SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-Q
               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended March 31, 2002
                           Commission File No. 0-20943

                               Intelligroup, Inc.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


          New Jersey                                    11-2880025
-------------------------------             ------------------------------------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)


                  499 Thornall Street, Edison, New Jersey 08837
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                             (Zip Code)


                                 (732) 590-1600
                         -------------------------------
                         (Registrant's Telephone Number,
                              Including Area Code)


     Indicate  by  checkmark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                   Yes:  X                     No:
                       -----                      -----

     Indicate the number of shares  outstanding of each of the Issuer's  classes
of common stock, as of May 8, 2002:

             Class                                   Number of Shares
             -----                                   ----------------
  Common Stock, $.01 par value                          16,630,125



<PAGE>

                       INTELLIGROUP, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS
                                -----------------

                                                                            Page
                                                                            ----
PART I.  FINANCIAL INFORMATION

   Item 1.  Consolidated Financial Statements.............................    1

            Consolidated Balance Sheets as of March 31, 2002
            (unaudited) and December 31, 2001.............................    2

            Consolidated Statements of Operations and Comprehensive
            Loss for the Three Months Ended March 31, 2002 and 2001
            (unaudited)...................................................    3

            Consolidated Statements of Cash Flows for the Three Months
            Ended March 31, 2002 and 2001 (unaudited).....................    4

            Notes to Consolidated Financial Statements (unaudited)........    5

   Item 2.  Management's Discussion and Analysis of
            Financial Condition and Results of Operations.................   12

   Item 3.  Quantitative and Qualitative Disclosures About Market Risk....   25

PART II. OTHER INFORMATION

   Item 1.  Legal Proceedings.............................................   26

   Item 5.  Other Information.............................................   27

   Item 6.  Exhibits and Reports on Form 8-K..............................   27

SIGNATURES................................................................   28




                                      - i -
<PAGE>

                          PART I. FINANCIAL INFORMATION

                    ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS



                                     - 1 -
<PAGE>

                       INTELLIGROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 2002 AND DECEMBER 31, 2001
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                 MARCH 31,        DECEMBER 31,
                                                                   2002               2001
                                                              -------------       ------------
                          ASSETS
<S>                                                           <C>                <C>
Current Assets:
  Cash and cash equivalents.............................       $   1,972,000      $   2,138,000
  Accounts receivable, less allowance for doubtful
      accounts of $2,230,000 and $2,073,000 at
      March 31, 2002 and December 31, 2001,
      respectively......................................          13,654,000         13,519,000
  Unbilled services.....................................           6,973,000          7,536,000
  Prepaid income taxes..................................             380,000            342,000
  Deferred tax asset....................................           1,736,000          1,736,000
  Other current assets..................................           3,544,000          3,116,000
  Note receivable - SeraNova............................           9,140,000          9,140,000
                                                               -------------      -------------
        Total current assets............................          37,399,000         37,527,000

  Property and equipment, net...........................           7,486,000          8,099,000
  Other assets..........................................           1,505,000          1,468,000
                                                               -------------      -------------
                                                               $  46,390,000      $  47,094,000
                                                               =============      =============

           LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accounts payable......................................       $   4,150,000      $   3,548,000
  Accrued payroll and related taxes.....................           5,505,000          5,465,000
  Accrued expenses and other liabilities................           3,910,000          4,414,000
  Deferred revenue......................................             256,000          1,211,000
  Income taxes payable..................................             457,000            427,000
  Current portion of long term debt and obligations
      under capital leases..............................           5,314,000          4,712,000
                                                               -------------      -------------

        Total current liabilities.......................          19,592,000         19,777,000

Deferred tax liability..................................             170,000            164,000
                                                               -------------      -------------
Obligations under capital leases, less current portion..             260,000            371,000
                                                               -------------      -------------

Commitments and contingencies

Shareholders' Equity
   Preferred stock, $.01 par value, 5,000,000 shares
      authorized, none issued or outstanding............                  --                 --
   Common stock, $.01 par value, 25,000,000 shares
      authorized, 16,630,125 shares issued and
      outstanding at March 31, 2002 and
      December 31, 2001.................................             166,000            166,000
   Additional paid-in capital...........................          41,366,000         41,366,000
   Accumulated deficit..................................         (10,674,000)       (10,685,000)
   Currency translation adjustments.....................          (4,490,000)        (4,065,000)
                                                               -------------      -------------
        Total shareholders' equity .....................          26,368,000         26,782,000
                                                               -------------      -------------
                                                               $  46,390,000      $  47,094,000
                                                               =============      =============
</TABLE>

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



                                     - 2 -
<PAGE>

                       INTELLIGROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             AND COMPREHENSIVE LOSS
               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED MARCH 31,
                                                             2002               2001
                                                         -----------        -----------
<S>                                                      <C>                <C>
Revenue............................................      $24,609,000        $30,789,000
Cost of sales......................................       17,188,000         21,624,000
                                                         -----------        -----------
    Gross profit...................................        7,421,000          9,165,000
                                                         -----------        -----------
Selling, general and administrative expenses.......        6,505,000          8,118,000
Depreciation and amortization......................          706,000            945,000
                                                         -----------        -----------
    Total operating expenses.......................        7,211,000          9,063,000
                                                         -----------        -----------
    Operating income...............................          210,000            102,000
Other (expense) income, net........................          (68,000)           121,000
                                                         -----------        -----------
Income before provision for income taxes...........          142,000            223,000
Provision for income taxes.........................          131,000             35,000
                                                         -----------        -----------
Net income.........................................      $    11,000        $   188,000
                                                         ===========        ===========

Earnings per share:
    Basic earnings per share:
      Net income per share.........................      $      0.00        $      0.01
                                                         ===========        ===========
      Weighted average number of
      common shares - Basic........................       16,630,000         16,630,000
                                                         ===========        ===========

    Diluted earnings per share:
      Net income per share.........................      $      0.00        $      0.01
                                                         ===========        ===========
      Weighted average number of
      common shares - Diluted......................       16,631,000         16,662,000
                                                         ===========        ===========

Comprehensive Loss
------------------
Net income.........................................      $    11,000        $   188,000
Other comprehensive loss -
      Currency translation adjustments.............         (425,000)        (1,486,000)
                                                         -----------        -----------
Comprehensive loss.................................      $  (414,000)       $(1,298,000)
                                                         ===========        ===========
</TABLE>


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


                                     - 3 -
<PAGE>

                       INTELLIGROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the Three Months Ended March 31, 2002 and 2001
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED MARCH 31,
                                                                       2002             2001
                                                                   -----------      -----------
<S>                                                                <C>              <C>
Cash flows from operating activities:
  Net income...................................................    $    11,000      $   188,000
  Adjustments to reconcile net income to net cash provided
    by operating activities:
      Depreciation and amortization............................        968,000        1,053,000
      Provision for doubtful accounts..........................        210,000          453,000
      Deferred income taxes....................................          6,000               --
  Changes in operating assets and liabilities:
    Accounts receivable........................................       (345,000)         163,000
    Unbilled services..........................................        563,000        2,025,000
    Other current assets.......................................       (466,000)         992,000
    Other assets...............................................        (37,000)           9,000
    Accounts payable...........................................        602,000          516,000
    Accrued payroll and related taxes..........................         40,000       (1,477,000)
    Accrued expenses and other liabilities.....................        (73,000)         358,000
    Accrued restructuring charges..............................       (431,000)         (91,000)
    Deferred revenue...........................................       (955,000)      (1,644,000)
    Income taxes payable.......................................         30,000           11,000
                                                                   -----------      -----------
  Net cash provided by operating activities....................        123,000        2,556,000
                                                                   -----------      -----------

Cash flows from investing activities:
    Purchase of equipment .....................................       (355,000)      (1,876,000)
    Purchase of software licenses..............................             --       (2,678,000)
                                                                   -----------      -----------
  Net cash used in investing activities........................       (355,000)      (4,554,000)
                                                                   -----------      -----------

Cash flows from financing activities:
  Principal payments under capital leases......................       (165,000)        (128,000)
  Other repayments.............................................         (3,000)         (90,000)
  Net change in line of credit borrowings......................        659,000        3,133,000
  Repayment of note receivable-SeraNova subsequent to
   spin-off date...............................................             --        1,040,000
                                                                   -----------      -----------
    Net cash provided by financing activities..................        491,000        3,955,000
                                                                   -----------      -----------
    Effect of foreign currency exchange rate changes on cash...      (425,000)      (1,486,000)
                                                                   -----------      -----------
Net increase (decrease) in cash and cash equivalents ..........       (166,000)         471,000
Cash and cash equivalents at beginning of period...............      2,138,000        1,327,000
                                                                   -----------      -----------
Cash and cash equivalents at end of period.....................    $ 1,972,000      $ 1,798,000
                                                                   ===========      ===========
Supplemental disclosures of cash flow information:
  Cash paid for income taxes...................................    $   408,000      $   422,000
                                                                   ===========      ===========
  Cash paid for interest.......................................    $   105,000      $   223,000
                                                                   ===========      ===========
</TABLE>



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


                                     - 4 -
<PAGE>

                       INTELLIGROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

     The   consolidated   financial   statements  and   accompanying   financial
information  as of March 31, 2002 and for the three  months ended March 31, 2002
and  2001  are  unaudited  and,  in  the  opinion  of  management,  include  all
adjustments  (consisting only of normal recurring adjustments) which the Company
considers  necessary for a fair  presentation  of the financial  position of the
Company  at such  dates  and the  operating  results  and cash  flows  for those
periods.  The  financial  statements  included  herein  have  been  prepared  in
accordance with generally accepted accounting principles and the instructions of
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted.  These  financial  statements  should be read in  conjunction  with the
Company's  audited  financial  statements  for the year ended December 31, 2001,
which were included as part of the Company's Form 10-K.

