UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 September 30, 2008

Commission file number 0-20943
INTELLIGROUP, INC.
(Exact Name of Registrant as Specified In Its Charter)
New Jersey	11-2880025
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
5 Independence Way, Suite 220, Princeton, New Jersey	08540
(Address of Principal Executive Offices)	(Zip Code)
(646) 810-7400
(Registrant’s Telephone Number, Including Area Code)

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

Yes x       No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer:  o Accelerated filer:  o Non-accelerated filer:  o Smaller Reporting Company  x

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).

Yes o       No x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of November 7, 2008:
Class	Number of Shares
Common Stock, $.01 par value	42,171,515

1

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of September 30, 2008 (un audited) and December 31, 2007	4
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Nine months and	5
	Three Months Ended September 30, 2008 and 2007 (un audited)
	Consolidated Statements of Cash Flows for the Nine months Ended September 30, 2008 and 2007 (un audited)	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1a.	Risk Factors	25
Item 4	Submission of Matters to a Vote of Security Holders	25
Item 6.	Exhibits	26
Signatures		29

2

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include, among other things, business strategy and expectations concerning industry conditions, market position, future operations, margins, profitability, liquidity and capital resources. Forward-looking statements generally can be identified by the use of terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate” or “believe” or similar expressions or the negatives thereof. These expectations are based on management’s assumptions and current beliefs based on currently available information. Although the Company believes that the expectations reflected in such statements are reasonable, it can give no assurance that such expectations will be correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this quarterly report on Form 10-Q and the Company does not have any obligation to update the forward looking statements. The Company’s operations are subject to a number of uncertainties, risks and other influences, many of which are outside its control, and any one of which, or a combination of which, could cause its actual results of operations to differ materially from the forward-looking statements. Important factors that could cause actual results to differ materially from its expectations are disclosed in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and listed under Item A “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2007 filed with the Commission on March 31, 2008 and elsewhere in this quarterly report on Form 10-Q.

3

PART I FINANCIAL STATEMENTS

ITEM 1.

INTELLIGROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands except par value)

	September 30			December 31
	2008			2007
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	8,737		$	8,419
Accounts receivable, less allowance for doubtful accounts of $1,612 and $1,240 at
September 30, 2008 and December 31, 2007, respectively		22,320			24,493
Unbilled services, less allowance for doubtful accounts of $911 as at September 30,
2008 and December 31, 2007		16,126			11,393
Prepaid expenses & taxes		1,841			1,567
Deferred tax asset, current portion		701			589
Other current assets		1,043			1,965
Total current assets		50,768			48,426
Property and equipment, net		4,315			6,470
Goodwill and Intangibles		2,512			3,034
Restricted Cash & Investments		3,983			4,848
Deferred taxes and other assets		2,779			2,684
Total Assets	$	64,357		$	65,462
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit borrowings	$	2,852		$	6,566
Accounts payable		4,397			3,542
Accrued payroll and related taxes		11,759			11,645
Accrued expenses and other current liabilities		5,844			4,878
Deferred revenue		1,287			3,345
Tax Payable		1,287
Current portion of obligations under capital lease		226			457
Total current liabilities		27,652			30,433
Obligations under capital lease, net of current portion and long term debt		253			375
Deferred revenue, net of current portion		524			691
Other long-term liabilities		1,200			579
Total Liabilities		29,629			32,078
Commitments and contingencies
SHARE HOLDERS' EQUITY
Preferred stock, $.01 par value, 5,000,000 shares authorized, none issued or outstanding		—			—
Common stock, $.01 par value, 50,000,000 shares authorized and 42,172,000 shares
issued and outstanding at September 30, 2008 and 42,160,000 shares issued and
outstanding at December 31, 2007.		421			421
Additional paid-in capital		71,927			71,119
Accumulated deficit		(35,095	)		(40,789	)
Accumulated other comprehensive income		(2,525	)		2,633
Total shareholders’ equity		34,728			33,384
Total liabilities and shareholders’ equity	$	64,357		$	65,462

See accompanying notes

4

INTELLIGROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(Dollars in thousands except per share data)

	NINE MONTHS ENDED						THREE MONTHS ENDED
	SEPTEMBER 30,						SEPTEMBER 30
	2008			2007			2008			2007
Revenue	$	119,797		$	106,745		$	41,207		$	38,010
Cost of revenue		82,453			78,817			28,326			26,945
Gross profit		37,344			27,928			12,881			11,065
Selling, general and administrative expenses		27,466			26,087			8,798			8,397
Depreciation and amortization		1,685			1,799			222			560
Total operating expenses		29,151			27,886			9,020			8,957
Operating Income		8,193			42			3,861			2,108
Interest Income / (expense), net		(168	)		(516	)		12			(142	)
Other income / (expense)		(1,236	)		756			(720	)		817
Income before income tax provision		6,788			282			3,153			2,783
Provision for income taxes		1,094			631			456			182
Net income/(loss)	$	5,694		$	(349	)	$	2,696		$	2,601
Income/(Loss) per share:
Basic net income/(loss) per share	$	0.14		$	(0.01	)	$	0.06		$	0.06
Diluted net income/(loss) per share	$	0.13		$	(0.01	)	$	0.06		$	0.06
Weighted average number of common shares
outstanding – basic		42,160			41,988			42,160			42,078
Weighted average number of common shares
outstanding – diluted		42,439			41,988			42,580			42,181
Comprehensive income
Net income/(loss)	$	5,694		$	(349	)	$	2,696		$	2,601
Other comprehensive income /(loss) -
currency translation adjustments	$	(5,158	)	$	2,389		$	(2,619	)	$	388
Comprehensive income	$	536		$	2,040		$	77		$	2,989

See accompanying notes.

5

INTELLIGROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

	NINE MONTHS ENDED SEP 30
	2008			2007
Cash flows from operating activities:
Net Income / (loss)	$	5,694		$	(349	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		1,917			2,045
Provision for doubtful accounts and advances		664			70
Stock compensation expense		792			859
Exchange (gain) loss		1,370			1,143
Deferred taxes		(1,732	)		(116	)
Changes in operating assets and liabilities:
Accounts receivable		900			(971	)
Unbilled services		(4,931	)		(1,638	)
Prepaid expenses and other current assets		(762	)		(404	)
Other assets		(232	)		386
Restricted Cash		62			(503	)
Accounts payable		(1,351	)		287
Accrued payroll and related taxes		615			190
Accrued expenses and other current liabilities		1,246			52
Deferred revenue and advanced payments		(1,198	)		(354	)
Income taxes payable		2,368			(243	)
Other long-term liabilities		(110	)		598
Net cash provided by operating activities	$	5,312		$	1,050
Cash flows from investing activities:
Purchase of property and equipment	$	(758	)	$	(2,308	)
Proceeds from sale of equipment		74			36
Purchases of investments		-			(6,290	)
Proceeds from sale of Investments		-			7,136
Acquisition of businesses		-			(3,013	)
Net cash used in investing activities	$	(684	)	$	(4,439	)
Cash flows from financing activities:
Principal payments under capital leases	$	(533	)	$	(575	)
Proceeds from exercise of stock options		15			240
Net change in line of credit borrowings		(3,441	)		(965	)
Net cash used in financing activities	$	(3,959	)	$	(1,300	)
Effect of foreign currency exchange rate changes on cash	$	(351	)	$	324
Net increase (decrease) in cash and cash equivalents		318			(4,366	)
Cash and cash equivalents - beginning of year	$	8,419		$	12,277
Cash and cash equivalents - end of the period	$	8,737		$	7,911

See accompanying notes.

6

INTELLIGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2008 AND 2007

NOTE 1- BASIS OF PRESENTATION

     The condensed consolidated financial statements and accompanying financial information as of September 30, 2008 and for the three and nine months ended September 30, 2008 and 2007 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 unaudited condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America and the instructions of Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to accounting requirements of the Securities and Exchange Commission applicable to quarterly reports on Form 10-Q, the accompanying unaudited condensed consolidated financial statements and these notes do not include all disclosures required by accounting principles generally accepted in the United States of America for audited financial statements. Accordingly, these statements should be read in conjunction with the accounting policies and Notes to Consolidated Financial Statements included in the Company’s consolidated financial statements filed on Form 10-K for the year ended December 31, 2007.

     The amounts for the December 31, 2007 balance sheet have been extracted from the audited consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2007.

     The results of the Company’s operations for the three and nine months ended September 30, 2008 are not necessarily indicative of the results of operations to be expected for the full year ending December 31, 2008.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Earnings (loss) per Common Share

     Basic net income (loss) per share (“EPS”) is computed using the weighted average number of common shares outstanding for the period. Diluted earnings per share include additional dilution from potential common stock, such as stock issuable pursuant to the exercise of stock options. Potential common stock is not included in the computation of diluted earnings per share when the exercise price of the outstanding options exceeds the current market value or the Company reports a loss because to do so would be anti-dilutive for the periods presented.

     For the three months ended September 30, 2008 and 2007, respectively, options to purchase 1,291,054 and 1,404,198 shares of common stock were not included in the computation of diluted earnings (loss) per share because inclusion would have been anti-dilutive. For the nine months ended September 30, 2008 and 2007, respectively, options to purchase, 335,138 and 2,048,372 shares of common stock were not included in the computation of diluted earnings (loss) per share because inclusion would have been anti-dilutive.

Derivative Instruments

     The Company has entered into foreign currency derivative contracts to manage a portion of its foreign currency risk related to U.S. Dollar denominated asset balances at our Indian subsidiary. The foreign currency derivative contract is marked-to-market and recorded at fair value with unrealized gains and losses reported along with foreign currency gains or losses in the caption “other income (expense),” on the Company’s consolidated statements of operations and comprehensive income (loss). During the three months ended September 30, 2008, the Company entered into foreign currency forward contracts totaling $4.80 million to sell US dollars for Indian Rupees. As of September 30, 2008, a total of $25 million of notional amounts under option contracts and $12.55 million under forward contracts remain and are expected to be settled by May 2010. These contracts are expected to be settled monthly over the period until the maturity date. The Company has an option to settle its option contracts in the event the contracted rates are more favorable than the prevalent spot rates.

At September 30, 2008, summary information about the instruments is as follows.

	Option Contracts	Forward Contracts
Notional Amount	$25 million	$12.55 million
Rates	INR 39.70 to 43.45	INR 43.21 to 44.93
Effective date	05/18/07, 11/28/07 and 01/17/08	6/5/2008,6/6/08,6/30/2008,
		8/14/2008 and 8/20/2008
Maturity Dates	10/28/2008 to 05/26/10	12/30/2008 to 12/30/09
Fair Value	$ (2.4) million	$ (0.8) million

Income Taxes

     The Company records tax expense/benefit based upon the taxable income/loss recorded in each tax jurisdiction. The Company recorded an income tax expense of $0.5 million on a pretax income of $3.2 million for the three months ended September 30, 2008 as opposed to an income tax expense of $0.2 million on pretax income of $2.8 million for the three months ended September 30, 2007. The Company’s effective tax rate reflects the impact of earnings in various tax jurisdictions as well as historical losses incurred in certain of those jurisdictions.

