##### Table of Contents



SECURITIES AND EXCHANGE
    COMMISSION
 Washington, DC 20549
    Form 10-K
  FOR ANNUAL AND TRANSITION
    REPORTS
    PURSUANT TO SECTIONS 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
  (Mark One)þ


ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    March 31, 2006ORo


TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number: 0-22993
    INDUS INTERNATIONAL,
    INC.
 (Exact name of Registrant as
    specified in its charter)
  Delaware

94-3273443(State or Other Jurisdiction
    of

(I.R.S. EmployerIncorporation or
    Organization)

Identification No.)3301 Windy Ridge Parkway
    Atlanta, Georgia

30339(Zip code)(Address of Principal Executive
    Offices)   Registrants telephone number, including area code
  (770) 952-8444
  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
  Series A Junior Participating Preferred Stock
 (Title of Class)
    þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K/A (Form 10-K/A) Form 10-K.




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##### 



INDUS
    INTERNATIONAL, INC.
  FORM 10-K
    FOR THE FISCAL YEAR ENDED MARCH 31, 2006
  TABLE OF
    CONTENTS
  PageDocuments Incorporated by Reference


CoverCautionary
    Statement Regarding Forward-Looking Statements


2PART IItem 1.

Business


2Item 1A.

Risk
    Factors


15Item 2.

Properties


25Item 3.

Legal
    Proceedings


26Item 4.

Submission of
    Matters to a Vote of Security Holders


26PART IIItem 5.

Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


26Item 6.

Selected Financial
    Data


27Item 7.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


29Item 7A.

Quantitative and
    Qualitative Disclosures About Market Risk


42Item 8.

Financial
    Statements and Supplementary Data


43Item 9.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


70Item 9A.

Controls and
    Procedures


70Item 9B.

Other
    Information


73PART IIIItem 10.

Directors and
    Executive Officers of the Registrant


73Item 11.

Executive
    Compensation


73Item 12.

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


73Item 13.

Certain
    Relationships and Related Transactions


73Item 14.

Principal
    Accountant Fees and Services


73PART IVItem 15.

Exhibits and
    Financial Statement Schedules


74Signatures


78EX-10.12 FORM OF INDUS INTENATIONAL, INC. FISCAL 2007 INCENTIVE COMPENSATION PLANEX-10.22 AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT/GREGORY J. DUKATEX-10.26 AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT/PATRICK M. HENNEX-10.30 AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT/JOHN D. GREGGEX-10.34 AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT/JOSEPH T. TRINOEX-10.35 EMPLOYMENT AGREEMENT DATED FEBRUARY 1, 2006/ARTHUR W. BECKMANEX-10.36 CHANGE OF CONTROL SEVERANCE AGREEMENT/ARTHUR W. BECKMANEX-10.37 AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT/ARTHUR W. BECKMANEX-10.38 AMENDMENT TO CHANGE OF CONTROL SEVERANCE AGREEMENT DATED MAY 9, 2006/ARTHUR W. BECKMANEX-21.1 SUBSIDIARIES OF REGISTRANTEX-23.1 CONSENT OF ERNST & YOUNG LLPEX-31.1 SECTION 302, CERTIFICATION OF THE CEOEX-31.2 SECTION 302, CERTIFICATION OF THE CFOEX-32.1 SECTION 906, CERTIFICATION OF THE CEOEX-32.2 SECTION 906, CERTIFICATION OF THE CFO   1




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CAUTIONARY
    STATEMENT REGARDING FORWARD-LOOKING STATEMENTS  This Annual Report on
    Form 10-K,
    as well as documents incorporated herein by reference, may
    contain forward-looking statements within the meaning of
    Section 27A of the Securities Act of 1933, as amended, and
    Section 21E of the Securities Exchange Act of 1934, as
    amended. These forward-looking statements are not based on
    historical facts, but rather reflect managements current
    expectations concerning future results and events. These
    forward-looking statements generally can be identified by the
    use of phrases and expressions such as believe,
    expect, anticipate, intend,
    plan, foresee, likely,
    will or other similar words or phrases. These
    statements, which speak only as of the date given, are subject
    to certain risks and uncertainties that could cause actual
    results to differ materially from our historical experience and
    our expectations or projections. These risks include, but are
    not limited to, projected growth in the emerging markets for
    service delivery management market and field service management,
    market acceptance and the success of our new products and
    enhancements and upgrades to our existing products, market
    acceptance of our service delivery management strategy, current
    market conditions for our products and services, the capital
    spending environment generally, our ability to achieve growth in
    our Asset Suite, Customer Suite and Service Suite products, our
    ability to license software to new customers, the success of our
    product development strategy, delays in professional services
    projects, our competitive position, our ability to establish and
    retain partnership arrangements, our ability to develop our
    indirect sales channels, changes in our executive management
    team, uncertainty relating to and the management of personnel
    changes, timely development and introduction of new products,
    releases and product enhancements, current economic conditions,
    heightened security and war or terrorist acts in countries of
    the world that affect our business, and other risks identified
    in Item 1A. Risk Factors, beginning on page 15.
    Readers are cautioned not to place undue reliance on these
    forward-looking statements, which reflect managements
    opinions only as of the date hereof. The Company undertakes no
    obligation to revise or publicly release the results of any
    revision to these forward-looking statements.
 PART I  Item 1.
    Business  General
  best-in-class
   2




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Service
    Delivery Management Background
    The Indus
    Solution
       3




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
    Improve Asset Performance.  Our products help
    organizations control and reduce all asset lifecycle costs, as
    well as budget and plan more accurately, by ensuring that assets
    operate at peak performance to avoid unnecessary downtime and
    shorten planned outages. This requires that the organization
    have real-time visibility into the health and condition of
    facilities, equipment
    and/or
    critical parts.
    Maximize Financial Performance.  Organizations
    must transition from reactive to proactive decision-making in
    order to optimize performance and maximize financial gain. Our
    products facilitate this transition by providing the right tools
    to analyze and balance the financial impact of strategic and
    operational initiatives across the organization, and to
    determine best-case alternatives.
    Optimize Workforce Efficiency.  Organizations
    must operate their workforces at optimum efficiency, addressing
    planned and unplanned work requests in a timely and efficient
    manner. Instant field communications and feedback is vital. Our
    products give organizations real-time visibility into resource
    availability, skill sets, parts, tools, customer requirements,
    and documentation. In addition, our products provide the remote
    workforce mobile applications which allow real-time
    communication of service requests and the status of such request.
    Ensure Customer Loyalty.  Customer loyalty is
    the most accurate barometer of superior performance. Our
    products enable organizations to instantly access and analyze
    enterprise-wide information, rapidly respond to customer
    requests and issues, make timely and appropriate decisions, and
    provide accurate billing and collection.
    Streamline the Supply Chain.  Our products help
    organizations operate their supply chain more efficiently, with
    better planning and streamlined logistics. Our products provide
    organizations with increased visibility into the availability of
    spare parts, and enable them to optimize inventory levels and
    reduce the number of suppliers, while helping to deliver the
    right parts to the right place at the right time.  Business
    Strategy
  best-in-class
    Develop and Enhance Software Solutions. best-in-class
  Expand Our Strategic Alliances and Indirect Sales
    Channels. case-by-case
 4




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Expand International Sales.
  Acquire or Invest in Complementary
    Businesses. and/or
  Products
  best-in-class
  Customer
    Suite
   5




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Asset
    Suite
    e-procurement E-procurement
    Service
    Suite
    
    WorkCenter.  Indus
    WorkCentertm
    is the web-based order entry and management module. As the
    starting point of work and order processing, WorkCenter provides
    a variety of options and tools to accommodate the needs of both
    customers and service providers. With WorkCenter, call center
    representatives can initiate service requests, schedule service
    appointments, and check service status from any web browser.
    Appointment scheduling is immediate, and the service
    organization is notified automatically. Business rules and
    customer preferences ensure timely fulfillment by the most
    appropriate service provider.
    WorkManager.  Indus
    WorkManagertm
    helps manage the constantly changing dynamics of field service
    by furnishing dispatchers with a real-time graphical
    representation of people, places and things in an information
    and response portal. All updates and changes to the schedule can
    be viewed as they happen. Rule violations, cost and time
    overruns, and other performance indicators are highlighted for
    action. Visual cues and filters assist management personnel with
    understanding the status of all work at any time. Relationships
    between work orders, dependencies, and the parent/child
    relationship within a work order are evident. Integration with
    leading global positioning systems further enhances
    understanding of where personnel are deployed and how they can
    be routed.
    WorkMobile.  Indus
    WorkMobiletm
    equips mobile service resources with real-time interactive
    wireless applications and access to organizational data.
    WorkMobile provides online web-based or wireless 6




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
    WorkOptimizer.  Indus
    WorkOptimizertm
    enhances operational achievements with optimization technology.
    The product employs proprietary algorithms to calculate and
    accommodate complex but known variables in the field service
    chain to help overcome operational inefficiencies and ensure the
    optimal balance between profitability, effectiveness, and
    customer satisfaction. Real-time logistical support allows the
    organization to deploy field personnel with the right skills to
    the right place at the right time.  Real-Time
    Performance
    Management tm (RPM)
  tm
  Indus
    Foundation
    Architecture tm
  best-of-breed,
  Services
  e-Learning
  Professional
    Services
   7




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tm step-by-step








Training




off-the-shelf, e-Learning easy-to-use step-by-step




Global
    Client Services




point-of-origin,




Hosted
    Services




best-in-class






8



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Sales and
    Marketing




Global
    Organization








| |   |                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Americas, with direct sales representatives in the United
    States and Canada, and strategic partnerships to expand the
    scope of sales opportunities.                                                                                    
|
| |  | Europe, Middle East and Africa, with direct sales
    representatives in the United Kingdom, France, Germany and Italy
    as well as partnerships which extend our selling capability into
    continental Europe, the Middle East and Africa.
|
| |  | Asia-Pacific, with direct sales coverage in Australia and
    Japan and strategic partnerships to expand the scope of sales
    opportunities.                                                                                                 







| |   |                                                  
| | - | -------------------------------------------------
| |  | Utilities                                        
|
| |  | Water and waste treatment                        
|
| |  | Nuclear power generation                         
|
| |  | Fossil power generation                          
|
| |  | Hydroelectric power generation                   
|
| |  | Energy transmission and substations              
|
| |  | Energy distribution and delivery                 
|
| |  | Energy resource extraction and process industries
|
| |  | Chemical, petrochemical, oil and gas             
|
| |  | Metals and mining                                
|
| |  | Pulp, paper and forest products                  
|
| |  | Process manufacturing                            
|
| |  | Discrete manufacturing                           
|
| |  | Consumer packaged goods                          
|
| |  | Facilities management                            
|
| |  | Managed services                                 
|
| |  | Telecommunications and cable                     
|
| |  | High-tech and electronics                        
|
| |  | Medical                                          





9



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Sales
    Cycle and Customer Life Cycle












Product
    Development




















Strategic
    Relationships








Systems
    Integrators




opportunity-by-opportunity


10



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Channel
    Partners
    Software
    Product Partners
        
    NextAxiom  provides a highly
    differentiated software platform used to produce, consume and
    deploy software components as standard-based services. Business
    applications built upon these reusable components are
    significantly easier to tailor, manage and integrate with
    existing software assets.
    Oracle  we are a member of the Oracle
    Partner Network, as a Certified Partner.
    Business Objects  supports our Real-Time
    Performance Management (RPM) product enabling users to monitor
    and improve operational performance across the service delivery
    organization.  Customers
    
    Utilities, including water and waste water treatment, power
    generation, and energy transmission and distribution
    Manufacturing
    Chemical and petrochemical
    Oil and gas
    Pulp and paper
    Metals and mining
    Telecommunications 11




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
    Government and education
    Transportation
    Consumer packaged goods
    Medical
    Managed services    Competition
    
    Product quality, return on investment, performance, and
    functionality;
    Adaptability to new trends driven by technology and customer
    requirements;
    Cost of internal product development as compared with cost of
    purchase of products from outside vendors;
    Ease and speed of implementation;
    Cost of ongoing maintenance; and
    Time-to-market
    with, and market acceptance of, new products, enhancements,
    functionality and services.      
    Depth and breadth of products.  We
    believe that no other software vendor offers the breadth of
    customer, asset, and field service management applications,
    coupled with the depth of functionality offered in our products.
    Scalability of our products.  Our
    products are able to scale up to multiple thousands of users.
    Substantial installed base.  Over the
    past 25 years, we have attained the leading market share
    position in the Tier 1 market (customers having
    annual revenues greater than $1 billion dollars) for asset
    management software products, especially among utilities and
    process manufacturers. This installed customer base provides us
    with a fertile source for selling our comprehensive SDM
    solutions, including our Customer Suite and Service Suite
    software products, as well as providing us with numerous client
    references that can help us close deals with new prospects. 12




