exposure,  and
Identitech  Corporation,  maker of electronic  document  management and workflow
software.  Other third party  integration  alliance partners are currently under
consideration by the Company.

Indus Partner Program

     The  Indus  Partner  Program  consists  of three  classes  of  third  party
providers  including:  Indus  Service  Partners  (foreign and  domestic),  Indus
Solution Series Platform Partners, and partners in the Indus Extension Program.

     Indus  Service   Partners  include   third-party   consultants  and  system
integration  firms,  which help deliver the services required to implement Indus
Software Solutions.  These recognized firms add specialty knowledge to assist in
training and  reengineering  services,  help provide  staffing  levelization and
supply peak load project  resources to the regional  operators.  These resources
assist in the delivery of ABACUS services on an as-needed  basis.  Domestically,
implementation  partners include: Arthur Andersen,  Coopers & Lybrand,  Computer
Science  Corporation,  Deloitte  & Touche  Consulting  Group,  Solbourne  Group,
Cimcorp,  and  The  Application  Group.  International  implementation  partners
include: Enidata,  Euriware, Gulf Data International,  Innova, Maxon Engineering
Services, Inc., Eagle Technologies, SGA Integrators and PosData.

     Indus  Series  Platform  Partners  are  computer  hardware   providers  and
operating system software providers that help the Company remain technologically
current and up to date with evolving releases of software and hardware upgrades.
Cooperative   marketing,   joint  trade  show   participation  and  vendor  fair
participation  at the  INDUSWORLDEXPO  Annual  Conference  of the User Group are
extended to this cooperative group of vendors.  The Company  participates in the
Hewlett-Packard  Channel Program,  Digital Equipment's Business Partner Program,
the IBM Business Partner Program, Sun MicroSystems  Alliance Program, as well as
Microsoft's  Solution  Provider  Program and Oracle's  Cooperative  Applications
Initiative.

     The Indus  Extension  Program is comprised of third party vendors  offering
products,  which provide  value-added  product extensions or specialty services,
taking Indus  Solution  Series data beyond the specified  scope of the Company's
application  systems.  Both  specialty  hardware and  specialty  point  solution
software  vendors are recognized in this program which include  offerings  from:
Harbinger Corporation (Acquion, Inc.), Commerce One, Inc., Dolphin Software, DEI
Group, Future Horizons,  Intermat, Meridium Corporation,  Primavera, Tadcom, and
Telxon  Corporation.  The Company's  solutions for the Energy Delivery Industry,
the AM/FM/GIS solutions  interoperate with products from Intergraph,  SHL Vision
and Smallworld Corporation.

                                       8
<PAGE>
Research and Development

     The  Company has a  dedicated  research  and  development  and  engineering
organization  and regularly  releases new products and  enhancements to existing
products.  Research and development  efforts are directed at increasing  product
functionality,  improving product  performance and expanding the capabilities of
the  products  to  interoperate  with  selected  third-party  software  products
available  from its alliance  partners  such as Oracle,  PeopleSoft  and others.
These efforts include  developing new  applications  that address new functions,
both  horizontal  function as well as new  targeted  vertical  market  function,
designed  to  enhance to the  intellectual  property  content  of the  Company's
offerings and ensure that the products remain best-of-class.

     The Company  believes that  research and  development  is most  effectively
accomplished  if customers are involved in the process.  Through direct customer
involvement and consensus input from user group  oversight  committees,  InSight
and InFocus,  product content is improved and the customer acceptance  threshold
usually  associated  with new  software  deployment  significantly  lowered.  In
addition,  the  interactive  development  process  promotes  increased  customer
awareness  of the  technological  features of the  product  and fosters  greater
product loyalty.

     There can be no assurance that the Company will be successful in developing
and marketing product enhancements or new products that respond to technological
change, changes in customer requirements,  or emerging industry standards,  that
the Company  will not  experience  difficulties  that could delay or prevent the
successful   development,   introduction  or  marketing  of  such  products  and
enhancements, or that any new products or enhancement that it may introduce will
achieve market  acceptance.  The inability of the Company,  for technological or
other reasons, to develop and introduce new products or enhancements in a timely
manner in response to changing customer  requirements,  technological  change or
emerging  industry  standards,  would  have a  material  adverse  effect  on the
Company's business or results of operations.

     As of December 31, 1997, the Company had 261 employees  engaged in research
and  development.   The  Company's   research  and  development   expenses  were
approximately  $18.1 million,  $23.3 million and $27.7 million in 1995, 1996 and
1997 respectively.  Development costs funded by customers as part of license and
service contracts are included as part of cost of revenues.

Competition

     The  enterprise  asset  management  software  solutions  market  is  highly
competitive,   rapidly  changing  and  significantly  affected  by  new  product
introductions  and  other  market  activities  of  industry  participants.   The
Company's  primary  competition stems from companies  offering  enterprise asset
software  solutions,   vendors  offering  partial  solutions  and  suppliers  of
departmental systems (primarily  LAN-based).  The Company's  competitors include
SAP  Aktiengesellschaft  ("SAP"), the Company's principal competitor,  and other
software vendors such as Mincom Corp., Project Software & Development, Inc., and
DataStream,  Inc. In the  future,  the  Company  may face  competition  from its
Alliance Partners. In the electric utility market, the Company faces competition
from suppliers of energy delivery  applications,  including Severn Trent Systems
and Synercom.

     In addition,  the Company  faces  indirect  competition  from  suppliers of
custom-developed  business  applications  software that have focused  largely on
proprietary  mainframe  and  minicomputer-based  systems with highly  customized
software,  such as the systems  consulting  groups of major accounting firms and
systems  integrators.  The Company also faces indirect  competition from systems
developed by the internal MIS departments of large organizations.

     Many of the Company's  competitors  and potential  competitors  have longer
operating histories,  significantly greater financial,  technical, marketing and
other  resources,  greater  name  recognition,  and a larger  installed  base of
customers than the Company.  In addition,  certain  competitors,  including SAP,
have  well-established  relationships  with  customers  of the  Company and with
accounting  and  consulting  firms that may have an incentive to recommend  such
competitors over the Company. Furthermore, as the enterprise management software
solutions market for process  industries  expands,  companies with significantly
greater  resources  than the Company could attempt to increase their presence in
this market by acquiring or forming strategic  alliances with competitors of the
Company.

     The principal  competitive  factors  affecting the market for the Company's
software  products  are   responsiveness  to  the  needs  of  capital  intensive
industries,  product  functionality  and ease of use,  speed of  implementation,
product  architecture,  quality and reliability,  vendor and product reputation,
quality of  customer  support  and price.  Based on these  factors,  the Company
believes that it has competed  effectively to date. In order to be successful in
the future, the Company must continue to respond promptly and effectively to the
challenges  of  technological   change  and  its  competitors'   innovations  by
continually  enhancing  its own product  offerings.  There can be no  assurance,
however,  that the Company's products will continue to compete favorably or that
the Company will be successful in the face of  increasing  competition  from new
products and  enhancements  introduced by existing  competitors or new companies
entering this market.

                                       9
<PAGE>
Proprietary Rights and Licensing

     The Company  relies on a  combination  of the  protections  provided  under
applicable   copyright,   trademark  and  trade  secret  laws,  as  well  as  on
confidentiality  procedures and licensing  arrangements to establish and protect
its rights in its software.  Despite the Company's  efforts,  it may be possible
for  unauthorized  third  parties  to copy  certain  portions  of the  Company's
products or to reverse  engineer or obtain and use information  that the Company
regards  as  proprietary.  In  addition,  the laws of certain  countries  do not
protect the Company's  proprietary  rights to the same extent, as do the laws of
the United  States.  Furthermore,  the  Company  has no  patents,  and  existing
copyright  laws afford only  limited  protection.  Accordingly,  there can be no
assurance  that the  Company  will be able to protect its  proprietary  software
against  unauthorized  third party copying or use, which could adversely  affect
the Company's competitive position.

     The  Company   licenses  its   applications   to  customers  under  license
agreements,  which are  generally  in standard  form,  although  each license is
individually negotiated and may contain variations.  The standard form agreement
allows the  customer  to use the  Company's  products  solely on the  customer's
computer  equipment for the customer's  internal  purposes,  and the customer is
generally  prohibited from  sub-licensing or transferring the applications.  The
agreements  generally  provide that the  Company's  warranty for its products is
limited to correction or replacement of the affected product,  and in most cases
the Company's  warranty  liability  may not exceed the  licensing  fees from the
customer.  The Company's form agreement also includes a  confidentiality  clause
protecting proprietary information relating to the licensed applications.

     The Company's  products are generally  provided to customers in object code
(machine-readable) format only. From time to time, in limited circumstances, the
Company has  licensed  source code  (human-readable  form)  subject to customary
protections  such  as  use  restrictions  and  confidentiality   agreements.  In
addition,  customers can be beneficiaries of a master source code escrow for the
applications,  pursuant  to which the source  code will be released to end users
upon the occurrence of certain events, such as the commencement of bankruptcy or
insolvency  proceedings by or against the Company,  or certain material breaches
of the  agreement.  The  Company  has the right to object to the  release of the
source  code  in  such  circumstances,  and to  submit  the  matter  to  dispute
resolution  procedures.  In the event of any  release  of the  source  code from
escrow, the customer's license is limited to use of the source code to maintain,
support and configure the Company applications.

     The  Company  may from time to time  receive  notices  from  third  parties
claiming infringement by the Company's products of proprietary rights of others.
As  the  number  of  software  products  in  the  industry   increases  and  the
functionality  of these  products  further  overlap,  the Company  believes that
software developers may become increasingly  subject to infringement claims. Any
such claims,  with or without  merit,  can be time  consuming  and  expensive to
defend  or could  require  the  Company  to enter  into  royalty  and  licensing
agreements.  Such  agreements,  if  required,  may  not be  available  on  terms
acceptable to the Company, or at all.

