As filed with the Securities and Exchange Commission on December 19, 2001

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                            ------------------------
                                    FORM 20-F

|_|  REGISTRATION  STATEMENT  PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                                       OR

|X|  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 For the fiscal year ended June 30, 2001 OR

|_|  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

                      ------------------------------------
                          Commission File no. 000-30838
                                  INFOVISTA SA
             (Exact Name of Registrant as Specified in its charter)
                             -----------------------
                                 French Republic
                        (Jurisdiction of Incorporation or
                                  Organization)
                            ------------------------

                            6, rue de la Terre de Feu
                        91952 Courtaboeuf Cedex Les Ulis
                                     France
                               (33-1) 64-86-79-00
                        (Address and telephone number of
                        Registrant's principal executive
                                    offices)

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

             Title of each class:                             Name of each exchange on which registered:
<S>                                                           <C>
10,462,500 shares, nominal value(euro).54 per share           Nouveau Marche of Euronext Paris SA
                                                              Nasdaq National Market
---------------------------------------------------------------------------------------------------------
</TABLE>

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:

Ordinary shares...................................................    19,641,414

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

                                |X| Yes     |_| No

Indicate by check mark which financial statement item the registrant has elected
to follow:

                                |_| Item 17 |X| Item 18
<PAGE>

<TABLE>
<CAPTION>

                               TABLE OF CONTENTS

                                                                                       Page No.
                                                                                       --------
<S>                                                                                    <C>
PART I ....................................................................................5


ITEM 1.   IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS............................5


ITEM 2.   OFFER STATISTICS AND EXPECTED TIMETABLE..........................................5


ITEM 3.   KEY INFORMATION..................................................................5

3.1       SELECTED FINANCIAL DATA..........................................................5

3.2       EXCHANGE RATE INFORMATION........................................................7

3.3       RISK FACTORS.....................................................................8

      3.3.1       Risks Related to our Business............................................8
      3.3.2       Risks Related to our Industry...........................................18
      3.3.3       Other Risks.............................................................19

ITEM 4.   INFORMATION ON THE COMPANY......................................................21

4.1       GENERAL INFORMATION CONCERNING THE COMPANY......................................21

      4.1.1       Name and registered office..............................................21
      4.1.2       Legal form and applicable law...........................................21
      4.1.3       Date of incorporation and expiry........................................21
      4.1.4       Activity of the Company.................................................21
      4.1.5       Register of chamber of commerce.........................................22
      4.1.6       Consultation of legal documents.........................................22
      4.1.7       Fiscal year.............................................................22
      4.1.8       Mergers & consolidations................................................22

4.2       GENERAL INFORMATION CONCERNING THE SHARE CAPITAL OF THE COMPANY.................23

      4.2.1       Subsidiaries and Investments as of June 30, 2001........................23
      4.2.2       Share capital as of October 31, 2001....................................23