     The Company’s India subsidiary received tax assessments for the fiscal years ended March 31, 1998 to 2003 challenging the tax exemptions of certain revenue earned and disallowing certain expenses. The assessments demanded an additional tax of INR 30.1 million (or approximately $0.6 million). The amounts were deposited by the Company under protest and were fully reserved for. The Company is under litigation in respect of these assessments and received favorable judgment during 2007 for the fiscal years ended March 31, 1998 through March 31, 2000. The judgment refunded approximately $0.5 million of the amount deposited. The Company expects a similar judgment for the remaining of the fiscal years. While processing the above refund an amount of INR 2.5 million (or approximately $0.1 million) for the fiscal year ended March 31, 2000 had been deducted by the tax authorities challenging certain tax exemptions that had earlier been allowed to the Company. The Company has appealed against this order and expects a favorable decision. This has however, been fully reserved for as at September 30, 2008.

     U.S. and Indian transfer pricing regulations require that any international transaction involving associated enterprises be at an arm’s-length price. Transactions among the Company’s subsidiaries and the Company may be required to satisfy such requirements. Accordingly, the Company determines the pricing among its associated enterprises on the basis of detailed functional and economic analysis involving benchmarking against transactions among entities that are not under common control. If the applicable income tax authorities review any of the Company’s tax returns and determine that the transfer price applied was not appropriate, the Company may incur increased tax liability, including accrued interest and penalties.

7

INTELLIGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2008 AND 2007

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     During the second quarter of 2008, the company received an assessment order for the fiscal year ending March 31, 2005, challenging application of some of its Indian subsidiary’s transfer pricing policies. No additional tax demands have been made by the India Income Tax Authorities as yet. The Indian tax authorities are examining income tax returns for other tax years.

     Based on advice from its Indian tax advisors, the facts underlying its position and its experience with these types of assessments, the Company believes that the probability of loss is remote and accordingly has not accrued any amount with respect to these matters its unaudited condensed consolidated financial statements.

Goodwill and Intangibles

     As reported in Note 3 to the Company’s financial statements in its annual report on Form 10-K for the year ended December 31, 2007, on October 1, 2007, the Company’s wholly owned subsidiaries Intelligroup Europe Ltd and Intelligroup Asia Pvt Ltd acquired certain assets including without limitation customer contracts, fixed assets and employees from ISG Novasoft Technologies Limited (“Novasoft India”) and Novasoft Information Technology(Europe) Ltd., (“Novasoft Europe”) for an aggregate purchase price of three million one hundred thousand dollars ($3,100,000) ("Novasoft Acquisition"). The Company applied the purchase method of accounting for the acquisition. It does not amortize goodwill but instead tests goodwill at the reporting unit level for impairment at least annually or as circumstances warrant. If impairment is indicated, a write down to fair value (normally measured discounting estimated cash flows) is recorded. Other intangibles represent primarily customer relationships which are amortized on a straight line basis over their estimated useful lives.

As of September 30, 2008 the Company completed calculations and finalized its purchase price allocation relating to the acquisition as follows:.

Particulars	Assets	Liabilites
Cash	$75
Fixed Assets	4
Intangibles	1,289
Goodwill	1,865
Accrued Payroll		$91
Acquisition Expenses Payable		42
Payable to lender		3,100
Total	$3,233	$3,233

     As a result of the final allocation, approximately $1.4 million has been reallocated from intangibles to goodwill and the amortization of intangibles has been adjusted by approximately $0.3 million for the nine months ended September 30, 2008.

The following unaudited proforma statements of operations reflect the results of operations as though the acquisition had been completed at the beginning of the year 2006.

	in thousands except per share data
	2007	2006
Revenues	$148,566	$128,509
Net Income/ (Loss) after tax	$3,825	($2,892)
Income / (Loss) per Share
Basic - outstanding Shares	$0.09	($0.07)
Dilted- outstanding Shares	$0.09	($0.07)
Weighted Average Shares outstanding- Basic	42,026	40,179
Weighted Average Shares outstanding- Diluted	42,115	40,179

8

INTELLIGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2008 AND 2007

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Pension Plan Liability

     The Company provides its employees in India with benefits under a defined benefit pension plan, referred to as the Gratuity Plan. The Gratuity Plan provides a lump sum payment to vested employees on retirement or on termination of employment in an amount based on the respective employee’s salary and years of employment. The Company determines its liability under the Gratuity Plan by actuarial valuation using the projected unit credit method. Under this method, the Company determines liability based upon the discounted value of salary increases until the date of separation arising from retirement, death, resignation or other termination of services. Critical assumptions used in measuring the plan expense and projected liability under the projected unit credit method include the discount rate, expected return on assets and the expected increase in the compensation rates. The Company evaluates these critical assumptions at least annually. The Company periodically evaluates and updates other assumptions used in the projected unit credit method involving demographic factors, such as retirement age and turnover rate, to reflect its experience. The mortality rates used are consistent with those published by the Life Insurance Corporation of India.

     The discount rate enables the Company to state expected future cash flows at a present value on the measurement date. The discount rate used is equal to the yield on high quality fixed income investments in India at the measurement date. The expected rate of return on plan assets is estimated based on available market information, Indian law which regulates such investments and historical returns. The measurement date for these employee retirement benefits coincides with reporting date of the financial statements.

Share-Based Compensation Plans

     The Company’s share-based compensation plans are described in Note 7. The Company adopted the provisions of Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment,” (“SFAS No. 123R”) on January 1, 2006, using the modified prospective transition method.

     There was one share-based payment award granted in the three months ended September 30, 2008. The Company recognizes compensation expense for all share-based payment awards based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123R.

     The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line attribution method over the service period (generally the vesting period). The Black-Scholes model incorporates the following assumptions:

• Expected volatility – the Company estimates the volatility of common stock at the date of grant using a combination of unadjusted historical volatility, and historical volatility adjusted for periods of unusual stock price activity.
   
• Expected term – the Company estimates the expected term of options granted based on a combination of vesting schedules, life of the option, historical experience and in cases where the Company does not have significant historical experience, the simplified method of determining expected term outlined in Staff Accounting Bulletin 107 is used.
• Risk-free interest rate – the Company estimates the risk-free interest rate using the U.S. Treasury yield curve in effect at the time of grant for periods equal to the expected life of the options.
   
• Dividends – the Company uses an expected dividend yield of zero since it has never declared or paid any dividends on its capital stock. The Company intends to retain any earnings to fund future growth and the operation of its business, and, therefore does not anticipate paying any cash dividends in the foreseeable future.

Additionally, the Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. It uses a combination of historical data, demographic characteristics and other factors to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards that are expected to vest. SFAS No. 123R requires the cash flows resulting from the tax benefits for tax deductions in excess of the compensation expense recorded for those options to be classified as financing cash flows. There were 3 options exercised for which 11,725 shares were issued during the three months ended September 30, 2008 and there were 11 options exercised for which 112,500 shares were issued during the three months ended September 30, 2007.

NOTE 3- LINE OF CREDIT

     On May 22, 2008, the Company and its wholly-owned subsidiary Empower, Inc. closed out the existing $15 million line of credit with Steel City Capital Funding. The Company entered into a revolving credit loan and security agreement (“Credit Agreement”) with HSBC Bank, (the “Bank”). The Credit Agreement is comprised of a three year revolving line of credit pursuant to which the Company can borrow up to $10.0 million at the Bank’s Base Rate (as defined in the Credit Agreement) of 5.0% as of September 30, 2008, minus 0.85% percent. The credit facility is collateralized by substantially all of the assets of the United States based operations and all subsidiary stock (not to exceed 65% of the Equity Interests of any Foreign Subsidiary). The maximum borrowing availability under the Credit Agreement is based upon a percentage of eligible billed and unbilled accounts receivable. The Credit Agreement provides for certain financial covenants that shall only be tested as of the end of any fiscal quarter.

The Company was in compliance with the applicable financial covenants of the loan agreement related to the Credit Agreement as of September 30, 2008.

     As of September 30, 2008, the Company had $0.1 million outstanding borrowings under the Credit Agreement. The Company estimates undrawn availability under the Credit Facility to be $9.9 million as of September 30, 2008.

     On October 1, 2007, the Company’s subsidiaries Intelligroup Europe Ltd (“IGE”) and Intelligroup Asia Pvt Ltd. (“IGA”) acquired certain assets including without limitation customer contracts, fixed assets and employees from Novasoft Information Technology Ltd., (“Novasoft Europe”) and ISG Novasoft Technologies Limited (“Novasoft India”) for an aggregate purchase price of three million one hundred thousand dollars ($3,100,000) ("Novasoft Acquisition").

9

INTELLIGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2008 AND 2007

NOTE 3- LINE OF CREDIT (CONTINUED)

     In order to finance a significant portion of the purchase price for the Novasoft Acquisition, Intelligroup Europe Limited (“IGE”) received a loan of 1,500,000 from Lloyds Bank PLC “Lloyds Bank TBS” during 2007. This loan is secured by a stand by letter of credit from Citibank N.A. (“Citibank”), for which Intelligroup Asia Private Limited (“IGA”) has placed a hundred and ten percent margin money deposits with Citibank. The loan is payable in three annual installments of ₤500,000 starting October 2008, with interest payable monthly at the rate of 6.75% APR. The Company repaid this loan in entirety during the fourth quarter of 2008.

