# SECURITIES AND
EXCHANGE COMMISSION WASHINGTON, D.C. 20549

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# FORM 40-F

(Check one)

|_| Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934
                                                
or
|X| Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934

For
the fiscal year ended September 30, 2002       Commission
file number 1-14858

GROUPE CGI INC./CGI
GROUP INC. (Exact name of
Registrant as Specified in Its Charter)

CGI Group Inc.(Translation of
Registrants Name Into English)

Québec, Canada(Province
or Other Jurisdiction of Incorporation or Organization)

7374(Primary Standard
Industrial Classification Code Number)

[Not Applicable](I.R.S. Employer
Identification Number)

1130 Sherbrooke Street
West 5th FloorMontréal,
Québec Canada H3A 2M8(514) 841-3200(Address
and Telephone Number of Registrants Principal Executive Offices)

CGI Information Systems
& Management Consultants, Inc. 600 Federal StreetAndover, MA 01810(978) 946-3000 (Name, Address and
Telephone Number of Agent For Service in the United States)

Securities registered or to be
registered pursuant to Section 12(b) of the Act:

|Title Of Each Class        | Name Of Each Exchange On Which Registered
|-------------------------- | -----------------------------------------
|Class A Subordinate Shares | New York Stock Exchange                  

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

None (Title of Class)

Securities for which there is a
reporting obligation pursuant to Section 15(d) of the Act:

None

For annual reports, indicate by check
mark the information filed with this form:

||X| Annual Information Form | |X| Audited Annual Financial Statements
|--------------------------- | ---------------------------------------

Indicate the number of outstanding
shares of each of the issuers classes of capital or common stock as of the close of
the period covered by the annual report: 339,900,257 Class A Subordinate Shares,
40,799,774 Class B Shares

Indicate by check mark whether the
registrant by filing the information contained in this form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934 (the Exchange Act). If Yes is marked, indicate the file
number assigned to the registrant in connection with such rule. Yes____ 82-____
No X

Indicate by check mark whether the
registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act 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. YesX No____

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# Undertaking

Registrant
undertakes to make available, in person or by telephone, representatives to respond to
inquiries made by the Commission staff, and to furnish promptly, when requested to do so
by the Commission staff, information relating to: the securities registered pursuant to
Form 40-F; the securities in relation to which the obligation to file an annual report on
Form 40-F arises; or transactions in said securities.

# Controls and Procedures

The
Registrant has established a system of controls and other procedures designed to ensure
that information required to be disclosed in its periodic reports filed under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commissions rules and forms. These disclosure controls and procedures have been
evaluated under the direction of the Registrants Chief Executive Officer and Chief
Financial Officer within the last 90 days. Based on such evaluations, the Chief Executive
Officer and Chief Financial Officer have concluded that the disclosure controls and
procedures are effective. No significant changes were made in the Registrants
internal controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation

# Information to be Filed
on This Form

|The
following materials are filed as a part of this Annual Report:  
|--------------------------------------------------------------------
|                                                                    
|1.                                                                  
|                                                                    
|2.                                                                  
|                                                                    
|3.                                                                  
|                                                                    
|The
following document is filed as an exhibit to this Annual Report:
|                                                                    
|23.1                                                                
|                                                                    
|99.1                                                                
|                                                                    
|99.2                                                                
|                                                                    
|99.3                                                                

-2-

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# ANNUAL INFORMATION FORM

# CGI GROUP INC.

For the fiscal year ended
September 30, 2002

February 17, 2003

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# TABLE OF CONTENTS

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|1.     INCORPORATION AND DESCRIPTION OF CAPITAL STOCK                                    | 1 
|---------------------------------------------------------------------------------------- | --
|                                                                                        
|1.1 THE COMPANY                                                                          | 1 
|1.2 THE SUBSIDIARIES                                                                     | 3 
|                                                                                        
|2.     GENERAL DEVELOPMENT OF BUSINESS                                                   | 3 
|                                                                                        
|2.1 MISSION AND PROFILE                                                                  | 3 
|2.1.1    CGI's Business Approach                                                         | 3 
|2.1.2    Strategic Alliances                                                             | 4 
|2.1.3    Related-Party Transactions                                                      | 4 
|2.1.4    Commercial Alliances                                                            | 4 
|                                                                                        
|3.     DESCRIPTION OF BUSINESS                                                           | 5 
|                                                                                        
|3.1 CORPORATE STRUCTURE                                                                  | 5 
|3.2 STRUCTURE OF OPERATIONS                                                              | 6 
|3.3 MAIN SERVICES OFFERED BY CGI                                                         | 6 
|3.4 RESEARCH                                                                             | 7 
|3.5 HUMAN AND MATERIAL RESOURCES                                                         | 8 
|3.6 CLIENT BASE                                                                          | 8 
|3.7 THE NORTH AMERICAN INFORMATION TECHNOLOGY SERVICES INDUSTRY                          | 8 
|3.7.1    Size, Structure and Recent Developments                                         | 8 
|3.7.2    Industry Trends and Outlook                                                     | 9 
|3.8 CGI'S GROWTH AND POSITIONING STRATEGY                                                | 9 
|                                                                                        
|4.     FINANCIAL INFORMATION                                                             | 11
|                                                                                        
|4.1 TABLE OF COMPARATIVE RESULTS                                                         | 11
|4.2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS | 11
|4.2.1    Fiscal 2002                                                                     | 11
|4.2.2    Fiscal 2001                                                                     | 30
|4.2.3    Fiscal 2000                                                                     | 42
|4.2.4    Fiscal 1999                                                                     | 50
|4.3 STATISTICS FOR PAST NINE QUARTERS (2001-2003                                         | 59
|4.4 MANAGEMENT'S DISCUSSION OF QUARTERLY RESULTS                                         | 59
|                                                                                        
|5.     EVENTS SUBSEQUENT TO FISCAL 2002 AND OUTLOOK                                      | 60
|                                                                                        
|5.1 SUBSEQUENT EVENTS                                                                    | 60
|5.1.1    Strategic Developments                                                          | 60
|5.2 OUTLOOK FOR FISCAL 2003                                                              | 61
|5.3 FORWARD-LOOKING STATEMENTS                                                           | 62
|                                                                                        
|6.     DIRECTORS AND OFFICERS                                                            | 63
|                                                                                        
|6.1 DIRECTORS                                                                            | 63
|6.2 OFFICERS                                                                             | 67
|                                                                                        
|7.     MARKET FOR SECURITIES                                                             | 68
|                                                                                        
|8.     ADDITIONAL INFORMATION                                                            | 68

i

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|1.  | INCORPORATION AND DESCRIPTION OF CAPITAL STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1 | The Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | CGI Group Inc. (the Company or CGI) was incorporated under the
provisions of Part IA of the Companies Act (Quebec) on
September 29, 1981 to continue the activities of Conseillers en Gestion et
Informatique C.G.I. Inc., founded in 1976. In February 1983, September 1986
and September 1998, the Company obtained Certificates of Amendment to change its
name.

On December 17, 1986, CGI completed its initial public offering with an issue of
800,000 Class A subordinate shares (Class A shares). A
Certificate of Amendment was then obtained to reorganize the Companys share capital,
and its by-laws were modified to enable the creation of an unlimited number of First
Preferred shares and Second Preferred shares, Class A shares and Class B shares
(multiple voting) (Class B shares), all without par value. Class A
shares carry one vote per share and Class B shares carry 10 votes per share.
Class A shares may be converted into Class B shares, under certain conditions,
in the event of certain take-over bids in respect of Class B shares.

In the context of acquisitions, the Company amended its articles on November 17, 1995,
on June 21, 1996, on April 16, 1997, on October 21, 1997 and on
June 18, 1998 in order to create series of First Preferred shares. The issued shares
have since then been converted in Class A shares.

The Company also amended its articles on January 30, 1996, in order to grant the holders
of First Preferred shares the right to be invited to any meeting of shareholders of the
Company, to attend such meeting and to vote thereat.

On August 12, 1997, the Company proceeded with the subdivision, on a two for one basis,
of all of the outstanding shares of its share capital. In connection therewith, the
Company amended its articles in order to change the purchase for cancellation price of the
First Preferred shares, Series 1 and Series 2 especially to reflect the
subdivision.

On December 15, 1997 and on May 21, 1998 respectively, the Company proceeded with a
subdivision, on a two for one basis, of all of the outstanding shares of its share
capital.

On June 29, 1998, in the context of the agreements with BCE Inc. (BCE)
and Bell Canada described below, the Company amended its articles by:
(i) automatically converting the First Preferred shares, Series 1 into
Class A shares on a one for one basis and deleting the First Preferred shares,
Series 1 from the Companys authorized capital, (ii) modifying the
definition of Majority Holder in Section 3.4 of Annex I to the
Articles of Amendment of the Company attached to the Certificate of Amendment dated
November 25, 1986, and (iii) deleting from the Companys authorized capital
the First Preferred shares, Series 2, the First Preferred shares, Series 3, the
First Preferred shares, Series 4 and the First Preferred shares, Series 5.

On June 30, 1998, again in the context of the agreements with BCE and Bell Canada
described below, the Company amended its articles by providing for (i) the automatic
conversion of the Class B shares into Class A shares on a one for one basis,
(ii) the deletion of the Class B shares from the Companys authorized
capital and (iii) the redesignation of the

1

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| | Class A shares as Common
Shares, in each case as of January 5, 2004, subject to certain terms and
conditions of the Options Agreement (as defined below), and only if BCE and Bell Canada
and any of their wholly-owned subsidiaries hold in the aggregate 30% of the issued and
outstanding equity shares of CGI.

On November 18, 1998, Messrs. Serge Godin, André Imbeau and Jean Brassard,
9058-0705 Quebec Inc., 9061-9354 Quebec Inc. and 9065-4476 Quebec Inc.
(collectively the Majority Shareholders) executed a Second Amended and
Restated Options Agreement and Shareholders Agreement (the Options
Agreement) with, inter alia, BCE and Bell Canada (which Options
Agreement replaced and superseded the options agreement executed on July 1, 1998)
pursuant to which, inter alia, the Majority Shareholders were granted the
right to sell to BCE, in the aggregate, up to 20% of their Class B shares held on
July 1, 1998, at any time prior to January 5, 2002, up to 50% of the
Class B shares held on July 1, 1998, at any time from January 5, 2002, and
prior to January 5, 2003, and up to all Class B shares held on July 1,
1998, at any time from January 5, 2003, and prior to January 5, 2004, the whole
subject to certain terms and conditions as set forth in such agreement. For a period of
two years after January 5, 2004, BCE will have a right to purchase all Class A
shares and Class B shares then held by the Majority Shareholders, subject to certain
terms and conditions as set forth in such agreement.

On September 3, 1998, each of Serge Godin, André Imbeau and Jean Brassard partly
exercised their put options pursuant to the Options Agreement, Mr. Serge Godin
selling to BCE 700,000 Class B shares and Messrs. André Imbeau and
Jean Brassard selling to BCE 400,000 Class B shares, respectively.

On March 1, 1999, each of the Majority Shareholders partly exercised their put options
pursuant to the Options Agreement, 9058-0705 Quebec Inc. selling to BCE
1,577,365 Class B shares, and each of 9061-9354 Quebec Inc. and
9065-4476 Quebec Inc. respectively selling to BCE 200,000 Class B shares.

On January 7, 2000, the Company proceeded with a subdivision, on a two for one basis, of
all of the outstanding shares of its share capital.

On December 20, 2001, CGI completed its public offering of Class A shares, through which CGI
issued 11,110,000 Class A shares at a price of $11.25 per share, for gross
proceeds of $124,987,500, to a syndicate of investment dealers.

As at January 31, 2003, CGIs outstanding share capital was comprised of
359,414,410 Class A shares and 40,799,774 Class B shares.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2

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|1.2 | The Subsidiaries                                                                                                                                                                                                                                                                                                                                        
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | As of January 31, 2003, the following is a list of the subsidiaries of CGI having
(i) total assets representing more than 10% of the consolidated assets of CGI as at
September 30, 2002, or (ii) sales and operating revenues representing more than
10% of the consolidated sales and operating revenues of CGI for the year ended
September 30, 2002.

> Name
>           Laws ofIncorporation
>           Percentage ofOwnershipCGI Information Systems and Management Consultants Inc.
>           Canada
>           100%Conseillers en Gestion et Informatique C.G.I. Inc.
>           Quebec
>           100%The CGI Group Holding Corporation
>           Delaware
>           100%CGI Information Technology Services, Inc.(formerly IMRglobal Corp.)
>           Florida
>           100%COGNICASE Inc.
>           Canada
>           96.7%

|2   | GENERAL DEVELOPMENT OF BUSINESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1 | Mission and Profile                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The mission of CGI is to help its clients with professional services of outstanding quality,
competence and objectivity, delivering the best solutions to fully satisfy client
objectives in information technology, business processes and management. In all we do, we
foster a culture of partnership, intrapreneurship and integrity, building a world-class IT
and business process outsourcing company.

CGI is the largest independent Canadian information technology (IT) services company and the
fourth largest independent in North America, based on its headcount of more than 21,000
professionals, as at January 31, 2003. CGI helps its 3,500 clients in the private and
public sectors meet their strategic goals by providing them with an end-to-end offering of
high-level IT services and business solutions from offices located around the world.
CGIs unique mix of services is comprised of management of IT and business functions,
systems development and integration, and consulting.

| | 2.1.1 | CGIs Business Approach                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       | CGI focuses on serving specific industry sectors for which it has developed deep expertise. By
identifying six specific target markets, over time the Company has been able to develop
close, long-term relationships with its clients and to become their IT partner of choice.
CGI professionals have a thorough understanding of their clients business needs.

CGI chose to focus on industries that make a strategic use of information technology and that
rely on it to enhance their competitive position. CGI therefore provides end-to-end IT
services in six economic sectors: financial services, telecommunications,

3

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| |       | manufacturing/retail/distribution, governments, healthcare, as well as utilities and
services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2.1.2 | Strategic Alliances                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |       | BCE/Bell Canada

CGI has entered into a strategic alliance with BCE/Bell Canada, which originated in 1995 with
a Bell Canada strategic agreement. On November 17, 1995, CGI and Bell Canada entered
into a five-year renewable strategic agreement, which agreement was extended, on
July 1, 1998, until June 30, 2008. Bell Canada, the largest Canadian
telecommunications operating company, markets a full range of state-of-the-art products
and services to business and residence customers in Canada. In 1995, Bell Canada initially
injected $18.4 million into CGIs share capital to acquire 2,300,000 First
Preferred shares, Series 1. Following this investment, two Bell Canada nominees were
appointed to CGIs Board of Directors. In addition to this strategic alliance, CGI
and Bell Canada signed a commercial alliance whereby both companies agreed to partner in
addressing market opportunities.

On January 5, 1998, BCE/Bell Canada acquired 6 million Class A shares of
CGI from Teleglobe Investment Corp. On June 30, 1998, as part of CGIs
acquisition of BCE/Bell Canada subsidiaries Bell Sygma and Bell Sygma International (BSI),
BCE acquired 8.6 million First Preferred shares, Series 6 of CGI. With these two
transactions completed in 1998, BCEs representation on CGIs Board of Directors
was increased to three members; the equity interest of BCE/Bell Canada in CGI totalled 43%
and its voting interest stood at 17.9%. As at January 31, 2003, as a result of various
share issues completed by CGI, BCEs equity stake in CGI stood at 29.99% and its
voting interest represented 23.88%.
| | 2.1.3 | Related-Party
Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |       | Throughout fiscal 2002, CGI continued to build on its strategic alliance with BCE and Bell Canada. In
the normal course of business, the Company is party to contracts with certain BCE
subsidiaries and affiliated companies, pursuant to which the Company is their preferred
supplier for information systems and IT needs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 2.1.4 | Commercial Alliances                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       | CGI currently has approximately 40 commercial alliance agreements with various business
partners. These non-exclusive commercial agreements with hardware and software providers
allow the Company to provide its clients with best-of-breed technology, often on the best
commercial terms available. The following is a chronological list of CGIs primary
commercial alliances:

in 1996, CGI entered into a commercial alliance with IBM Canada;

     in 1998, CGI signed  commercial  agreements with ERP program  developers SAP,  PeopleSoft and Oracle;

     in September 1999, CGI entered into a non-exclusive alliance with Microsoft;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

4

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| |  | in October 1999, CGI signed a non-exclusive direct commercial systems integrator agreement
with Sun Microsystems;

     in December 2000, CGI signed a non-exclusive systems integration agreement with Siebel; and

     in July 2002, CGI signed a non-exclusive systems integration agreement with BEA Systems.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3   | DESCRIPTION OF BUSINESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1 | Corporate Structure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Head Office
(Montreal)

Administrative and financial functions
     Communications and investor relations
     Corporate and strategic development
     Corporate affairs
     Human resources
     Investments and acquisitions
     Marketing
     Planning and corporate development
     Quality
     R&D and professional development programs
     Support to large outsourcing projects
     Knowledge management
     Project performance
     Large acquisitionsStrategic Business Units
(Canada and Europe, U.S. and Asia-Pacific, Business Process Services

Services and areas of responsibility

Consulting
     Management of resources and members, including recruitment
     Outsourcing delivery - Large projects
     Outsourcing sales
     Performance management
     Strategic business units accounting and control
     Systems and solutions integration

5

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| | Offices and data centres
| | ------------------------

> NORTH AMERICA
>      EUROPECanada
> 
>      Burnaby, BC
>      Calgary, AB
>      Edmonton, AB
>      Fredericton, NB
>      Halifax, NS
>      Montreal, QC
>      Ottawa, ON
>      Quebec City, QC
>      Regina, SK
>      Saguenay, QC
>      Saint John, NB
>      Toronto, ON
>      Vancouver, BC
>      Winnipeg, MB
> 
>      U.S.
> 
>      Albany, NY
>      Andover, MA
>      Atlanta, GA
>      Canton, MA
>      Chicago, IL
>      Cincinnati, OH
>      Cleveland, OH
>      Dallas, TX
>      Detroit, MI
>      Houston, TX
>      Howell, NJ
>      Kansas City, KS
>      Minneapolis, MN
>      Nashville, TN
>      Oklahoma City, OK
>      Phoenix, AZ
>      Pittsburg, PA
>      Sacramento, CA
>      San Jose, CA
>      Seattle, WA
> 
>      England
> 
>      Basingstoke
>      Bristol
>      StevenageFrance
> 
>      Nîmes
>      ParisItaly
>      MilanLuxembourgBelgium
>      BrusselsASIA PACIFICIndia *
> 
>      Bangalore
>      Mumbai

|    | *Indian operations in Bangalore and Mumbai are
     considered part of the US operations, which they support.                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.2 | Structure of Operations                                                                                                                                                                                                                                               
|    | Since October 1, 2001, CGI has organized its business units according to the following
breakdown: Canada and Europe, US and Asia Pacific, and Business Process Services
(outsourcing of a clients business processing functions).                                    
|3.3 | Main Services Offered by CGI                                                                                                                                                                                                                                          
|    | CGI provides the full range of IT services including management of IT and business
functions (outsourcing), systems integration and consulting. The Companys primary
focus is large scale systems integration and outsourcing contracts. CGI provides the
consulting,

6

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|    | implementation and operations services that companies need to turn their
corporate strategy into reality.

Management of IT and Business Functions (outsourcing)

Outsourcing is one of the fastest-growing segments of the IT industry. CGI has been active in
outsourcing since 1986, which makes it a pioneer in this segment. Through a series of
acquisitions completed since 1996, including the acquisition on July 1, 1998, of Bell
Sygma and BSI, the Company has become the leading Canadian independent provider of IT
services and one of the four largest in North America, based on its headcount.

Outsourcing contracts are signed for periods ranging from five to ten years and are renewable. They
are paid for according to a formula of monthly payments.

As part of outsourcing contracts, clients delegate entire or partial responsibility for IT or
business functions in order to achieve significant savings and access the best information
technology, while retaining control over strategic IT functions. These contracts provide
revenue visibility and support performance stability.

Services provided as part of an outsourcing contract may include facilities management (data
centers, call centers, network and desktop services), application maintenance and support,
development and integration of new projects and applications, as well as business process
services including functions such as document management, finance and accounting
administration or insurance policy administration.

CGI today operates data centre facilities in Canada, namely Montreal, Mississauga and Regina,
as well as service centres in Montreal, Quebec City and Mississauga. In the United States,
CGI operates one data centre facility in Phoenix. CGI also operates one data centre
facility in the United Kingdom (Basingstoke) and two application development centers in
India (Bangalore and Mumbai).

Consulting and Systems Integration

When providing consulting services, CGI acts as a trusted advisor to its clients, offering a
full range of IT and management consulting services, including IT strategic planning,
business process engineering and systems architecture. In addition to their technical
expertise, CGI professionals understand the business issues in a particular industry or
sector.

In terms of systems integration, CGI provides implementation services covering the full scope
of todays enterprise IT environment, integrating different technologies to create IT
systems that respond to clients strategic needs. In addition to its expertise at
working with leading technologies and software applications, CGI provides customized
application development services leveraging its ISO and SEI CMM certified methodologies
and the option of economies from offshore development.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.4 | Research                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Information technologies are abundant, complex and rapidly changing. In this context, CGIs
success depends on its ability to remain at the forefront of its field, as well as to
adapt its service approach to suit each clients specific needs. This situation
requires the ongoing development of cutting-edge expertise, tools and methodology.
However, most of CGIs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

7

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| | research activities are initiated as part of client projects
and their cost is therefore supported by such clients.

The following chart shows the amounts invested in research in the past three years.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

> 2002
>      2001
>      2000Revenue
>      $2,169,613,000
>      $1,560,391,000
>      $1,423,080,000Research
>      $17,609,000
>      $12,585,000
>      $9,960,000

|3.5 | Human and Material Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | As at January 31, 2003, CGI had more than 21,000 employees. None of its employees are
unionized. In order to encourage a high degree of commitment necessary to ensure the
quality and continuity of client service, CGI has had an employee share purchase plan in
place for several years. In 1990, the Company introduced a profit-sharing program based on
the performance of its business units. These measures, together with the Companys
ongoing training programs, are based on the concepts of intrapreneurship and total quality
that form the core of CGIs corporate culture.

As for facilities, the vast majority of CGIs offices are located in rented premises. A
portion of the computer equipment, furniture and software used by the Company is covered
by capital leases. As of September 30, 2002, the net value of CGIs fixed assets
was $145.4 million. Capital leases related to these fixed assets amounted to $9.4
million.
|3.6 | Client Base                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | CGI works with some 3,500 large and medium-sized businesses in the private and public sectors,
throughout Canada, the United States and internationally. The Companys clientele is
well-balanced in terms of quality, quantity, stability and diversity. The BCE group of
companies domestic operations accounted for 23.2% of CGIs revenue in fiscal
2002, compared with 28.5% in fiscal 2001. With the exception of Bell Canada, none of
CGIs clients accounted for more than 10% of its business. During the past ten years,
CGI has had a client retention rate of approximately 90%.                                                                                                                                                                                                                                                                                                                                                            
|3.7 | The North American Information Technology Services Industry                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| | 3.7.1 | Size, Structure and Recent Developments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       | CGI is evolving within one of the most dynamic industries in the world. In October 2002,
according to United States based research firm International Data Corp., the total annual
spending in IT services, excluding hardware and software sales, but including a portion of
the internal IT spending of organizations, was valued at US$41 billion in Canada,
US$778 billion in the United States and US$701 billion in Europe. CGI refers to
this total IT spending potential as the IT domain. In Canada, the three largest
IT services companies currently hold an 8% market share, of which CGI represents 3%.
Therefore, CGI believes that the Canadian IT services market offers significant growth
opportunities.

8

---

| | 3.7.2 | Industry Trends and
Outlook                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       | In the last few years, this industry has also grown very rapidly in terms of its main
services and formulas. For instance, in the early to mid-1990s, 75% of the industrys
revenue came from per diem services, i.e. from specialized assistance within specific
projects. Such services did not require a large or complex organization nor did they allow
for much differentiation between firms, which resulted in fierce competition.

Today, 80% of the large firms revenues are generated by systems integration or outsourcing
projects aimed at comprehensive business solutions. Both public and private sector
organizations are looking for new ways to provide better services at lower cost. For
organizations, the emergence of Internet applications and Web-based business models have
shortened implementation time for solutions while increasing pressure to retain scarce
professional resources. Their need to concentrate on their core mission and to be more
flexible explains why companies increasingly turn to outside professionals for the
development and management of some of their specialized functions, including information
systems. They are demanding proven technological solutions that will be rapidly installed,
while allowing them to minimize operating costs.

Additionally, in view of the recent slowing of the world economy, many clients place greater emphasis on
a reduction of their cost base and are more inclined than ever to consider outsourcing
part or all of their IT services. These factors explain the growing popularity of global
outsourcing services, a trend that is all the more important in the field of information
systems given the fact that specialized firms are the ones that can best cope with the
high variety and complexity of information technologies.

Today, major IT outsourcing firms, with adequate financial strength and a wide range of services
and technological infrastructure, have easier access to large-scale IT outsourcing
contracts.

|3.8 | CGIs Growth
and Positioning Strategy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | CGI has major competitive advantages to efficiently meet market demand. The Company benefits
from a strong financial position and offers the full range of information technology
services.

Its independence from hardware manufacturers is also a decisive factor, since CGI is among the
few major players in North America that can guarantee their clients that their
technological decisions are completely transparent and based on performance, quality and
cost criteria.

CGI benefits from a highly flexible delivery model, which allows it to serve its US clients
using a mix of domestic (US) facilities, Canadian-based infrastructure and Indian-based
application development centers. This flexible service offering provides clients with high
quality services on very competitive terms, while protecting CGIs margins. Today,
CGI is one of only a few providers of outsourcing services in the world that can provide
this delivery through all of its own operations.

9

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| | CGIs client base represents all of the main economic sectors. In order to develop services
adapted to the specific needs of each market, the Companys professionals are grouped
according to targeted client segments, which provides the Company with a deeper
understanding of the trends specific to each industry, as well as a better understanding
of the clients competitive and technological challenges. This market expertise is a
key factor in a companys ability to develop comprehensive business solutions.

Quality Processes

CGIs ISO 9001 certified management frameworks ensure that its clients objectives are
clearly defined, that projects are properly scoped and that the necessary resources are
applied to meet such objectives. These processes ensure that clients requirements
drive CGIs solutions. Clients are constantly kept informed; their degree of
satisfaction is constantly measured and the remuneration of CGI managers is linked to
results.

In 1993, the Company began working towards obtaining ISO 9001 certification for its
Project Management Framework. CGIs Quebec City office was granted ISO 9001
certification in June 1994, which allowed CGI to become North Americas first
organization in the information technology consulting field to receive ISO 9001
certification for the way in which it managed projects. Between 1995 and 2002, CGI
expanded the ISO 9001 certification throughout its Canadian, US and international
offices as well as its corporate headquarters. Over the past several years, in the context
of CGIs high growth rate, its ISO-certified quality system has been a key ingredient
in spreading its culture, in part because it helps to successfully integrate new members.

As clients grow and IT projects become increasingly complex, CGI strives to further refine
its quality processes while allowing it to branch out across all its activities.
CGIs enhanced Quality System, referred to as the Client Partnership Management
Framework (CPMF) is simpler and provides the Companys business units with greater
autonomy in a context of decentralized activities. One of CGIs key focus areas
remains the successful management of client relationships, leading to long-term
partnerships. Following its merger with IMRglobal in July 2001, CGI gained applications
development centers in Mumbai and Bangalore which benefit from SEI CMM Level 5 quality
certification.

CGI strives to ensure that clients benefit from a seamless offering of consistently high
quality. Regardless of which CGI business unit they deal with, clients know that CGI will
provide the same quality services, while delivering projects on time and on budget by a
margin that far exceeds industry standards.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

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|4   | FINANCIAL INFORMATION                                                              
|--- | -----------------------------------------------------------------------------------
|4.1 | Table of Comparative Results                                                       
|    | Fiscal years ended September 30
(in thousands of dollars, except per share amounts)

> 2002
>      
>      2001
>      
>      2000
>      
>      1999Revenue
>      
>      2,169,613
>      
>      1,560,391
>      
>      1,423,080
>      
>      1,407,790Earnings before amortization
>           of goodwill
>      
>      135,799
>      
>      89,924
>      
>      73,542
>      
>      99,906Basic per share (1)
>      
>      0.36
>      
>      0.30
>      
>      0.27
>      
>      0.37Net earnings
>      
>      135,799
>      
>      62,789
>      
>      55,666
>      
>      83,816Basic per share (1)
>      
>      0.36
>      
>      0.21
>      
>      0.21
>      
>      0.31Total assets
>      
>      2,300,892
>      
>      2,028,669
>      
>      928,555
>      
>      866,489Shareholders' equity
>      
>      1,779,615
>      
>      1,503,114
>      
>      677,301
>      
>      563,055Net book value per share (1)
>      
>      4.72
>      
>      5.02
>      
>      2.50
>      
>      2.10Unsecured revolving credit facility
>      
>      -
>      
>      25,000
>      
>      30,000
>      
>      46,200(1)    Adjusted for 2-for-1 stock splits effective January 7, 2000.

|4.2 | Management's Discussion and Analysis of Financial Position and Results of Operations
|--- | ------------------------------------------------------------------------------------

| | 4.2.1 | Fiscal 2002
| | ----- | -----------

| | Roadmap

This managements discussion and analysis of financial position and results of operations
(MD&A) should be read in conjunction with the Consolidated Financial
Statements of the Companys fiscal years 2002, 2001 and 2000 and the notes beginning
on page 42 in the 2002 annual report. The Companys accounting policies are in
accordance with Canadian generally accepted accounting principles (GAAP) of
the Canadian Institute of Chartered Accountants (CICA). These differ in some
respects from GAAP in the United States (US GAAP). The fiscal 2002, 2001 and
2000 results are reconciled to US GAAP in Note 16 to the Consolidated Financial Statements
in the 2002 annual report. All dollar amounts are in Canadian dollars unless otherwise
indicated.

Corporate overview

Headquartered in Montreal, CGIs operations are organized along geographic lines with three
strategic business units: Canada and Europe, US and Asia Pacific and Business Process
Services, along with Corporate Services. CGI provides end-to-end information technology
(IT) services in six economic sectors: financial services, telecommunications,
manufacturing/retail/distribution, governments, utilities and services, as well as
healthcare. Some 72% of the Companys business is in the management of IT and
business functions (outsourcing), and 28% in systems integration and consulting
(SI&C).

CGI and its affiliated companies employ 14,600 people serving some 3,000 clients from more
than 60 offices located around the world. The Company provides end-to-end IT services and
business solutions to its clients, including IT facilities management through a network of
state-of-the-art data
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

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| | centers in Canada (Montreal, Toronto and Regina), in the US
(Phoenix) and in the UK (Basingstoke). CGI also has applications maintenance and
development centers in India (Mumbai and Bangalore).

Business acquisitions

In
fiscal 2002, CGI completed the acquisition of five niche companies (through the purchase
of all shares, except in two cases where the assets were acquired) and invested to create
a joint venture with Canada Post Corporation (Canada Post).

On
April 2, 2002, CGI acquired Albany-based Rapid Application Developers Inc.
(RAD), one of the regions largest software development firms. At the
time of the acquisition, RAD had 36 employees serving government clients and generated
US$4.2 million in revenue annually. The price paid was approximately $6.5 million (US$4.0
million).

On
May 3, 2002, CGI signed a shareholders agreement which finalized the terms and
conditions of a new jointly-owned IT services company, Innovapost Inc.
(Innovapost), with Canada Post as the majority owner (51%) and CGI owning 49%.
Innovapost will provide all IT services to Canada Post, its affiliated companies, and
potentially to other postal organizations worldwide. Innovapost began generating revenue
in July 2002 and expects to achieve total revenue of approximately $200 million in its
first year, approximately $400 million by year three and approximately $3.5 billion over
10 years. This contract added approximately $1.75 billion to CGIs backlog over a
10-year period.

On
June 3, 2002, CGI closed the acquisition of Netplex Systems Inc.s Retail Division
(Netplex), which served over 240 retail customers including Macys, Toys
R Us and Value City, with retail solutions that focus on warehouse management,
store system integration and distribution. Forty professionals located in the state of
Oklahoma joined CGI. CGI paid a cash consideration of approximately $6.9 million (US$4.4
million) for the acquisition.

On
June 3, 2002, CGI completed the acquisition of electronic solutions provider Myriap Inc.
(Myriap), for a cash consideration of approximately $3.3 million, which
provided CGI with deeper knowledge in the transactional Web space. Some 60 professionals
located in Montreal and Toronto joined CGI.

On
June 12, 2002, CGI closed the acquisition of Stewart & Stewart Consulting Inc.
(Stewart & Stewart), with annual revenue of approximately $4 million. The
Edmonton-based company added geographic information systems and resource-based systems
knowledge with its 35 professionals supplying services primarily to the Alberta
government, under an existing outsourcing contract. CGI paid a cash consideration of
approximately $3.3 million for Stewart & Stewart.

On
July 9, 2002, CGI completed the acquisition of privately held IMPLETECH International Inc.
(Impletech) with annual revenue valued at $5 million. Impletech offered
SI&C services within the manufacturing sector with a focus on enterprise resource
planning (ERP) implementation. Twenty professionals, located mostly in Toronto, joined
CGI. Impletech served over 100 clients in the automotive, food and beverage,
pharmaceutical and industrial/electronic sectors. CGI paid approximately $1.4 million for
Impletech.

Large contracts

On
October 1, 2001, Firemans Fund Insurance Company (Firemans Fund),
a subsidiary of Allianz AG of Munich, and CGI finalized a 10-year IT outsourcing agreement
valued at US$380 million. As part of the agreement, CGI provides Firemans Fund with
IT support services to some 80 locations across the United States. Also, CGI took over the
clients Phoenix-based, 40,000 square foot, state-of-
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

---

| | the-art data center. On October
2, 2002, Firemans Fund Interstate Insurance Group, a division of Firemans
Fund, and CGI announced the signing of a nine-year outsourcing contract valued at US$13
million for the provision of infrastructure services. This contract is an addition to the
outsourcing agreement signed on October 1, 2001.

Other significant developments

On
December 20, 2001, CGI successfully closed its public offering of Class A subordinate
shares in Canada announced on December 3, 2001. CGI sold 11,110,000 Class A subordinate
shares of the Company at a price of $11.25 per share, for net proceeds of $119.5 million,
to a syndicate of investment dealers. The net proceeds of the offering were added to
CGIs general funds and used to finance its development activities, including the
funding of large outsourcing contracts and acquisitions, and for other general corporate
purposes.

Also,
in the second quarter of fiscal 2002, the Company sold two of its subsidiaries located in
Japan and Australia, for a cash consideration of approximately $10.4 million with no
resulting gain.

In
May 2002, the Company signed a memorandum of understanding for a 10-year outsourcing
agreement valued at $80 million with IT services provider League Data Limited
(League Data). CGI plans to manage League Datas banking environment and
build a new browser-based front-end solution. Shareholders of League Data approved the
entering into contract negotiations with the Company, which are still in process.

In
June 2002, Satish Sanan retired from his position as Vice-Chairman, Executive
Vice-President, US Business Engineering, and Board Director.

In
October 2002, Charles Sirois, Chairman and Chief Executive Officer of Telesystem Ltd,
resigned from CGIs Board. Mr. Sirois had served as a member of the Board since 1998.

Performance overview

Fiscal
2002 marked the 26th consecutive year of revenue growth for CGI. Revenue grew to $2,169.6
million, up from $1,560.4 million in fiscal 2001 and $1,423.1 million in fiscal 2000.
Earnings before depreciation and amortization of fixed assets and amortization of contract
costs and other long-term assets were $309.2 million, compared with $219.3 million in
fiscal 2001 and $168.2 million in fiscal 2000. Net earnings amounted to $135.8 million
($0.36 basic and diluted earnings per share), against earnings before amortization of
goodwill (cash net earnings) of $89.9 million ($0.30 basic and diluted cash
earnings per share) and net earnings of $62.8 million ($0.21 basic and diluted earnings
per share) in fiscal 2001 and to cash net earnings of $73.5 million ($0.27 basic and
diluted cash earnings per share) and net earnings of $55.7 million ($0.21 basic and $0.20
diluted earnings per share) in fiscal 2000. The net margin (i.e. net earnings over
revenue) was 6.3%, compared with 4.0% in 2001 and 3.9% in 2000.

The
balance sheet remained strong as at September 30, 2002, with $104.2 million in cash and
cash equivalents, $1.78 billion of shareholders equity and $8.5 million in long-term
debt, solely related to capital leases.

Preparation of Consolidated Financial Statements

In
an ongoing review of new or more precise interpretation of various accounting
pronouncements and to maintain its conservative accounting practices, CGI made
modifications or revisions to its financial statements and accompanying notes. As a result
of these modifications or revisions, there was no
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

---

| | impact on the net earnings or cash
provided by operating activities of the Company. Following are the most significant
reclassifications:

a) Amortization of incentives related to outsourcing contracts
During
the year ended September 30, 2002, the Company modified the presentation of the
amortization related to incentives granted on outsourcing contracts based on EITF 01-9,
Accounting for consideration given by a vendor to a customer, by the Financial Accounting
Standards Boards Emerging Issues Task Force (EITF). The amortization of
incentives is now presented as a reduction of revenue as opposed to being shown as
amortization of contract costs and other long-term assets. Furthermore, the Company also
reclassified discounts granted on an existing outsourcing contract which was previously
presented in the costs of services, selling and administrative expenses. For comparative
purposes, revenue for the years ended September 30, 2001 and 2000 were reduced by
$20,924,000 and $12,928,000 respectively, amortization of contract costs and other
long-term assets were reduced by $10,274,000 and $3,478,000 respectively, and costs of
services, selling and administrative expenses were reduced by $10,650,000 and $9,450,000
respectively (see Note 5 to the Consolidated Financial Statements in the 2002 annual
report).

b) Foreign currency translation adjustment
During
the quarter ended December 31, 2001, the Company revised the calculation of the foreign
currency translation adjustment in order to use the current rate as opposed to the
historical rate upon translation of the goodwill related to its self-sustaining foreign
subsidiaries. This adjustment results in an increase of $21,197,000 of the foreign
currency translation adjustment and goodwill as at September 30, 2001.

c) Accounts receivable and deferred revenue
During
the year ended September 30, 2002, the Companys management changed the presentation
related to accounts receivable and deferred revenue for the month-end advance billing on
outsourcing contracts. Accordingly, accounts receivable and deferred revenue were both
reduced by $34,511,000 as at September 30, 2001.

d) Goodwill and integration liability
During
the quarter ended June 30, 2002, the Company reviewed its interpretation of the accounting
treatment for integration costs accrued for in connection with business acquisitions;
accordingly, the integration liability originally accrued for in 2001 in connection with
the acquisition of IMRglobal Corp. (IMRglobal) was reduced by $20,810,000. As
a result, goodwill and future income tax assets recorded in connection with the
acquisition also decreased by $17,027,000 and $3,783,000, respectively.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

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| | Comparison of operating results for the years ended September 30, 2002, and September 30, 2001
| | ----------------------------------------------------------------------------------------------

> RevenueYEAR ENDED
>      SEPTEMBER 30,
>      2002
>      
>      PERCENTAGE
>      CHANGE VS
>      2001
>      
>      YEAR ENDED
>      SEPTEMBER 30,
>      2001(in '000 of Canadian dollars)
>      
>      $
>      
>      %
>      
>      $Revenue
>      
>      2,169,613
>      
>      39.0
>      
>      1,560,391

| | Revenue
for fiscal 2002 increased 39.0% to $2.17 billion, from $1.56 billion in the previous year.
Year-over-year organic growth of 9.9% was driven by a combination of new client wins,
notably with Firemans Fund in the US and Canada Post in Canada, as well as contract
renewals and add-on projects from existing clients. External revenue growth was 29.1% and
was primarily attributable to the full 12-month contribution of the IMRglobal acquisition,
completed in July 2001.

2002 revenue mix
In fiscal 2002, the revenue mix by contract type, geographic market and targeted vertical was
as follows:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

> Targeted Verticals (%)
>          a.       Financial services 41%
>          b.       Telecommunications 25%
>          c.       Manufacturing, retail
>               and distribution 15%
>          d.       Governments 15%
>          e.       Utilities and services  3%
>          f.       Healthcare 1%
>      
>      Contract Types (%)
>          a.       Management of IT and business
>                 functions (outsourcing) 72%
>            b. Systems integration and consulting 28%
>      
>      Geographic Markets (%)
>          a.       Canada 73%
>          b. US 20%
>          c. International 7%

| | Long-term
outsourcing contracts represented 72% of the Companys total revenue, including 15%
from business process services, while project oriented systems integration and consulting
(SI&C) work represented 28%. Geographically, clients in Canada represented
73%; clients in the US represented 20%; and all other regions, 7%. Year-over-year, a
notable change in the mix by client geography is in the increasing proportion of revenue
coming from outside Canada. In fiscal 2001, clients in Canada represented 77%; US
represented 17% and all other regions, 6%.

Another
noteworthy year-over-year change is the revenue distribution by targeted vertical. Revenue
from clients in the financial services sector remained strong, representing 41% of
revenue; while telecommunications represented 25%; manufacturing, retail and distribution
(MRD), 15%; governments, 15%; utilities and services, 3%; and healthcare, 1%. Over fiscal
2002, CGI has grown its presence in the financial services, government, and utilities and
services verticals but the telecommunications revenue, while consistent in absolute
dollars, has declined as a percentage of total revenue from 33% in fiscal 2001, to 25% in
2002.

Throughout
fiscal 2002, demand for outsourcing services remained strong across all of the
Companys key geographic markets, namely Canada, the US and Europe. However, demand
for SI&C services was weaker in the US and in France, and the Company does not expect
the demand for these services to increase significantly before 2004.

Please see discussion of revenue, which follows in the section entitled Segmented
information below.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15

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> Operating expensesYEAR ENDED
>      SEPTEMBER 30,
>      2002
>      
>      PERCENTAGE
>      CHANGE VS
>      2001
>      
>      YEAR ENDED
>      SEPTEMBER 30,
>      2001(in '000 of Canadian dollars)
>      
>      $
>      
>      %
>      
>      $Total operating expenses
>      
>      1,860,463
>      
>      38.7
>      
>      1,341,045

| | The
costs of services, selling and administrative expenses totaled $1,842.9 million in fiscal
2002, or 84.9% of revenue, compared with $1,328.5 million, or 85.1% of revenue in fiscal
2001. Research expenses amounted to $17.6 million in fiscal 2002 compared to $12.6 million
in 2001. During fiscal 2002, the Company continued to invest in the $50.0 million
Strategic Investment Program announced in fiscal 2000. The purpose of this program is to
support client oriented initiatives, development of the Companys proprietary
solutions and implementation of new technologies. The Companys efforts are aimed at
assisting its clients in meeting their growing and diversified needs.

