**Exhibit 99.1**

[*The following is a free English translation of theFrench language*Rapport du President du Conseil d’Administration*for information purposes only, with no binding orother effect*]

**G E N E S Y S S.A.**

**A French *société anonyme*with a capital of €69,798,286Registered office: “L’Acropole”, 954/980 Avenue Jean Mermoz34000 MontpellierRegistry of Commerce andCompanies of Montpellier 339 697 021**

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**REPORTOF THE CHAIRMAN OF THE BOARD OF DIRECTORS ON THE PREPARATION AND ORGANIZATIONOF THE BOARD’S WORK, ON ANY LIMITATIONS ON THE POWERS OF THE MANAGING DIRECTORAND ON THE CONTROL PROCEDURES ESTABLISHED BY THE COMPANY**

Ladies and Gentlemen:

In accordance with the new provisions of Article L. 225-37paragraph 6 of the French Commercial Code, we are reporting on the followingitems:

o                 the preparation and organization of the workof your Board of Directors;

o                 the internal control procedures set up by theCompany;

o                 any limitations on the powers of the managingdirector established by the Board of Directors.

The Chairman has mandated the Company’s Legal and Financial Departmentsto conduct due diligence and preparatory work and to report to him regardingtheir findings. The Company’s statutory auditors have received informationregarding this preparatory work and due diligence.

**I.**                                         Preparationand organization of the work of the Board of Directors 

On November 7, 2003,the Board of Directors adopted internal rules based on the recommendationsof the Bouton report, the purpose of which is to clarify the terms andconditions of functioning of the board under general principles of corporategovernance. The internal rules supplement the provisions of law and theby-laws to which the Board of Directors of the Company is subject. They are addressedto members of the Board of Directors of the Company, permanent representativesof directors who are legal entities, censors and, more generally, to any persontaking part in or attending the board’s meetings, whether occasionally or on aregular basis.

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***1.             Specific rules regarding thefunctioning and organization of the board and application***

1.1           Composition of the Board of Directors

The Company’s by-laws provide that the Board ofDirectors may have from 3 to 18 members. As of today, the Board is composed of5 members.

Details on the composition of the Board of Directorsappear as an annex hereto.

In accordance with legal provisions, following theshareholders’ meeting of June 28, 2005, which renewed the appointment of Mr. Legrosas a member of the Board of Directors, the Board of Directors, on the same day,decided to renew the appointment of Mr. Legros as Chairman and ManagingDirector of Genesys S.A.

The Board reviewed the current situation of each ofthe directors in order to assess his characterization as an independentdirector based on the criteria listed in the internal rules. The directors complying with the followingconditions shall be deemed independent. Directors shall deemed to beindependent if:

·                  theyare not, and have not during the preceding five years been, an employee orcorporate officer of the Company, an employee or corporate officer of itsparent company or a company it consolidates;

·                  theyare not a corporate officer of a company of which the Company is a director,directly or indirectly, or in which an employee appointed as such or acorporate officer of the Company (current officer or having been an officer forless than five years) is a director;

·                  theyare not a client, a supplier, a corporate banker or a significant financing bankerof the Company or of its group, or for which the Company or its grouprepresents a substantial portion of its business;

·                  theyhave no close family relationship with a corporate officer;

·                  theyhave not been an auditor of the Company during the preceding five years (Article L.822-12 of the French Commercial Code).

·                  theyhave not been a director of the Company for more than twelve years.

Fordirectors holding 10% or more of the share capital or voting rights of theCompany or representing a legal entity holding such an interest, the Boardshall decide on their independence by taking into account the composition ofthe Company’s capital and the existence of a potential conflict of interestsinto account.

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Therefore, under these criteria, the Board of Directorsof the Company includes three independent directors: Patrick Jones, FrédéricSpagnou and Thomas Abbott.

The shareholders’ meeting of June 28, 2005ratified the nomination of Mr. Spagnou as a member of the Board ofDirectors for a term of three years.

1.2                                 Callingand holding of the Board’s meetings

During the fiscal year, the Board of Directors met 8 times and theparticipation rate was an average of 95%.

Theaverage time period for notices calling meetings of the Board of Directors wasapproximately 10 days prior to the meeting date.

Thedirectors may be represented at the Board’s meetings by another director. Thepower must be given in writing. During the fiscal year 2005, no Director usedthis right of representation.