     In November 2001, the Emerging  Issues Task Force ("EITF") of the Financial
Accounting Standards Board ("FASB") concluded that reimbursable  "out-of-pocket"
expenses should be classified as revenue,  and correspondingly cost of services,
in the statement of operations.  Most service  companies,  whose employees incur
incidental expenses such as airfare,  mileage, hotel and out-of-town meals while
working on behalf of customers, previously reported reimbursable "out-of-pocket"
expenses on a "net" basis in the statement of operations. Accordingly, effective
January 1, 2002,  the Company has reported  gross  reimbursable  "out-of-pocket"
expenses  incurred  as both  revenue  and  cost of  sales  in the  statement  of
operations. The Company has also reclassified prior period financial information
for presentation consistent with the new EITF accounting guidance. The impact of
this  reclassification  was an  increase  to both  revenue  and cost of sales of
$497,000  and  $752,000  for the three  months  ended  March 31,  2002 and 2001,
respectively.

     The Company's 2002 operating plan contains  assumptions  regarding  revenue
and  expenses.  The  achievement  of the operating  plan depends  heavily on the
timing of work performed by the Company on existing  projects and the ability of
the Company to gain and perform  work on new  projects.  Project  cancellations,
delays in the timing of work  performed  by the Company on existing  projects or
the inability of the Company to gain and perform work on new projects could have
an adverse  impact on the Company's  ability to execute its  operating  plan and
maintain  adequate  cash  flow.  In the  event  actual  results  do not meet the
operating  plan,  management  believes  it could  execute  contingency  plans to
mitigate such effects.  Such plans include additional cost reductions or seeking
additional  financing.  Considering  the cash on hand,  the credit  facility and
based on the achievement of the operating plan and management's actions taken to
date,  management believes it has the ability to continue to generate sufficient
cash to satisfy its  operating  requirements  in the normal  course of business.
However,  no assurance can be given that  sufficient cash will be generated from
operations.



                                     - 5 -
<PAGE>

     Results for interim periods are not  necessarily  indicative of results for
the entire year.

NOTE 2 - EARNINGS PER SHARE

     Basic earnings per share is computed by dividing income available to common
shareholders by the weighted average number of common stock  outstanding for the
period.  Diluted  earnings per share reflects the potential  dilution that could
occur if securities or other  contracts to issue common stock were  exercised or
converted into common stock, unless they are antidilutive.

     A reconciliation of weighted average number of common shares outstanding to
weighted average common shares outstanding assuming dilution is as follows as of
March 31:

                                                        2002             2001
                                                        ----             ----

Weighted average number of common shares......      16,630,000       16,630,000

Common share equivalents of outstanding
stock options.................................           1,000           32,000
                                                    ----------       ----------
Weighted average number of common shares
 assuming dilution............................      16,631,000       16,662,000
                                                    ==========       ==========

        Stock options,  which would be antidilutive  (2,786,000 and 3,117,000 as
of  March  31,  2002  and  2001,  respectively),  have  been  excluded  from the
calculations of diluted shares outstanding and diluted earnings per share.

NOTE 3 - LINES OF CREDIT

     On May 31, 2000, the Company and PNC Bank, N.A. (the "Bank") entered into a
three-year  revolving  credit  facility.  Such credit facility is comprised of a
revolving  line of  credit  pursuant  to which  the  Company  can  borrow  up to
$20,000,000  either  at the  Bank's  prime  rate per annum or the Euro Rate plus
1.75% to 2.5%  based  upon the  Company's  ratio of debt to  EBITDA.  The credit
facility is  collateralized  by substantially all of the assets of the Company's
United States based  operations.  The maximum borrowing  availability  under the
line of credit is based  upon a  percentage  of  eligible  billed  and  unbilled
accounts  receivable,  as  defined.  As of  March  31,  2002,  the  Company  had
outstanding  borrowings  under the credit  facility of  $4,725,000.  The Company
estimates undrawn  availability under the credit facility to be $6,744,000 as of
March 31, 2002. As of December 31, 2001, the Company had outstanding  borrowings
under the credit facility of $4,066,000.




                                     - 6 -
<PAGE>

NOTE 3 - LINES OF CREDIT (CONTINUED)

     The credit facility provides for the following financial  covenants,  among
other things,  (1) the Company must maintain  consolidated net worth, as defined
("consolidated   net  worth")  of  (a)  not  less  than  95%  of  the  Company's
consolidated  net worth of the immediately  preceding fiscal year-end as at each
such  fiscal  quarter  after  December  31,  2000;  and (b) at least 105% of the
Company's consolidated net worth as of the immediately preceding fiscal year-end
as at each such fiscal  year-end  subsequent  to December  31,  2000;  provided,
however,  the foregoing  covenant shall not be tested for any quarter so long as
the  Company  maintains,  at all  times  during  such  fiscal  quarter,  undrawn
availability  of  more  than  $5,000,000  and  (2)  the  Company  must  maintain
unconsolidated  net worth,  as defined  ("unconsolidated  net worth") of (a) not
less  than 95% of the  Company's  unconsolidated  net  worth of the  immediately
preceding  fiscal  year-end as at each such fiscal  quarter  after  December 31,
2000; and (b) at least 105% of the Company's  unconsolidated net worth as of the
immediately preceding fiscal year-end as at each such fiscal year-end subsequent
to December 31, 2000;  provided,  however,  the foregoing  covenant shall not be
tested for any quarter so long as the  Company  maintains,  at all times  during
such fiscal quarter, undrawn availability of more than $5,000,000. Additionally,
the credit facility  contains material adverse change clauses with regard to the
financial condition of the assets, liabilities and operations of the Company.

     As of  December  31,  2001,  the  Company  was not in  compliance  with the
consolidated  net worth and  unconsolidated  net worth financial  covenants.  In
March  2002,  the  Company  finalized  with the Bank the  terms of a waiver  and
amendment  to the  credit  agreement.  The  terms of the  waiver  and  amendment
included,  among  other  things,  (1) a waiver of the  covenant  defaults  as of
December 31, 2001, (2) a modification to the financial covenants to require that
consolidated net worth and  unconsolidated  net worth as of December 31, 2002 be
not less than 102% of  consolidated  net worth  and  unconsolidated  net  worth,
respectively,  as of  December  31,  2001,  and  (3) a  new  financial  covenant
requiring  that  the  Company   generate   earnings  before   interest,   taxes,
depreciation  and  amortization  ("EBITDA")  of at least 90% of the prior year's
EBITDA. The Company was in compliance with all covenants as of March 31, 2002.

     Interest expense on debt and obligations under capital leases  approximated
$105,000  and  $223,000  for the three  months  ended  March 31,  2002 and 2001,
respectively.


NOTE 4 - NOTE RECEIVABLE - SERANOVA

     On May 31, 2000, SeraNova,  Inc.  ("SeraNova") and the Company formalized a
$15,100,000 unsecured promissory note (the "Note") relating to net borrowings by
SeraNova  from the Company  through  such date.  The Note bears  interest at the
prime rate plus 1/2%.  The  Company  has  recorded  total  accrued  interest  of
$940,000  as of March 31,  2002 and  December  31,  2001.  The  Company  has not
recorded  any  accrued  interest on the  balance of the Note  subsequent  to the
maturity  date of July 31, 2001. A payment of  $3,000,000  was made on September
29, 2000 with the balance being due on July 31, 2001.



                                     - 7 -
<PAGE>

NOTE 4 - NOTE RECEIVABLE - SERANOVA (CONTINUED)

     In September  2000,  SeraNova  consummated  an $8,000,000  preferred  stock
financing  with  two  institutional   investors.   According  to  the  mandatory
prepayment provisions of the Note, SeraNova was required to make a prepayment of
$3,000,000  on the Note as a result of the stock  financing.  Subsequently,  the
Company finalized, with SeraNova, the terms of an agreement to waive, subject to
certain conditions, certain of the mandatory prepayment obligations arising as a
result of the financing.  The terms of the new agreement  included,  among other
things,  that  SeraNova  pay the  Company (i)  $500,000  upon  execution  of the
agreement;  (ii)  $500,000 on or before each of January 31,  2001,  February 28,
2001,  March 31, 2001, April 30, 2001 and May 31, 2001; and (iii) $400,000 on or
before  December 15, 2000 to be applied either as (a) an advance payment towards
a  contemplated  services  arrangement  for  hosting  services to be provided to
SeraNova by Company (the "Hosting Agreement");  or (b) in the event that no such
Hosting  Agreement is executed on or before  December 15,  2000,  an  additional
advance prepayment toward the principal of the Note.

     The Company  received from SeraNova the $500,000  payment that was due upon
execution of the agreement and a $400,000 payment in December 2000 as an advance
payment  towards  the  principal  of the Note  since no  Hosting  Agreement  was
executed before December 15, 2000.