4.3       BUSINESS OVERVIEW...............................................................23

4.4       INDUSTRY BACKGROUND.............................................................26

4.5       THE INFOVISTA SOLUTION..........................................................28

4.6       STRATEGY........................................................................29

4.7       DESCRIPTION OF OUR BUSINESS.....................................................30

4.8       PRODUCTS........................................................................30

4.9       PRODUCTS IN DEVELOPMENT.........................................................33

4.10      SERVICES........................................................................34

4.11      GEOGRAPHICAL BREAKDOWN OF REVENUES..............................................35

4.12      END USERS.......................................................................36

4.13      SALES AND MARKETING.............................................................37

4.14      STRATEGIC RELATIONSHIPS.........................................................37

4.15      COMPETITION.....................................................................38

4.16      INTELLECTUAL PROPERTY...........................................................39

4.17      INSURANCE.......................................................................40


                                       1
<PAGE>

4.18      COMMUNICATIONS..................................................................40

4.19      PERSONNEL - SEE "DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES"....................40

4.20      RESEARCH AND DEVELOPMENT........................................................40

4.21      OUTLOOK.........................................................................41

4.22      FACILITIES......................................................................41

4.23      LEGAL PROCEEDINGS...............................................................41

4.24      SEASONALITY.....................................................................41

4.25      RAW MATERIALS...................................................................41

4.26      MATERIAL EFFECT OF GOVERNMENT REGULATIONS.......................................41

4.27      ORGANIZATIONAL STRUCTURE........................................................41


ITEM 5.   OPERATING AND FINANCIAL REVIEW AND PROSPECTS....................................42

5.1       OVERVIEW........................................................................42

5.2       RECENT DEVELOPMENTS.............................................................42

5.3       REVENUES........................................................................42

5.4       COST OF REVENUES................................................................44

5.5       OPERATING EXPENSES..............................................................44

5.6       PERIOD-TO-PERIOD VARIABILITY....................................................45

5.7       RESULTS OF OPERATIONS...........................................................45

5.8       LIQUIDITY AND CAPITAL RESOURCES.................................................48

5.9       THE EURO........................................................................49

5.10      FORWARD LOOKING STATEMENTS......................................................50


ITEM 6.   DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES......................................50

6.1       BOARD OF DIRECTORS..............................................................50

6.2       EXECUTIVE OFFICERS..............................................................53

6.3       CORPORATE GOVERNANCE............................................................55

      6.3.1       Audit Committee.........................................................55
      6.3.2       Compensation Committee..................................................55
      6.3.3       Investment Committee....................................................55

6.4       [RESERVED] .....................................................................55

6.5       COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS................................55

6.6       OPTIONS AND WARRANTS TO PURCHASE OUR SECURITIES.................................56

      6.6.1       Options.................................................................56
      6.6.2       Warrants................................................................59

6.7       EMPLOYEES.......................................................................60

      6.7.1       Distribution by sector..................................................60
      6.7.2       Geographic distribution.................................................61
      6.7.3       Profit sharing and Share purchase schemes...............................61
      6.7.4       Collective agreements...................................................61

6.8       SHARE OWNERSHIP.................................................................61

ITEM 7.   MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS...............................62

7.1       MAJOR SHAREHOLDERS AS AT OCTOBER 31, 2001.......................................62

                                       2
<PAGE>

7.2       SIGNIFICANT CHANGES TO SHAREHOLDINGS OVER THE LAST 3 FISCAL YEARS...............63

7.4       RELATED PARTY TRANSACTIONS......................................................63


ITEM 8.   FINANCIAL INFORMATION...........................................................63


ITEM 9.   THE OFFER AND LISTING...........................................................63

9.1       MARKETS.........................................................................63

9.2       PRICE HISTORY OF THE STOCK......................................................64

9.3       GENERAL.........................................................................66

9.4       THE NOUVEAU MARCHE..............................................................66


ITEM 10.  ADDITIONAL INFORMATION..........................................................67

10.1      MEMORANDUM AND ARTICLES OF ASSOCIATION..........................................67

10.2      SHAREHOLDERS' MEETINGS AND VOTING RIGHTS........................................67

      10.2.1      General.................................................................67
      10.2.2      Annual Ordinary Meetings................................................68
      10.2.3      Notice of Shareholders' Meetings........................................68
      10.2.4      Attendance and Voting at Shareholders' Meetings.........................69
      10.2.5      Proxies and Votes by Mail...............................................69
      10.2.6      Quorum..................................................................70
      10.2.7      Majority................................................................70

10.3      FINANCIAL STATEMENTS AND OTHER COMMUNICATIONS WITH SHAREHOLDERS.................71

10.4      DIVIDENDS.......................................................................71

      10.4.1      Legal Reserve...........................................................71
      10.4.2      Approval of Dividends...................................................71
      10.4.3      Distribution of Dividends...............................................71
      10.4.4      Timing of Payment.......................................................72

10.5      CHANGES IN SHARE CAPITAL........................................................72

      10.5.1      Increases in Share Capital..............................................72
      10.5.2      Decreases in Share Capital..............................................73

10.6      PREEMPTIVE SUBSCRIPTION RIGHTS..................................................73

10.7      FORM, HOLDING AND TRANSFER OF SHARES............................................73

      10.7.1      Form of Shares..........................................................73
      10.7.2      Holding of Shares.......................................................73
      10.7.3      Transfer of Shares......................................................74