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
    Industry expertise.  Our professional
    services are provided by experts with extensive industry
    experience. This experience and domain knowledge gained from
    prior implementations allows us to enhance new implementations
    with industry-specific best practices.  International
    Operations
      Proprietary
    Rights and Licensing
       13




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Employees
    Executive
    Officers
    Name of Executive
    Officer

Age

Principal OccupationGregory J. Dukat


45


President and Chief Executive
    OfficerPatrick M. Henn


38


Executive Vice President and Chief
    Financial OfficerJohn D. Gregg


57


Executive Vice President of Field
    OperationsJoseph T. Trino


57


Executive Vice President of
    Corporate StrategyArthur W. Beckman


50


Executive Vice President and Chief
    Technical Officer   start-up
    10-month
 14




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Employment
    Agreements
    Exchange
    Act Reports
  www.indus.com Form 10-K.
  Form 10-K, Form 10-Q, Form 8-K.
  Item 1A.
    Risk
    Factors   15




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Our
    operating results have fluctuated in the past and may continue
    to fluctuate significantly from
    quarter-to-quarter
    which could negatively affect our results of operations and our
    stock price.
  quarter-to-quarter
  
    the variable size and timing of individual license transactions
    and services engagements;
    delays in maintenance renewals or non-renewals or cancellation
    of maintenance services;
    delays in the completion of product implementations or other
    consulting projects;
    changes in the proportion of revenues attributable to license
    fees, hosting fees and services;
    risks and delays related to successful completion of customer
    funded development;
    restructuring charges related to internal restructuring
    activities, including possible revisions to assumptions
    underlying previous restructuring charges;
    changes in the level of operating expenses;
    our success in, and costs associated with, developing,
    introducing and marketing new products;
    delays associated with product development, including the
    development and introduction of new products and new releases of
    existing products;
    the development and introduction of new operating systems
    and/or
    technological changes in computer systems that require
    additional development efforts;
    software defects and other product quality problems and the
    costs associated with solving those problems; and
    personnel changes, including changes in our management.  quarter-to-quarter quarter-to-quarter
  If the
    markets for service delivery management solutions and our
    Service Suite solution do not grow as anticipated or if our
    service delivery management solutions are not accepted in the
    marketplace, we may not be able to grow our
    business.
    If the
    market does not accept our new products and enhancements or
    upgrades to our existing products that we launch from time to
    time, our operating results and financial condition would be
    materially adversely affected.
   16




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Demand
    for our Asset Suite and Customer Suite products may grow slowly
    or decrease in upcoming quarters, which may impair our business
    and could materially adversely affect our results of operations
    and financial condition.
    If we
    are not able to license software to more new customers not
    currently using our software, our business and long-term
    prospects could be harmed.
    As a
    result of our lengthy sales cycle and the large size of our
    typical orders from new customers, any delays we experience will
    affect our operating results.
    Our
    ability to use our net operating loss carryforwards to reduce
    future consolidated taxable income will be subject to annual
    limitations under U.S. tax rules, which could have a negative
    effect on financial results in future periods.
   17




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If we
    experience delays in product development or the introduction of
    new products or new versions of existing products, our business
    and sales will be negatively affected.
    Delays
    in our performance of software implementation and other
    consulting projects may negatively affect our
    business.
  quarter-to-quarter
  Our
    growth is dependent, in part, upon the successful development of
    our indirect sales channels and maintaining good working
    relationships with systems integrators and other technology
    companies.
   18




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If we
    are unable to maintain consistent profitability and positive
    operating cash flow in future quarters, our business and
    long-term prospects may be harmed.
    We
    have experienced significant change in our executive management
    team and our board of directors, and the current executive
    management team and board have only recently begun to work
    together.
    Our
    success depends upon our ability to attract and retain key
    personnel.
   19




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Our
    business may suffer from risks associated with growth through
    acquisitions, should they occur.
    
    the assumption of unanticipated liabilities and contingencies;
    diversion of our managements attention;
    inability to achieve market acceptance of acquired
    products; and
    possible reduction of our reported asset values and earnings
    because of:  
    goodwill impairment;
    increased interest costs;
    issuances of additional securities or debt; and
    difficulties in integrating acquired businesses and assets.    
    properly maintain and take advantage of the business or value of
    any acquired business and assets;
    identify suitable acquisition candidates;
    complete any additional acquisitions; or
    integrate any acquired businesses or assets into our operations.  The
    strain on our management may negatively affect our business and
    our ability to execute our business strategy.
    The
    market for our products is highly competitive, and we may be
    unable to maintain or increase our market share.
   20




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best-of-breed
    If we
    dont respond to rapid technological change and evolving
    industry standards, we will be unable to compete
    effectively.
    If we
    fail to comply with laws or government regulations, we may be
    subject to penalties and fines.
    If we
    are not successful in Japan, we may not be able to grow revenue
    and we may need to write off some portion of our capitalized
    software, which could have a negative effect on our operating
    results and financial condition.
   21




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If we
    are unable to expand our international operations, our operating
    results and financial condition could be materially and
    adversely affected.
    The
    success of our international operations is subject to many
    uncertainties.
    
    costs and other difficulties in producing and gaining acceptance
    of localized versions of our products;
    cultural differences in the conduct of business;
    difficulties in staffing and managing foreign operations;
    the burden of complying with a wide variety of foreign laws,
    including laws related to employment and laws related to
    contractual agreements with partners and resellers;
    unfavorable exchange rate fluctuations;
    longer accounts receivable payment cycles;
    greater difficulty in accounts receivable collection;
    seasonality due to the annual slow-down in European business
    activity during the third calendar quarter;
    unexpected changes in regulatory requirements and withholding
    taxes that restrict the repatriation of earnings;
    tariffs and other trade barriers; and
    negative effects relating to hostilities, war or terrorist acts.   22




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We
    have only limited protection of our proprietary rights and
    technology.
    We may
    not be successful in avoiding claims that we infringe
    others proprietary rights.
    Our
    failure to realize the expected benefits of our restructurings,
    including anticipated cost savings, could result in unfavorable
    financial results.
     23




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Assumptions
    underlying our prior restructuring charges may need to be
    revised which could have unfavorable financial
    results.
    Product
    liability claims made by our customers, whether successful or
    not, could be expensive and could harm our
    business.
      Anti-takeover
    provisions in our charter documents and Delaware law could
    prevent or delay a change in control of Indus, even if a change
    of control would be beneficial to our
    stockholders.
      
    authorization of a stockholder rights plan or poison
    pill to deter a takeover attempt;
    authorization of blank check preferred stock that
    our board of directors could issue to thwart a takeover attempt;
    limitations on the ability of stockholders to call special
    meetings of stockholders;
    limitations on stockholder action by written consent; and
    advance notice requirements for nominations for election to our
    board of directors or for proposing matters that can be acted
    upon by stockholders at stockholder meetings.   24




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Failure
    to maintain effective internal controls could have a material
    adverse effect on our business, operating results and stock
    price.
    OTHER
    RISKS
    Item 2.
    Properties    Square


OwnershipLocation

Principal Use

Footage


InterestDomestic Offices:Atlanta, GA

Corporate Headquarters,
    Research and Development, Sales
    And Marketing, Operations


45,557



LeaseColumbia, SC

Regional Operations, Research
    and Development, Sales and
    Marketing, Operations


80,000



OwnSan Francisco, CA

Regional Operations, Research
    and Development, Sales and
    Marketing, Operations


25,670



LeasePittsburgh, PA

Regional Operations


6,833



LeaseInternational
    Offices:Woking, Surrey, United Kingdom

Regional Operations


9,087



LeaseParis, France

Regional Operations


6,660



Lease      25




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Item 3.
    Legal
    Proceedings      Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities    High


LowYear ended March 31, 2005First Quarter

$
3.80


$
1.91Second Quarter


2.18



1.23Third Quarter


2.19



1.41Fourth Quarter


2.77



2.00Year ended March 31, 2006First Quarter

$
2.50


$
1.89Second Quarter


2.89



2.07Third Quarter


3.28



2.46Fourth Quarter


3.96



3.11        26




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Equity
    Compensation Plan Information
    (c) Number of SecuritiesRemaining Available(a) Number of Securities


(b) Weighted Average


for Future Issuanceto be Issued Upon


Exercise Price of


Under EquityExercise of Outstanding


Outstanding


Compensation PlansOptions, Warrants


Options, Warrants


(Excluding SecuritiesPlan Category*

and Rights


and Rights


Reflected in Column
    (a))Equity Compensation Plans Approved
    by Stockholders


9,494,293


$
2.88



5,822,243     *
    
    All of the Companys Equity Compensation Plans have been
    approved by its stockholders.  Item 6.
    Selected
    Financial Data      27




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##### Table of Contents



|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|---------------------------------------------------- |  | ------------------------------------------------- | ------- | - | ------------ | - | ------- | ------------------------- |  | - | ----------- | - |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                     |  |                                                   |         |   | Three Months |   |         |                           | 
|                                                     |  | Year Ended                                        |         |   | Ended        |   |         |                           | 
|                                                     |  | December 31,                                      |         |   | March 31,    |   |         | Years Ended
    March 31, | 
|                                                     |  | 2001                                              |         |   | 2002         |   |         | 2003                      |  |   | 2003        |   |  | 2004 |         |   | 2005 |   |         | 2006 | 
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   | (Unaudited) |   |  |      |         |   |      |   |         |      | 
|                                                     |  | (Amounts in thousands, except
    per share data) |        
|                                                    
|Statement of Operations
    data:                    |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Revenue:                                             |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Software license fees                                |  | $                                                 | 21,005  |   |              | $ | 15,527  |                           |  | $ | 2,637       |   |  | $    | 13,936  |   |      | $ | 23,917  |      |  | $ | 31,866  |   |  | $ | 25,971  |  
|Services:                                            |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Support, outsourcing and hosting                     |  |                                                   | 35,637  |   |              |   | 36,780  |                           |  |   | 10,614      |   |  |      | 38,751  |   |      |   | 59,536  |      |  |   | 59,543  |   |  |   | 59,694  |  
|Consulting, training and other                       |  |                                                   | 119,372 |   |              |   | 64,858  |                           |  |   | 13,983      |   |  |      | 59,269  |   |      |   | 62,933  |      |  |   | 50,760  |   |  |   | 47,491  |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Total services                                       |  |                                                   | 155,009 |   |              |   | 101,638 |                           |  |   | 24,597      |   |  |      | 98,020  |   |      |   | 122,469 |      |  |   | 110,303 |   |  |   | 107,185 |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Total revenue                                        |  |                                                   | 176,014 |   |              |   | 117,165 |                           |  |   | 27,234      |   |  |      | 111,956 |   |      |   | 146,386 |      |  |   | 142,169 |   |  |   | 133,156 |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Cost of revenue:                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Software license fees                                |  |                                                   | 1,378   |   |              |   | 2,997   |                           |  |   | 226         |   |  |      | 3,109   |   |      |   | 999     |      |  |   | 3,737   |   |  |   | 2,041   |  
|Services:                                            |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Support, outsourcing and hosting                     |  |                                                   | 8,242   |   |              |   | 11,150  |                           |  |   | 4,175       |   |  |      | 13,194  |   |      |   | 20,265  |      |  |   | 16,975  |   |  |   | 14,474  |  
|Consulting, training and other                       |  |                                                   | 71,816  |   |              |   | 44,842  |                           |  |   | 11,001      |   |  |      | 42,293  |   |      |   | 46,342  |      |  |   | 38,995  |   |  |   | 37,398  |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Total services                                       |  |                                                   | 80,058  |   |              |   | 55,992  |                           |  |   | 15,176      |   |  |      | 55,487  |   |      |   | 66,607  |      |  |   | 55,970  |   |  |   | 51,872  |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Total cost of revenue                                |  |                                                   | 81,436  |   |              |   | 58,989  |                           |  |   | 15,402      |   |  |      | 58,596  |   |      |   | 67,606  |      |  |   | 59,707  |   |  |   | 53,913  |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Gross margin                                         |  |                                                   | 94,578  |   |              |   | 58,176  |                           |  |   | 11,832      |   |  |      | 53,360  |   |      |   | 78,780  |      |  |   | 82,462  |   |  |   | 79,243  |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Operating expenses:                                  |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Research and development                             |  |                                                   | 49,720  |   |              |   | 45,750  |                           |  |   | 8,713       |   |  |      | 41,756  |   |      |   | 34,960  |      |  |   | 31,956  |   |  |   | 29,357  |  
|Sales and marketing                                  |  |                                                   | 30,363  |   |              |   | 29,945  |                           |  |   | 6,546       |   |  |      | 28,927  |   |      |   | 33,334  |      |  |   | 30,619  |   |  |   | 27,234  |  
|General and administrative                           |  |                                                   | 17,468  |   |              |   | 13,306  |                           |  |   | 3,957       |   |  |      | 14,590  |   |      |   | 21,226  |      |  |   | 15,125  |   |  |   | 15,187  |  
|Restructuring and settlement
    expenses/(benefits) |  |                                                   | 10,188  |   |              |   | 8,199   |                           |  |   | 1,968       |   |  |      | 6,771   |   |      |   | 44      |      |  |   | 10,430  |   |  |   | (24     | )
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Total operating expenses                             |  |                                                   | 107,739 |   |              |   | 97,200  |                           |  |   | 21,184      |   |  |      | 92,044  |   |      |   | 89,564  |      |  |   | 88,130  |   |  |   | 71,754  |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Income (loss) from operations                        |  |                                                   | (13,161 | ) |              |   | (39,024 | )                         |  |   | (9,352      | ) |  |      | (38,684 | ) |      |   | (10,784 | )    |  |   | (5,668  | ) |  |   | 7,489   |  
|Other income (expense), net                          |  |                                                   | 2,412   |   |              |   | 1,303   |                           |  |   | (50         | ) |  |      | 1,058   |   |      |   | (554    | )    |  |   | (285    | ) |  |   | 529     |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Income (loss) before taxes                           |  |                                                   | (10,749 | ) |              |   | (37,721 | )                         |  |   | (9,402      | ) |  |      | (37,626 | ) |      |   | (11,338 | )    |  |   | (5,953  | ) |  |   | 8,018   |  
|Provision (benefit) for income taxes                 |  |                                                   | 36      |   |              |   | (3,944  | )                         |  |   | 277         |   |  |      | (3,669  | ) |      |   | 623     |      |  |   | 112     |   |  |   | (162    | )
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss)                                    |  | $                                                 | (10,785 | ) |              | $ | (33,777 | )                         |  | $ | (9,679      | ) |  | $    | (33,957 | ) |      | $ | (11,961 | )    |  | $ | (6,065  | ) |  | $ | 8,180   |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss) per
    share:                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                |  | $                                                 | (0.31   | ) |              | $ | (0.96   | )                         |  | $ | (0.26       | ) |  | $    | (0.95   | ) |      | $ | (0.24   | )    |  | $ | (0.11   | ) |  | $ | 0.14    |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                              |  | $                                                 | (0.31   | ) |              | $ | (0.96   | )                         |  | $ | (0.26       | ) |  | $    | (0.95   | ) |      | $ | (0.24   | )    |  | $ | (0.11   | ) |  | $ | 0.14    |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Shares used in computing per
    share data:         |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                |  |                                                   | 34,857  |   |              |   | 35,237  |                           |  |   | 37,210      |   |  |      | 35,838  |   |      |   | 49,455  |      |  |   | 57,259  |   |  |   | 57,951  |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                              |  |                                                   | 34,857  |   |              |   | 35,237  |                           |  |   | 37,210      |   |  |      | 35,838  |   |      |   | 49,455  |      |  |   | 57,259  |   |  |   | 60,195  |  
|                                                     |  |                                                   |         |   |              |   |         |                           |  |   |             |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  