     In 2001, the Company received principal  payments totaling  $2,060,000 from
SeraNova.  However,  SeraNova  failed to make final  payment of all  amounts due
under the Note to the  Company  as of July 31,  2001.  On August 16,  2001,  the
Company filed a complaint against SeraNova and Silverline  Technologies  Limited
("Silverline"), which acquired SeraNova in March 2001. As of such date, SeraNova
was  obligated  to pay to the Company  the  remaining  principal  (approximately
$9,140,000) and accrued interest  (approximately  $940,000),  or an aggregate of
$10,080,000.  Although  the Company  believes  that it is entitled to the entire
$10,080,000  balance,  there can be no assurance that SeraNova and/or Silverline
will pay the entire balance due the Company.  In the event the Company accepts a
payment in less than full  satisfaction of the $10,080,000 due, the Company will
record a charge  against  earnings  for such  difference.  The  Company  has not
recorded a reserve against the remaining  balance of $10,080,000  under the Note
as of March 31,  2002,  as the  amount  of loss,  if any,  cannot be  reasonably
estimated. The Company believes that SeraNova and/or Silverline have the ability
to pay  the  entire  balance  due.  The  resolution  of this  uncertainty  could
materially impact the Company's  consolidated  financial position and results of
operations.  In addition,  SeraNova filed a counterclaim against the Company for
unspecified  damages as a set-off against the Company's  claims.  In response to
the Company's request for a statement of damages, SeraNova stated that it was in
the process of calculating its damages,  but for informational  purposes claimed
compensatory  damages in excess of $5,500,000 and punitive damages in the amount
of $10,000,000. The parties are currently proceeding with the discovery process.
The Company  believes that there is no basis to support such amounts  claimed by
SeraNova.


                                     - 8 -
<PAGE>

NOTE 4 - NOTE RECEIVABLE - SERANOVA (CONTINUED)

     In addition, on March 4, 2002, the Company filed an arbitration demand with
the American Arbitration Association against SeraNova and Silverline. The demand
for arbitration,  which seeks damages,  alleges among other things that SeraNova
and/or  Silverline  failed to pay outstanding lease obligations to the Company's
landlords and to reimburse the Company for all rent payments made by the Company
on their behalf.  As of the date the arbitration  demand was filed,  the Company
claimed that the outstanding lease obligations totaled $236,010.  The Company is
further seeking jurisdiction over further payment defaults by the respondents to
the Company and its landlords.  The Company does not believe that the outcome of
this claim will have a  materially  adverse  effect on the  Company's  business,
financial condition or results of operations.

NOTE 5 - RESTRUCTURING AND OTHER SPECIAL CHARGES

     In connection with the Company's plan to reduce costs and improve operating
efficiencies,  the Company incurred a non-recurring charge of $5,628,000 related
to  restructuring  initiatives  during the year ended  December  31,  1999.  The
restructuring charge included settlement of the former chief executive officer's
employment agreement and additional severance payment,  expenses associated with
the  termination of certain  employees in the United States and United  Kingdom,
the closing of certain  satellite offices in the United States and an additional
office in Belgium, and costs to exit certain contractual obligations.

     During the quarter ended  December 31, 2001, in an effort to further refine
the Company's  business  strategy around its core competencies and to refocus on
more active markets, the Company recorded a $13,261,000  restructuring and other
special charges  provision.  The charges,  which were mainly non-cash in nature,
were related primarily to the ASP business in the United States, the termination
of an agreement to build and operate a technology development and support center
in  Puerto  Rico,  and to the  restructuring  and  downsizing  of the  Company's
operations in the United Kingdom.


                                     - 9 -
<PAGE>

NOTE 5 - RESTRUCTURING AND OTHER SPECIAL CHARGES (CONTINUED)

     Activity in accrued costs for restructuring and other special charges is as
follows:

<TABLE>
<CAPTION>
                                           SEVERANCE AND       ASSET
                                           RELATED COSTS    IMPAIRMENTS     EXIT COSTS        TOTAL
                                            ------------------------------------------------------------

<S>                                        <C>              <C>            <C>             <C>
Charges to operations during 1999......    $  5,027,000     $        --    $   601,000     $  5,628,000
Costs paid during 1999.................      (4,162,000)             --       (517,000)      (4,679,000)
Accrued costs as of December 31, 1999..         865,000              --         84,000          949,000

Costs paid during 2000.................        (608,000)             --             --         (608,000)
Accrued costs as of December 31, 2000..         257,000              --         84,000          341,000

Charges to operations during 2001......         530,000      10,999,000      1,732,000       13,261,000
Costs paid during 2001.................        (402,000)             --       (172,000)        (574,000)
Non-cash utilization during 2001.......              --     (10,999,000)    (1,177,000)     (12,176,000)
Accrued costs as of December 31, 2001..         385,000              --        467,000          852,000
2001

Costs paid during 2002.................        (224,000)             --       (207,000)        (431,000)
Accrued costs as of March 31, 2002.....    $    161,000     $        --    $   260,000     $    421,000
</TABLE>

NOTE 6 - SEGMENT DATA AND GEOGRAPHIC INFORMATION

     The Company operates in one industry,  information technology solutions and
services.  The  Company  has  four  reportable  operating  segments,  which  are
organized and managed on a geographical basis, as follows:

     o    United  States  ("US") - the  largest  segment  of the  Company,  with
          operations  in  the  United  States  and  Puerto  Rico.  Includes  the
          operations  of the Company's US  subsidiary,  Empower,  Inc.,  and all
          corporate functions and activities.  The US and corporate headquarters
          are located in Edison, New Jersey;

     o    Asia-Pacific  ("APAC") - includes  the  operations  of the  Company in
          Australia, Hong Kong, Indonesia, Japan, New Zealand and Singapore. The
          APAC headquarters are located in Wellington, New Zealand;

     o    Europe - includes the operations of the Company in Denmark, Sweden and
          the United Kingdom. The European  headquarters are located in Norfolk,
          United Kingdom; and

     o    India - includes the  operations  of the Company in India and Jamaica.
          The Indian headquarters are located in Hyderabad, India.


                                     - 10 -
<PAGE>

NOTE 6 - SEGMENT DATA AND GEOGRAPHIC INFORMATION (CONTINUED)

     Each of the  operating  segments  has a Managing  Director,  or  equivalent
position,   which  reports  directly  to  the  Chief  Executive  Officer  (CEO).
Currently,  the CEO is fulfilling the  requirements  of this position in the US.
The CEO has been identified as the Chief Operating Decision Maker (CODM) because
he has final  authority  over  resource  allocation  decisions  and  performance
assessment.  The CODM regularly receives certain discrete financial  information
about the  geographical  operating  segments,  including  primarily  revenue and
operating income, to evaluate segment performance.

     Accordingly,  the Company's  operating  results and financial  position are
presented in the following  geographic segments for the three months ended March
31, 2002 and 2001.

<TABLE>
<CAPTION>
                                 UNITED STATES  ASIA-PACIFIC     EUROPE         INDIA          TOTAL
                                 -------------  ------------     ------         -----          -----
THREE MONTHS ENDED
------------------
MARCH 31, 2002
------------------
<S>                               <C>            <C>           <C>            <C>           <C>
Revenue......................     $17,469,000    $2,501,000    $1,585,000     $3,054,000    $24,609,000
Depreciation & amortization..         474,000        27,000        57,000        148,000        706,000 (1)
Operating income (loss)......         115,000      (199,000)     (189,000)       483,000        210,000
Total assets.................      33,371,000     5,225,000     1,917,000      5,877,000     46,390,000

THREE MONTHS ENDED
------------------
MARCH 31, 2001
------------------
Revenue......................     $19,996,000    $3,703,000    $3,886,000     $3,204,000    $30,789,000
Depreciation & amortization..         538,000        84,000       183,000        140,000        945,000 (1)
Operating income (loss)......         (10,000)     (269,000)     (733,000)     1,114,000        102,000
Total assets.................      45,779,000     7,678,000     8,647,000      4,554,000     66,658,000
</TABLE>
-----------
(1)  Excludes $262,000 and $108,000 of depreciation and amortization included in
     cost of  sales  for the  three  months  ended  March  31,  2002  and  2001,
     respectively.

     Included  above  are  application   management  and  support   revenues  of
$6,417,000  and  $5,103,000  for the three months ended March 31, 2002 and 2001,
respectively.   Other  information   related  to  the  hosting  and  application
management and support  business is not  maintained  and the Company  determined
that it would be impractical to calculate such data.

NOTE 7 - PENDING ACCOUNTING PRONOUNCEMENT

     In August 2001, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 143,  "Accounting for Asset Retirement  Obligations."  SFAS No. 143
addresses  financial  accounting and reporting  obligations  associated with the
retirement of tangible  long-lived  assets and the associated  asset  retirement
costs. SFAS No. 143 is effective for fiscal years beginning after June 14, 2002.
The Company has evaluated  the impact of the adoption of SFAS No. 143,  which is
effective  for the  Company as of January 1, 2003,  and does not believe it will
have a  material  impact on the  Company's  financial  position  or  results  of
operations.


                                     - 11 -
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

OVERVIEW

     The  Company  provides  a  wide  range  of   high-quality,   cost-effective
information  technology  solutions  and services.  These  services and solutions
include the development, integration, implementation,  management and support of
enterprise,  e-commerce  and  m-commerce  software  applications.  The Company's
onsite/offshore    delivery   model,    comprehensive   suite   of   tools   and
industry-specific  solutions provide customers with a faster  time-to-market and
lower total cost of ownership.