10.8      LIQUIDATION RIGHTS..............................................................74

10.9      REQUIREMENTS FOR HOLDINGS EXCEEDING CERTAIN PERCENTAGES.........................74

10.10     PURCHASE OF OUR OWN SHARES......................................................75

10.11     TRADING IN OUR OWN SHARES.......................................................76

10.12     OWNERSHIP OF SHARES BY NON-FRENCH PERSONS.......................................77

10.13     MATERIAL CONTRACTS..............................................................77

10.14     EXCHANGE CONTROLS...............................................................77

10.15     OTHER...........................................................................77

10.16     TAXATION........................................................................77

10.17     FRENCH TAXATION.................................................................77

                                       3
<PAGE>

      10.17.1        Taxation on Sale or Disposal of Shares...............................78
      10.17.2        Taxation of Dividends................................................78
      10.17.3        The Precompte........................................................80
      10.17.4        Estate and Gift Tax..................................................80
      10.17.5        Wealth Tax...........................................................80
      10.17.6        Taxation of U.S. Investors...........................................81
      10.17.7        Where You Can Find More Information..................................86

ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK......................87

11.1      CURRENCIES......................................................................87

11.2      FINANCIAL INSTRUMENTS...........................................................87


ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES..........................88


PART II   ................................................................................88


ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.................................88


ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS....88

14.1      MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS........................88

14.2      USE OF PROCEEDS.................................................................88


Part III  ................................................................................89


ITEM 15.  [RESERVED]......................................................................89


ITEM 16.  [RESERVED]......................................................................89


ITEM 17.  FINANCIAL STATEMENTS............................................................89


ITEM 18.  FINANCIAL STATEMENTS............................................................89


ITEM 19.  EXHIBITS .......................................................................90

19.1      GLOSSARY OF TERMS...............................................................91

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS............................................92
</TABLE>

                                       4
<PAGE>


PART I


ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable.


ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

ITEM 3.  KEY INFORMATION

3.1      SELECTED FINANCIAL DATA

You should read the following selected consolidated financial data together with
the section  entitled  "Operating  and Financial  Review and  Prospects" and our
consolidated financial statements.

The table below sets forth  selected  consolidated  financial data as of and for
each of the five financial  years ended,  June 30, 2001,  2000,  1999,  1998 and
1997. The data for the years ended and at June 30, 2001,  2000,  1999, 1998, and
1997 are derived from our  consolidated  financial  statements,  which have been
audited by PricewaterhouseCoopers. The audited consolidated financial statements
as of June  30,  2001,  2000,  and 1999  and at June  30,  2001 and 2000  appear
elsewhere in this report.

All financial data set forth in the following  tables are derived from financial
statements prepared in accordance with U.S. GAAP. For your convenience,  we have
also presented U.S. dollar amounts, calculated at the rate of U.S. $1.00 =(euro)
1.1120  ((euro)  1.00  =0.8993),  which was the noon  buying rate on October 31,
2001.

                                       5
<PAGE>
<TABLE>
<CAPTION>

   (In thousands, except for share and
   per share data)                                                          Year ended June 30
                                               ---------------------------------------------------------------------------
                                                 2001         2001            2000       1999          1998         1997
                                               -------       ------         -------     -------       ------       -------
                                                (euro)          $            (euro)     (euro)        (euro)       (euro)
<S>                                         <C>           <C>           <C>           <C>         <C>           <C>
Consolidated  Statement  of Income  and
Comprehensive Income Data:
Revenues
   License revenues.........................    19,548       17,579           7,691       1,615          783           52
   Service revenues.........................     8,111        7,295           2,650       1,190          290           69
                                            -----------   ----------     -----------  ----------   ----------   ----------
     Total revenues.........................    27,659       24,874          10,341       2,805        1,073          121

Cost   of   revenues    (exclusive   of
   non-cash   compensation  expense  of
   (euro) 146, $ 132,(euro) 215,(euro) 32,
   (euro) 1 and (euro) 0 respectively)
   Cost of License..........................       882          793             216          67           65            4
   Cost of Services.........................     5,893        5,299           2,540       1,564          416           16
                                            -----------   ----------     -----------  ----------   ----------   ----------
   Total cost of revenues...................     6,775        6,092           2,756       1,631          480           20
                                            -----------   ----------     -----------  ----------   ----------   ----------
   Gross profit.............................    20,884       18,782           7,585       1,174          593          101