Total
operating expenses, including expenses associated with research, were $1,860.5 million or
85.8% of revenue, a slight improvement from 85.9% in fiscal 2001.

Earnings
before depreciation and amortization of fixed assets, amortization of contract costs and
other long-term assets, interest and income taxes (EBITDA)1
EBITDA in fiscal 2002 increased 40.9% to $309.2 million, compared
with $219.3 million in the previous year. The EBITDA margin improved to 14.2%, compared
with 14.1% in the previous year. The improvement was driven by synergies from additional
outsourcing contracts, tight expense controls applied across the Company, as well as
contribution from acquisitions made during the year.

Depreciation and amortization
In fiscal 2002, CGI reported depreciation and amortization of fixed assets of $37.8 million,
compared with $32.5 million in the prior year. The increase between fiscal 2002 and fiscal
2001 is reflective of a greater level of fixed asset acquisitions made through either
purchases or business acquisitions.

Amortization
of contract costs and other long-term assets was $39.2 million in fiscal 2002, an increase
compared to $23.2 million in fiscal 2001, as a result of increased contract costs
associated with the delivery of large outsourcing contracts with the
Confédération des caisses populaires et déconomie Desjardins du
Québec (Desjardins), Laurentian Bank of Canada (Laurentian
Bank), Firemans Fund and Canada Post, the purchase of two enterprise license
agreements in the second half of the fiscal year 2002, and to a lesser extent, the closing
of five niche acquisitions (see further detailed discussions in the Review of
balance sheets section of this MD&A).

Earnings before interest, income taxes and amortization of goodwill (EBIT)
EBIT increased to $232.6 million in fiscal 2002, compared to $162.1 million in fiscal 2001. The
EBIT margin (i.e. EBIT over revenue) was 10.7% in fiscal 2002, compared to 10.4% in the
previous year.

Interest
Interest on long-term debt decreased to $2.4 million from $4.2 million in fiscal 2001, as a result
of a decrease in the average debt and capital leases held during the year. In fiscal 2002,
interest expense

_________________ 1EBITDA represents earnings before depreciation and amortization, interest and
income taxes. EBITDA is presented because it is a widely accepted financial indicator of a
companys ability to service and incur debt. EBITDA should not be considered by an
investor as an alternative to operating income or net earnings, as an indicator of
operating performance or of cash flows or as a measure of liquidity. Because EBITDA is not
a measurement determined in accordance with Canadian GAAP, EBITDA as presented may not be
comparable to similarly titled measures of other companies.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

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| | was related mainly to the Libor advance debt of US$20 million. In fiscal
2001, such expense stemmed mainly from a loan contracted in the course of a large
outsourcing contract and an acquisition.

Income taxes
The effective income tax rate in fiscal 2002 was down to 41.6% compared with 44.5% in fiscal
2001. The decrease in CGIs tax rate compared with last year reflects a reduction in
the significance of the tax losses incurred by the Companys foreign subsidiaries,
compared with the earnings before income taxes, as well as a 2.0% reduction in the
Canadian combined federal and provincial statutory tax rates.

Amortization of goodwill, net of income taxes
Effective October 1, 2001, CGI stopped recording goodwill amortization based on the new CICA
Handbook recommendations, discussed in the section Critical Accounting
Policies further in this MD&A. As such, current net earnings and earnings before
amortization of goodwill (cash net earnings) for periods before October 1,
2001, are equivalent. For purposes of clarity and ease of comparison, CGI compares net
earnings to cash net earnings figures in year-over-year comparisons.

Net earnings
Net earnings in fiscal 2002 increased 51.0% to $135.8 million, or 6.3% of revenue, against
comparable cash net earnings of $89.9 million or 5.8% of revenue and net earnings of $62.8
million or 4.0%, in the previous fiscal year. Basic and diluted earnings per share of
$0.36 in fiscal 2002 were up from basic and diluted cash earnings per share of $0.30 and
from basic and diluted earnings per share of $0.21 reported in fiscal 2001. This increase
in earnings per share takes into account a 26.0% year-over-year increase in the weighted
average number of shares outstanding. The weighted average number of shares outstanding
increased year-over-year primarily as a result of the issuance of shares as part of the
acquisition of IMRglobal in late July 2001. The increase in net earnings and higher
earnings per share year-over-year reflects, in part, the fact that the Company no longer
records goodwill amortization.

Pro forma net earnings
Under the Stock option plan, had compensation cost been determined using the fair value method
at the day of grant for awards granted since October 1, 2001, the Companys pro forma
net earnings, basic and diluted earning per share would have been $131.7 million, $0.35
and $0.35 respectively, for the 12-month period ended September 30, 2002.

Segmented information
CGI has three strategic business units (SBU): Canada and Europe, US and Asia
Pacific, and Business Process Services (BPS), along with Corporate Services.
CGI evaluates each SBUs performance and reports segmented information according to
this structure (see Note 12 to the Consolidated Financial Statements). The highlights for
each segment in fiscal 2002 are detailed below:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17

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> YEAR ENDED
>      SEPTEMBER 30,
>      2002
>      
>      YEAR ENDED
>      SEPTEMBER 30,
>      2001(in '000 of Canadian dollars)
>      
>      $
>      
>      $RevenueCanada and Europe
>      
>      1,823,995
>      
>      1,345,538US and Asia Pacific
>      
>      309,683
>      
>      178,566BPS
>      
>      93,461
>      
>      74,735Intersegment elimination
>      
>      (57,526)
>      
>      (38,448)Total revenue
>      
>      2,169,613
>      
>      1,560,391Earnings before interest, income taxes,
>                    entity subject to significant influence
>                    and amortization of goodwillCanada and Europe
>      
>      283,409
>      
>      203,678US and Asia Pacific
>      
>      (4,784)
>      
>      (18,636)BPS
>      
>      17,295
>      
>      14,193Corporate expenses and programs
>      
>      (63,775)
>      
>      (35,611)Total earnings before interest,
>                       income taxes, entity subject
>                       to significant influence and
>                    amortization of goodwill
>      
>      232,145
>      
>      163,264

| | In
fiscal 2002, revenue from the Canada and Europe SBU was $1,824.0 million, up 35.6% over
revenue of $1,345.5 million posted in fiscal 2001. Revenue from the US and Asia Pacific
SBU was $309.7 million, up 73.4% over revenue of $178.6 million in fiscal 2001. Revenue
reported by the BPS SBU was $93.5 million, up 25.2% from $74.7 million in the previous
fiscal year.

EBIT
for the Canada and Europe SBU was $283.4 million in fiscal 2002, up 39.1% year-over-year.
In the US and Asia Pacific SBU, there was a loss before interest, income taxes and
amortization of goodwill of $4.8 million, an improvement of 74.2% over last year when the
loss was $18.6 million. The BPS SBU reported EBIT of $17.3 million, up 21.8% from the
$14.2 million reported last year.

Canada
was a major contributor to CGIs growth throughout fiscal 2002. CGIs position
as a leading end-to-end IT services provider in this market, coupled with numerous strong
client relationships and high customer satisfaction ratings, fueled strong growth. Revenue
was driven by a combination of IT and business process outsourcing and SI&C contracts
wins, renewals and add-on projects. Growth in revenue, without a corresponding increase in
overhead, resulted in good margin contribution. New contract wins in the government
vertical were strong throughout the year and provided good growth as well.

In
Europe, the improvement in results was driven largely by growth in the UK, especially
SI&C contract wins. As expected, France was softer, partly because of what is referred
to as the Euro hangovera phenomenon not unlike the slowdown in spending after Year
2000. Planned improvements in France should result in a gradual positive effect year over
year.

The
US and Asia Pacific operations growth in revenue was primarily the result of
including a full year of activities from the US operations of IMRglobal that had been
acquired on July 27, 2001 and for which only two months of revenue was included in the
results of 2001. The EBIT improved significantly from a loss of $18.6 million to a loss of
$4.8 million for the current year. The significant driver for the improvement was the
integration of the existing operations of the Company with the
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18

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| | activities of the recent US
acquisitions, primarily IMRglobal. As well, several outsourcing contracts were initiated
in the US during the year, leveraging the Companys near-shore and offshore delivery
model which takes advantage of the lower cost delivery services in Canada and India.

Overall,
US operations improved as a result of a greater push towards a global operational model
and adherence to CGIs standard management ratios. During the year, the integration
of US operations was completed under a global operations structure headed by Michael
Roach, Chief Operating Officer, which presents additional opportunities for synergies.

In
the US outsourcing space, CGI continued to better position itself to propose and win large
IT and business process outsourcing contracts. CGIs current outsourcing contracts
with US clients have been growing and today represent 56% of the business generated in the
US. CGIs long-term objective is to generate 75% of its US business from outsourcing.
CGI believes it has made progress in building a presence and brand as an outsourcer in the
US market place, and in leveraging synergies with Canadian and global operations. The
Companys strength and advantage are in the midtier or middle market where contracts
range between $50 million and $200 million per year, a segment where interest in
outsourcing is growing.

CGI
was affected negatively by the continued softness in the US market and the weak demand for
SI&C services. The Company does not expect the SI&C business in the US to return
with any degree of strength before fiscal 2004, but does expect that its US operations
will see a gradual improvement in margins.

In
fiscal 2002, the BPS SBU delivered a solid performance, realizing renewals with its
overall roster of clients. Among fiscal 2002 achievements for the BPS SBU was the
successful implementation of the first phase of a document management services contract
with Arbella Insurance in the third quarter, as well as the signing in the fourth quarter
of a 10-year, US$36 million business process outsourcing contract with US-based GrafTech
International Ltd. (formerly UCAR International Inc.), an existing IT outsourcing client
of CGI. The Companys credentials as a provider of business process services continue
to grow and its BPS offering continues to be well received by its client base, especially
in the insurance sector.

Comparison of operating results for the years ended September 30, 2001, and September 30, 2000
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

> RevenueYEAR ENDED
>      SEPTEMBER 30,
>      2001
>      
>      PERCENTAGE
>      CHANGE VS
>      2000
>      
>      YEAR ENDED
>      SEPTEMBER 30,
>      2000(in '000 of Canadian dollars)
>      
>      $
>      
>      %
>      
>      $Revenue
>      
>      1,560,391
>      
>      9.6
>      
>      1,423,080

| | In
fiscal 2001, revenue increased marginally by 9.6% to $1,560.4 million, from $1,423.1
million in fiscal 2000, as a result of numerous acquisitions completed during the year. In
fiscal 2001, long-term outsourcing contracts represented 69% of total revenue and systems
integration and consulting contracts were 31% of total revenue.

In
fiscal 2001, CGI implemented a dynamic acquisition strategy aimed at acquiring both niche
and large IT companies. As a result of this, the Company acquired nine companies and took
an equity position in four such entities, which together contributed $216.5 million in
incremental revenue. Also, in fiscal 2001, CGI signed several large IT outsourcing
contracts, which contributed significantly to
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

19

---

| | its revenue growth. Among the most important
contributors, CGIs operating results benefited from a five-month contribution
related to the contract with Desjardins, as well as a three and a half month contribution
related to its agreement with Laurentian Bank. In addition, the Company benefited from
contracts with Allianz (effective February 7, 2001) and Sun Life (effective January 4,
2001).

In
fiscal 2000, the Company benefited from a 12-month contribution of its contract with Bell
Mobility, as well as from its DRT Systems International and DRT Systems International L.P.
(jointly, DRT) acquisition, effective July 1, 1999. These revenue gains were
partially offset by Bell Canadas reduction in IT budgets, compounded by an
industry-wide slowdown in IT spending related to the Year 2000 phenomenon.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

> Operating expensesYEAR ENDED
>      SEPTEMBER 30,
>      2001
>      
>      PERCENTAGE
>      CHANGE VS
>      2000
>      
>      YEAR ENDED
>      SEPTEMBER 30,
>      2000(in '000 of Canadian dollars)
>      
>      $
>      
>      %
>      
>      $Total operating expenses
>      
>      1,341,045
>      
>      38.7
>      
>      1,254,861

| | The
costs of services, selling and administrative expenses totaled $1,328.5 million in fiscal
2001, or 85.1% of revenue, compared with $1,244.9 million, or 87.5% of revenue in fiscal
2000. This reduction in the operating expenses to revenue ratio in fiscal 2001 was
achieved by lower overhead costs in the US and Europe units resulting from the
improvements in the utilization of CGIs IT members, synergies from the integration
of the business acquisitions and outsourcing contracts, the revenue contribution of
IMRglobal and other acquired companies. Also, the Companys participation in the
Quebec governments refundable tax credits on salaries program which the Company
benefits from, as a result of its future relocation to E-Commerce Place in Montreal,
contributed to decrease the ratio. Total operating expenses, including expenses associated
with research, were $1,341.0 million or 85.9% of revenue, an improvement from 88.2% in
fiscal 2000.

Earnings before depreciation and amortization of fixed assets, amortization of contract costs and
other long-term assets, interest and income taxes (EBITDA)
EBITDA in fiscal 2001 increased 30.4% to $219.3 million, compared with $168.2 million in fiscal
2000. In fiscal 2001, the EBITDA margin improved to 14.1%, compared with 11.8% in the
previous year.

Depreciation and amortization
In fiscal 2001, CGI reported depreciation and amortization of fixed assets totaling $32.5
million, compared with $26.4 million the year before. The increase in fiscal 2001 was the
result of the acquisition of fixed assets related to the Desjardins contract, as well as
other asset purchases acquired through the acquisition of nine companies, and the four
joint ventures in which CGI acquired interests. In fiscal 2000, depreciation and
amortization of fixed assets was lower, partly as a result of the fact that only two
acquisitions were made.

In
fiscal 2001, amortization of contract costs and other long-term assets totaled $23.2
million, compared with $18.5 million in fiscal 2000. The amounts of amortization of
contract costs and other long-term assets against the revenue were of $10.3 million and
$3.5 million for 2001 and 2000, respectively. Amortization of contract costs and other
long-term assets increased as a result of costs incurred for the delivery of large
outsourcing contracts with Desjardins, Laurentian Bank and Sun Life, among others. The
year-over-year increase in the amortization of this charge is also reflective of
integration costs incurred on these new outsourcing contracts, as well as the value
assigned to the client contracts of acquired businesses.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20

---

| | Earnings before interest, income taxes and amortization of goodwill (EBIT)
EBIT was $163.6 million in fiscal 2001, up 32.7% over fiscal 2000 EBIT of $123.3 million. The
EBIT margin improved to 10.5% in fiscal 2001, compared with 8.7% in fiscal 2000.

Interest
Interest on long-term debt increased to $4.2 million from $3.6 million in fiscal 2000. In fiscal
2001, interest expense was related mainly to a loan contracted in the course of a large
outsourcing contract and an acquisition. In fiscal 2000, such expense stemmed mainly from
a full year of outstanding long-term debt relating to the acquisition of DRT.

Income taxes
The effective income tax rate before amortization of goodwill was 44.5% in fiscal 2001,
compared with 40.5% in fiscal 2000, despite a 2.0% decrease in the combined federal and
provincial statutory rates. In fiscal 2001, the Company recorded additional valuation
allowances relating to the tax benefit on losses incurred in the US and certain
international operations.

Net earnings
Net earnings in fiscal 2001 increased 12.8% to $62.8 million ($0.21 basic and diluted earnings
per share) compared with $55.7 million ($0.21 basic and $0.20 diluted earnings per share)
in the previous fiscal year. In fiscal 2001, the net margin (i.e. net earnings over
revenue) improved to 4.0%, compared with 3.9% in fiscal 2000.

Review of balance sheetsfiscal year-ends 2002 and 2001
A discussion follows on line items of the balance sheet for which there were significant
variances over last year.

Assets
at the end of fiscal 2002 were $2,300.9 million, compared with $2,028.7 million at the end
of fiscal 2001, representing an increase of 13.4%. Most asset items increased over the
previous fiscal year, the major one being contract costs and other long-term assets, as
well as cash and cash equivalents.

In
fiscal 2002, accounts receivable were higher than the previous year by $9.0 million
primarily due to an increase in the refundable tax credits on salaries related to
E-Commerce Place for $5.9 million that are included in the accounts receivable balance.
This tax credit receivable balance was excluded from the calculation of the Companys
collection period for accounts receivable and work in progress. Days of sales outstanding
(DSO) at the end of fiscal 2002 were 50 days, compared with 67 days at
the end of the last fiscal year. The DSOcalculation subtracts the deferred revenue
from the accounts receivable and work in progress balances. The year-over-year decrease in
DSO is a reflection of the IMRglobal acquisition that was made late in fiscal 2001 for
which its revenue stream was accounted over a period of only two months in 2001. Excluding
the impact of the IMRglobal acquisition, DSO for CGI at the end of fiscal 2001 would have
been 57 days.

The
year-over-year increase of $14.1 million in work in progress is primarily a result of
unbilled revenue as at September 30, 2002, for work performed on certain outsourcing
contracts but not yet billed as per contract specifications.

Fixed
assets increased by $22.0 million despite a depreciation and amortization charge of $37.8
million during fiscal 2002. The main components of this increase were an investment for
the development of a new software designed for CGIs internal use along with the
capitalization of the installation costs for the new offices located at E-Commerce Place
in Montreal. The balance of the increase in fixed assets was a result of purchases made
during the normal course of business.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21

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| | Contract
costs and other long-term assets were up by $161.3 million compared with last September
30, 2001. This increase is largely reflective of outsourcing contracts signed with
Firemans Fund and with Canada Post. The 10-year contract signed with Firemans
Fund on October 1, 2001, added $56.0 million to contract costs, as an incentive granted to
the client. In the Canada Post contract, the amounts booked to contract costs comprised,
firstly, an amount of $26.0 million for CGIs investment in its share of the joint
venture Innovapost, and secondly, an additional $26.0 million which CGI paid to Canada
Post as an incentive for the creation of the joint venture and the signing of a 10-year
outsourcing contract. Additionally, in the last quarter of fiscal 2002, an incentive of
$15.7 million was paid pursuant to an outsourcing agreement with a Canada Post subsidiary,
and was recorded with contract costs and other long-term assets.

Also
in the increase of contract costs and other long-term assets are two five-year license
agreements for certain software that will be used in the delivery of services to the
Companys outsourcing clients ($32.3 million). Other items were also added to the
contract costs in fiscal 2002 during the normal course of business, including costs for
the development of software or software acquired to provide long-term outsourcing services
to clients; future income tax adjustments related to the Companys contracts with
Firemans Fund and with Innovapost ($25.1 million); and the value of various
contracts acquired through acquisitions. These additions to contract costs and other
long-term assets were offset by a total amortization charge of $62.8 million during the
year. The amortization of the incentives included in the contract costs against revenue
for 2002 represented $23.6 million.

Total
short and long-term future income tax assets decreased by $5.8 million over last year,
largely as a result of the reduction of the integration provision balance (described in
Note 9 to the Consolidated Financial Statements), and due to the differences between the
carrying and the tax values of the fixed assets.

Goodwill
was up by $14.9 million at the end of fiscal 2002. Goodwill denominated in US dollars, UK
pounds and Euros are translated using the year-end currency exchange rate. The exchange
rate variances between the Canadian dollar and these other currencies resulted in a $2.6
million increase in the goodwill between September 30, 2001, and September 30, 2002.
Adjustments were made to certain goodwill balances relating to acquisitions made during
the 2001 fiscal year (see Note 9 to the Consolidated Financial Statements). In addition,
an $8.0 million decrease in goodwill resulted from the sale of the Japanese and Australian
operations. Finally, $23.0 million of goodwill was recorded as a result of acquisitions
made during the year.

Total
liabilities of the Company were $521.3 million. The most significant variances were within
the long-term future income tax liability, and the accounts payable and accrued
liabilities.

Accounts
payable and accrued liabilities decreased by $33.6 million compared to September 30, 2001,
largely as a result of the usage of the acquisition and integration liabilities of
companies acquired in 2001, the most significant being IMRglobal which decreased during
the last 12 months by $18.3 million. Also, accounts payable and accrued liabilities as at
September 30, 2001, included IMRglobal accounts payable, which were assumed as part of the
acquisition on July 27, 2001, and paid subsequent to the end of the year.

Deferred
revenue was up by 20.5% at the end of fiscal 2002. This reflects payments from several
clients in advance of the work being performed.

For
fiscal 2002, income taxes payable were up $6.1 million over last year receivable balance
of $979,000, as a result of an increase in the profitability of CGIs Canadian
operations compared to fiscal 2001.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22

---

| | The short and long-term portions of the future income tax liabilities were up $55.3 million of
which $29.6 million resulted from contract costs and other long-term assets capitalized in
the year. Another $18.4 million was recorded as a result of the difference between the tax
and carrying values of contract costs and other long-term assets. Finally, another $4.8
million was credited in respect to the tax credits on salaries that had been accrued at
year-end.

Deferred credits and other long-term liabilities decreased by $9.7 million in fiscal 2002 as a
result of the following factors. First, incentives granted to Desjardins and Laurentian
Bank in fiscal 2001 were used during fiscal 2002. Also, additions to deferred credits for
new incentives granted, in the form of rebates, as part of the Firemans Fund
outsourcing contract for $23.7 million in the first quarter of 2002, and the discount
granted to a Canada Post subsidiary for $15.7 million in the last quarter of 2002,
increased the balance but were offset by the portion used by these clients, totaling $6.8
million in fiscal 2002. The remaining variance in this account is related to the change in
the US currency rate that affected the US dollar portion of the deferred credits.

Shareholders equity increased by $276.5 million between September 30, 2001 and September 30, 2002.

A portion of the increase comes from the net earnings of $135.8 million recorded during
fiscal 2002. The capital stock balance increased as well between the two dates, resulting
from the public issuance of 11,110,000 shares on December 20, 2001, for net proceeds of
$119.5 million, which was discussed earlier in the Other significant
developments section.

Foreign currency translation adjustment increased by $10.5 million in the year reflecting the
currency exchange rate differences for CGIs self-sustaining foreign subsidiaries.
The Canadian currency rate vis-à-vis the US dollar increased to 1.5810 at September
30, 2002, from 1.5712 at September 30, 2001. The UK pound increased from 2.3105 at
September 30, 2001, to 2.4705 at September 30, 2002, and the Euro increased from 1.4497 at
September 30, 2001, to 1.5494 at September 30, 2002.

Analysis of financial condition and cash flows
Cash and cash equivalents on September 30, 2002 were up by $58.2 million or 126.5% over
September 30, 2001. As at September 30, 2000, this balance represented $49.3 million. The
drivers of the September 30, 2002, increase compared to September 30, 2001, and the
decrease between September 30, 2001, and September 30, 2000, are explained below.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

---

> Operating expensesYEAR ENDED
>      SEPTEMBER 30,
>      2002
>      
>      YEAR ENDED
>      SEPTEMBER 30,
>      2001
>      
>      YEAR ENDED
>      SEPTEMBER 30,
>      2000(in '000 of Canadian dollars)
>      
>      $
>      
>      $
>      
>      $Cash provided by
>           operating activities
>      
>      177,447
>      
>      174,002
>      
>      67,550Cash provided by (used for)
>           financing activities
>      
>      92,894
>      
>      (15,821)
>      
>      (11,176)Cash used for investing
>           activities
>      
>      (215,603)
>      
>      (157,751)
>      
>      (50,331)Foreign exchange gain (loss)
>           on cash held in foreign
>           currencies of self-sustaining
>           subsidiaries
>      
>      3,475
>      
>      (3,763)
>      
>      1,069Net change in cash
>           and cash equivalents
>      
>      58,213
>      
>      (3,333)
>      
>      7,112

| | Cash provided by operating activities in fiscal 2002 was similar to the previous year. The
Companys net earnings for the year increased by 116.3%, despite higher depreciation
and amortization of fixed assets and amortization of contract costs and other long-term
assets, but this was offset by higher usage by the outsourcing clients of their rebates by
$35.6 million during the period. The net change in non-cash working capital items amount
was lower by $40.0 million compared with the 12-month period ended September 30, 2001. The
main reasons are the reduction of the integration provision liability provisioned for the
IMRglobal acquisition and an increase of work in progress. The use of cash was offset,
however, by the increase in the level of prepayments received from outsourcing clients, by
an increase of the payable income taxes provision and by an improvement in the DSO by 20
days during the year. The cash provided by operating activities between fiscal 2001 and
fiscal 2000 increased by $106.5 million. The change came from the increase by 12.8% in net
earnings, along with increases in the depreciation and amortization of fixed assets, in
the amortization of contract costs and other long-term assets, in the future income tax
balances, and in the variance from the changes in non-cash working capital items. The
change in non-cash working capital items was due to an increase in work in progress, which
resulted from the increased business volumes, business acquisitions and major outsourcing
contracts signed in fiscal 2001. Accounts payable and accrued liabilities increased in the
normal course of business.

In fiscal 2000, the net change in non-cash working capital items reflected mainly a decrease
in accounts payable and accrued liabilities related to the decrease in the operating
expenses year over year.

In fiscal 2002, cash provided by financing activities was $92.9 million, compared with $15.8
million used for financing activities in the prior year. This year-over-year increase of
$108.7 million reflects two significant events. On December 20, 2001, the Company issued
11,110,000 Class A subordinate shares at $11.25 per share for net proceeds of $119.5
million. Offsetting in part the cash raised in this offering was the repayment of a US$20
million Libor debt advance in the fourth quarter of fiscal 2002 and payments on capital
leases held by the Company. The exercise of stock options during the year also contributed
to the increase in cash provided by financing activities. In 2001, the $65.0 million debt
repayment was related to the reimbursement of outstanding long-term debt of companies
acquired during 2001 (mostly Star Data Systems Inc. and IMRglobal). Offsetting this draw
down of the cash balance in fiscal 2001 was an amount of $54.2 million of net proceeds
from the issuance of 6.4 million
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24

---

| | shares. This resulted primarily from the exercise of
preemptive rights by two majority shareholders of the Company, pursuant to the IMRglobal
acquisition.

Cash
used for investing activities was up $57.9 million in fiscal 2002 reflecting investments
made during the year as part of large outsourcing contracts signed (mostly Firemans
Fund and Canada Post), including an amount used for the start-up of the joint venture
Innovapost, the acquisition of five niche companies and the purchase of fixed assets
(mostly the installation costs for the fit-up of the E-Commerce Place in Montreal and the
development costs of software that will be used internally). More information on cash used
for purchase of fixed assets and contract costs and other long-term assets is discussed in
the earlier section, Review of balance sheets. Cash used for investing
activities was offset by proceeds of $10.4 million received in the sale of the
Companys Japanese and Australian operations. Additionally, the Company disbursed
$20.1 million for five business acquisitions in fiscal 2002, as compared to $141.0 million
for 10 business acquisitions along with four joint venture investments in fiscal 2001. The
cash used for investing activities in fiscal 2001 totaled $157.8 million up from $50.3
million in fiscal 2000. Business acquisitions had increased to $86.4 million in 2001, up
from $18.4 million in fiscal 2000, reflecting the 10 business acquisitions the Company had
made, along with four joint venture investments, compared to two business acquisitions in
fiscal 2000. The increase in the cash used for contract costs and other long-term assets
in fiscal 2001 was a result of the costs incurred as part of the outsourcing contracts
signed in fiscal 2001, including those with Desjardins, Laurentian Bank, Sun Life and
GrafTech International Ltd.

Liquidity and other financial resources
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

> TOTAL
>      COMMITMENT
>      
>      AVAILABLE AT
>      SEPTEMBER 30,
>      2002
>      
>      OUTSTANDING AT
>      SEPTEMBER 30,
>      2002
>      
>      AVAILABLE AT
>      SEPTEMBER 30,
>      2001
>      
>      OUTSTANDING AT
>      SEPTEMBER 30,
>      2001(in '000 of Canadian dollars)
>      
>      $
>      
>      $
>      
>      $
>      
>      $
>      
>      $Unsecured revolving credit facility
>      
>      225,000
>      
>      222,796
>      
>      2,204
>      
>      199,050
>      
>      25,950Lines of credit (Bank of Montreal)
>      
>      25,000
>      
>      23,342
>      
>      1,658
>      
>      23,350
>      
>      1,650Lines of credit (BC Central Credit Union)
>      
>      500
>      
>      500
>      
>      -
>      
>      500
>      
>      -Other   (Sept. 30, 2002)
>      
>      2,471
>      
>      2,471
>      
>      -
>      
>      -
>      
>      -Other   (Sept. 30, 2001)
>      
>      3,250
>      
>      -
>      
>      -
>      
>      2,350
>      
>      900

| | CGI
maintains a strong balance sheet and cash position, which together with bank lines are
sufficient to support the Companys growth strategy and represent a competitive
strength when proposing on outsourcing contracts. If these resources need to be augmented
due to the financing requirements related to new large outsourcing contracts or large
acquisitions, significant additional cash requirements would likely be financed by the
issuance of debt and/or equity securities. At September 30, 2002, cash and cash
equivalents were $104.2 million and the total credit facility available amounted to $249.1
million, compared with $225.3 million at the same time in 2001. As a Libor advance of
US$20 million was reimbursed during the last quarter of the fiscal year 2002, the
financing available under both the unsecured revolving credit facility and available lines
of credit with the Bank of Montreal were increased in comparison to September 30, 2001.

The bank credit facility contains certain covenants, which require the Company to maintain
certain financial ratios. As at September 30, 2002, and September 30, 2001, the Company
met these ratios.

Under a new credit facility closed subsequent to year-end, the Company has access to a $150
million revolving credit facility for the operating activity needs and working capital
purposes and to a $265 million three-year term revolving credit facility for financing of
acquisitions and outsourcing contracts. The Company has also access to a $25 million
uncommitted operating facility for cash management purposes. The $150 million revolving
credit facility, at the option of the lenders, can be renewed on
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

25

---

| | an annual basis for an
additional year or have, at the initiative of the Company, the balance outstanding on this
credit facility locked into a two-year term loan.

Commitments
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

> COMMITMENT TYPES
>      
>      TOTAL MINIMAL LEASE
>      PAYMENTS DUE UNTIL 2007(in '000 of canadian dollars)
>      
>      $Operating leases
>           Rental of office space
>      
>      742,466Computer equipment
>      
>      93,511Long-term service agreements
>      
>      57,110

| | CGI
is committed under the term of operating leases with various expiration dates, primarily
for rental of premises, computer equipment used in outsourcing contracts and long-term
service agreements in the aggregate amount of $893.1 million. Of this total amount, rental
of office space represents $742.5 million; computer equipment represents $93.5 million and
long-term service agreements, $57.1 million. The increase in the property leases compared
to commitments as of September 30, 2001, reflects CGI having entered into a 20-year lease
with E-Commerce Place in Montreal. This commitment represents $472.1 million. As part of
its relocation to E-Commerce Place, CGI has been receiving provincial tax credits on
salaries since May 11, 2000, which are deducted from the costs of services, selling and
administrative expenses since then. The Company will be receiving these tax credits,
representing up to $12,500 per year for each eligible employee relocated to E-Commerce
Place, until fiscal 2010 inclusively. Further details can be found in Note 3 to the
Consolidated Financial Statements in the 2002 annual report.

Computer
equipment leases are related to hardware leased from manufacturers or financial
institutions in the course of business activities. As part of the outsourcing agreements
in particular, clients agree to take back the computer equipment in the case of early
contract termination.

Critical accounting policies

Revenue recognition
The Company provides two broad ranges of services: outsourcing services (management of IT and
business functions) and IT consulting services (systems integration and consulting). The
Companys revenue is principally derived from outsourcing services.

Revenue from outsourcing contracts is based on the services performed or information processed
during the period in accordance with contract terms and the agreed-upon billing rates
applied to the consumed service metrics. In some cases, the Company bills customers prior
to performing the service, resulting in deferred revenue which is presented as a current
liability in the Consolidated Financial Statements. Reimbursements, including those
relating to travel and other out-of-pocket expenses, and other similar third party costs,
such as the cost of hardware and software resales, are included in revenue and the
corresponding expense is included in costs of services.

For time and materials and level of effort types of contracts, revenue is recognized as the
services are provided. For cost-based contracts, revenue is recorded as reimbursable costs
are incurred. These types of contracts are generally entered into with customers in the
context of IT consulting services.
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| | Revenue on fixed-price contracts is recognized on the basis of the estimated
percentage-of-completion of services rendered that reflects the extent of work
accomplished. This type of contract is generally entered into for systems integration
services. Management estimates the percentage-of-completion by reference to measures of
performance that are reasonably determinable and are directly related to the activities
critical to completion of the contract. Management measures performance principally based
on the labor hours spent on the contract over the total estimated labor hours for the
contract. The Company uses this method of revenue recognition as projected contract
revenue and costs may reasonably be estimated based on the Companys business
practices, methods and historical experience. This method requires estimates of costs and
profits over the entire term of the contract. Management regularly reviews underlying
estimates of project profitability; revisions to estimates are reflected in the statement
of earnings in the period in which the facts that give rise to the revision become known.
Provisions for estimated losses, if any, are recognized in the period in which the loss is
determined. Contract losses are measured as the amount by which the estimated costs of the
contract exceed the estimated total revenue from the contract.

Occasionally, the Company sells software licenses. Revenue from the sale of software licenses is
recognized when the product is delivered, no significant vendor obligations remain and the
collection of the agreed-upon fee is probable. Where license agreements include multiple
elements, revenue from sale of licenses is recognized on the same basis, provided the
services do not include significant customization to the base product. In these cases,
revenue is recognized over the period of delivery. Revenue from software maintenance and
support agreements is recognized on a straight-line basis over the term of the related
agreements.

Contract costs and other long-term assets
Contract costs and other long-term assets include principally contract costs, cost of software
acquired and developed and software license acquisition costs.

Contract
costs are incurred in the course of two to 10-year IT management contracts. These assets
are recorded at cost and amortized using the straight-line method over the term of the
respective contracts. Contract costs principally comprise the following:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | Incentives granted to clients upon signature of long-term outsourcing contracts.
          Occasionally, incentives may be granted either in the form of cash payments,
          issuance of equity instruments, or rebates granted primarily over a transition
          period as negotiated in the contract. In the case of an incentive in the form of
          an issuance of equity instruments, cost is measured at the estimated fair value
          of the equity instruments issued. For incentives in the form of rebates, cost is
          measured at the value of the financial commitment granted and a corresponding
          deferred credit is recorded. As services are provided to the customer, the
          deferred credit is reversed in the statement of earnings and recognized as
          revenue. Amortization of the incentives is presented as a reduction of revenue;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | Estimated fair value of long-term outsourcing contracts and/or customer lists
          acquired through business acquisitions; the estimated fair value is determined
          as part of the purchase price allocation process in the context of business
          acquisitions; and,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | c) | Transition costs incurred during the transition period on long-term outsourcing
          contracts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| | Costs of software acquired
and developed include software specifically designed or acquired to
provide long-term outsourcing contracts to clients or groups of clients. Costs of software
developed
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

27

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| | are capitalized only after technological feasibility is established. Software
acquired and developed is recorded at cost and amortized on a straight-line basis over its
estimated useful life.

Costs
of software licenses include licenses acquired for the purpose of certain long-term
outsourcing contracts. Software licenses are recorded at cost and are amortized on a
straight-line basis over their respective contract terms, estimated useful lives or based
on consumption.

Goodwill
Goodwill represents the excess of the purchase price over the fair values of the net assets of
entities acquired at the respective dates of acquisition. On October 1, 2001, the Company
adopted prospectively the new recommendations of the CICA Handbook Sections 1581, Business
Combinations, and 3062, Goodwill and Other Intangible Assets. Accordingly, the Company
discontinued the amortization of goodwill as of October 1, 2001. Prior to October 1, 2001,
goodwill was amortized on a straight-line basis over its expected useful life of 20 years.
For business combinations occurring after June 30, 2001, the Company did not amortize the
resulting goodwill, consistent with transition recommendations of Section 1581.

Goodwill
is tested annually, or more frequently if impairment indicators arise, for impairment in
relation to the fair value of each reporting unit to which goodwill applies and the value
of other assets in that reporting unit. An impairment charge is recorded for any goodwill
that is considered impaired.

During
the second quarter ended March 31, 2002, the Company completed the transitional impairment
test and concluded that no goodwill impairment charge needed to be recorded. The Company
intends to perform its annual review of goodwill as of September 30 of each year. Based on
the impairment test performed as of September 30, 2002, the Company concluded that no
goodwill impairment charge was required.

Deferred credits
Deferred credits principally comprise the unused portion of rebates granted by the Company to
customers under the terms of certain long-term outsourcing contracts (see Contract costs
and other long-term assets described above).

Stock option plan
The Company has a stock option compensation plan, which is described in Note 7 to the
Consolidated Financial Statements in the 2002 annual report. No compensation expense is
recognized for this plan when stock options are granted to employees and directors. Any
consideration paid by employees and directors on exercise of stock options is credited to
share capital.

On
April 1, 2002, the Company early adopted the recommendations of CICA Handbook Section
3870, Stock-Based Compensation and Other Stock-Based Payments. This section establishes
standards for the recognition, measurement and disclosure of stock-based compensation made
in exchange for goods and services and requires the use of the fair value method to
account for awards to non-employees and direct awards of stock to employees and
encourages, but does not require, the use of the fair value method to account for
stock-based compensation costs arising from awards to employees. The section also requires
pro forma disclosures relating to net earnings and earnings per share figures as if the
fair value method of accounting had been used. The Company has chosen not to use the fair
value method to account for stock-based compensation costs arising from awards to
employees. The pro forma disclosure is presented in Note 7 to the Consolidated Financial
Statements in the 2002 annual report.
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| | Risks and uncertainties

While
management is positive about the Companys long-term prospects, the following risks
and uncertainties should be considered when evaluating CGIs potential:

The competition for contractsCGI has a disciplined approach to management of all
aspects of its business, with an increasing proportion of its operations codified under
ISO 9001 certified processes and in corporate manuals. These processes were developed to
help CGI ensure that its employees deliver services consistently according to the
Companys high standards and they are based on strong values underlying its
client-focused culture. These processes contribute to CGIs high contract win rate
and renewal rate. Additionally, the Company has developed a deep strategic understanding
of the six economic sectors it targets, and this helps enhance its competitive position.
CGIs critical mass and end-to-end IT services have qualified it to make proposals on
large IT and business process outsourcing contracts across North America and in Europe.

The long sales cycle for major outsourcing contractsThe average sales cycle for
large outsourcing contracts typically ranges from six to 18 months, with some extending to
24 months.

Foreign
currency riskThe increased international business volume could expose CGI to
greater foreign currency exchange risks, which could adversely impact its operating
results. CGI has in place a strategy to protect itself from currency fluctuations, to the
extent possible, against foreign currency exposure.

Business
mix variationsFollowing the merger with US-based IMRglobal in July 2001, the
greater proportion of SI&C services in CGIs business mix, versus outsourcing,
may result in greater quarterly revenue variations. However, CGIs efforts in the US
market place are aimed at developing its capability to deliver an end-to-end IT
outsourcing offering. As a result of this transition, CGI expects to increase the
proportion of its outsourcing business, thus ensuring greater revenue visibility and
predictability.

The
availability and cost of qualified IT professionalsThe high growth of the IT
industry results in strong demand for qualified individuals. Over the years, CGI has been
able to successfully staff for its needs thanks to its solid culture, strong values and
emphasis on career development, as well as performance-driven remuneration. In addition,
CGI has implemented a comprehensive program aimed at attracting and retaining qualified
and dedicated professionals and today, the Company is a preferred employer in the IT
services industry. CGI also secures access to additional qualified professionals through
outsourcing contracts and business acquisitions.

The
ability to successfully integrate business acquisitions and the operations of IT
outsourcing clientsThe integration of acquired operations has become a core
competency for CGI, which has acquired a significant number of companies over the past 15
years. The Companys disciplined approach to management, largely based on its ISO
9001 certified management frameworks, has been an important factor in the successful
integration of human resources of acquired companies and the IT operations of outsourcing
clients. As at the end of fiscal 2002, the vast majority of CGIs operations had
received ISO 9001 certification.

The
ability to continue developing and expanding service offerings to address emerging
business demand and technology trendsCGI remains at the forefront of
developments in the IT services industry, thus ensuring that it can meet the evolving
needs of its clients. The Company achieves the aforementioned through: its specialization
in six targeted economic sectors; its non-exclusive
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| | commercial alliances with hardware and
software vendors and strategic alliances with major partners; its development of
proprietary IT solutions to meet the needs of clients; regular training and sharing of
professional expertise across its network of offices; and business acquisitions that
provide specific knowledge or added geographic coverage.

Material
developments regarding major commercial clients resulting from such causes as changes in
financial condition, mergers or business acquisitionsWith the exception
of BCE Inc., its subsidiaries and affiliates, no one company or group of related companies
represents more than 10% of CGIs total revenue. See Note 13 to the Consolidated
Financial Statements in the 2002 annual report.

Potential
liability if contracts are not successfully carried outCGI has a strong record
of successfully meeting or exceeding client needs. The Company takes a professional
approach to business, and its contracts are written to clearly identify the scope of its
responsibilities and to minimize risks.

Credit
risk concentration with respect to trade receivables is limited due to the Companys
large client baseThe Company generates a significant portion of its
revenue from a shareholders subsidiaries and affiliates, namely BCE Inc. Management
does not believe that the Company is subject to any significant credit risk. The Company
operates internationally and is exposed to market risks from changes in foreign currency
rates. Other than the use of financial products to deliver on its hedging strategy, the
Company does not trade derivative financial instruments.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.2.2 | Fiscal 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       | Note: Please note that in fiscal 2002, CGI restated certain items of its financial statements
for the years 1998-2002. The following section does not reflect such restatements. For a
view reflecting such changes, please refer to CGIs fiscal 2002 financial statements
in the annual report.

The
following discussion and analysis should be read in conjunction with the Companys
fiscal 2001, 2000 and 1999 Consolidated Financial Statements and the notes thereto on
pages 33 to 57 of the Companys 2001 Annual Report (the Consolidated Financial
Statements). All dollar amounts are in Canadian dollars unless otherwise indicated.

Corporate Overview

Headquartered
in Montreal, CGI was organized along geographic lines with three strategic business lines:
Canada, US and International. Effective October 1, 2001, CGI reorganized its business
units according to the following breakdown: Canada and Europe, US and Asia Pacific, and
Business Process Services (see the section entitled Organizational Change on
page 19). CGI provides end-to-end (IT) services in six economic sectors: financial
services, telecommunications, manufacturing/retail/distribution, governments, energy and
services, as well as healthcare. Some 69% of the Companys business is in the
management of business and IT functions (outsourcing), and 31% in consulting and systems
integration.

CGI
has more than 13,000 employees (members) and provides end-to-end IT services and business
solutions to some 3,000 clients in North America, Europe and Asia Pacific from more than
60 offices around the world. The Company provides IT facilities management to its clients
using a network of state-of-the-art data centers in Montreal, Toronto and Regina,

30

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| |  | as well
as in Phoenix (US) and Basingstoke (UK). CGI also has applications maintenance and
development centers in Mumbai and Bangalore (India).