28



---



##### Table of Contents



|                           |  |              |         |  |           |   |         |                |  |   |         |   |  |      |         |  |      |   |         |  |  |   |         | 
|-------------------------- |  | ------------ | ------- |  | --------- | - | ------- | -------------- |  | - | ------- | - |  | ---- | ------- |  | ---- | - | ------- |  |  | - | ------- | 
|                           |  | December 31, |         |  | March 31, |  
|                           |  | 2001         |         |  | 2002      |   |         | 2003           |  |   | 2004    |   |  | 2005 |         |  | 2006 |  
|                           |  |              |         |  |           |   |         | (In thousands) |  |   |         |   |  |      |        
|                          
|Balance sheet data:        |  |              |         |  |           |   |         |                |  |   |         |   |  |      |         |  |      |   |         |  |  |   |         | 
|Working capital            |  | $            | 43,283  |  |           | $ | 14,145  |                |  | $ | (17,104 | ) |  | $    | 1,655   |  |      | $ | 3,683   |  |  | $ | 15,031  | 
|Total assets               |  |              | 139,965 |  |           |   | 101,712 |                |  |   | 145,831 |   |  |      | 133,951 |  |      |   | 122,777 |  |  |   | 114,833 | 
|Short-term debt            |  |              | 4       |  |           |   | 266     |                |  |   | 24,790  |   |  |      | 814     |  |      |   | 968     |  |  |   | 999     | 
|Long-term debt             |  |              |        |  |           |   | 124     |                |  |   | 52      |   |  |      | 10,299  |  |      |   | 9,530   |  |  |   | 8,763   | 
|Total stockholders equity |  |              | 59,393  |  |           |   | 26,709  |                |  |   | 27,081  |   |  |      | 45,600  |  |      |   | 40,413  |  |  |   | 50,081  | 





|        |                                                                                              
|------- | ---------------------------------------------------------------------------------------------
|Item 7. | Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations







Critical
    Accounting Policies










29



---



##### Table of Contents







Revenue
    Recognition








and/or




and/or percentage-of-completion progress-to-completion percentage-of-completion.


30



---



##### Table of Contents











Accounts
    Receivable and Allowance for Doubtful Accounts












non-U.S. Dollar




Valuation
    of Intangible Assets and Goodwill










31



---



##### Table of Contents











Restructuring




















Consolidated
    Results of Operations




Operating
    Results






32



---



##### Table of Contents



and/or and/or




Year
    Ended March 31, 2005 Compared to the Year Ended
    March 31, 2006




Revenue




|                                 |  |                     |         |   |           |   |         |        |  |  |       |   
|-------------------------------- |  | ------------------- | ------- | - | --------- | - | ------- | ------ |  |  | ----- | --
|                                 |  | Twelve Months Ended |         |   | %         |  
|                                 |  | 3/31/2005           |         |   | 3/31/2006 |   |         | Change | 
|                                 |  | (In thousands)      |         |   |           |  
|                                
|Software license fees            |  | $                   | 31,866  |   |           | $ | 25,971  |        |  |  | (18.5 | )%
|Percentage of total revenue      |  |                     | 22.4    | % |           |   | 19.5    | %      |  |  |       |   
|Support, outsourcing and hosting |  |                     | 59,543  |   |           |   | 59,694  |        |  |  | 0.3   | % 
|Percentage of total revenue      |  |                     | 41.9    | % |           |   | 44.8    | %      |  |  |       |   
|Consulting, training and other   |  |                     | 50,760  |   |           |   | 47,491  |        |  |  | (6.4  | )%
|Percentage of total revenue      |  |                     | 35.7    | % |           |   | 35.7    | %      |  |  |       |   
|                                 |  |                     |         |   |           |   |         |        |  |  |       |   
|Total revenue                    |  | $                   | 142,169 |   |           | $ | 133,156 |        |  |  |       |   
|                                 |  |                     |         |   |           |   |         |        |  |  |       |   









Software license fees:




Support, outsourcing and hosting:




Consulting, training and other:


33



---



##### Table of Contents



Cost of
    Revenue
  Twelve Months Ended


%3/31/2005


3/31/2006


Change(In thousands)Cost of software license fees

$
3,737


$
2,041



(45.4
)%Percentage of software license
    revenue


11.7
%


7.9
%Cost of support, outsourcing and
    hosting


16,975



14,474



(14.7
)%Percentage of support, outsourcing
    and hosting


28.5
%


24.2
%Cost of consulting, training and
    other


38,995



37,398



(4.1
)%Percentage of consulting, training
    and other


76.8
%


78.7
%Total cost of revenue

$
59,707


$
53,913     Cost of software license fees:
  Cost of services revenue  customer support,
    outsourcing and hosting:
  Cost of services revenue  consulting,
    training and other:
  Operating
    Expenses
  Twelve Months Ended


%3/31/2005


3/31/2006


Change(In thousands)Research and development

$
31,956


$
29,357



(8.1
)%Percentage of total revenue


22.5
%


22.0
%Sales and marketing


30,619



27,234



(11.1
)%Percentage of total revenue


21.5
%


20.5
%General and administrative


15,125



15,187



0.4
%Percentage of total revenue


10.6
%


11.4
%Restructuring and settlement
    expenses (benefits)


10,430



(24
)


>100
%Percentage of total revenue


7.3
%


(0.0
)%Total operating expense

$
88,130


$
71,754  34




---



##### Table of Contents



Research and development:
  Sales and marketing:
  General and administrative:
  Restructuring and settlement expenses
    (benefits):
    Interest
    Income (Expense), Other Income and Provision (Benefit) for
    Income Taxes
  Twelve Months Ended


%3/31/2005


3/31/2006


Change(In thousands)Interest income (expense), net

$
(470
)

$
185



139.4
%Percentage of total revenue


(0.3
)%


0.1
%Other income, net


185



344



85.9
%Percentage of total revenue


0.1
%


0.3
%Provision (benefit) for income
    taxes


112



(162
)


(244.6
)%Percentage of total revenue


0.1
%


(0.1
)%   Interest income (expense), net:
  Other income, net: non-U.S. subsidiaries
  Provision (benefit) for income taxes:
 35




---



##### Table of Contents



Year
    Ended March 31, 2004 Compared to the Year Ended
    March 31, 2005
  Revenue
  Twelve Months Ended


%3/31/2004


3/31/2005


Change(In thousands)Software license fees

$
23,917


$
31,866



33.2
%Percentage of total revenue


16.3
%


22.4
%Support, outsourcing and hosting


59,536



59,543



0.0
%Percentage of total revenue


40.7
%


41.9
%Consulting, training and other


62,933



50,760



(19.3
)%Percentage of total revenue


43.0
%


35.7
%Total revenue

$
146,386


$
142,169   Software license fees:
  Support, outsourcing and hosting: year-over-year
  Consulting, training and other:
  Cost of
    Revenue
  Twelve Months Ended


%3/31/2004


3/31/2005


Change(In thousands)Cost of software license fees

$
999


$
3,737



274.1
%Percentage of software license
    revenue


4.2
%


11.7
%Cost of support, outsourcing and
    hosting


20,265



16,975



(16.2
)%Percentage of support, outsourcing
    and hosting


34.0
%


28.5
%Cost of consulting, training and
    other


46,342



38,995



(15.9
)%Percentage of consulting, training
    and other


73.6
%


76.8
%Total cost of revenue

$
67,606


$
59,707   Cost of software license fees:
 36




---



##### Table of Contents



Cost of services revenue  customer support,
    outsourcing and hosting:
  Cost of services revenue  consulting,
    training and other:
  Operating
    Expenses
  Twelve Months Ended


%3/31/2004


3/31/2005


Change(In thousands)Research and development

$
34,960


$
31,956



(8.6
)%Percentage of total revenue


23.9
%


22.5
%Sales and marketing


33,334



30,619



(8.1
)%Percentage of total revenue


22.8
%


21.5
%General and administrative


21,226



15,125



(28.7
)%Percentage of total revenue


14.5
%


10.6
%Restructuring expense


44



10,430



>100
%Percentage of total revenue


0.0
%


7.3
%Total operating expense

$
89,564


$
88,130   Research and development:
  Sales and marketing:
  General and administrative:
  Restructuring expense:
 37




---



##### Table of Contents



Interest
    Income (Expense), Other Income and Provision for Income
    Taxes
  Twelve Months Ended


%3/31/2004


3/31/2005


Change(In thousands)Interest expense, net

$
(655
)

$
(470
)


28.2
%Percentage of total revenue


(0.4
)%


(0.3
)%Other income, net


101



185



83.2
%Percentage of total revenue


0.1
%


0.1
%Provision for income taxes


623



112



(82.0
)%Percentage of total revenue


0.4
%


0.1
%   Interest expense, net:
  Other income, net: non-U.S. subsidiaries
  Provision for income taxes:
  Liquidity
    and Capital Resources
      