     In October 1987, the Company first began to provide systems integration and
custom software development services to customers. In 1994, the Company began to
diversify its customer  base by expanding  the scope of its systems  integration
and custom development  services to include Enterprise Resource Planning ("ERP")
software.  ERP software products are pre-packaged  solutions for a wide-range of
business  areas,  including  financial  information,   manufacturing  and  human
resources.  For  prospective  customers,  ERP products are an alternative to the
custom design and development of their own  applications.  Although ERP products
are  pre-packaged  solutions,  there is a significant  amount of technical  work
involved  in  implementing  them  and  tailoring  their  use  for  a  particular
customer's needs.

     Throughout  the  mid-to-late  1990s,  the  Company  grew  significantly  by
capitalizing  on  the  business   opportunity  to  provide   implementation  and
customization services work to the expanding ERP market. The Company first began
to provide  these  technical  services to  customers  implementing  SAP software
before  expanding  its service  offerings to include ERP  products  developed by
Oracle in 1995 and PeopleSoft in 1997.

     In late 1999,  the Company  made the  strategic  decision  to leverage  its
traditional  application  integration  and consulting  experience and reposition
Intelligroup for future growth by focusing on the emerging  Application  Service
Provider  ("ASP")  market.  At the same time,  the  Company  made the  strategic
decision  to  spin-off  its  Internet  services  business  to its  shareholders.
Accordingly,   on  January  1,  2000,  the  Company   transferred  its  Internet
applications  services and management  consulting  businesses to SeraNova,  Inc.
("SeraNova"),  a wholly owned subsidiary of the Company on such date. On July 5,
2000, the Company  distributed all of the outstanding shares of the common stock
of  SeraNova  then held by the  Company to  holders  of record of the  Company's
common stock as of the close of business on May 12, 2000 (or to their subsequent
transferees) in accordance  with the terms of a Distribution  Agreement dated as
of January 1, 2000 between the Company and SeraNova.

     During the second half of 2000,  finding  that the market for ASP  services
had not  developed  and grown as  projected  by  market  analysts,  the  Company
significantly reduced its investment in the ASP business model. Expenditures for
marketing and direct selling initiatives were significantly  decreased,  as were
the infrastructure and personnel that supported the Company's ASP services.  The
Company renewed it focus and efforts on pursuing shorter-term


                                     - 12 -
<PAGE>

success  opportunities of implementing and enhancing application solutions based
on SAP, Oracle and PeopleSoft products.

     At the same time, the Company redirected some of its ASP infrastructure and
personnel towards Application  Management  Services.  Additionally,  the Company
introduced  Power Up Services.  Finally,  in 2001, the Company  developed Pharma
Express  and  Contractor  Express.  Pharma  Express,  a  solution  designed  for
small-to-medium   sized  life   sciences   companies,   improves   manufacturing
efficiencies and helps control the total cost of production.  Contractor Express
assists   companies  in  improving   operational   efficiency  and   controlling
manufacturing project schedules.

     The  majority  of the  Company's  revenues  are derived  from  professional
services rendered to customers.  Revenue is typically recognized as services are
performed.  The Company's services range from providing  customers with a single
consultant  to  multi-personnel  full-scale  projects.  Although the Company has
contracts with many of its customers to provide its services,  in general,  such
contracts are terminable upon relatively  short notice,  typically not more than
30 days. There can be no assurance that the Company's customers will continue to
enter into  contracts  with the Company or that existing  contracts  will not be
terminated.  The  Company  provides  its  services  either  directly to end-user
organizations,  or  as a  member  of a  consulting  team  assembled  by  another
information  technology  consulting firm. Where contractual  provisions  permit,
customers also are billed for  reimbursement of expenses incurred by the Company
on the customers' behalf.

     The Company has provided  services on certain  projects in which it, at the
request of the  clients,  offered a fixed price for its  services.  For the year
ended  December  31, 2001,  revenues  derived  from  projects  under fixed price
contracts  represented  approximately 17% of the Company's total revenue.  Fixed
price  contracts,  in the  aggregate,  represented  23% of the  Company's  total
revenue  during the three  months  ended March 31,  2002.  No single fixed price
project was material to the Company's  business  during 2001 or during the three
months  ended March 31,  2002.  The  Company  believes  that,  as it pursues its
strategy of providing  Application  Management  Services to  customers,  it will
continue to offer  fixed price  projects.  The Company  believes  that there are
certain  risks  related  to  fixed  price  arrangements  and  thus  prices  such
arrangements to reflect the associated  risk. There can be no assurance that the
Company  will  be  able  to  complete  such  projects  within  the  fixed  price
timeframes. The failure to perform within such fixed price contracts, if entered
into, could have a material adverse effect on the Company's business,  financial
condition and results of operations.

     The  Company has derived  and  believes  that it will  continue to derive a
significant  portion  of its  revenue  from a limited  number of  customers  and
projects.  For the three months ended March 31, 2002 and the year ended December
31, 2001, the Company's ten largest  customers  accounted for, in the aggregate,
approximately 37% and 33% of revenue,  respectively.  For the three months ended
March 31, 2002, one customer accounted for approximately 10% of revenue. For the
year ended December 31, 2001, no single customer  accounted for more than 10% of
revenue.  For the three months ended March 31, 2002 and the year ended  December
31, 2001, 36% and 42%,  respectively,  of the Company's revenue was generated by
serving  as  a  member  of  consulting  teams  assembled  by  other  information
technology consulting firms. There can be no


                                     - 13 -
<PAGE>

assurance that such  information  technology  consulting  firms will continue to
engage the Company in the future at current levels of retention, if at all.

     During the three  months  ended March 31, 2002 and the year ended  December
31,  2001,  approximately  67% and 69%,  respectively,  of the  Company's  total
revenue was derived from  projects in which the Company  implemented,  extended,
maintained, managed or supported software developed by SAP. For the three months
ended March 31, 2002 and the year ended December 31, 2001, approximately 20% and
17%,  respectively,  of the Company's total revenue was derived from projects in
which the  Company  implemented,  extended,  maintained,  managed  or  supported
software developed by PeopleSoft.  For the three months ended March 31, 2002 and
the year ended  December 31,  2001,  approximately  8% and 9%, of the  Company's
total  revenue was  derived  from  projects  in which the  Company  implemented,
extended, maintained, managed or supported software developed by Oracle.

     The Company's most significant cost is project  personnel  expenses,  which
consist of consultant salaries, benefits and payroll-related expenses. Thus, the
Company's financial performance is based primarily upon billing margin (billable
hourly rate less the cost to the Company of a consultant on an hourly basis) and
personnel utilization rates (billable hours divided by paid hours).

     The Company  currently  maintains its  headquarters in Edison (New Jersey),
and branch  offices in Atlanta  (Georgia),  Rosemont  (Illinois) and Foster City
(California).  The Company also maintains offices in Europe (Denmark, Sweden and
the United Kingdom), and Asia-Pacific (Australia,  Hong Kong, India,  Indonesia,
Japan,  New Zealand,  and  Singapore).  The Company leases its  headquarters  in
Edison,  New Jersey.  Such lease has an initial  term of ten (10)  years,  which
commenced in September 1998.

CRITICAL ACCOUNTING POLICIES ESTIMATES AND RISKS

     The  Company's  critical  accounting  policies  are set forth in its Annual
Report on Form 10-K for the year  ended  December  31,  2001.  There has been no
change,  update  or  revision  to the  Company's  critical  accounting  policies
subsequent to the filing of the Company's  Form 10-K for the year ended December
31, 2001.

FORWARD-LOOKING STATEMENTS

     This Form 10-Q contains  forward-looking  statements  within the meaning of
Section 21E of the  Securities  Exchange  Act of 1934,  as  amended,  including,
without limitation,  statements  regarding the Company's intention to shift more
of its focus  towards  the  management  and  support of  customers'  enterprise,
e-commerce and m-commerce applications.  Such forward-looking statements include
risks and uncertainties, including, but not limited to:

     o    the continued  uncertainty  associated  with the slowdown in economies
          worldwide, including its impact on IT spending habits by customers;

     o    the  continued  uncertainty  of the  outsourcing  market and  revenues
          derived from anticipated application management and support business;


                                     - 14 -
<PAGE>

     o    the failure to maintain the minimum bid price of $1.00 per share for a
          period of 30  consecutive  business days or other criteria as required
          for continued listing by the Nasdaq National Market;

     o    the  substantial  variability  of the  Company's  quarterly  operating
          results  caused by a variety of factors,  many of which are not within
          the Company's control, including (a) patterns of software and hardware
          capital spending by customers,  (b) information technology outsourcing
          trends,  (c) the timing,  size and stage of  projects,  (d) timing and
          impact of acquisitions,  (e) new service  introductions by the Company
          or its competitors and the timing of new product  introductions by the
          Company's  ERP  partners,  (f)  levels  of market  acceptance  for the
          Company's services, (g) general economic conditions, (h) the hiring of
          additional staff and (i) fixed price contracts;

     o    changes in the Company's billing and employee utilization rates;

     o    the Company's ability to manage its business  effectively,  which will
          require  the  Company (a) to continue  developing  and  improving  its
          operational,  financial  and other  internal  systems,  as well as its
          business  development  capabilities,  (b) to attract,  train,  retain,
          motivate and manage its  employees,  (c) to continue to maintain  high
          rates of employee  utilization  at profitable  billing  rates,  (d) to
          successfully  integrate the personnel and  businesses  acquired by the
          Company, and (e) to maintain project quality, particularly if the size
          and scope of the Company's projects increase;

     o    the Company's limited operating history within the outsourcing line of
          business;

     o    the Company's  reliance on continued  relationships  with SAP America,
          Oracle and PeopleSoft, and the Company's present partnership status;

     o    the  Company's   substantial  reliance  on  key  customers  and  large
          projects;

     o    the  highly  competitive  nature  of the  markets  for  the  Company's
          services;

     o    the Company's ability to successfully  address the continuing  changes
          in information  technology,  evolving industry  standards and changing
          customer objectives and preferences;

     o    the Company's  reliance on the continued services of its key executive
          officers and leading technical personnel;

     o    the  Company's  ability to attract and retain a  sufficient  number of
          highly skilled employees in the future;

     o    the Company's ability to protect its intellectual property rights;

     o    uncertainties  resulting  from  pending  litigation  matters  and from
          potential  administrative  and  regulatory  immigration  and  tax  law
          matters and from the