Employees

     As of December 31, 1997, the Company employed 896 people, of which 261 were
primarily  engaged in research and  development  activities,  466 in  post-sales
support and customer project operations,  102 in sales and marketing,  and 67 in
administration and finance. None of the Company's employees are represented by a
labor union. The Company has experienced no work stoppages and believes that its
relationship with its employees is excellent.

     The  Company's  future  success  depends,  in large part,  on the continued
service  of its key  management,  sales,  product  development  and  operational
personnel and on its ability to attract and retain highly  qualified  employees,
including management personnel.  There can be no assurance that the Company will
be successful in attracting, retaining and motivating key personnel.

Executive Officers

<TABLE>
     The  executive  officers  of the  Company as of  December  31,  1997 are as
follows:

<CAPTION>
                Name of Nominee                     Age                 Principal Occupation
<S>                                                 <C>    <C>
Robert W. Felton...............................     59     Chief Executive Officer and Chairman of the Board
Christopher R. Lane............................     42     President of Strategy and Product Development and Vice
                                                           Chairman of the Board
John W. Blend, III.............................     51     President of Worldwide Sales and Marketing and Director
Richard W. MacAlmon............................     48     Senior Vice President and Director
Frank M. Siskowski.............................     50     Chief Financial Officer and Executive Vice President of
                                                           Investor Relations
</TABLE>

     A biography, including the principal occupations for the past five years of
each  of  the  executive  officers,  is  provided  below.  There  is  no  family
relationship between any executive officer of the Company.

                                       10
<PAGE>


     Mr.  Felton is a founder of The Indus  Group,  Inc.  and has been the Chief
Executive  Officer and Chairman of the Board of Directors since the consummation
of the Merger on August 25, 1997.  From 1988 until  August 25, 1997,  he was the
Chairman, President and Chief Executive Officer of The Indus Group, Inc.

     Mr. Lane has served as the  President of Strategy  and Product  Development
and Vice Chairman of the Board of Directors since the consummation of the Merger
on August 25, 1997.  From May 1994 to August 25, 1997, he served as President of
TSW  International,  Inc. and was Chief Executive Officer since June 1994, and a
director  since 1993.  From June 1994 to July 1996, he served as Chairman of the
Board of TSW International, Inc. Prior to joining TSW International, Inc. in May
1994,  he served as a Vice  President  at E.M.  Warburg,  Pincus & Co.,  Inc., a
diversified  financial services firm ("EMW Inc."),  from 1993 to 1994. From 1987
to 1993, he held various positions at Oracle Corporation, a provider of software
for information management ("Oracle"), in both the United States and Europe. Mr.
Lane developed  Oracle's  strategic market divisions in the United Kingdom,  was
Vice President of its U.S.  consulting business and was responsible for European
product development.

     Mr. Blend has as served as the  President of Worldwide  Sales and Marketing
and a director  since the  consummation  of the Merger on August 25, 1997.  From
1986 to August 25, 1997, he served as TSW  International,  Inc.'s Executive Vice
President,  Worldwide  Distribution.  He  also  served  as  a  director  of  TSW
International,  Inc. since 1987.  Prior to joining TSW  International,  Inc., he
served as Area Vice President for the eastern field operations of HBO & Company,
a provider of enterprise-wide  patient care,  clinical,  financial and strategic
management software  solutions,  from 1980 to 1985. Prior to his tenure at HBO &
Company, he was employed in various positions by IBM Corporation;  a provider of
customer solutions through the use of advanced information technologies.

     Mr.  MacAlmon is a founder of The Indus  Group,  Inc. and has been a Senior
Vice President and director since the  consummation  of the Merger on August 25,
1997.  Prior to August 25, 1997, he served as Vice President of Marketing and as
a  director  of The Indus  Group,  Inc.  since  January  1990 and a Senior  Vice
President  of The Indus  Group,  Inc.  since June  1995.  From  January  1988 to
December 1989, Mr. MacAlmon  served as a Product  Developer for The Indus Group,
Inc.

     Mr.  Siskowski has served as Chief  Financial  Officer and  Executive  Vice
President of Investor  Relations since the consummation of the Merger August 25,
1997.  Prior to August 25, 1997,  he served as Senior Vice  President  and Chief
Financial  Officer of The Indus Group, Inc. since September 1996. From July 1991
to September 1996, Mr.  Siskowski served as Senior Vice President and Controller
of VISA  International.  From  January  1983 to July  1991,  he  served  as Vice
President  and  Controller  of MCI  Telecommunications  and Chief  Financial and
Administrative   Officer  of  the  Pacific   Division   of  MCI   Communications
Corporation.

Risk Factors

     This report  contains  forward-looking  statements  that involve  risks and
uncertainties.  Forward-looking  statements  have  been  made  pursuant  to  the
provisions of Section 27A of the  Securities  Act of 1933 and Section 21E of the
Securities and Exchange Act of 1934,  including  without  limitation  statements
regarding the Company's expectations,  beliefs,  intentions, plans or strategies
regarding the future.  Unless required by law, the Company assumes no obligation
to update any such  forward-looking  statements.  The Company's  actual  results
could  differ  materially  from  those  anticipated  in  these   forward-looking
statements as a result of certain  factors,  including those set forth below and
elsewhere in this report.

Risks Relating to the Merger

     Integration  of  Operations.  The Merger of The Indus  Group,  Inc. and TSW
International,  Inc. has been  consummated  with the expectation that the merger
will result in  beneficial  synergistic  effects for the Combined  Company.  The
combination of the two companies  involves,  among other things,  integration of
the companies'  respective  product offerings and coordination of their research
and development  efforts.  The difficulties of integration include the necessity
of coordinating geographically separated organizations and integrating personnel
with  disparate  business  backgrounds.  Failure  to  effectively  complete  the
integration  of the two  companies'  operations  would have a  material  adverse
effect on the Company's business, operating results and financial condition.

Volatility of Quarterly Operating Results

     History of TSW  International,  Inc.  Losses.  Although TSW  International,
Inc.'s total revenue has  increased in each of the last five fiscal  years,  TSW
International, Inc. has experienced operating and net losses for fiscal 1994 and
1995 and a net loss for fiscal 1996. Such losses  resulted  primarily from costs
incurred  in  connection   with  the   development   and   introduction  of  TSW
International,   Inc.'s   client/server  Asset  Care  system,   Enterprise  MPAC
("EMPAC"), purchasing delays by customers in anticipation of the introduction of
EMPAC,  and, to a lesser  extent,  costs  associated  with the  expansion of TSW
International,  Inc.'s international operations.  There can be no assurance that
the Company will be able to achieve or sustain profitability in the future.

                                       11

<PAGE>


     Fluctuating   Operating  Results.  The  Company's  operating  results  have
fluctuated in the past, and the Company's results may fluctuate significantly in
the future  depending on a number of factors,  including (i) the relatively long
sales cycles for their products, (ii) the variable size and timing of individual
license  transactions,  (iii) changes in demand for their products and services,
(iv) competitive  conditions in the industry,  (v) changes in customer  budgets,
(vi) the timing of the  introduction of new products or product  enhancements by
each  such  company  or its  competitors,  (vii)  their  success  in  and  costs
associated with  developing and  introducing  new products,  (viii) product life
cycles, (ix) variability in new licenses obtained, (x) changes in the proportion
of revenues  attributable to license fees versus  services,  (xi) changes in the
level of operating expenses, (xii) delay or deferral of customer implementations
of their software,  (xiii) software defects and other product quality  problems,
and (xiv) other economic  conditions  generally or in specific  process industry
segments.  Further,  the purchase of the Company's products generally involves a
significant   commitment  of  capital,  with  the  attendant  delays  frequently
associated with large capital  expenditures and authorization  procedures within
large  organizations.  For these and other  reasons,  the sales  cycles  for the
Company's  products are typically lengthy and subject to a number of significant
risks  over  which  each  such  company  has  little  or no  control,  including
customers' budget constraints and internal  authorization  reviews. In addition,
delays  in the  completion  of a product  implementation  may  require  that the
revenues  associated with such implementation be recognized over a longer period
than originally  anticipated.  Such delays in the implementation or execution of
orders have caused,  and may in the future cause,  material  fluctuations in the
Company's  operating  results.  Similarly,  customers may cancel  implementation
projects  at any time  without  penalty,  and such  cancellations  could  have a
material  adverse  effect on the  Company's  business or results of  operations.
Because the Company's  expenses are relatively  fixed, a small  variation in the
timing of recognition of specific revenues can cause  significant  variations in
operating  results from quarter to quarter and may in some future quarter result
in losses or have a material adverse effect on the Company's business or results
of operations.

     Additional  factors  that may  contribute  to  future  fluctuations  in the
Company's  quarterly  operating  results  include,  but are not  limited to: (i)
development and  introduction of new operating  systems that require  additional
development efforts; (ii) introduction or enhancement of products by the Company
or its  competitors;  (iii)  changes in pricing  policies  of the Company or its
competitors;  (iv) increased competition;  (v) technological changes in computer
systems and  environments;  (vi) the  ability of the Company to timely  develop,
introduce  and market new  products;  (vii)  quality  control of products  sold;
(viii)  market  acceptance  of new products and product  enhancements;  (ix) the
Company's success in expanding its sales and marketing  programs;  (x) personnel
changes;  (xi) foreign  currency  exchange  rates;  (xii) mix of products  sold;
(xiii) acquisition costs; and (xiv) general economic conditions.

Management of Growth; Dependence on Key Personnel

     The  Company's  business has grown  rapidly in recent  periods,  with total
revenues  increasing  from $101.8  million in 1995 to $143.0 million in 1996 and
$177.0  million in 1997.  The growth of the Company's  business and expansion of
customer  base has  placed a strain on  management  and  operations.  The recent
expansion  has  also  resulted  in  substantial  growth  in  the  number  of its
employees,  the scope of its operating and financial  systems and the geographic
area of its  operations,  resulting in increased  responsibility  for management
personnel.  These strains on systems and resources  have been  exacerbated  as a
result of the process of integrating  the  constituent  companies as a result of
the Merger.