NOTE 4- RESTRICTED CASH AND INVESTMENTS

     During October 2007, “Intelligroup Asia Private Limited” (“IGA”), a wholly owned subsidiary of Intelligroup Inc., placed a hundred and ten percent margin money deposits with Citibank N.A (Citibank) against a stand by letter of credit issued by Citibank to Lloyds’ Bank TSB, London in connection with the Novasoft Acquisition. This margin money deposit has been classified under restricted cash on the balance sheet as on September 30, 2008. In addition IGA has few investments primarily in non convertible debentures which it has placed with Citibank as a lien against the derivative contracts which IGA has in place with Citibank. The various components of restricted cash and investments consist of the following as on September 30, 2008

Restricted asset	Restricted against	in thousands
Fixed Deposit	Letter of credit to Lloyds Bank TSB	$1,051
Investments	Letter of credit to Lloyds Bank TSB	1,930
Fixed Deposit	Lien against derivative contracts	736
Fixed Deposit	Against various statutory and customer related	266
	compliances
Total		$3,983

NOTE 5- RELATED PARTY TRANSACTIONS

     Effective August 1, 2005, Intelligroup Asia Pvt. Ltd. (“IGA”) entered into an agreement to lease certain premises for certain of the Company’s India operations from iLabs Hyderabad Technology Center Pvt. Ltd. (“iLabs”), a party with which two members of the Company’s Board of Directors, Srini Raju and Sandeep Reddy, are affiliated. The terms of the lease agreement provide for, among other things: (1) a minimum lease period of five years with an option for two three-year renewal periods; (2) payment of a security deposit equivalent to nine (9) months’ rent in the amount of 15.3 million Indian rupees (approximately $323,000); (3) payment of monthly lease fees in the amount of 1.7 million Indian rupees (approximately $39,000), subject to yearly five percent (5%) escalation; and (4) monthly operations and maintenance fees of 0.3 million Indian rupees (approximately $7,000). Rent paid for the three months ended September 30, 2008 towards such lease was 7.4 million rupees (approximately $170,000). There are no advance lease rentals as of September 30, 2008.

NOTE 6- LITIGATION

     There is no pending litigation to which the Company is a party or to which any of its property is subject that would have a material impact on its consolidated financial condition, results of operations or cash flows in the event we were unsuccessful in such litigation. However the Company cannot predict with certainty the outcome of any litigation or the potential for future litigation and any such matters could adversely affect its financial condition, results of operations, cash flows and business.

NOTE 7- SHAREHOLDERS’ EQUITY

Share-Based Compensation Plans

     The Company has four share-based compensation plans that reserve common shares for issuance to key employees, consultants and directors, as described below. The compensation cost that has been charged against income for those plans was $0.8 million for the nine months ended September 30, 2008. The Company did not recognize income tax benefit in the condensed consolidated statement of operations and comprehensive loss for the first nine months of 2008, due to its history of net operating losses. Three options were exercised and 11,725 shares were issued during the nine months ended September 30, 2008.

10

INTELLIGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2008 AND 2007

NOTE 7- SHAREHOLDERS’ EQUITY (CONTINUED)

Stock Options:

     The 2004 Equity Incentive Award Plan (“2004 Plan”) was approved by the Company’s Board of Directors on April 5, 2004 and adopted by the Company’s shareholders on June 8, 2004. The maximum number of shares of Common Stock reserved for issuance under the 2004 Plan shall be equal to 1,600,000, plus the number of shares of Common Stock which are or become available for issuance under the Company’s 1996 Stock Plan (the “Prior Plan”), and which are not issued under such plan, which includes an increase of 500,000 shares pursuant to the third amendment to the 2004 plan which was adopted by the Board of Directors on May 4, 2006 and approved by the stockholders of the Company on June 8, 2006. Those eligible to receive stock option grants or stock purchase rights under the 2004 Plan include employees, non employee Directors and consultants. The Compensation Committee of the Board of Directors of the Company administers the 2004 Plan. Subject to the provisions of the 2004 Plan, the administrator of the 2004 Plan has the discretion to determine the optionees and/or grantees, the type of equity awards to be granted (incentive stock options and nonqualified stock options, restricted stock, stock appreciation rights, performance shares, performance stock units, stock payments, deferred stock, restricted stock units, other stock-based awards, and performance-based awards), the vesting provisions, the terms of the grants and such other related provisions as are consistent with the 2004 Plan.

     The exercise price of a stock option may not be less than the fair market value per share of the Common Stock on the date of grant or, in the case of an optionee receiving incentive stock option award who beneficially owns 10% or more of the outstanding capital stock of the Company, not less than 110% of the fair market value per share on the date of grant. Notwithstanding the foregoing, the Compensation Committee may in its discretion issue non-qualified stock options to purchase up to 500,000 shares of Common Stock with an option exercise price of less than 100% of the fair market value of the Common Stock on the date of grant. The options terminate not more than ten years from the date of grant, subject to earlier termination on the optionee’s death, disability or termination of employment with the Company, provided however that the term of any incentive stock options granted to a holder of more than 10% of the outstanding shares of capital stock may be no longer than five years. Options are not assignable or otherwise transferable except by will or the laws of descent and distribution.

     The Compensation Committee may provide that if a Change of Control (as defined in the 2004 Plan) of the Company occurs and any awards made pursuant to the 2004 Plan are not converted, assumed or replaced by a successor, then all outstanding awards that are not converted, assumed or replaced may become fully vested and exercisable. The Compensation Committee, subject to approval of the Board, may terminate, amend, or modify the 2004 Plan at any time; provided, however, that stockholder approval must be obtained for any amendment to the extent necessary or desirable to comply with any applicable law, regulation or stock exchange rule, to increase the number of shares available under the 2004 Plan, to permit the Compensation Committee to grant options with an exercise price below fair market value on the date of grant, or to extend the exercise period for an option beyond ten years from the date of grant. The 2004 Plan terminates on June 8, 2014 unless terminated earlier by the Company’s Board of Directors.

     The 1996 Stock Plan (“1996 Plan”) was adopted by the Board of Directors and approved by the shareholders of the Company on June 3, 1996, and became effective on July 12, 1996. Those eligible to receive stock option grants or stock purchase rights under the 1996 Plan include employees, non employee Directors and consultants. The Compensation Committee of the Board of Directors of the Company administers the 1996 Plan. Subject to the provisions of the 1996 Plan, the administrator of the 1996 Plan has the discretion to determine the optionees and/or grantees, the type of options to be granted (incentive stock options or nonqualified stock options), the vesting provisions, the terms of the grants and such other related provisions as are consistent with the 1996 Plan. The exercise price of an incentive stock option may not be less than the fair market value per share of the Common Stock on the date of grant or, in the case of an optionee who beneficially owns 10% or more of the outstanding capital stock of the Company, not less than 110% of the fair market value per share on the date of grant. The exercise price of nonqualified stock options granted under the 1996 Plan may not be less than 85% of the fair market value per share of the Common Stock on the date of grant or, in the case of an optionee who beneficially owns 10% or more of the outstanding capital stock of the Company, not less than 110% of the fair market value per share on the date of grant. The purchase price of shares issued pursuant to stock purchase rights may not be less than 50% of the fair market value of such shares as of the offer date of such rights. The options terminate not more than ten years from the date of grant, subject to earlier termination on the optionee’s death, disability or termination of employment with the Company, provided however that the term of any options granted to a holder of more than 10% of the outstanding shares of capital stock may be no longer than five years. Options are not assignable or otherwise transferable except by will or the laws of descent and distribution. In the event of a merger or consolidation of the Company with or into another corporation or the sale of all or substantially all of the Company’s assets in which the successor corporation does not assume outstanding options or issue equivalent options, the Board of Directors of the Company is required to provide accelerated vesting of outstanding options. As of June 8, 2004, the Company ceased granting options under the 1996 Plan.

     The 1996 Non-Employee Director Plan was approved by the Board of Directors on June 3, 1996. The shareholders adopted the Company’s 1996 Non-Employee Director Stock Option Plan (the “Director Plan”) and it became effective on July 12, 1996. The Director Plan provides for the grant of options to purchase a maximum of 140,000 shares of Common Stock of the Company to non-employee Directors of the Company. The Board of Directors administers the Director Plan.

     In October and November 2000, the Company’s Board of Directors approved grants of options for equity compensation plans not approved by security holders (the “Out of Plan” options). Each of the Out of Plan options vest in four equal semiannual installments beginning on the first six-month anniversary of the date of grant and expire on the tenth anniversary of the date of grant. The price of the options granted pursuant to the Out of Plan options is equal to the fair market value of the shares on the date of grant.

The fair value of option grants is estimated on the date of grant using the Black-Scholes option-pricing model using the following weighted average assumptions:

	Three Months Ended		Nine Months Ended
	30-Sep		30-Sep
	2008	2007	2008	2007
Expected Volatility	81.51%	85.81%	81.51-84.69%	85.81-88.7%
Expected Lives(years)	6.0625	6.0625	6.0625	6.0625
Risk free Interest Rate	3.20%	4.34%	2.80-3.50%	4.34-5.00%
Expected Dividends	0%	0%	0%	0%

11

INTELLIGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2008 AND 2007

NOTE 7- SHAREHOLDERS’ EQUITY (CONTINUED)

     The weighted average grant date fair value of options granted during the three months ended September 30, 2008 and 2007 was $1.43 and $1.46 respectively and $1.49 and $1.04 for the nine month ended September 30, 2008 and 2007 respectively.

     As of September 30, 2008, there was $1.4 million of total unrecognized compensation cost related to the stock options. That cost is expected to be recognized over the next four years.

The following table summarizes the share-based compensation expense for stock options that were recorded in accordance with SFAS No. 123R for the three and nine ended September 30, 2008 and September 30, 2007 (in thousands except per share information):

	Nine Months						Three Months
	Ended						Ended
	Sep 30			Sep 30			Sep 30			Sep 30
	2008			2007			2008			2007
Cost of Revenue	$	277		$	380		$	73		$	100
Selling, general and administrative expenses		515			478			164			139
Decrease in net income / Increase to net loss	$	792		$	858		$	237		$	239
Change in income / loss per share:
Basic	$	(0.02	)		(0.02	)	$	(0.01	)		(0.01	)
Diluted	$	(0.02	)		(0.02	)	$	(0.01	)		(0.01	)

NOTE 8- SEGMENT DATA AND GEOGRAPHIC INFORMATION

The Company operates in one industry segment, information technology solutions and services.

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

• United States (“US”) – the largest segment of the Company, with operations in the US 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 is located in Princeton, New Jersey;
• India – includes the operations of the Company in India, including services provided on behalf of other group subsidiaries, primarily to the US. The India offices are located in Hyderabad and Bangalore, India. A majority of total revenue generated in India is derived from providing offshore development and support services to customers through the Company’s affiliated entities in other parts of the world, but predominantly with the United States.
• Europe – includes the operations of the Company in Denmark and the United Kingdom. The European offices are located in Milton Keynes, United Kingdom and Odense in Denmark
• Japan – includes the operations of the Company in Japan. The office is located in Tokyo, Japan.