Business Acquisitions

In
fiscal 2001, CGI completed the acquisition of eight niche companies, one large acquisition
and one strategic outsourcing alliance that was accounted for as a business acquisition,
as well as four joint venture investments.

On
October 4, 2000, CGI completed the acquisition of Detroit-based C.U. Processing Inc.
(CUP), a provider of information management systems primarily to US credit
unions. At the time of the acquisition, CUP had a staff of approximately 160 and for its
latest fiscal year, it recorded revenue of more than $35.0 million. CUP was acquired for a
cash consideration of $38.5 million and goodwill of $41.6 million was recorded as part of
the transaction.

Effective
November 27, 2000, CGI completed a 49.0% equity investment in AGTI Consulting Services
Inc. (AGTI), a Montreal-based IT consulting firm with more than 225 senior
consultants and generating annual revenue of approximately $27 million. This transaction
was paid for through the issuance of $24.9 million in cash. Goodwill resulting from the
transaction amounted to $14.6 million.

On
December 12, 2000, CGI completed the acquisition of Toronto-based RSI Realtime Consulting
Inc. (RSI), an SAP implementation specialist. At the time of the acquisition,
the consulting and software development firm employed a staff of 45 and had annual revenue
of $6.0 million. CGI completed this acquisition for a consideration of $2.6 million in
cash and shares. Goodwill resulting from the transaction amounted to $3.1 million.

On
January 4, 2001, CGI closed the acquisition of Groupe-conseil CDL Inc. (CDL),
a Montreal-based IT consulting firm specializing in the implementation of J.D. Edwards
enterprise resource planning solutions. At the time of the acquisition, CDL had 45
employees and annual revenue of $6.4 million. CGI acquired CDL for a consideration of $4.9
million in cash and shares. As part of the transaction, CGI recorded goodwill of $4.0
million.

On
January 9, 2001, CGI acquired all of the outstanding shares of Star Data Systems Inc.
(Star Data), a Canadian-based provider of financial services with annual
revenue, at the time of closing, of nearly $80 million. Star Data employed over 400
professionals and operated two primary business lines information systems and wealth
management solutionsand its clients included major Canadian financial institutions.
The transaction was completed on the basis of 0.737 Class A subordinate share of CGI for
each Star Data common share. As a result of the transaction, CGI issued 13.5 million Class
A subordinate shares and recorded goodwill amounting to $73.1 million.

On
January 12, 2001, CGI increased its equity ownership in Quebec-based IT consulting firm
Conseillers en informatique daffaires from 35.0% to 49.0%. In the course of this
transaction, CGI issued 153,895 Class A subordinate shares and recorded goodwill totaling
$2.8 million.

On
February 1, 2001, CGI entered into a partnership with Loto-Québec, which involved
the creation of Nter Technologies, Limited Partnership (Nter). Nter offers
products and services to the worldwide gaming industry, including the development and sale
of IT solutions, consulting and management services. CGI acquired a 49.9% interest in
Nter. At the time of the announcement, the two partners estimated that the venture would
generate revenues of approximately $100 million over five years. CGI acquired its
ownership position for a cash
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

31

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| |  | consideration of $5.0 million.
As part of this transaction, CGI accounted for goodwill totalling $2.5 million.

On
May 1, 2001, CGI signed a strategic, 10-year alliance worth an estimated value of $1.2
billion with leading Canadian financial services group Confédération des
caisses populaires et déconomie Desjardins du Québec. In the context
of this agreement, CGI acquired the related assets, certain intellectual property rights
and assumed liabilities of Confédération des caisses populaires et
déconomie Desjardins du Québec, used in data and micro-computing of
Mouvement des caisses Desjardins (Desjardins) operations. CGI also took over
450 Desjardins employees and two Montreal data centers and will manage Desjardins
data processing operations. CGI also agreed to join with Desjardins to market the
clients banking solutions to financial institutions.

On
May 31, 2001, CGI acquired California-based CyberBranch Corporation, an Internet and
intranet provider of leading edge technology to credit unions across North America. The
acquisition was paid for with a cash consideration of $1.5 million, plus future royalties.
Goodwill from this transaction totalled $2.1 million.

On
July 1, 2001, CGI completed the acquisition of Larochelle Gratton, a Quebec-based IT
consulting firm, for a consideration of $4.7 million in cash and 516,352 Class A
subordinate shares of CGI. At the time of the acquisition, Larochelle Gratton had annual
revenue of $18.0 million and employed a staff of 200 employees. CGI recorded goodwill of
$7.8 million as part of this transaction.

On
July 27, 2001, CGI completed its merger with IMRglobal Corp. (IMRglobal),
following the approval of the merger agreement by a majority of IMRglobal shareholders. As
part of this transaction, CGI acquired all outstanding shares of common stock of
IMRglobal, on the basis of 1.5974 Class A subordinate share of CGI for each share of
IMRglobal common stock. As a result of the merger, CGI issued 70.8 million Class A
subordinate shares and 8.4 million options to acquire Class A subordinate shares, for a
total value of $552.8 million. Non-cash working capital items acquired included costs
totalling $68.0 million of acquisition and integration liabilities incurred for
professional fees and costs to exit and consolidate certain IMRglobal activities. CGI, as
part of the preliminary price allocation, recorded goodwill of $578.5 million on this
transaction which, under the new accounting standards effective July 1, 2001, is not
amortized.

On
August 7, 2001, CGI acquired Portugal-based LoyalTech, a consulting and systems
integration firm specializing in customer relationship management solutions and e-business
strategies, for a total consideration of $4.2 million. At the time of the acquisition,
LoyalTechs sales run-rate totalled over $4 million. Goodwill resulting from this
transaction totalled $4.2 million.

On
August 27, 2001, CGI signed a joint venture agreement with the former management team of
Toronto-based strategy and research firm Digital 4Sight, which involved the creation of a
new management strategy and research firm to accelerate Digital 4Sights expansion.
CGI paid a consideration of $200,000 for its 51.0% interest, and recorded goodwill
totalling that same amount.

On
September 10, 2001, CGI acquired EPC Services Conseils Inc. (EPC), a
Quebec-based IT consulting firm, for a consideration of $155,000.
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32

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| |  | Large Contracts

On
January 4, 2001, CGI signed an outsourcing contract worth more than $119 million with
UK-based financial services company Sun Life Financial (Sun Life). Under the
terms of the contract, extending over a seven-year period, CGI has taken over Sun
Lifes Basingstoke (UK) data center and will run and support the clients IT
infrastructure and desktops.

On
January 22, 2001, CGI announced the 10-year extension and broadening of an IT outsourcing
agreement with Interac Association, for an undisclosed amount.

On
February 7, 2001, CGI signed a major multi-million pounds sterling contract with insurance
industry leader Allianz AG, for the implementation of GIOS, CGIs insurance solution,
in more than 20 countries around the world.

On
April 5, 2001, CGI and UCAR International Inc. (UCAR) signed a 10-year
outsourcing contract valued at approximately US$75 million. Under the agreement, CGI will
manage UCARs data center services, networks, desktops, telecommunications and legacy
systems by leveraging its cost efficient near-shore delivery model.

On
June 14, 2001, CGI began operating the IT systems of Laurentian Bank of Canada
(Laurentian Bank), as part of a $300 million, 10-year outsourcing contract
with this client. The agreement covers areas such as project development, applications
maintenance and evolution, operations support and automated banking machine support. The
contract with Laurentian Bank was signed on June 4, 2001.

On
October 1, 2001, CGI signed a US$380 million, strategic 10-year alliance with
California-based Firemans Fund Insurance Company (Fireman). As part of
the agreement, CGI took over the clients Phoenix-based, state-of-the-art data center
and will provide Fireman with IT support services to some 80 locations across the United
States.

Organizational Change

On
July 27, 2001, CGI announced the launch of a new business unit, responsible for providing
business process services to CGIs worldwide client base. On the same date, CGI also
announced organizational adjustments to better reflect the nature of the Companys
operations. Based on these changes, the Companys operations are managed by three
senior executives, namely Michael Roach, President, Canada and Europe, Satish Sanan,
President, US and Asia Pacific, and Joseph Saliba, President, Business Process Services.
All CGI global and corporate functions remain the same. This change in operations
management will be reflected in the Companys accounting effective October 1, 2001.

Each
unit is evaluated primarily on its revenue, operating earnings and net contribution (the
latter being defined as earnings before interest, income taxes, entity subject to
significant influence and amortization of goodwill) by its respective President, who
reports directly to the Chief Executive Officer.

Growth Strategy of the Company

The
Companys growth strategy is comprised of four pillars, namely organic growth, large
outsourcing contracts, acquisition of niche companies and large business acquisitions.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

33

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| |  | During
the year, CGI signed several outsourcing contracts, with an aggregate value of $2.1
billion (excluding backlog from acquired companies), plus a US$380 million contract signed
with Fireman effective October 1, 2001. Some of these negotiations had been ongoing since
the latter part of fiscal 2000, but their signing had been delayed by the turn of the
millennium.

Throughout
fiscal 2001, the Company continued to acquire niche players in the IT services sector,
which allowed it to enrich its vertical industry offering or complete its geographic
coverage. The acquisition of these companies and the Companys joint ventures
represented the addition of approximately $160 million and $35 million in annual revenue,
respectively (based on annualized revenues as at acquisition date).

In
addition to the acquisition of these niche companies, CGI also pursued its large
acquisition strategy. On July 27, 2001, CGI closed its merger agreement with IMRglobal,
which provided it with significantly greater critical mass in the United States and other
international markets. For the six-month period ended June 30, 2001, representing its last
two quarters as a publicly traded company, IMRglobal achieved revenue totalling
approximately US$235 million on an annualized basis.

CGI
continues to seek large business acquisitions and continues to focus on growing its
presence in the US market. One main component of this growth is the Companys highly
cost effective IT services delivery model, which allowed it to sign several IT outsourcing
contracts during the year. CGIs flexible model allows it to serve its US clients
using a combination of local (US), near-shore (Canadian) and off-shore (Indian)
operations. CGI is in a position to leverage its newly acquired Phoenix-based US data
center, its network of Canadian infrastructure facilities, as well as its Bangalore and
Mumbai applications development centers.

Performance Overview

Fiscal
2001 marked the twenty-fifth consecutive year of growth for CGI, as revenue totalled $1.58
billion, up from $1.44 billion in fiscal 2000 and $1.41 billion in fiscal 1999. Operating
earnings before depreciation and amortization of fixed assets and amortization of contract
costs and other long-term assets totalled $229.6 million, compared with $171.7 million in
fiscal 2000 and $214.3 million in 1999. Earnings before amortization of goodwill were
$89.9 million ($0.30 per share basic and diluted), compared with $73.5 million ($0.27 per
share basic and diluted) in fiscal 2000 and $99.9 million ($0.37 per share basic and
diluted) in fiscal 1999. The year-over-year improvement in earnings before amortization of
goodwill was 22.3%. Net earnings amounted to $62.8 million ($0.21 per share basic and
diluted), compared with $55.7 million ($0.21 per share basic, $0.20 per share diluted) in
fiscal 2000 and $83.8 million ($0.31 per share basic and diluted) in fiscal 1999. The net
margin was 4.0%, compared with 3.9% one year ago and 5.9% in 1999.

In
the fourth quarter, revenue was $469 million, compared with $320.1 million in the fourth
quarter a year ago. Operating earnings before depreciation and amortization of fixed
assets and amortization of contract costs and other long-term assets totalled $72.6
million, compared with $24.8 million in the fourth quarter of fiscal 2000. Earnings before
amortization of goodwill were $27.2 million ($0.08 per share basic and diluted), compared
with $7.1 million ($0.03 per share basic and diluted) in fiscal 2000. Net earnings were
$19.8 million ($0.06 per share basic and diluted), compared with $2.4 million ($0.01 per
share basic and diluted) in the same quarter of fiscal 2000. The year-over-year
improvement in earnings before amortization of goodwill was 283.1% while the improvement
over the same period for net earnings was 725%.
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34

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| |  | The
balance sheet remained strong at September 30, 2001, with $46 million in cash and cash
equivalents, $1.48 billion of shareholders equity and $40.3 million in long-term
debt, related to bankers acceptances and capital leases.

Seasonality

CGIs
quarterly results reflect some seasonality, which in many years has been offset to some
extent by the Companys growing outsourcing revenue, which is earned consistently on
a monthly basis throughout the year. Seasonality in the fourth quarter of fiscal 2001 has
increased marginally following the July 2001 acquisition of IMRglobal, whose business is
mainly comprised of consulting and systems integration services.

Comparison of Operating Results for the Years Ended September 30, 2001, 2000 and 1999

Revenue
Revenue increased by 10.1% in fiscal 2001 to $1,581.3 million, following a marginal
increase to $1,436 million in fiscal 2000, and a 90.2% increase to $1,409.5 million in
fiscal 1999. In fiscal 2001, revenue growth was driven by business acquisitions.

Throughout
the year, revenue growth from the United States and international markets remained
challenged. Completion in fiscal 2000 of a large international systems integration
contract in Brazil also hindered internal growth.

These
factors were more than compensated by CGIs dynamic two-fold acquisition strategy,
aimed at acquiring niche IT companies as well as large players. In fiscal 2001, CGI
acquired nine IT companies and took an equity position in four such entities, which
together made a revenue contribution of $216.5 million in the year. CGI also acquired one
large US-based company (IMRglobal), which added another $48.7 million to revenue in the
two last months of fiscal 2001.

Throughout
the year, CGI signed several large IT outsourcing contracts, which contributed
significantly to its revenue growth. CGI benefited from a five-month contribution from its
contract with Desjardins, three and a half month contribution from its agreement with
Laurentian Bank, in addition to contracts with Allianz AG (effective February 7, 2001) and
Sun Life (effective January 4, 2001), among others.

In fiscal 2000, the Company benefited from a 12-month contribution of its contract with Bell
Mobile Communications Inc. (Bell Mobility), as well as from its DRT
acquisition, effective July 1, 1999. These revenue gains were partially offset by Bell
Canadas reduction in IT budgets, compounded by an industry-wide slowdown in IT
spending related to the Year 2000 phenomenon. The 90.2% increase in revenue in fiscal 1999
reflected the $4.5 billion, 10-year IT outsourcing contract with Bell Canada (through
CGIs acquisition of Bell Sygma) and the acquisition of BSI for the full year. The
1999 revenue increase also reflected the acquisition of TDL effective January 1, 1999.

In fiscal 2001, the revenue mix
by geographic region was : Canada 77%, compared with 73%
in fiscal 2000 and 81% in fiscal 1999; United States 17%, compared with 15% in 2000 and
10% in 1999; and International 6%, compared with 12% in 2000 and 9% in 1999.

In fiscal 2001, the mix by
type of service was 69% management of IT and business functions
(outsourcing), and 31% from consulting and systems integration. In fiscal 2000, the mix
was
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| |  | 62% outsourcing and 38% systems
integration and consulting. In fiscal 1999, these two
sectors represented 72% and 28%, respectively.

Operating expenses
Costs of services, selling and administrative expenses amounted to $1,339.1 million in fiscal
2001 or 84.7% of revenue, compared with $1,254.4 million or 87.3% the previous year and
$1,185.6 million or 84.1% of revenue in fiscal 1999. This reduction in the operating
expenses to revenue ratio in fiscal 2001 was achieved by lower overhead costs in the
United States and international units resulting from the improvements in the utilization
of CGIs IT members, synergies from the integration of the business acquisitions and
outsourcing contracts, the revenue contribution of IMRglobal and other acquired companies
and, finally, the Companys participation in the Quebec governments refundable
tax credits on salaries program which the Company benefits from as a result of its future
relocation to E-Commerce Place.

Research
expenses amounted to $12.6 million in fiscal 2001, up from $10 million in the previous
fiscal year and $9.6 million in fiscal 1999. During 2001, CGI continued to invest in the
$50 million Strategic Investment Program announced in fiscal 2000. The purpose of the
program is to support client oriented initiatives, development of CGIs proprietary
solutions and implementation of new technologies. CGIs efforts are aimed at
assisting its clients in meeting their growing and diversified needs. In fiscal 2000,
research expenses were related to the Web-enabling of CGIs capabilities and
intellectual property. In 1999, research spending revolved around the development of
solutions for the property and casualty insurance markets in Canada and the United States.

Earnings before depreciation and amortization of fixed assets and amortization of contract costs and other long-term assets
Earnings before depreciation and amortization of
fixed assets and amortization of contract costs and other long-term assets totalled $229.6
million, compared with $171.7 million in fiscal 2000 and $214.3 million in fiscal 1999. In
fiscal 2001, CGI reported depreciation and amortization of fixed assets totalling $32.5
million, compared with $26.4 million in fiscal 2000 and $27.4 million in fiscal 1999. In
fiscal 2001, amortization of fixed assets increased as a result of the acquisition of
fixed assets related to the Desjardins contract, as well as other asset purchases acquired
through the nine companies acquired, and the four joint ventures in which CGI acquired
interests. In fiscal 2000, amortization of fixed assets was slightly lower than in fiscal
1999, due to the fact that some assets were fully amortized and given that only two
companies were acquired. In fiscal 1999, amortization of fixed assets reflected the
purchase of new assets resulting from business acquisitions.

Amortization
of contract costs and other long-term assets totalled $33.5 million in fiscal 2001, up
from $22 million in the previous year and $20.9 million in fiscal 1999. Amortization of
contract costs and other long-term assets increased as a result of costs incurred for the
delivery of large outsourcing contracts with Desjardins, Laurentian Bank, UCAR and Sun
Life, among others. In fiscal 2000, the increase in amortization of contract costs and
other long-term assets reflected the addition of licensing fees and other expenses
incurred in the course of IT management contracts.

Interest
Interest
on long-term debt increased to $4.2 million from $3.6 million in the previous year and
$1.4 million in 1999. In fiscal 2001, interest expense was related mainly to a loan
contracted in the course of a large outsourcing contract and an acquisition. In fiscal
2000, such expense stemmed from a full year of outstanding long-term debt relating to the
acquisition of DRT.
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| |  | Fiscal 1999 interest expense
was primarily related to the financing of
the DRT acquisition over a period of three months.

Interest
income amounted to $3 million, compared with $3.9 million in fiscal 2000 and $5.3 million
in 1999. Interest income was related to investment of excess cash balances in short-term
fixed income instruments.

Income taxes
The effective income tax rate before goodwill amortization was 44.5% in fiscal 2001, compared
with 40.5% in 2000 and 41.2% in 1999. In fiscal 2001, the Company recorded additional
valuation allowances relating to the tax benefit on losses incurred in the United States
and certain international operations.

Earnings before amortization of goodwill
Earnings before amortization of goodwill totalled $89.9 million ($0.30 per share basic and diluted)
in fiscal 2001, compared with $73.5 million ($0.27 per share basic and diluted) in 2000
and $99.9 ($0.37 per share basic and diluted) in 1999. CGIs increase in earnings
before amortization of goodwill was driven by the Companys higher revenue stream
resulting from new large IT outsourcing contracts and business acquisitions. However,
earnings were negatively impacted by the Companys higher tax expense.

Amortization of goodwill
Amortization of goodwill, net of income taxes, increased to $27.1 million, from $17.9 million in fiscal
2000 and $16.1 million in 1999. The increase was mainly due to amortization of the
goodwill from the companies acquired in fiscal 2001, and the goodwill resulting from the
acquisition of APG, over a full 12-month period, compared with one month in fiscal 2000.
Effective July 1, 2001, CGI has been applying the Canadian Institute of Chartered
Accountants (CICA) Handbook Sections 1581, Business Combinations, and
3062, Goodwill and Other Intangible Assets. Please refer to Note 2 to the
Consolidated Financial Statements. Accordingly, CGI has not amortized goodwill related to
the business acquisitions of IMRglobal, LoyalTech, Larochelle Gratton, EPC and
Digital4Sight. Effective October 1, 2001, CGI will no longer record amortization of
goodwill.

Net Earnings
Net earnings increased 12.8% to $62.8 million ($0.21 per share basic and diluted), from $55.7
million ($0.21 per share basic and $0.20 per share diluted) in fiscal 2000 and $83.8
million ($0.31 per share basic and diluted) in fiscal 1999. The net margin was 4%,
compared with 3.9% in fiscal 2000 and 5.9% in fiscal 1999.

The
weighted average number of shares outstanding increased by 10.7% to 299,500,350, compared
with a 0.9% increase to 270,442,354 in fiscal 2000 and 14.2% increase to 267,969,082 in
fiscal 1999, adjusted for a two for one share split in January 2000. In fiscal 2001, the
increase in the weighted number of shares outstanding resulted from the issue of
70,753,841 shares for the acquisition of IMRglobal on July 27, 2001, the issue of
5,953,248 shares on August 14, 2001 for the exercise of preemptive rights of Serge Godin
and André Imbeau in the course of the IMRglobal transaction, and the issue of
15,081,337 shares in consideration for the business acquisitions outlined in Note 9 to the
Consolidated Financial Statements in the 2001 annual report.

On
October 1, 2000, the Company adopted the new recommendations of the CICA Handbook Section
3500, Earnings per share. Under the revised section 3500, the treasury stock method
is used instead of the imputed earnings approach for determining the dilutive effect of
options
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| |  | and warrants issued. In addition,
the section requires that a reconciliation of
the numerator and denominator be disclosed (see Notes 2 and 7 to the Consolidated
Financial Statements in the 2001 annual report).

In
accordance with United States generally accepted accounting principles (GAAP),
net earnings were $46.2 million ($0.15 per share basic and diluted) in fiscal 2001, $53.9
million ($0.20 per share basic and diluted) in fiscal 2000 and $86.1 million ($0.32
per share basic and diluted) in fiscal 1999. Differences between Canadian GAAP and United
States GAAP arise mainly from the difference in the accounting treatment of warrants
issued, as well as the method used for integration costs recognition.

Liquidity and financial resources
CGI concluded fiscal 2001 with a strong balance sheet and cash position, which, together with
its available credit facility, is sufficient to support the Companys organic growth
strategy. If these resources need to be augmented due to the financing requirements
related to new large outsourcing contracts or large acquisitions, significant additionnal
cash requirements would likely be financed by the issuance of debt and/or equity
securities.

In
fiscal 2001, the Company renewed the $250 million revolving credit facility arranged in
1999 with four Canadian chartered banks. The credit facility is available for business
acquisitions, for general working capital purposes and can be locked into a three-year
term at the Companys initiative. At the close of fiscal 2001, the total credit
facilities available amounted to $225.2 million.

Operating
cash flow before changes in non-cash operating working capital items was $194.2 million
($0.65 per share) in fiscal 2001, compared with $126.3 million in fiscal 2000 ($0.47 per
share) and $162 million ($0.60 per share basic) in fiscal 1999. When adjusted for changes
in non-cash operating working capital items, the operating cash flow was $174 million,
compared with $67.6 million in fiscal 2000 and $76.5 million in 1999. The change in the
operating cash flow reflected the $7.1 million increase (12.8%) in net earnings, as
well as higher depreciation and amortization expenses and future income taxes.

Changes
in non-cash operating working capital items, which excludes business acquisitions
described in Note 9 of the Consolidated Financial Statements, reflected an increase in
accounts receivable and work in progress, which resulted from the increased business
volumes, business acquisitions and major outsourcing contracts signed during the year.
Accounts payable and accrued liabilities increased in the normal course of business.
Deferred revenue increased due to the billing in advance on new outsourcing contracts as
well as a general increase related to other outsourcing contracts. In fiscal 2000, the
change in non-cash working capital items reflected mainly a decrease in accounts payable
and accrued liabilities related to the decrease in the operating expenses on a
quarter-over-quarter basis.

Net
cash used for financing activities amounted to $15.8 million, from $11.2 million in fiscal
2000 while $41.5 million was provided by financing activities in fiscal 1999. The $65
million of debt repayment during fiscal 2001 was related to the reimbursement of
outstanding long-term debt of acquired companies (mostly Star Data and IMRglobal). Also,
during fiscal 2001 the Company repaid, on its credit facility, an amount of $5 million
over and above the sums drawn during the year.

In
fiscal 2001, the issuance of shares provided $54.2 million to the cash balance, compared
with $10.9 million in the previous year. This resulted primarily from the exercise of
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38

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| |  | preemptive rights by two majority
shareholders of the Company pursuant to the IMRglobal
merger, as well as from the exercise of options.

Net cash used for investing activities
totalled $157.8 million, up from $50.3 million in
fiscal 2000. Business acquisitions increased to $86.4 million, up from $18.4 million
in fiscal 2000, reflecting the Companys 10 business acquisitions and four joint
venture investments completed in fiscal 2001, compared with two business acquisitions in
fiscal 2000 (for a complete description of business acquisitions, please refer to section
entitled Business Acquisitions). The purchase of fixed assets totalled $24
million, compared with $18.1 million in fiscal 2000. The increase reflected improvements
that were carried out on Star Datas infrastructure and other assets which were also
acquired in the normal course of business.

Contract costs and other long-term assets include costs incurred as part of outsourcing contracts
signed during the year, including those with Desjardins, Laurentian Bank, Sun Life and
UCAR.

The
net decrease in cash position amounted to $3.3 million, compared with a net increase of
$7.1 million in fiscal 2000, and a net decrease of $79.2 million in fiscal 1999.

Accounting changes
Effective July 1, 2001, CGI has been applying CICA Handbook Sections 1581, Business
Combinationsand 3062, Goodwill and Other Intangible Assets. The Standards
require that all business combinations be accounted for using the purchase method.
Additionally, effective January 1, 2002, goodwill and other intangible assets with an
indefinite life will no longer be amortized to earnings and will be assessed for
impairment on an annual basis in accordance with the new standards. Please refer to Note 2
to the Consolidated Financial Statements in the 2001 annual report.

Balance SheetFiscal Year-Ends 2001 and 2000


Assets totalled $2,062.8 million at the end of fiscal 2001, compared with $928.6 million at
September 30, 2000, representing an increase of 122.2%. All asset items increased over the
previous fiscal year, the major item being goodwill, which increased by $718.9 million
(181.6%) to $1,114.8 million, from $395.9 million in fiscal 2000 due to goodwill resulting
from the 10 business acquisitions and four joint venture investments completed during the
year. This $718.9 million increase also includes $578.5 million of goodwill from the
acquisition of IMRglobal.

Fiscal
2001 accounts receivable include the Quebec governments E-Commerce Place tax credits
on salaries which the Company has been accounting for since the third quarter of fiscal
2000. Such credits were excluded from the calculation of the Companys collection
period for accounts receivable and work in progress (days-sales outstanding or DSOs),
which amounted to 72 days, compared with 75 days in fiscal 2000. Excluding the impact on
DSOs of the IMRglobal acquisition, DSOs for CGI would have totalled 65 days as at
September 30, 2001. This difference is due to the fact that IMRglobals revenue
stream was accounted for over a period of only two months. In fiscal 2000, the DSOs
reflected the closing of the APG acquisition shortly before the end of the fiscal year.

Fixed
assets increased to $123.4 million, up from $58.9 million in fiscal 2000. The increase was
primarily a result of assets acquired through business acquisitions and large outsourcing
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39

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| |  | contracts. Four buildings,
located in Clearwater (two), Mumbai and New Delhi and worth
$23.4 million, were acquired through the merger agreement with IMRglobal.

Contract
costs and other long-term assets are related to large outsourcing contracts and include
certain integration costs as well as incentives and warrants granted to clients to encourage
the use of IT services from CGI. These contracts include conditions for early
termination such that any unamortized amount would be refundable to CGI upon termination.

Accounts
payable and accrued liabilities totalled $315.9 million, up 121.3% from the amount of
$142.8 million recorded in fiscal 2000, primarily due to 10 business acquisitions and four
joint venture investments. The transaction with IMRglobal also resulted in an addition of
$53.1 million in accounts payable, as at September 30, 2001.

Deferred
revenue totalled $85.2 million, up from $33.2 million in fiscal 2000. The current
liability is comprised mostly of billing revenue, related to certain outsourcing
contracts, which has been paid prior to the delivery of services. This increase is
consistent with the greater number and larger value of outsourcing contracts signed during
fiscal 2001.

CGIs
long-term debt decreased by 7.1% to $40.3 million as at September 30, 2001, compared with
$43.4 million one year prior. This is the result of a net repayment of $5 million on its
credit facility line, partially offset by additional capital leases.

Deferred
credits are primarily comprised of unused portion of discounts granted under the terms of
the contracts entered into with Desjardins and Laurentian Bank.

Risks and Uncertainties

While
management is optimistic about the Companys long-term prospects, the following risks
and uncertainties should be considered in evaluating CGIs potential.

The competition for contracts  CGI has a highly disciplined approach to management
of all aspects of its business, with an increasing proportion of its operations codified
under ISO 9001 certified processes and in corporate manuals. These processes were
developed to help CGI ensure that its employees deliver services consistently according to
the Companys high standards and they are based on strong values underlying its
client-focused culture. These processes contribute to CGIs high contract win rate
and renewal rate. Additionally, the Company has developed a deep strategic understanding
of the six economic sectors it targets, and this helps enhance its competitive position.
CGIs critical mass and end-to-end IT services have qualified it to make proposals on
large IT services contracts across North America and in Europe.

The
long sales cycle for major outsourcing contracts  The average sales cycle for
large outsourcing contracts typically ranges from six to 18 months. In the second half of
fiscal 2001, however, CGI witnessed a shortening of the sales cycle and, in some cases,
signing of outsourcing contracts only a few months after issuance of requests for
proposals.

Foreign
currency risk  The increased international business volume could expose CGI to
greater foreign currency exchange risks, which could adversely impact its operating
results. CGI has in place a hedging strategy to protect it, to the extent possible,
against foreign currency exposure.
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| |  | Business
mix variations  Following the merger with IMRglobal, the greater proportion of
consulting and systems integration services in CGIs business mix, versus
outsourcing, may result in greater quarterly revenue variations. However, CGIs
efforts are aimed at developing IMRglobals capability to deliver an end-to-end IT
outsourcing offering. As a result of this transition, CGI expects to increase the
proportion of its outsourcing business, thus ensuring greater revenue visibility and
predictability.

The
availability and cost of qualified IT professionals  The high growth of the IT
industry results in strong demand for qualified individuals. Over the years, CGI has been
able to successfully staff for its needs thanks to its solid culture, strong values and
emphasis on career development, as well as performance-driven remuneration. In addition,
CGI has implemented a comprehensive program aimed at attracting and retaining qualified
and dedicated professionals and today, CGI is a preferred employer in the IT services
industry. CGI also secures access to additional qualified professionals through
outsourcing contracts and business acquisitions.

The
ability to successfully integrate business acquisitions and the operations of IT
outsourcing clients  The integration of acquired operations has become a core
competency for CGI, which has acquired a significant number of companies over the past 15
years. The Companys disciplined approach to management, largely based on its ISO
9001 certified management frameworks, has been an important factor in the successful
integration of human resources of acquired companies and the IT operations of outsourcing
clients. As at the end of fiscal 2001, the vast majority of CGIs operations had
received ISO 9001 certification.

The
ability to continue developing and expanding service offerings to address emerging
business demand and technology trends  CGI remains at the forefront of
developments in the IT services industry, thus ensuring that it can meet the evolving
needs of its clients. The Company achieves the aforementioned through: its specialization
in six targeted economic sectors, its non-exclusive commercial alliances with hardware and
software vendors and strategic alliances with major partners, its development of
proprietary IT solutions to meet the needs of clients, regular training and sharing of
professional expertise across its network of offices, and business acquisitions that
provide specific knowledge or added geographic coverage.

Material
developments regarding major commercial clients resulting from such causes as changes
in financial condition, mergers or business acquisitions  With the exception
of BCE Inc., its subsidiaries and affiliates, no one company or group of related companies
represents more than 10% of CGIs total revenue.

Potential
liability if contracts are not successfully carried out  CGI has a strong record
of successfully meeting or exceeding client needs. The Company takes a professional
approach to business, and its contracts are written to clearly identify the scope of its
responsibilities and to minimize risks.

Outlook

CGI
expects to post solid growth in fiscal 2002. The Companys strategy will continue to
be based on its four pillars of growth, namely organic, growth through large outsourcing
contracts, and growth through the acquisition of niche players and large companies.

CGI
will continue to leverage its unique and highly flexible outsourcing delivery model in
order to secure a growing number of large outsourcing contracts in the US market. As CGI
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| |       | successfuly completes the integration of IMRglobal, it expects to gradually migrate
IMRglobals business model away from consulting and systems integration, to focus
more on providing end-to-end IT outsourcing services.

There
is growing demand for IT services outsourcing in CGIs markets in general, and
particularly in North America. In a slowing economic environment, more and more companies
recognize the value of outsourcing their IT services in order to reduce their cost base
while using IT to further enhance their competitive position.

Also,
CGIs solid balance sheet with a strong liquidity position enables it to capitalize
on acquisition opportunities and is an important strength when bidding on large contracts.
CGI maintains a conservative approach to financial management.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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| | 4.2.3 | Fiscal 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |       | Note: Please note that in fiscal 2002, CGI restated certain items of its financial statements
for the years 1998-2002. The following section does not reflect such restatements. For a
view reflecting such changes, please refer to CGIs fiscal 2002 financial statements
in the annual report.

Corporate Overview

Headquartered
in Montreal, CGI is organized along geographic lines with three strategic business units:
Canada, United States and International. CGI provides end-to-end IT services in five
economic sectors: telecommunications, financial services,
manufacturing/retail/distribution, governments, public utilities and services. Some 62% of
the Companys business is in the management of IT and business functions
(outsourcing), 23% is in systems integration and 15% is in consulting. The outsourcing
business generates some 75% of its revenues from higher value-added tier 2 and tier 3
activities and 25% from tier 1 activities (see inside front cover of the 2000 annual
report for Tier 1, 2 and 3 definitions).

CGI
has close to 10,000 professionals and provides end-to-end IT services and business
solutions to some 2,500 clients in Canada, the United States and more than 20 countries
around the world. The Company has four state-of-the-art data centres in Canada, providing
IT facilities management to clients coast-to-coast. In the US, through an agreement, CGI
has secured access to a data centre facility in Andover, Massachusetts.

Acquisitions

Since
fiscal 1999, CGI has made three acquisitions, which have contributed IT expertise and
additional market presence in Canada and the United States.

On
October 26, 1999, CGI acquired MCM Technology Inc. (MCM) a New Brunswick-based
firm with a reputation for leading edge component-based development expertise. At closing,
MCM had approximately $10 million of annual revenue, 85 employees and two offices in
Canada. CGI acquired all the outstanding shares of MCM for a total consideration of $9.3
million, of which $8.9 million was goodwill.

Effective
September 1, 2000, CGI acquired APG Solutions & Technologies inc. (APG) a
Montreal-based consulting firm, which specializes in the implementation of enterprise

42

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| |  | resource planning packages, application evolution, systems evolution and maintenance
mainly in the telecommunications and financial services sectors. This transaction will
allow the Company to increase its critical mass in these sectors. At closing, APG had
annual revenue close to $80 million, 750 employees in seven offices, mainly in Canada. CGI
acquired all the outstanding shares for a total consideration of $60.0 million. Goodwill
amounted to $64.3 million, as outlined in Note 9 to the Consolidated Financial Statements
in the 2000 annual report.

Subsequent
to year-end, on October 4, 2000, CGI acquired C.U. Processing Inc., a Detroit-based firm
that provides information management systems primarily to US credit unions. With this
transaction, the Company now serves a total of five million credit union members, equally
distributed across Canada and the US. At closing, C.U. Processing had annual revenue of
$35 million, 160 professionals in 14 locations in the US and an office in Toronto. CGI
acquired C.U. Processing for a total consideration of $37 million.

Large Contracts

In
October 1999, CGI entered into an agreement with Portugal Telecom, IBM and Case, creating
a systems and information technology partnership over 10 years. The information systems
and data processing functions of Portugal Telecom were outsourced to a newly-created
company (PT Information Systems, PT-SI), held by Portugal Telecom (51%), the
CGI-Case consortium (44%) and IBM (5%). In the scope of the agreement, the CGI and Case
consortium manages the IT functions, including applications management and support of
PT-SI. PT-SI began operations on January 15, 2000.

In
April 2000, the Co-operators General Insurance Company renewed an IT services contract
initially signed in 1997. As part of the new five-year renewable agreement, the
Co-operators has committed to acquiring IT services from CGI with a total value of at
least $100 million.

Subsequent
to year-end, on October 24, 2000, CGI announced that it had entered into a strategic
alliance with the Mouvement Desjardins to manage its data processing operations through a
10-year contract worth more than $1 billion. Under the agreement, which is expected to be
concluded by May 2001, CGI will assume the management of Desjardinsdata processing
operations and will take on 550 Desjardins employees who work in this sector. Desjardins
will maintain control of its technological orientations.

Organizational Changes

As
outlined in Note 11 to the Consolidated Financial Statements in the 2000 annual report,
during the fourth quarter of fiscal 2000, the Company announced changes to its
organizational structure. The Companys six strategic business units (SBU), that were
organized along geographic lines except for the Telecommunications SBU, were regrouped
into three SBUs: Canada, US and International. Each SBU is evaluated primarily on its
revenue, operating earnings and net contribution (net contribution being defined as
earnings before interest, income taxes, entity subject to significant influence and
amortization of goodwill) by its respective senior executive, who reports directly to the
chief executive officer.

Growth Strategy Initiatives

The
main growth drivers for CGI are large outsourcing contracts and acquisitions. In 1999, a
large number of organizations carried out significant expenditures in IT services to make
their systems Y2K compliant or replace existing systems altogether, prior to the turn of
the
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| |  | millennium. As a result of this unusually high level of spending, many client
organizations lowered the value of their IT investments in 2000. Also, toward the end of
1999, a number of clients elected to postpone large outsourcing contract decisions until
later in 2000, to focus their efforts on ensuring a smooth transition into the new
century.

In
the second half of fiscal 2000, CGIs business units were invited to identify smaller
acquisition candidates and contract opportunities valued at under $100 million. At the
corporate level, the Company maintains its focus on large contracts and acquisitions. In
the United States, the Company is targeting primarily systems integration companies to
gain critical mass and complementary expertise, and outsourcing companies or contracts to
gain data centre infrastructure which will enable it to make proposals on major
outsourcing contracts.

In
fiscal 2000, the Company committed to an investment in e-business to further strengthen
the expertise in Web-related services and solutions. As part of this initiative to support
the evolution of the e-business capabilities, the Company is investing in the development
of centres of expertise and in training for its members.

In
the course of fiscal 2000, CGI announced that it was taking part in the Quebec
governments program aimed at establishing E-Commerce Place, a pole of development of
electronic business. As part of this program, CGI will receive Quebec provincial tax
credits. The ministère des Finances (Quebec) granted the Company refundable tax
credits on salaries, calculated at the rate of 25% on salaries paid in Quebec, for a
maximum of $10,000 a year per eligible employee. The period covered by the agreement
varies from five to 10 years, and is conditional upon the Companys relocation to
E-Commerce Place.

Performance Overview

Fiscal
2000 marked the twenty-fourth consecutive year of revenue growth for CGI. Fiscal 2000
revenue increased to $1.44 billion, from $1.41 billion in fiscal 1999.

Earnings
before interest, taxes, depreciation and amortization (EBITDA) totalled
$171.7 million, compared with $214.3 million in fiscal 1999. Earnings before
amortization of goodwill were $73.5 million ($0.27 per share basic and diluted)
compared with $99.9 million ($0.37 per share basic and diluted) in fiscal 1999. Net
earnings amounted to $55.7 million ($0.21 per share basic and diluted) compared with
$83.8 million ($0.31 per share basic and diluted) the previous year. The net margin
was 3.9% compared with 5.9% a year ago.

In
the fourth quarter, revenue was $320.1 million, compared with $394 million in
the fourth quarter a year ago. EBITDA was $24.8 million, compared with
$56.5 million in the fourth quarter of fiscal 1999. Earnings before amortization of
goodwill were $7.1 million, or $0.03 per share, compared with $27.3 million or
$0.10 per share a year ago. Net earnings were $2.4 million or $0.01  (per share
basic and diluted), compared with $22.6 million or $0.08 (per share basic and
diluted) in the same quarter of fiscal 1999.

The
balance sheet remained strong at September 30, 2000, with $49.3 million of cash
and cash equivalents, $677.3 million of shareholders equity and
$43.4 million of long-term debt which is mostly related to the funding of the DRT
acquisition made in 1999.
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| |  | Seasonality

CGIs
quarterly results reflect some seasonality, which in many years has been offset to some
extent by the Companys continuing expansion and growth through outsourcing
contracts. The fourth quarter results reflect the impact of summer vacations.

Comparison of Operating Results for the Years ended September 30, 2000, 1999 and 1998

Revenue
Revenue
increased marginally in fiscal 2000 to $1,436 million, following a 90% increase to
$1,409.5 million in fiscal 1999, and a 219% increase to $741 million in fiscal
1998. Revenue from acquisitions was responsible for the 2% increase in consolidated
revenue.

In
2000, the Company benefited from a full 12-month contribution from a major contract with
Bell Mobility, which was effective May 1, 1999, as well as from DRT which was
acquired effective July 1, 1999. In fiscal 2000, Bell Canada reduced its IT expenses
by $123.3 million which partially offset these revenue gains. Excluding the Bell
Canada contract, CGIs revenue growth for fiscal 2000 amounted to 15.7% compared with
the previous year. The reduction in revenue growth also reflects the industry-wide
slowdown in IT services spending. The 90% increase in revenue in fiscal 1999 reflects the
10-year Bell Canada IT outsourcing contract (through its acquisition of Bell Sygma) and
the acquisition of BSI for the full year versus only three months in fiscal 1998. The 1999
increase also reflects the acquisition of TDL effective January 1, 1999, the
$750 million, 10-year Bell Mobility contract effective May 1, 1999 and the
acquisition of DRT on July 1, 1999.

The
revenue mix by geographic region was: Canada, which represented 73% of revenue in fiscal
2000 and 81% in fiscal 1999; the United States, which represented 15% in fiscal 2000 and
10% in fiscal 1999; and International, which represented 12% in fiscal 2000 and 9% in
fiscal 1999. In fiscal 1998, the mix was 83% from Canada, 13% from the United States, and
4% from International.

The
mix by type of services in fiscal 2000 was 62% from management of IT and business
functions (outsourcing), 23% from systems integration and 15% from consulting. This
compares with 72%, 17% and 11% respectively in fiscal 1999, and 70%, 18% and 12%,
respectively in fiscal 1998.

Operating expenses
Costs
of services, selling and administrative expenses amounted to $1,254.4 million or
87.3% of revenue in fiscal 2000, compared with $1,185.6 million or 84.1% of revenue
in fiscal 1999, and $633.6 million or 85.5% of revenue in fiscal 1998. The increase
in the operating expense ratio in fiscal 2000 reflects the combination of reduced revenue
growth and the Companys decision to retain its professionals in view of an expected
growth in demand in the information technology services industry. The improvement in the
operating expense ratio in fiscal 1999 reflects efficiencies resulting from applying
ISO 9001 certified business processes, synergies resulting from integration of
acquisitions, and increasing economies of scale. The Company maintains its efforts toward
operating efficiency by continuing to take advantage of the aforementioned.