    Cash of $11.0 million was provided from operating
    activities. Cash realized from earnings of $8.2 million and
    favorable collections of outstanding accounts receivable were
    the principal sources of cash during the twelve months ending
    March 31, 2006. The Company generated operating income
    during all four quarters of fiscal 2006 as well as the third and
    fourth quarters of fiscal 2005 largely through better execution
    on its business plans and realization of financial benefits from
    the Companys restructuring activities in the first half of
    fiscal 2005. The Company made cash payments of approximately
    $2.5 million in settlement of a lease buyout on a portion
    of the office space in the Companys headquarters in
    Atlanta, GA. Days Sales Outstanding (DSO)
    improved to 60 days at March 31, 2006, from
    76 days at March 31, 2005. The cash from favorable
    collections was reduced by payments associated with sales
    incentive plans, management bonuses, and related payments tied
    to prior fiscal year performance and by $7.1 million in
    payments on obligations from prior restructuring activities. 38




---



##### Table of Contents




    Cash of $1.4 million was used in investing activities with
    $1.7 million for capital expenditures, which consist
    principally of purchases of computers, equipment and technology,
    which have been reduced to a level to ensure consistency in
    operations and customer success. This cash outflow was offset by
    a decrease in restricted cash of $0.2 million.
    Cash of $0.6 million was provided by financing activities,
    which includes debt payments of $1.3 million offset by
    proceeds from stock option exercises of $1.9 million.  Commitments
    Under Prior Restructuring Activities:
    Restricted
    Cash:
    Acquisition
    Financing:
  15-year
    Cash
    Analysis:
   39




---



##### Table of Contents



New
    Accounting Pronouncements
           40




---



##### Table of Contents







Off-Balance
    Sheet Arrangements




Regulation S-K




Aggregate
    Contractual Obligations












|                                   |  |                                                 |        |  |           |   |       |           |  |   |           |  |  |         |       |  |  |   |     | 
|---------------------------------- |  | ----------------------------------------------- | ------ |  | --------- | - | ----- | --------- |  | - | --------- |  |  | ------- | ----- |  |  | - | --- | 
|                                   |  | Payments Due by Period as of
    March 31, 2006 |       
|                                   |  |                                                 |        |  | Less Than |   |       |           |  |   |           |  |  | After   |      
|                                   |  | Total                                           |        |  | 1 Year    |   |       | 1-3 Years |  |   | 3-5 Years |  |  | 5 Years |      
|                                  
|Contractual Obligations            |  |                                                 |        |  |           |   |       |           |  |   |           |  |  |         |       |  |  |   |     | 
|Long-term debt, including interest |  | $                                               | 10,968 |  |           | $ | 1,363 |           |  | $ | 9,605     |  |  | $       |      |  |  | $ |    | 
|Operating lease obligations(1)     |  |                                                 | 14,160 |  |           |   | 4,797 |           |  |   | 6,666     |  |  |         | 1,856 |  |  |   | 841 | 
|Other long-term liabilities(2)     |  |                                                 | 2,531  |  |           |   |      |           |  |   | 2,531     |  |  |         |      |  |  |   |    | 
|                                   |  |                                                 |        |  |           |   |       |           |  |   |           |  |  |         |       |  |  |   |     | 
|Total                              |  | $                                               | 27,659 |  |           | $ | 6,160 |           |  | $ | 18,802    |  |  | $       | 1,856 |  |  | $ | 841 | 
|                                   |  |                                                 |        |  |           |   |       |           |  |   |           |  |  |         |       |  |  |   |     | 









|    |  |                                                                                                                                                                 
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | Operating lease obligations are presented net of income from
    subleases in effect at March 31, 2006.                                                         
|   
|(2) |  | Other long-term liabilities represents restructuring accruals
    and are presented net of expected sublease income in the
    aggregate amount of $2.0 million.







Indemnifications:






41



---



##### Table of Contents



















|         |                                                                
|-------- | ---------------------------------------------------------------
|Item 7A. | Quantitative
    and Qualitative Disclosures About Market Risks



Foreign
    Exchange Rate Sensitivity:








Interest
    Rates










42



---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  INDUS
    INTERNATIONAL, INC.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON THE
    CONSOLIDATED FINANCIAL STATEMENTS


44CONSOLIDATED
    BALANCE SHEETS


45CONSOLIDATED
    STATEMENTS OF OPERATIONS


46CONSOLIDATED
    STATEMENT OF STOCKHOLDERS EQUITY


47CONSOLIDATED
    STATEMENTS OF CASH FLOWS


48NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


49  43




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm on the
    Consolidated Financial Statements             
    44




---



##### Table of Contents



INDUS
    INTERNATIONAL, INC.
  CONSOLIDATED BALANCE SHEETS
  March 31, 2005


March 31, 2006(In thousands, except share and
    per share data)ASSETSCurrent assets:Cash and cash equivalents

$
27,779


$
37,165Restricted cash


194



2,793Billed accounts receivable, net of
    allowance for doubtful accounts of $562 and $1,134 at
    March 31, 2005 and March 31, 2006, respectively


16,844



14,020Unbilled accounts receivable


14,293



6,257Other current assets


3,672



3,683Total current assets


62,782



63,918Property and equipment, net


30,755



26,990Capitalized software, net


5,014



3,760Goodwill


7,442



7,442Acquired intangible assets, net


10,536



9,066Restricted cash, non-current


5,821



2,976Other assets


427



681Total assets

$
122,777


$
114,833LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Current portion of note payable

$
767


$
767Accounts payable


4,208



3,836Accrued liabilities


19,213



14,050Deferred revenue


34,911



30,234Total current liabilities


59,099



48,887Income tax payable


3,137



2,553Note payable, net of current
    portion


9,530



8,763Other liabilities


10,598



4,549Stockholders equity:Preferred stock, $.001 par
    value Shares authorized: 10 million; shares issued: none
    outstanding






Common stock, $.001 par valueShares authorized: 100 millionShares issued and outstanding:
    March 31, 2005  57,534,289Shares issued and outstanding:
    March 31, 2006  58,581,254


58



59Additional paid-in capital


165,280



163,243Treasury stockShares: March 31,
    2005  935,500Shares: March 31,
    2006  none


(4,681
)


Note receivable from stockholder






(25
)Deferred compensation






(480
)Accumulated deficit


(121,322
)


(113,142
)Accumulated other comprehensive
    income


1,078



426Total stockholders equity


40,413



50,081Total liabilities and
    stockholders equity

$
122,777


$
114,833    45




---



##### Table of Contents



INDUS
    INTERNATIONAL, INC.
  CONSOLIDATED STATEMENTS OF OPERATIONS
  Years Ended
    March 31,2004


2005


2006(In thousands, except per share
    data)Revenue:Software license fees

$
23,917


$
31,866


$
25,971Support, outsourcing and hosting


59,536



59,543



59,694Consulting, training and other


62,933



50,760



47,491Total services


122,469



110,303



107,185Total revenue


146,386



142,169



133,156Cost of revenue:Software license fees


999



3,737



2,041Services:Support, outsourcing and hosting


20,265



16,975



14,474Consulting, training and other


46,342



38,995



37,398Total services


66,607



55,970



51,872Total cost of revenue


67,606



59,707



53,913Gross margin


78,780



82,462



79,243Operating expenses:Research and development


34,960



31,956



29,357Sales and marketing


33,334



30,619



27,234General and administrative


21,226



15,125



15,187Restructuring and settlement
    expenses/(benefits)


44



10,430



(24
)Total operating expenses


89,564



88,130



71,754Income (loss) from operations


(10,784
)


(5,668
)


7,489Interest and other income


700



475



1,242Interest expense


(1,254
)


(760
)


(713
)Income (loss) before income taxes


(11,338
)


(5,953
)


8,018Provision (benefit) for income
    taxes


623



112



(162
)Net income (loss)

$
(11,961
)

$
(6,065
)

$
8,180Net income (loss) per
    share:Basic

$
(0.24
)

$
(0.11
)

$
0.14Diluted

$
(0.24
)

$
(0.11
)

$
0.14Shares used in computing per
    share data:Basic


49,455



57,259



57,951Diluted


49,455



57,259



60,195    46




---



##### Table of Contents



INDUS
    INTERNATIONAL, INC.
  CONSOLIDATED STATEMENT OF STOCKHOLDERS
    EQUITY
  Deferred





AccumulatedCompen-





Other


TotalAddl


Trea-


sation


Accumu-


Compre-


Stock-Common Stock


Paid-In


sury


&


lated


hensive


holdersShares


Amount


Capital


Stock


Other


Deficit


Income/(Loss)


Equity(In thousands)Balance, March 31,
    2003


42,066


$
42


$
135,279


$
(4,681
)

$
(79
)

$
(103,296
)

$
(184
)

$
27,081Exercise of stock options


130







153



















153Sale of common stock under Employee
    Stock Purchase Plan


72







148



















148Issuance of common stock in private
    placement transaction


5,000



5



14,492



















14,497Issuance of stock from convertible
    notes


9,792



10



13,930



















13,940Issuance of options in connection
    with acquisitions










429







(29
)










400Amortization of deferred
    compensation


















58











58Comprehensive loss:Net loss






















(11,961
)






(11,961
)Unrealized loss on marketable
    securities


























(70
)


(70
)Foreign currency translation


























1,354



1,354Total comprehensive loss






























(10,677
)Balance, March 31,
    2004


57,060



57



164,431



(4,681
)


(50
)


(115,257
)


1,100



45,600Exercise of stock options


222







407



















407Sale of common stock under Employee
    Stock Purchase Plan


253



1



451



















452Common stock issuance costs










(58
)


















(58
)Accelerated stock option vesting










45



















45Option valuation for non-employee
    grant










4



















4Amortization of deferred
    compensation


















50











50Comprehensive loss:Net loss






















(6,065
)






(6,065
)Foreign currency translation


























(22
)


(22
)Total comprehensive loss






























(6,087
)Balance, March 31,
    2005


57,535



58



165,280



(4,681
)






(121,322
)


1,078



40,413Exercise of stock options


794



1



1,435



















1,436Sale of common stock under Employee
    Stock Purchase Plan


252







475



















475Notes receivable from stockholder


















(25
)










(25
)Cancellation of treasury stock










(4,681
)


4,681















Restricted Stock Grants










563







(563
)










Performance based option grants










171







(171
)










Amortization of deferred
    compensation


















254











254Comprehensive income:Net income






















8,180







8,180Foreign currency translation


























(652
)


(652
)Total comprehensive income






























7,528Balance, March 31,
    2006


58,581


$
59


$
163,243


$



$
(505
)

$
(113,142
)

$
426


$
50,081    47




---



##### Table of Contents



INDUS
    INTERNATIONAL, INC.
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Years Ended
    March 31,2004


2005


2006(In thousands)Cash flows from operating
    activities:Net income (loss)

$
(11,961
)

$
(6,065
)

$
8,180Adjustments to reconcile net income
    (loss) to net cash provided by (used in) operating activities:Depreciation and amortization


10,941



12,540



8,715Provision for doubtful accounts


(3,548
)


(362
)


595Amortization of deferred
    compensation


29



50



254(Gain) loss on disposal of fixed
    assets


(29
)


(17
)


50Changes in operating assets and
    liabilities:Billed accounts receivable


9,849



4,120



2,311Unbilled accounts receivable


4,404



(1,020
)


5,957Income tax receivable


4,504



557



296Other current assets


1,714



(151
)


(418
)Other assets


475



149



(279
)Accounts payable


1,414



(2,616
)


(316
)Income taxes payable


(409
)


(1,240
)


(598
)Accrued restructuring


(3,653
)


3,649



(7,830
)Other accrued liabilities


(3,278
)


(1,402
)


(3,167
)Deferred revenue


(13,806
)


(6,890
)


(2,753
)Net cash provided by (used in)
    operating activities


(3,354
)


1,302



10,997Cash flows from investing
    activities:Purchase of marketable securities


(1,949
)






Sale of marketable securities


2,706







(Increase) decrease in restricted
    cash


78



(449
)


235Acquisition of business, net of
    cash acquired


(14,910
)


(486
)


Capitalized software


(7,318
)


(3
)


Acquisition of property and
    equipment


(4,158
)


(3,394
)


(1,683
)Net cash used in investing
    activities


(25,551
)


(4,332
)


(1,448
)Cash flows from financing
    activities:Net proceeds of note payable


11,066







Payment of note payable and capital
    leases


(280
)


(1,077
)


(1,330
)Proceeds from issuance of common
    stock, net of issuance costs


15,450



849



1,911Changes in stockholder receivables










(25
)Net cash provided by (used in)
    financing activities


26,236



(228
)


556Effect of exchange rate differences
    on cash


1,083



(44
)


(719
)Net increase (decrease) in cash and
    cash equivalents


(1,586
)


(3,302
)


9,386Cash and cash equivalents at
    beginning of period


32,667



31,081



27,779Cash and cash equivalents at end of
    period

$
31,081


$
27,779


$
37,165Supplemental disclosures of cash
    flow information:Interest paid

$
1,424


$
756


$
713Income taxes paid

$
111


$
760


$
67Income tax refunds

$
4,792


$
4


$
32Supplemental noncash financing
    activities:Acquisition of IUS business:Fair value of assets acquired