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 consolidated operating results for the three and nine months ended September 30, 2008 and 2007 are presented in the following geographic segments (in thousands):

12

INTELLIGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2008 AND 2007

NOTE 8- SEGMENT DATA AND GEOGRAPHIC INFORMATION (CONTINUED)

	United States			India	Europe		Japan	Total
Three Months ended September 30, 2008
Revenue	$	24,338		12,151	3,347		1,371	41,207
Operating Income / (Loss)		1,592		1,923	140		206	3,861
Income Tax Expense		14		282	160		-	456
Net Income / (Loss)	$	1,670		819	(8	)	215	2,696
Three Months ended September 30, 2007
Revenue	$	23,589		10,126	3,091		1,204	38,010
Operating Income / (Loss)		601		596	573		337	2,107
Income Tax Expense		(211	)	393	-		-	182
Net Income / (Loss)	$	853		621	633		493	2,600
Nine months ended September 30, 2008
Revenue	$	69,768		34,936	11,424		3,669	119,797
Operating Income / (Loss)		2,822		4,579	693		99	8,193
Income Tax Expense		59		775	260		-	1,094
Net Income / (Loss)	$	3,092		1,832	558		212	5,694
Property & Equipment, net	$	528		2,415	1,317		55	4,315
Total Assets	$	20,019		39,012	4,896		429	64,356
Nine months ended September 30, 2007
Revenue	$	66,036		29,333	8,672		2,704	106,745
Operating Income / (Loss)		(3,469	)	2,592	708		211	42
Income Tax Expense		(653	)	1,284	-		-	631
Net Income / (Loss)	$	(2,761	)	1,316	781		315	(349	)
Property & Equipment, net	$	522		3,639	2,372		49	6,582
Total Assets	$	32,664		19,252	7,971		1,691	61,578

NOTE 9- COMMITMENTS AND CONTINGENCIES

     On July 5, 2000, the Company distributed SeraNova common stock to its shareholders in a transaction that was structured to be and was reported as a tax-free spin-off pursuant to Section 355 of the Internal Revenue Code (“IRC Section 355”). For distributions of stock qualifying under IRC Section 355, neither the Company nor the Company’s shareholders recognize any gain or income in connection with the transaction for US federal income tax purposes. The Company and SeraNova executed a Tax Sharing Agreement, dated January 1, 2000 (“Tax Sharing Agreement”), whereby SeraNova would indemnify the Company for any tax liabilities in the event a future transaction of SeraNova results in the spin-off is being deemed a taxable event. On October 27, 2000, SeraNova and Silverline Technologies, Inc. announced that they had entered into an agreement and plan of merger, under which Silverline Technologies, Inc. would acquire control of SeraNova in exchange for American depository shares of Silverline. Subsequently, SeraNova and Silverline Technologies, Inc. filed for Chapter 7 Bankruptcy on August 8, 2003. As a condition to the distribution, SeraNova management represented that there was no present plan, nor intent to enter into a subsequent transaction that would disturb the intended tax–free nature of the distribution.

     IRC Section 355(e) provides that the Company may be required to recognize a gain equal to the excess of the fair market value of the SeraNova shares distributed over their tax basis if the distribution is part of a plan pursuant to which one or more persons acquire 50% or more of SeraNova common stock within two years of the distribution date. Should the spin-off ultimately be construed as taxable the resultant tax liability could be in the range of $55 million to $65 million and related penalties (if assessed) and interest could increase the amount by $40 million to $50 million as at September 30, 2008, depending on the facts that ultimately are established. No future benefits would inure to the Company as a result of imposition of a tax on the SeraNova distribution, and no reserve has been recorded for this potential tax. However, should such a tax liability be imposed, the Company may be able to utilize some of its existing net operating losses to mitigate this tax liability.

Employment Agreements

     As of September 30, 2008, the Company had employment agreements with certain of its executive officers, which provide for minimum payments in the event of termination for reasons other than just cause. The aggregate amount of compensation commitment in the event of termination under such agreements is approximately $1.1 million. In addition, IGA had entered into Severance Packages totaling approximately $0.6 million with certain former members of the IGA management team. Pursuant to the terms of the Agreement for Severance Package, the Severance Package is activated upon the fulfillment of certain events, including a change in management of the Company or IGA. In April 2005, following the termination of the Company’s Chief Executive Officer, three members of the IGA management team, each of whom had a Severance Package, resigned. Except as set forth below, to date, the Company has not received any claim for payment of the Severance Package. In September 2005, two former members of the IGA management team sent IGA notices under Section 433 and 434 of the Indian Companies Act, 1956 for payment of such Severance Package. Such claims have not been pursued since such initial notice was served, and the Company does not believe that such severance amount is owed. In the event the Company is unsuccessful in defending against such claim for payment, the Company would owe approximately $0.6 million to such individuals.

13

INTELLIGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2008 AND 2007

NOTE 10- RECENT ACCOUNTING PRONOUNCEMENTS

     In September 2006, the Financial Accounting Standards Board (“FAS”) issued FAS No. 157, Fair Value Measurements (“FAS 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements, but provide guidance how to measure fair value by providing a fair value hierarchy used to clarify the source of information. SFAS 157-2 which delayed the effective date of SFAS 157 for all non financial assets and non financial liabilities, except that those are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually ). This FSP partially defers the effective date of Statement 157 to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years for items within the scope of this FSP. The Company adopted FAS 157 for all financial assets and liabilities required to be measured at fair value on a recurring basis, prospectively from January 1, 2008. The application of FAS 157 for financial instruments which are periodically measured at fair value did not have any significant impact on earnings nor the financial position since the fair values of the Company’s financial assets and liabilities (consisting primarily of its foreign exchange option contracts and certain market securities) are based either on observable market prices or on other observable inputs.

In February 2007, the FASB issued FAS No.159, The Fair Value Option for Financial Assets and Financial Liabilities – including an amendment of FASB 115 (“SFAS 159”) which allows an entity to choose to measure certain financial instruments and liabilities at fair value. Subsequent measurements for the financial instruments and liabilities an entity elects to fair value will be recognized in earnings and this election is irrevocable. SFAS 159 also establishes additional disclosure requirements. FAS159 is effective for the Company beginning January 1, 2008. The Company has not elected to apply the fair value option to any of its financial instruments.

     In December 2007, the FASB issued FAS No.141 (revised 2007), Business Combinations (“FAS 141R”). SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non controlling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. This statement is effective beginning January 1, 2009. The Company does not believe that there is will be a significant impact on its financial position or results of operations as a result this pronouncement.

     In December 2007, the FASB issued SFAS No.160, Non Controlling Interests in Consolidated Financial Statements-an amendment of Accounting Research Bulletin No.51 (“FAS 160”). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by the parties other than parent, the amount of the consolidated net income attributable to the parent and to the non controlling interest, changes in parent’s ownership interest, and the valuation of retained non controlling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and interests of the non controlling owners. This statement is effective for the Company beginning January 1, 2009. The Company is currently evaluating the potential impact of the adoption of FAS 141R on its consolidated financial position, results of operations or cash flows.

     In March 2008, The FASB issued SFAS No.161 Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No.133 (“FAS 161”). FAS161 enhances disclosures about the Company’s derivative and hedging activities and thereby improves the transparency of financial reporting. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.

     In May 2008, The FASB issued SFAS 162 – The Hierarchy of Generally Accepted Accounting Principles. FAS 162 is intended to improve financial reporting by indentifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with US GAAP for non governmental entities. The Company does not believe that there will be a significant impact on its financial position or results of operations as a result this pronouncement.

NOTE 11- FINANCIAL INSTRUMENTS

     The Company measures certain financial assets and liabilities at fair value on a recurring basis, including derivative instruments and investments. The fair value measurements of these derivative instruments and investments were determined using the following inputs of Sept 30, 2008:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in		Significant Other		Significant Other
			Active Markets for		Observable Inputs		Unobservable Inputs
			Identical Assets
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Investments (Note a)	$	1,930,306	$	-	$	1,930,306	$	-
Total	$	1,930,306	$	-	$	1,930,306	$	-
Liabilities:
Derivative Instruments (Note b)	$	3,178,962	$	-	$	3,178,962	$	-
Total	$	3,178,962	$	-	$	3,178,962	$	-

(a) Included in restricted cash & investments in the consolidated balance sheets. (Please refer note 4 – Restricted cash & Investments) 
(b) Included in current liabilities ($2.4 million) and other long term liabilities ($0.8 million) in the consolidated balance sheets. (Please refer note 2 – Derivative instruments under Summary of significant accounting policies) 

     There has been no change in Level classification during the period ended Sept 30, 2008.

14

INTELLIGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 2008 AND 2007

NOTE 12- OTHER INCOME/ (EXPENSE)

     Other income/ (expense) results from transaction gains or losses associated with changes in foreign currency exchange rates, sublease income, dividend income from investments and other items.

     For the three months ended September 30, 2008 and 2007, the Company recorded transaction losses of approximately $0.7 million and transaction gains of $0.8 million, as a result of currency translation on account of currency fluctuations in Asia and Europe. $1.6 million loss was on account of Company’s mark to market accounting for derivative instruments due to the decline of the value of the Indian Rupee against the U.S. dollar during the three months ended September, 2008 compensated partially by a gain of $0.9 million recorded on account of foreign currency revaluation of accounts receivable balances. Additionally, for the three months ended September 30, 2008 the Company recorded net expense of $0.1 million pertaining to sublease rental income, dividend income and other items compared with net expense of $6,000 for the three months ended September 30, 2007.

For the nine months ended September 30, 2008 and 2007, the Company recorded transaction losses of approximately $1.7 million and transaction gains of approximately $0.4 million, as a result of currency translation, primarily as a result of currency fluctuations in Asia and Europe. Additionally, for the nine months ended September 30, 2008 the Company recorded sublease income, dividend income and other items of approximately $0.5 million compared with $0.4 million for the three months ended September 30, 2007.

NOTE 13- EMPLOYEE BENEFIT PLANS

     The Gratuity Plan provides a lump sum payment to vested employees on retirement or on termination of employment in an amount based on the respective employee’s salary and years of employment with the Company. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation. Current service costs for the Gratuity Plan are accrued in the year to which they relate.

Net gratuity cost includes the following components:

	Nine Months Ended						Three Months Ended
	30-Sep			30-Sep			30-Sep		30-Sep
	2008			2007			2008		2007
Service Cost	$	148			132		$	69		51
Interest Cost		40			34			19		11
Actuarial (Gain) / Loss		(50	)		0			(73)		0
Expected Return on Assets		(0	)		(4	)		(0)		(1	)
Net Gratuity Cost	$	138			162		$	15		60

NOTE 14- OTHER COMPREHENSIVE INCOME/(LOSS)

The changes in Other Comprehensive Income (Loss) are mainly due to the foreign currency translation adjustments of overseas subsidiaries.

For the three months ended September 30, 2008, the Company recorded other comprehensive loss due to translation adjustment of approximately $2.6 million on account of currency fluctuations in Asia and Europe. Other comprehensive income of approximately $0.4 million was recorded for the three month ended September 30, 2007.

For the nine months ended September 30, 2008, the Company recorded other comprehensive loss due to translation adjustment of approximately $5.2 million on account of currency fluctuations in Asia and Europe. Other comprehensive income of approximately $2.4 million was recorded for the nine month ended September 30, 2007.