Research
and development (R&D) expenses amounted to $10 million in fiscal 2000 compared
with $9.6 million in fiscal 1999 and $6 million in 1998. During the year, the
Company committed an investment of $50 million over two years to strengthen its
Web-enabling
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| |  | capabilities and related intellectual property. The R&D focus in 1999 was
primarily on the development of solutions for property and casualty insurance markets in
Canada and the United States.

Earnings before interest, taxes, depreciation and amortization (EBITDA)
EBITDA
declined 19.9% to $171.7 million in fiscal 2000, from $214.3 million, following
several years of strong growth. EBITDA in fiscal 1999 represented growth of 111.4%
compared with EBITDA of $101.4 million reported in fiscal 1998. The decrease in
EBITDA in fiscal 2000 was mainly due to the reduced revenue growth combined with higher
costs of services, selling and administrative expenses as the Company retained its
professionals to sustain future expected strengthened demand. The 1999 increase was
largely attributable to the contribution of major outsourcing contracts added at the end
of fiscal 1998 and during fiscal 1999. The EBITDA margin was 12%, compared with 15.2% in
fiscal 1999 and 13.7% in fiscal 1998.

Depreciation and amortization
In fiscal 2000, CGI adjusted its reporting of depreciation and amortization in order to begin
reporting earnings before amortization of goodwill (net of income taxes), also known as
cash earnings. Total depreciation and amortization, which excludes amortization of
goodwill, increased marginally to $48.4 million, from $48.3 million in fiscal
1999, compared with $30.3 million in fiscal 1998. In fiscal 1999, the increase in
depreciation and amortization of fixed assets reflects investment in new assets and assets
resulting from acquisitions. The increase in the amortization of contract costs primarily
relates to licensing fees and other expenses incurred in the course of IT management
contracts.

Interest
Interest
on long-term debt increased to $3.6 million from $1.4 million in fiscal 1999 and
$0.8 million in 1998. The increase in fiscal 2000 reflects a full year of long-term
debt outstanding related to the financing of DRT, compared to three months in 1999. Fiscal
1999 interest expense was largely related to the financing of the DRT acquisition.

Interest
income amounted to $3.9 million in fiscal 2000, compared with $5.3 million in
fiscal 1999 and $2 million in fiscal 1998. Interest income is related to investment
of excess cash balances in short-term fixed income instruments, which were lower during
fiscal 2000 compared with fiscal 1999.

Income taxes
The
effective income tax rate was 40.5% in fiscal 2000, compared with 41.2% in fiscal 1999 and
40.6% in fiscal 1998. As outlined in Note 2 to the consolidated financial statements of
the Company presented in its 2000 Annual report, on October 1, 1999, the Company adopted
the recommendations of the CICA Handbook section 3465, Income taxes, which replaces
the deferral method with the liability method of tax allocation. The Company applied the
new recommendations retroactively without restating prior years.

Earnings before amortization of goodwill
Starting
in the first quarter of fiscal 2000, the Company started presenting earnings before
amortization of goodwill. In doing so, the Company presents a more accurate picture of the
Companys profitability, since the goodwill amortization has no impact on its cash
resources.

Earnings
before amortization of goodwill were $73.5 million ($0.27 per share basic and
diluted) in fiscal 2000, compared with $99.9 million ($0.37 per share basic and
diluted) in fiscal 1999 and $43.2 million ($0.18 per share basic and diluted) in
fiscal 1998. The decrease
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| |  | in fiscal 2000 reflects the combination of reduced revenue
growth and the Companys decision to retain its professionals in view of an expected
strengthening of demand in the IT services industry. The increase in 1999 was largely
attributable to the contribution of major outsourcing contracts added at the end of fiscal
1998 and during fiscal 1999.

Amortization of goodwill
Amortization
of goodwill, net of income taxes, increased to $17.9 million in fiscal 2000, from
$16.1 million in fiscal 1999 and $8.3 million in fiscal 1998. The increase is
mainly due to amortization of the acquisition of DRT for the full year in fiscal 2000
compared with three months in fiscal 1999 and, to a lesser extent, the amortization of
MCM, acquired in the first quarter of fiscal 2000 and of APG, acquired in the fourth
quarter. Goodwill is amortized over 20 years.

Net earnings
Net
earnings declined by 33.6% to $55.7 million ($0.21 per share basic and diluted) in
fiscal 2000, from $83.8 million ($0.31 per share basic and diluted) in fiscal 1999
but ahead of $34.8 million ($0.15 per share basic and diluted) in fiscal 1998. The
net margin was 3.9 % in fiscal 2000, compared with 5.9% in fiscal 1999 and 4.7% in fiscal
1998. The decrease in net earnings and net earnings margin was mainly due to the slowdown
in revenue growth in fiscal 2000 and CGIs decision to maintain its level of
professionals. The increase in 1999 was largely attributable to the contribution of major
outsourcing contracts added at the end of fiscal 1998 and during fiscal 1999.

The
weighted average number of shares outstanding increased by 1% to 270,442,354 in fiscal
2000, and by 14.2% to 267,969,082 in 1999, adjusted for two for one share splits in
December 1997, May 1998 and January, 2000. In fiscal 1999, the increase in weighted
average number of shares outstanding resulted primarily from the timing of the issuance of
shares related to business acquisitions.

Reconciled
in accordance with United States GAAP, net earnings were $53.9 million ($0.20 per
share basic and diluted) in fiscal 2000, $86.1 million ($0.32 per share basic and
diluted) in fiscal 1999, and $32.8 million ($0.14 per share basic and diluted) in
fiscal 1998. Differences between Canadian GAAP and United States GAAP arise mainly from
the difference in the method used for foreign currency translation, goodwill amortization
and integration costs.

Liquidity and financial resources
CGI
concluded the fiscal year with a strong balance sheet and cash position, which, together
with bank lines, is sufficient to support the Companys growth strategy. In fiscal
2000, the Company renewed the $250 million revolving credit facility arranged in 1999
with four Canadian chartered banks. The credit facility is available for acquisitions, for
general working capital purposes and can be locked into a three-year term at the
Companys initiative. At close of fiscal 2000, the total credit facility available
amounted to $218.9 million.

Operating
cash flow was $126.3 million ($0.47 per share), compared with $162 million
($0.60 per share) in fiscal 1999 and $74 million ($0.32 per share) in fiscal 1998.
The variation in operating cash flow is reflective of the variation in net earnings. When
adjusted for changes in non-cash operating working capital items, the operating cash flow
was $67.6 million, compared with $76.5 million in fiscal 1999, and
$150.4 million in fiscal 1998. The change in non-cash working capital items reflected
a decrease in accounts payable and accrued liabilities related to the decrease in the
operating expenses on a quarter-over-quarter basis. In fiscal 1999, the change in non-cash
working capital items reflected an increase in
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| |  | accounts receivable and work in progress
related to increased business volumes and major systems integration contracts signed
during the year.

Net
cash used for financing activities amounted to $11.2 million in fiscal 2000, compared
with net cash provided by financing activities of $41.5 million in fiscal 1999 and
$22.4 million in fiscal 1998. In fiscal 2000, the Company used cash to reduce its
long-term debt by a net amount of $22.1 million. Most of this amount was used to
repay long-tem debt which resulted from the 1999 acquisition of DRT. In fiscal 1999, the
Company increased its long-term debt by a net amount of $36.5 million compared to a
net decrease of $25.3 million in fiscal 1998. The increase in debt in fiscal 1999 was
related to the acquisition of DRT. In fiscal 1998, the Company repaid a revolving credit
facility. The Company issued $10.9 million of capital stock in fiscal 2000 compared
with $5 million in fiscal 1999 and $47.7 million in fiscal 1998. This capital
stock was issued as part of the Companys Share Option Plan to allow BCE to maintain
its proportionate equity interest in CGI and as consideration for business acquisitions.

Cash
used for investing activities totalled $50.3 million, compared with
$196.5 million in fiscal 1999 and $37.8 million in fiscal 1998. Business
acquisitions include MCM and APG in fiscal 2000 and DRT and TDL in fiscal 1999. Contract
costs include costs incurred for the re-engineering of business processes and investments
to achieve synergies. These costs also include software licensing fees and costs related
to development of business solutions. In 1999, the increase is mostly reflective of the
impact of a significant outsourcing contract signed during the year. Purchases of fixed
assets were made in the normal course of business.

The
net increase in cash and cash equivalents amounted to $7.1 million in fiscal 2000,
compared with a net cash position decrease of $79.2 million in fiscal 1999 and a net
increase of $136.2 million in fiscal 1998.

Accounting changes
On
October 1, 2000, the Company adopted the recommendations of the CICA Handbook
Section 3461, Employee Future Benefits. This standard requires companies to
accrue the costs of post-retirement benefits other than pensions over the expected working
lives of employees in a manner similar to pension costs. Under current practice, such
costs are charged to income as incurred. The standard also requires a change in the
discount rate used to value liabilities and service costs from an estimated long-term
interest rate to a market-based interest rate. The adoption of the recommendations of
Section 3461 did not have a material effect on the consolidated financial statements
of the Company.

Balance Sheet  Fiscal Year-Ends 2000 and 1999

Assets
totalled $920.9 million at the end of fiscal 2000, compared with $866.5 million
at September 30, 1999. The increase is mostly due to the increase in goodwill and
future income tax assets. The increase in goodwill of $37.1 million is due to the
acquisitions of MCM and APG. The increase in future income tax assets of
$31.5 million is due to the adoption of the recommendations of the CICA Handbook
Section 3465, Income taxes, which replaces the deferral method with the
liability method of tax allocation. This section does not allow the offsetting of future
income tax assets against future income tax liabilities of different legal entities within
a consolidated group, which used to be allowed in the past with the deferral method.
Working capital amounted to $164.6 million at the end of fiscal 2000, compared with
$97.6 million at the end of fiscal 1999. At September 30, 2000, CGI had cash and
equivalents of $49.3 million, compared with $42.2 million at the end of fiscal
1999. The companys current portion of long-term debt remained stable.
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| |  | In
fiscal 2000, the collection period for accounts receivable and work in progress amounted
to 75 days compared to 68 in 1999. The increase stems mostly from the APG acquisition
made in the last month of the year and the increase of international contracts.

Long-term
debt decreased to $43.4 million at the end of fiscal 2000, from $59.8 million at
the end of fiscal 1999. This debt mostly reflects the partial draw down of a revolving
credit facility related to the funding of the DRT acquisition in 1999, as well as
$12.8 million of obligations under capital leases. The Company reduced its long-term
debt in fiscal 2000.

Risks and Uncertainties

While
CGI management is optimistic about the Companys long-term prospects, the following
risks and uncertainties, among others, should be considered in evaluating its growth
prospects.

The competition for contractsCGI has a highly disciplined approach to management of
all aspects of its business, with an increasing proportion of this approach codified under
ISO 9001 certified processes and in corporate manuals. These processes were developed to
meet CGIs high standards for consistently delivering the specifications and are
based on strong values underlying its customer-focused corporate culture. These processes
contribute to CGIs high contract win rate and renewal rate. Additionally, the
Company has developed a deep strategic understanding of the five economic sectors it
targets, and this contributes to its competitive position. CGIs critical mass and
end-to-end IT services have qualified the Company to make proposals on large IT services
contracts.

The
long sales cycle for major outsourcing contractsThe average sales cycle for a
large outsourcing contract is six to 18 months, and exceptionally, in fiscal 2000, the
average cycle has lengthened as a result of organizations delaying decisions during and
after the Y2K compliance period.

The
availability and cost of qualified IT professionalsThe high growth of the IT
industry is placing strong demand on qualified people. CGI has been able to successfully
staff for its needs because its corporate culture, strong values and emphasis on career
development and performance-driven remuneration have made the Company a preferred employer
for qualified professionals. CGI has put in place a comprehensive program to attract and
retain qualified and dedicated professionals. CGI also gains qualified professionals
through outsourcing contracts.

The
ability to successfully integrate acquisitions and IT operations outsourcing
clientsThe integration of acquired operations has become a core competency for
CGI, which has acquired a significant number of companies over the past 14 years. The
Companys disciplined approach to management, largely based on its ISO 9001 certified
management frameworks, has been an important factor in the successful integration of the
human and capital resources of acquired companies and the IT operations of outsourcing
clients. As at the end of fiscal 2000, the vast majority of CGIs operations had
received ISO 9001 certification.

The
ability to continue to develop and expand service offerings to address emerging business demand and technology trendsCGI remains in the forefront of IT services
for its clients in a number of ways. These include its specialization in five targeted
economic sectors; non-exclusive strategic alliances with major software and hardware
vendors; development of proprietary IT solutions to meet the competitive requirements of
clients; regular training and
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49

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| |       | professional interchange of expertise and experience within
CGI; and acquisitions to gain new technology and expertise.

Material developments regarding major commercial customers resulting from such causes as
changes in financial condition, mergers or acquisitionsWith the exception of
BCE Inc., its subsidiaries and its affiliates, no one company or group of related
companies represents more than 10% of total revenue.

Potential
liability if contracts are not successfully carried outCGI has a strong record
of successfully meeting or exceeding client requirements. The Company takes a professional
approach to business, and its contracts are written to clearly identify the scope of its
responsibilities and to minimize risks.

Outlook

CGIs
growth has come from a balance of internal and external growth, with large acquisitions
and outsourcing contracts being the main growth drivers. Outsourcing is becoming more
pronounced due to user technical skills shortages, rapidly advancing new technologies,
client competitive pressures and the need to adopt an e-business model. There is pent-up
demand for outsourcing and systems integration, and there are signs that the slowdown is
beginning to reverse.

Additionally,
as e-business efforts have become more complex, there has been a shift in e-business
contracts from the specialized consulting and software firms to full service IT
outsourcing firms. These developments and others augur well for established IT services
firms such as CGI.

CGI
believes that its competitive strengths for e-business, as for other business, include its
leading technology, its full range of IT services for all platforms, from legacy systems
to Web-based platforms, its strategic understanding of our targeted markets, its ISO 9001
certified methodology which enables CGI to deliver on time and on budget, and its strong
financial position.

Also,
CGIs solid balance sheet with a strong liquidity position enables it to capitalize
on acquisition opportunities and is an important strength when bidding on large contacts.
CGI maintains a conservative approach to financial management.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4.2.4 | Fiscal 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       | Note: Please note that in fiscal 2002, CGI restated certain items of its financial statements
for the years 1998-2002. The following section does not reflect such restatements. For a
view reflecting such changes, please refer to CGIs fiscal 2002 financial statements
in the annual report.

Corporate Overview

CGI
is the fifth largest independent information technology (IT) services company in North
America and the largest in Canada, based on its revenue run-rate at the end of fiscal
1999. Headquartered in Montreal, CGI has strategic business units organized along
geographic lines except for the Telecommunications strategic business unit which is
industry based. Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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| |  | units in Canada and the United States provide end-to-end IT
services in five economic sectors (telecommunications, financial services, manufacturing
to retail value chain, governments, public utilities and services), while business units
outside of North America focus on two economic sectors, financial services and
telecommunications. Based on 1999 revenue, some 72% of the Companys business is IT
outsourcing, 17% is systems integration and 11% is consulting. The outsourcing business
generates 85% of its revenue from higher value added Tier 2 and Tier 3 activities and 15%
from Tier 1 activities (see Glossary on inside front cover of the 1999 annual report for
Tier 1, 2 and 3 definitions).

The
Company has 40 offices across Canada and the United States, offices in the United Kingdom
and a presence in some 23 countries around the world. CGI has 10,000 employees, and some
2,500 clients worldwide. The Company has four state-of-the-art data centres in Canada,
providing IT facilities management to clients coast-to-coast, and one data centre in the
United States.

Acquisitions

During
fiscal 1999, CGI made two business acquisitions, which have contributed IT expertise and
additional market presence in Canada and the United States.

On
January 1, 1999, CGI acquired the assets and all contracts of Technologie Desjardins
Laurentienne (TDL), which provides Desjardins Laurentian Financial Corporation
and other clients such as Laurentian Bank with IT, telecommunications, document printing
and insertion services. TDLs contracts at the time of closing totalled $155 million
over five years. Approximately 100 TDL employees joined CGI as part of the agreement. CGI
acquired the assets and contracts of TDL for $23.2 million, of which $18.5 million was
goodwill.

On
July 1, 1999, CGI acquired DRT Systems International L.P. and DRT Systems International
(jointly DRT), an independently operated business unit of Deloitte Consulting
that provides systems development and systems integration services throughout North
America. DRT significantly strengthens CGIs position in the United States, where DRT
generates about 85% of its revenue. At closing, DRT had US$100 million of annual revenue,
975 employees, and 12 offices including 10 across the United States in major business
centres. DRT brings deep Web-application expertise and expands CGIs client base for
offering IT outsourcing services. CGI acquired DRT for $95.9 million, of which $68.8
million was goodwill.

Subsequent
to year end, on October 26, 1999, CGI acquired New Brunswick-based MCM Technology Inc.,
which has leading edge component-based development expertise. With this transaction, CGI
now has four offices and 200 professionals in Eastern Canada.

Performance Overview

Fiscal
1999 marked the twenty-third consecutive year of revenue growth for CGI. Revenue increased
by 90% to $1,409.5 million in fiscal 1999, and by 219% to $741 million in fiscal
1998. The Company achieves continuous incremental growth from IT services contracts of
increasing average size and strategic acquisitions, and significant growth through large
contracts and major acquisitions. These last two components represented 70% of the
increase in revenue for fiscal 1999.
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| |  | Earnings
before interest, taxes, depreciation and amortization (EBITDA) increased 111% to
$214.3 million in fiscal 1999, and by 303% to $101.4 million in fiscal 1998,
reflecting strong revenue growth and increasing operating margins. The EBITDA margin
increased to 15.2% in 1999, from 13.7% in 1998 and 10.8% in 1997. Net earnings increased
141% to $83.8 million in fiscal 1999, and by 349% to $34.8 million in fiscal
1998 from $7.8 million in fiscal 1997. Earnings per share increased 110% to $0.63
(basic and diluted) in fiscal 1999, and by 200% to $0.30 in fiscal 1998, based on a 14%
increase in the weighted average number of shares in fiscal 1999, and a 51% increase in
fiscal 1998. The net margin increased to 5.9% in fiscal 1999, from 4.7% in 1998 and 3.3%
in fiscal 1997.

Revenue
increased 21% to $394 million in the fourth quarter of fiscal 1999, and by 348% to
$324.5 million in the fourth quarter of fiscal 1998. The increase in 1999 primarily
reflects the acquisition of the assets and all contracts of TDL on January 1, 1999,
the contribution from the $750 million, 10-year outsourcing contract with Bell
Mobility) effective May 1, 1999, and the acquisition of DRT on July 1, 1999. The
increase in 1998 reflects the Outsourcing Agreement with Bell Canada signed July 1,
1998.

EBITDA
increased 32% to $56.5 million in the fourth quarter of fiscal 1999, and by 395% to
$42.8 million in the same quarter of fiscal 1998. Net earnings increased by 40% to
$22.6 million ($0.17 per share basic and diluted) in the last quarter of fiscal 1999,
and by 463% to $16.1 million ($0.13 per share basic and diluted) in the fourth
quarter of fiscal 1998.

Seasonality

CGIs
quarterly results reflect some seasonality, which has been offset to some extent by the
Companys continuing expansion and increasing emphasis on outsourcing contracts. The
fourth quarter results reflect the impact of summer vacations.
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| |  | Comparison of Operating Results
for the years ended September 30, 1999, 1998 and 1997

Revenue
Revenue increased by 90% in fiscal 1999 to $1,409.5 million and by 219% in fiscal 1998 to
$741 million. The increase in fiscal 1999 reflects the 10-year Bell Canada IT
Outsourcing Agreement (through the acquisition of Bell Sygma) and the acquisition of BSI
for the full year versus only three months in fiscal 1998. The increase also reflects the
acquisition of TDL effective January 1, 1999, the $750 million, 10-year Bell
Mobility contract effective May 1, 1999, and the acquisition of DRT on July 1,
1999. Bell Sygma, BSI, and TDL are now fully integrated into CGI, and DRT will be
integrated by 1999 calendar year end. Revenue growth in fiscal 1998 primarily resulted
from the Bell Canada Outsourcing Agreement, and the acquisition in April and November 1997
of two companies focussed on IT services in retail banking and the property and casualty
insurance businesses, respectively.

Prior
to significant business acquisitions made in fiscal 1998, CGI was organized essentially on
a geographic basis with office locations throughout Canada and was considered to be active
in one single segment. During the fourth quarter of 1998, CGI reorganized its activities
into six strategic business units, two of which, International and Western Canada, have
been combined into Other due to their relative size. Each business unit offers
end-to-end IT services. In fiscal 1999, the contribution to revenue by business unit was:
Telecommunications, 36%; Ontario and Atlantic Provinces, 23%; Quebec, 19%; International
and Western Provinces (Other), 12%; and the United States, 10%.

The
geographic mix of revenue for fiscal 1999 was 81% from Canada, 10% from the United States
and 9% outside of North America, primarily in the United Kingdom and Europe. In fiscal
1998, the mix for the year was 83% from Canada, 13% from the United States, and 4% from
Other. In fiscal 1997, the mix was 96%, 3% and 1%, respectively.

The
mix by services line in fiscal 1999 was 72% from outsourcing, 17% from systems
integration, and 11% from consulting. This compares with 70%, 18% and 12%, respectively in
fiscal 1998, and 42%, 35% and 23%, respectively, in fiscal 1997.

Operating expenses
Costs
of services, selling and administrative expenses represented 84.1% of revenue in fiscal
1999, compared with 85.5% in 1998 and 87.8% in 1997. The improvement reflects efficiencies
resulting from applying ISO 9001 certified business processes, synergies resulting
from integration of acquisitions, and increasing economies of scale.

Research
and development expenses amounted to $9.6 million in fiscal 1999, compared with
$6 million in 1998 and $3.1 million in 1997. The R&D focus in 1999 was
primarily on the development of an IT business solution geared to the property and
casualty insurance business in the United Kingdom and Europe.

Earnings before interest,
taxes, depreciation and amortization (EBITDA)
EBITDA increased 111% to $214.3 million in fiscal 1999, and by 303% to $101.4 million
in fiscal 1998, reflecting continuing strong revenue growth and increasing operating
margins. The increase in the EBITDA is largely attributable to the contribution of major
outsourcing contracts added at the end of fiscal 1998 and during fiscal 1999. The EBITDA
margin increased to 15.2% in 1999, from 13.7% in 1998 and 10.8% in 1997.
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| |  | Depreciation and amortization
Total
depreciation and amortization increased 68% to $64.9 million in fiscal 1999, and by
300% to $38.7 million in fiscal 1998. The increase in depreciation and amortization
of fixed assets reflects investment in new assets, and assets resulting from acquisitions.
The increase in the amortization of costs related to outsourcing contracts primarily
relates to licensing fees and other expenses incurred in the course of IT management
contracts. Goodwill is amortized over 20 years, and the increase in the amortization
of goodwill reflects the business acquisitions of the past year.

Interest
Interest
expense is largely related to the financing of acquisitions, notably DRT effective
July 1, 1999. Interest income relates to investment of cash balances in short-term
fixed income instruments.

Income taxes
The income tax rate was 45.3% in fiscal 1999, compared with 45.8% in fiscal 1998 and 40.9% in
1997. The increase in the tax rate from 1997 reflects the increase of the goodwill related
to business acquisitions, which is not deductible for tax purposes, and from significant
tax benefits derived through a business acquisition in 1997.

Net earnings
Net earnings increased 141% to $83.8 million in fiscal 1999, and by 349% to
$34.8 million in fiscal 1998. The net margin increased to 5.9% in 1999, from 4.7% in
fiscal 1998, and 3.3% in fiscal 1997. Earnings per share increased 110% to $0.63 (basic
and diluted) in fiscal 1999, and by 200% to $0.30 in fiscal 1998. The weighted average
number of shares outstanding increased by 14% to 133,984,541 in fiscal 1999, and by 51% to
117,307,162 in 1998, adjusted for two for one share splits in August and December 1997 and
May 1998. The increase in the weighted average number of shares outstanding results
primarily from the exercise of stock options in fiscal 1999, and from the issuance of
shares related to business acquisitions, as well as the exercise of options in fiscal
1998.

Reconciled
in accordance with United States GAAP, net earnings were $86.1 million ($0.64 per
share basic and diluted) in fiscal 1999, $32.8 million ($0.28 per share basic and
diluted) in fiscal 1998 and $6.1 million ($0.08 per share) in fiscal 1997.
Differences between Canadian GAAP and United States GAAP arise mainly from the difference
in the method used for foreign currency translation, research and development expenses and
the method used to account for income taxes.

Liquidity and financial resources
CGI
concluded the fiscal year with a strong balance sheet and cash position which, together
with bank lines, is sufficient to support the Companys growth strategy. Just prior
to the end of fiscal 1999, the Company arranged an additional $250 million revolving
credit facility with four Canadian chartered banks. The credit facility is available for
acquisitions and for general working capital purposes, and can be locked into a three-year
term at the Companys initiative.

Operating
cash flow increased 119% to $162 million ($1.21 per share) in fiscal 1999 and by 240%
to $74 million ($0.63 per share) in fiscal 1998. When adjusted for changes in
non-cash operating working capital items, the operating cash flow was $76.5 million
in fiscal 1999, $150.4 million in 1998 and $8.4 million in fiscal 1997. The
changes in non-cash operating working capital items in fiscal 1999 reflect an increase in
accounts receivable and work in
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

54

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| |  | progress related to increased
business volumes and major
systems integration contracts signed during the year.

Through
financing activities, the Company issued $5 million of shares through its Share
Option Plan in fiscal 1999, $47.7 million of shares through the Share Option Plan and
for cash to Bell Canada to maintain its proportionate equity interest in 1998, and
$2.9 million of shares through the Share Option Plan and for cash in 1997. The net
increase in long-term debt of $48.5 million in 1999 reflects the funding of the DRT
acquisition compared to a net decrease of $18.8 million in the previous year
reflecting repayment of a revolving credit facility.

Cash
used for investing activities totalled $208.4 million in fiscal 1999,
$44.3 million in 1998 and $37 million in 1997. Business acquisitions (net of
cash acquired) in 1999 include DRT and TDL. Costs related to outsourcing contracts include
costs incurred for the re-engineering of business processes and investments to achieve
synergies. These costs also include software licensing fees and costs related to
development of business solutions.

The
Company had a net cash position decrease amounting to $79.2 million in fiscal 1999,
compared with a net cash position increase of $136.2 million in 1998 and a net cash
position decrease of $6.2 million in 1997.

Balance Sheet  Fiscal Year-Ends 1999-1998

Assets
totalled $866.5 million at September 30, 1999, compared with $744.9 million
at the end of fiscal 1998. The increase reflects a $70.7 million increase in
goodwill, attributed to the acquisitions of TDL and DRT, and increases in accounts
receivable and costs related to outsourcing contracts, which reflect the increased revenue
base. Working capital amounted to $97.6 million at the end of fiscal 1999, compared
with $64 million at the end of fiscal 1998. At September 30, 1999, CGI had cash
and cash equivalents amounting to $42.2 million, compared with $121.4 million at
the end of fiscal 1998. The reduction in cash and cash equivalents reflects the cash used
for business acquisitions. The Companys current portion of long-term debt remained
stable.

CGI
continued to achieve efficient management of current assets with a turnover rate of
49 days for accounts receivable, compared with 52 days in fiscal 1998. The
notable progress in 1999 reflects the increasing proportion of outsourcing business and
the corresponding increase in contracts providing for pre-payment each month. The increase
in work in progress turnover from three days to 19 days results from major systems
integration contracts signed during the year.

The
increase in goodwill to $358.8 million in fiscal 1999 and $288.1 million in
fiscal 1998 is largely attributable to the excess of the purchase price over the fair
values of the net assets acquired. These acquisitions comprise TDL and DRT in 1999, and
Bell Sygma and BSI, the Insurance Systems group of Teleglobe Inc. and Perigon Solutions
Inc. in fiscal 1998.

Long-term
debt of $59.8 million at the end of fiscal 1999 mostly reflects the partial drawdown
of a revolving credit facility related to the funding of the DRT acquisition, as well as
$13.4 million of obligations under capital leases. The Company reduced its long-term
debt in fiscal 1998 to $11.3 million, through the repayment of a revolving credit
facility.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

55

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| |  | Risks and Uncertainties

Year 2000 issueThis section is a Year 2000 Readiness Disclosure Statement.

For
CGI, the Year 2000 (Y2K) issue encompasses the costs required to make its internal systems
and those it uses to provide services to its clients, Y2K compliant, as well as providing
a revenue opportunity which the Company has managed to keep within 5% of its annual
revenue. CGI has completed all five stages of its Year 2000 compliance methodology
(assessment, analysis, remediation, testing and implementation) for most of its business
units. Exceptions concern essentially recent acquisitions, which have been audited and
integrated in the overall project, and testing project extensions demanded by clients. No
impact is expected on services that CGI provides.

The
net cost to CGI of achieving Y2K compliance has not exceeded 1% of annual revenue in any
year. The total amount spent to date on Y2K compliance is $23 million, and the remaining
cost is approximately $5 million.

CGI
began Y2K remediation at the business unit level in 1995 and established a senior-level
multi-disciplinary steering committee in 1997 to ensure standard methodology throughout
the Company for achieving Y2K compliance and to set and manage milestones leading to Y2K
compliance. The corporate steering committee includes an external counsel and regularly
reviews Y2K readiness, and provides a status report to the Board of Directors on a
quarterly basis. Each business unit has a steering committee which reports regularly to
the corporate steering committee.

CGIs
methodology comprises five phases: Assessment, Analysis, Remediation, Testing, and
Implementation. As with all projects, CGI applies its ISO 9001 certified Project
Management Framework to Y2K compliance. The five phases are summarized below.

Assessment:
An assessment was made of the impact of the Y2K issue across the Company, including:
systems operated for outsourcing clients, financial systems, operating systems, electronic
interfaces with customers, suppliers and others; telephone and communications systems;
automated security and access systems; and other devices that rely on computer or embedded
chip technology. The assessment identified CGI-controlled internal and CGI client-used
computer hardware with embedded chips and software that contain date dependent code, and
prioritized mission critical systems. Other sources of risk such as dependence on
suppliers, interconnectivity and the readiness of foreign trading partners were assessed.

Analysis:
Detailed analysis included a global conversion strategy, detailed costs and planning,
prioritizing of mission critical applications, requests for verification of Y2K compliance
from hardware and software vendors, and assessment of the need for contingency plans.

Remediation,
Testing and Implementation: These three stages of the methodology followed in sequence
over differing intervals depending on the complexity of the IT application and whether it
was integrated with external applications.

Remediation
involved conversion of information systems, codes and computer language to achieve Y2K
compliance and replacement of non-compliant hardware and software. In 1997, CGI
established two facilities dedicated to fixing codes and converting computer language for
CGI internal systems and clients.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

56

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| |  | Testing
included three levels: parallel testing of the converted application with the existing one
up to the date when it stops being compliant (the failure date); date advancing to the
1999-2000 boundary and Year 2000 leap year; and full date advancing testing on compliant
infrastructures.

Implementation
involved installing the compliant code and equipment in the production environment.

Documentation: An
important part of CGIs Project Management Framework is documentation. All strategic
business units were required to document their Y2K conversion effort in a full Project
Management plan, including background, scope, activities, deliverables, project structure,
roles and responsibilities, and management procedures. They were also required to produce
a Certification Package documenting due process for Y2K readiness of CGIs major
systems and products.

Third
party exposures: Suppliers of products used by CGI and representing a potential risk have
been contacted and asked for a formal statement of compliance, including conformance to a
strict definition of Y2K compliance. If the product was not compliant, version number,
price and availability date of the compliant version was required and progress to
compliance was monitored. Business partners and clients were also contacted, where
appropriate. Some vendor products were also tested by CGI as a precautionary measure. An
ongoing process of keeping vendor compliance statements up to date has also been
implemented. Exposure to liability: CGI writes its contracts to limit liability. A full
examination of contracts active at any time after January 1, 1996 and contracts above $1
million active after January 1, 1994 was undertaken to identify any potential Y2K issues.
Contracts where issues were found were to receive formal, documented resolution.

Year
2000 upgrade and conversion projects are completed. The only exceptions are recently
acquired business units, where Year 2000 efforts are being validated and completed if
required, and projects where clients have required extensions.

Contingency
plans: CGI has developed and tested contingency plans for critical business functions used
in providing services to clients, directly or indirectly. Command and Communication
Centers are now activated in all business units and at corporate headquarters to ensure
optimal response in case Y2K issues are uncovered.

Other risks and uncertainties
Risks
and uncertainties faced by participants in the IT services industry include: competition
for contracts, the availability and cost of qualified IT professionals, potential
liability if contracts are not successfully carried out, the ability to continue to
develop and expand service offerings to address emerging business demand and technology
trends, and material developments regarding major commercial customers resulting from such
causes as changes in financial condition, and mergers or acquisitions.

CGI mitigates such risks and uncertainties in a number of ways.

CGI
has a highly disciplined approach to management of all aspects of its business, with an
increasing proportion of this approach codified under ISO 9001 certified processes, and in
corporate manuals. These processes were developed to meet CGIs high standards for
consistently delivering to clients specifications and are based on strong values
underlying its customer-focused corporate culture. These processes contribute to
CGIs high contract win rate and renewal rate. This disciplined approach has
additionally been an important factor in
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

57

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| |  | the successful integration of the human and
capital resources of acquired companies and the IT operations of outsourcing clients.
During 1999, 11 sites obtained the ISO 9001 certification.

The
strong growth of the IT industry is placing strong demand on qualified people. CGI has
been able to successfully staff for its needs because its corporate culture, strong values
and emphasis on career development and performance-driven remuneration have made the
Company a preferred employer for qualified professionals. CGI has put in place a
comprehensive program to attract and retain qualified and dedicated professionals. CGI
also gains qualified professionals through outsourcing contracts, and typically deploys
60% to 75% of them on the new contract and the rest elsewhere within CGI.

CGI
remains in the forefront of IT services for its clients in a number of ways. These include
its specialization in five targeted economic sectors; non-exclusive strategic alliances
with major software and hardware vendors; development of proprietary IT solutions to meet
the competitive requirements of clients; regular training and professional interchange of
expertise and experience within CGI; and acquisitions to gain new technology and
expertise.

CGI
has a strong and growing order backlog of primarily outsourcing contracts averaging eight
years in duration and emphasizing higher value added Tier 2 and Tier 3 work. This backlog
provides a base of guaranteed revenue flow into the future. CGIs increased critical mass
and end-to-end services have qualified the Company to make proposals for the largest
IT services contracts in North America and this broadened market increases its growth
potential.

With
the exception of BCE Inc., which at the end of fiscal 1999 had a 45% equity interest in
CGI, no one Company or group of related companies represents more than 5% of total
revenue. The BCE group of companies represented 37% in fiscal 1999, and CGI expects to
reduce that percentage below 30% over the long term by increasing non-BCE business.

Outlook

CGIs
business plan calls for a balance of organic and external growth, with emphasis on organic
growth in Canada and acquisitions in the United States.

The
Company will continue to support organic growth through software licensing agreements, and
through strategic partnerships such as the enterprise alliance signed in September 1999
with Microsoft Corporation. CGIs strategic relationship with BCE Inc. positions the
Company as the preferred IT services provider to the BCE group of companies and a business
partner when bidding on certain third-party contracts. This relationship has led to
significant new business in North America and South America, and contributes to future
growth potential. With the Portugal Telecom agreement signed in October 1999, CGI further
strengthens its position in the IT services industry in Europe. Web-based IT assignments
represent an increasing percentage of CGIs business, and the Company is continually
deepening and broadening its expertise in this area through training, alliances and
acquisitions. CGI also continues to develop and refine proprietary business solutions for
its target markets.

The
Companys markets present significant growth opportunities. With its emphasis on
outsourcing, notably higher value added Tier 2 and Tier 3 IT activities, CGI is benefiting
from the increasing trend to IT outsourcing by mid and large-sized organizations. Research
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

58

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| |  | from International Data Corporation
(IDC) commissioned by CGI has identified the potential
IT domain, excluding hardware and software sales, as well as part of the IT spending
already outsourced by companies, to be US$34 billion in Canada, US$639 billion in the
United States and US$498 billion in Europe.

CGI
is an acquisitor in the IT services industry, which is fragmented and undergoing
significant consolidation. The Company has completed 17 acquisitions in the past 13 years.
The expertise it has developed for successfully integrating acquisitions, and also
outsourcing contracts, is an important strength for managing its rapid growth.

The
Company plans to focus primarily on developing business in North America, while
selectively pursuing opportunities in Europe and South America.

CGI
considers its large order backlog, amounting to $7.5 billion at the end of fiscal 1999, to
be an important strength in all economic environments. It provides guaranteed revenue into
the future, and contributes to stability and predictability of performance.

CGIs
solid balance sheet with a strong liquidity position enables it to capitalize on
acquisition opportunities and is an important strength when bidding on large contacts. CGI
maintains a conservative approach to financial management.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.3 | Statistics for Past Nine Quarters (2001-2003)                                      
|--- | -----------------------------------------------------------------------------------
|    | Please note that all amounts are in thousands of dollars, except per share amounts.

> Fiscal year
>      2003
>      
>      Fiscal year
>      2002
>      
>      Fiscal year
>      2001Q1
>      
>      Q4
>      Q3
>      Q2
>      Q1
>      
>      Q4
>      Q3
>      Q2
>      Q131/12/02
>      |
>      30/09/02
>      31/03/02
>      30/06/02
>      31/12/01
>      |
>      30/09/01
>      31/03/01
>      30/06/01
>      31/12/00Revenue
>      588,984
>      |
>      571,860
>      553,355
>      531,901
>      512,497
>      |
>      461,907
>      398,495
>      370,031
>      329,958Earnings before
>      amortization of
>      goodwill
>      37,020
>      |
>      35,524
>      36,476
>      33,187
>      30,612
>      |
>      27,272
>      24,312
>      22,198
>      16,142Basic per share(1)
>      0.10
>      |
>      0.09
>      0.10
>      0.09
>      0.08
>      |
>      0.08
>      0.08
>      0.08
>      0.06Net Earnings
>      37,020
>      |
>      35,524
>      36,476
>      33,187
>      30,612
>      |
>      19,821
>      17,340
>      15,206
>      10,422Basic per share(1)
>      0.10
>      |
>      0.09
>      0.10
>      0.09
>      0.08
>      |
>      0.06
>      0.06
>      0.05
>      0.04

|    | (1) Adjusted for 2-for-1 stock splits
effective August 12 and December 15, 1997, as
well as May 21, 1998 and January 7, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.4 | Managements Discussion of Quarterly Results                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | In the first quarter ended December 31, 2001, revenue increased 55.3% to $512.5 million, from
$330.0 million in the same quarter the year before, and was up 11.0% sequentially over
fourth quarter revenue of $461.9 million. The significant growth in revenue was due
primarily to continuing strong demand for outsourcing services, across all geographic
areas, but especially in Canada. Revenue growth also reflected the contribution of
acquisitions completed in the past 12 months. Net earnings in the first quarter increased
89.7% to $30.6 million, against comparable earnings before amortization

59

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|    | of goodwill
of $16.1 million in the same quarter one year prior. Net earnings per share of $0.08 for
the quarter were up $0.02 over the $0.06 reported for the first quarter of fiscal 2001,
after accounting for a 34.0% year-over-year increase in the weighted average shares
outstanding.

Revenue
in the second quarter ended March 31, 2002 increased 43.7% to $531.9 million, from $370.0
million in the same quarter of 2001. In addition to solid organic growth of 29.6%, the
increase in revenue also reflected the contribution of acquisitions completed in the
previous 12 months. Net earnings in the second quarter increased 49.5% to $33.2 million,
against comparable earnings before amortization of goodwill of $22.2 million in the same
quarter of fiscal 2001. Net earnings per share of $0.09 for the quarter were up $0.01 over
$0.08 reported for the second quarter one year prior, despite a 31.7% year-over-year
increase in the weighted average number of shares outstanding.

In
the third quarter ended June 30, 2002, revenue increased 38.9% to $553.4 million, from
$398.5 million in the same period of fiscal 2001. The year-over-year organic growth of
25.1% was driven by a combination of new client wins, renewals, and meaningful add-on
projects from existing clients. Net earnings in the third quarter increased 50% to
$36.5 million, against comparable earnings before amortization of goodwill of $24.3
million in the same quarter of fiscal 2001. Net earnings per share of $0.10 for the
quarter were up over earnings before amortization of goodwill of $0.08 reported in the
same quarter of the previous year.

Revenue
for the fourth quarter ended September 30, 2002 increased 23.8% to $571.9 million, from
$461.9 million in the same quarter of fiscal 2001. The year-over-year organic gorwth of
20.6% was driven by a combination of new client wins, renewals, and add-on projects from
existing clients. Net earnings were $35.5 million, up 30.3% against comparable earnings
before amortization of goodwill of $27.3 million in the same quarter one year prior. Net
earnings per share were $0.09 for the quarter, compared with earnings per share before
amortization of goodwill of $0.08 reported in the fourth quarter of fiscal 2001.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5.  | EVENTS SUBSEQUENT TO FISCAL 2002 AND OUTLOOK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|5.1 | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| | 5.1.1 | Strategic Developments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       | On November 12, 2002, CGI announced the signing of a binding memorandum of understanding
(MOU) for the acquisition of the Underwriters Adjustment Bureau Ltd. (UAB) with an
annualized revenue run rate of approximately CDN$100 million. The acquisition, which
closed on January 8, 2003. The purchase price was CDN$53 million and the transaction is
expected to be accretive to CGIs fiscal 2003 earnings. The acquisition of UAB
significantly expanded CGIs business processing capabilities for the insurance
industry.

On December 6, 2002, CGI announced an offer to purchase all of the outstanding common shares
of COGNICASE Inc. In connection with this offer, CGI entered into a lock-up agreement with
National Bank of Canada, the largest shareholder (9,450,187 shares or approximately 15%)
and largest client of COGNICASE, , whereby National Bank of Canada agreed to tender its
shares to CGI.

On January 1, 2003 CGI and COGNICASE entered into a support agreement (the Support
Agreement) whereby COGNICASE supported CGIs revised Offer and the Board of
Directors of COGNICASE agreed to recommend the acceptance of such revised Offer to its

60

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| |       | shareholders. The consideration
payable under CGIs revised Offer was increased from
$4.25 to $4.50 cash and from 0.5484 to 0.6311 Class A Subordinate Shares of CGI per
COGNICASE share.