$
(55
)Fair value of liabilities assumed


10,000Net assets acquired


9,945Due from seller


(3,255
)Net acquisition-related cash paid

$
6,690Acquisition of Wishbone Systems
    business:Fair value of assets acquired

$
8,632


$
486Fair value of liabilities assumed


(412
)


Net assets acquired, less cash

$
8,220


$
486Cancellation of treasury stock









$
4,681Granting of performance based
    options and restricted stock, net of cancellations









$
734    48




---



##### Table of Contents



INDUS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  INDUS
    INTERNATIONAL, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  1.
    Nature of
    Business and Significant Accounting Policies  Organization
    and Business
  Business
      Significant
    Accounting Policies
  Basis of
    Presentation
    Reclassifications
    Revenue
    Recognition
  SOP 98-4 SOP 98-9,
 49




---



##### Table of Contents



and/or
  percentage-of-completion
              Foreign
    Currency Translation
   50




---



##### Table of Contents



Fair
    Value of Financial Instruments
    Concentration
    of Credit Risk
        Balance at


Charged to


Changes-Beginning


Costs and


Add


Balance atAllowance for Doubtful
    Accounts

of Year


Expenses


(Deduct)


End of YearYear Ended March 31, 2006

$
562


$
(103
)

$
675


$
1,134Year Ended March 31, 2005

$
912


$
(98
)

$
(252
)

$
562Year Ended March 31, 2004

$
4,375


$
(289
)

$
(3,174
)

$
912       Restricted
    Cash
   51




---



##### Table of Contents



Property
    and Equipment
      Software
    Development Costs
      Internal-Use
    Software
  SOP 98-1,
  Acquisition-Related
    Intangible Assets
   52




---



##### Table of Contents



March 31,2006Acquired trademarks

$
730Acquired technology


2,870Acquired contracts and customer
    base


10,920Total acquired intangible assets


14,520Less accumulated amortization


(5,454
)Net intangible assets

$
9,066     2007

$
1,4322008


1,3832009


8142010


6572011


657Thereafter


4,123$
9,066     Goodwill
    and Impairment
      Notes Payable
   53




---



##### Table of Contents



15-year
  Guarantees
    and Indemnifications
           54




---



##### Table of Contents



Advertising
    Costs
    Segment
    Information
    Income
    Taxes
    Per Share
    Data
      Years Ended
    March 31,2004


2005


2006Net income (loss)

$
(11,961
)

$
(6,065
)

$
8,180Calculation of shares outstanding
    for computing diluted net income (loss) per share:Shares used in computing basic net
    income (loss) per share


49,455



57,259



57,951Shares to reflect the effect of
    the assumed exercise of:Employee stock options










2,214Restricted stock grants










30Shares used in computing diluted
    net income (loss) per share


49,455



57,259



60,195Basic and Diluted net income
    (loss) per share

$
(0.24
)

$
(0.11
)

$
0.14       Use of
    Estimates
   55




---



##### Table of Contents









Stock-Based
    Compensation






56



---



##### Table of Contents











|                                                                                                               |  |                           |         |   |      |   |        |      |  |   |        |  
|-------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                                               |  | Years Ended
    March 31, |        
|                                                                                                               |  | 2004                      |         |   | 2005 |   |        | 2006 | 
|                                                                                                              
|Net income (loss) as reported                                                                                  |  | $                         | (11,961 | ) |      | $ | (6,065 | )    |  | $ | 8,180  |  
|Add: Total stock-based
    compensation expense determined under the intrinsic value method                    |  |                           | 38      |   |      |   | 33     |      |  |   | 254    |  
|Deduct: Total stock-based
    compensation expense determined under fair-value based method
    for all awards |  |                           | (4,616  | ) |      |   | (3,934 | )    |  |   | (2,625 | )
|                                                                                                               |  |                           |         |   |      |   |        |      |  |   |        |  
|Pro forma net income (loss)                                                                                    |  | $                         | (16,539 | ) |      | $ | (9,966 | )    |  | $ | 5,809  |  
|                                                                                                               |  |                           |         |   |      |   |        |      |  |   |        |  
|Income (loss) per share:                                                                                       |  |                           |         |   |      |   |        |      |  |   |        |  
|Basic:                                                                                                         |  |                           |         |   |      |   |        |      |  |   |        |  
|As reported                                                                                                    |  | $                         | (0.24   | ) |      | $ | (0.11  | )    |  | $ | 0.14   |  
|                                                                                                               |  |                           |         |   |      |   |        |      |  |   |        |  
|Pro forma                                                                                                      |  | $                         | (0.33   | ) |      | $ | (0.17  | )    |  | $ | 0.10   |  
|                                                                                                               |  |                           |         |   |      |   |        |      |  |   |        |  
|Diluted:                                                                                                       |  |                           |         |   |      |   |        |      |  |   |        |  
|As reported                                                                                                    |  | $                         | (0.24   | ) |      | $ | (0.11  | )    |  | $ | 0.14   |  
|                                                                                                               |  |                           |         |   |      |   |        |      |  |   |        |  
|Pro forma                                                                                                      |  | $                         | (0.33   | ) |      | $ | (0.17  | )    |  | $ | 0.10   |  
|                                                                                                               |  |                           |         |   |      |   |        |      |  |   |        |  
|Shares used in computing per share
    data:                                                                   |  |                           |         |   |      |   |        |      |  |   |        |  
|Basic                                                                                                          |  |                           | 49,455  |   |      |   | 57,259 |      |  |   | 57,951 |  
|                                                                                                               |  |                           |         |   |      |   |        |      |  |   |        |  
|Diluted                                                                                                        |  |                           |         |   |      |   |        |      |  |   |        |  
|As reported                                                                                                    |  |                           | 49,455  |   |      |   | 57,279 |      |  |   | 60,195 |  
|                                                                                                               |  |                           |         |   |      |   |        |      |  |   |        |  
|Pro forma                                                                                                      |  |                           | 49,455  |   |      |   | 57,259 |      |  |   | 59,454 |  
|                                                                                                               |  |                           |         |   |      |   |        |      |  |   |        |  









Recent
    Accounting Pronouncements










57



---



##### Table of Contents

















Note 1- Stock-Based
    Compensation




|   |                                                     
|-- | ----------------------------------------------------
|2. | Restructuring
    and Settlement Expenses/(Benefits)









58



---



##### Table of Contents





















Company
    headquarters relocation and MoD project
    suspension:




|                          |  |            |        |  
|------------------------- |  | ---------- | ------ | -
|                          |  | Facilities |       
|                         
|Balance at March 31, 2003 |  | $          | 12,256 |  
|                          |  |            |        |  
|Payments in 2004          |  |            | (3,023 | )
|Accruals in 2004          |  |            | 44     |  
|Adjustments in 2004       |  |            |       |  
|                          |  |            |        |  
|Balance at March 31, 2004 |  | $          | 9,277  |  
|                          |  |            |        |  
|Payments in 2005          |  |            | (2,897 | )
|Accruals in 2005          |  |            | 44     |  
|Adjustments in 2005       |  |            | 612    |  
|                          |  |            |        |  
|Balance at March 31, 2005 |  | $          | 7,036  |  
|                          |  |            |        |  
|Payments in 2006          |  |            | (2,556 | )
|Accruals in 2006          |  |            | 38     |  
|Adjustments in 2006       |  |            | (424   | )
|                          |  |            |        |  
|Balance at March 31, 2006 |  | $          | 4,094  |  
|                          |  |            |        |  



59



---



##### Table of Contents







Office
    and business consolidation:




|                          |  |               |        |   |            |   |        |       |  |   |        |  
|------------------------- |  | ------------- | ------ | - | ---------- | - | ------ | ----- |  | - | ------ | -
|                          |  | Severance and |        |   |            |   |        |       | 
|                          |  | Related Costs |        |   | Facilities |   |        | Total | 
|                         
|Balance at March 31, 2004 |  | $             |       |   |            | $ |       |       |  | $ |       |  
|                          |  |               |        |   |            |   |        |       |  |   |        |  
|Payments in 2005          |  |               | (2,602 | ) |            |   | (1,982 | )     |  |   | (4,584 | )
|Accruals in 2005          |  |               | 3,154  |   |            |   | 7,941  |       |  |   | 11,095 |  
|Adjustments in 2005       |  |               | (244   | ) |            |   | (377   | )     |  |   | (621   | )
|                          |  |               |        |   |            |   |        |       |  |   |        |  
|Balance at March 31, 2005 |  | $             | 308    |   |            | $ | 5,582  |       |  | $ | 5,890  |  
|                          |  |               |        |   |            |   |        |       |  |   |        |  
|Payments in 2006          |  |               | (312   | ) |            |   | (4,270 | )     |  |   | (4,582 | )
|Accruals in 2006          |  |               |       |   |            |   | 371    |       |  |   | 371    |  
|Adjustments in 2006       |  |               | 4      |   |            |   | (677   | )     |  |   | (673   | )
|                          |  |               |        |   |            |   |        |       |  |   |        |  
|Balance at March 31, 2006 |  | $             |       |   |            | $ | 1,006  |       |  | $ | 1,006  |  
|                          |  |               |        |   |            |   |        |       |  |   |        |  









|   |                           
|-- | --------------------------
|3. | Property
    and Equipment







|                                                   |  |           |        |  |      |   |        | 
|-------------------------------------------------- |  | --------- | ------ |  | ---- | - | ------ | 
|                                                   |  | March 31, |       
|                                                   |  | 2005      |        |  | 2006 |  
|                                                  
|Land and buildings                                 |  | $         | 19,073 |  |      | $ | 19,083 | 
|Furniture and fixtures                             |  |           | 6,376  |  |      |   | 5,321  | 
|Office equipment                                   |  |           | 45,096 |  |      |   | 35,898 | 
|Leasehold improvements                             |  |           | 7,345  |  |      |   | 6,495  | 
|Internal-use software                              |  |           | 16,356 |  |      |   | 16,799 | 
|                                                   |  |           |        |  |      |   |        | 
|                                                   |  |           | 94,246 |  |      |   | 83,596 | 
|Less accumulated depreciation and
    amortization |  |           | 63,491 |  |      |   | 56,606 | 
|                                                   |  |           |        |  |      |   |        | 
|                                                   |  | $         | 30,755 |  |      | $ | 26,990 | 
|                                                   |  |           |        |  |      |   |        | 









|   |                        
|-- | -----------------------
|4. | Accrued
    Liabilities







|                                          |  |           |        |  |      |   |        | 
|----------------------------------------- |  | --------- | ------ |  | ---- | - | ------ | 
|                                          |  | March 31, |       
|                                          |  | 2005      |        |  | 2006 |  
|                                         
|Accrued compensation-related
    expenses |  | $         | 6,872  |  |      | $ | 4,862  | 
|Accrued taxes                             |  |           | 1,724  |  |      |   | 1,351  | 
|Accrued restructuring expenses            |  |           | 4,915  |  |      |   | 2,566  | 
|Accrued legal and accounting
    expenses |  |           | 1,173  |  |      |   | 914    | 
|Other accruals                            |  |           | 4,529  |  |      |   | 4,357  | 
|                                          |  |           |        |  |      |   |        | 
|                                          |  | $         | 19,213 |  |      | $ | 14,050 | 
|                                          |  |           |        |  |      |   |        | 



60



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|   |                   
|-- | ------------------
|5. | Long-Term
    Debt



15-year




|     |  |           |       | 
|---- |  | --------- | ----- | 
|     |  | March 31, |      
|     |  | 2006      |      
|    
|2007 |  | $         | 767   | 
|2008 |  |           | 767   | 
|2009 |  |           | 7,996 | 
|     |  |           |       | 
|     |  | $         | 9,530 | 
|     |  |           |       | 





|   |                                  
|-- | ---------------------------------
|6. | Commitments
    and Contingencies















|                                            |  |           |        |  |         |   |     |  
|------------------------------------------- |  | --------- | ------ |  | ------- | - | --- | -
|                                            |  | Operating |        |  | Capital |  
|Years Ending
    March 31,                  |  | Leases    |        |  | Leases  |  
|                                           
|2007                                        |  | $         | 6,517  |  |         | $ | 240 |  
|2008                                        |  |           | 6,516  |  |         |   |    |  
|2009                                        |  |           | 2,172  |  |         |   |    |  
|2010                                        |  |           | 960    |  |         |   |    |  
|2011                                        |  |           | 896    |  |         |   |    |  
|Thereafter                                  |  |           | 841    |  |         |   |    |  
|                                            |  |           |        |  |         |   |     |  
|Total minimum payments required             |  | $         | 17,902 |  |         | $ | 240 |  
|                                            |  |           |        |  |         |   |     |  
|Less amounts representing interest          |  |           |        |  |         |   | (8  | )
|                                            |  |           |        |  |         |   |     |  
|Present value of minimum lease
    payments |  |           |        |  |         | $ | 232 |  
|                                            |  |           |        |  |         |   |     |  