TheChairman presides at the Board meetings or, if he is absent, a Vice-Chairman ora director designated by the Board of Directors acts as Chairman of the meeting.Of the 8 meetings of the Board of Directors held during fiscal year 2005, allwere presided over by the Chairman.

TheCompany’s by-laws provide directors the option of participating in thedeliberations of the Board through videoconference. In accordance with theby-laws and the internal rules, the directors who participate in the Board’sdeliberations through such means shall be deemed to be present for purposes ofcalculation of the quorum and majority, except for the adoption of thefollowing decisions: preparation of the annual financial statements,consolidated financial statements, management report, appointment or dismissalof the Chairman and determination of his compensation, determination of theremuneration or dismissal of the Managing Director, appointment and dismissalas well as determination of the compensation of Deputy Managing Directors. Thisoption was used during the past fiscal year.

In accordance with the provisions of Article L. 225-238 ofthe French Commercial Code, the statutory auditors have also been convened tothe Board’s meetings called to examine and establish the interim financialstatements and the annual financial statements.

1.3                                 Informationof Directors

TheChairman has consistently communicated to the directors, within a satisfactoryperiod of time, all information concerning the Company of which he was awareand the communication of which he deemed to be relevant in order to enable themto fully exercise their responsibilities.

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1.4                                 Evaluationof the performance of the Board of Directors

Followingthe adoption of its internal rules, the Board of Directors conducted anevaluation of its organization of work and achievements. A questionnaire wasprepared and distributed to the members of the Board of Directors in order toobtain the opinions of the members, in particular with respect to thefollowing:

·                  frequencyof meetings and quality of their organization;

·                  noticeperiods and quality of information provided in advance of meetings;

·                  contentsof the agenda and the length of meetings;

·                  responsesto questions raised;

·                  qualityof minutes; and

·                  implementationof decisions taken by the Board.

1.5                                 Principalactivities of the Board of Directors in 2005

TheBoard of Directors studied the Company’s financial and commercial results eachquarter. The meetings of the Board of Directors also addressed the strategy ofthe Group, remuneration methods and legal issues (options to subscribe shares,implementation of various codes within the Company, agreements, guarantees,etc.). In addition, the Board calls the annual meeting of shareholders, votesthe budget of the Group and discusses questions of corporate governance.Finally, the Board addresses issues that may impact the conduct of the Company’sbusiness as they may arise at any time.

1.6                                 Duediligence supporting the preparation of this report

Thisreport has been prepared with the assistance of the Financial andAdministrative departments and on the basis of work conducted by the InternalAudit department. It has been discussed in a meeting with our statutoryauditors.

***2.             Interestedparty transactions***

Duringthe fiscal year, no new interested party transactions under Article L.225-38of the French Commercial Code, other than agreements relating to ordinarycourse of business transactions, were entered into under arm’s-lengthconditions; a list of these agreements was presented for authorization to theBoard’s meeting of March 28, 2006.

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***3.******                                      Delegationsregarding sureties, pledges and guarantees***

TheBoard of Directors authorized the Chairman to issue, in the Company’s name,sureties, pledges and guarantee up to a global annual amount of €1,000,000 andeach surety, pledge and guarantee may not exceed €200,000.

Thisauthorization, granted for a 12-month period, expires on March 30,2006. At the close of the fiscal year, the Chairman had not granted any suchsurety, pledge or guarantee.

Underthe terms of this annual authorization, the Board of Directors at its meetingof January 23, 2006, authorized the Chairman and Managing Director toprovide the necessary guarantees in for the refinancing of the 2001 U.S. $125million credit facility. The authorizations that were granted related to thefollowing agreements:

·                  anAmended and Restated Facilities Agreement;

·                  anAmended and Restated First Demand Guarantee;

·                  anAmended and Restated Pledge over Shares Agreement; and

·                  aConfirmation of Security Agreement.

As a result, the Board of Directors gave full powers to its President,or any other person duly delegated by the President, to negotiate, modify inany way and every point considered appropriate by the President of the Board ofDirectors, and to sign the Amended and Restated Facilities Agreement,the Amended and Restated First Demand Guarantee, the Amended and RestatedPledge over Shares Agreement, and the Confirmation of Security Agreement, aswell as all other documents or guarantees related to these draft agreements,and to agree in the name of the Company to sureties, pledges and guarantees upto a maximum total amount of €100 million.