Operating expenses:
   Selling   and   marketing   expenses
   (exclusive of non-cash  compensation
   expense of(euro) 309,  $ 278,(euro) 361,
   (euro) 43,(euro)3, and(euro) 3
   respectively) ...........................    16,574       14,905           8,589       2,807        1,401          553
   Research  and  development  expenses
   (exclusive of non-cash  compensation
   expense of(euro) 155,  $ 140,(euro) 231,
   (euro)38,(euro)14, and (euro) 24
   respectively) ...........................     4,640        4,173           1,952       1,063          766          679
   General and administrative  expenses
   (exclusive of non-cash  compensation
   expense of(euro) 1,619, $ 1,455, (euro)
   600, (euro)441,(euro)588, and(euro) 0
   respectively) ...........................     7,629        6,861           3,184       1,689          804          524
   Stock compensation expense...............     2,229        2,005           1,407         554          606           27
   Amortization of goodwill and ............       513          461               -           -            -            -
                                            -----------   ----------     -----------  ----------   ----------   ----------
   purchased intangibles assets
   Total operating expenses.................    31,585       28,405          15,132       6,113        3,576        1,782
                                            -----------   ----------     -----------  ----------   ----------   ----------
   Operating loss...........................   (10,701)      (9,623)         (7,547)     (4,939)      (2,983)      (1,681)
                                            -----------   ----------     -----------  ----------   ----------   ----------
   Other income (expense)...................     4,319        3,884             574         464           58           29
                                            -----------   ----------     -----------  ----------   ----------   ----------
   Loss   before   income taxes and
   minority interest........................    (6,382)      (5,739)         (6,973)     (4,475)      (2,925)      (1,652)
   Income tax benefit.......................        (2)          (2)              -          13           83          183
   Minority interest........................        68           61              17           -            -            -
                                            -----------   ----------     -----------  ----------   ----------   ----------
   Net loss.................................    (6,316)      (5,680)         (6,956)     (4,462)      (2,842)      (1,468)
Other comprehensive (loss) gain,  net of tax:
   Foreign currency translation adjustments.       297         268             (615)       (258)         (12)         (16)
                                            -----------   ----------     -----------  ----------   ----------   ----------
   Comprehensive loss.......................    (6,019)      (5,412)         (7,571)     (4,720)      (2,854)      (1,485)
                                            ===========   ==========     ===========  ==========   ==========   ==========
   Basic and diluted loss per share(1)......     (0.34)       (0.30)          (0.89)      (0.65)       (0.41)       (0.24)
     Basic and diluted weighted
     average shares outstanding(1)..........18,851,731   18,851,731       7,772,868   6,884,708    6,884,708    6,177,942
 Other Financial Data:
 Purchase of fixed assets...................    (4,081)      (3,670)           (788)       (423)        (138)         (75)
 Net cash used by operating activities......    (1,604)      (1,442)         (7,778)     (3,477)        (769)      (2,413)

 Depreciation and amortization..............     1,525        1,372             222         142           77           43

-----------
   (1)   As  adjusted to reflect  the 1:2  reverse  stock split  approved by our shareholders  on May  25,  2000.
         See  Note  1-R  to  the  consolidated financial statements.
</TABLE>

                                       6
<PAGE>
<TABLE>
<CAPTION>

(In  thousands,  except  for share and per
share data)                                                                     As of June 30,
                                                  -------------------------------------------------------------------------
                                                    2001        2001            2000      1999            1998        1997
                                                  -------     -------         -------    -------        -------     -------
                                                   (euro)         $            (euro)    (euro)          (euro)      (euro)
<S>                                               <C>         <C>            <C>         <C>            <C>         <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents.......................   62,904      56,569           2,950     2,250          4,727         596
Working capital (current assets less current
   liabilities) ................................   62,775      56,454           4,649     1,470          4,332       1,789
Fixed assets, net...............................    4,758       4,279           1,156       529            210         112
Total assets....................................   85,000      76,441          20,146     5,415          6,350       3,034
Total current liabilities.......................   11,983      10,776          13,421     2,606          1,154         605
Total non-current liabilities...................      448         403             668       485            565         687
Shareholders' equity............................   72,569      65,262           6,004     2,324          4,631       1,742
Capital stock (2)...............................   96,252      86,560          24,560    13,100          9,582       3,851