61



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|                                                  |  |          |       | 
|------------------------------------------------- |  | -------- | ----- | 
|                                                  |  | Sublease |      
|Years Ending
    March 31,                        |  | Income   |      
|                                                 
|2007                                              |  | $        | 1,720 | 
|2008                                              |  |          | 1,733 | 
|2009                                              |  |          | 289   | 
|Thereafter                                        |  |          |      | 
|                                                  |  |          |       | 
|Total sublease income under
    current contracts |  | $        | 3,742 | 
|                                                  |  |          |       | 









|   |                         
|-- | ------------------------
|7. | Stockholders
    Equity

















62



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##### Table of Contents













|   |                
|-- | ---------------
|8. | Stock
    Plans



Stock
    Option and Benefit Plans








2004
    Long Term Incentive Plan
















1997
    Stock Plan






63



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##### Table of Contents







1997 Directors
    Option Plan








1998
    Indus International, Inc. Company Share Option
    Plan












|                               |  |                     |            |   |                |   |      | 
|------------------------------ |  | ------------------- | ---------- | - | -------------- | - | ---- | 
|                               |  | Options Outstanding |           
|                               |  |                     |            |   | Weighted-      |  
|                               |  |                     |            |   | Average        |  
|                               |  | Options             |            |   | Exercise Price |  
|                              
|Balances at March 31,
    2003 |  |                     | 10,401,549 |   |                | $ | 4.34 | 
|Options granted                |  |                     | 4,205,357  |   |                | $ | 2.63 | 
|Options forfeited              |  |                     | (3,395,435 | ) |                | $ | 5.40 | 
|Options exercised              |  |                     | (129,918   | ) |                | $ | 1.17 | 
|                               |  |                     |            |   |                |   |      | 
|Balances at March 31,
    2004 |  |                     | 11,081,553 |   |                | $ | 3.40 | 
|Options granted                |  |                     | 1,786,500  |   |                | $ | 1.75 | 
|Options forfeited              |  |                     | (2,784,588 | ) |                | $ | 4.18 | 
|Options exercised              |  |                     | (222,133   | ) |                | $ | 1.84 | 
|                               |  |                     |            |   |                |   |      | 
|Balances at March 31,
    2005 |  |                     | 9,861,332  |   |                | $ | 2.92 | 
|Options granted                |  |                     | 1,888,640  |   |                | $ | 2.25 | 
|Options forfeited              |  |                     | (1,460,603 | ) |                | $ | 2.97 | 
|Options exercised              |  |                     | (795,076   | ) |                | $ | 1.81 | 
|                               |  |                     |            |   |                |   |      | 
|Balances at March 31,
    2006 |  |                     | 9,494,293  |   |                | $ | 2.88 | 
|                               |  |                     |            |   |                |   |      | 



64



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|                  |  |                     |           |  |                    |  |      |           |  |   |              |  |  |           |           |  |  |   |      | 
|----------------- |  | ------------------- | --------- |  | ------------------ |  | ---- | --------- |  | - | ------------ |  |  | --------- | --------- |  |  | - | ---- | 
|                  |  | Options Outstanding |           |  | Options Vested and | 
|                  |  |                     |           |  | Weighted-          |  |      |           |  |   | Exercisable  | 
|                  |  | Number              |           |  | Average            |  |      | Weighted- |  |   | Number       |  |  | Weighted- |          
|                  |  | Outstanding         |           |  | Remaining          |  |      | Average   |  |   | Exercisable  |  |  | Average   |          
|Range of          |  | at March 31,        |           |  | Contractual        |  |      | Exercise  |  |   | at March 31, |  |  | Exercise  |          
|Exercise Prices   |  | 2006                |           |  | Life               |  |      | Price     |  |   | 2006         |  |  | Price     |          
|                 
|$0.4100 - $1.3800 |  |                     | 1,384,647 |  |                    |  | 7.30 |           |  | $ | 1.35         |  |  |           | 775,322   |  |  | $ | 1.34 | 
|$1.4700 - $1.7400 |  |                     | 1,161,250 |  |                    |  | 6.82 |           |  | $ | 1.61         |  |  |           | 806,625   |  |  | $ | 1.61 | 
|$1.7500 - $1.9500 |  |                     | 704,500   |  |                    |  | 7.11 |           |  | $ | 1.93         |  |  |           | 523,000   |  |  | $ | 1.92 | 
|$1.9700 - $2.9900 |  |                     | 3,153,510 |  |                    |  | 8.37 |           |  | $ | 2.35         |  |  |           | 714,745   |  |  | $ | 2.51 | 
|$3.0500 - $3.9400 |  |                     | 1,296,040 |  |                    |  | 5.39 |           |  | $ | 3.81         |  |  |           | 999,540   |  |  | $ | 3.80 | 
|$4.0400 - $4.7900 |  |                     | 746,221   |  |                    |  | 2.53 |           |  | $ | 4.48         |  |  |           | 731,735   |  |  | $ | 4.48 | 
|$5.0000 - $6.8750 |  |                     | 792,125   |  |                    |  | 5.67 |           |  | $ | 5.71         |  |  |           | 784,625   |  |  | $ | 5.70 | 
|$7.6000 - $8.0625 |  |                     | 256,000   |  |                    |  | 4.32 |           |  | $ | 7.96         |  |  |           | 256,000   |  |  | $ | 7.96 | 
|                  |  |                     |           |  |                    |  |      |           |  |   |              |  |  |           |           |  |  |   |      | 
|Totals            |  |                     | 9,494,293 |  |                    |  | 7.80 |           |  | $ | 2.88         |  |  |           | 5,591,592 |  |  | $ | 3.35 | 
|                  |  |                     |           |  |                    |  |      |           |  |   |              |  |  |           |           |  |  |   |      | 









Employee
    Stock Purchase Plans












|   |                                                
|-- | -----------------------------------------------
|9. | Alternative
    Method of Valuing Stock Options









65



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|                        |  |           |         |   |      |  |         |      |  |  |         |  
|----------------------- |  | --------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                        |  | March 31, |        
|                        |  | 2004      |         |   | 2005 |  |         | 2006 | 
|                       
|Dividend yield          |  |           | 0       | % |      |  | 0       | %    |  |  | 0       | %
|Expected volatility     |  |           | 99      | % |      |  | 85      | %    |  |  | 64      | %
|Risk free interest rate |  |           | 3.09    | % |      |  | 3.69    | %    |  |  | 3.78    | %
|Expected life           |  |           | 4 years |   |      |  | 4 years |      |  |  | 3 years |  





|    |                                              
|--- | ---------------------------------------------
|10. | Employee
    Benefit and Profit-Sharing Plans







|    |                                                   
|--- | --------------------------------------------------
|11. | Segment
    Information and Geographic Information











|                                          |  |                           |         |  |      |   |         |      |  |   |         | 
|----------------------------------------- |  | ------------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | 
|                                          |  | Years Ended
    March 31, |        
|                                          |  | 2004                      |         |  | 2005 |   |         | 2006 | 
|                                         
|Revenue (based on customer
    location): |  |                           |         |  |      |   |         |      |  |   |         | 
|North America                             |  | $                         | 120,703 |  |      | $ | 112,879 |      |  | $ | 109,918 | 
|United Kingdom                            |  |                           | 17,446  |  |      |   | 13,143  |      |  |   | 10,862  | 
|Others                                    |  |                           | 8,237   |  |      |   | 16,147  |      |  |   | 12,376  | 
|                                          |  |                           |         |  |      |   |         |      |  |   |         | 
|Total consolidated revenue                |  | $                         | 146,386 |  |      | $ | 142,169 |      |  | $ | 133,156 | 
|                                          |  |                           |         |  |      |   |         |      |  |   |         | 





|                                         |  |           |        |  |           |   |        |           |  |   |        | 
|---------------------------------------- |  | --------- | ------ |  | --------- | - | ------ | --------- |  | - | ------ | 
|                                         |  | March 31, |        |  | March 31, |   |        | March 31, | 
|                                         |  | 2004      |        |  | 2005      |   |        | 2006      | 
|                                        
|Long-lived assets:                       |  |           |        |  |           |   |        |           |  |   |        | 
|North America                            |  | $         | 33,980 |  |           | $ | 30,286 |           |  | $ | 26,557 | 
|Others                                   |  |           | 702    |  |           |   | 469    |           |  |   | 433    | 
|                                         |  |           |        |  |           |   |        |           |  |   |        | 
|Total consolidated long-lived
    assets |  | $         | 34,682 |  |           | $ | 30,755 |           |  | $ | 26,990 | 
|                                         |  |           |        |  |           |   |        |           |  |   |        | 



66



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|    |                 
|--- | ----------------
|12. | Income
    Taxes







|                  |  |                           |     |  |      |   |      |      |  |   |      |  
|----------------- |  | ------------------------- | --- |  | ---- | - | ---- | ---- |  | - | ---- | -
|                  |  | Years Ended
    March 31, |    
|                  |  | 2004                      |     |  | 2005 |   |      | 2006 | 
|                 
|Current:          |  |                           |     |  |      |   |      |      |  |   |      |  
|Federal           |  | $                         |    |  |      | $ | (249 | )    |  | $ | (576 | )
|State and foreign |  |                           | 623 |  |      |   | 361  |      |  |   | 414  |  
|                  |  |                           |     |  |      |   |      |      |  |   |      |  
|                  |  |                           | 623 |  |      |   | 112  |      |  |   | (162 | )
|                  |  |                           |     |  |      |   |      |      |  |   |      |  
|Deferred:         |  |                           |     |  |      |   |      |      |  |   |      |  
|Federal           |  |                           |    |  |      |   |     |      |  |   |     |  
|State and foreign |  |                           |    |  |      |   |     |      |  |   |     |  
|                  |  |                           |     |  |      |   |      |      |  |   |      |  
|                  |  |                           |    |  |      |   |     |      |  |   |     |  
|                  |  |                           |     |  |      |   |      |      |  |   |      |  
|                  |  | $                         | 623 |  |      | $ | 112  |      |  | $ | (162 | )
|                  |  |                           |     |  |      |   |      |      |  |   |      |  









|                                                         |  |                           |         |   |      |   |        |      |  |   |        |  
|-------------------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                         |  | Years Ended
    March 31, |        
|                                                         |  | 2004                      |         |   | 2005 |   |        | 2006 | 
|                                                        
|Income (loss) before income taxes                        |  |                           |         |   |      |   |        |      |  |   |        |  
|United States                                            |  | $                         | (8,691  | ) |      | $ | (4,960 | )    |  | $ | 7,203  |  
|International:                                           |  |                           |         |   |      |   |        |      |  |   |        |  
|Europe, Middle East &
    Africa                         |  |                           | (2,021  | ) |      |   | (15    | )    |  |   | (854   | )
|Asia                                                     |  |                           | (1,157  | ) |      |   | (2,306 | )    |  |   | (1,228 | )
|Canada                                                   |  |                           | (656    | ) |      |   | 473    |      |  |   | 1,146  |  
|Australia                                                |  |                           | 1,187   |   |      |   | 855    |      |  |   | 1,751  |  
|                                                         |  |                           |         |   |      |   |        |      |  |   |        |  
|Total consolidated income (loss)
    before income taxes |  | $                         | (11,338 | ) |      | $ | (5,953 | )    |  | $ | 8,018  |  
|                                                         |  |                           |         |   |      |   |        |      |  |   |        |  









|                                                  |  |                           |       |    |      |  |       |      |  |  |       |   
|------------------------------------------------- |  | ------------------------- | ----- | -- | ---- |  | ----- | ---- |  |  | ----- | --
|                                                  |  | Years Ended
    March 31, |      
|                                                  |  | 2004                      |       |    | 2005 |  |       | 2006 | 
|                                                 
|Federal statutory rate                            |  |                           | 34.0  | %  |      |  | 34.0  | %    |  |  | 34.0  | % 
|State taxes, net of federal benefit               |  |                           |      |    |      |  | 3.6   |      |  |  | 3.9   |   
|Foreign taxes                                     |  |                           | (5.5  | )  |      |  | (1.5  | )    |  |  | 0.8   |   
|Reported losses and tax credits
    not benefited |  |                           | (26.2 | )  |      |  | (43.0 | )    |  |  | (33.2 | ) 
|Tax contingency reserve                           |  |                           | (9.1  | )  |      |  | 4.2   |      |  |  | (8.0  | ) 
|Other                                             |  |                           | 1.3   |    |      |  | 0.8   |      |  |  | 0.5   |   
|                                                  |  |                           |       |    |      |  |       |      |  |  |       |   
|                                                  |  |                           | (5.5  | %) |      |  | (1.9  | %)   |  |  | (2.0  | %)
|                                                  |  |                           |       |    |      |  |       |      |  |  |       |   