***4.             Committeescreated by the Board***

TheBoard of Directors has created committees to improve the functioning of theBoard and to support the preparation of its decisions. The Board has thuscreated the following permanent committees: Audit committee, Compensation committee, and Disclosure committee. Thesecommittees meet as often as required.

## 4.1           Audit Committee

Genesys’ audit committee functions to assist theBoard of Directors in verifying (i) the integrity of the Company’s accounts, (ii) the Company’s observance of legal and regulatoryrequirements, (iii) accounting and financial reporting practices of theCompany, (iv) the effectiveness of the Company’s control andcommunications procedures and of the internal controls on financial reporting, (v) theindependence and ability of the firm of independent auditors engaged by theCompany and (vi) the performance of the internal audit functions of theCompany and the services of the independent auditors.

 

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In accordance with NASDAQ regulations, all members ofthe audit committee are independent members of the Board, and have the necessary ability to understand financial concepts. Theaudit committee has adopted a charter that sets forth its responsibilities,which include, in particular:

·                  review and reassess the adequacy of its internal rules annuallyand recommend any proposed changes to the Board of Directors for approval;

·                  review the annual audited financial statementsand internal controls reports with management, including major issues regarding accounting and auditing principlesand practices, as well as the adequacy of internal controls that couldsignificantly affect the Company’s financial statements;

·                  review the analysis prepared by theindependent auditor on significant financial reporting issues as well as theauditor’s judgment made in connection with the preparation of the Company’sfinancial statements;

·                  review with management and the independentauditor the Company’s annual and interim financial statements prior to thefiling of such financial statements with the U.S. Securities and ExchangeCommission or the Autorité des marchés financiers;

·                  discuss the risk evaluation and riskmanagement policies of the Company, in particular the risk of fraud. Thecommittee should also discuss the Company’s major financial risk exposures andthe steps taken by management to monitor and limit such exposures;

·                  review major changes to the Company’s auditing and accountingprinciples and practices as suggested by the independent auditor, any internalauditor or management;

·                  receive regular reports from the independentauditor regarding the auditor’s independence, discuss such reports with the auditor, and if the Audit Committeeso determines, take or recommend that the full Board takes appropriate actionto ensure the independence of the auditor.

·                  decide upon the nomination, remuneration,dismissal and supervise the work of the independent auditors (in particular, toresolve any disagreements between management and the auditor on questionsregarding financial reporting orinternal controls) in connection with the preparation and delivery of any auditreport, verification or attestation of the Company; the independent auditorsmust report directly to the committee. The audit committee must also proposethe appointment or dismissal of the independent auditors for consideration andapproval by the Company’s shareholders in accordance with French law;

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·                  receive and study, at least once a year, areport prepared by the independent auditors describing: (i) internalcontrol procedures within the firm; (ii) significant questions raised bythe most recent internal quality control or study of the firm by its peers or by any inquest or investigation byadministrative or professional authorities during the preceding five years,concerning one or more independent audits conducted by the firm and all actionstaken with respect to these questions; and (iii) any relationships betweenthe independent auditors and the Company in order to evaluate the independenceof the auditors;

·                  evaluate the work conducted by the independentauditors continually throughout the year, on the basis of the preceding report,in particular the ability, performance and independence of the auditors. Thisevaluation must include a study and evaluation of the principal partner incharge of the audit and take into account the opinions of management and of those members of the personnel of theCompany responsible for the internal audit function;

·                  determine whether the firm of independentauditors has a procedure in place to guarantee the rotation of the principal partner in charge of the audit and of the otherpartners working on the matter in accordance with the independence rules ofthe U.S. Securities and Exchange Commission;

·                  review the appointment and replacement of any senior internal auditor;

·                  reviewthe significant reports to management prepared by any internal auditing departmentand management’s responses to these reports;

·                  meetwith the independent auditorprior to the beginning of the audit to review the scope and staffing of theaudit;

·                  obtainreports from management, the Company’s senior internal auditors and the independentauditor confirming that the Company’s subsidiary/foreign affiliated entitiesare in conformity with applicable laws;

·                  reviewand approve all transactions with related parties in accordance with RegulationS-K, Item 404, of the U.S. Securities and Exchange Commission and discuss the reasons for these transactionswith management and whether appropriate disclosure of these transactions hasbeen made;

·                  reviewand examine the financial results press releases as well as the financialinformation and earnings guidance provided to analysts and rating agencies;