                                     - 15 -
<PAGE>

          outstanding  liability of SeraNova to the Company under the promissory
          note dated May 31, 2000, as amended; and

     o    in  addition,  in March 2001,  SeraNova  and  Silverline  Technologies
          Limited  ("Silverline")  consummated  the  acquisition  of SeraNova by
          Silverline.   SeraNova's   management   has   represented   that  such
          acquisition  was  not  contemplated  at the  time of the  spin-off  of
          SeraNova  by the  Company,  and  accordingly  should  not  impact  the
          tax-free  nature of the  spin-off.  Should the spin-off be  ultimately
          construed  to be  taxable,  there is a risk  that if  SeraNova  and/or
          Silverline  are unable or unwilling to pay the resultant tax liability
          pursuant  to  SeraNova's  indemnification  obligations  under  its Tax
          Sharing  Agreement  with  the  Company,  the  Company  would  bear the
          liability to pay such resultant tax liability.

     As a result of these factors and others,  the Company's  actual results may
differ materially from the results disclosed in such forward-looking statements.

RESULTS OF OPERATIONS - CONSOLIDATED

     The following table sets forth for the periods  indicated certain financial
data expressed as a percentage of total revenue:

                                                     PERCENTAGE OF REVENUE
                                                  ---------------------------
                                                  THREE MONTHS ENDED MARCH 31
                                                  ---------------------------
                                                   2002                  2001
                                                   ----                  ----

Revenue.......................................     100.0%               100.0%
Cost of sales.................................      69.8                 70.2
                                                   -----                -----
    Gross profit..............................      30.2                 29.8
Selling, general and administrative expenses..      26.4                 26.4
Depreciation and amortization expense.........       2.9                  3.1
                                                   -----                -----
    Total operating expenses..................      29.3                 29.5
                                                   -----                -----
    Operating income..........................       0.9                  0.3
Other (expense) income, net...................      (0.3)                 0.4
                                                   -----                -----
Income before provision for income taxes......       0.6                  0.7
Provision for income taxes....................       0.6                  0.1
                                                   -----                -----
Net income....................................       0.0%                 0.6%
                                                   =====                =====

     Three Months Ended March 31, 2002  Compared to Three Months Ended March 31,
2001

     The following  discussion  compares the consolidated  results for the three
months ended March 31, 2002 and the three months ended March 31, 2001.

     Revenue.  Total revenue  decreased by 20.1%,  or $6.2  million,  from $30.8
million for the three  months  ended March 31,  2001,  to $24.6  million for the
three months ended March 31, 2002. This decrease was  attributable  primarily to
the continued  weakness in the global economy and the resulting impact on the IT
services market.  Throughout the year, the effects of the uncertain and weakened
economic climate impacted the Company, as customers delayed and/or


                                     - 16 -
<PAGE>

decreased the scope of IT projects,  and as the Company experienced  competitive
pricing pressures in the provision of consulting services.

     In November 2001, the Emerging  Issues Task Force ("EITF") of the Financial
Accounting Standards Board ("FASB") concluded that reimbursable  "out-of-pocket"
expenses should be classified as revenue,  and correspondingly cost of services,
in the statement of operations.  Most service  companies,  whose employees incur
incidental expenses such as airfare,  mileage, hotel and out-of-town meals while
working on behalf of customers, previously reported reimbursable "out-of-pocket"
expenses on a "net" basis in the statement of operations. Accordingly, effective
January 1, 2002,  the Company has reported  gross  reimbursable  "out-of-pocket"
expenses  incurred  as both  revenue  and  cost of  sales  in the  statement  of
operations. The Company has also reclassified prior period financial information
for presentation consistent with the new EITF accounting guidance. The impact of
this  reclassification  was an  increase  to both  revenue  and cost of sales of
$497,000  and  $752,000  for the three  months  ended  March 31,  2002 and 2001,
respectively.

     Gross profit.  The Company's cost of sales  primarily  includes the cost of
salaries to consultants  and related  employee  benefits and payroll taxes.  The
Company's cost of sales decreased by 20.5%, or $4.4 million,  from $21.6 million
for the three months ended March 31, 2001, to $17.2 million for the three months
ended March 31, 2002.  The Company's  gross profit  decreased by 19.0%,  or $1.7
million,  from $9.2 million for the three  months ended March 31, 2001,  to $7.4
million  for  the  three  months  ended  March  31,  2002.   This  decrease  was
attributable  primarily to lower revenues.  Gross margin  increased  slightly to
30.2% for the three  months ended March 31, 2002 from 29.8% for the three months
ended March 31, 2001. The Company was able to slightly  improve gross margins by
reducing non-billable consultant time and other related costs.

     Selling,  general  and  administrative   expenses.   Selling,  general  and
administrative  expenses  primarily  consist  of  administrative  salaries,  and
related benefits costs,  occupancy costs, sales person compensation,  travel and
entertainment  and  professional  fees.  Selling,   general  and  administrative
expenses  decreased  by 19.9%,  or $1.6  million,  to $6.5 million for the three
months ended March 31, 2002,  from $8.1 million for the three months ended March
31,  2001,  but  remained  constant  as a  percentage  of revenue at 26.4%.  The
decrease in selling,  general and administrative  expenses, in absolute dollars,
was related  primarily  to the further  containment  of  discretionary  spending
throughout the Company, as well as the downsizing initiative completed in Europe
during the prior quarter.

     Depreciation  and  amortization.  Depreciation  and  amortization  expenses
decreased 25.3% to $706,000 for the three months ended March 31, 2002,  compared
to $945,000  for the three  months  ended March 31,  2001.  The  decrease is due
primarily to the amortization  and  depreciation  associated with the intangible
assets and  long-lived  assets that were  written-down  as part of the Company's
restructuring  and other  special  charges  provision  during the quarter  ended
December 31, 2001.

     Other (expense) income,  net. The Company earned $37,000 in interest income
during the three months ended March 31, 2002,  compared with $344,000 during the
three months ended


                                     - 17 -
<PAGE>

March 31,  2001.  The  decrease in interest  income is related  primarily to the
Company not  recording  accrued  interest on the balance of the note  receivable
with SeraNova subsequent to the maturity date of the note of July 31, 2001. Such
note receivable is currently in default and the Company has commenced litigation
against SeraNova (see Part II, Item 1, Legal Proceedings).  The Company incurred
$105,000  and $223,000 in interest  expense  during the three months ended March
31, 2002 and 2001, respectively,  related primarily to borrowings under its line
of  credit.  Borrowings  under  the line of credit  were used to fund  operating
activities. The decrease in interest expense results from a combination of lower
outstanding borrowings under the line of credit and lower interest rates charged
on outstanding borrowings during the three months ended March 31, 2002.

     Provision for income  taxes.  The  Company's  effective  rate was 92.3% and
15.7% for the three months ended March 31, 2002 and 2001, respectively. The high
tax rate for the three months ended March 31, 2002,  results from the  valuation
allowances  provided for the losses  generated in Europe and  Asia-Pacific.  The
Company's  net deferred tax asset as of March 31, 2002 relates  primarily to the
US operations. Based on anticipated profitability in the near future, management
believes  it is more likely than not,  that the net  deferred  tax asset of $1.6
million will be realized.

     In  1996,  the  Company  elected  a five  year tax  holiday  in  India,  in
accordance with a local tax incentive  program whereby no income tax will be due
in such period.  Such tax holiday was extended an additional five years in 1999.
Effective  April 1, 2000 pursuant to changes  introduced  by the Indian  Finance
Act, 2000,  the tax holiday  previously  granted is no longer  available and has
been  replaced  in the form of a tax  deduction  incentive.  The  impact of this
change is not expected to be material to the consolidated  financial  statements
of the  Company.  For the three  months  ended March 31, 2002 and 2001,  the tax
holiday and new tax deduction  favorably  impacted the  Company's  effective tax
rate.

     The Company's Indian  subsidiary has received an assessment from the Indian
taxing  authority  denying tax  exemptions  claimed for certain  revenue  earned
during the fiscal years ended March 31, 1998 and March 31, 1999.  The assessment
is  for  20  million  rupees,  or  approximately   $417,000.   Management  after
consultation  with its  advisors,  believes  the  Company is entitled to the tax
exemption claimed and thus has not recorded a liability as of March 31, 2002. If
the Company is not successful with its appeal, which was filed in 2001, a future
charge  of  approximately  $417,000  would  be  recorded  and  reflected  in the
Company's consolidated statement of operations.