67



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|                                            |  |           |         |   |      |   |         |  
|------------------------------------------- |  | --------- | ------- | - | ---- | - | ------- | -
|                                            |  | March 31, |        
|                                            |  | 2005      |         |   | 2006 |  
|                                           
|Accounts receivable allowances              |  | $         | 4,805   |   |      | $ | 2,184   |  
|Depreciation and amortization               |  |           | (2,597  | ) |      |   | 1,917   |  
|Other (prepaid license writedown)           |  |           | 2,114   |   |      |   | 2,856   |  
|Nondeductible accruals                      |  |           | 2,876   |   |      |   | 1,976   |  
|Deferred revenue                            |  |           | 959     |   |      |   | 198     |  
|Net operating loss carryforwards            |  |           | 26,939  |   |      |   | 26,399  |  
|Research and other credit
    carryforwards |  |           | 10,442  |   |      |   | 8,752   |  
|Foreign losses                              |  |           | 5,562   |   |      |   | 4,084   |  
|                                            |  |           |         |   |      |   |         |  
|                                            |  |           | 51,100  |   |      |   | 48,366  |  
|Valuation allowance                         |  |           | (51,100 | ) |      |   | (48,366 | )
|                                            |  |           |         |   |      |   |         |  
|                                            |  | $         |        |   |      | $ |        |  
|                                            |  |           |         |   |      |   |         |  

















|    |           
|--- | ----------
|13. | Litigation









68



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|    |             
|--- | ------------
|14. | Acquisitions



IUS:








Wishbone:








|    |                                    
|--- | -----------------------------------
|15. | Quarterly
    Results of Operations







|                                                     |  |                                           |        |   |               |   |        |              |  |   |           |   |  |          |        |   |               |   |        |              |  |   |           |  |  |   |        |  |  |   |        |   |  |  |  | 
|---------------------------------------------------- |  | ----------------------------------------- | ------ | - | ------------- | - | ------ | ------------ |  | - | --------- | - |  | -------- | ------ | - | ------------- | - | ------ | ------------ |  | - | --------- |  |  | - | ------ |  |  | - | ------ | - |  |  |  | 
|                                                     |  | Three Months Ended                        |        |   |               |  
|                                                     |  | June 30,                                  |        |   | September 30, |   |        | December 31, |  |   | March 31, |   |  | June 30, |        |   | September 30, |   |        | December 31, |  |   | March 31, |  |  |   |       
|                                                     |  | 2004                                      |        |   | 2004          |   |        | 2004         |  |   | 2005      |   |  | 2005     |        |   | 2005          |   |        | 2005         |  |   | 2006      |  |  |   |       
|                                                     |  | (In thousands, except per share
    data) |        |   |               |  
|                                                    
|Total revenues                                       |  | $                                         | 38,552 |   |               | $ | 32,566 |              |  | $ | 33,671    |   |  | $        | 37,380 |   |               | $ | 33,621 |              |  | $ | 32,858    |  |  | $ | 34,744 |  |  | $ | 31,933 |   |  |  |  | 
|Cost of revenues                                     |  |                                           | 17,631 |   |               |   | 14,395 |              |  |   | 13,922    |   |  |          | 13,759 |   |               |   | 13,423 |              |  |   | 13,508    |  |  |   | 13,121 |  |  |   | 13,861 |   |  |  |  | 
|                                                     |  |                                           |        |   |               |   |        |              |  |   |           |   |  |          |        |   |               |   |        |              |  |   |           |  |  |   |        |  |  |   |        |   |  |  |  | 
|Gross margin                                         |  |                                           | 20,921 |   |               |   | 18,171 |              |  |   | 19,749    |   |  |          | 23,621 |   |               |   | 20,198 |              |  |   | 19,350    |  |  |   | 21,623 |  |  |   | 18,072 |   |  |  |  | 
|Operating expenses                                   |  |                                           | 20,308 |   |               |   | 18,051 |              |  |   | 18,379    |   |  |          | 20,962 |   |               |   | 18,582 |              |  |   | 17,795    |  |  |   | 19,002 |  |  |   | 16,400 |   |  |  |  | 
|Restructuring and settlement
    expenses/(benefits) |  |                                           | 9,601  |   |               |   | 1,937  |              |  |   | (991      | ) |  |          | (117   | ) |               |   | 43     |              |  |   | 41        |  |  |   | 45     |  |  |   | (153   | ) |  |  |  | 
|Net income (loss)                                    |  | $                                         | (9,008 | ) |               | $ | (2,131 | )            |  | $ | 2,562     |   |  | $        | 2,512  |   |               | $ | 1,613  |              |  | $ | 1,582     |  |  | $ | 2,924  |  |  | $ | 2,061  |   |  |  |  | 
|                                                     |  |                                           |        |   |               |   |        |              |  |   |           |   |  |          |        |   |               |   |        |              |  |   |           |  |  |   |        |  |  |   |        |   |  |  |  | 
|Net income (loss) per share:                         |  |                                           |        |   |               |   |        |              |  |   |           |   |  |          |        |   |               |   |        |              |  |   |           |  |  |   |        |  |  |   |        |   |  |  |  | 
|Basic(1)                                             |  | $                                         | (0.16  | ) |               | $ | (0.04  | )            |  | $ | 0.04      |   |  | $        | 0.04   |   |               | $ | 0.03   |              |  | $ | 0.03      |  |  | $ | 0.05   |  |  | $ | 0.04   |   |  |  |  | 
|Diluted(1)                                           |  | $                                         | (0.16  | ) |               | $ | (0.04  | )            |  | $ | 0.04      |   |  | $        | 0.04   |   |               | $ | 0.03   |              |  | $ | 0.03      |  |  | $ | 0.05   |  |  | $ | 0.03   |   |  |  |  | 









|    |  |                                                                                                                                                                                             
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | Because of the method used in calculating per share data, the
    quarterly net income (loss) per share amounts may not
    necessarily sum to the net loss per share computed for the year.

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|        |                                                                                             
|------- | --------------------------------------------------------------------------------------------
|Item 9. | Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure







|         |                            
|-------- | ---------------------------
|Item 9A. | Controls
    and Procedures



Form 10-K Rule 13a-14




Evaluation
    of Disclosure Controls and Procedures.








Managements
    Annual Report on Internal Control Over Financial
    Reporting.




Rule 13a-15(f)












Changes
    in Internal Control Over Financial Reporting.






70



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##### Table of Contents







Inherent
    Limitations on Effectiveness of Controls






71



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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm on Internal
    Control over Financial Reporting











































72



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##### Table of Contents

Item 9B.
    Other Information







PART III




Form 10-K/A (Form 10-K/A) Form 10-K.




|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors
    and Executive Officers of the Registrant



Form 10-K/A Form 10-K




www.indus.com Form 8-K




|         |                           
|-------- | --------------------------
|Item 11. | Executive
    Compensation



Form 10-K/A Form 10-K




|         |                                                                                                       
|-------- | ------------------------------------------------------------------------------------------------------
|Item 12. | Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters



Form 10-K/A Form 10-K




|         |                                                   
|-------- | --------------------------------------------------
|Item 13. | Certain
    Relationships and Related Transactions



Form 10-K/A Form 10-K




|         |                                           
|-------- | ------------------------------------------
|Item 14. | Principal
    Accountant Fees and Services



Form 10-K/A Form 10-K


73



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##### Table of Contents

PART IV

|         |                                               
|-------- | ----------------------------------------------
|Item 15. | Exhibits
    and Financial Statement Schedules



Financial Statements




Form 10-K.




Financial Statement
    Schedule








Exhibits








|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|       
|        | 2  | .1          |  | Purchase Agreement, dated as of
    February 12, 2003, by and among the Registrant, SCT Utility
    Systems, Inc., SCT, SCT Financial Corporation, SCT Property,
    Inc., SCT International Limited, SCT Technologies (Canada) Inc.,
    SCT Software & Resource Management Corporation and
    Systems & Computer Technology International B.V.
    (incorporated by reference to Exhibit 10.1 to the
    Form 8-K
    filed on February 14, 2003)               
|        | 2  | .2          |  | Amendment No. 1 to Purchase
    Agreement, dated as of March 5, 2003, by and among the
    Registrant, SCT Utility Systems, Inc., SCT, SCT Financial
    Corporation, SCT Property, Inc., SCT International Limited, SCT
    Technologies (Canada) Inc., SCT Software & Resource
    Management Corporation and Systems & Computer
    Technology International B.V. (incorporated by reference to
    Exhibit 10.3 to the
    Form 8-K
    filed on March 6, 2003)
|        | 3  | .1          |  | Registrants Amended and
    Restated Certificate of Incorporation (incorporated by reference
    to Exhibit 3.1 of the
    Form 8-K
    filed on January 26, 2005)                                                                                                                                                                                                                                                                                                
|        | 3  | .2          |  | Registrants Amended and
    Restated Bylaws (incorporated by reference to Exhibit 3.2
    to the Annual Report on
    Form 10-K/A
    filed on June 30, 2003)                                                                                                                                                                                                                                                                                                     
|        | 4  | .1          |  | Registration Rights Agreement for
    Shares, dated as of February 12, 2003, by and among the
    Registrant and each of the Purchasers of the Shares, as listed
    on the Schedule of Purchasers accompanying the Purchase
    Agreement (incorporated by reference to Exhibit 10.3 to the
    Form 8-K
    filed on February 14, 2003)                                                                                                                          
|        | 4  | .2          |  | Registration Rights Agreement for
    Conversion Shares, dated as of February 12, 2003, by and
    among the Registrant and each of the Purchasers of the Notes, as
    listed on the Schedule of Purchasers accompanying the Purchase
    Agreement (incorporated by reference to Exhibit 10.4 to the
    Form 8-K
    filed on February 14, 2003)                                                                                                                
|        | 4  | .3          |  | Registration Rights Agreement
    dated as of February 6, 2004 by and among the Registrant
    and each of the Purchasers of the Shares, as listed on the
    Schedule of Purchasers accompanying the Purchase Agreement
    (incorporated by reference to Exhibit 10.2 to the
    Form 8-K
    filed on February 10, 2004)                                                                                                                                        
|        | 4  | .4          |  | Securities Purchase Agreement,
    dated as of August 19, 2004, by and among Warburg, Pincus
    Investors, L.P., Warburg, Pincus Investors Liquidating Trust,
    Registrant and each of the Purchasers listed on the schedule
    attached as Schedule A to the Securities Purchase
    Agreement. (incorporated by reference to Exhibit 10 to the
    Form 8-K
    filed on August 20, 2004)                                                                    
|        | 4  | .5          |  | Stockholder Protection Rights
    Agreement, dated January 25, 2005, between Registrant and
    Mellon Investors Services LLC, as Rights Agent (incorporated by
    reference to Exhibit 99.1 of the
    Form 8-K
    filed on January 26, 2005)                                                                                                                                                                                                                   
|        | 10 | .1*         |  | Indus International, Inc. 1997
    Stock Plan and form of Award Certificate for Stock Option
    (incorporated by reference to Exhibit 10.1 to the
    Registration Statement on
    Form S-4
    (No. 333-33113)
    filed on August 7, 1997)                                                                                                                                                                                                                     