NOTE 15- SUBSEQUENT EVENTS

     On October 24^th 2008, the Board of Directors of the Company approved a share repurchase program of up to $5,000,000 of the Company's common stock over the next 18 months. The share repurchase program will be funded using the Company's working capital and authorizes the Company to repurchase shares from time to time through open market or privately negotiated transactions. The Company also intends to adopt a Rule 10b5-1 trading plan that will allow the Company to purchase its shares at times when it ordinarily would not be in the market due to its internal trading policy. The program will expire on the earlier of (i) the repurchase of the maximum number of shares under the program, (ii) the 18 month anniversary of the approval of the program or (iii) a determination by the Board of Directors to discontinue the program. The Company is not obligated to repurchase shares under the authorization or enter into a Rule 10b5-1 trading plan and the timing; actual number and value of shares purchased will depend on many factors, including the Company’s cash flow and the liquidity and price performance of its shares. As of November 10, 2008, no shares were repurchased under this program.

15

INTELLIGROUP, INC.

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our results of operations and financial condition should be read in conjunction with the Financial Statements and Notes included in Part I. “Financial Information”. This report contains forward looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “can” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “seek,” “estimate,” “continue,” “plan,” “point to,” “project,” “predict,” “could,” “intend,” “target,” “potential,” and other similar words and expressions of the future.

Forward-looking statements may not be realized due to a variety of factors, including, without limitation:

• the inability to generate new sales and maintain profitability; 
   
• the inability to attract and retain a sufficient number of highly skilled technical employees, particularly senior level technical personnel and project managers;
   
• Changes in the political, regulatory, and economic conditions in India, which is where a substantial portion of our operations are located;
   
• Effects of competition in the information technology services industry where there is a very high level of competition for employees and customers;
   
• Restrictions imposed by U.S. immigration regulation which could affect the ability of our employees who are primarily Indian nationals to obtain the necessary work visas to work in the United States;
   
• Inability to maintain access to external funding;
   
• Inability to maintain effective internal control over financial reporting or to remediate any weaknesses that may arise in the future;
   
• claims for damages by third parties, including liability claims arising from negligent acts, errors, mistakes or omission in rendering our IT professional services;
   
• our dependence on a limited number of large customers;
   
• A systems failure or disruption in telecommunications could disrupt our business and result in lost customers and negative publicity;
   
• Dependence on a limited number of software partners;
   
• disruption to our operations, including disruptions caused by geopolitical conditions in India;
   
• the effects of volatility and lack of liquidity in our common stock;
   
• our inability to protect our intellectual property;
   
• Third party claims that our services infringe on their intellectual property rights;
   
• We may be subject to increased tax liabilities, including if the spin-off in 2000 of our former subsidiary, SeraNova, is determined to be taxable. We could be liable in the range of $55 million to $65 million and related penalties (if assessed) and interest could increase the amount by $40 million to $50 million. In July 2000, we completed the tax-free spin-off of SeraNova, our former subsidiary. In March 2001, SeraNova and Silverline Technologies Limited (“Silverline”) consummated the acquisition of SeraNova by Silverline. Had the acquisition of SeraNova by Silverline been contemplated at the time of the spin-off, the spin-off would have been a taxable transaction. Based upon the information available to the us, we believe that such acquisition was not contemplated at the time of the spin-off of SeraNova by Intelligroup, and accordingly should not impact the tax-free nature of the spin-off. However, if it were determined that the spin-off was taxable, Intelligroup may have to bear the liability to pay such tax liability, which would be material. Please refer to Note 10 to the financial statements on in our annual report on Form 10-K for the year ended December 31, 2007; and
   
• the factors listed under “Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2007 and other reports that we file with the Securities and Exchange Commission.

16

INTELLIGROUP, INC.

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this report. We have no obligation, and expressly disclaim any obligation, to update, revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise. We have expressed our expectations, beliefs and projections in good faith and we believe they have a reasonable basis. However, we cannot assure you that our expectations, beliefs or projections will result or be achieved or accomplished.

Overview

The Company plans, consults, builds and manages ERP solutions based on SAP, Oracle, PeopleSoft and Microsoft applications and technology platforms and also provide services around business intelligence, ERP Infrastructure Management, E-Business ERP Integration, ERP Testing, Application Management & Support and business process outsourcing or “BPO” and knowledge process outsourcing or “KPO”.

The Company helps its customers align and optimize their technology platforms, primarily their enterprise resource planning or “ERP” systems, with their businesses. Such systems have increasingly become mission critical for companies with revenues of between $500 million and $5 billion (“Mid-Tier Market”) or more, as these systems are used to help them drive greater revenue and productivity as well as to better manage and control costs.

The Company has worked to position itself as the “go-to” partner for companies looking for an ERP and extended ERP solutions partner particularly for Mid-Tier Market and that positioning provides it with an important competitive edge. This positioning is reflected in the fact that over 90% of our business is generated from ERP-driven projects.

     In this Section, the Company will discuss the following: (i) key factors in evaluating the Company’s financial performance; (ii) application of critical accounting principles, which explains the accounting principles necessary to understand how the Company records its financial information; (iii) results of operations - consolidated, in which the Company’s consolidated results are compared period to period to recognize trends; (iv) results of operations by business segment, which allows the Company to compare the results of its different business units; (v) liquidity and capital resources; and (vi) recent accounting pronouncements, which identifies new accounting literature that may have an impact on the Company’s future results.

Key Factors in Evaluating the Company’s Financial Performance

     Management believes the following factors should be considered when evaluating the Company’s reported financial information contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Revenue

     The majority of the Company’s revenue is 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 IT consulting firm. Where contractual provisions permit, customers also are billed for reimbursement of expenses incurred by the Company on the customers’ behalf.

Fixed Price Projects

     The Company has provided services on certain projects in which it, at the request of the clients, offers a fixed price for its services. For the nine months ended September 30 2008 and 2007, revenue derived from projects under fixed price contracts represented approximately 29% and 40%, respectively, of the Company’s total revenue. No single fixed price project was material to the Company’s business during the nine months ended September 30, 2008 or 2007. 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.

Customer Concentration

     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 nine months ended September 30, 2008 and 2007, the Company’s ten largest customers accounted for in the aggregate approximately 37% and 42% of its revenue, respectively. During the three and nine months ended September 30, 2008, no single customer accounted for 10% or more of revenues. For the nine months ended September 30, 2008 and 2007, 13% and 17%, respectively, of the Company’s revenue was generated by providing supplemental resources directly to the end-customer or as part of a consulting team assembled by another IT consulting firm. There can be no assurance that such IT consulting firms will continue to engage the Company in the future at current levels of retention, if at all.

Software Partners

     For the three and nine months ended September 30, 2008 and 2007, the Company derived the following percentages of total revenue from projects in which the Company implemented, extended, maintained, managed or supported software developed by SAP, PeopleSoft and Oracle.

17

INTELLIGROUP, INC.

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

	Percentage of Revenues
	Three Months ended				Nine Months ended
	Sep 30, 2008		Sep 30, 2007		Sep 30, 2008		Sep 30, 2007
SAP	75	%	77	%	77	%	75	%
PeopleSoft	2	%	7	%	3	%	9	%
Oracle	11	%	6	%	9	%	7	%
e-Business	5	%	6	%	5	%	6	%
Others	7	%	4	%	6	%	3	%
Total	100	%	100	%	100	%	100	%

Markets

     The Company currently serves the United States market with its headquarters in Princeton (New Jersey), and branch offices in Atlanta, GA, Naperville IL and Milpitas CA. The Company also maintains local offices to serve the markets in India, the United Kingdom, Denmark and Japan.

Expenses

     The Company’s most significant cost is project personnel expenses, which consist of consultant salaries, payroll taxes, benefits and subcontractor fees. 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).

Application of Critical Accounting Policies

     The preparation of the Company’s condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s estimates, judgments and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates.

     Certain of the Company’s accounting policies require higher degrees of judgment than others in their application. These include revenue recognition and allowance for doubtful accounts, impairments and estimation of useful lives of long-term assets, income tax recognition of current and deferred tax items, assumptions used in valuing stock-based compensation arrangements, and accruals for contingencies.

     There have been no material changes to our critical accounting policies and estimates as identified in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in our annual report on Form 10-K for the fiscal year ended December 31, 2007.

Results of Operations – Consolidated – nine months ended September 30, 2008 compared to nine months ended September 30, 2007.

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

	Percentage of Revenue
	Nine months ended September 30
	2008		2007
Revenue	100.0	%	100.0	%
Cost of Revenues	68.8		73.8
Gross Profit	31.2		26.2
Selling general and administrative expenses	22.9		24.4
Depreciation and amortization	1.4		1.7
Total operating expenses	24.3		26.1
Operating Income	6.8		0.1
Interest Expense	(0.1	)	(0.5	)
Other Income (Expense)	(1.0	)	0.7
Income before income tax provision	5.7		0.3
Income tax provision	0.9		0.6
Net income / (loss)	4.8	%	(0.3	)%

18

INTELLIGROUP, INC.

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Nine months Ended September 30, 2008 Compared to nine months Ended September 30, 2007

The following discussion compares the consolidated results of operations for the nine months ended September 30, 2008 and 2007.

     Revenue. Total revenue increased by 12.3% or $13.1million, from $106.7 million for the nine months ended September 30, 2007 to $119.8 million for the nine months ended September 30, 2008. The increase was primarily due to continued new business wins primarily from customers in the mid-tier market and continued or steady business with existing customers. The revenue derived from consulting services related to SAP, Oracle and other applications grew while the revenue generated from consulting services related to PeopleSoft applications continued to decline. We expect that revenue derived from services related to PeopleSoft applications will continue to decline.

     Cost of revenue and gross profit. The Company’s cost of revenue increased by 4.7% or $3.7 million, from $78.8 million for the nine months ended September 30, 2007 to $82.5 million for the nine months ended September 30, 2008, primarily due to the increase in headcount and related compensation and travel related costs for consultants. The Company’s gross profit increased by 33.7% or $9.4 million, from $27.9 million for the nine months ended September 30, 2007 to $37.3 million for the nine months ended September 30, 2008. Gross margin increased from 26.2% for the nine months ended September 30, 2007 to 31.2% for the nine months ended September 30, 2008. The increase in gross profit and gross margin was primarily due to the combination of increased revenues combined with improved resource management and utilization as well as efforts to contain non project costs.