(2) inclusive of common stock, preferred stock and capital in excess of par value of stock
-------------------------------------------------------------------------------------------------------------------
</TABLE>

3.2  EXCHANGE RATE INFORMATION

In this  report,  all  references  to the "euro" or  "(euro)"  are to the lawful
currency of the European Monetary Union, all references to the "U.S.  dollar" or
"$"  are to the  lawful  currency  of the  United  States  of  America,  and all
references  to the  "French  franc" or "FF" are to the  lawful  currency  of the
French Republic. The legal rate of conversion between French francs and the euro
was fixed on December 31, 1998 at (euro) 1.00 = FF 6.55957.

For your convenience,  this report contains translations of certain euro amounts
into  U.S.  dollars.  Unless  otherwise  indicated,  dollar  amounts  have  been
translated from euro at the rate of $1.00 = (euro) 1.1120,  the noon buying rate
in euro on October 31, 2001.  The noon buying rate is the  exchange  rate in New
York City for cable  transfers in foreign  currencies  as certified  for customs
purposes by the  Federal  Reserve  Bank of New York.  This does not mean that we
actually  converted these amounts into U.S.  dollars at that rate and you should
not assume that they could have been converted at that or any other rate.

On March 10, 2000,  we changed our share  capital to euro.  Fluctuations  in the
exchange rate between the euro and the U.S.  dollar will affect the U.S.  dollar
price of our ADSs on the Nasdaq National Market.

Since  the euro did not exist  prior to  January  1,  1999,  we  cannot  present
exchange  rates  between the euro and the U.S.  dollar for periods  earlier than
that date. Our reporting  currency during those periods was the French franc. In
order that you may ascertain how the trends in our financial  results might have
appeared had they been expressed in U.S. dollars,  the following table shows the
French  franc/U.S.  dollar exchange rate for 1997 through 1998 based on the noon
buying rate  expressed  in French  francs per $1.00,  and the  euro/U.S.  dollar
exchange rate for subsequent  periods based on the noon buying rate expressed in
euro per $1.00.

                                       7
<PAGE>

<TABLE>
<CAPTION>


                                Period end rate     Average rate           High           Low
  <S>                           <C>                 <C>                   <C>            <C>
  Euro/Dollar(2)
  November 2001................     1.12               1.13                1.14           1.10
  October 2001.................     1.11               1.10                1.13           1.09
  September 2001...............     1.10               1.10                1.13           1.08
  August 2001..................     1.09               1.11                1.14           1.09
  July 2001....................     1.14               1.16                1.19           1.14
  June 2001....................     1.18               1.17                1.18           1.15

  Year Ended June 30,
  -------------------
  Euro/Dollar(2)
  2001.........................     1.18               1.12                1.21           1.05
  2000.........................     1.05               1.01                1.12           0.92
  1999.........................     0.97               1.11                1.18           1.05

  French Franc/Dollar
  1998.........................  FF 6.05            FF 6.03             FF 6.35        FF 5.72
  1997.........................     5.88               5.42                5.88           5.00
-----------
(1)  The average of the noon buying rate for French  francs or euro, as the case
     may be, on the last business day of each month during the relevant period.
(2)  Originally published as dollar/euro.
</TABLE>

3.3      RISK FACTORS

You should carefully consider the following factors and the other information in
this report before deciding to invest in our shares.

3.3.1    Risks Related to our Business

Our limited  operating  history  makes it difficult for investors to predict how
our business and our future operating results will develop

We began our current  activities in 1995 and from that time have been developing
the technology that forms the basis of our products.  We began  generating sales
from early  versions of our base product,  the InfoVista  Engine (now  InfoVista
Runtime/Workshop), in May 1997. Accordingly, we have a limited operating history
as a developer and provider of service level  management  ("SLM")  products upon
which an evaluation of our business and prospects can be based, and we face many
of the risks and  uncertainties  encountered  by emerging  companies  in rapidly
evolving markets,  particularly  companies in the competitive software industry.
In  addition,  because  of  our  limited  operating  history,  we  have  limited
experience and insight into trends that may emerge and affect our business.