·                  reviewwith the independent auditor the Company’s accounting practices and policiesand any problems encountered in the course of the audit by the auditor. Suchreport shall include: (i) all critical accounting policies and practicesused by the Company, (ii) all alternative treatments in accordance withgeneral accounting principles andwith respect to the practices and policies applicable to material items thathave been discussed with the Company’s management, including the various usesthat may be made of alternative disclosures and treatments, and the treatmentselected by the independent auditor, (iii) all difficulties encountered inthe course of the audit work, including any restrictions on the scope ofactivities or access to required information, (iv) other material writtencommunications between the independent auditor and the Company’s management,including any letter provided by the independent auditor to management and theCompany’s response to that letter, (v) any changes in the scope of theinternal audit as initially planned, (vi) all accounting changes that werenoted or suggested by the auditors but were not adopted (whether they wereconsidered not pertinent or for any other reason), (vii) allcorrespondence between the audit team and its major office regarding audit oraccounting questions or questions regarding internal controls that were raisedby the engagement and (viii) all correspondence between management or theinternal comptroller and the audit firm;

 

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·                  advisethe Board with respect to the Company’s policies and procedures to ensurecompliance with applicable laws and regulations;

·                  reviewwith the Company’s legal counselany legal matters that may have a material impact on the financial statements,the Company’s compliance policies and any material reports or inquiriesreceived from governmental authorities;

·                  meetat least once a year with the Chief Financial Officer, any senior internalauditor and the independent auditor in separate meetings;

·                  establishprocedures for the receipt, retention, and treatment of complaints received bythe Company with regard to accounting, internal accounting or auditing controls, as well as for theconfidential, anonymous submission by employees of concerns regardingquestionable accounting or auditing matters and oversee the implementation ofsuch procedures;

·                  studywith management the proceduresand controls intended to reduce fraud in the Company;

·                  reviewthe compliance programs of the Company,in particular the consideration given to conditions established by law andregulations, and review with management its periodic evaluation of theseprograms. The committee reviews the code of conduct and the programs of theCompany that have been established by management to ensure that this code isrespected. The committee receives reports from the legal department describingsignificant violations of securities laws or any fiduciary duty by the Company;

·                  reviewpresentations made to the committee by the Chief Executive Officer and theChief Financial Officer of the Company during the process of their certification in preparation for the filingof the Company’s public documents regarding any significant deficiencies in thedesign or operation of internal controls or their weaknesses and any fraudinvolving management or other employees who participate in the internalcontrols of the Company;

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·                  establishclear hiring policies for employees or former employees of the independentauditors that respect the regulations of the U.S. Securities and ExchangeCommission and listing standards;

·                  conductan evaluation of its performance at least annually to determine whether it isfunctioning appropriately. The committee shall also consult the independent auditor for their comments on theeffectiveness of the committee;

·                  determineappropriate funding for the payment of compensation by the Company to theindependent auditor and to any outside advisors engaged by the Committee, aswell as for the ordinary expenses of the Committee. The chairman of the auditcommittee prepares a quarterly or biannual report regarding the committee’sreview of this issue;

·                  approvein advance all audit-related contractual commitments and attest that the use ofnon-audit services has been permitted, either by (a) providing expressapproval before an independent auditor is engaged to render audit or permittednon-audit services or (b) by establishing pre-approval policies that are detailed as to the particular service to be providedby an independent auditor. The Committee may delegate its authority topre-approve such commitments to one or more members of the Committee and maydelegate such responsibility to the Company’s management for amounts less than €10,000. The Committee must be informed of all pre-approved commitments;

The responsibilities and powers of the committeedescribed above do not imply any duty or responsibility incumbent upon theaudit committee to organize and conduct the audits or to determine that theannual, quarterly or other accounts of the Company are complete and accurateand prepared in accordance with generally accepted accounting principles, asthis responsibility rests upon management and the independent auditorexclusively. The committee also does not have a duty or responsibility toconduct investigations, to resolve any disputes that may arise betweenmanagement and the independent auditors that do not bear upon the financialreporting procedures or to ensure compliance with laws and regulations and withthe Company’s code of conduct.