     Selling, general and administrative expenses. Selling, general and administrative expenses primarily consist of salaries and related benefits for sales and general administrative personnel, occupancy costs, related travel and entertainment and professional fees. Selling, general and administrative expenses increased by 5.4%, or $1.4 million, from $26.1 million for the nine months ended September 30, 2007 to $27.5 million for the nine months ended September 30, 2008 resulting primarily from investments the Company made to support growth in the business and decreased as a percentage of revenue from 24.4% for the nine months ended September 30, 2007 to 22.9% for the nine months ended September 30, 2008 mainly on account of the Company’s focus on driving increased operational efficiencies through effective cost management strategies.

     Depreciation and amortization expenses The Company recorded depreciation and amortization expenses of $1.7 million for the nine months ended September 30, 2008 as opposed to $1.8 million for the nine months ended September 30, 2007.

     Income tax provision (benefit). The Company recorded an income tax provision of $1.1 million on a pretax income of $6.8 million for the nine months ended September 30, 2008 as opposed to an income tax provision of $600,000 on a pretax income of $300,000 for the nine months ended September 30, 2007. The Company’s effective tax rate reflects the impact of earnings in various tax jurisdictions as well as historical losses incurred in certain of those jurisdictions.

Interest expense and other income. The Company recorded a net interest expense of $.200,000 for the nine months ended September 30, 2008 as opposed to $ 500,000 for the nine months ended September 30, 2007. The decrease is mainly on account of reduction in prime rate and average outstanding loan balance with the principal lender. The Company recorded other expenses of $1.2 million for the nine months ended September 30, 2008 as opposed to other income of $ 800,000 during the nine months ended September 30, 2007. The increase in other expense was mainly reflecting an impact from the Company’s mark to market accounting for its derivative instruments due to the unexpected decline of the value of the Rupee versus the U.S. dollar in the second and third quarter of 2008. While hedging is an important long-term risk management practice and an integral component of onshore/offshore businesses, increasing fluctuations in foreign exchange markets can still result in volatility in quarterly and year-to-date operating results.

Results of Operations - Consolidated– Three months ended September 30, 2008 compared to three months ended September 30, 2007.

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 September 30
	2008		2007
Revenue	100.0	%	100.0	%
Cost of Revenues	68.7		70.9
Gross Profit	31.3		29.1
Selling general and administrative expenses	21.4		22.1
Depreciation and amortization	0.5		1.5
Total operating expenses	21.9		23.6
Operating Income	9.4		5.5
Interest Expense	0.0		(0.4	)
Other Income / (Expense)	(1.7	)	2.1
Income before income tax provision	7.7		7.2
Income Tax	1.2		0.4
Net income	6.5	%	6.8	%

19

INTELLIGROUP, INC.

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007

The following discussion compares the consolidated results of operations for the Three months ended September 30, 2008 and 2007.

     Revenue. Total revenue increased by 8.4% or $3.2 million, from $38.0 million for the three months ended September 30, 2007 to $41.2 million for the three months ended September 30, 2008. The increase was primarily due to continued new business wins primarily from customers in the mid-tier market and continued or steady business with existing customers. The revenue derived from consulting services related to SAP, Oracle and other applications grew while the revenue generated from consulting services related to PeopleSoft applications continued to decline. We expect that revenue derived from services related to PeopleSoft applications will continue to decline.

     Cost of revenue and gross profit. The Company’s cost of revenue increased by 5.1% or $1.4 million, from $26.9 million for the three months ended September 30, 2007 to $28.3 million for the three months ended September 30, 2008, due primarily to the increase in headcount and related compensation and travel related costs for consultants. The Company’s gross profit increased by 16.2% or $1.8 million, from $11.1 million for the three months ended September 30, 2007 to $12.9 million for the three months ended September 30, 2008. Gross margin increased from 29.1% for the three months ended September 30, 2008 to 31.3% for the three months ended September 30, 2008. The increase in gross profit and gross margin was primarily due to the combination of increased revenues combined with improved resource management and utilization as well as efforts to contain non project costs

     Selling, general and administrative expenses. Selling, general and administrative expenses primarily consist of salaries and related benefits for sales and general administrative personnel, occupancy costs, related travel and entertainment and professional fees. Selling, general and administrative expenses increased by 4.8%, or $400,000, from $8.4 million for the three months ended September 30, 2007 to $8.8 million for the three months ended September 30, 2008 resulting primarily from investments the Company made to support growth in the business and decreased marginally as a percentage of revenue from 22.1% for the three months ended September 30, 2007 to 21.4% for the three months ended September 30, 2008.

     Depreciation and amortization expenses The Company recorded depreciation and amortization expenses of $0.2 million for the nine months ended September 30, 2008 as opposed to $0.6 million for the nine months ended September 30, 2007. The decrease is primarily due to the reversal in amortization expense as a result of the finalization of purchase price allocation relating to the Novasoft acquisition

     Income tax provision (benefit). The Company recorded an income tax provision of $500,000 on a pretax income of $3.2 million for the three months ended September 30, 2008 as opposed to an income tax benefit of $200,000 on a pretax income of $2.8 million for the three months ended September 30, 2007. The Company’s effective tax rate reflects the impact of earnings in various tax jurisdictions as well as historical losses incurred in certain of those jurisdictions.

Interest expense and other income. The Company recorded a net interest income of $12,000 for the three months ended September 30, 2008 as opposed to interest expense of $142,000 for the three months ended September 30, 2007. The decrease was mainly on account of reduction in prime rate and average outstanding loan balance with the principal lender. The Company recorded other expenses of $700,000 for the three months ended September 30, 2008 as opposed to other income of $800,000 during the three months ended September 30, 2007. The increase in other expense is mainly reflecting an impact from the Company’s mark to market accounting for its derivative instruments due to the unexpected decline of the value of the Rupee versus the U.S. dollar in the third quarter of 2008. While hedging is an important long-term risk management practice and an integral component of onshore/offshore businesses, increasing fluctuations in foreign exchange markets can still result in volatility in quarterly operating results.

Results of Operations by Business Segment

The Company operates in one industry segment, information technology solutions and services.

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

• United States (“US”) – the largest segment of the Company, with operations in the US 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 is located in Princeton, New Jersey;
   
• India – includes the operations of the Company in India, including services provided on behalf of other group subsidiaries, primarily to the US. The India offices are located in Hyderabad and Bangalore, India; A majority of the total revenue generated in India is derived from providing off shore development and support services to customers through the Company’s affiliated entities in other parts of the world, but predominantly with the United States.
   
• Europe – includes the operations of the Company in Denmark and the United Kingdom. The European offices are located in Milton Keynes, United Kingdom; and Odense in Denmark
   
• Japan – includes the operations of the Company in Japan. The office is located in Tokyo, Japan.

20

INTELLIGROUP, INC.

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

     The revenues are attributed to each segment on the basis of the location of the entity which contracts with the customer and on the basis of the inter-company agreements between India and other affiliated entities. 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.

Nine months ended September 30, 2008 Compared to nine months ended September 30, 2007

The following discussion compares the segment results of operations for the nine months ended September 30, 2008 and 2007.

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

	Nine months ended September 30,
	2008				2007
	Dollars		Percentage of		Dollars		Percentage of
			Total				Total
United States	$	69,768	58.2	%	$	66,036	61.9	%
India		34,936	29.2			29,333	27.5
Europe		11,424	9.5			8,672	8.1
Japan		3,668	3.1			2,704	2.5
Total	$	119,797	100	%	$	106,745	100	%

US revenue increased by 5.8% or $3.8 million, from $66 million for the nine months ended September 30, 2007 to $69.8 million for the nine months ended September 30, 2008. The increase was primarily on account of continued new business wins primarily with customers in the mid-tier market, and from steady or increased sales to existing customers.

     India revenue increased by 19.5%, or $5.7 million, from $29.3 million for the nine months ended September 30, 2007 to $35.0 million for the nine months ended September 30, 2008. The increase was attributable to increased demand for offshore services from customers in the United States, 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, but predominantly with the United States.

     Europe revenue increased by 31.3% or $2.7 million, from $8.7 million for the nine months ended September 30, 2007 to $11.4 million for the nine months ended September 30, 2008. The increase in Europe revenue resulted primarily from increased demand for the Company’s consulting services in the local ERP market and the expanded customer base due to the Novasoft acquisition towards the end of 2007.

     Japan revenue increased by 37% or $1.0 million, from $2.7 million for the nine months ended September 30, 2007 to $3.7 million for the nine months ended September 30, 2008. The increase was due primarily to increased demand for the Company’s consulting services within the local ERP market.

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

	Nine months ended September 30,
	2008		2007
United States	$	2,822	($	3,469	)
India		4,579		2,592
Europe		693		708
Japan		98		211
Total	$	8,193		$42

     US operating performance improved by $6.3 million from an operating loss of $3.5 million for the nine months ended September 30, 2007 to an operating profit of $2.8 million for the nine months ended September 30, 2008. The improvement in operating performance was primarily related to an improvement in resource utilization and a decrease in general and administration expenses combined with increased revenues.

     India operating income increased by $2.1 million from an operating profit of $2.5 million for the nine months ended September 30, 2007 to an operating profit of $4.6 million for the nine months ended September 30, 2008. The increase in operating profit was primarily related to an increase in revenues.

     Europe operating performance decreased marginally by $15,000 from an operating profit of $708,000 for nine months ended September 30, 2007 to an operating profit of $693,000 for the nine months ended September 30, 2008.

     Japan operating performance decreased by $100,000 from an operating profit of $200,000 for nine months ended September 30, 2007 to an operating profit of $100,000 for the nine months ended September 30, 2008 as its operating expenses increased proportionately to its increase in revenues.

21

INTELLIGROUP, INC.

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007

The following discussion compares the segment results of operations for the three months ended September 30, 2008 and 2007.

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

	Three months ended Sep 30,
	2008				2007
	Dollars		Percentage of		Dollars		Percentage of
			Total				Total
United States	$	24,338	59.1	%	$	23,589	62.1	%
India		12,151	29.5			10,126	26.6
Europe		3,347	8.1			3,091	8.1
Japan		1,370	3.3			1,204	3.2
Total	$	41,207	100	%	$	38,010	100	%

US revenue increased by 3% or $0.7 million, from $23.6 million for the three months ended September 30, 2007 to $24.3 million for the three months ended September 30, 2008. The increase was primarily on account of continued new business wins primarily with customers in the mid-tier market, and from steady or increased sales to existing customers.

     India revenue increased by 20%, or $2 million, from $10.1 million for the three months ended September 30, 2007 to $12.1 million for the three months ended September 30, 2008. The increase was attributable to increased demand for offshore services from customers in the United States, as a majority of the total revenue generated in India was derived from providing offshore development and support services to customers sourced through the Company’s affiliated entities in other parts of the world, but predominantly with the United States.

     Europe revenue increased by 6.5% or $0.2 million, from $3.1 million for the three months ended September 30, 2007 to $3.3 million for the three months ended September 30, 2008. The increase in Europe revenue resulted primarily from increased demand for the Company’s consulting services in the local ERP market and the expanded customer base due to the Novasoft acquisition towards the end of 2007.