On January 14, 2003, CGI announced
the successful completion of its offer to acquire all of
the outstanding common shares of COGNICASE, given that a total of approximately
64.5 million common shares of COGNICASE Inc. were deposited by shareholders of
COGNICASE at or prior to midnight on January 13, 2003. This represented approximately
90.2% of the then 71.5 million outstanding common shares of COGNICASE.

Furthermore, Messrs. Serge Godin,
André Imbeau and Jean Brassard, as well as BCE Inc. and/or any
affiliate thereof, elected not to exercise their pre-emptive rights in connection with the
issuance of Class A Subordinate Shares pursuant to the Offer for COGNICASE.                                                                                                                                                                                                                                                                                                     
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5.1.2 | First-Quarter
Results for Fiscal 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |       | Revenue for the first quarter ended
December 31, 2002 increased 14.9% to $589.0 million, from
$512.5 million in the same quarter last year. The year-over-year organic growth of 12.2%
was driven by a combination of client wins, renewals, and add-on projects from existing
clients.

Earnings
before interest and income taxes (EBIT) was $60.7 million in the first quarter, up 15.6%
over last years first quarter EBIT of $52.6 million. The EBIT margin was 10.3% for
the quarter, compared with 10.3% in last years first quarter, and was affected by
restructuring activities including severance costs related to the Companys
operations in France.

Net
earnings in the first quarter were up 20.9% to $37.0 million, compared to $30.6 million in
the same quarter a year ago. Earnings per share increased to $0.10 for the quarter,
compared with earnings per share of $0.08 reported in last years first quarter. The
net margin improved to 6.3%, compared with 6.0% in the first quarter of fiscal 2002. In
addition to profitable growth of the business, a lower tax rate of 39.7%, down from 41.3%
in last years first quarter, contributed to higher net earnings.

|5.2 | Outlook for Fiscal 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | CGI expects to be able to deliver
continued growth in fiscal 2003. The Companys strategy
will continue to be based on a balanced mix of its four pillars of growth, namely organic
growth through smaller contracts and projects, organic growth through large outsourcing
contract wins, acquisitions and equity investments at the business unit level and large
acquisitions.

CGI will continue to leverage its
flexible outsourcing delivery model in order to secure IT
and business process outsourcing contracts. CGIs solid balance sheet and liquidity
position represent strength when bidding on acquisitions and large outsourcing contracts.
CGI is active in reviewing potential acquisition candidates to increase its critical mass
in Canada, the US and Europe, particularly the UK. The Company believes that there are
many acquisition opportunities available, but remains committed to its financial,
operational and cultural criteria, and will not sacrifice these for short term or
potential gain.

Based on information known today
about current market conditions and demand, and the adjustment
made to comply with the EITF 01-9 of the Financial Accounting Standards Board, the Company
has provided the following guidance for the fiscal year ending September 30, 2003. This
guidance is

61

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|    | before the effect of potential
large outsourcing contracts or large
acquisitions, contributing more than $100 million per year in annual revenue. Base revenue
for the year is expected to be between $2.4 billion and $2.6 billion, representing between
11% and 20% growth over fiscal 2002 results. Net earnings per share should be in the range
of $0.43 to $0.47.

Margin
improvement remains among CGIs most important financial objectives. Improvements
during coming quarters will be driven by further synergies from large outsourcing
contracts, ongoing integration of acquisitions and a gradual reduction in selling, general
and administration expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5.3 | Forward-looking statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | All statements in this Annual Information Form that do not directly and exclusively relate to
historical facts constitute forward-looking statements within the meaning of
that term in Section 27A of the United States Securities Act of 1933, as amended, and
Section 21E of the United States Securities Exchange Act of 1934, as amended. These
statements represent CGI Group Inc.s intentions, plans, expectations, and beliefs,
and are subject to risks, uncertainties, and other factors, of which many are beyond the
control of the Company. These factors could cause actual results to differ materially from
such forward-looking statements.

These factors include and are
not restricted to the timing and size of contracts, acquisitions
and other corporate developments; the ability to attract and retain qualified employees;
market competition in the rapidly-evolving information technology industry; general
economic and business conditions, foreign exchange and other risks identified in the
MD&A in CGI Group Inc.s Annual Report or Form 40-F filed with the U.S.
Securities and Exchange Commission, the Companys Annual Information Form filed with
the Canadian securities authorities, as well as assumptions regarding the foregoing. The
words believe, estimate, expect, intend,
anticipate, foresee, plan, and similar expressions and
variations thereof, identify certain of such forward-looking statements, which speak only
as of the date on which they are made. In particular, statements relating to future growth
are forward-looking statements. CGI disclaims any intention or obligation to publicly
update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise. Readers are cautioned not to place undue reliance on these
forward-looking statements.

62

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|6.  | DIRECTORS AND OFFICERS
|--- | ----------------------
|6.1 | Directors             

---

| | WILLIAM D. ANDERSON (b)
Director since 1999 
Class A Subordinate Shares: 1,000 (¤)                                                      | William  D.  Anderson  is  President  of  BCE  Ventures,
responsible  for BCE  Inc.'s  investment  in a number of
companies  including  CGI. A chartered  accountant,  Mr.
Anderson  previously was Chief  Financial  Officer (CFO)
of  Bell  Canada,  CFO  of BCE  Inc.  and  CFO  of  Bell
Cablemedia  plc.  He is on  the  advisory  board  of the
Richard  Ivey  School of  Business,  and a member of the
Standard  Advisory Board of the  Comptroller  General of
Canada.                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | CLAUDE BOIVIN (a)
Director since 1993 
Class A Subordinate Shares: 106,596 (¤)
Deferred stock units: 4,916 ()
Stock options: 19,828    | Claude  Boivin  held a number  of  senior  positions  at
Hydro  Quebec,  and was  President  and Chief  Operating Officer  when  he  retired  in  1992.  Mr.  Boivin  is a
Director  of  Tembec   Inc.,   Heroux   Devtek,   Groupe Laperriere et Verreault Inc. and Fonds Boralex Energie.                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | JEAN BRASSARD Director since 1978 
Class A Subordinate Shares: 232,071 (¤)
Class B Shares: 1,334,496 (¤)
Stock options: 228,000         | Jean Brassard is  Vice-Chairman  of the Board,  and was,
until year 2000,  President and Chief Operating  Officer
of CGI. He contributed  to CGI growth in Canada,  in USA
and Europe.  He joined CGI in 1978. Mr. Brassard is also
member  of  the  AGTI  Consulting  Services'  and  CIA's
board,  two  subsidiaries  of  CGI.  He also  serves  as
Director  of  several   organizations,   including   the
University  of Laval  Foundation  and the  Centre  d'Art
d'Orford.                                                                                                                                                   
| |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | CLAUDE CHAMBERLAND(b)
Director since 1998 
Class A Subordinate Shares: 11,396 (¤)
Deferred stock units: 4,382 ()
Stock options: 16,559 | Claude  Chamberland
has spent  over 37 years with Alcan
Inc.   covering  most  management   levels  and  finally
retiring as Executive  Vice-President.  His national and
international  responsibilities  were largely related to
management   and   general   management   of   operating
businesses  but,  at times,  included  R&D,  information
technology  and  construction   management.   He  is  an
administrator  of  McGill   University   Health  Center,
Intellium  Technologies  Inc., FRE  Composites  Inc. and
some  non-profit  organizations.  He is also a member of
the advisory board of Hatch Associates Ltd.
| |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

63

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| |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ---------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ROBERT CHEVRIER
(*)
Nominee for 2003 
Class A Subordinate Shares: 5,000 (¤)                                                        | Robert  Chevrier is  President of Roche  Management  Co.
Inc.,  a holding  and  investment  company.  A chartered
accountant,   he  was  previously   Chairman  and  Chief
Executive   Officer  of  Rexel  Canada  Inc.,   formerly
Westburne  Inc.  He also serves as a Director of Bank of
Montreal,  G.T.C.  Continental Group Ltd., Les Boutiques
San Francisco Incorporees and Richelieu Hardware Ltd.                                                                                                                                                             
| |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | PAULE DORÉ Director since 1996 
Class A Subordinate Shares: 474,641  (¤)
Stock options: 305,000                                    | Paule  Dore  is  Executive   Vice-President   and  Chief
Corporate Officer,  and Coporate Secretary of CGI. Prior
to joining CGI in 1990,  she was General  Manager of the
Montreal Chamber of Commerce.  Ms. Dore was President of
the  Board  of  Trade  of   Metropolitan   Montreal  and
currently is a Director of AXA Insurance Canada.  She is
also  Director  of  several  non-profit   organizations,
including the Canadian Centre for Architecture.                                                                                                          
| |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | SERGE GODIN (c)
Director since 1976 
Class A Subordinate Shares: 567,345 (¤)
Class B Shares: 28,216,507 (¤)
Stock options: 875,000 | Serge Godin is  Chairman  and Chief  Executive  Officer.
Mr. Godin  co-founded  CGI  in  1976  and  has  led  its
development  since then.  Mr.  Godin  received a special
distinction  from  the  University  du  Quebec  for  his
lifetime  professional  and  business  achievements  and
personal  involvement in social issues. In June 2000, he
was  awarded  an  honorary  Doctor  of Law  degree  from
Concordia  University.  He is a Director of the Canadian
Council of Chief  Executives,  and  participates in many
charitable and community organizations.
| |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ANDRÉ IMBEAU
Director since 1976 
Class A Subordinate Shares: 230,654 (¤)
Class B Shares: 4,221,165 (¤)
Stock options: 545,000     | Andre  Imbeau  is  Executive  Vice-President  and  Chief
Financial  Officer,  and  Treasurer of CGI.  Mr.  Imbeau
co-founded  CGI in  1976  and is  head  of  finance  and
administration  since  then.  He  is  a  member  of  the
Financial  Executives  Institute Canada. He was selected
CFO of the year in 2001 by Canadian Business Magazine.                                                                                                                                                                                                                     
| |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

64

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| |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | DAVID L. JOHNSTON (b)
Director since 1994 
Class A Subordinate Shares: 74,120 (¤)
Deferred stock units: 4,916 ()
Stock options: 19,878 | David L.  Johnston  has been Lead  Director of CGI since
1996.  Dr. Johnston is President and  Vice-Chancellor of
the  University  of  Waterloo,  appointed  in 1999,  and
previously  was  professor  at McGill's  Faculty of Law,
following 15 years as Principal and  Vice-Chancellor  of
McGill  University.  He has chaired  numerous boards and
organizations   including  the  Board  of  Overseers  of
Harvard   University   and  the   Federal   Government's
Information  Highway Advisory  Council.  He has authored
books  providing the legal  perspective  on  e-business,
the information  highway and corporations.  Dr. Johnston
has 12 honorary  doctorates  and is a  Companion  of the
Order of  Canada.  He is a Director  of  Alcatel  Canada
Inc. and Emco Ltd.
| |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | EILEEN A. MERCIER (a)
Director since 1996 
Class A Subordinate Shares: 15,774 (¤)
Deferred stock units: 2,191 ()
Stock options: 13,795 | Eileen A.  Mercier  formed  Finvoy  Management  Inc.,  a
management  consulting  firm,  in  1995  and  serves  as
President.  Previously,  she was  Senior  Vice-President
and Chief Financial  Officer of  Abitibi-Price  Inc. Ms.
Mercier is a Director of several corporations  including
Hydro One Inc.,  Quebecor  World Inc.,  ING Bank Canada,
Winpak  Limited  and  Teekay  Shipping  Corp.,   and  of
non-profit  organizations  including York University and
the University Health Network.  Ms. Mercier holds an MBA
from York University.                                                                                                                                                                                                                                 
| |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | C. WESLEY M. SCOTT Director since 2001 
Class A Subordinate Shares: 1,000 (¤)
Deferred stock units: 2,291 ()
Stock options: 14,582     | C.  Wesley M.  Scott is a retired  executive  of the BCE
Group,  having  held a number  of  positions,  including
Chief Corporate  Officer of BCE,  Vice-Chairman  of Bell
Canada and Chief Financial  Officer of Nortel  Networks.
He is a director  of a number of public  companies:  BCE
Emergis  Inc.,  Bell Canada  International  Inc.,  Sears
Canada Inc. and Solectron Corporation.                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | GERALD T. SQUIRE
Director since January 2003                                                                                            | Gerald T. Squire  retired from his position as President
and CEO of The Co-operators Group in 2002,  following 47
years in the insurance sector.  Mr. Squire  participated
in a number of professional  organizations  including as
Chairman  of  the  Insurance  Institute  of  Canada  and
Director   of  the   Insurance   Bureau  of  Canada  and
International    Cooperative   and   Mutual    Insurance
Federation.                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

65

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| |                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ROBERT TESSIER
Director since January 2003
Class A Subordinate Shares: 3,000 (¤) | Robert  Tessier has been  President and Chief  Executive
Officer of Gaz Metroplitan inc. since 1997.  Previously,
he was President and Chief  Executive  Officer of Alstom
Canada,  a manufacturer  of power  equipment and railway
material.  Mr. Tessier  is President of the Board of the
Canadian Gas Association  and of the Montreal  Institute
of  Cardiology.  He is a  Director  of  AXA  Canada  and
Investors Group Corporate Class Inc.      
| |                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | SIIM A. VANASELJA Director since 2002 
Class A Subordinate Shares: 5,000 (¤)     | Siim A.  Vanaselja  is Chief  Financial  Officer  of BCE
Inc.,  a position  he has held  since  January  2001.  A
chartered  accountant,  Mr. Vanaselja joined BCE Inc. in
1994 from KPMG  Canada  where he was a partner.  He is a
member  of the  Conference  Board of  Canada's  National
Council   of   Financial   Executives,   the   Corporate
Executive  Board's  Working  Council for Chief Financial
Officers and Moody's Canadian CFO Council.

---

|    |                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Member of the Audit Committee                                                                                                                              
|(b) | Member of the Human Resources and Corporate Governance Committee                                                                                           
|(c) | Ex-officio member of the Human Resources and Corporate Governance Committee                                                                                
|(¤) | Number of shares beneficially owned or controlled                                                                                                          
|() | For more information regarding deferred stock units (DSUs), please refer to the Remuneration of Directors section of the Companys Information Circular

For the past five years, all of the
nominees have been engaged in their present occupation or in other management capacities
with the companies with which they currently hold positions, except for: Mr. William D.
Anderson who, prior to December 2000, was Chief Financial Officer of BCE Inc.; Mr. Jean
Brassard who, prior to October 2000, was President and Chief Operating Officer of CGI
Group Inc.; Mr. Claude Chamberland who, prior to May 2001, was President of Alcan
International Ltd.; Mr. Robert Chevrier who, prior to March 2001, was Chairman and Chief
Executive Officer of Rexel Canada Inc., formerly Westburne Inc.; Mr. C. Wesley M. Scott
who, prior to March 2001, was Chief Corporate Officer of BCE Inc.; Mr. Gerald T. Squire
who, prior to April 2002, was President and Chief Executive Officer of The Co-operators
Group; and Mr. Siim A. Vanaselja who, prior to January 2001, was Executive Vice-President
and Chief Financial Officer of BCI Inc.

---

66

---

|6.2 | Officers                                                                                                                                               
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|    | The following table states the names of CGIs Senior Officers, their place of residence
and their principal occupation within the five preceding years:

> Name and place of residence
>      
>      Principal occupationSerge Godin
>      Montreal, Quebec
>      
>      Chairman of the Board
>      and Chief Executive OfficerJean Brassard
>      Longueuil, Quebec
>      
>      Vice-Chairman of the BoardDavid Anderson
>      Toronto, Ontario
>      
>      Senior Vice-President and Corporate ControllerAndre  Bourque
>      Montreal, Quebec
>      
>      Senior Vice-President and Chief Legal OfficerPaule Dore
>      Montreal, Quebec
>      
>      Executive Vice-President and Chief
>      Corporate Officer and SecretaryAndre Imbeau
>      Beloeil, Quebec
>      
>      Executive Vice-President and
>      Chief Financial Officer and TreasurerAndre Nadeau
>      Montreal, Quebec
>      
>      Executive Vice-President
>      and Chief Strategy OfficerLuc Pinard
>      Longueuil, Quebec
>      
>      President, European OperationsMichael E. Roach
>      Ajax, Ontario
>      
>      President and Chief Operating OfficerDaniel Rocheleau
>      Longueuil, Quebec
>      
>      Executive Vice-President and
>      Chief Business Engineering OfficerJacques Roy
>      Longueuil, Quebec
>      
>      Senior Vice-President, Finance and TreasuryJoseph I. Saliba
>      Boston, Massachussets
>      
>      President,US and Asia Pacific, and
>      Business Process Services

| | All of the above-mentioned persons have held
the position set out opposite their names, or
other executive or management functions in the Company or its subsidiaries during the last
five years, except:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

67

---

| | (i)   | David Anderson, who was Chief Financial Officer of Bell Sygma Inc. until June
               1998;                
| | ----- | ------------------------------------------------------------------------------------------------------------------
| | (ii)  | André Bourque, who was external legal counsel to CGI until April 1998;                                            
| | (iii) | André Nadeau, who was a professional consultant until October 1997;                                               
| | (iv)  | Michael E. Roach, who was President and Chief Executive Officer of Bell Sygma
               Inc. until June 1998;
| | (v)   | Joseph I. Saliba, who was President, Outsourcing and Software Services with
          Sabre Group until July 2001.

|7. | MARKET FOR SECURITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | CGIs Class A shares are traded on The Toronto Stock Exchange under the symbol GIB.A and on
the New York Stock Exchange, under the symbol GIB.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|8. | ADDITIONAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company shall provide to any person, upon request to the secretary of the Company,
(i) a copy of the Annual Information Form of the issuer, together with one copy of
any document, or the pertinent pages of any document incorporated by a reference in the
Annual Information Form, (ii) a copy of the comparative financial statements of the
Company for the year ended September 30, 2002 together with the accompanying report
of the auditor and one copy of any subsequent interim financial statements, (iii) a
copy of the Information Circular dated December 20, 2002 and (iv) a copy of the
2002 Annual Report of the Company.

Additional
information including directors and officers remuneration and indebtedness,
and principal holders of the Companys shares is included in the Information Circular
dated December 20, 2002.

Additional
financial information on the last fiscal year ended September 30, 2002, is presented
in the audited financial statements (pages 38 to 65) and under the title
Managements Discussion and Analysis of Financial Position and Results of
Operations (pages 24 to 37), in the 2002 Annual Report.

The
documents mentioned above are available at the Companys head office:

1130 Sherbrooke Street West
5th Floor
Montreal, Quebec
H3A 2M8

Telephone: (514) 841-3200
Fax: (514) 841-3299

68

---

financial statements

Consolidated Statements of
Earnings

Years ended September 30(in thousands of Canadian dollars, except per share
amounts)

|                                                                     | 2002$ | 2001$       | 2000$
|-------------------------------------------------------------------- | ----- | ----------- | -----
|Revenue                                                              |       | 2,169,613   |      
|                                                                    
|Operating expenses                                                   |      
|Costs of services, selling and administrative expenses               |       | 1,842,854   |      
|Research                                                             |       | 17,609      |      
|                                                                    
|                                                                     |       | 1,860,463   |      
|                                                                    
|Earnings before the under-noted:                                     |       | 309,150     |      
|                                                                    
|Depreciation and amortization of fixed assets                        |       | 37,781      |      
|Amortization of contract costs and other long-term assets (Note 5)   |       | 39,224      |      
|                                                                    
|                                                                     |       | 77,005      |      
|                                                                    
|Earnings before the following items:                                 |       | 232,145     |      
|                                                                    
|Interest                                                             |      
|Long-term debt                                                       |       | 2,411       |      
|Other                                                                |       | (2,833      | )    
|                                                                    
|                                                                     |       | (422        | )    
|                                                                    
|Earnings before income taxes, entity subject to                      |      
|significant influence and amortization of goodwill                   |       | 232,567     |      
|Income taxes (Note 8)                                                |       | 96,768      |      
|                                                                    
|Earnings before entity subject to significant influence              |      
|and amortization of goodwill                                         |       | 135,799     |      
|Entity subject to significant influence                              |       | --          |      
|                                                                    
|Earnings before amortization of goodwill                             |       | 135,799     |      
|Amortization of goodwill, net of income taxes (Note 2)               |       | --          |      
|                                                                    
|Net earnings                                                         |       | 135,799     |      
|                                                                    
|Weighted average number of outstanding Class A                       |      
|subordinate shares and Class B shares                                |       | 377,349,472 |      
|                                                                    
|Basic and diluted earnings per share before amortization of goodwill |       | 0.36        |      
|                                                                    
|Basic earnings per share                                             |       | 0.36        |      
|                                                                    
|Diluted earnings per share                                           |       | 0.36        |      
|                                                                    

See Notes to the Consolidated Financial Statements.

Consolidated Statements of Retained
Earnings

Years ended September 30(in thousands of Canadian dollars, except per share
amounts)

|                                                             | 2002$ | 2001$   | 2000$
|------------------------------------------------------------ | ----- | ------- | -----
|Retained earnings, beginning of year, as previously reported |       | 245,945 |      
|Adjustment for change in accounting policy (Note 2)          |       | --      |      
|                                                            
|Retained earnings, beginning of year, as restated            |       | 245,945 |      
|Net earnings                                                 |       | 135,799 |      
|Share issue costs, net of income taxes (Note 7)              |       | (3,800  | )    
|                                                            
|Retained earnings, end of year                               |       | 377,944 |      
|                                                            
|See Notes to the Consolidated Financial Statements           |      

|CGI GROUP INC. 2002 | 39
|------------------- | --

---

financial statements

Consolidated Balance
Sheets

As at September 30--(in thousands of Canadian dollars)

|                                                   | 2002
   $ | 2001
$
(Restated, Note 2)
|-------------------------------------------------- | --------- | -------------------------
|Assets                                             |           |                          
|Current assets                                    
|Cash and cash equivalents                          | 104,221   | 46,008                   
|Accounts receivable (Note 3)                       | 295,191   | 286,156                  
|Income taxes                                       | --        | 979                      
|Work in progress                                   | 98,904    | 84,838                   
|Prepaid expenses and other current assets          | 48,373    | 48,931                   
|Future income taxes (Note 8)                       | 12,567    | 17,998                   
|                                                  
|                                                   | 559,256   | 484,910                  
|Fixed assets (Note 4)                              | 145,381   | 123,391                  
|Contract costs and other long-term assets (Note 5) | 433,742   | 272,403                  
|Future income taxes (Note 8)                       | 28,661    | 29,002                   
|Goodwill                                           | 1,133,852 | 1,118,963                
|                                                  
|                                                   | 2,300,892 | 2,028,669                
|                                                  
|Liabilities                                       
|Current liabilities                               
|Accounts payable and accrued liabilities           | 261,509   | 295,092                  
|Deferred revenue                                   | 61,027    | 50,652                   
|Income taxes                                       | 5,128     | --                       
|Future income taxes (Note 8)                       | 26,301    | 21,013                   
|Current portion of long-term debt (Note 6)         | 4,172     | 7,528                    
|                                                  
|                                                   | 358,137   | 374,285                  
|Future income taxes (Note 8)                       | 93,696    | 43,705                   
|Long-term debt (Note 6)                            | 4,328     | 32,752                   
|Deferred credits and other long-term liabilities   | 65,116    | 74,813                   
|                                                  
|                                                   | 521,277   | 525,555                  
|                                                  
|Shareholders' equity                              
|Capital stock (Note 7)                             | 1,332,621 | 1,198,096                
|Contributed surplus                                | 3,652     | 211                      
|Warrants and stock options (Note 7)                | 31,132    | 35,101                   
|Retained earnings                                  | 377,944   | 245,945                  
|Foreign currency translation adjustment            | 34,266    | 23,761                   
|                                                  
|                                                   | 1,779,615 | 1,503,114                
|                                                  
|                                                   | 2,300,892 | 2,028,669                
|                                                  
|See Notes to the Consolidated Financial Statements

|                      |             
|--------------------- | ------------
|Approved by the Board |             
|Signed                | Signed      
|Serge Godin           | André Imbeau
|Director              | Director    

|40 | CGI GROUP INC. 2002
|-- | -------------------

---

financial statements

Consolidated Statements
of Cash Flows

Years
ended September 30(in thousands of Canadian dollars)

|                                                          |  | 2002
$   |   | 2001
$   |   | 2000
$ 
|--------------------------------------------------------- |  | -------- | - | -------- | - | -------
|Operating activities                                      |  |          |   |          |   |        
|Net earnings                                              |  | 135,799  |   | 62,789   |   | 55,666 
|Adjustments for:                                          | 
|Depreciation and amortization of fixed assets             |  | 37,781   |   | 32,536   |   | 26,387 
|Loss on disposal of fixed assets                          |  | --       |   | --       |   | 1,454  
|Amortization of contract costs and other long-term assets |  | 62,783   |   | 33,460   |   | 21,991 
|Amortization of goodwill                                  |  | --       |   | 28,586   |   | 19,153 
|Deferred credits and other long-term liabilities          |  | (50,021  | ) | (14,442  | ) | --     
|Future income taxes                                       |  | 35,602   |   | 32,589   |   | 2,214  
|Foreign exchange loss (gain)                              |  | 1,240    |   | 4,213    |   | (497   
|Entity subject to significant influence                   |  | --       |   | (7       | ) | (64    
|Net change in non-cash working capital items (Note 11)    |  | (45,737  | ) | (5,722   | ) | (58,754
|                                                         
|Cash provided by operating activities                     |  | 177,447  |   | 174,002  |   | 67,550 
|                                                         
|Financing activities                                      | 
|Net variation of credit facility                          |  | (25,000  | ) | (5,000   | ) | (16,200
|Decrease of other long-term debt                          |  | (8,342   | ) | (65,027  | ) | (5,907 
|Issuance of shares (Note 7)                               |  | 131,736  |   | 54,206   |   | 10,931 
|Share issue costs (Note 7)                                |  | (5,500   | ) | --       |   | --     
|                                                         
|Cash provided by (used for) financing activities          |  | 92,894   |   | (15,821  | ) | (11,176
|                                                         
|Investing activities                                      | 
|Business acquisitions (net of cash) (Note 9)              |  | (19,866  | ) | (86,393  | ) | (18,395
|Investment in a joint venture (Note 9)                    |  | (26,000  | ) | --       |   | --     
|Investment in an entity subject to significant influence  |  | --       |   | --       |   | (514   
|Purchase of fixed assets                                  |  | (57,199  | ) | (23,993  | ) | (18,090
|Proceeds from sale of subsidiaries (Note 9)               |  | 10,365   |   | --       |   | --     
|Proceeds from sale of fixed assets                        |  | --       |   | 1,270    |   | 845    
|Contract costs and other long-term assets                 |  | (122,903 | ) | (48,635  | ) | (14,177
|                                                         
|Cash used for investing activities                        |  | (215,603 | ) | (157,751 | ) | (50,331
|                                                         
|Foreign exchange gain (loss) on cash held                 | 
|in foreign currencies of self-sustaining subsidiaries     |  | 3,475    |   | (3,763   | ) | 1,069  
|                                                         
|Net increase (decrease) in cash and cash equivalents      |  | 58,213   |   | (3,333   | ) | 7,112  
|Cash and cash equivalents at beginning of year            |  | 46,008   |   | 49,341   |   | 42,229 
|                                                         
|Cash and cash equivalents at end of year                  |  | 104,221  |   | 46,008   |   | 49,341 
|                                                         
|Supplementary cash flow information (Note 11)             | 
|See Notes to the Consolidated Financial Statements        | 

|CGI GROUP INC. 2002 | 41
|------------------- | --

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 1. Description of
business

CGI Group Inc. (the
Company or CGI), directly or through its subsidiaries, provides a
full range of information technology (IT) services including management of IT
and business functions, systems integration and consulting. The Companys primary
focus is large-scale systems integration and outsourcing contracts for both private and
public sector organizations.

Note 2. Summary of significant
accounting policies

The Consolidated Financial Statements are prepared in accordance with
Canadian generally accepted accounting principles (GAAP), which differ in
certain material respects with US GAAP. Significant differences relevant to the Company
are presented in Note 16. Certain comparative figures have been reclassified in order to
conform to the presentation adopted in 2002.

Use of estimatesThe preparation of the Consolidated
Financial Statements in conformity with Canadian GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the Consolidated Financial
Statements and the reported amounts of revenue and expenses during the reporting period.
Because of the use of estimates inherent in the financial reporting process, actual
results could differ from those estimates.

Principles of
consolidationThe financial statements of entities
controlled by the Company are consolidated; entities jointly controlled by the Company,
referred to as joint ventures, are accounted for using the proportionate consolidation
method; the associated company, which the Company had the ability to significantly
influence, was accounted for using the equity method.

Revenue recognitionThe Company provides two broad ranges
of services: outsourcing services (management of IT and business functions) and IT
consulting services (systems integration and consulting). The Companys revenue is
principally derived from outsourcing services.

Revenue
from outsourcing contracts is based on the services performed or information processed
during the period in accordance with contract terms and the agreed-upon billing rates
applied to the consumed service metrics. In some cases, the Company bills customers prior
to performing the service, resulting in deferred revenue which is presented as a current
liability in the Consolidated Financial Statements. Reimbursements, including those
relating to travel and other out-of-pocket expenses, and other similar third party costs,
such as the cost of hardware and software resales, are included in revenue and the
corresponding expense is included in costs of services.

For
time and materials and level of effort types of contracts, revenue is recognized as the
services are provided. For cost-based contracts, revenue is recorded as reimbursable costs
are incurred. These types of contracts are generally entered into with customers in the
context of IT consulting services.

Revenue
on fixed-price contracts is recognized on the basis of the estimated
percentage-of-completion of services rendered that reflects the extent of work
accomplished. This type of contract is generally entered into for systems integration
services. Management estimates the percentage-of-completion by reference to measures of
performance that are reasonably determinable and are directly related to the activities
critical to completion of the contract. Management measures performance principally based
on the labour hours spent on the contract over the total estimated labour hours for the
contract. The Company uses this method of revenue recognition as projected contract
revenue and costs may reasonably be estimated based on the Companys business
practices, methods and historical experience. This method requires estimates of costs and
profits over the entire term of the contract. Management regularly reviews underlying
estimates of project profitability; revisions to estimates are reflected in the statement
of earnings in the period in which the facts that give rise to the revision become known.
Provisions for estimated losses, if any, are recognized in the period in which the loss is
determined. Contract losses are measured as the amount by which the estimated costs of the
contract exceed the estimated total revenue from the contract.

|42 | CGI GROUP INC. 2002
|-- | -------------------

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Occasionally,
the Company sells software licenses. Revenue from the sale of software licenses is
recognized when the product is delivered, no significant vendor obligations remain and the
collection of the agreed-upon fee is probable. Where license agreements include multiple
elements, revenue from sale of licenses is recognized on the same basis, provided the
services do not include significant customization to the base product. In these cases,
revenue is recognized over the period of delivery. Revenue from software maintenance and
support agreements is recognized on a straight-line basis over the term of the related
agreements.

Cash and cash equivalentsCash and cash equivalents consist
primarily of unrestricted cash and short-term investments having an initial maturity of
three months or less.

Depreciation and
amortizationFixed assets are recorded at cost and
are depreciated and amortized over their estimated useful lives, using principally the
straight-line method. The annual depreciation and amortization periods by fixed asset
category are as follows:

|                       |                                        
|---------------------- | ---------------------------------------
|Buidings               | 10 to 40 years                         
|Leasehold improvements | Term of lease plus first renewal option
|Furniture and fixtures | 3 to 10 years                          
|Computer equipment     | 3 to 5 years                           
|Software               | 1 to 5 years                           

Contract costs and other
long-term assetsContract costs and other long-term
assets include principally contract costs, cost of software acquired and developed and
software license costs.

Contract
costs are incurred in the course of two to 10-year IT management contracts. These assets
are recorded at cost and amortized using the straight-line method over the term of the
respective contracts. Contract costs principally comprise the following:

|a) |  | Incentives granted to clients upon signature of long-term outsourcing contracts.
               Occasionally, incentives can be granted either in the form of cash payments,
               issuance of equity instruments, or rebates granted principally over a transition
               period as negotiated in the contract. In the case of an incentive in the form of
               an issuance of equity instruments, cost is measured at the estimated fair value
               of the equity instruments issued. For incentives in the form of rebates, cost is
               measured at the value of the financial commitment granted and a corresponding
               deferred credit is recorded. As services are provided to the customer, the
               deferred credit is reversed in the statement of earnings and recognized as
               revenue. Amortization of the incentives is presented as a reduction of revenue;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b) |  | Estimated fair value of long-term outsourcing contracts and/or customer lists
               acquired through business acquisitions; the estimated fair value is determined
               as part of the purchase price allocation process in the context of business
               acquisitions; and,
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|c) |  | Transition costs incurred during transition period on long-term outsourcing
          contracts.
|-- |  | ------------------------------------------------------------------------------------------------

Costs
of software acquired and developed include software specifically designed or acquired to
provide long-term outsourcing contracts to clients or groups of clients. Costs of software
developed are capitalized only after technological feasibility is established. Software
acquired and developed is recorded at cost and amortized on a straight-line basis over its
estimated useful life.

Costs
of software licenses include licenses acquired for purposes of certain long-term
outsourcing contracts. Software licenses are recorded at cost and are amortized on a
straight-line basis over their respective contract terms, estimated useful lives or based
on consumption.

|CGI GROUP INC. 2002 | 43
|------------------- | --

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 2. Summary of significant
accounting policies (cont'd)

GoodwillGoodwill represents the excess of the
purchase price over the fair values of the net assets of entities acquired at the
respective dates of acquisition. On October 1, 2001, the Company adopted prospectively the
new recommendations of the Canadian Institute of Chartered Accountants (CICA)
Handbook Sections 1581, Business Combinations, and 3062, Goodwill and Other
Intangible Assets. Accordingly, the Company discontinued the amortization of goodwill
as of October 1, 2001. Prior to October 1, 2001, goodwill was amortized on a straight-line
basis over its expected useful life of 20 years. For business combinations occurring after
June 30, 2001, the Company did not amortize the resulting goodwill, consistent with
transition recommendations of Section 1581.

Goodwill
is tested annually, or more frequently if impairment indicators arise, for impairment in
relation to the fair value of each reporting unit to which goodwill applies and the value
of other assets in that reporting unit. An impairment charge is recorded for any goodwill
that is considered impaired.

During
the second quarter ended March 31, 2002, the Company completed the transitional impairment
test and concluded that no goodwill impairment charge needed to be recorded. The Company
intends to perform its annual review of goodwill as of September 30 of each year. Based on
the impairment test performed as of September 30, 2002, the Company concluded that no
goodwill impairment charge was required.

Impairment of long-lived assets
other than goodwill and intangible assets with indefinite livesThe Company evaluates
the carrying value of its long-lived assets other than goodwill and intangible assets with
indefinite lives on an ongoing basis. In order to determine whether an impairment exists,
management considers the undiscounted cash flows estimated to be generated by those assets
as well as other indicators. Any permanent impairment in the carrying value of assets is
charged against earnings in the period an impairment is determined. The Company does not
have intangible assets with indefinite lives.

Deferred creditsDeferred credits principally comprise
the unused portion of rebates granted by the Company to customers under the terms of
certain long-term outsourcing contracts (see Contract costs and other long-term
assets described above).

Stock option planThe Company has a stock option
compensation plan, which is described in Note 7. No compensation expense is recognized for
this plan when stock options are granted to employees and directors. Any consideration
paid by employees and directors on exercise of stock options is credited to share capital.

On
April 1, 2002, the Company early adopted the recommendations of CICA Handbook Section
3870, Stock-Based Compensation and Other Stock-Based Payments. This Section
establishes standards for the recognition, measurement and disclosure of stock-based
compensation made in exchange for goods and services and requires the use of the fair
value method to account for awards to non-employees and direct awards of stock to
employees and encourages, but does not require, the use of the fair value method to
account for stock-based compensation costs arising from awards to employees. The Section
also requires pro forma disclosures relating to net earnings and earnings per share
figures as if the fair value method of accounting had been used. The Company has chosen
not to use the fair value method to account for stock-based compensation costs arising
from awards to employees. The pro forma disclosure is presented in Note 7.

ResearchResearch expenses are charged to
earnings in the year they are incurred, net of related investment tax credits.

# 

Income taxesOn October 1, 1999, the Company
adopted the recommendations of CICA Handbook Section 3465, Income taxes, which
replaced the deferral method with the liability method of tax allocation. The Company
applied the recommendations retroactively without restating prior years.

|44 | CGI GROUP INC. 2002
|-- | -------------------

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Future
income taxes relate to the expected future tax consequences of differences between the
carrying amount of balance sheet items and their corresponding tax values. Future tax
assets are recognized only to the extent that, in the opinion of management, it is more
likely than not that the future income tax assets will be realized. Future income tax
assets and liabilities are adjusted for the effects of changes in tax laws and rates on
the date of enactment or substantive enactment.

The
change had the following cumulative effect on the October 1, 1999 accounts:

|                                        | INCREASE
$ | DECREASE
$
|--------------------------------------- | ---------- | ----------
|Retained earnings                       |            | 11,590    
|Goodwill                                |            | 16,869    
|Current future income tax assets        | 9,060      |           
|Long-term future income tax assets      | 4,722      |           
|Current future income tax liabilities   | 15         |           
|Long-term future income tax liabilities | 8,488      |           

Translation of foreign
currenciesRevenue and expenses denominated in
foreign currencies are recorded at the rate of exchange prevailing at the transaction
date. Assets and liabilities denominated in foreign currencies are translated at exchange
rates prevailing at the balance sheet dates. Unrealized translation gains and losses are
reflected in net earnings.

Self-sustaining
subsidiaries and joint ventures whose economic activities are largely independent of the
parent company are accounted for using the current-rate method. Under this method, assets
and liabilities of subsidiaries denominated in a foreign currency are translated into
Canadian dollars at exchange rates in effect at the balance sheet dates. Revenue and
expenses are translated at average exchange rates prevailing during the period. Resulting
unrealized gains or losses are accumulated and reported as foreign currency translation
adjustments in shareholders equity. As a result of differences in the translation of
the financial statements of foreign subsidiaries and joint ventures, the foreign currency
translation adjustment increased by $10,505,000 and $21,634,000 in 2002 and 2001,
respectively. These increases resulted principally from translating US dollars denominated
goodwill.

The
accounts of foreign subsidiaries, which are financially or operationally dependent on the
parent company, are accounted for using the temporal method. Under this method, monetary
assets and liabilities are translated at the exchange rates in effect at the balance sheet
dates and non-monetary assets and liabilities are translated at historical exchange rates.
Revenue and expenses are translated at average rates for the period. Translation exchange
gains or losses of such subsidiaries are reflected in net earnings.

Prior
to October 1, 2001, the Company used the current-rate method to account for all its
subsidiaries and joint ventures except for its Japanese, Australian, South American and
United Kingdom (UK) subsidiaries which were translated using the temporal
method. On October 1, 2001, the Company reclassified, for foreign currency translation
purposes, its subsidiary located in the UK from integrated to self-sustaining operations
as a result of changes in its economic and operating facts and circumstances. During 2001,
the UK subsidiary signed large contracts allowing it to generate cash flows independently.
Prior to 2001, the UK subsidiary generated minimal local cash flows from operations. In
addition, as a result of the acquisition of IMRglobal Corp. (IMRglobal or
IMR), completed in July 2001 (see Note 9), CGI acquired a second subsidiary in
the UK. This contributed to additional, more significant revenue streams for the UK
operations. As a result of this reclassification, applied on a prospective basis, the
foreign currency translation component of shareholders equity increased by
approximately $1,400,000.

Preparation of Consolidated
Financial Statements

| | a) |  | Amortization of incentives related to outsourcing contracts 
During
the year ended September 30, 2002, the Company modified the presentation of the
amortization related to incentives granted on outsourcing contracts based on EITF 01-9,
Accounting for consideration given by a vendor to a customer,by the
Financial Accounting Standards Boards Emerging Issues Task Force (EITF).
The amortization of incentives is now presented as a reduction of revenue as opposed to
being shown as amortization of contract costs and other long-term assets. Furthermore, the
Company also reclassified discounts granted on an existing outsourcing contract which was
previously presented in the costs of services,
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|CGI GROUP INC. 2002 | 45
|------------------- | --

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 2. Summary of significant
accounting policies (cont'd)

| |  |  | selling and administrative expenses. For
comparative purposes, revenue for the years ended September 30, 2001 and 2000 were reduced
by $20,924,000 and $12,928,000 respectively, amortization of contract costs and other
long-term assets were reduced by $10,274,000 and $3,478,000 respectively and costs of
services, selling and administrative expenses were reduced by $10,650,000 and $9,450,000
respectively.
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) |  | Foreign
currency translation adjustment During the quarter ended December 31, 2001, the Company
revised the calculation of the foreign currency translation adjustment in order to use
the current rate as opposed to the historical rate upon translation of the goodwill
related to its self-sustaining foreign subsidiaries. This adjustment resulted in an
increase of $21,197,000 of the foreign currency translation adjustment and goodwill as at
September 30, 2001.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) |  | Accounts
receivable and deferred revenue During the year ended September 30, 2002, the Companys
management changed the presentation related to accounts receivable and deferred revenue
for the month-end advance billing on outsourcing contracts. Accordingly, accounts
receivable and deferred revenue were both reduced by $34,511,000 as at September 30,
2001.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | d) |  | Goodwill
and integration liability During the quarter ended June 30, 2002, the Company reviewed
its interpretation of the accounting treatment for integration costs accrued for in
connection with business acquisitions; accordingly, the integration liability originally
accrued for in 2001 in connection with the acquisition of IMR was reduced by $20,810,000.
As a result, goodwill and future income tax assets recorded in connection with the
acquisition also decreased by $17,027,000 and $3,783,000, respectively.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note 3. Accounts
receivable

|         | 2002
$  | 2001
$ 
|-------- | ------- | -------
|Trade    | 229,583 | 223,158
|Other(1) | 65,608  | 62,998 
|        
|         | 295,191 | 286,156
|        

|(1) | Other accounts receivable include refundable tax credits on salaries, calculated
          at the rate of 25% on salaries paid in Quebec, to a maximum of $10,000 per year
          per eligible employee. This tax credit was increased during the year to 35% of
          salaries paid to a maximum of $12,500, retroactive to January 1, 2001. The
          Company became eligible to receive these tax credits starting May 11, 2000, upon
          its commitment to relocate to the E-Commerce Place. Other accounts receivable,
          as at September 30, 2002 and 2001, include refundable tax credits on salaries of
          approximately $38,446,000 and $32,513,000 respectively. Of these amounts,
          $43,184,000, $24,763,000 and $7,750,000 were recorded as a reduction of salary
          expense comprised in costs of services, selling and administrative expenses in
          the consolidated statements of earnings for 2002, 2001 and 2000, respectively.
          The amount credited to expenses for 2002 includes a retroactive adjustment of
          $4,414,000 for fiscal 2001 in order to reflect the increase in tax credit rate
          from 25% to 35%.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | These
refundable tax credits on salaries carry certain conditions. The Company must be defined
as an eligible company meaning that it will relocate to the E-Commerce Place. In addition,
the Company must, every year, obtain an eligibility certificate from the
ministère des Finances confirming that the Company operates eligible
activities in a proportion of at least 75% as well as an eligibility certificate for
employees working for the Company during the year. Should the Company fail to relocate to
the E-Commerce Place or fail to meet other significant obligations required under the
current tax credits on salaries program, any tax credits received would have to be
refunded to the Quebec government. Any refund made by the Company would be charged to
earnings in the corresponding period. No future liability has been recorded related to any
reimbursement clause as of September 30, 2002.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|46 | CGI GROUP INC. 2002
|-- | -------------------

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 4. Fixed assets

# 

|                       | COST
$  | ACCUMULATED
DEPRECIATION
AND
AMORTIZATION
$ | 2002
NET BOOK
VALUE
$
|---------------------- | ------- | ------------------------------------------- | ---------------------
|Land                   | 4,102   | --                                          | 4,102                
|Buildings              | 24,724  | 761                                         | 23,963               
|Leasehold improvements | 45,766  | 14,186                                      | 31,580               
|Furniture and fixtures | 40,157  | 22,131                                      | 18,026               
|Computer equipment     | 120,854 | 94,986                                      | 25,868               
|Software               | 57,393  | 15,551                                      | 41,842               
|                      
|                       | 292,996 | 147,615                                     | 145,381              
|                      

|                       | COST
$  | ACCUMULATED
DEPRECIATION
AND
AMORTIZATION
$ | 2001
NET BOOK
VALUE
$
|---------------------- | ------- | ------------------------------------------- | ---------------------
|Land                   | 4,191   | --                                          | 4,191                
|Buildings              | 23,397  | 167                                         | 23,230               
|Leasehold improvements | 30,572  | 6,033                                       | 24,539               
|Furniture and fixtures | 30,411  | 12,884                                      | 17,527               
|Computer equipment     | 112,276 | 70,140                                      | 42,136               
|Software               | 24,496  | 12,728                                      | 11,768               
|                      
|                       | 225,343 | 101,952                                     | 123,391              
|                      

Fixed assets include assets acquired
under capital leases totaling $9,434,000 ($11,368,000 in 2001), net of accumulated
depreciation and amortization of $22,209,000 ($27,301,000 in 2001).