RESULTS OF OPERATIONS BY BUSINESS SEGMENT

     The Company has four reportable operating segments, which are organized and
managed on a geographical basis, as follows:

     o    United  States  ("US") - the  largest  segment  of the  Company,  with
          operations  in  the  United  States  and  Puerto  Rico.  Includes  the
          operations  of the Company's US  subsidiary,  Empower,  Inc.,  and all
          corporate functions and activities.  The US and corporate headquarters
          are located in Edison, New Jersey;


                                     - 18 -
<PAGE>

     o    Asia-Pacific  ("APAC") - includes  the  operations  of the  Company in
          Australia, Hong Kong, Indonesia, Japan, New Zealand and Singapore. The
          APAC headquarters are located in Wellington, New Zealand;

     o    Europe - includes the operations of the Company in Denmark, Sweden and
          the United Kingdom. The European  headquarters are located in Norfolk,
          United Kingdom; and

     o    India - includes the  operations  of the Company in India and Jamaica.
          The Indian headquarters are located in Hyderabad, India.

     Each of the operating segments has a Managing Director,  or manager with an
equivalent position,  who reports directly to the Chief Executive Officer (CEO).
Currently,  the CEO is fulfilling the  requirements  of this position in the US.
The CEO has been identified as the Chief Operating Decision Maker (CODM) because
he has final  authority  over  resource  allocation  decisions  and  performance
assessment.  The CODM regularly receives certain discrete financial  information
about the  geographical  operating  segments,  including  primarily  revenue and
operating income, to evaluate segment performance.


     Three Months Ended March 31, 2002  Compared to Three Months Ended March 31,
2001

     The following  discussion compares the segment results for the three months
ended March 31, 2002 and the three months ended March 31, 2001.

     Revenue.  The following table displays  revenues by reportable  segment (in
thousands).

                                     THREE MONTHS ENDED MARCH 31
                          ----------------------------------------------------
                                   2002                        2001
                          -----------------------     ------------------------
                                    PERCENTAGE OF                PERCENTAGE OF
                          DOLLARS       TOTAL         DOLLARS        TOTAL
                          -------   -------------     -------    -------------

United States...........  $17,469       71.0%         $19,996         64.9%
Asia-Pacific............    2,501       10.2            3,703         12.1
Europe..................    1,585        6.4            3,886         12.6
India...................    3,054       12.4            3,204         10.4
                          -------      -----          -------        -----
Total...................  $24,609      100.0%         $30,789        100.0%
                          =======      =====          =======        =====

     US revenue decreased by 12.6%, or $2.5 million,  from $20.0 million for the
three months ended March 31, 2001,  to $17.5  million for the three months ended
March 31,  2002.  The  decrease  was  attributable  primarily  to the  continued
weakness in the US economy and the resulting  impact on the IT services  market.
Throughout the year, the effects of the uncertain and weakened  economic climate
impacted the US, as customers delayed and/or decreased the scope of IT projects,
and as the US  experienced  competitive  pricing  pressures in the  provision of
consulting services.

     APAC revenue decreased by 32.5%, or $1.2 million, from $3.7 million for the
three months  ended March 31,  2001,  to $2.5 million for the three months ended
March 31, 2002. The


                                     - 19 -
<PAGE>

decrease was due primarily to  challenging  economic  conditions  throughout the
Asia-Pacific  region,  including New Zealand (a decrease of $567,000),  Japan (a
decrease of $373,000), Indonesia (a decrease of $117,000), Australia (a decrease
of $89,000) and Singapore (a decrease of $56,000).

     Europe revenue  decreased by 59.2%, or $2.3 million,  from $3.9 million for
the three  months  ended March 31,  2001,  to $1.6  million for the three months
ended March 31,  2002.  The decrease  was  attributable  primarily to the United
Kingdom ("UK")  operations (a decrease of $2.2 million),  while the consolidated
Nordic  operations  (Denmark  and  Sweden)  decreased  slightly  (a  decrease of
$109,000).  The UK  operations  were  negatively  impacted  by  the  competitive
economic  conditions  and  the  resulting  impact  on  the IT  services  market,
particularly  the SAP  market.  As a  result,  the  Company  executed  a plan to
reorganize and downsize the Company's operations in the UK during late 2001. The
UK operations now consist of a much smaller core group of billable  consultants,
focused  primarily on providing  application  management and support services in
the PeopleSoft market.

     India  revenue  decreased by 4.7%,  or $150,000,  from $3.2 million for the
three months  ended March 31,  2001,  to $3.1 million for the three months ended
March 31, 2002. The decrease was attributable primarily to continued weakness in
the global  economy,  as a majority of the total  revenue  generated in India is
derived from providing  offshore  development and support  services to customers
sourced through the Company's affiliated entities in other parts of the world.

     Operating  Income (Loss).  The following  table displays  operating  income
(loss) by reportable segment (in thousands).

                                                 THREE MONTHS ENDED MARCH 31
                                                 ---------------------------
                                                   2002                2001
                                                 -------             -------
United States.........................           $   115             $   (10)
Asia-Pacific..........................              (199)               (269)
Europe................................              (189)               (733)
India.................................               483               1,114
                                                 -------             -------
Total.................................           $   210             $   102
                                                 =======             =======

     US  operating  income  increased by  $125,000,  from an  operating  loss of
$10,000  for the three  months  ended March 31,  2001,  to  operating  income of
$115,000 for the three  months  ended March 31, 2002.  The increase in operating
income was  attributable  primarily to the further  containment of discretionary
expenditures, such as employee bonuses and travel and entertainment expenses.

     APAC operating loss declined by $70,000, from an operating loss of $269,000
for the three months ended March 31, 2001, to an operating  loss of $199,000 for
the three  months  ended  March  31,  2002.  The  improvement  was  attributable
primarily to the operating performance in Japan (an improvement of $134,000) and
Indonesia (an improvement of $60,000), as both countries realized an improvement
in gross profit margins as consultant  utilization improved. The improvement was
partially offset by a decline in operating income in New Zealand (a


                                     - 20 -
<PAGE>

decrease of $94,000) and  Singapore (a decrease of  $23,000),  as gross  margins
declined as a result of local market conditions.

     Europe  operating  loss  declined by $544,000,  from an  operating  loss of
$733,000  for the three months  ended March 31,  2001,  to an operating  loss of
$189,000  for the  three  months  ended  March 31,  2002.  The  improvement  was
attributable  primarily to an improvement in the operating performance of the UK
of $630,000, while the Nordic operations declined by $86,000. The improvement in
the UK operating  performance resulted primarily from the restructuring  program
initiated in the UK during late 2001.  As noted  above,  the UK  operations  now
consist of a much smaller core group of billable consultants,  focused primarily
on  providing  application  management  and support  services in the  PeopleSoft
market.  The  decline  in  the  Nordic  operating   performance   resulted  from
competitive local conditions, primarily within the SAP software market.

     India operating income  decreased by 56.6%, or $631,000,  from $1.1 million
for the three  months  ended March 31,  2001,  to $483,000  for the three months
ended March 31,  2002.  The  decrease  was  attributable  primarily to continued
weakness in the global economy,  as a majority of the total revenue generated in
India is derived from providing  offshore  development  and support  services to
customers  sourced through the Company's  affiliated  entities in other parts of
the world.

LIQUIDITY AND CAPITAL RESOURCES

     The Company had cash and cash equivalents of $2.0 million at March 31, 2002
and $2.1 million at December 31, 2001. The Company had working  capital of $17.8
million at each of March 31, 2002 and December 31, 2001.

     Cash  provided by  operating  activities  was $123,000 for the three months
ended March 31, 2002,  resulting primarily from depreciation and amortization of
$968,000,  the  provision  for  doubtful  accounts  of  $210,000,  a decrease in
unbilled  services of $563,000 and an increase in accounts  payable of $602,000.
These  amounts were  partially  offset by increases  in accounts  receivable  of
$345,000  and  other  current  assets  of  $466,000  and  decreases  in  accrued
restructuring charges of $431,000 and deferred revenue of $955,000.  The changes
in accounts  receivable,  unbilled  services,  other  current  assets,  accounts
payable and deferred  revenue  result  primarily  from timing  differences.  The
decrease in accrued  restructuring charges results from the payment of severance
and related costs and exit costs.  Cash provided by operating  activities during
the three months ended March 31, 2001 was $2.6 million.

     The Company  invested  $355,000  and $1.9  million in  computer  equipment,
internal-use  computer  software and office  furniture  and fixtures  during the
three months ended March 31, 2002 and 2001,  respectively.  The decrease results
from  concerted  efforts by  management to closely  monitor and curtail  capital
expenditures.

     In  conjunction  with the  strategic  decision to focus on the emerging ASP
market,  the  Company  invested  $2.7  million in  purchased  computer  software
licenses during the three months ended March 31, 2001. The computer software was
to be re-sold to customers as part of the


                                     - 21 -
<PAGE>

Company's ASPPlus solutions and services. However, during the three months ended
December 31, 2001, the Company  recorded a write-down of the purchased  computer
software,  as management  believed the recoverability of the value of the assets
acquired  for use in the ASP service  offering was  unlikely  given  current and
future expected market conditions.