     In the  future,  the  Company  will be  required to continue to improve its
financial and management controls,  reporting systems and procedures on a timely
basis and to expand,  train and manage its employee work force.  There can be no
assurance that the Company will be able to effectively  manage such growth.  Its
failure to do so would have a material adverse effect on its business, operating
results and financial condition.  Competition for qualified sales, technical and
other personnel is intense,  and there can be no assurance that the Company will
be able to attract,  assimilate or retain additional highly qualified  employees
in the  future.  If the Company  were unable to hire and retain such  personnel,
particularly  those  in key  positions,  its  business,  operating  results  and
financial condition would be materially adversely affected. The Company's future
success also depends in significant  part upon the continued  service of its key
technical,  sales and senior management  personnel.  The loss of the services of
one or more of this key employees  could have a material  adverse  effect on its
business,  operating  results  and  financial  condition.  Additions  of new and
departures  of  existing  personnel,  particularly  in  key  positions,  can  be
disruptive  and  have a  material  adverse  effect  on the  Company's  business,
operating results and financial condition.

Intense Competition

     The   enterprise   management   software   solutions   business  is  highly
competitive,   rapidly  changing  and  significantly  affected  by  new  product
introductions  and  other  market  activities  of  industry  participants.   The
Company's primary  competition stems from companies offering enterprise software
solutions,  vendors  offering  partial  solutions and suppliers of  departmental
systems (primarily LAN-based).  The Company's competitors include SAP, and other
software vendors such as Mincom Corp. and Project Software & Development,  Inc.,
firms that provide software products to electric  utilities such as Severn Trent
Systems and Synercom,  and many other firms. In the future, the Company may also
face competition from Oracle,  PeopleSoft and SPL WorldGroup B.V., through which
it has  developed  or is  developing  PassBook  integration  products to provide
interoperability  with Oracle's corporate financial  applications,  PeopleSoft's
corporate   financial,   payroll  and  human  resources   applications  and  SPL
WorldGroup's customer information  applications.  In addition, the Company faces
competition from suppliers of  custom-developed  business  application  software
that have focused  largely on  proprietary  mainframe-  and  microcomputer-based
systems

                                       12

<PAGE>


with highly customized software,  such as the systems consulting groups of major
accounting  firms and systems  integrators.  The Company also faces  competition
from systems developed by the internal MIS departments of large organizations.

     The businesses in which the Company competes are intensely  competitive and
rapidly  changing  and,  in order to compete,  the Company  will have to enhance
current  products  and develop  new  products  in a timely  fashion.  Management
believes that the principal competitive factors in the Company's businesses will
be product  performance and functionality,  cost of internal product development
as compared with cost of purchase of products supplied by outside vendors,  cost
of on-going  maintenance and time-to-market.  Many of the Company's  competitors
will have substantially greater financial, technical, sales, marketing and other
resources,  as well as greater name recognition and a larger customer base, than
the Company. The Company's success will also depend significantly on its ability
to develop more  advanced  products more quickly and less  expensively  than its
existing  competitors  and  potential   competitors  and  to  educate  potential
customers  of the  benefits of  licensing  the  Company's  products  rather than
developing  their own  products.  The Company's  current and future  competitors
could introduce  products with more features,  greater  functionality  and lower
prices than the Company's products. These competitors could also bundle existing
or new products with other,  more established  products in order to compete with
the Company. In addition, because there are relatively low barriers to entry for
the software  market,  the Company  expects  additional  competition  from other
established and emerging companies. Increased competition is likely to result in
price reductions,  reduced gross margins and loss of sales volume,  any of which
could materially and adversely affect the Company's business,  operating results
and financial  condition.  Any material  reduction in the price of the Company's
products  would  negatively  affect its gross revenues and could have a material
adverse effect on its business, operating results and financial condition. There
can be no  assurance  that  the  Company  will be able to  compete  successfully
against  current and future  competitors,  and the failure to do so would have a
material  adverse  effect upon the  Company's  business,  operating  results and
financial condition.

Risk of Successfully Integrating Current and Future Products and Technologies.

     The Company's product strategy is initially to integrate  selected products
and  technologies to enhance  enterprise  management  solutions and to integrate
certain products  throughout its entire product line through the availability of
a common set of services.  Such product and  technology  integration  activities
have begun but a schedule has not been determined.  The success of this strategy
is dependent  in  significant  part on the  Company's  ability to integrate  its
products as planned and the resultant  products  achieving market  acceptance by
end  users.  No  assurance  can be given  that  the  Company  will  successfully
integrate  its  products  as  planned.  If the  Company is unable to develop and
introduce new integrated products and technologies,  or enhancements to existing
products,  in a timely  manner,  its business,  operating  results and financial
condition would be materially and adversely affected.

Rapid  Technological  Change;  Need to Develop  New  Products;  Requirement  for
Frequent Product Transitions

     The industries in which the Company participates are intensely  competitive
and characterized by rapid technological change,  evolving industry standards in
computer hardware and software  technology changes in customer  requirements and
frequent  new  product  introductions  and  enhancements.  The  introduction  of
products  embodying new technologies,  the emergence of new standards or changes
in customer  requirements  could render the Company's existing products obsolete
and  unmarketable.  As a result,  the Company's success will depend in part upon
its ability to continue to enhance  existing  products and expand its  products,
continue to provide enterprise  solutions and develop and introduce new products
that  keep   pace  with   technological   developments,   satisfy   increasingly
sophisticated  customer  requirements and achieve customer acceptance.  Customer
requirements  include,  but are not limited to, product  operability and support
across  distributed and changing  heterogeneous  hardware  platforms,  operating
systems,  relational databases and networks.  There can be no assurance that the
Company's  products will achieve customer  acceptance or will adequately address
the changing needs of the  marketplace or that the Company will be successful in
developing and marketing  enhancements to its existing  products or new products
incorporating  new  technology  on a timely  basis.  The Company has in the past
experienced  delays in product  development,  and there can be no assurance that
the Company will not experience  further  delays in connection  with its current
product development or future development  activities.  If the Company is unable
to develop and introduce new products,  or enhancements to existing products, in
a  timely  manner  in  response  to  changing  market   conditions  or  customer
requirements,  the Company's business, operating results and financial condition
will be  materially  and  adversely  affected.  Because  the Company has limited
resources,  the  Company  must  effectively  manage and  properly  allocate  and
prioritize its product  development  efforts and its porting efforts relating to
newer  products and  operating  systems.  There can be no  assurance  that these
efforts will be successful or, even if successful,  that any resulting  products
or operating systems will achieve customer acceptance.

International Operations

      International  revenue (from sales outside the United  States,  Canada and
Mexico) accounted for approximately  18%, 20% and 14% of total revenues in 1995,
1996 and 1997,  respectively.  The Company maintains an operational  presence in
the United Kingdom and France with the acquisition of SQL Systems  International
plc,  in  October  1994  and an 80%  equity  interest  in,  Socotec  Maintenance
Services,  in July 1995.  In  addition,  the Company has  established  sales and
support offices in Europe,  Australia and Asia; and expects  international sales
to  continue  to  become  a  more   significant   component  of  its   business.
International  expansion may require the Company to establish additional foreign
operations  and  hire  additional   personnel.   This

                                       13

<PAGE>


may require significant  management  attention and financial resources and could
adversely affect the Company's  operating  margin.  To the extent the Company is
unable to effect these additions efficiently and in a timely manner, its growth,
if any, in  international  sales will be limited,  and its  business,  operating
results and  financial  condition  could be materially  and adversely  affected.
There can be no assurance  that the Company will be able to maintain or increase
international market demand for its products.

     The  Company's  international  business  will  also  involve  a  number  of
additional risks,  including lack of acceptance of localized products,  cultural
differences  in the conduct of  business,  longer  accounts  receivable  payment
cycles, greater difficulty in accounts receivable collection, seasonality due to
the slow-down in European  business  activity  during the Company's third fiscal
quarter,   unexpected  changes  in  regulatory   requirements  and  royalty  and
withholding taxes that restrict the repatriation of earnings,  tariffs and other
trade barriers, and the burden of complying with a wide variety of foreign laws.
The  Company's  international  sales will be  generated  primarily  through  its
international  sales  subsidiaries  and are expected to be  denominated in local
currency,  creating a risk of foreign currency  translation gains and losses. To
the extent profit is generated or losses are incurred in foreign countries,  the
Company's effective income tax rate may be materially and adversely affected. In
some  markets,  localization  of the  Company's  products  will be  essential to
achieve  market  penetration.  The  Company  may  incur  substantial  costs  and
experience delays in localizing its products, and there can be no assurance that
any localized product will ever generate  significant  revenue.  There can be no
assurance  that any of the  factors  described  herein  will not have a material
adverse effect on the Company's future  international  sales and operations and,
consequently, its business, operating results and financial condition.

     Recent economic trends, particularly in the Asia-Pacific marketplace,  have
caused a heightened  awareness of the impact this portion of the world's economy
can have on the overall economy. As the Asia-Pacific market currently represents
almost  one-third  of  the  worlds  buying  power  and  approximately  4% of the
Company's  revenues are to this region,  changes in this area's  economic growth
rate may  impact  suppliers  of  product  into that  market.  While  the  actual
magnitude of the business at risk is unknown, it is likely that capital spending
in this  market  will  decrease  and thus,  the  Company's  ability to  increase
revenues in this region may be negatively impacted.