     Japan revenue increased by 16.7% or $0.2 million, from $1.2 million for the three months ended September 30, 2007 to $1.4 million for the three months ended September 30, 2008. The increase was due primarily to increased demand for the Company’s consulting services within the local ERP market.

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

	Three months ended September 30,
	2008		2007
United States		$1,592		$602
India		1,924		596
Europe		140		573
Japan		206		337
Total		$3,861	$	2,108

     US operating performance improved by $1.0 million from an operating profit of $600,000 for the three months ended September 30, 2007 to an operating profit of $1.6 million for the three months ended September 30, 2008. The improvement in operating performance was primarily related to an improvement in resource utilization and a decrease in general and administration expenses combined with increased revenues.

     India operating income increased by $1.3 million from an operating profit of $600,000 for the three months ended September 30, 2007 to an operating profit of $1.9 million for the three months ended September 30, 2008. The increase in operating profit is primarily related to an increase in revenues.

     Europe operating performance decreased by $500,000 from an Operating profit of $600,000 for the three months ended September 30, 2007 to an operating profit of $100,000 for the three months ended September 30, 2008. The decrease was primarily due to increase in the operating costs in the region.

     Japan operating performance decreased by $100,000 from an Operating profit of $300,000 for the three months ended September 30, 2007 to an operating profit of $200,000 for the three months ended September 30, 2008. The decrease was primarily due to increase in the operating costs in the region.

22

INTELLIGROUP, INC.

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Liquidity and Capital Resources

Cash Position and Cash Flows

     The Company had cash and cash equivalents of $8.7 million at September 30, 2008 and $8.4 million at December 31, 2007. The Company had working capital of $23.1 million at September 30, 2008 and $17.6 million at December 31, 2007. The increase in working capital resulted primarily from increase in accounts receivable balances.

     Cash generated from operating activities was $5.3 million for the nine months ended September 30, 2008, resulting primarily from the net profit of $5.7 million. Cash used in operating activities was $1.0 million for the nine month ended September 30, 2007, resulting primarily from an increase in unbilled accounts receivable balances.

     The Company invested $700,000 and $2.3 million in computer equipment, internal-use computer software and office furniture, fixtures and leasehold improvements during the nine months ended September 30, 2008 and 2007, respectively. Net cash provided by investments was $900,000 during the nine month ended September 30, 2007 while there was no net purchase or sale of investment instruments during the nine month ended September 30, 2008.

     Cash used in financing activities was $4 million and $1.3 million during the nine month ended September 30, 2008 and September 30, 2007, respectively, resulting primarily from repayment of line of credit borrowings.

Credit Facility

     On May 22, 2008, the Company and its wholly-owned subsidiary Empower, Inc. closed out the existing $15 million line of credit with Steel City Capital Funding. The Company entered into a revolving credit loan and security agreement (“Credit Agreement”) with HSBC Bank, (the “Bank”). The Credit Agreement is comprised of a three year revolving line of credit pursuant to which the Company can borrow up to $10.0 million at the Bank’s Base Rate (as defined in the Credit Agreement) of 5.0% as of September 30, 2008, minus 0.85% percent. The credit facility is collateralized by substantially all of the assets of the United States based operations and all subsidiary stock (not to exceed 65% of the Equity Interests of any Foreign Subsidiary). The maximum borrowing availability under the Credit Agreement is based upon a percentage of eligible billed and unbilled accounts receivable. The Credit Agreement provides for certain financial covenants that shall only be tested as of the end of any fiscal quarter.

The Company was in compliance with the applicable financial covenants of the loan agreement related to the Credit Agreement as of September 30, 2008.

     As of September 30, 2008, the Company had approximately $100,000 outstanding borrowings under the Credit Agreement. The Company estimates undrawn availability under the Credit Facility to be $9.9 million as of September 30, 2008.

     In order to finance a significant portion of the purchase price for the Novasoft Acquisition, IGE received a loan (“UK Loan”) of £ 1,500,000 from Lloyds Bank PLC “Lloyds Bank TBS” during the twelve month period ended December 31, 2007. This loan is secured by a stand by letter of credit from Citibank N.A. (“Citibank”), for which Intelligroup Asia Private Limited (“IGA”) has placed a hundred and ten percent margin money deposits with Citibank. The loan is payable in three annual installments of ₤500,000 starting October 2008, with interest payable monthly at the rate of 6.75% APR The Company repaid this loan in entirety during the fourth quarter of 2008.

Cash to Fund Operating Activities

     The Company relies on the cash generated by operating activities, cash on hand and the financing available under its credit facility to fund ongoing operations. The Company’s credit facility with the Bank represents its sole source of external financing for ongoing business operations. The Company’s operating plan depends on its cash generated by operating activities continued borrowing availability under this credit facility or securing alternate sources of financing. The Company must comply with certain covenants or secure from the Bank waivers of any default on such covenants to maintain its line of credit with the Bank. Given the Company’s variable operating performance in the past few years, there can be no assurances that the Company will be able to maintain compliance with the applicable financial covenants under its credit agreement or obtain waivers of any defaults.

     The Company’s 2008 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, or ability to timely collect cash from its customers 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 reductions in capital expenditures and operating costs, and/or seeking additional financing. In addition, the Company may seek additional financing from time to time to fund its cash requirements for operating expenses and capital expenses; however, the availability of financing may be limited because, among other things, the Company is not currently listed on a national stock exchange. Assuming that the Company achieves the revenue and expense targets included in the Company’s operating plan, management believes that the Company’s cash on hand and cash generated by operations and borrowings under its credit facility will be sufficient to fund the Company’s current and planned operations through at least the next twelve months.

Share Repurchase Program

     On October 24^th 2008, the Board of Directors of the Company approved a share repurchase program of up to $5,000,000 of the Company's common stock over the next 18 months. The share repurchase program will be funded using the Company's working capital and authorizes the Company to repurchase shares from time to time through open market or privately negotiated transactions. The Company also intends to adopt a Rule 10b5-1 trading plan that will allow the Company to purchase its shares at times when it ordinarily would not be in the market due to its internal trading policy. The program will expire on the earlier of (i) the repurchase of the maximum number of shares under the program, (ii) the 18 month anniversary of the approval of the program or (iii) a determination by the Board of Directors to discontinue the program. The Company is not obligated to repurchase shares under the authorization or enter into a Rule 10b5-1 trading plan and the timing, actual number and value of shares purchased will depend on many factors, including the Company’s cash flow and the liquidity and price performance of its shares.

23

INTELLIGROUP, INC.

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 or interest rate changes have historically had a material effect on its revenues or results of operations. However, significant effects of inflation, currency fluctuations and changes in interest rates on the economies of the United States, Asia and Europe could favorably or adversely impact the Company’s revenues and results of operations in the future. Currency fluctuations have historically had and will continue to have an impact on the Company’s operations. If there is a material change in the relationship between European currencies and/or Asian currencies and the United States Dollar, such change could materially affect the result of the Company’s European and/or Asian operations as reflected in the Company’s consolidated financial statements.

     The Company is exposed to foreign currency exchange rate risk in the ordinary course of doing business as it transacts or holds a portion of funds in foreign currencies, particularly the Indian Rupee. Accordingly, management periodically evaluates the need for hedging strategies to mitigate the effect of foreign currency fluctuations. As of September 30, 2008, $25 million of the foreign currency European Option contracts and $12.55 million foreign currency forward contracts remain outstanding which are expected to be settled by May 2010. The details of such derivative contracts are given below.

	Option Contracts	Forward Contracts
Notional Amount	$25 million	$12.55 million
Rates	INR 39.70 to 43.45	INR 43.21 to 44.93
Effective date	05/18/07, 11/28/07 and 01/17/08	6/5/2008,6/6/08,6/30/2008,
		8/14/2008 and 8/20/2008
Maturity Dates	10/28/2008 to 05/26/10	12/30/2008 to 12/30/09
Fair Value	$ (2.4) million	$ (0.8) million

Management may continue to enter into such contracts in the future to reduce foreign currency exposure to appreciation or depreciation in the value of certain foreign currencies. Other than the aforementioned derivative contracts, the Company has not engaged in hedging activities nor entered into off-balance sheet transactions, arrangements or other relationships with unconsolidated entities or other persons that are likely to affect liquidity or the availability of or requirements for capital resources.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

     The Company is responsible for maintaining disclosure controls and procedures designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission’s rules and regulations, and that such information is accumulated and communicated to its management, including its chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. In designing and evaluating the Company’s disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures and implementing controls and procedures based upon the application of management’s judgment. Based on its evaluation, the Company’s principal executive officer and principal financial officer have concluded that, as of September 30, 2008, its disclosure controls and procedures were effective as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Changes in Internal Controls

     There were no changes in our internal control over financial reporting during the quarter ended September 30, 2008, that materially effected, or are reasonably likely to materially affect, our internal control over financial reporting.

24

INTELLIGROUP, INC.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     There is no pending litigation to which the Company is a party or to which any of its property is subject that would have a material impact on its consolidated financial condition, results of operations or cash flows in the event we were unsuccessful in such litigation. However, the Company cannot predict with certainty the outcome of any litigation or the potential for future litigation and any such matters could adversely affect its financial condition, results of operations, cash flows and business.

Item 1a. Risk Factors

There have been no material changes to our risk factors previously disclosed in our annual report on Form 10-K for the period ended December 31, 2007.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There are no matters to report subject to this Item for the period ended September 30, 2008.

Item 3. Defaults Upon Senior Securities

There are no matters to report subject to this Item for the period ended September 30, 2008.

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

     The Company held its annual meeting on September 18, 2008 (“2008 Annual Meeting”) at which the matters described herein were submitted to a vote of the security holders.

     At the 2008 Annual Meeting, the Company submitted a proposal to elect Vikram Gulati, Ravi Adusumalli, Ajit Isaac, Babar Khan, Srini Raju and Sandeep Reddy to serve as directors until the next annual meeting of shareholders and until their respective successors have been duly elected and qualified. The votes cast for or withheld for each nominee were as follows:

Nominee:	Votes For:	Votes Withheld:
Vikram Gulati	35,528,608 Shares	564,497 Shares
Ravi Adusumalli	35,528,708 Shares	571,548 Shares
Ajit Isaac	35,528,593 Shares	564,597 Shares
Babar Khan	35,529,188 Shares	564,612 Shares
Srini Raju	35,523,657 Shares	564,017 Shares
Sandeep Reddy	35,521,657 Shares	569,548 Shares

     At the 2008 Annual Meeting, the Company submitted a proposal to ratify the appointment of Ernst & Young LLP as the Company’s independent auditors for the year ended December 31, 2008. The votes cast for, against or abstaining from, and the broker non-votes were as follows:

No. of	No. of Shares	No. of	No. of Broker
Voted For:	Voted Against:	Abstentions:	Non-vote:
36,070,207	16,996	6,001	0

Item 5. Other Information

There are no matters to report subject to this Item for the period ended September 30, 2008.