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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                         
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|       
|        | 10 | .2*         |  | Amendment No. 1 to the Indus
    International, Inc. 1997 Stock Plan (incorporated by reference
    to Exhibit 99.1 to the Registration Statement on
    Form S-8
    filed with the Commission on July 5, 2001)                                                                                                                                                                        
|        | 10 | .3*         |  | Amendment No. 2 to the Indus
    International, Inc. 1997 Stock Plan (incorporated by reference
    to Exhibit 99.2 to the Registration Statement on
    Form S-8
    filed with the Commission on July 5, 2001)                                                                                                                                                                        
|        | 10 | .4*         |  | Amendment No. 3 to the Indus
    International, Inc. 1997 Stock Plan (incorporated by reference
    to Exhibit 99.3 to the Registration Statement on
    Form S-8
    filed with the Commission on July 5, 2001)                                                                                                                                                                        
|        | 10 | .5*         |  | Amendment No. 4 to the Indus
    International, Inc. 1997 Stock Plan (incorporated by reference
    to Exhibit 10.1 to the Registrants Quarterly Report
    on
    Form 10-Q
    for the fiscal quarter ended September 30, 2005)                                                                                                                                                      
|        | 10 | .6*         |  | Indus International, Inc. Amended
    and Restated 1997 Director Option Plan (incorporated by
    reference to Exhibit 99.2 to the
    Form 8-K
    filed with the Commission on October 29, 2004)                                                                                                                                                                                      
|        | 10 | .7*         |  | Indus International, Inc. 2004
    Long-Term Incentive Plan (incorporated by reference to
    Exhibit 99.1 to the
    Form 8-K
    filed with the Commission on October 29, 2004)                                                                                                                                                                                                       
|        | 10 | .8*         |  | Form of Incentive/Non-Statutory
    Stock Option Non-transferable Grant under the Indus
    International, Inc. 2004 Long-Term Incentive Plan (incorporated
    by reference to Exhibit 10.3 to the Registrants
    Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 31, 2004)                                                                              
|        | 10 | .9*         |  | Form of Restricted Stock Agreement
    Non-transferable Grant under the Indus International, Inc. 2004
    Long-Term Incentive Plan (incorporated by reference to
    Exhibit 10.4 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 31, 2004)                                                                                            
|        | 10 | .10*        |  | Rules of the Indus International,
    Inc. Company Share Option Plan (the UK Option Plan)
    (incorporated by reference to Exhibit 10.7 of the
    Registrants Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2001)                                                                                                                                       
|        | 10 | .11*        |  | 2003 Employee Stock Purchase Plan
    (incorporated by reference to Appendix A of the
    Registrants Proxy Statement filed on July 1, 2003)                                                                                                                                                                                                                                           
|        | 10 | .12*        |  | Form of Indus International, Inc.
    Fiscal 2007 Incentive Compensation Plan                                                                                                                                                                                                                                                                                                           
|        | 10 | .13*        |  | Amended and Restated Lease
    Agreement for the Registrants Atlanta, Georgia corporate
    headquarters by and between Cousins Properties Incorporated and
    the Registrant dated August 1, 2000 (incorporated by
    reference to Exhibit 10.12 to the Registrants Annual
    Report on
    Form 10-K
    for the fiscal year ended December 31, 2000)                            
|        | 10 | .14         |  | First Amendment to Amended and
    Restated Lease Agreement for the Registrants Atlanta,
    Georgia corporate headquarters by and between Cousins Properties
    Incorporated and the Registrant dated September 28, 2004
    (incorporated by reference to Exhibit 10.3 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 31, 2005)
|        | 10 | .15         |  | Second Amendment to Amended and
    Restated Lease Agreement for the Registrants Atlanta,
    Georgia corporate headquarters by and between Cousins Properties
    Incorporated and the Registrant dated March 14, 2005
    (incorporated by reference to Exhibit 10.2 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 31, 2005)   
|        | 10 | .16         |  | Third Amendment to Amended and
    Restated Lease Agreement for the Registrants Atlanta,
    Georgia corporate headquarters by and between Cousins Properties
    Incorporated and the Registrant dated January 26, 2006
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 31, 2005)  
|        | 10 | .17         |  | Office Lease Agreement for the
    Registrants San Francisco, California regional office
    by and between EOP  60 Spear, L.L.C. and the
    Registrant dated March 3, 2000, as amended (incorporated by
    reference to Exhibit 10.8 to the Registrants Annual
    Report on
    Form 10-K
    for the fiscal year ended December 31, 2000)                                       
|        | 10 | .18         |  | Indus International, Inc. Board
    Compensation Policy (incorporated by reference to
    Exhibit 10.1 to the Registrants Current Report on
    Form 8-K
    filed on July 28, 2005)                                                                                                                                                                                                   
|        | 10 | .19*        |  | Employment Agreement dated as of
    October 1, 2005 by and between the Registrant and Gregory
    J. Dukat (incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    filed October 4, 2005)                                                                                                                                                

75



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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                        
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|       
|        | 10 | .20*        |  | First Amendment to Employment
    Agreement dated as of January 1, 2006 by and between the
    Registrant and Gregory J. Dukat (incorporated by reference to
    Exhibit 10.5 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 31, 2005)
|        | 10 | .21*        |  | Change of Control Severance
    Agreement dated as of October 1, 2005 by and between the
    Registrant and Gregory J. Dukat (incorporated by reference to
    Exhibit 10.4 to the Registrants Current Report on
    Form 8-K
    filed October 4, 2005)                              
|        | 10 | .22*        |  | Amendment to Change of Control
    Severance Agreement dated as of May 9, 2006 by and between
    the Registrant and Gregory J. Dukat                                                                                                                                                  
|        | 10 | .23*        |  | Employment Agreement dated as of
    October 13, 2005, by and between the Registrant and Patrick
    M. Henn (incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    filed September 27, 2005)                                           
|        | 10 | .24*        |  | First Amendment to Employment
    Agreement dated as of January 1, 2006 by and between the
    Registrant and Patrick M. Henn (incorporated by reference to
    Exhibit 10.11 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 31, 2005)
|        | 10 | .25*        |  | Change of Control Severance
    Agreement dated as of October 13, 2005 by and between the
    Registrant and Patrick M. Henn (incorporated by reference to
    Exhibit 10.2 to the Registrants Current Report on
    Form 8-K
    filed September 27, 2005)                           
|        | 10 | .26*        |  | Amendment to Change of Control
    Severance Agreement dated as of May 9, 2006 by and between
    the Registrant and Patrick M. Henn                                                                                                                                                   
|        | 10 | .27*        |  | Employment Agreement dated as of
    October 1, 2005 by and between the Registrant and John D.
    Gregg (incorporated by reference to Exhibit 10.3 to the
    Registrants Current Report on
    Form 8-K
    filed October 4, 2005)                                                  
|        | 10 | .28*        |  | First Amendment to Employment
    Agreement dated as of January 1, 2006 by and between the
    Registrant and John D. Gregg (incorporated by reference to
    Exhibit 10.14 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 31, 2005)  
|        | 10 | .29*        |  | Change of Control Severance
    Agreement dated as of October 1, 2005 by and between the
    Registrant and John D. Gregg (incorporated by reference to
    Exhibit 10.6 to the Registrants Current Report on
    Form 8-K
    filed October 4, 2005)                                 
|        | 10 | .30*        |  | Amendment to Change of Control
    Severance Agreement dated as of May 9, 2006 by and between
    the Registrant and John D. Gregg                                                                                                                                                     
|        | 10 | .31*        |  | Employment Agreement dated as of
    October 1, 2005 by and between the Registrant and Joseph T.
    Trino (incorporated by reference to Exhibit 10.2 to the
    Registrants Current Report on
    Form 8-K
    filed October 4, 2005)                                                
|        | 10 | .32*        |  | First Amendment to Employment
    Agreement dated as of January 1, 2006 by and between the
    Registrant and Joseph T. Trino (incorporated by reference to
    Exhibit 10.8 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 31, 2005) 
|        | 10 | .33*        |  | Change of Control Severance
    Agreement dated as of October 1, 2005 by and between the
    Registrant and Joseph T. Trino (incorporated by reference to
    Exhibit 10.5 to the Registrants Current Report on
    Form 8-K
    filed October 4, 2005)                               
|        | 10 | .34*        |  | Amendment to Change of Control
    Severance Agreement dated as of May 9, 2006 by and between
    the Registrant and Joseph T. Trino                                                                                                                                                   
|        | 10 | .35*        |  | Employment Agreement dated as of
    February 1, 2006 by and between the Registrant and Arthur
    W. Beckman                                                                                                                                                                          
|        | 10 | .36*        |  | Change of Control Severance
    Agreement dated as of May 5, 2005 by and between the
    Registrant and Arthur W. Beckman                                                                                                                                                              
|        | 10 | .37*        |  | Amendment to Change of Control
    Severance Agreement dated as of February 1, 2006 by and
    between the Registrant and Arthur W. Beckman                                                                                                                                            
|        | 10 | .38*        |  | Amendment to Change of Control
    Severance Agreement dated as of May 9, 2006 by and between
    the Registrant and Arthur W. Beckman                                                                                                                                                 

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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                                  
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|       
|        | 10 | .39         |  | Purchase Agreement, dated as of
    February 12, 2003, by and among the Registrant and each of
    the Purchasers listed on the Schedule of Purchasers accompanying
    the Purchase Agreement (incorporated by reference to
    Exhibit 10.2 to the
    Form 8-K
    filed on February 14, 2003)
|        | 10 | .40         |  | Purchase Agreement, dated as of
    February 6, 2004, by and among the Registrant and each of
    the Purchasers listed on the Schedule of Purchasers accompanying
    the Purchase Agreement (incorporated by reference to
    Exhibit 10.1 to the
    Form 8-K
    filed on February 10, 2004) 
|        | 10 | .41         |  | Promissory Note dated
    September 4, 2003 by Indus Utility Systems, Inc. to New
    Small Research, LLC (incorporated by reference to
    Exhibit 10.1 to the Registrants Quarterly Report on
    Form 10-Q
    filed on November 10, 2003)                                                   
|        | 10 | .42         |  | Loan Agreement dated
    September 4, 2003 by and between Indus Utility Systems,
    Inc. and New Small Research, LLC (incorporated by reference to
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q
    filed on November 10, 2003)                                       
|        | 10 | .43         |  | Recourse Carve-Out Guaranty dated
    September 4, 2003 by and between the Registrant and New
    Small Research, LLC (incorporated by reference to
    Exhibit 10.3 to the Registrants Quarterly Report on
    Form 10-Q
    filed on November 10, 2003)                                       
|        | 21 | .1          |  | Subsidiaries of Registrant                                                                                                                                                                                                                                                                       
|        | 23 | .1          |  | Consent of Ernst & Young
    LLP, Independent Registered Public Accounting Firm                                                                                                                                                                                                                  
|        | 24 | .1          |  | Power of Attorney, included on the
    signature page of this report                                                                                                                                                                                                                             
|        | 31 | .1          |  | Certification of Chief Executive
    Officer of the Registrant, pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a)                                                                                                                                                                         
|        | 31 | .2          |  | Certification of Chief Financial
    Officer of the Registrant, pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a)                                                                                                                                                                         
|        | 32 | .1          |  | Statement of the Chief Executive
    Officer of the Registrant, pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002                                                                                                                 
|        | 32 | .2          |  | Statement of the Chief Financial
    Officer of the Registrant, pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002                                                                                                                 









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



PLEASE NOTE: Form 10-K. Form 10-K, Form 10-K


77



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##### Table of Contents

SIGNATURES







Indus International, Inc.




| |     |                          
| | --- | -------------------------
| | By: | /s/  Gregory
    J. Dukat





President and Chief Executive Officer








his/her attorneys-in-fact, Form 10-K, attorneys-in-fact, his/her








|                                                          |  |                                                                                                           |  |               |  | 
|--------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------- |  | ------------- |  | 
|Signature                                                 |  | Title                                                                                                     |  | Date         
|                                                         
|/s/  Gregory
    J. DukatGregory
    J. Dukat             |  | President and Chief Executive
    Officer (Principal Executive Officer),
    Director                     |  | June 13, 2006
|                                                          |  |                                                                                                           |  |              
|/s/  Patrick
    M. HennPatrick
    M. Henn               |  | Executive Vice President and
    Chief Financial Officer
    (Principal Financial and Accounting Officer) |  | June 13, 2006
|                                                          |  |                                                                                                           |  |              
|/s/  Allen
    R. FreedmanAllen
    R. Freedman           |  | Chairman of the Board, Director                                                                           |  | June 13, 2006
|                                                          |  |                                                                                                           |  |              
|/s/  Richard
    C. CookRichard
    C. Cook               |  | Director                                                                                                  |  | June 13, 2006
|                                                          |  |                                                                                                           |  |              
|/s/  Eric
    HaskellEric
    Haskell                     |  | Director                                                                                                  |  | June 13, 2006
|                                                          |  |                                                                                                           |  |              
|/s/  Kenneth
    G. LawrenceKenneth
    G. Lawrence       |  | Director                                                                                                  |  | June 13, 2006
|                                                          |  |                                                                                                           |  |              
|/s/  Thomas
    R. Madison, Jr.Thomas
    R. Madison, Jr. |  | Director                                                                                                  |  | June 12, 2006
|                                                          |  |                                                                                                           |  |              
|/s/  Frederick
    J. SchwabFrederick
    J. Schwab       |  | Director                                                                                                  |  | June 2, 2006 



78