Dependence on Proprietary Technology; Risks of Infringement

     The Company's success is heavily dependent upon its proprietary technology.
The  Company  will  rely on a  combination  of the  protections  provided  under
applicable   copyright,   trademark  and  trade  secret  laws,   confidentiality
procedures and licensing arrangements,  to establish and protect its proprietary
rights. As part of its  confidentiality  procedures,  the Company will generally
enter  into  non-disclosure  agreements  with its  employees,  distributors  and
corporate  partners,  and  license  agreements  with  respect  to its  software,
documentation and other proprietary information.  Despite these precautions,  it
may be possible for  unauthorized  third parties to copy certain portions of the
Company's products or to reverse engineer or obtain and use information that the
Company  regards as  proprietary  the Company's  products or technology  without
authorization,  or to develop similar technology  independently.  Moreover,  the
laws of certain countries do not protect the Company's proprietary rights to the
same extent, as do the laws of the United States.  Furthermore,  the Company has
no patents,  and existing  copyright  laws afford only limited  protection.  The
Company  will make source code  available  for certain of its  products  and the
provision of such source code may increase the likelihood of misappropriation or
other misuses of the Company's intellectual property.  Accordingly, there can be
no assurance that the Company will be able to protect its  proprietary  software
against  unauthorized  third party copying or use, which could adversely  affect
the Company's competitive position.

     The Company is not aware that any of its products  infringe the proprietary
rights of third  parties.  There can be no assurance that a third party will not
assert that the Company's  technology violates its patents in the future. As the
number of software  products in the industry  increases and the functionality of
these products  further overlap,  the Company believes that software  developers
may become increasingly subject to infringement claims. Any such claims, with or
without  merit,  can be time  consuming and expensive to defend or could require
the Company to enter into royalty and  licensing  agreements.  Such claims might
require the Company to enter into royalty or license agreements. Such royalty or
license agreements, if required, may not be available on terms acceptable to the
Company or at all, which could have a material adverse effect upon the Company's
business, operating results and financial condition.

Lengthy Sales and Implementation Cycle; Large Order Size

     The purchase and  implementation of the Company's  software  solutions by a
customer will generally involve a significant  commitment of capital over a long
period of time, with the risk of delays frequently associated with large capital
expenditures  and  implementation  procedures  within an  organization,  such as
budgetary  constraints and internal  approval review.  During the sales process,
the Company may devote significant time and resources to a prospective customer,
including costs associated with multiple site visits, product demonstrations and
feasibility  studies,  and experience  significant delays over which the Company
will have no control.  In addition,  following license sales, the implementation
of the Company's  products will involve a lengthy  process,  including  customer
training  and  consultation.  A successful  implementation  will require a close
working relationship between the Company, the customer and, if applicable, third
party  consultants  and systems  integrators  who assist in the  process.  These
factors may increase the costs associated with completion of any given sale, and
risks of cancellation or delay of such sales.

                                       14

<PAGE>


Dependence on Licensed Technology

     Elements of the  Company's  products,  particularly  in its EMPAC  workflow
engine,  are licensed from third parties under license  agreements.  The loss of
the Company's right to use and license such technology could limit the Company's
ability to  successfully  market  certain  modules of EMPAC.  While the  Company
believes that the it would be able to either license or develop  alternatives to
such component technologies, there can be no assurance that the Company would be
able to do so, or that such  alternatives  would achieve market acceptance or be
available  on a timely  basis.  Failure to obtain the  necessary  licenses or to
develop  needed  technologies  could  have  a  material  adverse  effect  on the
Company's business, operating results and financial condition.

Dependence on Third Parties

     Implementation  and  development of EMPAC  software  depends on proprietary
technology licensed from third parties. Implementation of EMPAC requires the use
of the Windows environment licensed from Microsoft Corporation. The introduction
and increased market  acceptance of operating systems that are incompatible with
the  Company's  products,  or the failure of  Microsoft's  operating  systems to
achieve continued market  acceptance,  could adversely affect the market for the
Company's  products.  EMPAC also relies on certain  proprietary  features of the
database  management system developed by Oracle.  The introduction and increased
market acceptance of database  management systems that are incompatible with the
Company's  products,  or the  failure of Oracle  products  to achieve  continued
market acceptance, could adversely affect the market for the Company's products.
In addition,  certain elements of EMPAC have been developed in  PowerBuilder,  a
client/server   development   product  that  has  been  traditionally   database
independent.   Sybase,  Inc.  acquired  Powersoft  Corporation,  which  licenses
PowerBuilder,  in  1994.  If  PowerBuilder  does  not  continue  to be  database
independent,  future development of the Company's Windows-based components which
operate  in  conjunction  with the  Oracle  database  management  system  may be
adversely affected. Although the Company's strategy has been to develop software
products  that  are  minimally  dependent  on  any  particular  element  of  the
underlying platform,  there can be no assurance that the Company will be able to
avoid the  obsolescence  of its products due to rapid  technological  change and
evolving industry standards.

Risk of Software Defects; Product Liability

     The sale and  support  of the  Company's  products  may  entail the risk of
product  liability  claims.  The license  agreements  of the  Company  typically
contain  provisions  designed to limit exposure to potential  product  liability
claims.  It is possible,  however,  that the limitation of liability  provisions
contained  in such  license  agreements  may not be  effective  as a  result  of
federal,  state or local laws or ordinances or unfavorable judicial decisions. A
successful  product  liability  claim  brought  against the Company could have a
material  adverse  effect upon the  Company's  business,  operating  results and
financial condition.

Past and Future Acquisitions.

     The Company, as well as its predecessor corporations, The Indus Group, Inc.
and TSW International,  Inc. have made acquisitions in the past. Acquisitions of
companies,  divisions of companies or products entail numerous risks,  including
difficulty  in  successfully  assimilating  acquired  operations,  diversion  of
management's attention and loss of key employees of acquired companies. In 1997,
The Indus Group,  Inc. has completed  two  acquisitions.  In 1994 and 1995,  TSW
International,  Inc.  concluded  a total of  three  acquisitions  of  companies,
divisions of companies or products. The Company may make additional acquisitions
in the future. Products acquired by The Indus Group, Inc. and TSW International,
Inc. in the past required significant  additional  development before they could
be marketed and some failed to generate any revenue for The Indus Group, Inc. or
TSW  International,  Inc.  Any  problems  related to  acquisitions  could have a
material  adverse  effect  on the  Company's  business,  operating  results  and
financial condition. In addition,  future acquisitions by the Company may result
in dilutive  issuance of equity  securities,  incurring  additional  debt, large
one-time write-offs and the creation of goodwill or other intangible assets that
could  result in  amortization  expense.  These  factors  could  have a material
adverse  effect on the  Company's  business,  operating  results  and  financial
condition.

                                       15

<PAGE>



ITEM 2.  PROPERTIES

<TABLE>
     Certain  information  concerning the Company's office space at December 31,
1997 is set forth below:

<CAPTION>
                     Location                              Principal use                   Footage        Ownership
       -------------------------------------    ------------------------------------    --------------    ----------------
<S>                                             <C>                                        <C>               <C>
       Domestic Offices:
          Atlanta, GA......................     Regional Headquarters, Research            107,650           Lease
                                                and Development, Sales and
                                                Marketing, Operations
          San Francisco, CA................     Corporate Headquarters, Research            66,678           Lease
                                                and Development, Sales and
                                                Marketing, Operations
          Pittsburgh, PA...................     Regional Operations                         28,261           Lease
          Dallas, TX.......................     Regional Operations                          9,041           Lease
          Lake Oswego, OR..................     Regional Operations                          5,507           Lease
          Malvern, PA......................     Regional Operations                          4,075           Lease
          Other executive offices..........     Sales                                        3,455           Lease

       International Offices:
          Woking, Surrey, United Kingdom...     Regional Operations                          9,300           Lease
          Richmond, United Kingdom.........     Regional Operations                          7,779           Lease
          Brisbane.........................     Regional Operations                          6,695           Lease
          Chertsey, Surrey, United Kingdom.     Regional Operations                          5,500           Lease
          Singapore........................     Regional Operations                            807           Lease
          Executive offices in Asia Pacific     Sales                                        1,840           Lease
</TABLE>

     In the first quarter of 1998,  the Company  entered into  additional  lease
agreements  for  additional  office space,  in  Singapore,  France and Canada of
3,305,  6,660 and 1,600 square feet,  respectively.  Management is currently and
will  continue to evaluate  additional  leased  facilities  to  accommodate  the
anticipated growth in operations for 1998. The company owns substantially all of
the equipment used in its facilities.


ITEM 3.  LEGAL PROCEEDINGS

     From time to time, the Company is involved in legal proceedings  incidental
to the  conduct of its  business.  While the outcome of these  claims  cannot be
predicted  with  certainty,  the Company does not believe  that the  litigation,
individually or in the aggregate,  to which it is currently a party is likely to
have a  material  adverse  effect on the  results  of  operations  or  financial
condition.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were  submitted to a vote of security  holders during the fourth
quarter of fiscal year 1997.

                                       16

<PAGE>


                                     PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The  Company's  common  stock,  $.001 par  value,  is traded on the  Nasdaq
National  Market under the symbol "IINT".  The table sets forth the high and low
closing  prices  of the  Company's  common  stock  for  the  periods  indicated.
Information  included in the table for the periods prior to the  consummation of
the Merger on August 25, 1997  reflect the stock  prices of the common  stock of
The Indus Group, Inc., the Company's predecessor issuer, which was traded on the
Nasdaq National Market under the symbol "IGRP"  commencing on February 29, 1996,
the date of its initial public offering.

                                                           High        Low
                                                           ----        ---
       Fiscal 1996
            First Quarter...........................   $ 22-3/4      $ 18
            Second Quarter..........................     21-1/2        17
            Third Quarter...........................     21-1/4        15-3/4
            Fourth Quarter..........................     25-3/4        18-7/8

       Fiscal 1997
            First Quarter...........................     25-3/4        14
            Second Quarter..........................     20-1/4        13-1/2
            Third Quarter...........................     19-3/4        15-3/8
            Fourth Quarter..........................     17-3/4         6-1/2

     The  Company  anticipates  that any future  earnings  will be  retained  to
finance the continuing development of its business. The Company has not declared
or paid any cash  dividends on its Common Stock and does not  anticipate  paying
cash dividends in the foreseeable future.