Note 5. Contract costs and other
long-term assets

|                                | COST
$  | ACCUMULATED
AMORTIZATION
$ | 2002
NET BOOK
VALUE
$
|------------------------------- | ------- | -------------------------- | ---------------------
|Contract costs                  | 379,985 | 56,091                     | 323,894              
|Software acquired and developed | 83,018  | 23,313                     | 59,705               
|Software licenses and other     | 105,573 | 55,430                     | 50,143               
|                               
|                                | 568,576 | 134,834                    | 433,742              
|                               

|                                | COST
$  | ACCUMULATED
AMORTIZATION
$ | 2001
NET BOOK
VALUE
$
|------------------------------- | ------- | -------------------------- | ---------------------
|Contract costs                  | 219,816 | 24,780                     | 195,036              
|Software acquired and developed | 49,380  | 10,409                     | 38,971               
|Software licenses and other     | 76,081  | 37,685                     | 38,396               
|                               
|                                | 345,277 | 72,874                     | 272,403              
|                               

|CGI GROUP INC. 2002 | 47
|------------------- | --

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 5. Contract costs and other
long-term assets (cont'd)

Contract costs and other long-term assets amortization expense comprises the following for the years ended
September 30:

|                                | 2002
$ | 2001
$ | 2000
$
|------------------------------- | ------ | ------ | ------
|Contract costs                  | 31,312 | 12,943 | 6,539 
|Software acquired and developed | 12,911 | 4,879  | 1,858 
|Software licenses and other     | 18,560 | 15,638 | 13,594
|                               
|                                | 62,783 | 33,460 | 21,991
|                               

Amortization expense of contract costs
and other long-term assets is presented as follows in the consolidated statements of
earnings for the years ended September 30 (see Note 2):

|                                                          | 2002
$ | 2001
$ | 2000
$
|--------------------------------------------------------- | ------ | ------ | ------
|Reduction of revenue                                      | 23,559 | 10,274 | 3,478 
|Amortization of contract costs and other long-term assets | 39,224 | 23,186 | 18,513
|                                                         
|                                                          | 62,783 | 33,460 | 21,991
|                                                         

Note 6. Long-term debt

|                                                                 | 2002
$ | 2001
$
|---------------------------------------------------------------- | ------ | ------
|Unsecured revolving credit facility, repaid during the year(1)   | --     | 25,000
|Obligations under capital leases, bearing interest at various   
|interest rates varying from 4.9% to 12.25% and repayable in     
|blended monthly instalments maturing at various dates until 2006 | 8,500  | 14,901
|Other secured and unsecured loans, repaid during the year        | --     | 379   
|                                                                
|                                                                 | 8,500  | 40,280
|Current portion                                                  | 4,172  | 7,528 
|                                                                
|                                                                 | 4,328  | 32,752
|                                                                

|(1) | An amount of $225,000,000 is available under the terms of this unsecured
          revolving credit facility. In addition to this revolving credit facility, the
          Company also has available lines of credit totaling $27,971,000. Under both of
          these facilities, an amount totaling approximately $3,862,000 as at September
          30, 2002, has been drawn to cover various letters of credit issued for contracts
          with major outsourcing and systems integration clients. The credit facility
          contains certain covenants which require the Company to maintain certain
          financial ratios.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Minimum capital lease payments are as follows:

|                                     | PAYMENT
$ | INTEREST
$ | PRINCIPAL
$
|------------------------------------ | --------- | ---------- | -----------
|2003                                 | 4,707     | 535        | 4,172      
|2004                                 | 3,709     | 234        | 3,475      
|2005                                 | 848       | 55         | 793        
|2006                                 | 73        | 13         | 60         
|2007                                 | --        | --         | --         
|                                    
|Total minimum capital lease payments | 9,337     | 837        | 8,500      
|                                    

|48 | CGI GROUP INC. 2002
|-- | -------------------

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 7. Capital stock, stock options
and warrants

# a) Capital stock

Authorized, an unlimited number
without par value:

| |  |  | First preferred shares, carrying one vote per share, ranking prior to second preferred
shares, Class A subordinate shares and Class B shares with respect to the payment of
dividends;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Second preferred shares, non-voting, ranking prior to Class A subordinate shares and Class
B shares with respect to the payment of dividends;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Class A subordinate shares, carrying one vote per share, participating equally with Class
B shares with respect to the payment of dividends and convertible into Class B shares
under certain conditions in the event of certain takeover bids on Class B shares;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Class B shares, carrying 10 votes per share, participating equally with Class A
subordinate shares with respect to the payment of dividends, convertible at any time at
the option of the holder into Class A subordinate shares.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For 2002, 2001 and 2000, and after
giving retroactive effect to the subdivision of the Companys shares that occurred on
January 7, 2000, the Class A subordinate shares and the Class B shares changed as follows:

|                                                           | CLASS A SUBORDINATE SHARES | CLASS B SHARES
|---------------------------------------------------------- | -------------------------- | --------------
|
|
|Balance at September 30, 1999                              | 233,887,974                | 423,616       
|Issued for cash                                            | 287,914                    | 4,003         
|Issued as consideration for business acquisitions (Note 9) | 5,626,369                  | 57,112        
|Options exercised                                          | 953,410                    | 5,914         
|                                                          
|Balance at September 30, 2000                              | 240,755,667                | 490,645       
|Issued for cash                                            | --                         | --            
|Issued as consideration for business acquisitions (Note 9) | 85,835,178                 | 651,010       
|Options exercised                                          | 441,872                    | 2,236         
|                                                          
|Balance at September 30, 2001                              | 327,032,717                | 1,143,891     
|Issued for cash(1)                                         | 11,110,000                 | 124,988       
|Issued as consideration for business acquisitions (Note 9) | 210,739                    | 2,261         
|Options exercised                                          | 1,546,801                  | 7,276         
|                                                          
|Balance at September 30, 2002                              | 339,900,257                | 1,278,416     
|                                                          

|(1) | On December 20, 2001, the Company issued 11,110,000 Class A subordinate shares
          to the public for cash proceeds of $124,988,000 before share issue costs of
          $3,800,000 (net of income tax recoveries of $1,700,000).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# b) Stock options

Under a Stock option compensation
plan for certain employees and directors of the Company and its subsidiaries, the Board of
Directors may grant, at its discretion, options to purchase company stock to certain
employees and directors of the Company and its subsidiaries. The exercise price is
established by the Board of Directors but may not be lower than the average closing price
for Class A shares over the five business days preceding the date of the grant. Options
generally vest one to three years from the date of grant and must be exercised within a
10-year period, except in the event of retirement, termination of employment or death.
Options for 35,749,234 Class A subordinate shares have been reserved for issuance under
the Stock option plan.

Had
compensation cost been determined using the fair value method at the day of grant for
awards granted since October 1, 2001, under this Stock option plan, the Companys pro
forma net earnings, basic and diluted earnings per share for the year ended September 30,
2002, would have been $131,669,000, $0.35 and $0.35, respectively. These pro forma amounts
include a compensation cost based on a weighted-average grant date fair value of $4.27 per
stock option for 1,096,101 stock options (net of cancellation) granted during the year
ended September 30, 2002, as calculated using the Black-Scholes option pricing model with
the following assumptions: risk-free interest rate of 4.6%, dividend yield of 0.0%,
expected volatility of 48.7% and expected life of five years. As permitted by CICA
Handbook Section 3870, the pro forma disclosure omits the effect of awards granted before
October 1, 2001.

|CGI GROUP INC. 2002 | 49
|------------------- | --

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 7. Capital stock, stock options
and warrants (cont'd)

In
connection with a business acquisition completed in fiscal 2001 (see Note 9) where
outstanding stock options of the acquiree became options to acquire CGI Class A
subordinate shares, the Company recorded 3,357,962 vested options out of a total of
8,424,502 options outstanding as a purchase consideration of $16,519,000 representing the
estimated fair value of the outstanding vested stock options of the acquiree at the date
of acquisition.

# c) Warrants

In connection with the signing of a
strategic outsourcing contract and of a business acquisition (see Note 9), the Company
granted warrants entitling the holders to subscribe to up to 5,118,210 Class A subordinate
shares. The exercise prices were determined using the average closing price for Class A
subordinate shares at a date and for a number of days around the respective transaction
dates. The warrants vest upon signature of the contract, or date of business acquisition,
and have an exercise period of five years. As at September 30, 2002 and 2001, there were
5,118,210 warrants issued and outstanding, 4,000,000 of which are exercisable at a price
of $6.55 per share and expire April 30, 2006, and the remaining 1,118,210 are exercisable
at a price of $8.78 per share expiring June 13, 2006. The fair values of the warrants,
totaling $19,655,000, were estimated at their respective grant dates using the
Black-Scholes option pricing model with the following assumptions: risk-free interest rate
of 4.9%, dividend yield of 0.0%, expected volatility of 57.7% and expected life of five
years.

In
addition to the warrants to purchase up to 5,118,210 Class A subordinate shares referred
to above and issued in connection with the signing of a strategic outsourcing contract and
of a business acquisition (the Initial Warrants), CGI issued to the Majority
Shareholders and BCE warrants (the Pre-emptive Rights Warrants) to subscribe
in the aggregate up to 3,865,014 Class A subordinate shares and 697,044 Class B shares
pursuant to their pre-emptive rights contained in the articles of incorporation of CGI,
with substantially similar terms and conditions as those of the Initial Warrants. The
Pre-emptive Rights Warrants may be exercised by BCE and the Majority Shareholders only to
the extent that the holders of the Initial Warrants exercise such Initial Warrants.

Furthermore,
subject to regulatory approval, the Company has undertaken in favor of a holder of Initial
Warrants to purchase up to 4,000,000 Class A subordinate shares to issue promptly after
April 30, 2006 (the Expiration Date) replacing warrants (the Extended
Warrants) to purchase Class A subordinate shares equal to the number of Class A
subordinate shares not purchased by such holder under terms of the Initial Warrants on the
Expiration Date. The Extended Warrants will have substantially similar terms and
conditions as those of the Initial Warrants, except for the exercise price which will be
based upon the closing price of the Class A subordinate shares on the Toronto Stock
Exchange (TSX) on the date preceding the issuance of the Extended Warrants.

# d)    The following table presents the number of all shares, stock options and
          warrants outstanding as at September 30:

|                                                                                      | 2002        | 2001       
|------------------------------------------------------------------------------------- | ----------- | -----------
|Class A subordinate shares                                                            | 339,900,257 | 327,032,717
|Class B shares                                                                        | 40,799,774  | 40,799,774 
|                                                                                     
|Total capital stock                                                                   | 380,700,031 | 367,832,491
|Number of stock options (Class A subordinate shares) -Accounted for                   | 2,333,231   | 3,139,943  
|Number of stock options (Class A subordinate shares) -Not accounted for               | 18,481,589  | 21,083,909 
|Number of warrants (Class A subordinate shares) -Accounted for                        | 5,118,210   | 5,118,210  
|Number of warrants (Class A subordinate shares and Class B shares) -Not accounted for | 4,562,058   | 4,562,058  
|                                                                                     
|Number of shares reflecting the potential exercise of stock options and warrants      | 411,195,119 | 401,736,611
|                                                                                     

|50 | CGI GROUP INC. 2002
|-- | -------------------

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

# e)    The following table presents information concerning stock options and
          warrants accounted for the years ended September 30:

|                               |           |         |           | 2002   |           |         |           | 2001  
|------------------------------ | --------- | ------- | --------- | ------ | --------- | ------- | --------- | ------
|
|
|
|Balance, beginning of year     | 3,139,943 | 15,446  | 5,118,210 | 19,655 | --        | --      | --        | --    
|Granted as consideration for  
|business acquisitions (Note 9) | --        | --      | --        | --     | 3,357,962 | 16,519  | 5,118,210 | 19,655
|Exercised                      | (107,318) | (528)   | --        | --     | (218,019) | (1,073) | --        | --    
|Forfeited and expired(1)       | (699,394) | (3,441) | --        | --     | --        | --      | --        | --    
|                              
|Balance, end of year           | 2,333,231 | 11,477  | 5,118,210 | 19,655 | 3,139,943 | 15,446  | 5,118,210 | 19,655
|                              

|(1) | During the year ended September 30, 2002, the Company cancelled options for an
          amount of $3,441,000 which has been reclassified to contributed surplus.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

# f)    Additional information on stock options

The following table presents
information concerning all outstanding stock options granted to certain employees and
directors by the Company ended September 30:

|                                      |             | 2002  |            | 2001  |             | 2000 
|------------------------------------- | ----------- | ----- | ---------- | ----- | ----------- | -----
|
|
|Outstanding, beginning of year        | 24,223,852  | 10.69 | 6,413,181  | 11.46 | 4,996,414   | 8.23 
|Granted                               | 1,206,925   | 8.91  | 10,643,930 | 8.89  | 2,565,594   | 15.93
|Granted as consideration for business
|acquisition (Note 9)                  | --          | --    | 8,424,502  | 12.27 | --          | --   
|Exercised                             | (1,546,801) | 4.27  | (441,872)  | 2.63  | (1,026,284) | 6.75 
|Forfeited and expired                 | (3,069,156) | 12.55 | (815,889)  | 13.90 | (122,543)   | 13.21
|                                     
|Outstanding, end of year              | 20,814,820  | 10.79 | 24,223,852 | 10.69 | 6,413,181   | 11.46
|                                     

(1)    
          Include stock options that are accounted for as indicated in the table above.

The following table summarizes
information about outstanding stock options granted to certain employees and directors of
the Company at September 30, 2002:

|               |            |   | OPTIONS OUTSTANDING |            | OPTIONS EXERCISABLE
|-------------- | ---------- | - | ------------------- | ---------- | -------------------
|
|
|0.05 to 4.40   | 998,378    | 7 | 2.79                | 534,777    | 2.47               
|5.14 to 5.94   | 993,173    | 1 | 5.70                | 973,918    | 5.71               
|6.03 to 8.99   | 8,966,226  | 9 | 8.45                | 7,330,755  | 8.52               
|9.03 to 13.61  | 5,416,530  | 7 | 10.63               | 4,232,456  | 10.64              
|14.00 to 17.44 | 2,768,014  | 7 | 15.82               | 2,159,288  | 15.74              
|18.01 to 23.94 | 1,322,044  | 5 | 20.48               | 1,019,473  | 20.23              
|24.51 to 36.79 | 350,455    | 6 | 33.97               | 309,800    | 34.85              
|              
|               | 20,814,820 | 7 | 10.79               | 16,560,467 | 10.86              
|              

|CGI GROUP INC. 2002 | 51
|------------------- | --

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 7. Capital stock, stock options
and warrants (cont'd)

# g)   Earnings per share

The following table sets forth the
computation of basic and diluted earnings per share for the years ended September 30:

|                           | NET EARNINGS
(NUMERATOR) | NUMBER
OF SHARES
(DENOMINATOR) | 2002
EARNINGS
PER SHARE | NET EARNINGS
(NUMERATOR) | NUMBER
OF SHARES
(DENOMINATOR) | 2001
EARNINGS
PER SHARE | NET EARNINGS
(NUMERATOR) | NUMBER
OF SHARES
DENOMINATOR) | 2000
EARNINGS
PER SHARE
|-------------------------- | ------------------------ | ------------------------------ | ----------------------- | ------------------------ | ------------------------------ | ----------------------- | ------------------------ | ----------------------------- | -----------------------
|
|Net earnings               | 135,799                  | 377,349,472                    | 0.36                    | 62,789                   | 299,500,350                    | 0.21                    | 55,666                   | 270,442,354                   | 0.21                   
|Dilutive options           | --                       | 2,083,498                      | --                      | --                       | 1,287,291                      | --                      | --                       | 2,317,858                     | --                     
|Dilutive warrants          | --                       | 2,137,885                      | --                      | --                       | 319,545                        | --                      | --                       | --                            | --                     
|                          
|Net earnings after assumed
|conversions                | 135,799                  | 381,570,855                    | 0.36                    | 62,789                   | 301,107,186                    | 0.21                    | 55,666                   | 272,760,212                   | 0.20                   
|                          

Note 8. Income taxes

As described in Note 2, the Company
adopted the recommendations of CICA Handbook Section 3465, Income Taxes, effective
October 1, 1999, as a cumulative adjustment to retained earnings. The income tax provision
is as follows for the years ended September 30:

|          | 2002
$ | 2001
$ | 2000
$
|--------- | ------ | ------ | ------
|Current   | 61,166 | 38,125 | 46,494
|Future(1) | 35,602 | 34,040 | 3,491 
|         
|          | 96,768 | 72,165 | 49,985
|         

(1)    
          Includes $1,451,000 in 2001, and $1,277,000 in 2000, of future income taxes
          related to goodwill amortization.

The Companys effective income
tax rate differs from the combined Canadian statutory tax rate for the following reasons
for the years ended September 30:

|                                                       | 2002$ | 2001$ | 2000$
|------------------------------------------------------ | ----- | ----- | -----
|                                                      
|Combined federal and provincial tax rates              |       | 36    | .6   
|Non-deductible items                                   |       | 0     | .7   
|Valuation allowance relating to tax benefits on losses |       | 4     | .4   
|Other                                                  |       | (0    | .1)  
|                                                      
|Effective income tax rate after goodwill amortization  |       | 41    | .6   
|Goodwill amortization                                  |       | --    |      
|                                                      
|Effective income tax rate before goodwill amortization |       | 41    | .6   
|                                                      

|52 | CGI GROUP INC. 2002
|-- | -------------------

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Future income taxes are as follows at
September 30:

|                                                        |  | 2002
$  |   | 2001
$
(Restated) |  
|------------------------------------------------------- |  | ------- | - | ----------------- | -
|Future income tax assets:                               |  |         |   |                   |  
|Provision for integration costs                         |  | 5,160   |   | 22,310            |  
|Tax benefits on losses carried forward                  |  | 127,609 |   | 97,415            |  
|Accrued compensation                                    |  | 5,969   |   | 7,107             |  
|Allowance for doubtful accounts                         |  | 1,421   |   | 3,507             |  
|Other                                                   |  | 1,888   |   | 3,742             |  
|                                                       
|                                                        |  | 142,047 |   | 134,081           |  
|                                                       
|Future income tax liabilities:                          | 
|Fixed assets, contract costs and other long-term assets |  | 88,387  |   | 28,597            |  
|Work in progress                                        |  | 6,490   |   | 6,716             |  
|Goodwill                                                |  | 5,309   |   | 5,467             |  
|Refundable tax credits on salaries                      |  | 13,832  |   | 8,997             |  
|Other                                                   |  | 5,979   |   | 8,202             |  
|                                                       
|                                                        |  | 119,997 |   | 57,979            |  
|                                                       
|Valuation allowance                                     |  | 100,819 |   | 93,820            |  
|                                                       
|Future income taxes, net                                |  | (78,769 | ) | (17,718           | )
|                                                       
|Future income taxes are classified as follows:          | 
|Current future income tax assets                        |  | 12,567  |   | 17,998            |  
|Long-term future income tax assets                      |  | 28,661  |   | 29,002            |  
|Current future income tax liabilities                   |  | (26,301 | ) | (21,013           | )
|Long-term future income tax liabilities                 |  | (93,696 | ) | (43,705           | )
|                                                       
|Future income tax liabilities, net                      |  | (78,769 | ) | (17,718           | )
|                                                       

Certain
of the Companys subsidiaries have losses carried forward aggregating approximately
$369,000,000, of which approximately $325,000,000 (US$206,000,000) originates from the
Companys US subsidiaries, available to reduce future taxable income and expiring at
various dates to 2022. The benefit of these losses has been reflected in the Consolidated
Financial Statements to the extent that it was considered to be more likely than not that
the related future income tax assets would be realized.

Foreign
earnings of certain of CGIs subsidiaries would be taxed only upon their repatriation
to Canada. The Company has not recognized a future tax liability for these retained
earnings as management does not expect them to be repatriated. On remittance, certain
countries impose withholding taxes that, subject to certain limitations, are then
available for use as tax credits against a federal or provincial income tax liability, if
any. Determination of the amount of unrecognized federal and provincial future income tax
liability for these retained earnings or foreign tax withholding is not practicable
because of the complexities associated with its hypothetical calculation.

Note 9. Investments in subsidiaries
and joint ventures

For all business acquisitions, the Company began recording the results
of operations of the acquired entities as of their respective effective acquisition dates.

During
fiscal 2002, the Company completed five acquisitions of IT consulting firms for
considerations ranging between $2,100,000 and $7,000,000, for an aggregate consideration
of $24,988,000, including acquisition costs of approximately $503,000 and the issuance of
210,739 Class A subordinate shares at a price of $10.73 per share. The Company acquired
all of the outstanding shares of the businesses, except in two cases where assets were
acquired.

|CGI GROUP INC. 2002 | 53
|------------------- | --

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 9. Investments in subsidiaries
and joint ventures (cont'd)

The acquisitions were accounted for
using the purchase method and the total initial purchase price allocation is as follows:

|                                                  |  | 2002
$ |  
|------------------------------------------------- |  | ------ | -
|Non-cash working capital items                    |  | (2,686 | )
|Future income taxes                               |  | 933    |  
|Fixed assets                                      |  | 1,271  |  
|Contract costs and other long-term assets         |  | 2,166  |  
|Goodwill(1)                                       |  | 23,049 |  
|                                                 
|                                                  |  | 24,733 |  
|Cash position at acquisition                      |  | 255    |  
|                                                 
|Net assets acquired                               |  | 24,988 |  
|                                                 
|Consideration                                     | 
|Cash (including acquisition costs)                |  | 20,121 |  
|Balance of purchase price                         |  | 2,606  |  
|Issuance of 210,739 Class A subordinate shares(2) |  | 2,261  |  
|                                                 
|                                                  |  | 24,988 |  
|                                                 

|(1) | Includes $9,292,000 of goodwill deductible for tax purposes. Of the total
          goodwill amount, $10,986,000 is included in the US and Asia Pacific segment and
          the remaining $12,063,000 is included in the Canada and Europe segment.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The per share value of the shares issued as consideration for one of the
          business acquisitions was determined using the average closing share price on
          the TSX over a reasonable period before and after the date the terms of the
          business combination were agreed to and announced.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In
May 2002, the Company acquired, for a cash consideration of $26,000,000, a 49% interest in
a newly created joint venture, Innovapost Inc. (Innovapost). The Company also
paid, through Innovapost, an incentive of $26,000,000 to Canada Post Corporation, its
partner in the joint venture, for the signing of a 10-year outsourcing contract. The
aggregate consideration paid of $52,000,000 was accounted for as contract costs and other
long-term assets in accordance with its substance and will be amortized over the term of
the contract.

During
the year, the Company sold its Australian and Japanese operations for an aggregate cash
consideration of $10,365,000 with no resulting gain.

As
described below, during 2002, the Company finalized the purchase price allocation for both
the IMR and the Desjardins acquisitions completed during 2001.

The
schedule below reflects the payments made and the remaining balance of accrued acquisition
and integration costs related to IMR.

|                                        | RESTATE
BALANCE AS AT
SEPTEMBER 30,
2001(1)
$ | PAID DURING
THE YEAR ENDED
SEPTEMBER 30,
2002
$ | BALANCE AS AT
SEPTEMBER 30,
2002
$
|--------------------------------------- | --------------------------------------------- | ----------------------------------------------- | ----------------------------------
|Professional fees                       | 2,834                                         | 2,796                                           | 38                                
|Consolidation and closure of facilities | 12,446                                        | 4,745                                           | 7,701                             
|Severance                               | 11,700                                        | 10,468                                          | 1,232                             
|Other                                   | 1,655                                         | 325                                             | 1,330                             
|                                       
|                                        | 28,635                                        | 18,334                                          | 10,301                            
|                                       

(1)    
Restated as described in Note 2.

|54 | CGI GROUP INC. 2002
|-- | -------------------

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

During 2001, the Company made the
following acquisitions:

C.U. Processing Inc. (CUP)On October 4, 2000, the Company
          acquired all the outstanding shares of CUP, a Detroit-based provider of
          information management systems primarily to US credit unions;

AGTI Consulting Services Inc.
(AGTI)On November 27, 2000, the Company acquired 49% of all
outstanding shares of AGTI, a Montreal-based IT consulting firm. The Company accounts for
its 49% interest in AGTI using the proportionate consolidation method;

Star Data Systems Inc. (Star
Data)On January 9, 2001, the Company acquired all the outstanding common
shares of Star Data on the basis of 0.737 Class A subordinate shares of the Company for
each Star Data common share; therefore, the Company issued 13,546,327 Class A subordinate
shares at a price of $7.59 per share for a total consideration of $102,820,000 before
acquisition costs of approximately $2,150,000. The price per share of $7.59 was determined
using the trading price on the TSX of the CGI Class A subordinate shares over a reasonable
period before and after the closing date of the acquisition. Star Data is a Canadian-based
provider of IT services and solutions to the financial services industry;

Assets and liabilities of
Confédération des caisses populaires et déconomie Desjardins du
Québec used in data and micro-computing of Mouvement des caisses Desjardins
(Desjardins) operationsOn May 1, 2001, the Company acquired the
assets, certain intellectual property rights and assumed certain liabilities of Desjardins
which it used in data and micro-computing. In addition, approximately 450 Desjardins
employees were transferred to the Company. The total consideration paid for this
acquisition was $72,216,000, before acquisition costs of approximately $120,000, comprises
cash of $57,945,000 and the issuance of 4,000,000 warrants at fair value in the amount of
$14,271,000 (see Note 7). The warrants are presented as a component of shareholders
equity with a corresponding amount included in contract costs and other long-term assets,
in accordance with their substance;

IMRglobalOn July 27,
2001, the Company merged with IMRglobal, a US-based leading global provider of end-to-end
IT solutions, acquiring all the outstanding common stock of IMRglobal on the basis of
1.5974 Class A subordinate shares of the Company for each share of IMRglobal common stock;
therefore, the Company issued 70,753,841 Class A subordinate shares at a price of $7.58
per share for a consideration of $536,314,000 before acquisition costs of approximately
$17,347,000. The price per share of $7.58 was determined using the average trading price
on the TSX of the CGI Class A subordinate shares over a reasonable period before and after
the date that the terms of the business combination were agreed to and announced. In
addition, each outstanding IMRglobal stock option as of that date became a 1.5974 stock
option to acquire a Class A subordinate share of the Company; therefore, the Company
effectively issued 8,424,502 stock options having a weighted-average exercise price per
share of $12.27 and having a weighted-average fair value of $5.37 per option. Consistent
with Canadian GAAP at the time, $16,519,000 representing the total fair value of 3,357,562
outstanding vested stock options having a weighted average fair value of $4.92 per option,
was recorded as purchase consideration. The remaining $28,720,000 representing the total
fair value of 5,066,940 outstanding unvested stock options having a weighted-average fair
value of $5.67 per option was not recorded as purchase consideration (see Note 7).

The
purchase price included integration and acquisition costs totaling $47,190,000 incurred by
the Company for professional fees and costs to exit and consolidate certain IMR
activities.

The
components of the accrued costs included in the purchase price were as follows:

|                                        | RESTATED
ACQUISITION AND
INTEGRATION
LIABILITIES(1)
$ | RESTATED
PAID AS AT
SEPTEMBER 30,
2001(1)
$ | RESTATED BALANCE
REMAINING AS AT
SEPTEMBER 30,
2001(1)
$
|--------------------------------------- | ----------------------------------------------------- | ------------------------------------------- | --------------------------------------------------------
|Professional fees                       | 17,347                                                | 14,513                                      | 2,834                                                   
|Consolidation and closure of facilities | 14,000                                                | 1,554                                       | 12,446                                                  
|Severance                               | 12,000                                                | 300                                         | 11,700                                                  
|Other                                   | 3,843                                                 | 2,188                                       | 1,655                                                   
|                                       
|                                        | 47,190                                                | 18,555                                      | 28,635                                                  
|                                       

(1)    
          Restated as described in Note 2.

|CGI GROUP INC. 2002 | 55
|------------------- | --

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 9.
Investments in subsidiaries
and joint ventures (cont'd)

At
various dates throughout fiscal 2001, the Company completed the acquisition of all
outstanding shares of six other companies, entered into two joint venture agreements and
increased its interest in an equity investee for an aggregate consideration of
$32,705,000. The sum of the purchase price allocations to the net assets acquired is
presented in the Other column in the table below. A total of 1,535,010 Class A
subordinate shares having a weighted-average value per share of $7.74 were issued in
connection with these acquisitions. The per share value of the shares issued as
consideration was determined using the average closing share price on the TSX of the CGI
Class A subordinate shares over a reasonable period before and after the closing date of
the business combinations. In addition, the Company began using the proportionate
consolidation method to account for its investment in the equity investee as of January
12, 2001.

These fiscal 2001 acquisitions were
accounted for using the purchase method, as follows:

|NET ASSETS ACQUIRED            |  | IMR(2)
$ |   | STARDATA
$ |   | DESJARDINS(3)
$ |   | AGTI
$ |  | CUP
$   |   | OTHER$ |   | TOTAL
$ |  
|------------------------------ |  | -------- | - | ---------- | - | --------------- | - | ------ |  | ------- | - | ------ | - | ------- | -
|Non-cash working capital items |  | (45,695  | ) | (18,391    | ) | 24,245          |   | 2,216  |  | (12,061 | ) | (471   | ) |         |  
|Fixed assets                   |  | 42,095   |   | 21,211     |   | 3,612           |   | 448    |  | 3,296   |   | 2,135  |   | 72,797  |  
|Contract costs and other       | 
|long-term assets               |  | 29,923   |   | 9,203      |   | 111,986         |   | --     |  | 447     |   | 11     |   | 151,570 |  
|Future income taxes            |  | 1,102    |   | 15,716     |   | (7,744          | ) | 10     |  | 4,228   |   | 1,139  |   | 14,451  |  
|Goodwill(1)                    |  | 560,520  |   | 73,060     |   | 7,744           |   | 14,602 |  | 41,601  |   | 27,588 |   | 725,115 |  
|Long-term debt                 |  | (53,988  | ) | (10,799    | ) | --              |   | --     |  | (812    | ) | (1,759 | )
|Deferred credits and other     | 
|long-term liabilities          |  | (7,609   | ) | --         |   | (67,627         | ) | --     |  | --      |   | --     |   | (75,236 | )
|                              
|                               |  | 526,348  |   | 90,000     |   | 72,216          |   | 17,276 |  | 36,699  |   | 28,643 |   | 771,182 |  
|Cash position at acquisition   |  | 26,485   |   | 12,820     |   | --              |   | 7,639  |  | 1,837   |   | 4,062  |   | 52,843  |  
|                              
|                               |  | 552,833  |   | 102,820    |   | 72,216          |   | 24,915 |  | 38,536  |   | 32,705 |   | 824,025 |  
|                              
|Consideration                  | 
|Cash                           |  | --       |   | --         |   | 57,945          |   | 24,915 |  | 38,536  |   | 19,561 |   | 140,957 |  
|Issuance of 85,835,178 Class A | 
|subordinate shares             |  | 536,314  |   | 102,820    |   | --              |   | --     |  | --      |   | 11,876 |   | 651,010 |  
|Fair value of 3,357,562 vested | 
|stock options (Notes 2 and 7)  |  | 16,519   |   | --         |   | --              |   | --     |  | --      |   | --     |   | 16,519  |  
|4,000,000 warrants at fair     | 
|value (Note 7)                 |  | --       |   | --         |   | 14,271          |   | --     |  | --      |   | --     |   | 14,271  |  
|Equity value of investment     | 
|at acquisition date            |  | --       |   | --         |   | --              |   | --     |  | --      |   | 1,268  |   | 1,268   |  
|                              
|                               |  | 552,833  |   | 102,820    |   | 72,216          |   | 24,915 |  | 38,536  |   | 32,705 |   | 824,025 |  
|                              

|(1) | Includes $55,413,000 of goodwill deductible for tax purposes. Of the total
          goodwill amount, $534,415,000 is included in the US and Asia Pacific segment and
          the remaining $190,700,000 is included in the Canada and Europe segment.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | During 2002, the Company finalized the purchase price allocation of IMR; as a
          result, contract costs and other long-term assets were increased by $7,577,000
          and non-cash working capital items, goodwill and future income taxes were
          decreased by $3,947,000, $978,000 and $2,652,000, respectively. Total
          acquisition and integration costs were also adjusted (decrease of $20,810,000)
          to reflect the Companys reviewed interpretation of the accounting
          treatment for integration liabilities to be incurred in connection with business
          acquisitions (see discussion above). These adjustments are all reflected in the
          table above.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | During the third fiscal quarter of 2002, the Company finalized the purchase
          price allocation resulting in decreases in goodwill, integration liabilities,
          and future income tax assets of $1,805,000, $2,864,000 and $1,059,000
          respectively. These adjustments are all reflected in the above table.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|56 | CGI GROUP INC. 2002
|-- | -------------------

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

During 2001, the Company modified the
initial purchase price allocation of APG Solutions & Technologies Inc.
(APG), acquired in 2000, following the conclusion of pending arbitration at
the acquisition date, which resulted in a reduction of the consideration paid and the
corresponding value of net assets acquired of approximately $1,721,000.

During 2000, the Company made the
following acquisitions:

MCM Technology Inc.
(MCM)On October 26, 1999, the Company acquired all the outstanding
shares of MCM, an information technology consulting firm serving clients mainly in the
healthcare and telecommunications industries; therefore, the Company issued 462,062 Class
A subordinate shares at a price of $13.90 per share for a total consideration of
$6,425,000 before acquisition costs of approximately $100,000. The price per share of
$13.90 was determined using the trading price on the TSX of the CGI Class A subordinate
shares over a reasonable period before and after the closing date of the acquisition.

APGOn September 1, 2000,
the Company acquired all the outstanding shares of APG, an information technology
consulting firm specializing in the implementation of enterprise resource planning
solutions, system evolution, electronic commerce and knowledge management; therefore, the
Company issued 5,164,307 Class A subordinate shares at a price of $9.81 per share for a
total consideration of $50,687,000 before acquisition cost of approximately $1,300,000.
The price per share of $9.81 was determined using the trading price on the TSX of the CGI
Class A subordinate shares over a reasonable period before and after the closing date of
the acquisition.

These fiscal 2000 acquisitions,
including the fiscal 2001 modification relating to APG described above, were accounted for
using the purchase method, as follows:

|NET ASSETS ACQUIRED                                       |  | MCM
$  |   | APC$   |   | TOTAL$ |  
|--------------------------------------------------------- |  | ------ | - | ------ | - | ------ | -
|Non-cash working capital items                            |  | (1,208 | ) | (8,336 | ) | (9,544 | )
|Fixed assets                                              |  | 872    |   | 2,089  |   | 2,961  |  
|Contract costs and other long-term assets                 |  | --     |   | 64     |   | 64     |  
|Future income taxes                                       |  | 363    |   | 9,678  |   | 10,041 |  
|Goodwill                                                  |  | 8,925  |   | 63,749 |   | 72,674 |  
|Long-term debt                                            |  | (635   | ) | (1,775 | ) | (2,410 | )
|                                                         
|                                                          |  | 8,317  |   | 65,469 |   | 73,786 |  
|Cash position at acquisition                              |  | 1,008  |   | (7,162 | ) | (6,154 | )
|                                                         
|                                                          |  | 9,325  |   | 58,307 |   | 67,632 |  
|                                                         
|Consideration                                             | 
|Cash                                                      |  | 2,900  |   | 7,620  |   | 10,520 |  
|Issuance of 5,626,369 Class A subordinate shares (Note 7) |  | 6,425  |   | 50,687 |   | 57,112 |  
|                                                         
|                                                          |  | 9,325  |   | 58,307 |   | 67,632 |  
|                                                         

|CGI GROUP INC. 2002 | 57
|------------------- | --

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 10. Joint ventures: supplementary information

The Companys proportionate
share of its joint venture investees operations included in the Consolidated
Financial Statements is as follows:

|                             |  | As at and for the years ended September 30 |  
|---------------------------- |  | ------------------------------------------ | -
|
|Balance Sheets               |  |                                            |  
|Current assets               |  | 34,252                                     |  
|Non-current assets           |  | 29,431                                     |  
|Current liabilities          |  | 15,547                                     |  
|Non-current liabilities      |  | 3,580                                      |  
|Statements of earnings       | 
|Revenue                      |  | 79,456                                     |  
|Expenses                     |  | 77,226                                     |  
|                            
|Net earnings                 |  | 2,230                                      |  
|                            
|Statements of cash flows     | 
|Cash provided by (used for): | 
|Operating activities         |  | 10,552                                     |  
|Financing activities         |  | 3,868                                      |  
|Investing activities         |  | (2,573                                     | )
|                            

Note 11. Supplementary
cash flow information

i)    
          Net change in non-cash working capital items is as follows for the years ended
          September 30:

|                                          |  | 2002
$  |   | 2001
$  |   | 2000
$  |  
|----------------------------------------- |  | ------- | - | ------- | - | ------- | -
|Accounts receivable                       |  | (617    | ) | 725     |   | 17,206  |  
|Income taxes                              |  | 6,502   |   | (559    | ) | (13,647 | )
|Work in progress                          |  | (17,673 | ) | (12,277 | ) | 31,725  |  
|Prepaid expenses and other current assets |  | (1,361  | ) | (556    | ) | (5,486  | )
|Accounts payable and accrued liabilities  |  | (43,199 | ) | 2,073   |   | (92,027 | )
|Deferred revenue                          |  | 10,611  |   | 4,872   |   | 3,475   |  
|                                         
|                                          |  | (45,737 | ) | (5,722  | ) | (58,754 | )
|                                         

ii)    
          Non-cash operating, investing and financing activities are as follows for the
          years ended September 30:

|                                                 | 2002
$ | 2001
$  | 2000
$
|------------------------------------------------ | ------ | ------- | ------
|Operating activities                             |        |         |       
|Deferred credits and other long-term liabilities | 15,728 | 14,000  | --    
|Future income taxes                              | 12,347 | 3,029   | --    
|                                                
|                                                 | 28,075 | 17,029  | --    
|                                                
|Investing activities                            
|Shares issued for business acquisitions          | 2,261  | 681,800 | 57,112
|Purchase of assets under capital leases          | --     | --      | 2,882 
|Contract costs and other long-term assets        | 28,075 | 22,413  | --    
|                                                
|                                                 | 30,336 | 704,213 | 59,994
|                                                

|58 | CGI GROUP INC. 2002
|-- | -------------------

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

ii)  
Non-cash operating, investing and financing activities are as follows for the years ended September 30 (cont'd):

|                                             | 2002
$ | 2001
$  | 2000
$
|-------------------------------------------- | ------ | ------- | ------
|Financing activities                        
|Issuance of shares                           | 2,261  | 651,010 | 57,112
|Issuance of warrants and stock options       | --     | 36,174  | --    
|Increase in obligations under capital leases | --     | --      | 2,882 
|                                            
|                                             | 2,261  | 687,184 | 59,994
|                                            

iii)    
          Interest paid and income taxes paid are as follows for the years ended September
          30:

|                  | 2002
$ | 2001
$ | 2000
$
|----------------- | ------ | ------ | ------
|Interest paid     | 2,172  | 4,592  | 3,754 
|Income taxes paid | 51,923 | 41,615 | 67,154

Note 12. Segmented
information

Effective October 1, 2001, the
Company changed its organizational structure. The Company has three strategic business
units (SBU) as follows: Canada and Europe, US and Asia Pacific, and Business
Process Services (BPS). As of that date, the Company began to evaluate each
SBUs performance under this structure and began reporting segmented information on
that basis. Comparative segmented information has been restated to reflect the fiscal 2002
segmentation basis.

The
Company evaluates each SBUs performance primarily based on its revenue, revenue less
operating expenses as well as based on its net contribution (the latter being defined as
earnings before interest, income taxes and amortization of goodwill) by its Management
Committee that is chaired by the Chief Executive Officer.