     On May 31, 2000, the Company and PNC Bank, N.A. (the "Bank") entered into a
three-year  revolving  credit  facility.  Such credit facility is comprised of a
revolving  line of credit  pursuant  to which the Company can borrow up to $20.0
million either at the Bank's prime rate per annum or the Euro Rate plus 1.75% to
2.5% based upon the Company's  ratio of debt to EBITDA.  The credit  facility is
collateralized by substantially all of the assets of the Company's United States
based operations. The maximum borrowing availability under the line of credit is
based upon a percentage of eligible billed and unbilled accounts receivable,  as
defined. As of March 31, 2002, the Company had outstanding  borrowings under the
credit  facility of $4.7 million.  The Company  estimates  undrawn  availability
under  the  credit  facility  to be $6.7  million  as of March 31,  2002.  As of
December  31,  2001,  the Company had  outstanding  borrowings  under the credit
facility of $4.1 million.

     The credit facility provides for the following financial  covenants,  among
other things,  (1) the Company must maintain  consolidated net worth, as defined
("consolidated   net  worth")  of  (a)  not  less  than  95%  of  the  Company's
consolidated  net worth of the immediately  preceding fiscal year-end as at each
such  fiscal  quarter  after  December  31,  2000;  and (b) at least 105% of the
Company's consolidated net worth as of the immediately preceding fiscal year-end
as at each such fiscal  year-end  subsequent  to December  31,  2000;  provided,
however,  the foregoing  covenant shall not be tested for any quarter so long as
the  Company  maintains,  at all  times  during  such  fiscal  quarter,  undrawn
availability  of more  than  $5.0  million  and (2) the  Company  must  maintain
unconsolidated  net worth,  as defined  ("unconsolidated  net worth") of (a) not
less  than 95% of the  Company's  unconsolidated  net  worth of the  immediately
preceding  fiscal  year-end as at each such fiscal  quarter  after  December 31,
2000; and (b) at least 105% of the Company's  unconsolidated net worth as of the
immediately preceding fiscal year-end as at each such fiscal year-end subsequent
to December 31, 2000;  provided,  however,  the foregoing  covenant shall not be
tested for any quarter so long as the  Company  maintains,  at all times  during
such  fiscal   quarter,   undrawn   availability  of  more  than  $5.0  million.
Additionally,  the credit facility contains material adverse change clauses with
regard to the financial  condition of the assets,  liabilities and operations of
the Company.

     As of  December  31,  2001,  the  Company  was not in  compliance  with the
consolidated  net worth and  unconsolidated  net worth financial  covenants.  In
March  2002,  the  Company  finalized  with the Bank the  terms of a waiver  and
amendment  to the  credit  agreement.  The  terms of the  waiver  and  amendment
included,  among  other  things,  (1) a waiver of the  covenant  defaults  as of
December 31, 2001, (2) a modification to the financial covenants to require that
consolidated net worth and  unconsolidated  net worth as of December 31, 2002 be
not less than 102% of  consolidated  net worth  and  unconsolidated  net  worth,
respectively,  as of  December  31,  2001,  and  (3) a  new  financial  covenant
requiring  that  the  Company   generate   earnings  before   interest,   taxes,
depreciation  and  amortization  ("EBITDA")  of at least 90% of the prior year's
EBITDA. The Company was in compliance with all covenants as of March 31, 2002.


                                     - 22 -
<PAGE>

     On May 31,  2000,  SeraNova  and the  Company  formalized  a $15.1  million
unsecured  promissory  note (the "Note")  relating to net borrowings by SeraNova
from the Company  through such date.  The Note bears  interest at the prime rate
plus 1/2%. The Company has recorded total accrued interest of $1.0 million as of
each of March 31, 2002 and December  31, 2001.  The Company has not recorded any
accrued  interest on the balance of the Note  subsequent to the maturity date of
July 31,  2001.  On  September  29,  2000,  the Company  received a $3.0 million
payment from SeraNova.

     In September  2000,  SeraNova  consummated an $8.0 million  preferred stock
financing  with  two  institutional   investors.   According  to  the  mandatory
prepayment provisions of the Note, SeraNova was required to make a prepayment of
$3.0 million on the Note as a result of the stock financing.  Subsequently,  the
Company  finalized with SeraNova the terms of an agreement to waive,  subject to
certain conditions, certain of the mandatory prepayment obligations arising as a
result of the financing.  The terms of the new agreement  included,  among other
things,  that  SeraNova  pay the  Company (i)  $500,000  upon  execution  of the
agreement;  (ii)  $500,000 on or before each of January 31,  2001,  February 28,
2001,  March 31, 2001, April 30, 2001 and May 31, 2001; and (iii) $400,000 on or
before  December 15, 2000 to be applied either as (a) an advance payment towards
a  contemplated  services  arrangement  for  hosting  services to be provided to
SeraNova by the Company (the "Hosting  Agreement");  or (b) in the event that no
such Hosting Agreement is executed on or before December 15, 2000, an additional
advance prepayment toward the principal of the Note.

     The Company  received from SeraNova the $500,000  payment that was due upon
execution of the agreement and a $400,000 payment in December 2000 as an advance
payment  towards  the  principal  of the Note  since no  Hosting  Agreement  was
executed before December 15, 2000.

     In 2001, the Company received principal payments totaling $2.1 million from
SeraNova.  However,  SeraNova  failed to make final  payment of all  amounts due
under the Note to the  Company  as of July 31,  2001.  On August 16,  2001,  the
Company filed a complaint against SeraNova and Silverline  Technologies  Limited
("Silverline"), which acquired SeraNova in March 2001. As of such date, SeraNova
was obligated to pay to the Company the remaining principal  (approximately $9.1
million) and accrued interest  (approximately $1.0 million),  or an aggregate of
$10.1 million.  Although the Company  believes that it is entitled to the entire
$10.1 million balance, there can be no assurance that SeraNova and/or Silverline
will pay the entire balance due the Company.  In the event the Company accepts a
payment in less than full  satisfaction  of the $10.1  million  due, the Company
will record a charge against earnings for such  difference.  The Company has not
recorded a reserve against the remaining balance of $10.1 million under the Note
as of December 31, 2001,  as the amount of loss,  if any,  cannot be  reasonably
estimated. The Company believes that SeraNova and/or Silverline have the ability
to pay  the  entire  balance  due.  The  resolution  of this  uncertainty  could
materially impact the Company's  consolidated  financial position and results of
operations.  In addition,  SeraNova filed a counterclaim against the Company for
unspecified  damages as a set-off against the Company's  claims.  In response to
the Company's request for a statement of damages, SeraNova stated that it was in
the process of calculating its damages,  but for informational  purposes claimed
compensatory  damages  in excess of $5.5  million  and  punitive  damages in the
amount of $10.0


                                     - 23 -
<PAGE>

million  (see Part II, Item 1, Legal  Proceedings).  The  parties are  currently
proceeding  with the discovery  process.  The Company  believes that there is no
basis to support such amounts claimed by SeraNova.

     The Company's 2002 operating plan contains  assumptions  regarding  revenue
and  expenses.  The  achievement  of the operating  plan depends  heavily on the
timing of work performed by the Company on existing  projects and the ability of
the Company to gain and perform  work on new  projects.  Project  cancellations,
delays in the timing of work  performed  by the Company on existing  projects or
the inability of the Company to gain and perform work on new projects could have
an adverse  impact on the Company's  ability to execute its  operating  plan and
maintain  adequate  cash  flow.  In the  event  actual  results  do not meet the
operating  plan,  management  believes  it could  execute  contingency  plans to
mitigate such effects.  Such plans include additional cost reductions or seeking
additional financing.  Considering the cash on hand, the remaining  availability
under the credit facility and based on the achievement of the operating plan and
management's  actions taken to date,  management  believes it has the ability to
continue to generate  sufficient  cash to satisfy its operating  requirements in
the  normal  course  of  business.  However,  no  assurance  can be  given  that
sufficient cash will be generated from operations.

     The Company believes that its available funds, together with current credit
arrangements and the cash flow expected to be generated from operations, will be
adequate to satisfy its current and planned  operations for at least the next 12
months.

NASDAQ NATIONAL MARKET

     On April 4,  2002,  the  Company  received a letter  from the Nasdaq  Stock
Market   ("Nasdaq")   advising  the  Company  that  it  failed  to  meet  Nasdaq
requirements  for continued  listing as the closing "bid" price of the Company's
common  stock was less than  $1.00 for 30 trading  days.  On May 13,  2002,  the
Company  received a letter from Nasdaq advising the Company that it had regained
compliance with the continued listing requirements.

     In the future,  should the Company  fail to maintain a minimum  closing bid
price of $1.00 for a period of 30 consecutive  trading days, it would once again
be subject to notification by Nasdaq that it failed to meet Nasdaq  requirements
for continued listing. Upon such notice, the Company would have 90 days from the
notice date to regain  compliance  by having the bid price for its Common  Stock
close at $1.00 or greater for a minimum of 10  consecutive  trading  days during
the 90-day compliance  period. A delisting from the Nasdaq National Market could
severely  and  adversely  affect the market  liquidity of the  Company's  Common
Stock.