Item 6. Exhibits

See exhibit index hereto, which is incorporated by reference herein.

25

     INTELLIGROUP, INC.

EXHIBIT INDEX

Exhibit No.		Description of Exhibit
2		Agreement and Plan of Merger of the Company and its wholly owned subsidiary Oxford Systems Inc. dated December 2, 1996 (Incorporated by reference to the Company's Annual Report on Form 10-KSB for the year ended December 31, 1996.)
3.1		Amended and Restated Certificate of Incorporation dated December 27, 2005.
3.2		Amended and Restated Bylaws. (Incorporated by reference to the Company's Registration Statement on Form SB-2 (Registration Statement No. 333-5981) declared effective on September 26, 1996.)
4.1		Shareholder Protection Rights Agreement dated as of November 6, 1998, between the Company and American Stock Transfer & Trust Company which includes (I) the Form of Rights Certificate and (ii) the Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Intelligroup, Inc. (Incorporated by reference to Exhibit No. 4.1 of the Company's Report on Form 8-K dated November 9, 1998, filed with the Securities and Exchange Commission on November 9, 1998.)
4.2		Amendment dated September 29, 2004 to the Shareholder Protection Rights Agreement dated November 6, 2004. (Incorporated by reference to Exhibit No. 4.1 of the Company’s Report on Form 8-K dated September 29, 2004, filed with the Securities and Exchange Commission on October 5, 2004.)
10.1	*	1996 Stock Plan, as amended, of the Company.
10.2	*	1996 Non-Employee Director Stock Option Plan. (Incorporated by reference to the Company's Registration Statement on Form SB-2 (Registration Statement No. 333-5981) declared effective on September 26, 1996.)
10.3	*	Form of Indemnification Agreement entered into by the Company and each of its Directors and officers. (Incorporated by reference to the Company's Registration Statement on Form SB-2 (Registration Statement No. 333-5981) declared effective on September 26, 1996.)
10.4	*	Employee's Invention Assignment and Confidentiality Agreement. (Incorporated by reference to the Company's Registration Statement on Form SB-2 (Registration Statement No. 333-5981) declared effective on September 26, 1996.)
10.5		Services Provider Agreement by and between Oracle Corporation and the Company dated July 26, 1994. (Incorporated by reference to the Company's Registration Statement on Form SB-2 (Registration Statement No. 333-5981) declared effective on September 26, 1996.) See Exhibit 10.8.
10.6		Agreement by and between the Company and Intelligroup Asia Private Limited ("Intelligroup Asia") relating to operational control of Intelligroup Asia, with related agreements. (Incorporated by reference to the Company's Registration Statement on Form SB-2 (Registration Statement No. 333-5981) declared effective on September 26, 1996.)
10.7		Amendment No. 1 to Services Provider Agreement by and between Oracle Corporation and the Company dated December 30, 1996. (Incorporated by reference to the Company's Annual Report on Form 10-KSB for the year ended December 31, 1996.) See Exhibit 10.6.
10.8		R/3 National Logo Partner Agreement by and between SAP America, Inc. and the Company dated as of April 29, 1997. (Incorporated by reference to the Company's Registration Statement on Form SB-2 (Registration Statement No. 333-29119) declared effective on June 26, 1997.) See Exhibits 10.10, 10.14 and 10.24.
10.9		ASAP Partner Addendum to R/3 National Logo Partner Agreement between SAP America, Inc. and the Company effective July 1, 1997 (amends existing R/3 National Logo Partner Agreement). (Incorporated by reference to the Company's Quarterly Report on Form 10-QSB for the quarter ended September 30, 1997.) See Exhibits 10.9, 10.14 and 10.24.
10.1	0	Implementation Partner Agreement between PeopleSoft, Inc. and the Company effective July 15, 1997. (Incorporated by reference to the Company's Quarterly Report on Form 10-QSB for the quarter ended September 30, 1997.) See Exhibit 10.13.
10.1	1	Lease Agreement between Alfieri-Parkway Associates, as Landlord, and Intelligroup, Inc., as Tenant, dated March 17, 1998. (Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.)
10.1	2	Fifth Amendment to the Implementation Partner Agreement dated July 15, 1998, between the Company and PeopleSoft, Inc. See Exhibit 10.11.
10.1	3	Amendment to the National Implementation Partner Agreement dated as of January 1, 1999, between SAP America and the Company. See Exhibits 10.9, 10.10 and 10.24.

26

Exhibit No.	Description of Exhibit
10.14	mySap.com Partner-Services Addendum effective June 7, 2000 to R/3 National Logo Partner Agreement between SAP America, Inc. and the Company. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000.) See Exhibits 10.9, 10.10 and 10.14.
10.15	Service Alliance Master Agreement and Addendums dated May 5, 2000 between PeopleSoft, Inc. and the Company. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000.)
10.16	2004 Equity Incentive Award Plan.
10.17	First Amendment to the 2004 Equity Incentive Award Plan. (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 29, 2004, filed with the Securities and Exchange Commission on October 5, 2004.)
10.18	Common Stock Purchase Agreement dated September 29, 2004 by and between the Company, SB Asia Infrastructure Fund LP and Venture Tech Assets Ltd. (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 29, 2004, filed with the Securities and Exchange Commission on October 5, 2004.)
10.19	Amendment No. 1 to the Common Stock Purchase Agreement dated September 29, 2004. (Incorporated by reference to the Company’s Current Report on Form 8-K dated March 25, 2005, filed with the Securities and Exchange Commission on March 25, 2005.)
10.20	Employment Agreement effective June 30, 2005 between the Company and Vikram Gulati. (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 30, 2005, filed with the Securities and Exchange Commission on July 7, 2005.)
10.21	Second Amendment to the 2004 Equity Incentive Award Plan.
10.22	Common Stock Purchase Agreement dated March 30, 2006 by and between Intelligroup Inc., SB Asia Infrastructure Fund LP and Venture Tech Assets, Ltd. (Incorporated by reference to the Company’s current report on Form 8-K dated March 30, 2006 filed with the Securities and Exchange Commission on April 5, 2006.)
10.23	First Amendment to the Employment Agreement dated June 30, 2005 between Intelligroup Inc. and Vikram Gulati. (Incorporated by reference to the Company’s current report on Form 8-K dated April 6, 2006, filed with the Securities and Exchange Commission on April 13, 2006.)
10.24	Second Amendment to Employment Agreement dated June 30, 2005, between Intelligroup, Inc. and Vikram Gulati. (Incorporated by reference to the Company’s current report on Form 8-K dated June 8, 2006 filed with the Securities and Exchange Commission on June 12, 2006.)
10.25	Third Amendment to the 2004 Equity Incentive Award Plan.
10.26	Employment Agreement dated September 7, 2006 by and between Intelligroup, Inc. and Alok Bajpai. (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 7, 2006, filed with the Securities and Exchange Commission on September 7, 2006.)
10.27	Amendment No.3 dated June 8, 2007 to Employment agreement dated June 30, 2005 between Intelligroup, Inc. and Vikram Gulati. (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 8, 2007, filed with the Securities and Exchange Commission on June 13, 2007.)
10.28	Master Assignment Agreement between Novasoft Information Technology (Europe) Limited and Intelligroup Europe Limited dated June 8, 2007 (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 8, 2007, filed with the Securities and Exchange Commission on June 14, 2007.)
10.29	Master Assignment Agreement between ISG Novasoft Technologies Limited and Intelligroup Asia Private Limited dated June 8, 2007 (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 8, 2007, filed with the Securities and Exchange Commission on June 14, 2007.)
10.30	Non Compete Agreement between Novasoft Information Technology Corporation and Intelligroup Europe Ltd. Dated June 8, 2007. (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 8, 2007, filed with the Securities and Exchange Commission on June 14, 2007.)
10.31	Employment Agreement between Intelligroup Asia Pvt. Ltd. and Kalyan Sundaram Mahalingam. (Incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission on March 31, 2008).

27

Exhibit No.	Description of Exhibit
10.32	Amendment No.1 dated August 22, 2007 to Master Assignment Agreement between Novasoft Information Technology (Europe) Limited and Intelligroup Europe Limited dated June 8, 2007 . (Incorporated by reference to the Company’s Current Report on Form 8-K dated August 22, 2007, filed with the Securities and Exchange Commission on August 28, 2007.)
10.33	Amendment No.1 dated August 22, 2007 to Master Assignment Agreement between ISG Novasoft Technologies Limited and Intelligroup Asia Private Limited dated June 8, 2007 (Incorporated by reference to the Company’s Current Report on Form 8-K dated August 22, 2007, filed with the Securities and Exchange Commission on August 28, 2007.)
10.34	Amendment No.1 dated August 22, 2007 to Non Compete Agreement between Novasoft Information Technology Corporation and Intelligroup Europe Ltd. Dated June 8, 2007.
10.35	Amendment No.1 dated February 4, 2008 to Employment Agreement dated September 7, 2006 between Intelligroup, Inc. and Alok Bajpai. (Incorporated by reference to the Company’s Current Report on Form 8-K dated February 4, 2008, filed with the Securities and Exchange Commission on February 4, 2008.)
10.36	Revolving Credit and Security Agreement dated May 22, 2008 by and between Intelligroup Inc., Empower Inc. and HSBC Bank USA, National Association (incorporated by reference to Company’s current report on Form 8-K dated May 22, 2008, filed with the Securities and Exchange Commission on May 28, 2008.)
10.37	Revolving Promissory Note dated May 22, 2008 (incorporated by reference to Company’s current report on Form 8-K dated May 22, 2008 filed with the Securities and Exchange Commission on May 28, 2008.)
10.38	Amendment No.2 dated September 11 2008 to Employment Agreement dated September 7, 2006 between Intelligroup, Inc. and Alok Bajpai. (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 11, 2008, filed with the Securities and Exchange Commission on September 11, 2008.)
31.1†	Certifications of Chief Executive Officer Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2†	Certifications of Chief Financial Officer Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1†	Certifications of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2†	Certifications of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

____________________
 

*	A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(c) of Form 10-K.
†	Filed herewith. All other exhibits previously filed.

28
 

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 12th day of November 2008.

	INTELLIGROUP, INC.
Date: November 12, 2008	By:	/s/ Vikram Gulati
		Vikram Gulati
		Chief Executive Officer
Date: November 12, 2008	By:	/s/ Alok Bajpai
		Alok Bajpai
		Chief Financial Officer

29