The
Canada and Europe segment and the US and Asia Pacific segment offer end-to-end IT services
including management of IT and business functions, systems integration and consulting
services. The BPS segment provides services in the management of business functions. These
segments serve clients in the following sectors: financial services, telecommunications,
manufacturing, retail and distribution, governments, utilities and services and
healthcare. The corporate segment comprises management of cash and cash equivalents and
general corporate activities such as strategy and market development, coordination of
large projects and capital investment decisions. Costs which have not been allocated to
the other segments are included in this segment as they represent common costs and general
head office expenses; the allocation of these costs to the other segments would not assist
in the evaluation of the respective segments contributon.

|                                          |  |           |  |         |   |         |  |         |   |         |   | 2002      | 
|----------------------------------------- |  | --------- |  | ------- | - | ------- |  | ------- | - | ------- | - | --------- | 
|
|Revenue(1)                                |  | 1,823,995 |  | 309,683 |   | 93,461  |  | --      |   | (57,526 | ) | 2,169,613 | 
|Operating expenses                        |  | 1,481,129 |  | 303,530 |   | 71,927  |  | 61,403  |   | (57,526 | ) | 1,860,463 | 
|                                         
|Earnings before the undernoted:           |  | 342,866   |  | 6,153   |   | 21,534  |  | (61,403 | ) | --      |   | 309,150   | 
|Depreciation and amortization             |  | 59,457    |  | 10,937  |   | 4,239   |  | 2,372   |   | --      |   | 77,005    | 
|                                         
|Earnings before interest and income taxes |  | 283,409   |  | (4,784  | ) | 17,295  |  | (63,775 | ) | --      |   | 232,145   | 
|                                         
|Total assets                              |  | 1,363,889 |  | 645,224 |   | 118,142 |  | 173,637 |   | --      |   | 2,300,892 | 
|                                         

|(1) | Revenue of approximately $50,833,000 and $30,199,000 generated from clients
          located in the United States were presented under the Canada and Europe segment
          for the years 2002 and 2001 respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|CGI GROUP INC. 2002 | 59
|------------------- | --

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 12. Segmented
information (cont'd)

|                                        |  |           |  |         |   |        |  |         |   |         |   | 2001      | 
|--------------------------------------- |  | --------- |  | ------- | - | ------ |  | ------- | - | ------- | - | --------- | 
|
|Revenue                                 |  | 1,345,538 |  | 178,566 |   | 74,735 |  | --      |   | (38,448 | ) | 1,560,391 | 
|Operating expenses                      |  | 1,092,343 |  | 195,076 |   | 57,669 |  | 34,405  |   | (38,448 | ) | 1,341,045 | 
|                                       
|Earnings before the undernoted:         |  | 253,195   |  | (16,510 | ) | 17,066 |  | (34,405 | ) | --      |   | 219,346   | 
|Depreciation and amortization           |  | 49,517    |  | 2,126   |   | 2,873  |  | 1,206   |   | --      |   | 55,722    | 
|                                       
|Earnings before interest, income taxes, | 
|entity subject to significant influence | 
|and amortization of goodwill            |  | 203,678   |  | (18,636 | ) | 14,193 |  | (35,611 | ) | --      |   | 163,624   | 
|                                       
|Total assets(1)                         |  | 1,222,107 |  | 643,475 |   | 96,871 |  | 66,216  |   | --      |   | 2,028,669 | 
|                                       

|                                        |  |           |  |         |   |        |  |         |   |         |   | 2000      | 
|--------------------------------------- |  | --------- |  | ------- | - | ------ |  | ------- | - | ------- | - | --------- | 
|
|Revenue                                 |  | 1,275,471 |  | 158,449 |   | 75,840 |  | --      |   | (86,680 | ) | 1,423,080 | 
|Operating expenses                      |  | 1,085,071 |  | 164,204 |   | 57,534 |  | 34,732  |   | (86,680 | ) | 1,254,861 | 
|                                       
|Earnings before the undernoted:         |  | 190,400   |  | (5,755  | ) | 18,306 |  | (34,732 | ) | --      |   | 168,219   | 
|Depreciation and amortization           |  | 37,671    |  | 2,793   |   | 3,136  |  | 1,300   |   | --      |   | 44,900    | 
|                                       
|Earnings before interest, income taxes, | 
|entity subject to significant influence | 
|and amortization of goodwill            |  | 152,729   |  | (8,548  | ) | 15,170 |  | (36,032 | ) | --      |   | 123,319   | 
|                                       
|Total assets                            |  | 677,952   |  | 141,698 |   | 80,643 |  | 28,262  |   | --      |   | 928,555   | 
|                                       

Revenue by service line:

|                                                      | 2002
$    | 2001
$    | 2000
$   
|----------------------------------------------------- | --------- | --------- | ---------
|Management of IT and business functions (outsourcing) | 1,562,121 | 1,070,183 | 878,798  
|Systems integration and consulting                    | 607,492   | 490,208   | 544,282  
|                                                     
|Total                                                 | 2,169,613 | 1,560,391 | 1,423,080
|                                                     

The Canada and Europe segment
comprises revenue from contracts with a shareholder, its subsidiaries and its affiliated
companies (see Note 13).

|                    |         | FIXED ASSETS |         | CONTRACT COSTS ANDOTHER LONG-TERM ASSETS |           | GOODWILL 
|------------------- | ------- | ------------ | ------- | ---------------------------------------- | --------- | ---------
|
|Canada and Europe   | 59,727  | 63,132       | 367,712 | 233,597                                  | 579,369   | 582,788  
|US and Asia Pacific | 42,112  | 43,632       | 25,005  | 27,263                                   | 507,406   | 490,805  
|BPS                 | 16,912  | 8,923        | 10,461  | 9,324                                    | 47,077    | 45,370   
|Corporate           | 26,630  | 7,704        | 30,564  | 2,219                                    | --        | --       
|                   
|                    | 145,381 | 123,391      | 433,742 | 272,403                                  | 1,133,852 | 1,118,963
|                   

(1)    
          Restated as described in Note 2.

|60 | CGI GROUP INC. 2002
|-- | -------------------

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 13.Related party transactions

In the normal course of business, the
Company is party to contracts with certain of BCE Inc.s (BCE, a
shareholder) subsidiaries and affiliated companies, pursuant to which the Company is its
preferred IT supplier. BCE exercises significant influence over the Companys
operating, financing and investing activities through its 31.53% (32.63% in 2001)
ownership interest in CGI and through the significant business volume originating from BCE
together with its subsidiaries and affiliates. Transactions and resulting balances, which
were measured at exchange amounts, are presented below:

| |                                           | 2002    | 2001    | 2000    | 
| | ----------------------------------------- | ------- | ------- | ------- | 
|
| |                                           | $       | $       | $       | 
| | Revenue                                   | 502,645 | 437,591 | 560,077 | 
| | Purchase of services                      | 82,978  | 78,495  | 114,062 | 
| | Accounts receivable                       | 18,756  | 37,549  | 53,235  | 
| | Accounts payable                          | 7,850   | 4,828   | 12,645  | 
| | Work in progress                          | 126     | 16,389  | 12,072  | 
| | Deferred revenue                          | 853     | 24,010  | 11,998  | 
| | Contract costs and other long-term assets | 26,257  | 22,750  | 25,711  | 
|

In
the normal course of business, the Company is also party to contracts with Innovapost, a
joint venture, pursuant to which the Company is its preferred IT supplier. CGI exercises
significant influence over the Innovaposts operating, financing and investing
activities through its 49% ownership interest. Transactions and resulting balances, which
were measured at exchange amounts, are presented below:

| |                                           | 2002   | 
| | ----------------------------------------- | ------ | 
|
| |                                           | $      | 
| | Revenue                                   | 8,778  | 
| | Accounts receivable                       | 8,721  | 
| | Work in progress                          | 3,606  | 
| | Contract costs and other long-term assets | 23,747 | 
| | Deferred credits                          | 10,624 | 
|

Note 14.Commitments and contingencies

At September 30, 2002, the Company is
committed under the terms of operating leases with various expiration dates, primarily for
rental of premises and computer equipment used in outsourcing contracts, in the aggregate
amount of approximately $835,977,000. Minimum lease payments due in each of the next five
years are as follows:

| |      | $       | 
| | ---- | ------- | 
| | 2003 | 104,742 | 
| | 2004 | 96,225  | 
| | 2005 | 78,670  | 
| | 2006 | 61,644  | 
| | 2007 | 49,230  | 
|

|CGI GROUP INC. 2002 | 61
|------------------- | --

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 14.
Commitments and contingencies (cont'd)

The
Company concluded six long-term service agreements representing a total commitment of $57,110,000.
Minimum payments under these agreements due in each of the next five years are as follows:

| |      | $      | 
| | ---- | ------ | 
| | 2003 | 29,713 | 
| | 2004 | 14,515 | 
| | 2005 | 8,068  | 
| | 2006 | 4,245  | 
| | 2007 | 569    | 
|

Note 15.Financial instruments

Risk management
The Company periodically uses various
derivative instruments to manage its foreign currency position. The derivative instruments
entered into by CGI comprise principally forward contracts. The Company does not hold or
issue financial instruments for trading purposes.

Fair value
At September 30, 2002 and 2001, the
estimated fair values of cash and cash equivalents, accounts receivable, work in progress
and accounts payable and accrued liabilities approximate their respective carrying values.

The
estimated fair values of long-term debt and obligations under capital leases are not
significantly different from their respective carrying values at September 30, 2002 and
2001.

Credit risk
Credit risk concentration with
respect to trade receivables is limited due to the Companys large client base.
Furthermore, as described in Note 13, the Company generates a significant portion of its
revenue from a shareholders subsidiaries and affiliates. Management does not believe
that the Company is subject to any significant credit risk.

Currency risk
The Company operates internationally
and is exposed to market risks from changes in foreign currency rates. As at September 30,
2002 and 2001, there were no outstanding forward contracts. Realized and unrealized
foreign exchange gains and losses in relation to forward contracts for each of the years
in the three-year period ended September 30, 2002, were not significant.

|62 | CGI GROUP INC. 2002
|-- | -------------------

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 16.Reconciliation of results reported in accordance with Canadian GAAP to US GAAP

The material differences between
Canadian and US GAAP affecting the Companys Consolidated Financial Statements are
detailed as follows:

Reconciliation of net earnings:

| |                                   | 2002 |         | 2001 |         | 2000 |       
| | --------------------------------- | ---- | ------- | ---- | ------- | ---- | ------
|
| |                                   | $    |         | $    |         | $    |       
| | Net earnings - Canadian GAAP      |      | 135,799 |      | 62,789  |      | 55,666
| | Adjustments for:                 
| | Capitalized software costs (i)    |      | (2,771  | )    | --      |      | --    
| | Warrants (ii)                     |      | 910     |      | (11,605 | )    | --    
| | Unearned compensation (iii)       |      | (1,450  | )    | (150    | )    | --    
| | Integration costs (iv)            |      | --      |      | (4,842  | )    | (1,764
| | Goodwill (v)                      |      | --      |      | (500    | )    | (500  
| | Foreign currency translation (vi) |      | --      |      | 523     |      | 462   
|
| | Net earnings - US GAAP            |      | 132,488 |      | 46,215  |      | 53,864
|
| | Basic and diluted EPS - US GAAP   |      | 0.35    |      | 0.15    |      | 0.20  
|

Reconciliation of shareholders' equity:

| |                                      | 2002               |           | 2001 |           | 2000 |        
| | ------------------------------------ | ------------------ | --------- | ---- | --------- | ---- | -------
|
| |                                      | $                  |           | $    |           | $    |        
| |                                      | (Restated, Note 2) |          
| | Shareholders' equity - Canadian GAAP |                    | 1,779,615 |      | 1,503,114 |      | 677,301
| | Adjustments for:                    
| | Capitalized software costs (i)       |                    | (2,771    | )    | --        |      | --     
| | Warrants (ii)                        |                    | (10,695   | )    | (11,605   | )    | --     
| | Unearned compensation (iii)          |                    | (3,694    | )    | (3,694    | )    | --     
| | Integration costs (iv)               |                    | (6,606    | )    | (6,606    | )    | (1,764 
| | Goodwill (v)                         |                    | 28,078    |      | 27,578    | )    | (642   
| | Foreign currency translation (vi)    |                    | 581       |      | 581       |      | 1,659  
|
| | Shareholders' equity - US GAAP       |                    | 1,793,642 |      | 1,518,502 |      | 685,688
|

(i) Capitalized software costs
Under Canadian GAAP, certain overhead
costs were capitalized. Under US GAAP, these overhead costs are expensed as incurred. The
adjustment represents the charge to consolidated net earnings, net of amortization already
recorded for Canadian GAAP purposes and net of income taxes.

(ii) Warrants
Under Canadian GAAP, the fair value
of warrants issued in connection with long-term outsourcing contracts is recorded as
contract costs and amortized on a straight-line basis over the initial contract term.
Under US GAAP, the fair value of equity instruments issued was subtracted from the initial
proceeds received in determining revenue. The 2001 adjustment represents the subtraction
to revenue, net of contract costs amortization recorded for Canadian GAAP purposes and net
of income taxes. The 2002 adjustment reflects the reversal of contract cost amortization,
net of income taxes, which is included as a reduction to Canadian GAAP consolidated net
earnings.

|CGI GROUP INC. 2002 | 63
|------------------- | --

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

Note 16.
Reconciliation of results reported in accordance with Canadian GAAP to US GAAP (cont'd)

(iii) Unearned compensation
Under Canadian GAAP, unvested stock
options granted as a result of a business combination are not recorded. The adjustment
reflects the intrinsic value of unvested stock options (see (v) below) that would have
been recorded as a separate component of shareholders equity for US GAAP purposes,
relating to the IMR acquisition described in Note 9. This unearned compensation is
amortized over approximately three years, being the estimated remaining future vesting
(service) period.

(iv) Integration costs
Under Canadian GAAP, prior to January
1, 2001, certain restructuring costs relating to the purchaser may be recognized in the
purchase price allocation when accounting for business combinations, subject to certain
conditions. Under US GAAP, only costs relating directly to the acquired business may be
considered in the purchase price allocation. The adjustment represents the charge to
consolidated net earnings, net of goodwill amortization in 2001 and 2000, recorded for
Canadian GAAP purposes and net of income taxes.

(v) Goodwill
As described in (vii) below, goodwill
recorded by the Company would be greater for US GAAP purposes than for Canadian GAAP
purposes. The 2001 and 2000 adjustments reflect the additional goodwill amortization
expense for US GAAP purposes. Consistent with both Canadian and US GAAP, the Company
discontinued the amortization of goodwill effective October 1, 2001.

The
goodwill adjustment to shareholders equity results principally from the difference
in the value assigned to stock options issued to IMR employees. Under Canadian GAAP, the
fair value of outstanding vested stock options is recorded as part of the purchase
allocation (see Notes 2 and 7), whereas under US GAAP, the fair value of both vested and
unvested outstanding stock options granted as a result of the business acquisition is
recorded. See (iii) above for a further discussion relating to this item.

During
the year ended September 30, 2002, the Company revised the calculation of the goodwill
component adjustment under US GAAP. As a result, the goodwill component adjustment to
Canadian shareholders equity increased to $28,078,000 as at September 30, 2002, from
$27,578,000 as at September 30, 2001.

(vi) Foreign currency translation
Under Canadian GAAP, the financial
statements of the Companys foreign subsidiaries, which are considered integrated
operations, have been translated using the temporal method. Under this method, monetary
assets and liabilities are translated at the exchange rates in effect at the balance sheet
dates and non-monetary assets and liabilities are translated at historical exchange rates.
Revenue and expenses are translated at average rates for the period. Translation exchange
gains or losses of such subsidiaries are reflected in net earnings.

Under
US GAAP, Statement of Financial Accounting Standards (SFAS) No. 52, Foreign
Currency Translation, requires companies to translate functional-currency financial
statements into reporting currency using the current exchange rate method whereby the
rates in effect on the balance sheet dates for assets and liabilities and the weighted
average rate for statement of earnings elements are used. Any translation adjustments,
resulting from the process of translating the financial statements of foreign subsidiaries
into Canadian dollars, are excluded from the determination of net earnings and are
reported as a separate component in shareholders equity.

(vii) Income taxes and
adjustment for change in accounting policyOn October 1,
1999, the Company adopted the recommendations of CICA Handbook Section 3465,
Income taxes (see Note 2). The recommendations of Section 3465 are similar to
the provisions of SFAS No. 109, Accounting for Income Taxes, issued by the
Financial Accounting Standards Board (FASB). Upon the implementation
of Section 3465, the Company recorded an adjustment to reflect the difference
between the assigned value and the tax basis of assets acquired in a purchase
business combination, which resulted in future income tax liabilities; the
Company recorded this amount through a reduction of retained earnings as part of
the cumulative adjustment. Under US GAAP, this amount would have been reflected
as additional goodwill.

Prior
to the issuance of Section 3465, under Canadian GAAP, accounting for income taxes was
similar to the provisions of the US Accounting Principles Board No. 11. Under US GAAP, the
Company would have followed the provisions of SFAS No. 109.

|64 | CGI GROUP INC. 2002
|-- | -------------------

---

notes to the consolidated financial statementsYears ended September 30, 2002, 2001 and 2000 
(tabular amounts only are in thousands of Canadian dollars except share data)

(viii) Comprehensive income
Cumulative other comprehensive income
is comprised solely of foreign currency translation adjustments which result from the
process of translating the financial statements of foreign subsidiaries (see (vi) above).
As at September 30, 2002, 2001 and 2000, cumulative other comprehensive income amounts to
$34,266,000, $24,526,000 and $2,889,000, respectively.

The
following table represents comprehensive income in accordance with SFAS No. 130,
Reporting Comprehensive Income:

| |                                                              | 2002    | 2001(1) | 2000   | 
| | ------------------------------------------------------------ | ------- | ------- | ------ | 
|
| |                                                              | $       | $       | $      | 
| | (Restated)                                                   |        
| | Net earnings - US GAAP                                       | 134,094 | 46,215  | 53,864 | 
| | Other comprehensive income:                                 
| | Foreign currency translation adjustment, net of income taxes | 10,505  | 22,034  | 1,762  | 
|
| | Comprehensive income                                         | 144,599 | 68,249  | 55,626 | 
|

(1) Restated as described in Note 2.

(ix) Proportionate consolidation
The proportionate consolidation
method is used to account for interests in joint ventures. Under US GAAP, entities in
which the Company owns a majority of the share capital would be fully consolidated and
those which are less than majority-owned but over which the Company exercises significant
influence, would be accounted for using the equity method. This would result in
reclassifications in the consolidated balance sheets and statements of earnings as at
September 30, 2002 and 2001, and for each of the years in the three-year period ended
September 30, 2002. However, the differences in the case of majority-owned joint ventures
were not considered material and have consequently not been presented (see Note 10). In
accordance with practices prescribed by the U.S. Securities and Exchange Commission, the
Company has elected, for the purpose of this reconciliation, to account for interests in
joint ventures using the proportionate consolidation method.

(x) Earnings before amortization of goodwill
In Canada, the Accounting Standards
Board approved an addendum to CICA Handbook Section 1580, Business Combinations,
subsequently superceded by Section 1581, Business Combinations, that permitted
goodwill amortization expense to be presented net-of-tax on a separate line in the
consolidated statements of earnings. This presentation was not permitted under US GAAP.
Under US GAAP, for the years ended September 30, 2001 and 2000, $29,086,000 and
$19,653,000 (as adjusted for US GAAP purposes) of amortization of goodwill would have been
included in operating expenses, respectively.

(xi) Depreciation and amortization
Under US GAAP, depreciation and
amortization amounts would be included in operating expenses.

(xii) Consolidated statements of cash flows
The Companys consolidated
statements of cash flows for each of the years in the three-year period ended September
30, 2002, were prepared in accordance with CICA Handbook Section 1540, Cash Flow
Statements, the provisions of which are substantially similar to those of SFAS No. 95,
Statement of Cash Flows.

|CGI GROUP INC. 2002 | 65
|------------------- | --

---

managements
discussion and analysisof financial position and results of operationsFiscal
year ended September 30, 2002

RoadmapThis managements discussion and analysis of financial position and results of
operations (MD&A) should be read in conjunction with the Consolidated
Financial Statements of the Companys fiscal years 2002, 2001 and 2000 and the notes
beginning on page 42 of this annual report. The Companys accounting policies are in
accordance with Canadian generally accepted accounting principles (GAAP) of
the Canadian Institute of Chartered Accountants (CICA). These differ in some
respects from GAAP in the United States (US GAAP). The fiscal 2002, 2001 and
2000 results are reconciled to US GAAP in Note 16 to the Consolidated Financial
Statements. All dollar amounts are in Canadian dollars unless otherwise indicated.

Corporate overviewHeadquartered in Montreal, CGIs operations are organized along geographic lines
with three strategic business units: Canada and Europe, US and Asia Pacific and Business
Process Services, along with Corporate Services. CGI provides end-to-end information
technology (IT) services in six economic sectors: financial services,
telecommunications, manufacturing/retail/distribution, governments, utilities and
services, as well as healthcare. Some 72% of the Companys business is in the
management of IT and business functions (outsourcing), and 28% in systems integration and
consulting (SI&C).

CGI and its affiliated companies
employ 14,600 people serving some 3,000 clients from more than 60 offices located around
the world. The Company provides end-to-end IT services and business solutions to its
clients, including IT facilities management through a network of state-of-the-art data
centers in Canada (Montreal, Toronto and Regina), in the US (Phoenix) and in the UK
(Basingstoke). CGI also has applications maintenance and development centers in India
(Mumbai and Bangalore).

Business acquisitionsIn
fiscal 2002, CGI completed the acquisition of five niche companies (through the purchase
of all shares, except in two cases where the assets were acquired) and invested to create
a joint venture with Canada Post Corporation (Canada Post).

On April 2, 2002, CGI acquired
Albany-based Rapid Application Developers Inc. (RAD), one of the regions
largest software development firms. At the time of the acquisition, RAD had 36 employees
serving government clients and generated US$4.2 million in revenue annually. The price
paid was approximately $6.5 million (US$4.0 million).

On May 3, 2002, CGI signed a
shareholders agreement which finalized the terms and conditions of a new
jointly-owned IT services company, Innovapost Inc. (Innovapost), with Canada
Post as the majority owner (51%) and CGI owning 49%. Innovapost will provide all IT
services to Canada Post, its affiliated companies, and potentially to other postal
organizations worldwide. Innovapost began generating revenue in July 2002 and expects to
achieve total revenue of approximately $200 million in its first year, approximately $400
million by year three and approximately $3.5 billion over 10 years. This contract added
approximately $1.75 billion to CGIs backlog over a 10-year period.

On June 3, 2002, CGI closed the
acquisition of Netplex Systems Inc.s Retail Division (Netplex), which
served over 240 retail customers including Macys, Toys R Us and Value
City, with retail solutions that focus on warehouse management, store system integration
and distribution. Forty professionals located in the state of Oklahoma joined CGI. CGI
paid a cash consideration of approximately $6.9 million (US$4.4 million) for the
acquisition.

On June 3, 2002, CGI completed the
acquisition of electronic solutions provider Myriap Inc. (Myriap), for a cash
consideration of approximately $3.3 million, which provided CGI with deeper knowledge in
the transactional Web space. Some 60 professionals located in Montreal and Toronto joined
CGI.

On June 12, 2002, CGI closed the
acquisition of Stewart & Stewart Consulting Inc. (Stewart & Stewart),
with annual revenue of approximately $4 million. The Edmonton-based company added
geographic information systems and resource-based systems knowledge with its 35
professionals supplying services primarily to the Alberta government, under an existing
outsourcing contract. CGI paid a cash consideration of approximately $3.3 million for
Stewart & Stewart.

On July 9, 2002, CGI completed the
acquisition of privately held IMPLETECH International Inc. (Impletech) with
annual revenue valued at $5 million. Impletech offered SI&C services within the
manufacturing sector with a focus on enterprise resource planning (ERP) implementation.
Twenty professionals, located mostly in Toronto, joined CGI. Impletech served over 100
clients in the automotive, food and beverage, pharmaceutical and industrial/electronic
sectors. CGI paid approximately $1.4 million for Impletech.

Large contractsOn October 1,
2001, Firemans Fund Insurance Company (Firemans Fund), a
subsidiary of Allianz AG of Munich, and CGI finalized a 10-year IT outsourcing agreement
valued at US$380 million. As part of the agreement, CGI provides Firemans Fund with
IT support services to some 80 locations across the United States. Also, CGI took over the
clients Phoenix-based, 40,000 square foot, state-of-the-art data center. On October
2, 2002, Firemans Fund Interstate Insurance Group, a division of Firemans
Fund, and CGI announced the signing of a nine-year outsourcing contract valued at US$13
million for the provision of infrastructure services.

|24 | CGI GROUP INC. 2002
|-- | -------------------

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managements
discussion and analysisof financial position and results of operationsFiscal
year ended September 30, 2002

This contract is an addition to the
outsourcing agreement signed on October 1, 2001.

Other significant developmentsOn December 20, 2001, CGI successfully closed its public offering of Class A subordinate shares in Canada announced
on December 3, 2001. CGI sold 11,110,000 Class A subordinate shares of the Company at a
price of $11.25 per share, for net proceeds of $119.5 million, to a syndicate of
investment dealers. The net proceeds of the offering were added to CGIs general
funds and used to finance its development activities, including the funding of large
outsourcing contracts and acquisitions, and for other general corporate purposes.

Also, in the second quarter of fiscal
2002, the Company sold two of its subsidiaries located in Japan and Australia, for a cash
consideration of approximately $10.4 million with no resulting gain.

In May 2002, the Company signed a
memorandum of understanding for a 10-year outsourcing agreement valued at $80 million with
IT services provider League Data Limited (League Data). CGI plans to manage
League Datas banking environment and build a new browser-based front-end solution.
Shareholders of League Data approved the entering into contract negotiations with the
Company, which are still in process.

In June 2002, Satish Sanan retired
from his position as Vice-Chairman, Executive Vice-President, US Business Engineering, and
Board Director.

In October 2002, Charles Sirois,
Chairman and Chief Executive Officer of Telesystem Ltd, resigned from CGIs Board.
Mr. Sirois had served as a member of the Board since 1998.

Performance overviewFiscal 2002 marked the 26th
consecutive year of revenue growth for CGI. Revenue grew to $2,169.6 million, up from
$1,560.4 million in fiscal 2001 and $1,423.1 million in fiscal 2000. Earnings before
depreciation and amortization of fixed assets and amortization of contract costs and other
long-term assets were $309.2 million, compared with $219.3 million in fiscal 2001 and
$168.2 million in fiscal 2000. Net earnings amounted to $135.8 million ($0.36 basic and
diluted earnings per share), against earnings before amortization of goodwill (cash
net earnings) of $89.9 million ($0.30 basic and diluted cash earnings per share) and
net earnings of $62.8 million ($0.21 basic and diluted earnings per share) in fiscal 2001
and to cash net earnings of $73.5 million ($0.27 basic and diluted cash earnings per
share) and net earnings of $55.7 million ($0.21 basic and $0.20 diluted earnings per
share) in fiscal 2000. The net margin (i.e. net earnings over revenue) was 6.3%, compared
with 4.0% in 2001 and 3.9% in 2000.

The balance sheet remained strong as
at September 30, 2002, with $104.2 million in cash and cash equivalents, $1.78 billion of
shareholders equity and $8.5 million in long-term debt, solely related to capital
leases.

Preparation of Consolidated
Financial StatementsIn an ongoing review of new or more precise interpretation of
various accounting pronouncements and to maintain its conservative accounting practices,
CGI made modifications or revisions to its financial statements and accompanying notes. As
a result of these modifications or revisions, there was no impact on the net earnings or
cash provided by operating activities of the Company. Following are the most significant
reclassifications:

a)    
Amortization of incentives related to outsourcing contractsDuring the year
ended September 30, 2002, the Company modified the presentation of the
amortization related to incentives granted on outsourcing contracts based on
EITF 01-9, Accounting for consideration given by a vendor to a customer,
by the Financial Accounting Standards Boards Emerging Issues Task Force
(EITF). The amortization of incentives is now presented as a
reduction of revenue as opposed to being shown as amortization of contract costs
and other long-term assets. Furthermore, the Company also reclassified discounts
granted on an existing outsourcing contract which was previously presented in
the costs of services, selling and administrative expenses. For comparative
purposes, revenue for the years ended September 30, 2001 and 2000 were reduced
by $20,924,000 and $12,928,000 respectively, amortization of contract costs and
other long-term assets were reduced by $10,274,000 and $3,478,000 respectively,
and costs of services, selling and administrative expenses were reduced by
$10,650,000 and $9,450,000 respectively (see Note 5 to the Consolidated
Financial Statements).

b)    
Foreign currency translation adjustmentDuring the quarter ended December 31,
2001, the Company revised the calculation of the foreign currency translation
adjustment in order to use the current rate as opposed to the historical rate
upon translation of the goodwill related to its self-sustaining foreign
subsidiaries. This adjustment results in an increase of $21,197,000 of the
foreign currency translation adjustment and goodwill as at September 30, 2001.

c)    
Accounts receivable and deferred revenueDuring the year ended September 30,
2002, the Companys management changed the presentation related to accounts
receivable and deferred revenue for the month-end advance billing on outsourcing
contracts. Accordingly, accounts receivable and deferred revenue were both
reduced by $34,511,000 as at September 30, 2001.

|CGI GROUP INC. 2002 | 25
|------------------- | --

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managements
discussion and analysisof financial position and results of operationsFiscal
year ended September 30, 2002

d)    
Goodwill and integration liabilityDuring the quarter ended June 30, 2002, the
Company reviewed its interpretation of the accounting treatment for integration
costs accrued for in connection with business acquisitions; accordingly, the
integration liability originally accrued for in 2001 in connection with the
acquisition of IMRglobal Corp. (IMRglobal) was reduced by
$20,810,000. As a result, goodwill and future income tax assets recorded in
connection with the acquisition also decreased by $17,027,000 and $3,783,000,
respectively.

Comparison of operating results
for the years ended September 30, 2002, and September 30, 2001

Revenue

|                              | YEAR ENDED
SEPTEMBER 30,
2002 | PERCENTAGE
CHANGE VS
2001 | YEAR ENDED
SEPTEMBER 30,
2001
|----------------------------- | ----------------------------- | ------------------------- | -----------------------------
|(in '000 of Canadian dollars) | $                             | %                         | $                            
|Revenue                       | 2,169,613                     | 39.0                      | 1,560,391                    
|                             

Revenue for fiscal 2002 increased
39.0% to $2.17 billion, from $1.56 billion in the previous year. Year-over-year organic
growth of 9.9% was driven by a combination of new client wins, notably with Firemans
Fund in the US and Canada Post in Canada, as well as contract renewals and add-on projects
from existing clients. External revenue growth was 29.1% and was primarily attributable to
the full 12-month contribution of the IMRglobal acquisition, completed in July 2001.

2002 revenue mix

In fiscal 2002, the revenue mix by
contract type, geographic market and targeted vertical was as shown below.

Long-term outsourcing contracts
represented 72% of the Companys total revenue, including 15% from business process
services, while project oriented systems integration and consulting (SI&C)
work represented 28%. Geographically, clients in Canada represented 73%; clients in the US
represented 20%; and all other regions, 7%. Year-over-year, a notable change in the mix by
client geography is in the increasing proportion of revenue coming from outside Canada. In
fiscal 2001, clients in Canada represented 77%; US represented 17% and all other regions,
6%.

Another noteworthy year-over-year
change is the revenue distribution by targeted vertical. Revenue from clients in the
financial services sector remained strong, representing 41% of revenue; while
telecommunications represented 25%; manufacturing, retail and distribution (MRD), 15%;
governments, 15%; utilities and services, 3%; and healthcare, 1%. Over fiscal 2002, CGI
has grown its presence in the financial services, government, and utilities and services
verticals but the telecommunications revenue, while consistent in absolute dollars, has
declined as a percentage of total revenue from 33% in fiscal 2001, to 25% in 2002.

Throughout fiscal 2002, demand for
outsourcing services remained strong across all of the Companys key geographic
markets, namely Canada, the US and Europe. However, demand for SI&C services was
weaker in the US and in France, and the Company does not expect the demand for these
services to increase significantly before 2004. Please see discussion of revenue, which
follows in the section entitled Segmented informationof this MD&A.

[Pie charts showing the following omitted]

|Contract Types (%)                                                                                          | Geographic Markets (%)                    | Targeted Verticals (%)                                                                                                                                                  
|----------------------------------------------------------------------------------------------------------- | ----------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a. Management of IT and business    functions (outsourcing) 72%b. Systems integration and    consulting 28% | a. Canada 73%b. US 20%c. International 7% | a.  Financial services 41%
b.  Telecommunications 25%c.  Manufacturing, retail and    distribution 15%
d.  Governments 15%e.  Utilities and services 3%f.  Healthcare 1%

|26 | CGI GROUP INC. 2002
|-- | -------------------

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managements
discussion and analysisof financial position and results of operationsFiscal
year ended September 30, 2002

Operating expenses

|                              | YEAR ENDED
SEPTEMBER 30,
2002 | PERCENTAGE
CHANGE VS
2001 | YEAR ENDED
SEPTEMBER 30,
2001
|----------------------------- | ----------------------------- | ------------------------- | -----------------------------
|(in '000 of Canadian dollars) | $                             | %                         | $                            
|Total operating expenses      | 1,860,463                     | 38.7                      | 1,341,045                    
|                             

The costs of services, selling and
administrative expenses totaled $1,842.9 million in fiscal 2002, or 84.9% of revenue,
compared with $1,328.5 million, or 85.1% of revenue in fiscal 2001. Research expenses
amounted to $17.6 million in fiscal 2002 compared to $12.6 million in 2001. During fiscal
2002, the Company continued to invest in the $50.0 million Strategic Investment Program
announced in fiscal 2000. The purpose of this program is to support client oriented
initiatives, development of the Companys proprietary solutions and implementation of
new technologies. The Companys efforts are aimed at assisting its clients in meeting
their growing and diversified needs.

Total operating expenses, including
expenses associated with research, were $1,860.5 million or 85.8% of revenue, a slight
improvement from 85.9% in fiscal 2001.

Earnings before depreciation and
amortization of fixed assets, amortization of contract costs and other long-term assets,
interest and income taxes (EBITDA)1EBITDA in fiscal
2002 increased 40.9% to $309.2 million, compared with $219.3 million in the previous year.
The EBITDA margin improved to 14.2%, compared with 14.1% in the previous year. The
improvement was driven by synergies from additional outsourcing contracts, tight expense
controls applied across the Company, as well as contribution from acquisitions made during
the year.

Depreciation and
amortizationIn fiscal 2002, CGI reported
depreciation and amortization of fixed assets of $37.8 million, compared with $32.5
million in the prior year. The increase between fiscal 2002 and fiscal 2001 is reflective
of a greater level of fixed asset acquisitions made through either purchases or business
acquisitions.

Amortization of contract costs and
other long-term assets was $39.2 million in fiscal 2002, an increase compared to $23.2
million in fiscal 2001, as a result of increased contract costs associated with the
delivery of large outsourcing contracts with the Confédération des caisses
populaires et déconomie Desjardins du Québec (Desjardins),
Laurentian Bank of Canada (Laurentian Bank), Firemans Fund and Canada
Post, the purchase of two enterprise license agreements in the second half of the fiscal
year 2002, and to a lesser extent, the closing of five niche acquisitions (see further
detailed discussions in the Review of balance sheets section of this
MD&A).

Earnings before interest,
income taxes and amortization of goodwill (EBIT)EBIT increased to $232.6 million in fiscal
2002, compared to $162.1 million in fiscal 2001. The EBIT margin (i.e. EBIT over revenue)
was 10.7% in fiscal 2002, compared to 10.4% in the previous year.



InterestInterest on long-term debt decreased
to $2.4 million from $4.2 million in fiscal 2001, as a result of a decrease in the average
debt and capital leases held during the year. In fiscal 2002, interest expense was related
mainly to the Libor advance debt of US$20 million. In fiscal 2001, such expense stemmed
mainly from a loan contracted in the course of a large outsourcing contract and an
acquisition.

Income taxesThe effective income tax rate in
fiscal 2002 was down to 41.6% compared with 44.5% in fiscal 2001. The decrease in
CGIs tax rate compared with last year reflects a reduction in the significance of
the tax losses incurred by the Companys foreign subsidiaries, compared with the
earnings before income taxes, as well as a 2.0% reduction in the Canadian combined federal
and provincial statutory tax rates.

Amortization of goodwill,
net of income taxesEffective October 1, 2001, CGI
stopped recording goodwill amortization based on the new CICA Handbook recommendations,
discussed in the section Critical Accounting Policies further in this
MD&A. As such, current net earnings and earnings before amortization of goodwill
(cash net earnings) for periods before October 1, 2001, are equivalent. For
purposes of clarity and ease of comparison, CGI compares net earnings to cash net earnings
figures in year-over-year comparisons.

Net earningsNet earnings in fiscal 2002 increased
51.0% to $135.8 million, or 6.3% of revenue, against comparable cash net earnings of $89.9
million or 5.8% of revenue and net earnings of $62.8 million or 4.0%, in the previous
fiscal year. Basic and diluted earnings per share of $0.36 in fiscal 2002 were up from
basic and diluted cash earnings per share of $0.30 and from basic and diluted earnings

_________________

|1 |  | EBITDA represents earnings before depreciation and amortization, interest and income
taxes. EBITDA is presented because it is a widely accepted financial indicator of a
companys ability to service and incur debt. EBITDA should not be considered by an
investor as an alternative to operating income or net earnings, as an indicator of
operating performance or of cash flows or as a measure of liquidity. Because EBITDA is not
a measurement determined in accordance with Canadian GAAP, EBITDA as presented may not be
comparable to similarly titled measures of other companies.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|CGI GROUP INC. 2002 | 27
|------------------- | --

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managements
discussion and analysisof financial position and results of operationsFiscal
year ended September 30, 2002

per
share of $0.21 reported in fiscal 2001. This increase in earnings per share takes into
account a 26.0% year-over-year increase in the weighted average number of shares
outstanding. The weighted average number of shares outstanding increased year-over-year
primarily as a result of the issuance of shares as part of the acquisition of IMRglobal in
late July 2001. The increase in net earnings and higher earnings per share year-over-year
reflects, in part, the fact that the Company no longer records goodwill amortization.

Pro forma net earningsUnder the Stock option plan, had
compensation cost been determined using the fair value method at the day of grant for
awards granted since October 1, 2001, the Companys pro forma net earnings, basic and
diluted earning per share would have been $131.7 million, $0.35 and $0.35 respectively,
for the 12-month period ended September 30, 2002.

Segmented informationCGI has three strategic business
units (SBU): Canada and Europe, US and Asia Pacific, and Business Process
Services (BPS), along with Corporate Services. CGI evaluates each SBUs
performance and reports segmented information according to this structure (see Note 12 to
the Consolidated Financial Statements). The highlights for each segment in fiscal 2002 are
detailed below:

|                                        | YEAR ENDED
SEPTEMBER 30,
2002 | YEAR ENDED
SEPTEMBER 30,
         2001
|--------------------------------------- | ----------------------------- | --------------------------------------
|(in '000 of Canadian dollars)           |                               | $                                     
|Revenue                                 |                              
|Canada and Europe                       |                               | 1,823,995                             
|US and Asia Pacific                     |                               | 309,683                               
|BPS93,461                               |                               | 74,735                                
|Intersegment elimination                |                               | (57,526                               
|                                       
|Total revenue                           |                               | 2,169,613                             
|                                       
|Earnings before interest, income taxes, |                              
|entity subject to significant influence |                              
|and amortization of goodwill            |                              
|Canada and Europe                       |                               | 283,409                               
|US and Asia Pacific                     |                               | (4,784                                
|BPS                                     |                               | 17,295                                
|Corporate expenses and programs         |                               | (63,775                               
|                                       
|Total earnings before interest,         |                              
|income taxes, entity subject            |                              
|to significant influence and            |                              
|amortization of goodwill                |                               | 232,145                               
|                                       

In fiscal 2002, revenue from the
Canada and Europe SBU was $1,824.0 million, up 35.6% over revenue of $1,345.5 million
posted in fiscal 2001. Revenue from the US and Asia Pacific SBU was $309.7 million, up
73.4% over revenue of $178.6 million in fiscal 2001. Revenue reported by the BPS SBU was
$93.5 million, up 25.2% from $74.7 million in the previous fiscal year.

EBIT for the Canada and Europe SBU
was $283.4 million in fiscal 2002, up 39.1% year-over-year. In the US and Asia Pacific
SBU, there was a loss before interest, income taxes and amortization of goodwill of $4.8
million, an improvement of 74.2% over last year when the loss was $18.6 million. The BPS
SBU reported EBIT of $17.3 million, up 21.8% from the $14.2 million reported last year.

Canada was a major contributor to
CGIs growth throughout fiscal 2002. CGIs position as a leading end-to-end IT
services provider in this market, coupled with numerous strong client relationships and
high customer satisfaction ratings, fueled strong growth. Revenue was driven by a
combination of IT and business process outsourcing and SI&C contracts wins, renewals
and add-on projects. Growth in revenue, without a corresponding increase in overhead,
resulted in good margin contribution. New contract wins in the government vertical were
strong throughout the year and provided good growth as well.

In Europe, the improvement in results
was driven largely by growth in the UK, especially SI&C contract wins. As expected,
France was softer, partly because of what is referred to as the Euro hangovera
phenomenon not unlike the slowdown in spending after Year 2000. Planned improvements in
France should result in a gradual positive effect year over year.

The US and Asia Pacific
operations growth in revenue was primarily the result of including a full year of
activities from the US operations of IMRglobal that had been acquired on July 27, 2001 and
for which only two months of revenue was included in the results of 2001. The EBIT
improved significantly from a loss of $18.6 million to a loss of $4.8 million for the
current year. The significant driver for the improvement was the integration of the
existing operations of the Company with the activities of the recent US acquisitions,
primarily IMRglobal. As well, several outsourcing contracts were initiated in the US
during the year, leveraging the Companys near-shore and offshore delivery model
which takes advantage of the lower cost delivery services in Canada and India.

Overall, US operations improved as a
result of a greater push towards a global operational model and adherence to CGIs
standard management ratios. During the year, the integration of US operations was
completed under a global operations structure headed by Michael Roach, Chief Operating
Officer, which presents additional opportunities for synergies.

|28 | CGI GROUP INC. 2002
|-- | -------------------

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managements
discussion and analysisof financial position and results of operationsFiscal
year ended September 30, 2002

In the US outsourcing space, CGI
continued to better position itself to propose and win large IT and business process
outsourcing contracts. CGIs current outsourcing contracts with US clients have been
growing and today represent 56% of the business generated in the US. CGIs long-term
objective is to generate 75% of its US business from outsourcing. CGI believes it has made
progress in building a presence and brand as an outsourcer in the US market place, and in
leveraging synergies with Canadian and global operations. The Companys strength and
advantage are in the midtier or middle market where contracts range between $50 million
and $200 million per year, a segment where interest in outsourcing is growing.

CGI was affected negatively by the
continued softness in the US market and the weak demand for SI&C services. The Company
does not expect the SI&C business in the US to return with any degree of strength
before fiscal 2004, but does expect that its US operations will see a gradual improvement
in margins.