     The number of stockholders  of record for the Company's  common stock as of
March 11, 1998 was 288.


ITEM 6.  SELECTED FINANCIAL INFORMATION

     The following selected financial information of the Company is qualified by
reference to and should be read in conjunction with the financial statements and
notes thereto and other financial  information included elsewhere herein. During
1997,  The Indus Group,  Inc.  entered into an agreement  and plan of merger and
reorganization with TSW International, Inc. The Merger was consummated on August
25, 1997 and has been  accounted  for as a  pooling-of-interests.  All financial
information  has been  restated to reflect the combined  operations of The Indus
Group,  Inc.  and  TSW  International,   Inc.  The  consolidated  statements  of
operations  data for the years  ended  December  31,  1995,  1996,  and 1997 and
consolidated  balance  sheet data as of  December  31, 1996 and 1997 are derived
from and  qualified  by  reference to the audited  financial  statements  of the
Company and are included elsewhere herein.  The consolidated  balance sheet data
as of  December  31,  1993,  1994  and 1995 and the  consolidated  statement  of
operations  for the years ended  December 31, 1993 and 1994 are derived from the
audited financial statements of the Company which are not included herein.

                                       17

<PAGE>


<TABLE>
                                                      INDUS INTERNATIONAL, INC.
                                                 SUMMARY CONSOLIDATED FINANCIAL DATA

<CAPTION>
                                                                                    Years Ended December 31,
                                                              ---------------------------------------------------------------------
Statement of operations data:                                    1993           1994           1995           1996           1997
                                                              ---------      ---------      ---------      ---------      ---------
<S>                                                           <C>            <C>            <C>            <C>            <C>
Revenues:
   Software licensing fees (1) (2) ......................     $  14,961      $  15,380      $  32,816      $  43,060      $  55,958
   Services and maintenance .............................        34,751         41,901         67,824         97,515        119,382
   Other revenue ........................................         2,729            824          1,184          2,463          1,694
                                                              ---------      ---------      ---------      ---------      ---------
     Total revenues .....................................     $  52,441      $  58,105      $ 101,824      $ 143,038      $ 177,034
Cost of revenues ........................................        23,458         27,664         47,872         63,738         78,575
                                                              ---------      ---------      ---------      ---------      ---------
Gross margin ............................................     $  28,983      $  30,441      $  53,952      $  79,300      $  98,459
                                                              ---------      ---------      ---------      ---------      ---------
Operating expenses:
   Research and  development ............................        11,263         19,063         18,151         23,265         27,664
   Sales and marketing ..................................         8,412         13,084         19,915         26,523         33,568
   General and administrative ...........................         5,959         10,352         12,996         14,951         14,991
   Compensation charge-stock options (3) ................          --             --           18,900           --             --
   Merger and restructuring expenses(4) .................          --             --             --             --           12,083
                                                              ---------      ---------      ---------      ---------      ---------
     Total operating expenses ...........................     $  25,634      $  42,499      $  69,962      $  64,739      $  88,306
                                                              ---------      ---------      ---------      ---------      ---------
Income (loss) from operations ...........................     $   3,349      $ (12,058)     $ (16,010)     $  14,561      $  10,153
Other income (expense) net ..............................            80           (783)        (2,112)        (1,887)        (1,968)
                                                              ---------      ---------      ---------      ---------      ---------
Income (loss) before taxes ..............................     $   3,429      $ (12,841)     $ (18,122)     $  12,674      $   8,185
Provision (benefit) for income taxes ....................           187         (1,195)           423          6,849          6,408
Cumulative effect of deferred income taxes
provided upon conversion by Indus to C
Corporation(5) ..........................................          --             --             --            6,700           --
                                                              ---------      ---------      ---------      ---------      ---------
Income (loss) before extraordinary item .................         3,242        (11,646)       (18,545)          (875)         1,777
Extraordinary item ......................................          --             --             --             --             (787)
                                                              ---------      ---------      ---------      ---------      ---------

Net Income (loss) .......................................     $   3,242      $ (11,646)     $ (18,545)     $    (875)     $     990
                                                              =========      =========      =========      =========      =========

Pro forma statement of operations as adjusted:
   Income (loss) before income taxes ....................                                   $ (18,122)     $  12,674
   Add back portion of compensation charge-stock
   options (3) ..........................................                                      17,900           --
                                                                                            ---------      ---------
   Income (loss) before  income taxes, as adjusted ......                                   $    (222)     $  12,674
   Provision for income taxes (federal, state
   and foreign) (5) .....................................                                       5,181          6,849
                                                                                            ---------      ---------
   Pro forma net income (loss) ..........................                                   $  (5,403)     $   5,825
                                                                                            =========      =========
Income (loss) per share (computed on pro forma
net income (loss) in 1995 and 1996) .....................                                   $   (0.25)     $    0.22      $    0.03
                                                                                            =========      =========      =========

Shares used in computing per share data .................                                      22,027         25,976         28,574
                                                                                            =========      =========      =========
</TABLE>


<TABLE>
<CAPTION>
                                                                                  Years Ended December 31,
                                                          --------------------------------------------------------------------------
Balance sheet data:                                         1993            1994             1995             1996            1997
                                                          --------        --------         --------         --------        --------
<S>                                                       <C>             <C>              <C>              <C>             <C>
Working capital ..................................        $  9,235        $    226         $   (291)        $ 43,064        $ 37,238
Total assets .....................................          25,984          39,857           57,734          117,855         136,725
Short-term debt ..................................           2,331           4,496           16,481           16,951          29,054
Long-term debt ...................................             249             665            1,222            2,126           1,105
Subordinated long-term notes .....................            --             9,650           16,251           18,065            --
TSW redeemable preferred stock ...................           8,100          11,100           13,100           18,100            --
Total stockholder's equity .......................           6,972         (11,846)         (20,473)          20,666          70,230

<FN>
(1)  Effective  in the third  quarter of 1997,  The Indus Group,  Inc.  began to
     report  applicable  new license  fees on  standard  software  products  not
     requiring substantial  modification or customization as earned revenue upon
     shipment to customers.  Previously,  because  substantial  modification and
     customization  of software  products was expected by  customers,  The Indus
     Group,  Inc.  had  deferred  the  applicable  license  fees  initially  and
     recognized   those  fees  as  earned  over  the  period  of   modification,
     customization and other installation  services.  TSW  International,  Inc.,
     which had not been required to perform substantial  customization services,
     continued to  recognize  the  applicable  portion of license fees as earned
     upon shipment of standard software products to customers.
(2)  TSW International, Inc. began recognizing license fee revenue from EMPAC in
     the quarter ended December 31, 1995, when EMPAC first became operational at
     a customer site.

                                       18

<PAGE>


(3)  Reflects  nonrecurring  expense  incurred  in the third  quarter of 1995 in
     connection with an amendment to The Indus Group's 1992 Stock Option Plan to
     accelerate  the  exercisability  of outstanding  stock  options,  which had
     previously been  contingent upon the occurrence of certain events.  The pro
     forma adjustment of $17,900,000 is to reduce 1995  compensation  expense to
     the amount  related to options  granted in 1995 only. See Note 1 and Note 9
     of the Notes to the Consolidated Financial Statements.
(4)  See Note 1 of the Notes to the  Consolidated  Financial  Statements  for an
     explanation of the merger and restructuring expenses.
(5)  Prior to January 1, 1996, The Indus Group,  Inc. was not subject to federal
     corporate  income  taxation  because of its  election to be taxed under the
     provisions of  Subchapter S of the Code.  Pro forma net income for 1995 has
     been  determined  by  assuming  that  the  Company  had  been  taxed as a C
     Corporation   for  1995.  Pro  forma  net  income  for  1996  reflects  the
     elimination of a nonrecurring  charge for the cumulative effect of deferred
     income taxes  incurred in the first quarter of 1996 in connection  with the
     termination  of The Indus Group's S Corporation  status.  See Note 1 to the
     Consolidated Financial Statements.
(6)  There were no material  transactions  between The Indus Group, Inc. and TSW
     International,  Inc. prior to the  consummation of the merger on August 25,
     1997.
</FN>
</TABLE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

     The  information  required by this Item is incorporated by reference to the
section entitled  "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations" in the Company's 1997 Annual Report to Stockholders.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The  information  required by this Item is incorporated by reference to the
section  entitled  "Consolidated  Financial  Statements"  in the Company's  1997
Annual Report to Stockholders.


ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

     Not applicable.


                                    PART III

     Certain  information  required  by Part III is omitted  from this Report in
that  the  Registrant  will  file  a  definitive  proxy  statement  pursuant  to
Regulation  14(a) (the "Proxy  Statement") not later that 120 days after the end
of the fiscal  year  covered by this  Report and  certain  information  included
therein is  incorporated  herein by reference.  Only those sections of the Proxy
Statement that specifically  address the items set forth herein are incorporated
by reference.  Such  incorporation  does not include the Compensation  Committee
Report or the Performance Graph included in the Proxy Statement.


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information concerning the Company's Directors required by this Item is
incorporated  by  reference  to the  information  contained  under the  captions
"Election  of  Directors-Nominees"   and  "Section  16(a)  Beneficial  Ownership
Compliance" in the Proxy  Statement.  The  information  concerning the Company's
officers  required  by this Item is  included  in the  Section  in Part I hereof
entitled "Executive Officers".