During 2005, the audit committee has,in particular:

·                  studiedthe performance of the Company indetail each quarter;

·                  heardfrom the various managers ofdepartments who have a direct influence upon financial decisions;

·                  heardfrom the statutory auditors at each committee meeting;

·                  studiedthe amount of fees charged by the statutory auditors;

·                  studiedthe internal control proceduresof the Company and made recommendations in this regard;

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·                  heardfrom the financial management team (Financial Management, management controls);and

·                  followedthe development of newlegislation in the United States (the Sarbanes-Oxley Act) and in France.

In 2005, the audit committee was made up of threemembers: Patrick Jones, Thomas Abbott and Frédéric Spagnou.

In 2004, the committee met fivetimes and the participation rate at those meetings was 93.34%.

4.2           Compensation Committee

TheBoard of Directors of Genesys has established a Compensation Committee.

Thiscommittee is responsible for:

·                  reviewing and making proposals regarding theremuneration of corporate officers, in particular concerning the variable portion of such remuneration (by defining the rules underwhich that variable portion is determined and by ensuring the consistency ofthose rules with the annual assessment of corporate officers’ performancewith respect to the middle-term strategy of the Company) and all benefits inkind, options to subscribe or purchase shares received from any company of thegroup, provisions relating to their pensions, and all other benefits of anykind;

·                  proposing to the Board allocation rules fordirectors’ fees and the individual amounts of payments to be made in thisrespect to directors, by taking into account the participation of the directorsin the Board and the Committees;

·                  proposing to the Board a global amount fordirectors’ fees to be proposed to the shareholders’ meeting of the Company;

·                  providing to the Board an opinion on thegeneral allocation policy regarding options to subscribe and/or purchase shares that must be reasonable and appropriate and on thestock option plans established by the general management of the Group, inparticular with respect to the rules and recommendations of the Viénot andBouton reports; indicating to the Board its proposal regarding allocation ofoptions to subscribe or purchase shares by setting out the reasons for itschoice as well as its consequences; defining in advance the frequency of issueof the allocations in order to avoid granting options in an opportunistic way;

·                  obtaining information regarding the compensation policies applicable to seniormanagers who are not corporate officers of the Company or other companies ofthe group;

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·                  reviewing any issue that the Chairman maysubmit to it relating to proposed capital increases reserved for employees.

Duringfiscal year 2004, the Compensation Committee has, in particular:

·                  studied the incentive plans for management level employees of the Company;

·                  studied the methods of granting options tosubscribe shares relative to the position of the employee within the Company, the salary received and the targets assigned to theemployee; and

·                  determined the variable portion of theChairman’s compensation with regard to the results for the fiscal year.

The Compensation Committee includes, as of the dateof this report, Thomas Abbott, David Detert, Patrick Jones and FrédéricSpagnou. Only Mr. Detert is not an independent member of the Board ofDirectors during 2005. In 2005, the committee met three times and all the membersattended the meetings.

###### 4.3           DisclosureCommittee

The Board ofDirectors of Genesys has established a Disclosure Committee to review theCompany’s public communications and tomake sure that they are accurate and complete. The Disclosure Committee shallundertake or supervise each of the following actions:

·                  checkingcompliance with the information obligations that the Company is subject to, inparticular with a view to the requirements of applicable stock exchange andfinancial regulations and to giving its opinion on the compliance of theCompany with such obligations;

·                  preparingthe Company’spublications and communications calendar and their model content;

·                  preparingand organizing analysts’meetings;

·                  preparingand organizing pressconferences;

·                  selectingthe media used topublish information (press releases, electronic medias, etc.);

·                  makingsure that the internal collection procedures and procedures for supervision ofthe information to be made public by the Company are defined, guaranteeing thereliability of such procedures, and overseeing compliance with such procedures;

·                  regularlyassessing, under the supervision of the Chief Executive Officer and the ChiefFinancial Officer, the internal collection procedures and procedures forsupervision of information, to recommendingmodifications to such procedures, if any, and overseeing the implementation ofany modifications approved by the Chief Executive Officer and the Chief Financial Officer;

 

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·                  appointing the person or persons in charge of preparingand drafting reports and communications of the Company, who may be, at theCommittee’s discretion, different persons depending on the subject of the reports or communications;

·                  organizingthe training of the persons involved in the process of communicatinginformation about the Company;

·                  reviewingeach draft report or communication of the Company, examining the informationincluded therein and providing an opinion on the advisability of conductingadditional diligence or investigations to verify such information;

·                  providingan opinion on the significance of any event or other information relating tothe Company;

·                  providingan opinion on the advisability of submitting a draft report or communication tothe statutory auditors, legalcounsel or any other third party expert for the validation of informationincluded in such report or communication;

·                  providingan opinion on thenecessity of obtaining approval from the Company’s Board of Directors on thecontent of the draft report or communication; and

·                  approvingthe procedures for publication and distribution of reports or communicationsthat have been approved by theCommittee, as well as the terms and conditions for filing or registrationthereof with the stock exchange authorities.