In fiscal 2002, the BPS SBU delivered
a solid performance, realizing renewals with its overall roster of clients. Among fiscal
2002 achievements for the BPS SBU was the successful implementation of the first phase of
a document management services contract with Arbella Insurance in the third quarter, as
well as the signing in the fourth quarter of a 10-year, US$36 million business process
outsourcing contract with US-based GrafTech International Ltd. (formerly UCAR
International Inc.), an existing IT outsourcing client of CGI. The Companys
credentials as a provider of business process services continue to grow and its BPS
offering continues to be well received by its client base, especially in the insurance
sector.

Comparison of operating results
for the years ended September 30, 2001, and September 30, 2000

Revenue

|                              | YEAR ENDED
SEPTEMBER 30,
2001 | PERCENTAGE
CHANGE VS
2000 | YEAR ENDED
SEPTEMBER 30,
2000
|----------------------------- | ----------------------------- | ------------------------- | -----------------------------
|(in '000 of Canadian dollars) | $                             | %                         | $                            
|Revenue                       | 1,560,391                     | 9.6                       | 1,423,080                    
|                             

In fiscal 2001, revenue increased
marginally by 9.6% to $1,560.4 million, from $1,423.1 million in fiscal 2000, as a result
of numerous acquisitions completed during the year. In fiscal 2001, long-term outsourcing
contracts represented 69% of total revenue and systems integration and consulting
contracts were 31% of total revenue.

In fiscal 2001, CGI implemented a
dynamic acquisition strategy aimed at acquiring both niche and large IT companies. As a
result of this, the Company acquired nine companies and took an equity position in four
such entities, which together contributed $216.5 million in incremental revenue. Also, in
fiscal 2001, CGI signed several large IT outsourcing contracts, which contributed
significantly to its revenue growth. Among the most important contributors, CGIs
operating results benefited from a five-month contribution related to the contract with
Desjardins, as well as a three and a half month contribution related to its agreement with
Laurentian Bank. In addition, the Company benefited from contracts with Allianz (effective
February 7, 2001) and Sun Life (effective January 4, 2001).

In fiscal 2000, the Company benefited
from a 12-month contribution of its contract with Bell Mobility, as well as from its DRT
Systems International and DRT Systems International L.P. (jointly, DRT)
acquisition, effective July 1, 1999. These revenue gains were partially offset by Bell
Canadas reduction in IT budgets, compounded by an industry-wide slowdown in IT
spending related to the Year 2000 phenomenon.

Operating expenses

|                              | YEAR ENDED
SEPTEMBER 30,
2001 | PERCENTAGE
CHANGE VS
2000 | YEAR ENDED
SEPTEMBER 30,
2000
|----------------------------- | ----------------------------- | ------------------------- | -----------------------------
|(in '000 of Canadian dollars) | $                             | %                         | $                            
|Total operating expenses      | 1,341,045                     | 6.9                       | 1,254,861                    
|                             

The costs of services, selling and
administrative expenses totaled $1,328.5 million in fiscal 2001, or 85.1% of revenue,
compared with $1,244.9 million, or 87.5% of revenue in fiscal 2000. This reduction in the
operating expenses to revenue ratio in fiscal 2001 was achieved by lower overhead costs in
the US and Europe units resulting from the improvements in the utilization of CGIs
IT members, synergies from the integration of the business acquisitions and outsourcing
contracts, the revenue contribution of IMRglobal and other acquired companies. Also, the
Companys participation in the Quebec governments refundable tax credits on
salaries program which the Company benefits from, as a result of its future relocation to
E-Commerce Place in Montreal, contributed to decrease the ratio. Total operating expenses,
including expenses associated with research, were $1,341.0 million or 85.9% of revenue, an
improvement from 88.2% in fiscal 2000.

Earnings before depreciation and
amortization of fixed assets, amortization of contract costs and other long-term assets,
interest and income taxes (EBITDA)EBITDA in fiscal 2001 increased 30.4%
to $219.3 million, compared with $168.2 million in fiscal 2000. In fiscal 2001, the EBITDA
margin improved to 14.1%, compared with 11.8% in the previous year.

|CGI GROUP INC. 2002 | 29
|------------------- | --

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managements
discussion and analysisof financial position and results of operationsFiscal
year ended September 30, 2002

Depreciation and amortization
In fiscal 2001, CGI reported depreciation and amortization of fixed assets totaling $32.5 million, compared with $26.4
million the year before. The increase in fiscal 2001 was the result of the acquisition of
fixed assets related to the Desjardins contract, as well as other asset purchases acquired
through the acquisition of nine companies, and the four joint ventures in which CGI
acquired interests. In fiscal 2000, depreciation and amortization of fixed assets was
lower, partly as a result of the fact that only two acquisitions were made.

In fiscal 2001, amortization of
contract costs and other long-term assets totaled $23.2 million, compared with $18.5
million in fiscal 2000. The amounts of amortization of contract costs and other long-term
assets against the revenue were of $10.3 million and $3.5 million for 2001 and 2000,
respectively. Amortization of contract costs and other long-term assets increased as a
result of costs incurred for the delivery of large outsourcing contracts with Desjardins,
Laurentian Bank and Sun Life, among others. The year-over-year increase in the
amortization of this charge is also reflective of integration costs incurred on these new
outsourcing contracts, as well as the value assigned to the client contracts of acquired
businesses.

Earnings before interest, income taxes and amortization of goodwill (EBIT)
EBIT was $163.6 million in fiscal 2001, up 32.7% over fiscal 2000 EBIT of $123.3 million. The EBIT margin improved to 10.5%
in fiscal 2001, compared with 8.7% in fiscal 2000.

Interest
Interest on long-term debt increased
to $4.2 million from $3.6 million in fiscal 2000. In fiscal 2001, interest expense was
related mainly to a loan contracted in the course of a large outsourcing contract and an
acquisition. In fiscal 2000, such expense stemmed mainly from a full year of outstanding
long-term debt relating to the acquisition of DRT.

Income taxes
The effective income tax rate before
amortization of goodwill was 44.5% in fiscal 2001, compared with 40.5% in fiscal 2000,
despite a 2.0% decrease in the combined federal and provincial statutory rates. In fiscal
2001, the Company recorded additional valuation allowances relating to the tax benefit on
losses incurred in the US and certain international operations.

Net earnings
Net earnings in fiscal 2001 increased
12.8% to $62.8 million ($0.21 basic and diluted earnings per share) compared with $55.7
million ($0.21 basic and $0.20 diluted earnings per share) in the previous fiscal year. In
fiscal 2001, the net margin (i.e. net earnings over revenue) improved to 4.0%, compared
with 3.9% in fiscal 2000.

Review of balance
sheetsfiscal year-ends 2002 and 2001
A discussion follows on line items of the
balance sheet for which there were significant variances over last year.

Assets at the end of fiscal 2002 were
$2,300.9 million, compared with $2,028.7 million at the end of fiscal 2001, representing
an increase of 13.4%. Most asset items increased over the previous fiscal year, the major
one being contract costs and other long-term assets, as well as cash and cash equivalents.

In fiscal 2002, accounts receivable
were higher than the previous year by $9.0 million primarily due to an increase in the
refundable tax credits on salaries related to E-Commerce Place for $5.9 million that are
included in the accounts receivable balance. This tax credit receivable balance was
excluded from the calculation of the Companys collection period for accounts
receivable and work in progress. Days of sales outstanding (DSO) at the end of
fiscal 2002 were 50 days, compared with 67 days at the end of the last fiscal year.
The DSO calculation subtracts the deferred revenue from the accounts receivable and work
in progress balances. The year-over-year decrease in DSO is a reflection of the IMRglobal
acquisition that was made late in fiscal 2001 for which its revenue stream was accounted
over a period of only two months in 2001. Excluding the impact of the IMRglobal
acquisition, DSO for CGI at the end of fiscal 2001 would have been 57 days.

The year-over-year increase of $14.1
million in work in progress is primarily a result of unbilled revenue as at September 30,
2002, for work performed on certain outsourcing contracts but not yet billed as per
contract specifications.

Fixed assets increased by $22.0
million despite a depreciation and amortization charge of $37.8 million during fiscal
2002. The main components of this increase were an investment for the development of a new
software designed for CGIs internal use along with the capitalization of the
installation costs for the new offices located at E-Commerce Place in Montreal. The
balance of the increase in fixed assets was a result of purchases made during the normal
course of business.

Contract costs and other long-term
assets were up by $161.3 million compared with last September 30, 2001. This increase is
largely reflective of outsourcing contracts signed with Firemans Fund and with
Canada Post. The 10-year contract signed with Firemans Fund on October 1, 2001,
added $56.0 million to contract costs, as an incentive granted to the client. In the
Canada Post contract, the amounts booked to contract costs comprised, firstly, an amount
of $26.0 million for CGIs investment in its share of the joint venture

|30 | CGI GROUP INC. 2002
|-- | -------------------

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managements
discussion and analysisof financial position and results of operationsFiscal
year ended September 30, 2002

Innovapost,
and secondly, an additional $26.0 million which CGI paid to Canada Post as an incentive
for the creation of the joint venture and the signing of a 10-year outsourcing contract.
Additionally, in the last quarter of fiscal 2002, an incentive of $15.7 million was paid
pursuant to an outsourcing agreement with a Canada Post subsidiary, and was recorded with
contract costs and other long-term assets.

Also in the increase of contract
costs and other long-term assets are two five-year license agreements for certain software
that will be used in the delivery of services to the Companys outsourcing clients
($32.3 million). Other items were also added to the contract costs in fiscal 2002 during
the normal course of business, including costs for the development of software or software
acquired to provide long-term outsourcing services to clients; future income tax
adjustments related to the Companys contracts with Firemans Fund and with
Innovapost ($25.1 million); and the value of various contracts acquired through
acquisitions. These additions to contract costs and other long-term assets were offset by
a total amortization charge of $62.8 million during the year. The amortization of the
incentives included in the contract costs against revenue for 2002 represented $23.6
million.

Total short and long-term future
income tax assets decreased by $5.8 million over last year, largely as a result of the
reduction of the integration provision balance (described in Note 9 to the Consolidated
Financial Statements), and due to the differences between the carrying and the tax values
of the fixed assets.

Goodwill was up by $14.9 million at
the end of fiscal 2002. Goodwill denominated in US dollars, UK pounds and Euros are
translated using the year-end currency exchange rate. The exchange rate variances between
the Canadian dollar and these other currencies resulted in a $2.6 million increase in the
goodwill between September 30, 2001, and September 30, 2002. Adjustments were made to
certain goodwill balances relating to acquisitions made during the 2001 fiscal year (see
Note 9 to the Consolidated Financial Statements). In addition, an $8.0 million decrease in
goodwill resulted from the sale of the Japanese and Australian operations. Finally, $23.0
million of goodwill was recorded as a result of acquisitions made during the year.

Total liabilities of the Company were
$521.3 million. The most significant variances were within the long-term future income tax
liability, and the accounts payable and accrued liabilities.

Accounts payable and accrued
liabilities decreased by $33.6 million compared to September 30, 2001, largely as a result
of the usage of the acquisition and integration liabilities of companies acquired in 2001,
the most significant being IMRglobal which decreased during the last 12 months by $18.3
million. Also, accounts payable and accrued liabilities as at September 30, 2001, included
IMRglobal accounts payable, which were assumed as part of the acquisition on July 27,
2001, and paid subsequent to the end of the year.

Deferred revenue was up by 20.5% at
the end of fiscal 2002. This reflects payments from several clients in advance of the work
being performed.

For fiscal 2002, income taxes payable
were up $6.1 million over last year receivable balance of $979,000, as a result of an
increase in the profitability of CGIs Canadian operations compared to fiscal 2001.

The short and long-term portions of
the future income tax liabilities were up $55.3 million of which $29.6 million resulted
from contract costs and other long-term assets capitalized in the year. Another $18.4
million was recorded as a result of the difference between the tax and carrying values of
contract costs and other long-term assets. Finally, another $4.8 million was credited in
respect to the tax credits on salaries that had been accrued at year-end.

Deferred credits and other long-term
liabilities decreased by $9.7 million in fiscal 2002 as a result of the following factors.
First, incentives granted to Desjardins and Laurentian Bank in fiscal 2001 were used
during fiscal 2002. Also, additions to deferred credits for new incentives granted, in the
form of rebates, as part of the Firemans Fund outsourcing contract for $23.7 million
in the first quarter of 2002, and the discount granted to a Canada Post subsidiary for
$15.7 million in the last quarter of 2002, increased the balance but were offset by the
portion used by these clients, totaling $6.8 million in fiscal 2002. The remaining
variance in this account is related to the change in the US currency rate that affected
the US dollar portion of the deferred credits.

Shareholders equity increased
by $276.5 million between September 30, 2001 and September 30, 2002.

A portion of the increase comes from
the net earnings of $135.8 million recorded during fiscal 2002. The capital stock balance
increased as well between the two dates, resulting from the public issuance of 11,110,000
shares on December 20, 2001, for net proceeds of $119.5 million, which was discussed
earlier in the Other significant developments section.

Foreign currency translation
adjustment increased by $10.5 million in the year reflecting the currency exchange rate
differences for CGIs self-sustaining foreign subsidiaries. The Canadian currency
rate vis-à-vis the US dollar increased to 1.5810 at September 30, 2002, from 1.5712
at September 30, 2001. The UK pound increased from 2.3105 at September 30, 2001, to 2.4705
at September 30, 2002, and the Euro increased from 1.4497 at September 30, 2001, to 1.5494
at September 30, 2002.

|CGI GROUP INC. 2002 | 31
|------------------- | --

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managements
discussion and analysisof financial position and results of operationsFiscal
year ended September 30, 2002

Analysis of financial condition
and cash flows
Cash and cash equivalents on September 30, 2002 were up by $58.2
million or 126.5% over September 30, 2001. As at September 30, 2000, this balance
represented $49.3 million. The drivers of the September 30, 2002, increase compared to
September 30, 2001, and the decrease between September 30, 2001, and September 30, 2000,
are explained below.

|(in '000 of Canadian dollars) | YEAR ENDEDSEPTEMBER 30,2002$ |          | YEAR ENDEDSEPTEMBER 30,2001$ |          | YEAR ENDEDSEPTEMBER 30,2000$ |        
|----------------------------- | ---------------------------- | -------- | ---------------------------- | -------- | ---------------------------- | -------
|Cash provided by              |                              |          |                              |          |                              |        
|operating activities          |                              | 177,447  |                              | 174,002  |                              | 67,550 
|Cash provided by (used for)   |                             
|financing activities          |                              | 92,894   |                              | (15,821  | )                            | (11,176
|Cash used for investing       |                             
|activities                    |                              | (215,603 | )                            | (157,751 | )                            | (50,331
|Foreign exchange gain (loss)  |                             
|on cash held in foreign       |                             
|currencies of self-sustaining |                             
|subsidiaries                  |                              | 3,475    |                              | (3,763   | )                            | 1,069  
|                             
|Net change in cash            |                             
|and cash equivalents          |                              | 58,213   |                              | (3,333   | )                            | 7,112  
|                             

Cash provided by operating activities
in fiscal 2002 was similar to the previous year. The Companys net earnings for the
year increased by 116.3%, despite higher depreciation and amortization of fixed assets and
amortization of contract costs and other long-term assets, but this was offset by higher
usage by the outsourcing clients of their rebates by $35.6 million during the period. The
net change in non-cash working capital items amount was lower by $40.0 million compared
with the 12-month period ended September 30, 2001. The main reasons are the reduction of
the integration provision liability provisioned for the IMRglobal acquisition and an
increase of work in progress. The use of cash was offset, however, by the increase in the
level of prepayments received from outsourcing clients, by an increase of the payable
income taxes provision and by an improvement in the DSO by 20 days during the year. The
cash provided by operating activities between fiscal 2001 and fiscal 2000 increased by
$106.5 million. The change came from the increase by 12.8% in net earnings, along with
increases in the depreciation and amortization of fixed assets, in the amortization of
contract costs and other long-term assets, in the future income tax balances, and in the
variance from the changes in non-cash working capital items. The change in non-cash
working capital items was due to an increase in work in progress, which resulted from the
increased business volumes, business acquisitions and major outsourcing contracts signed
in fiscal 2001. Accounts payable and accrued liabilities increased in the normal course of
business.

In fiscal 2000, the net change in
non-cash working capital items reflected mainly a decrease in accounts payable and accrued
liabilities related to the decrease in the operating expenses year over year.

In fiscal 2002, cash provided by
financing activities was $92.9 million, compared with $15.8 million used for financing
activities in the prior year. This year-over-year increase of $108.7 million reflects two
significant events. On December 20, 2001, the Company issued 11,110,000 Class A
subordinate shares at $11.25 per share for net proceeds of $119.5 million. Offsetting in
part the cash raised in this offering was the repayment of a US$20 million Libor debt
advance in the fourth quarter of fiscal 2002 and payments on capital leases held by the
Company. The exercise of stock options during the year also contributed to the increase in
cash provided by financing activities. In 2001, the $65.0 million debt repayment was
related to the reimbursement of outstanding long-term debt of companies acquired during
2001 (mostly Star Data Systems Inc. and IMRglobal). Offsetting this draw down of the cash
balance in fiscal 2001 was an amount of $54.2 million of net proceeds from the issuance of
6.4 million shares. This resulted primarily from the exercise of preemptive rights by two
majority shareholders of the Company, pursuant to the IMRglobal acquisition.

Cash used for investing activities
was up $57.9 million in fiscal 2002 reflecting investments made during the year as part of
large outsourcing contracts signed (mostly Firemans Fund and Canada Post), including
an amount used for the start-up of the joint venture Innovapost, the acquisition of five
niche companies and the purchase of fixed assets (mostly the installation costs for the
fit-up of the E-Commerce Place in Montreal and the development costs of software that will
be used internally). More information on cash used for purchase of fixed assets and
contract costs and other long-term assets is discussed in the earlier section,
Review of balance sheets. Cash used for investing activities was offset by
proceeds of $10.4 million received in the sale of the Companys Japanese and
Australian operations. Additionally, the Company disbursed $20.1 million for five business
acquisitions in fiscal 2002, as compared to $141.0 million for 10 business acquisitions
along with four joint venture investments in fiscal 2001. The cash used for investing
activities in fiscal 2001 totaled $157.8 million up from $50.3 million in fiscal 2000.
Business acquisitions had increased to $86.4 million in 2001, up from $18.4 million in
fiscal 2000, reflecting the 10 business acquisitions the Company had made, along with four
joint venture investments, compared to two business acquisitions in fiscal 2000. The
increase in the cash used for contract costs and other long-term assets in fiscal 2001 was
a result of the costs incurred as part of the outsourcing contracts signed in fiscal 2001,
including those with Desjardins, Laurentian Bank, Sun Life and GrafTech International Ltd.

|32 | CGI GROUP INC. 2002
|-- | -------------------

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managements
discussion and analysisof financial position and results of operationsFiscal
year ended September 30, 2002

Liquidity and other
financial resources

|(in '000 of Canadian dollars)             |                  | TOTAL
        COMMITMENT
        $ | AVAILABLE AT
        SEPTEMBER 30,
        2002
        $ | OUTSTANDING AT
        SEPTEMBER 30,
        2002
        $ | AVAILABLE AT
        SEPTEMBER 30,
        2001
        $ | OUTSTANDING AT
        SEPTEMBER 30,
        2001
        $
|----------------------------------------- | ---------------- | ---------------------------------- | --------------------------------------------------------- | ----------------------------------------------------------- | --------------------------------------------------------- | -----------------------------------------------------------
|Unsecured revolving credit facility       |                  | 225,000                            | 222,796                                                   | 2,204                                                       | 199,050                                                   | 25,950                                                     
|Lines of credit (Bank of Montreal)        |                  | 25,000                             | 23,342                                                    | 1,658                                                       | 23,350                                                    | 1,650                                                      
|Lines of credit (BC Central Credit Union) |                  | 500                                | 500                                                       | --                                                          | 500                                                       | --                                                         
|Other                                     | (Sept.30, 2002)  | 2,471                              | 2,471                                                     | --                                                          | --                                                        | --                                                         
|                                          | (Sept. 30, 2001) | 3,250                              | --                                                        | --                                                          | 2,350                                                     | 900                                                        

CGI maintains a strong balance sheet
and cash position, which together with bank lines are sufficient to support the
Companys growth strategy and represent a competitive strength when proposing on
outsourcing contracts. If these resources need to be augmented due to the financing
requirements related to new large outsourcing contracts or large acquisitions, significant
additional cash requirements would likely be financed by the issuance of debt and/or
equity securities. At September 30, 2002, cash and cash equivalents were $104.2 million
and the total credit facility available amounted to $249.1 million, compared with $225.3
million at the same time in 2001. As a Libor advance of US$20 million was reimbursed
during the last quarter of the fiscal year 2002, the financing available under both the
unsecured revolving credit facility and available lines of credit with the Bank of
Montreal were increased in comparison to September 30, 2001.

The bank credit facility contains
certain covenants, which require the Company to maintain certain financial ratios. As at
September 30, 2002, and September 30, 2001, the Company met these ratios.

Under a new credit facility closed
subsequent to year-end, the Company has access to a $150 million revolving credit facility
for the operating activity needs and working capital purposes and to a $265 million
three-year term revolving credit facility for financing of acquisitions and outsourcing
contracts. The Company has also access to a $25 million uncommitted operating facility for
cash management purposes. The $150 million revolving credit facility, at the option of the
lenders, can be renewed on an annual basis for an additional year or have, at the
initiative of the Company, the balance outstanding on this credit facility locked into a
two-year term loan.

Commitments

|COMMITMENT TYPES
        (in '000 of canadian dollars) | TOTAL MINIMAL LEASE
        PAYMENTS DUE UNTIL 2007
        $
|------------------------------------------------------ | -------------------------------------------------------------
|Operating leases                                       |                                                              
|Rental of office space                                 | 742,466                                                      
|Computer equipment                                     | 93,511                                                       
|Long-term service agreements                           | 57,110                                                       

CGI is committed under the term of
operating leases with various expiration dates, primarily for rental of premises, computer
equipment used in outsourcing contracts and long-term service agreements in the aggregate
amount of $893.1 million. Of this total amount, rental of office space represents $742.5
million; computer equipment represents $93.5 million and long-term service agreements,
$57.1 million. The increase in the property leases compared to commitments as of September
30, 2001, reflects CGI having entered into a 20-year lease with E-Commerce Place in
Montreal. This commitment represents $472.1 million. As part of its relocation to
E-Commerce Place, CGI has been receiving provincial tax credits on salaries since May 11,
2000, which are deducted from the costs of services, selling and administrative expenses
since then. The Company will be receiving these tax credits, representing up to $12,500
per year for each eligible employee relocated to E-Commerce Place, until fiscal 2010
inclusively. Further details can be found in Note 3 to the Consolidated Financial
Statements.

Computer equipment leases are related
to hardware leased from manufacturers or financial institutions in the course of business
activities. As part of the outsourcing agreements in particular, clients agree to take
back the computer equipment in the case of early contract termination.

Critical accounting policiesRevenue recognition
The Company provides two broad ranges
of services: outsourcing services (management of IT and business functions) and IT
consulting services (systems integration and consulting). The Companys revenue is
principally derived from outsourcing services.

Revenue from outsourcing contracts is
based on the services performed or information processed during the period in accordance
with contract terms and the agreed-upon billing rates applied to the consumed service
metrics. In some cases, the Company bills customers prior to performing the service,
resulting in deferred revenue which is presented as a current liability in the
Consolidated Financial Statements. Reimbursements, including those relating to travel and
other out-of-pocket expenses, and other similar third

|CGI GROUP INC. 2002 | 33
|------------------- | --

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managements
discussion and analysisof financial position and results of operationsFiscal
year ended September 30, 2002

party costs, such as the cost of
hardware and software resales, are included in revenue and the corresponding expense is
included in costs of services.

For time and materials and level of
effort types of contracts, revenue is recognized as the services are provided. For
cost-based contracts, revenue is recorded as reimbursable costs are incurred. These types
of contracts are generally entered into with customers in the context of IT consulting
services.

Revenue on fixed-price contracts is
recognized on the basis of the estimated percentage-of-completion of services rendered
that reflects the extent of work accomplished. This type of contract is generally entered
into for systems integration services. Management estimates the percentage-of-completion
by reference to measures of performance that are reasonably determinable and are directly
related to the activities critical to completion of the contract. Management measures
performance principally based on the labor hours spent on the contract over the total
estimated labor hours for the contract. The Company uses this method of revenue
recognition as projected contract revenue and costs may reasonably be estimated based on
the Companys business practices, methods and historical experience. This method
requires estimates of costs and profits over the entire term of the contract. Management
regularly reviews underlying estimates of project profitability; revisions to estimates
are reflected in the statement of earnings in the period in which the facts that give rise
to the revision become known. Provisions for estimated losses, if any, are recognized in
the period in which the loss is determined. Contract losses are measured as the amount by
which the estimated costs of the contract exceed the estimated total revenue from the
contract.

Occasionally, the Company sells
software licenses. Revenue from the sale of software licenses is recognized when the
product is delivered, no significant vendor obligations remain and the collection of the
agreed-upon fee is probable. Where license agreements include multiple elements, revenue
from sale of licenses is recognized on the same basis, provided the services do not
include significant customization to the base product. In these cases, revenue is
recognized over the period of delivery. Revenue from software maintenance and support
agreements is recognized on a straight-line basis over the term of the related agreements.

Contract costs and other long-term assets
Contract costs and other long-term assets
include principally contract costs, cost of software acquired and developed and software
license acquisition costs.

Contract costs are incurred in the
course of two to 10-year IT management contracts. These assets are recorded at cost and
amortized using the straight-line method over the term of the respective contracts.
Contract costs principally comprise the following:

|a) |  | Incentives granted to clients upon signature of long-term outsourcing contracts.
               Occasionally, incentives may be granted either in the form of cash payments,
               issuance of equity instruments, or rebates granted primarily over a transition
               period as negotiated in the contract. In the case of an incentive in the form of
               an issuance of equity instruments, cost is measured at the estimated fair value
               of the equity instruments issued. For incentives in the form of rebates, cost is
               measured at the value of the financial commitment granted and a corresponding
               deferred credit is recorded. As services are provided to the customer, the
               deferred credit is reversed in the statement of earnings and recognized as
               revenue. Amortization of the incentives is presented as a reduction of revenue;
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b) |  | Estimated fair value of long-term outsourcing contracts and/or customer lists
               acquired through business acquisitions; the estimated fair value is determined
               as part of the purchase price allocation process in the context of business
               acquisitions; and,
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|c) |  | Transition costs incurred during the transition period on long-term outsourcing
               contracts.
|-- |  | ---------------------------------------------------------------------------------------------------------

Costs of software acquired and
developed include software specifically designed or acquired to provide long-term
outsourcing contracts to clients or groups of clients. Costs of software developed are
capitalized only after technological feasibility is established. Software acquired and
developed is recorded at cost and amortized on a straight-line basis over its estimated
useful life.

Costs of software licenses include
licenses acquired for the purpose of certain long-term outsourcing contracts. Software
licenses are recorded at cost and are amortized on a straight-line basis over their
respective contract terms, estimated useful lives or based on consumption.

Goodwill
Goodwill represents the excess of the
purchase price over the fair values of the net assets of entities acquired at the
respective dates of acquisition. On October 1, 2001, the Company adopted prospectively the
new recommendations of the CICA Handbook Sections 1581, Business Combinations, and
3062, Goodwill and Other Intangible Assets. Accordingly, the Company discontinued
the amortization of goodwill as of October 1, 2001. Prior to October 1, 2001, goodwill was
amortized on a straight-line basis over its expected useful life of 20 years. For business
combinations occurring after June 30, 2001, the Company did not amortize the resulting
goodwill, consistent with transition recommendations of Section 1581.

|34 | CGI GROUP INC. 2002
|-- | -------------------

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managements
discussion and analysisof financial position and results of operationsFiscal
year ended September 30, 2002

Goodwill is tested annually, or more
frequently if impairment indicators arise, for impairment in relation to the fair value of
each reporting unit to which goodwill applies and the value of other assets in that
reporting unit. An impairment charge is recorded for any goodwill that is considered
impaired.

During the second quarter ended March
31, 2002, the Company completed the transitional impairment test and concluded that no
goodwill impairment charge needed to be recorded. The Company intends to perform its
annual review of goodwill as of September 30 of each year. Based on the impairment test
performed as of September 30, 2002, the Company concluded that no goodwill impairment
charge was required.

Deferred credits
Deferred credits principally comprise
the unused portion of rebates granted by the Company to customers under the terms of
certain long-term outsourcing contracts (see Contract costs and other long-term assetsdescribed above).

Stock option plan
The Company has a stock option
compensation plan, which is described in Note 7 to the Consolidated Financial Statements.
No compensation expense is recognized for this plan when stock options are granted to
employees and directors. Any consideration paid by employees and directors on exercise of
stock options is credited to share capital.

On April 1, 2002, the Company early
adopted the recommendations of CICA Handbook Section 3870, Stock-Based Compensation and
Other Stock-Based Payments. This section establishes standards for the recognition,
measurement and disclosure of stock-based compensation made in exchange for goods and
services and requires the use of the fair value method to account for awards to
non-employees and direct awards of stock to employees and encourages, but does not
require, the use of the fair value method to account for stock-based compensation costs
arising from awards to employees. The section also requires pro forma disclosures relating
to net earnings and earnings per share figures as if the fair value method of accounting
had been used. The Company has chosen not to use the fair value method to account for
stock-based compensation costs arising from awards to employees. The pro forma disclosure
is presented in Note 7 to the Consolidated Financial Statements.

Risks and uncertainties
While management is positive about the Companys long-term prospects, the following risks
and uncertainties should be considered when evaluating CGIs potential:

The competition for
contractsCGI has a disciplined approach to management of all aspects of its
business, with an increasing proportion of its operations codified under ISO 9001
certified processes and in corporate manuals. These processes were developed to help CGI
ensure that its employees deliver services consistently according to the Companys
high standards and they are based on strong values underlying its client-focused culture.
These processes contribute to CGIs high contract win rate and renewal rate.
Additionally, the Company has developed a deep strategic understanding of the six economic
sectors it targets, and this helps enhance its competitive position. CGIs critical
mass and end-to-end IT services have qualified it to make proposals on large IT and
business process outsourcing contracts across North America and in Europe.

The long sales cycle for major
outsourcing contractsThe average sales cycle for large outsourcing contracts
typically ranges from six to 18 months, with some extending to 24 months.

Foreign currency riskThe
increased international business volume could expose CGI to greater foreign currency
exchange risks, which could adversely impact its operating results. CGI has in place a
strategy to protect itself from currency fluctuations, to the extent possible, against
foreign currency exposure.

Business mix
variationsFollowing the merger with US-based IMRglobal in July 2001, the greater
proportion of SI&C services in CGIs business mix, versus outsourcing, may result
in greater quarterly revenue variations. However, CGIs efforts in the US market
place are aimed at developing its capability to deliver an end-to-end IT outsourcing
offering. As a result of this transition, CGI expects to increase the proportion of its
outsourcing business, thus ensuring greater revenue visibility and predictability.

|CGI GROUP INC. 2002 | 35
|------------------- | --

---

managements discussion and analysis
of financial position and results of operationsFiscal year ended September 30, 2002

The availability and cost of
qualified IT professionalsThe high growth of the IT industry results in strong
demand for qualified individuals. Over the years, CGI has been able to successfully staff
for its needs thanks to its solid culture, strong values and emphasis on career
development, as well as performance-driven remuneration. In addition, CGI has implemented
a comprehensive program aimed at attracting and retaining qualified and dedicated
professionals and today, the Company is a preferred employer in the IT services industry.
CGI also secures access to additional qualified professionals through outsourcing
contracts and business acquisitions.

The ability to successfully
integrate business acquisitions and the operations of IT outsourcing clientsThe
integration of acquired operations has become a core competency for CGI, which has
acquired a significant number of companies over the past 15 years. The Companys
disciplined approach to management, largely based on its ISO 9001 certified management
frameworks, has been an important factor in the successful integration of human resources
of acquired companies and the IT operations of outsourcing clients. As at the end of
fiscal 2002, the vast majority of CGIs operations had received ISO 9001
certification.

The ability to continue developing
and expanding service offerings to address emerging business demand and technology
trendsCGI remains at the forefront of developments in the IT services industry,
thus ensuring that it can meet the evolving needs of its clients. The Company achieves the
aforementioned through: its specialization in six targeted economic sectors; its
non-exclusive commercial alliances with hardware and software vendors and strategic
alliances with major partners; its development of proprietary IT solutions to meet the
needs of clients; regular training and sharing of professional expertise across its
network of offices; and business acquisitions that provide specific knowledge or added
geographic coverage.

Material developments regarding
major commercial clients resulting from such causes as changes in financial condition,
mergers or business acquisitionsWith the exception of BCE Inc., its subsidiaries
and affiliates, no one company or group of related companies represents more than 10% of
CGIs total revenue. See Note 13 to the Consolidated Financial Statements.

Potential liability if contracts
are not successfully carried outCGI has a strong record of successfully meeting
or exceeding client needs. The Company takes a professional approach to business, and its
contracts are written to clearly identify the scope of its responsibilities and to
minimize risks.

Credit risk concentration with
respect to trade receivables is limited due to the Companys large client
baseThe Company generates a significant portion of its revenue from a
shareholders subsidiaries and affiliates, namely BCE Inc. Management does not
believe that the Company is subject to any significant credit risk. The Company operates
internationally and is exposed to market risks from changes in foreign currency rates.
Other than the use of financial products to deliver on its hedging strategy, the Company
does not trade derivative financial instruments.

Outlook
CGI expects to be able
to deliver continued growth in fiscal 2003. The Companys strategy will continue to
be based on a balanced mix of its four pillars of growth, namely organic growth through
smaller contracts and projects, organic growth through large outsourcing contract wins,
acquisitions and equity investments at the business unit level and large acquisitions.

CGI will continue to leverage its
flexible outsourcing delivery model in order to secure IT and business process outsourcing
contracts. CGIs solid balance sheet and liquidity position represent strength when
bidding on acquisitions and large outsourcing contracts. CGI is active in reviewing
potential acquisition candidates to increase its critical mass in the US and Europe,
particularly the UK. The Company believes that there are many acquisition opportunities
available, but remains committed to its financial, operational and cultural criteria, and
will not sacrifice these for short term or potential gain.

Based on information known today
about current market conditions and demand, and the adjustment made to comply with the
EITF 01-9 of the Financial Accounting Standards Board, the Company has provided the
following guidance for the fiscal year ending September 30, 2003. This guidance is before
the effect of potential large outsourcing contracts or large acquisitions, contributing
more than $100 million per year in annual revenue. Base revenue for the year is expected
to be between $2.4 billion and $2.6 billion, representing between 11% and 20% growth over
fiscal 2002 results. Net earnings per share should be in the range of $0.43 to $0.47.

Margin improvement remains among
CGIs most important financial objectives. Improvements during coming quarters will
be driven by further synergies from large outsourcing contracts, ongoing integration of
acquisitions and a gradual reduction in selling, general and administration expenses.

|36 | CGI GROUP INC. 2002
|-- | -------------------

---

managements discussion and analysis
of financial position and results of operationsFiscal year ended September 30, 2002

Forward-looking statements
All statements in this MD&A that do not directly and exclusively relate to historical
facts constitute forward-looking statements within the meaning of that term in
Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of
the United States Securities Exchange Act of 1934, as amended. These statements represent
CGI Group Inc.s intentions, plans, expectations, and beliefs, and are subject to
risks, uncertainties, and other factors, of which many are beyond the control of the
Company. These factors could cause actual results to differ materially from such
forward-looking statements.

These factors include and are not
restricted to the timing and size of contracts, acquisitions and other corporate
developments; the ability to attract and retain qualified employees; market competition in
the rapidly-evolving information technology industry; general economic and business
conditions, foreign exchange and other risks identified in the MD&A in CGI Group
Inc.s Annual Report or Form 40-F filed with the U.S. Securities and Exchange
Commission, the Companys Annual Information Form filed with the Canadian securities
authorities, as well as assumptions regarding the foregoing. The words
believe, estimate, expect, intend,
anticipate, foresee, plan, and similar expressions and
variations thereof, identify certain of such forward-looking statements, which speak only
as of the date on which they are made. In particular, statements relating to future growth
are forward-looking statements. CGI disclaims any intention or obligation to publicly
update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise. Readers are cautioned not to place undue reliance on these
forward-looking statements.

|CGI GROUP INC. 2002 | 37
|------------------- | --

---

management's and auditors' reports

Managements ReportThe management of the Company is responsible for the
preparation and integrity of the financial statements contained in the Annual Report.
These statements have been prepared in accordance with accounting principles generally
accepted in Canada and necessarily include some amounts that are based on
managements best estimates and judgment. Management considers that the statements
present fairly the financial position of the Company, the results of its operations and
its cash flows.

To
fulfill its responsibility, management developed and continues to maintain systems of
internal accounting controls and establishes policies and procedures to ensure the
reliability of financial information and to safeguard assets. The internal control systems
and financial records are subject to reviews by external auditors during the examination
of the financial statements.

The
Audit Committee of the Board of Directors meets regularly with the external auditors and
with management to approve the scope of audit work and assess reports on audit work
performed. The financial statements have been reviewed and approved by the Board of
Directors on the recommendation of the Audit Committee.

|[Signed]Serge GodinChairman and Chief Executive Officer |  | [Signed]André ImbeauExecutive Vice-President and Chief Financial Officer | 
|------------------------------------------------------- |  | ------------------------------------------------------------------------ | 

November 4, 2002

Auditors ReportTo the Shareholders of
CGI Group Inc.        We
have audited the consolidated balance sheets of CGI Group Inc. as at September 30, 2002
and 2001 and the consolidated statements of earnings, retained earnings and cash flows for
each of the years in the three-year period ended September 30, 2002. These financial
statements are the responsibility of the Companys management. Our responsibility is
to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with Canadian generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable assurance
whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial
statement presentation.

In
our opinion, these consolidated financial statements present fairly, in all material
respects, the financial position of the Company as at September 30, 2002 and 2001 and the
results of its operations and its cash flows for each of the years in the three-year
period ended September 30, 2002 in accordance with Canadian generally accepted accounting
principles.

[Signed]

Samson Bélair
Deloitte & ToucheChartered Accountants

Montreal, QuebecNovember 4, 2002

|38 | CGI GROUP INC. 2002
|-- | -------------------

---

# SIGNATURES

Pursuant
to the requirements of the Exchange Act, the registrant certifies that it meets all of the
requirements for filing on Form 40-F and has duly caused this annual report to be signed
on its behalf by the undersigned, thereto duly authorized.

|                           | Groupe CGI Inc./CGI Group Inc.                                                                                                        
|-------------------------- | --------------------------------------------------------------------------------------------------------------------------------------
|Date:    February 13, 2003 | By /s/ Paule Doré
       Name:   Paule Doré
       Title:    Executive Vice President and
                
    Chief Corporate Affairs

---

# CERTIFICATIONS

I, Serge Godin, certify
that:

|1. | I have reviewed this annual report on Form 40-F of CGI Group, Inc.;
|-- | -------------------------------------------------------------------

|2. | Based on my knowledge, this annual report does not contain any untrue statement
          of a material fact or omit to state a material fact necessary to make the
          statements made, in light of the circumstances under which such statements were
          made, not misleading with respect to the period covered by this annual report;
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Based on my knowledge, the financial statements, and other financial information
          included in this annual report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this annual report;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | The Registrants other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | designed such disclosure controls and procedures to ensure that material
               information relating to the registrant, including its consolidated subsidiaries,
               is made known to us by others within those entities, particularly during the
               period in which this annual report is being prepared;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | evaluated the effectiveness of the Registrants disclosure controls and
               procedures as of a date within 90 days prior to the filing date of this annual
               report (the Evaluation Date); and
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) | presented in this annual report our conclusions about the effectiveness of the
               disclosure controls and procedures based on our evaluation as of the Evaluation
               Date;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | The Registrants other certifying officers and I have disclosed, based on
          our most recent evaluation, to the Registrants auditors and the audit
          committee of Registrants board of directors (and persons performing the
          equivalent function):
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | all significant deficiencies in the design or operation of internal controls
               which could adversely affect the Registrants ability to record, process,
               summarize and report financial data and have identified for the
               Registrants auditors any material weaknesses in internal controls; and
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | any fraud, whether or not material, that involves management or other employees
               who have a significant role in the Registrants internal controls; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | The Registrants other certifying officers and I have indicated in this
          annual report whether there were significant changes in internal controls or in
          other factors that could significantly affect internal controls subsequent to
          the date of our most recent evaluation, including any corrective actions with
          regard to significant deficiencies and material weaknesses.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date: February 13, 2003 | /s/ Serge Godin
     Serge Godin, Chief Executive Officer
|----------------------- | ---------------------------------------------------------

---

I, André Imbeau,
certify that:

|1. | I have reviewed this annual report on Form 40-F of CGI Group, Inc.;
|-- | -------------------------------------------------------------------

|2. | Based on my knowledge, this annual report does not contain any untrue statement
          of a material fact or omit to state a material fact necessary to make the
          statements made, in light of the circumstances under which such statements were
          made, not misleading with respect to the period covered by this annual report;
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Based on my knowledge, the financial statements, and other financial information
          included in this annual report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this annual report;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | The Registrants other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | designed such disclosure controls and procedures to ensure that material
               information relating to the registrant, including its consolidated subsidiaries,
               is made known to us by others within those entities, particularly during the
               period in which this annual report is being prepared;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | evaluated the effectiveness of the Registrants disclosure controls and
               procedures as of a date within 90 days prior to the filing date of this annual
               report (the Evaluation Date); and
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) | presented in this annual report our conclusions about the effectiveness of the
               disclosure controls and procedures based on our evaluation as of the Evaluation
               Date;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | The Registrants other certifying officers and I have disclosed, based on
          our most recent evaluation, to the Registrants auditors and the audit
          committee of Registrants board of directors (and persons performing the
          equivalent function):
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | all significant deficiencies in the design or operation of internal controls
               which could adversely affect the Registrants ability to record, process,
               summarize and report financial data and have identified for the
               Registrants auditors any material weaknesses in internal controls; and
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | any fraud, whether or not material, that involves management or other employees
               who have a significant role in the Registrants internal controls; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | The Registrants other certifying officers and I have indicated in this
          annual report whether there were significant changes in internal controls or in
          other factors that could significantly affect internal controls subsequent to
          the date of our most recent evaluation, including any corrective actions with
          regard to significant deficiencies and material weaknesses.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date: February 13, 2003 | /s/ André Imbeau
     André Imbeau, Chief Financial Officer
|----------------------- | -----------------------------------------------------------

---

# EXHIBIT INDEX

| | 23.1 |  | Consent
of Samson Bélair / Deloitte & Touche
| | ---- |  | --------------------------------------------

| | 99.1 |  | Certification
of the Registrants Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 99.2 |  | Certification
of the Registrants Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 99.3 |  | Comment by auditors
for U.S. readers on Canada-U.S. reporting difference.
| | ---- |  | -------------------------------------------------------------------------