ITEM 11.  EXECUTIVE COMPENSATION

     The information  concerning the Company's  Executive  Officers  required by
this Item is incorporated  by reference to the  information  contained under the
captions  "Proposal  One - Election  of  Directors - Director  Compensation  and
Executive Compensation" in the Proxy Statement.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  information  concerning  security  ownership  required by this Item is
incorporated  by  reference  to the  information  contained  under  the  caption
"Security  Ownership  of  Management;   Principal  Stockholders"  in  the  Proxy
Statement.

                                       19

<PAGE>


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  required by this item is incorporated by reference to the
information  contained under the caption "Certain  Transactions with Management"
in the Proxy Statement.


                                     PART IV



ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

a. The following documents are filed as a part of this Report:

1.       Financial Statements:  The following  Consolidated Financial Statements
         of  Indus  International,  Inc.  and  Report  of  Ernst  &  Young  LLP,
         Independent  Auditors,  are  incorporated  by  reference to the section
         entitled  "Consolidated  Financial Statements" of the Registrant's 1997
         Annual Report to Stockholders

              Consolidated  Balance  Sheets - Years Ended  December 31, 1996 and
              1997
              Consolidated  Statements of Operations - Years Ended  December 31,
              1995, 1996, and 1997
              Consolidated Statement of Stockholders' Equity - Three-Year Period
              Ended December 31, 1997
              Consolidated  Statements of Cash Flows - Years Ended  December 31,
              1995, 1996, and 1997
              Notes to Financial Statements

2.       Financial  Statement   Schedule:   The  following  financial  statement
         schedule of Indus International,  Inc. for the years ended December 31,
         1997,  1996 and 1995 is filed as part of this Report and should be read
         in  conjunction  with the  Consolidated  Financial  Statements of Indus
         International, Inc.

                  Schedule II       Valuation and Qualifying Accounts

         Schedules  not listed  above  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.

3.  Exhibits:  The exhibits  listed on the Exhibit Index at page 25 of this Form
10-K are filed as a part  hereof or  incorporated  by  reference  into this Form
10-K.

    Exhibit
    Number                                Description
    ------                                -----------
     2.1       Agreement and Plan of Merger and Reorganization  dated as of June
               5, 1997 ("Agreement of Merger"), by and among the Registrant, The
               Indus Group, Inc. ("Indus") and TSW  International,  Inc. ("TSW")
               (incorporated  by  reference  to Appendix  A-1 to the Joint Proxy
               Statement/Prospectus  filed as part of the Registration Statement
               on Form S-4 (Reg.  No.  333-33113)  filed with the Securities and
               Exchange Commission on August 7, 1997 (the "Proxy Statement"))

     2.2       First  Amendment to Agreement of Merger dated as of July 21, 1997
               by and  among the  Registrant,  Indus  and TSW  (incorporated  by
               reference to Exhibit 2.2 to the Proxy Statement)

     2.3       Form of  Agreement  of Merger to be entered into by and among the
               Registrant,  Indus Sub, Inc. and Indus (incorporated by reference
               to Appendix A-2 to the Proxy Statement)

     2.4       Form of  Agreement  of Merger to be entered into by and among the
               Registrant,  TSW Sub, Inc. and TSW  (incorporated by reference to
               Appendix A-3 to the Proxy Statement)

     3.1       Registrant's    Certificate   of   Incorporation,    as   amended
               (incorporated by reference to Exhibit 3.1 to the Proxy Statement)

     3.2       Registrant's Bylaws  (incorporated by reference to Exhibit 3.2 to
               the Proxy Statement)

                                       20

<PAGE>


     4.1       Form of  Registration  Rights  Agreement  entered  into among the
               Registrant,  Warburg, Pincus Investors, LP ("Warburg"), Robert W.
               Felton,  Richard  W.  MacAlmon,  John W.  Blend,  III and John R.
               Oltman  (incorporated  by  reference  to Exhibit 4.1 to the Proxy
               Statement)

     4.2       Form of  Indus  Affiliate  Agreement  dated  as of  June 5,  1997
               entered into by the Registrant,  Indus, TSW and each of Robert W.
               Felton,  Richard W. MacAlmon,  Michael E. Percy,  Alan G. Merten,
               Donald F.  Robertson,  Douglas R. Piper,  Frank M.  Siskowski and
               Edward R. Koepfler  (incorporated  by reference to Exhibit 4.2 to
               the Proxy Statement)

     4.3       Form of TSW Affiliate  Agreement dated as of June 5, 1997 entered
               into  by  the  Registrant,   Indus,  TSW  and  each  of  Warburg,
               Christopher R. Lane, John F. Bartels, John W. Blend, III, Kenneth
               C. Colby, Jr., David J. Loesch,  Allen D. Vaughn, John R. Oltman,
               George  D.  Busbee,  William  H.  Janeway  and  Joseph  P.  Landy
               (incorporated by reference to Exhibit 4.3 to the Proxy Statement)

     4.4       Felton Affiliate  Agreement dated as of June 5, 1997 entered into
               among  the   Registrant,   Indus,   TSW  and  Robert  W.   Felton
               (incorporated by reference to Exhibit 4.4 to the Proxy Statement)

     4.5       Warburg Affiliate Agreement dated as of June 5, 1997 entered into
               among the Registrant,  Indus,  TSW and Warburg  (incorporated  by
               reference to Exhibit 4.5 to the Proxy Statement)

     4.6       Nomination  Agreement entered into among the Registrant,  Warburg
               and Robert W. Felton (incorporated by reference to Exhibit 4.6 to
               the Proxy Statement)

     4.7       Specimen  certificate for Registrant's Common Stock (incorporated
               by reference to Exhibit 4.7 to the Proxy Statement)

     9.1       Indus  Voting  Agreement  dated as of June 5, 1997  entered  into
               among TSW,  Robert W.  Felton,  Richard W.  MacAlmon,  Michael E.
               Percy and Douglas R. Piper  (incorporated by reference to Exhibit
               9.1 to the Proxy Statement)

     9.2       TSW Voting  Agreement dated as of June 5, 1997 entered into among
               the Registrant,  Indus,  Warburg,  John W. Blend, III and John R.
               Oltman  (incorporated  by  reference  to Exhibit 9.2 to the Proxy
               Statement)

    10.1*      Indus  International,  Inc.  1997  Stock  Plan  (incorporated  by
               reference to Exhibit 10.1 to the Proxy Statement)

    10.2*      Indus  International,  Inc.  1997  Employee  Stock  Purchase Plan
               (incorporated   by   reference  to  Exhibit  10.2  to  the  Proxy
               Statement)

    10.3*      Indus International, Inc. 1997 Director Option Plan (incorporated
               by reference to Exhibit 10.3 to the Proxy Statement)

    10.4       Form of Tax  Indemnification  Agreement of Indus (incorporated by
               reference  to Exhibit  10.6 to Indus'  Registration  Statement on
               Form S-1 (File No. 33-80573)  declared  effective on February 26,
               1996, as amended (the "Indus Form S-1"))

    10.5       Software  Master  License  Agreement  between  Indus  and  Felton
               Enterprises,   dated   January  2,  1990,   as  amended  to  date
               (incorporated  herein by  reference  to Exhibit 10.7 to the Indus
               Form S-1)

    10.6       Conditional  Assignment of Software Master License  Agreement and
               Underlying  Software between Indus and Felton  Enterprises  dated
               February  24, 1996  (incorporated  herein by reference to Exhibit
               10.8 to the Indus Form S-1)

    10.7       Amended and Restated  Commercial  Loan  Agreement  dated June 30,
               1995 between  Indus and Sumitomo Bank of  California,  as amended
               through  December 19, 1995  (incorporated  herein by reference to
               Exhibit 10.9 to the Indus Form S-1)

                                       21

<PAGE>


    10.8       Third  Amendment to Commercial  Loan Agreement dated May 29, 1996
               between  Indus  and  Sumitomo  Bank of  California  (incorporated
               herein by reference to Exhibit 10.1 to the Indus Quarterly Report
               on Form 10-Q (File No.  0-27806)  filed with the  Securities  and
               Exchange Commission on August 13, 1996)

    10.9       Fourth  Amendment to Commercial Loan Agreement dated September 6,
               1996 between Indus and Sumitomo Bank of California  (incorporated
               herein by reference to Exhibit 10.1 to the Indus Quarterly Report
               on Form 10-Q (File No.  0-27806)  filed with the  Securities  and
               Exchange Commission on November 13, 1996)

    10.10      Asset    Acquisition    Agreement   between   Indus   and   Indus
               International,  Inc. (incorporated herein by reference to Exhibit
               10.10 to Amendment No. 3 to the Company's  Registration Statement
               on Form S-1 (Reg.  No.  33-80573)  filed with the  Securities and
               Exchange Commission on February 28, 1996)

    10.11      Lease for Indus' San Francisco, CA headquarters dated January 24,
               1990,  as amended  (incorporated  herein by  reference to Exhibit
               10.11 to the Indus Form S-1)

    10.12      Lease for Indus' Pittsburgh, PA sales office (incorporated herein
               by reference to Exhibit 10.12 to Amendment No. 1 to the Company's
               Registration Statement on Form S-1 (Reg. No. 33-80574) filed with
               the Securities and Exchange Commission on January 31, 1996)

    10.13      Loan and Security  Agreement  dated November 17, 1995 between TSW
               and  Greyrock  Business  Credit,  a division of Greyrock  Capital
               Group Inc.  ("Greyrock")  (incorporated  by  reference to Exhibit
               10.13 to the Proxy Statement)

    10.14      Patent and Trademark  Security  Agreement dated November 17, 1995
               between TSW and  Greyrock  (incorporated  by reference to Exhibit
               10.14 to the Proxy Statement)

    10.15      Security  Agreement in Copyrighted  Works dated February 28, 1996
               between TSW and  Greyrock  (incorporated  by reference to Exhibit
               10.15 to the Proxy Statement)