We have incurred losses, we may continue to incur losses and we cannot guarantee
that we will achieve profitability

Since we began our current  activities  in 1995, we have  experienced  operating
losses in each  quarter.  We had net  losses of (euro) 6.3  million,  (euro) 7.0
million,  and (euro) 4.5  million,  for the fiscal years 2001,  2000,  and 1999,
respectively.  As at June 30, 2001  cumulative  losses  amounted  to  (euro)22.7
million.  Our current  business plan targets  profitability in fiscal year 2003,
although we may experience one or more  profitable  quarters  during fiscal year
2002. We cannot guarantee that we shall attain this target of profitability  and
if we do achieve it, we may not be able to sustain or increase  profitability in
the future. In particular,  our ability to attain this target would be harmed if
the current economic downturn deepens or in certain  acquisition  scenarios,  as
discussed  in the risk factor "Our  inability  to acquire  and  integrate  other
businesses,  products  or  technologies  could  seriously  harm our  competitive
position". We expect to increase our operating expenses, in order to develop new

                                       8
<PAGE>

distribution  channels and broaden our technical  services and customer  support
capabilities.  We will  have to  significantly  increase  revenues  if we are to
achieve and  maintain  profitability  in light of these  increases  in operating
expenses. Although we have achieved significant revenue growth, we cannot assure
you that our revenues will  continue to increase or that revenue  growth that is
achieved can be sustained.  If we do not  significantly  increase  revenues,  we
could experience  losses and our operating results could be seriously harmed. We
are also subject to legal  limitations  on our use of net  operating  loss carry
forwards for tax purposes.

We expect that our  quarterly  operating  results will  fluctuate and this could
cause our stock price to fluctuate or decline

Our quarterly  operating results have varied  significantly in the past and will
likely  vary  significantly  in  the  future.  As  a  result,  we  believe  that
period-to-period  comparisons  of our operating  results are not  meaningful and
should  not be relied  upon as  indicators  of our  future  performance.  If our
quarterly revenues and operating results fail to meet or exceed the expectations
of securities analysts and investors, the market price of our common stock could
fall  substantially.  Operating  results vary  depending on a number of factors,
many of which are outside our control, including:

     o    demand for our products and services;

     o    the timing of sales of our products and services;

     o    the announcement and introduction of competing software;

     o    changes in our pricing policies or those of our competitors;

     o    delays in the  introduction  or enhancement of products or services by
          us or by our competitors;

     o    whether  our  software  and  services  are sold  directly  or  through
          indirect sales channels;

     o    the mix of sales of our licenses  and  services in Europe,  the United
          States and elsewhere;

     o    costs related to acquisitions of technology or businesses;

     o    customer budget cycles and changes in these cycles;

     o    deferrals of customer orders in anticipation of software  enhancements
          or new software;

     o    our ability to attract, retain and motivate qualified personnel; and

     o    changes in general economic and political conditions.

In  addition,  our  business  has  experienced  and may  continue to  experience
significant  seasonality.  Historically,  disproportionate amounts of our annual
revenues have been  generated by sales of our products  during our fourth fiscal
quarter (ending June 30), while revenues in our first quarter (ending  September
30) are  generally  our lowest  during the year.  Sales of products and services
such as ours in Europe  and  certain  other  parts of the  world  are  typically
adversely  affected in the quarter  ending  September 30 as many clients  reduce
their business activities during the summer months. We believe that these trends
are likely to continue to result in  significant  seasonal  fluctuations  in our
quarterly results.

We anticipate that the average size of individual  client orders may increase as
we focus on larger  business  accounts.  As a result,  a delay in  receiving  an
order, even from just one account,  could have a significant  negative impact on

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<PAGE>

our quarterly operating results.  Finally, because of the structure of our sales
incentives  and our  clients'  budgeting  procedures,  we  typically  realize  a
significant portion of software license revenues in the last month of a quarter,
frequently  in the  last  weeks  or even  days of a  quarter.  Software  license
revenues in any quarter are difficult to forecast because they are substantially
dependent  on  orders  booked  and  shipped  in  that  quarter.  A  delay  in an
anticipated sale past the end of a particular quarter could therefore negatively
impact our operating results for that quarter.