The DisclosureCommittee of the Company may delegate to one or several of its members thepowers listed above, with theexception of the approval of the final version of the annual report of theCompany (whether as a Document de référence in France or a Form 20-Fin the United States).

The currentmembers of the Disclosure Committee are: François Legros, Mike Savage, JimHuzell, Jim Lysinger, Olivier Fourcade, Denise Persson, Andrew Lazarus, ShellyRobertson, Darden Bell, Jon Pilon, Marine Pouvreau and Patrick Janel.

In 2005, theDisclosure Committee met five times.

###### 4.4           StrategicCommittee

In August 2004, the Board of Directors decided to create a StratigicCommittee. This committee includes the following members: Patrick Jones,Frédéric Spagnou, Thomas Abbott and David Detert.

In 2004, the Strategic Committee met eight times.

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The Strategic Committee is responsible for providing its opinion on themajor strategic orientations of the Company and the Group and on the businessplan and every other important strategic question referred to it by the Boardof Directors.

The Strategic Committee is also responsible for studying in detail thosequestions referred to it with respect to major investment transactions,external growth or divestitures and disposals, and shall provide its opinionregarding these questions to the Board of Directors.

**II.            Internalcontrol procedures**

Internal control is defined by the Companyas the set of procedures implemented by the Board of Directors, the seniormanagers, and the staff of the Company in order to provide the Board reasonableassurance regarding the achievement of the following aims:

·                  reliability of financial and managementinformation

·                  compliance with applicable laws andregulations

·                  completion and due management of itsoperations.

The Company’s definition of internal control issimilar to that of the “COSO” international authoritative document (CommitteeOf Sponsoring Organization of the Treadway Commission, the findings of whichwere published in 1992 in the United States). Please note that, according tothe “COSO” authoritative document, internal controls must give reasonableassurance regarding the achievement of the aims, and cannot, therefore, give anabsolute assurance that they will be achieved.

This report describes the Company’s internalcontrol system. Generally, this system has been prepared from an inventory ofthe existing procedures within the organization and with the support of thefinancial department of the Group. These procedures are applicable to allsubsidiaries within the Group.

2.1           General organization of InternalControl

The Board of Directors and its Committeestake part in the operating of the Group as described in the preceding sectionof this report.

2.1.1                        ManagementCommittee

The Executive Committee, chaired by theChief Executive Officer, meets formally once a month and includes the personsresponsible for each of the main departments of the Group.

This committee reviews the results andactivity of the Company, and decides upon any corrective actions to be implemented.

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2.1.2                        TheDisclosure Committee

This committee, described in detailabove, participates with respect to procedures to establish and reviewfinancial information. It reviews, in particular, the “*Document de Référence*”**(and its equivalent, the Form 20-F,prepared for the U.S. Securities and Exchange Commission).

2.1.3                        InternalAudit

The Internal Audit group is made up of ateam of 3 individuals, located in the United States. The principal tasks ofthis team in 2005 were to assist the Group in complying with the standardsimposed by the U.S. Sarbanes-Oxley Act and the French *Loi de Sécurité Financière*. The Companymust be in full compliance with the standards of Section 404 of theSarbanes-Oxley Act at December 31, 2006. Genesys intends to achieve this objectiveby that date. The Company is already in compliance with Sections 301 and 302 ofthe Sarbanes-Oxley Act.

This team is also responsible forconducting occasional studies at the request of the Audit Committee, thegeneral management or the financial management of the Company.

2.1.4                        Authoritativedocuments

Financial Code of Ethics

The Company has adopted a Financial Codeof Ethics applicable to the Chief Executive Officer and to the Chief FinancialOfficer, as well as to the management controllers and heads of consolidation. TheBoard of Directors is responsible for approving this code and any amendmentsthereto. The Board of Directors may consult the Audit Committee when such codeis to be amended.