    10.16      Amendment to Loan  Documents,  dated August 1, 1996,  between TSW
               and Greyrock  (incorporated  by reference to Exhibit 10.16 to the
               Proxy Statement)

    10.17      Secured  Promissory  Note dated  August 1, 1996  between  TSW and
               Greyrock (incorporated by reference to Exhibit 10.17 to the Proxy
               Statement)

    10.18      Guarantee  dated  November  6,  1996  between  TSW  International
               Limited and Greyrock  (incorporated by reference to Exhibit 10.18
               to the Proxy Statement)

    10.19      Deed of Guarantee and Indemnity  dated  November 14, 1996 between
               TSW and  International  Pty Ltd.  and Greyrock  (incorporated  by
               reference to Exhibit 10.19 to the Proxy Statement)

    10.20      Second  Amendment to Loan  Documents  dated April 3, 1997 between
               TSW and Greyrock  (incorporated  by reference to Exhibit 10.20 to
               the Proxy Statement)

    10.21      Securities  Purchase Agreement dated as of June 20, 1994, between
               TSW and Warburg, Pincus Investors,  LP ("Warburg")  (incorporated
               by reference to Exhibit 10.21 to the Proxy Statement)

    10.22      Amended and Restated  Stockholders  Agreement dated June 20, 1994
               between TSW,  Warburg,  John W. Blend, III ("Blend") and David P.
               Welden  (incorporated  by reference to Exhibit 10.22 to the Proxy
               Statement)

    10.23      Stockholder's  Rights  Agreement  dated  as of  August  30,  1994
               between TSW, Warburg and Alan Johnston (incorporated by reference
               to Exhibit 10.23 to the Proxy Statement)

    10.24      Form of  Stock  Purchase  Warrant  between  TSW and  Warburg  and
               schedule of  substantially  similar  Agreements  (incorporated by
               reference to Exhibit 10.24 to the Proxy Statement)

    10.25      Form of Subordinated Floating Rate Note payable by TSW to Warburg
               and schedule of substantially similar agreements (incorporated by
               reference to Exhibit 10.25 to the Proxy Statement)

                                       22

<PAGE>


    10.26*     Employment   Agreement  dated  July  19,  1994  between  TSW  and
               Christopher  R.  Lane  ("Lane")  (incorporated  by  reference  to
               Exhibit 10.26 to the Proxy Statement)

    10.27      Loan  Agreement  dated  December  22,  1996  between TSW and Lane
               (incorporated   by  reference  to  Exhibit  10.27  to  the  Proxy
               Statement)

    10.28      Supplemental  Severance Agreement dated December 15, 1994 between
               TSW and Lane  (incorporated  by reference to Exhibit 10.28 to the
               Proxy Statement)

    10.29      Promissory  Note dated  December  22,  1996  between TSW and Lane
               (incorporated   by  reference  to  Exhibit  10.29  to  the  Proxy
               Statement)

    10.30      Collateral  Assignment  Agreement dated December 22, 1996 between
               TSW and Lane  (incorporated  by reference to Exhibit 10.30 to the
               Proxy Statement)

    10.31      Nonrecourse  Loan Agreement  dated September 16, 1992 between TSW
               and Blend  (incorporated  by  reference  to Exhibit  10.31 to the
               Proxy Statement)

    10.32      Stock Pledge  Agreement  dated September 16, 1992 between TSW and
               Blend  (incorporated  by reference to Exhibit  10.32 to the Proxy
               Statement)

    10.33      Collateral  Assignment  and  Agreement  dated  September 16, 1992
               between TSW and Blend (incorporated by reference to Exhibit 10.33
               to the Proxy Statement)

    10.34      Nonrecourse  Promissory Note dated September 16, 1992 between TSW
               and Blend  (incorporated  by  reference  to Exhibit  10.34 to the
               Proxy Statement)

    10.35      Lease  Agreement  dated  June 8,  1993  between  TSW and  Cousins
               Properties Incorporated, as amended (incorporated by reference to
               Exhibit 10.35 to the Proxy Statement)

    10.36      Credit  Agreement  dated  September  2, 1997 (as amended  through
               First  Amendment  dated September 16, 1997) with Sumitomo Bank of
               California and Union Bank of California,  N.A.  (incorporated  by
               reference to Exhibit 10.01 to the  Registrant's  Quarterly Report
               on Form 10-Q (File No.  0-22993)  filed with the  Securities  and
               Exchange Commission on November 14, 1997)

    13.1       Portions of the Registrant's Annual Report

    21.1       Subsidiaries of Registrant

    23.1       Consent of Ernst & Young LLP, Independent Auditors

    24.1       Power of Attorney, filed on page 24 of this report.

    27.1       Financial Data Schedule

-----------
*    Designates management contract or compensatory plan or arrangement.

              (b)  Reports on Forms 8-K.

              No reports on Form 8-K were filed during the fourth quarter of the
fiscal year ended December 31, 1997.

                                       23

<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934, Indus International,  Inc. has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


                                              INDUS INTERNATIONAL, INC.

                                              /s/ Robert W. Felton
                                              --------------------
                                              Robert W. Felton
                                              Chief Executive Officer and
                                              Chairman of the Board of Directors

                                              Date:  March 31, 1998


                                              POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE  PRESENT,  that each person  whose  signature  appears
below constitutes and appoints Robert W. Felton and Frank M. Siskowski,  jointly
and severally,  his/her attorneys-in-fact,  each with the power of substitution,
for him/her in any and all capacities,  to sign any amendments to this Report on
Form 10-K, and to file the same,  with exhibits  thereto and other  documents in
connection  therewith  with  the  Securities  and  Exchange  Commission,  hereby
ratifying and  confirming  all that each of said  attorneys-in-fact,  or his/her
substitute or substitutes may do or cause to be done by virtue hereof.

<TABLE>
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:

<CAPTION>
            Signature                                  Title                                           Date
            ---------                                  -----                                           ----
<S>                                       <C>                                                      <C>
     /s/ Robert W. Felton                 Chief Executive Officer                                  March 31, 1998
----------------------------------        and Chairman of the Board of Directors
        (Robert W. Felton)

     /s/ Frank M. Siskowski               Chief Financial Officer and Executive                    March 31, 1998
----------------------------------        Vice President of Investor Relations
        (Frank M. Siskowski)

     /s/ Richard W. MacAlmon              Senior Vice President and Director                       March 31, 1998
----------------------------------
        (Richard W. MacAlmon)

     /s/ Christopher R. Lane              President of Strategy and Product                        March 31, 1998
----------------------------------        Development and Vice Chairman of the
        (Christopher R. Lane)             Board of Directors

      /s/ John W. Blend, III              President of Worldwide Sales and                         March 31, 1998
----------------------------------        Marketing and Director
         (John W. Blend, III)

       /s/ Alan G. Merten                 Director                                                 March 31, 1998
----------------------------------
          (Alan G. Merten)

     /s/ William H. Janeway               Director                                                 March 31, 1998
----------------------------------
        (William H. Janeway)

       /s/ Joseph P. Landy                Director                                                 March 31, 1998
----------------------------------
          (Joseph P. Landy)
</TABLE>

                                       24

<PAGE>


                                  EXHIBIT INDEX

   Exhibit
    Number                              Description
    ------                              -----------

     2.1       Agreement and Plan of Merger and Reorganization  dated as of June
               5, 1997 ("Agreement of Merger"), by and among the Registrant, The
               Indus Group, Inc. ("Indus") and TSW  International,  Inc. ("TSW")
               (incorporated  by  reference  to Appendix  A-1 to the Joint Proxy
               Statement/Prospectus  filed as part of the Registration Statement
               on Form S-4 (Reg.  No.  333-33113)  filed with the Securities and
               Exchange Commission on August 7, 1997 (the "Proxy Statement"))

     2.2       First  Amendment to Agreement of Merger dated as of July 21, 1997
               by and  among the  Registrant,  Indus  and TSW  (incorporated  by
               reference to Exhibit 2.2 to the Proxy Statement)

     2.3       Form of  Agreement  of Merger to be entered into by and among the
               Registrant,  Indus Sub, Inc. and Indus (incorporated by reference
               to Appendix A-2 to the Proxy Statement)

     2.4       Form of  Agreement  of Merger to be entered into by and among the
               Registrant,  TSW Sub, Inc. and TSW  (incorporated by reference to
               Appendix A-3 to the Proxy Statement)

     3.1       Registrant's    Certificate   of   Incorporation,    as   amended
               (incorporated by reference to Exhibit 3.1 to the Proxy Statement)

     3.2       Registrant's Bylaws  (incorporated by reference to Exhibit 3.2 to
               the Proxy Statement)

     4.1       Form of  Registration  Rights  Agreement  entered  into among the
               Registrant,  Warburg, Pincus Investors, LP ("Warburg"), Robert W.
               Felton,  Richard  W.  MacAlmon,  John W.  Blend,  III and John R.
               Oltman  (incorporated  by  reference  to Exhibit 4.1 to the Proxy
               Statement)

     4.2       Form of  Indus  Affiliate  Agreement  dated  as of  June 5,  1997
               entered into by the Registrant,  Indus, TSW and each of Robert W.
               Felton,  Richard W. MacAlmon,  Michael E. Percy,  Alan G. Merten,
               Donald F.  Robertson,  Douglas R. Piper,  Frank M.  Siskowski and
               Edward R. Koepfler  (incorporated  by reference to Exhibit 4.2 to
               the Proxy Statement)

     4.3       Form of TSW Affiliate  Agreement dated as of June 5, 1997 entered
               into  by  the  Registrant,   Indus,  TSW  and  each  of  Warburg,
               Christopher R. Lane, John F. Bartels, John W. Blend, III, Kenneth
               C. Colby, Jr., David J. Loesch,  Allen D. Vaughn, John R. Oltman,
               George  D.  Busbee,  William  H.  Janeway  and  Joseph  P.  Landy
               (incorporated by reference to Exhibit 4.3 to the Proxy Statement)