COMMITMENTS

     During  late  2001,  SeraNova  failed  to  pay  certain  outstanding  lease
obligations  to the  Company's  landlords.  Accordingly,  on March 4, 2002,  the
Company filed an arbitration  demand with the American  Arbitration  Association
against SeraNova and Silverline  Technologies.  The demand for arbitration seeks
reimbursement from SeraNova and/or Silverline Technologies for all rent payments
made by the  Company on behalf of SeraNova  and for  jurisdiction  over  further
payment defaults by SeraNova and/or  Silverline  Technologies to the Company and
its landlords


                                     - 24 -
<PAGE>

(see Part II, Item 1, Legal Proceedings).  The Company does not believe that the
outcome of this claim will have a  materially  adverse  effect on the  Company's
business,  financial  condition  or  results of  operations.  The  Company  also
believes it has sufficient  funds to pay the  outstanding  lease  obligations on
behalf of SeraNova for the shared office space for at least the next 12 months.

PENDING ACCOUNTING PRONOUNCEMENT

     In  August  2001,  the FASB  issued  SFAS No.  143,  "Accounting  for Asset
Retirement  Obligations."  SFAS  No.  143  addresses  financial  accounting  and
reporting  obligations  associated  with the  retirement of tangible  long-lived
assets and the associated asset retirement  costs. SFAS No. 143 is effective for
fiscal years beginning after June 14, 2002. The Company has evaluated the impact
of the  adoption  of SFAS No.  143,  which is  effective  for the  Company as of
January  1,  2003,  does not  believe  it will  have a  material  impact  on the
Company's financial position or results of operations.

EUROPEAN MONETARY UNION (EMU)

     The euro was  introduced  on  January  1,  1999,  at which  time the eleven
participating  EMU member countries  established  fixed conversion rates between
their  existing   currencies  (legacy  currencies)  and  the  euro.  The  legacy
currencies  will  continue to be used as legal tender  through  January 1, 2002;
thereafter, the legacy currencies will be canceled and euro bills and coins will
be used for cash  transactions  in the  participating  countries.  The Company's
European  sales and  operations  offices  affected by the euro  conversion  have
addressed  the systems  issues raised by the euro  currency  conversion  and are
cognizant of the business  implications of converting to a common currency.  The
Company is still  evaluating the ultimate  financial impact of the conversion on
its  operations,  if any,  given  that the  impact  will be  dependent  upon the
competitive  situations that exist in the various  regional markets in which the
Company  participates and the potential  actions that may or may not be taken by
the Company's competitors and suppliers.

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     Although the Company cannot accurately determine the precise effect thereof
on its  operations,  it does not believe  inflation,  currency  fluctuations  or
interest rate changes have  historically  had a material effect on its revenues,
sales or results of operations.  Any significant effects of inflation,  currency
fluctuations  and  changes  in  interest  rates on the  economies  of the United
States, Asia and Europe could adversely impact the Company's revenues, sales and
results of operations in the future.  If there were a material adverse change in
the  relationship  between European  currencies  and/or Asian currencies and the
United  States  Dollar,  such change would  adversely  affect the results of the
Company's  European  and/or  Asian  operations  as  reflected  in the  Company's
financial  statements.  The Company has not hedged its exposure  with respect to
this currency  risk,  and does not expect to do so in the future,  since it does
not believe that it is practicable for it to do so at a reasonable cost.


                                     - 25 -
<PAGE>

PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

     On February 7, 2001, NSA Investments II LLC filed a complaint in the United
States District Court for the District of  Massachusetts  naming,  among others,
SeraNova,  the Company  and  Rajkumar  Koneru,  a director  of the  Company,  as
defendants.  The  plaintiff  alleges that it invested  $4,000,000 in SeraNova as
part of a private placement of SeraNova common stock in March 2000, prior to the
spin-off of SeraNova by the Company. The complaint, which seeks compensatory and
punitive  damages,  alleges  that the  Company,  as a  "controlling  person"  of
SeraNova, is jointly and severally liable with and to the extent as SeraNova for
false and misleading statements constituting  securities laws violations.  After
being served with the complaint,  the Company made a request for indemnification
from  SeraNova  pursuant to the various  inter-company  agreements in connection
with the spin-off. By letter dated April 13, 2001,  SeraNova's counsel,  advised
the Company that SeraNova acknowledged liability for such indemnification claims
and has  elected to assume the  defense of the  plaintiff's  claims.  In October
2001,  the motion to dismiss,  filed on behalf of the  Company in May 2001,  was
denied  without  prejudice  to  refile  at the  close of the  discovery  period.
Court-ordered  mediation  between the plaintiff and SeraNova  during January and
February 2002 was  unsuccessful.  In January 2002,  plaintiff filed a motion for
partial  summary  judgment as to certain  claims  against  SeraNova.  No summary
judgment motion was filed against the Company.  SeraNova filed its opposition to
plaintiff's motion for partial summary judgment in February 2002. A hearing date
for such  partial  summary  judgment  motion has not yet been  scheduled  by the
court. The Company denies the allegations made and intends to defend  vigorously
the claims  made by the  plaintiff.  It is too early in the  dispute  process to
determine  the impact,  if any,  that such dispute will have upon the  Company's
business, financial condition or results of operations.

     On August 16, 2001,  the Company filed a complaint in the Superior Court of
New Jersey, Middlesex County, against SeraNova, Inc. and Silverline Technologies
Limited,  which  acquired  SeraNova in March 2001.  The  complaint,  which seeks
damages,  alleges among other things that  SeraNova  failed to pay amounts owing
under (i) an unsecured promissory note totaling  $10,079,717,  and (ii) a system
implementation  project totaling $511,573.  On September 25, 2001,  SeraNova and
Silverline  filed  a joint  Answer  to the  Company's  complaint.  In  addition,
SeraNova filed a counterclaim  against the Company for unspecified  damages as a
set-off against the Company's claims.  Thereafter,  in response to the Company's
request for a statement of damages,  SeraNova  stated that it was in the process
of calculating its damages, but for informational  purposes claimed compensatory
damages  in  excess  of  $5,500,000  and  punitive  damages  in  the  amount  of
$10,000,000.  The parties are currently  proceeding with the discovery  process.
The Company  believes  that there is no basis to support the amounts  claimed by
SeraNova  in  its  counterclaim  for  compensatory  and  punitive  damages.  The
inability  of the Company to collect the full  amount due from  SeraNova  and/or
Silverline  or an adverse  decision  with  respect to the  Company  relating  to
SeraNova's   counterclaim  could  negatively  affect  the  Company's   business,
financial condition or results of operations.

     On March 4, 2002, the Company filed an arbitration demand with the American
Arbitration Association against SeraNova, Inc. and Silverline Technologies.  The
demand for


                                     - 26 -
<PAGE>

arbitration,  which seeks damages,  alleges among other things that  respondents
failed to pay outstanding  lease  obligations to the Company's  landlords and to
reimburse the Company for all rent payments made by the Company on behalf of the
respondents.  As of the date the  arbitration  demand  was  filed,  the  Company
claimed that the outstanding lease obligations totaled $236,010.  The Company is
further seeking jurisdiction over further payment defaults by the respondents to
the Company and its landlords.  The Company does not believe that the outcome of
this claim will have a  materially  adverse  effect on the  Company's  business,
financial condition or results of operations.

     There is no other  material  litigation  pending to which the  Company is a
party or to which any of its property is subject.

ITEM 5.   OTHER INFORMATION

     On May 2,  2002,  the  Company  filed a Form 8-K with  the  Securities  and
Exchange  Commission and issued a press release  announcing that the Company had
rescheduled  its Annual  Meeting of  Shareholders  (the  "Annual  Meeting")  for
Tuesday,  July  2,  2002.  Shareholders  of the  Company  were  instructed  that
shareholder  proposals  must be  submitted  to the Company at its offices at 499
Thornall Street,  Edison, New Jersey 08837,  within a reasonable time before the
Company  began to print and mail its proxy  materials in order to be  considered
for inclusion in the Company's  proxy  materials for  presentation at the Annual
Meeting.  Shareholders were further advised that the Company anticipated mailing
its proxy materials on or about Friday, June 7, 2002.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits.

          None.

     (b)  Reports on Form 8-K.

          On January 14, 2002,  the Company  filed a Current  Report on Form 8-K
          with  the  Securities  and  Exchange  Commission  announcing  that the
          registrant will take approximately  $13.4 million in restructuring and
          other special charges in the fourth quarter of 2001.

          On April 12, 2002, subsequent to the quarter ended March 31, 2002, the
          Company  filed a Current  Report on Form 8-K with the  Securities  and
          Exchange  Commission  relating to the  scheduling of the  registrant's
          Annual Meeting of Shareholders.

          On May 2, 2002,  subsequent to the quarter  ended March 31, 2002,  the
          Company  filed a Current  Report on Form 8-K with the  Securities  and
          Exchange  Commission  relating to the rescheduling of the registrant's
          Annual Meeting of Shareholders.


                                     - 27 -
<PAGE>

                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                  Intelligroup, Inc.


DATE: May 15, 2002                By: /s/ Nagarjun Valluripalli
                                     ------------------------------------------
                                     Nagarjun Valluripalli,
                                     Chairman of the Board, President and Chief
                                     Executive Officer
                                     (Principal Executive Officer)


DATE: May 15, 2002                By: /s/ Nicholas Visco
                                     ------------------------------------------
                                     Nicholas Visco,
                                     Senior Vice President-Finance and
                                     Administration and Chief Financial Officer
                                     Principal Financial and Accounting Officer)



                                     - 28 -