Procedures Manual

The Company first established a proceduresmanual in August 2000. This manual lists all accounting procedures andprocesses leading to the preparation of accounting and financial statements. Thismanual was fully revised during fiscal year 2003 in order to take into account,among other elements, the growth of the Group over the preceding years.

During the 2004 and 2005 fiscal years,the Internal Audit team assured that all significant and key procedures weredocumented, and also verified and recommended corrective actions to remedy anyweaknesses discovered in these procedures (see paragraph 2.1.3).

2.2           Internalcontrol of accounting and financial information

Under the authority of the ExecutiveDirector Finance, the Department of Analysis and Planning of the Group and theConsolidation Department are responsible for the collection, analysis andconsistency of the Group’s financial information, as well as all processescontributing to the preparation of the Group’s financial statements.

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2.2.1                        Descriptionof Information System

The information systems used by the Group’sfinancial department and all of our subsidiaries are structured around thefollowing modules:

·                  InvoicingSystem

During fiscal year 2003, we completed theimplementation of this system. This unique and identical system is now used byeach of our entities. In 2004, invoicing for Europe and North America wascentralized in Denver, Colorado, which allowed this service to be even moreefficient. The system, called Gedi, was developed internally by the InformationTechnology Department.

·                  AccountingSystem

The accounting system used is alsoidentical in all of the Group’s subsidiaries (Sun Account by Systems Union). Thissystem has been implemented since 1998 and is systematically installed upon thecreation or acquisition of a new entity. The use of a single system enableseasy maintenance and facilitates setting parameters as they are determined bythe Management Controls of the Group.

·                  Reportingand consolidation systems

Since 2002, Management Controls hasimplemented a unique reporting tool (Skover) in order to centralize, in onedatabase, all management data derived from the various systems. At the end of2003, the Consolidation Department installed new consolidation software(Safran) in order to unify the integration of the data flows common tomanagement and consolidation reporting, and to reduce the time period requiredto establish financial statements. The new system is operational and was usedfor consolidation on December 31, 2003.

Since the beginning of 2004, a singledata set for financial reporting and consolidation is sent each month to theGroup Financial Department and used to populate the consolidation and reportingdatabases.

2.2.2                        Budgetingprocess

·                  BusinessPlan

Each year, the long-term business plan isupdated based on the latest surveys on economic environment and our market. Thisplan is prepared by the Department of Analysis and Planning and supervised bythe Financial Department and the management.

·                  AnnualBudget

The process is initiated each year duringthe month of October by the Group’s Department of Analysis and Planning. Themanagement defines the targets for the forthcoming year according to theBusiness Plan and the performance of the current year.

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Each entity, division and departmentreceives its own objectives and prepares its budget on a monthly basis. Thebudgets are returned to the Department of Analysis and Planning and are thenchecked and validated by the management.

The budgets are then consolidated andpresented at the end of January to the Board of Directors for approval.

·                  Updatingannual budget estimates

The initial budget estimates are updatedevery quarter by taking the most recent performance into account. This process,steered by the Group’s Department of Analysis and Planning, is less formal thanthe process of preparation of the annual budget but involves the personsresponsible for each main functional department as well as the finance teams ofour various entities.

2.2.3                        Monthlymanagement reporting process

This is the principle follow-up, controland steering tool. It is made up of a series of documents prepared by thevarious entities of the Group, validated and analyzed by the Department ofAnalysis and Planning and submitted to the members of the Executive Committee.

In this monthly reporting, the keyindicators of the activity and the comments on trends and differences comparedto the budget appear for each of the main segments and the main departments ofthe Company.

The accounting data and managementindicators are checked and analyzed by the Group’s Department of Analysis andPlanning and consolidated within a single database.

In order to facilitate the monthlyreporting and improve the speed with which reports are prepared, the Group’sFinancial Department has set up closing processes in each entity. Instructionmemoranda have been sent, detailing the preparation and reporting processes andschedule to be complied with.

2.2.4                        Consolidationprocess

Since the beginning of 2004, theconsolidation department has carried out a monthly consolidation of all theentities within the Group’s perimeter.

The quarterly consolidated financialstatements are prepared according to International Financial ReportingStandards (“IFRS”). However, considering its double listing on Euronext and theNasdaq, the Company presents a reconciliation note between financial statementspresented according to French generally accepted accounting principles and thefinancial statements prepared for the U.S. Securities and Exchange Commissionaccording to the U.S. generally accepted accounting principles.