     4.4       Felton Affiliate  Agreement dated as of June 5, 1997 entered into
               among  the   Registrant,   Indus,   TSW  and  Robert  W.   Felton
               (incorporated by reference to Exhibit 4.4 to the Proxy Statement)

     4.5       Warburg Affiliate Agreement dated as of June 5, 1997 entered into
               among the Registrant,  Indus,  TSW and Warburg  (incorporated  by
               reference to Exhibit 4.5 to the Proxy Statement)

     4.6       Nomination  Agreement entered into among the Registrant,  Warburg
               and Robert W. Felton (incorporated by reference to Exhibit 4.6 to
               the Proxy Statement)

     4.7       Specimen  certificate for Registrant's Common Stock (incorporated
               by reference to Exhibit 4.7 to the Proxy Statement)

     9.1       Indus  Voting  Agreement  dated as of June 5, 1997  entered  into
               among TSW,  Robert W.  Felton,  Richard W.  MacAlmon,  Michael E.
               Percy and Douglas R. Piper  (incorporated by reference to Exhibit
               9.1 to the Proxy Statement)

     9.2       TSW Voting  Agreement dated as of June 5, 1997 entered into among
               the Registrant,  Indus,  Warburg,  John W. Blend, III and John R.
               Oltman  (incorporated  by  reference  to Exhibit 9.2 to the Proxy
               Statement)

    10.1*      Indus  International,  Inc.  1997  Stock  Plan  (incorporated  by
               reference to Exhibit 10.1 to the Proxy Statement)

    10.2*      Indus  International,  Inc.  1997  Employee  Stock  Purchase Plan
               (incorporated   by   reference  to  Exhibit  10.2  to  the  Proxy
               Statement)

                                       25

<PAGE>


    10.3*      Indus International, Inc. 1997 Director Option Plan (incorporated
               by reference to Exhibit 10.3 to the Proxy Statement)

    10.4       Form of Tax  Indemnification  Agreement of Indus (incorporated by
               reference  to Exhibit  10.6 to Indus'  Registration  Statement on
               Form S-1 (File No. 33-80573)  declared  effective on February 26,
               1996, as amended (the "Indus Form S-1"))

    10.5       Software  Master  License  Agreement  between  Indus  and  Felton
               Enterprises,   dated   January  2,  1990,   as  amended  to  date
               (incorporated  herein by  reference  to Exhibit 10.7 to the Indus
               Form S-1)

    10.6       Conditional  Assignment of Software Master License  Agreement and
               Underlying  Software between Indus and Felton  Enterprises  dated
               February  24, 1996  (incorporated  herein by reference to Exhibit
               10.8 to the Indus Form S-1)

    10.7       Amended and Restated  Commercial  Loan  Agreement  dated June 30,
               1995 between  Indus and Sumitomo Bank of  California,  as amended
               through  December 19, 1995  (incorporated  herein by reference to
               Exhibit 10.9 to the Indus Form S-1)

    10.8       Third  Amendment to Commercial  Loan Agreement dated May 29, 1996
               between  Indus  and  Sumitomo  Bank of  California  (incorporated
               herein by reference to Exhibit 10.1 to the Indus Quarterly Report
               on Form 10-Q (File No.  0-27806)  filed with the  Securities  and
               Exchange Commission on August 13, 1996)

    10.9       Fourth  Amendment to Commercial Loan Agreement dated September 6,
               1996 between Indus and Sumitomo Bank of California  (incorporated
               herein by reference to Exhibit 10.1 to the Indus Quarterly Report
               on Form 10-Q (File No.  0-27806)  filed with the  Securities  and
               Exchange Commission on November 13, 1996)

    10.10      Asset    Acquisition    Agreement   between   Indus   and   Indus
               International,  Inc. (incorporated herein by reference to Exhibit
               10.10 to Amendment No. 3 to the Company's  Registration Statement
               on Form S-1 (Reg.  No.  33-80573)  filed with the  Securities and
               Exchange Commission on February 28, 1996)

    10.11      Lease for Indus' San Francisco, CA headquarters dated January 24,
               1990,  as amended  (incorporated  herein by  reference to Exhibit
               10.11 to the Indus Form S-1)

    10.12      Lease for Indus' Pittsburgh, PA sales office (incorporated herein
               by reference to Exhibit 10.12 to Amendment No. 1 to the Company's
               Registration Statement on Form S-1 (Reg. No. 33-80574) filed with
               the Securities and Exchange Commission on January 31, 1996)

    10.13      Loan and Security  Agreement  dated November 17, 1995 between TSW
               and  Greyrock  Business  Credit,  a division of Greyrock  Capital
               Group Inc.  ("Greyrock")  (incorporated  by  reference to Exhibit
               10.13 to the Proxy Statement)

    10.14      Patent and Trademark  Security  Agreement dated November 17, 1995
               between TSW and  Greyrock  (incorporated  by reference to Exhibit
               10.14 to the Proxy Statement)

    10.15      Security  Agreement in Copyrighted  Works dated February 28, 1996
               between TSW and  Greyrock  (incorporated  by reference to Exhibit
               10.15 to the Proxy Statement)

    10.16      Amendment to Loan  Documents,  dated August 1, 1996,  between TSW
               and Greyrock  (incorporated  by reference to Exhibit 10.16 to the
               Proxy Statement)

    10.17      Secured  Promissory  Note dated  August 1, 1996  between  TSW and
               Greyrock (incorporated by reference to Exhibit 10.17 to the Proxy
               Statement)

    10.18      Guarantee  dated  November  6,  1996  between  TSW  International
               Limited and Greyrock  (incorporated by reference to Exhibit 10.18
               to the Proxy Statement)

    10.19      Deed of Guarantee and Indemnity  dated  November 14, 1996 between
               TSW and  International  Pty Ltd.  and Greyrock  (incorporated  by
               reference to Exhibit 10.19 to the Proxy Statement)

                                       26

<PAGE>
    10.20      Second  Amendment to Loan  Documents  dated April 3, 1997 between
               TSW and Greyrock  (incorporated  by reference to Exhibit 10.20 to
               the Proxy Statement)

    10.21      Securities  Purchase Agreement dated as of June 20, 1994, between
               TSW and Warburg, Pincus Investors,  LP ("Warburg")  (incorporated
               by reference to Exhibit 10.21 to the Proxy Statement)

    10.22      Amended and Restated  Stockholders  Agreement dated June 20, 1994
               between TSW,  Warburg,  John W. Blend, III ("Blend") and David P.
               Welden  (incorporated  by reference to Exhibit 10.22 to the Proxy
               Statement)

    10.23      Stockholder's  Rights  Agreement  dated  as of  August  30,  1994
               between TSW, Warburg and Alan Johnston (incorporated by reference
               to Exhibit 10.23 to the Proxy Statement)

    10.24      Form of  Stock  Purchase  Warrant  between  TSW and  Warburg  and
               schedule of  substantially  similar  Agreements  (incorporated by
               reference to Exhibit 10.24 to the Proxy Statement)

    10.25      Form of Subordinated Floating Rate Note payable by TSW to Warburg
               and schedule of substantially similar agreements (incorporated by
               reference to Exhibit 10.25 to the Proxy Statement)

    10.26*     Employment   Agreement  dated  July  19,  1994  between  TSW  and
               Christopher  R.  Lane  ("Lane")  (incorporated  by  reference  to
               Exhibit 10.26 to the Proxy Statement)

    10.27      Loan  Agreement  dated  December  22,  1996  between TSW and Lane
               (incorporated   by  reference  to  Exhibit  10.27  to  the  Proxy
               Statement)

    10.28      Supplemental  Severance Agreement dated December 15, 1994 between
               TSW and Lane  (incorporated  by reference to Exhibit 10.28 to the
               Proxy Statement)

    10.29      Promissory  Note dated  December  22,  1996  between TSW and Lane
               (incorporated   by  reference  to  Exhibit  10.29  to  the  Proxy
               Statement)

    10.30      Collateral  Assignment  Agreement dated December 22, 1996 between
               TSW and Lane  (incorporated  by reference to Exhibit 10.30 to the
               Proxy Statement)

    10.31      Nonrecourse  Loan Agreement  dated September 16, 1992 between TSW
               and Blend  (incorporated  by  reference  to Exhibit  10.31 to the
               Proxy Statement)

    10.32      Stock Pledge  Agreement  dated September 16, 1992 between TSW and
               Blend  (incorporated  by reference to Exhibit  10.32 to the Proxy
               Statement)

    10.33      Collateral  Assignment  and  Agreement  dated  September 16, 1992
               between TSW and Blend (incorporated by reference to Exhibit 10.33
               to the Proxy Statement)

    10.34      Nonrecourse  Promissory Note dated September 16, 1992 between TSW
               and Blend  (incorporated  by  reference  to Exhibit  10.34 to the
               Proxy Statement)

    10.35      Lease  Agreement  dated  June 8,  1993  between  TSW and  Cousins
               Properties Incorporated, as amended (incorporated by reference to
               Exhibit 10.35 to the Proxy Statement)

    10.36      Credit  Agreement  dated  September  2, 1997 (as amended  through
               First  Amendment  dated September 16, 1997) with Sumitomo Bank of
               California and Union Bank of California,  N.A.  (incorporated  by
               reference to Exhibit 10.01 to the  Registrant's  Quarterly Report
               on Form 10-Q (File No.  0-22993)  filed with the  Securities  and
               Exchange Commission on November 14, 1997)

    13.1       Portions of the Registrant's Annual Report

    21.1       Subsidiaries of Registrant

    23.1       Consent of Ernst & Young LLP, Independent Auditors

    24.1       Power of Attorney, filed on page 24 of this report

    27.1       Financial Data Schedule

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*Designates management contract or compensatory plan or arrangement.

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