The Consolidation Department updates andsends the consolidation procedures to the subsidiaries, so that they can submithomogenous financial information. These procedures establish the accountingplan to be used as well as the principles and definition of the variouscaptions of the consolidation segments.

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The segments are prepared according tolocal accounting principles. Reprocessing is made by the Group’s ConsolidationDepartment.

The consolidated financial statementsprepared monthly are reconciled with the management reporting. This is acritical step of consistency control.

At the request of the Company, thestatutory auditors conduct a limited review at the end of each of the firstthree quarters, as well as performing the audit of the annual accounts.

2.2.4                        Consolidationprocess

*Dateof application of IFRS (International Financial Reporting Standards)*

In accordance with European CommunityRegulation no1606/2002 of July 9, 2002 on the application of internationalaccounting standards (International Financial Reporting Standards or “IFRS”) tolisted companies and in compliance with IFRS 1: “First-time adoption of IFRS”,the consolidated accounts of Genesys for the fiscal year ending December 31,2005 were prepared in accordance with IFRS applicable on December 31,2005, with comparable accounts for the 2004 fiscal year established inaccordance with the same standards, with the exception of IAS 32 & 39,which were adopted from January 1, 2005.

In order to provide this comparativeinformation, Genesys prepared an opening balance sheet at January 1, 2004under IFRS. In accordance with IFRS 1: “First-time adoption of IFRS”, theadjustments linked to the transition were recorded in shareholders’ equity, at January 1,2004.

In this context, Genesys implemented aplan for conversion to IFRS, with the objective of identifying the principaldifferences in accounting methods and preparing the opening balance sheet at January 1,2004 according to the standards applicable in 2005.

In order to ensure that accountingprinciples and application of those principles are consistent within the Group,the plan for conversion to IFRS was implemented by the consolidationmanagement, which conducted the plan under the authority of the ExecutiveFinancial Manager.

The first “diagnostic” phase of the plan,which was completed in July 2004, allowed the Company to identify andmeasure the principal differences between the new standards and existingstandards. During this phase, training was conducted, in particular in theCorporate Finance and Accounting Europe departments. During the second half of2004 and the first half of 2005, Genesys conducted the second phase of theplan, which involved a detailed, quantitative study of all IFRS impacts onGenesys’ assets position, balance sheet and statements of operations. Finally,during a third and final phase that was also conducted during the first half of2005, the implementation of the process was conducted and training continued.The analysis conducted in the second and third phases was presented to thestatutory auditors for validation as it was completed.

2.3           Approach retained and action plans

The Company’s objective is to be able to carry out,in the future, a global assessment of the relevance and proper application ofits internal controls.

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During the year 2004, the Company continued todevelop its internal controls by:

·                  Establishing anInternal Control department made up of 3 individuals.

·                  Finalizingintegration of the new consolidation system with the reporting system.

·                  Centralizing andharmonizing invoicing methods.

## In 2005, the Company continued its efforts toimplement such procedure through key control issues that will allow it tobetter evaluate and control its risks. The work of documenting and improvingprocedures conducted by the Internal Audit team and the various FinanceDepartment teams were continued.

The Group’s management provides full support tothis team.

**III.****                                 Exerciseof the Company’s general management and limitations on the powers of theManaging Director**

The Board of Directors has decided that a single person shall exercisethe powers of Chairman of the Board of Directors and Managing Director.

The Chief Executive Officer (*PrésidentDirecteur Général*) has been granted the broadest powers to act inall circumstances in the name of the Company. He exercises these powers withinthe limit of the corporate purpose and subject to the powers that the lawexpressly grants to shareholders’ meetings and to the Board of Directors. Herepresents the Company in its relations with third parties.

Theinternal rules of the Board of Directors specify in a non-exhaustive way the decisions thatmust be previously approved by the Board. Therefore, the Chief ExecutiveOfficer must consult the Board regarding:

·                  all external transactions (acquisitions,sales, contributions of undertakings, of businesses (*fonds de commerces*), of shares, of branches of activity orof isolated assets),

·                  all significant investments,

·                  all internal restructuring transactions,

·                  all financing, indebtedness and liquiditydecisions,

·                  all significant transactions outside the announcedstrategy of the Group

Done in Montpellier,

On April 15, 2006,
| /s/ François Legros                |   |
|-----------------------------------------|--------|
| François Legros                    |   |
| The Chairman of  the Board of Directors |   |

 

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