Because we rely on the  InfoVista  product  line and  related  services  for the
majority of our revenues today, our failure to commercialize  them  successfully
or to offer other products could weaken our  competitive  position and adversely
affect our results of operations

We  currently  derive the  majority  of our  revenues  from  licensing  fees and
services related to our InfoVista  product family,  which includes the InfoVista
Runtime,  the InfoVista  Workshop,  VistaViews,  VistaPortal,  VistaMart,  Vista
Plug-Ins, and Vista Finder. As we acquire companies or businesses, we shall have
additional  products in our range.  We expect that  revenues  from the InfoVista
product line and related  services  will  continue to account for a  substantial
part of our revenues for the  foreseeable  future.  Broad market  acceptance  of
these products is,  therefore,  critical to our future  success,  and any factor
adversely  affecting  sales or  pricing  levels of these  products  could have a
material  adverse  effect on our business,  results of operations  and financial
condition.  In  addition,  we cannot  assure you that market  acceptance  of our
products will increase or even remain at current levels. Factors that may affect
the market  acceptance  of our products  include the  availability  and price of
competing  products and  technologies  and the success of our sales  efforts and
those of our marketing partners. Our future performance will also depend in part
on the successful  development,  introduction  and market  acceptance of new and
enhanced  products.  We cannot assure you that any such new or enhanced products
will be successfully  developed,  introduced and marketed,  and failure to do so
would have a material adverse effect on our business,  results of operations and
financial  condition.  Furthermore,  in order to be  successful in this emerging
market, we must be able to differentiate  ourselves from our competitors through
our products and service  offerings  and brand name  recognition.  We may not be
successful  in   differentiating   ourselves  or  achieving   widespread  market
acceptance of our software and services.  In addition,  organizations  that have
already  invested  substantial  resources  in other  methods of  managing  their
computer  hardware and software  systems may be reluctant or slow to adopt a new
approach  that may  replace,  limit or compete  with their  existing  management
systems.

Our markets are highly competitive and we may not be able to compete effectively

Our software is designed for use in the  relatively  new,  rapidly  evolving and
highly  competitive  SLM  market,  and is targeted  to the  Operational  Support
Systems ("OSS") segment.  Competition in this market and segment is intense. Our
failure to maintain and enhance our  competitive  position could  seriously harm
our ability to license our products and sell our services  and,  therefore,  our
operating  results.  Our primary source of  competition  comes from suppliers of
comparable  products,   including  Concord  Communications,   Trinagy  (recently
acquired  by Hewlett  Packard),  the Vital  Signs  division  of Lucent,  Net IQ,
Quallaby  Corporation,  and several smaller software  vendors.  Other sources of
actual or potential competition include:

     o    suppliers  of  network  and  system  management  products,   including
          Computer  Associates,  Compuware,  Hewlett  Packard,  IBM Tivoli,  Sun
          Microsystems, Aprisma and BMC Software;

     o    SLM  software  providers  active in  adjacent  segments  such as event
          management and policy management;

     o    large software and hardware suppliers;

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<PAGE>

     o    systems  integrators  who  generally  provide  consulting  services to
          develop client-specific applications;

     o    service suppliers who act as outsourcers of SLM services; and

     o    our clients' internal technical organizations that produce proprietary
          software addressing internal needs.

Moreover,   we  anticipate  that  our  competitors  will  introduce   additional
competitive  products,  particularly if demand for network  management  software
products  increases,  which may reduce future market acceptance of our products.
In addition,  new competitors  could enter the SLM market and offer  alternative
products,  which may impact the market  acceptance of our  products.  This could
result in price reductions, reduced gross margins and loss of market share. Some
of our competitors have longer  operating  histories and  significantly  greater
financial,  technical  and  marketing  resources  than we  have.  Many of  these
companies have more extensive client bases and broader client relationships than
we have, including relationships with many of our current and potential clients.
Some of  these  companies  also  have  more  established  customer  support  and
professional  services  organizations than we have. We cannot assure you that we
will be able to compete effectively against our current and future competitors.

Our failure to attract new clients could cause our revenues to decline

We need to attract  new  clients or our  revenues  could  decline.  We intend to
continue  to develop  our  market  share  with our core  clients  and to use the
expertise that we have developed with these clients to develop additional market
share with other Information Technology  ("IT")-intensive  organizations such as
financial services  companies,  outsourcers of IT services,  application service
providers and other  multinationals.  Our ability to attract new clients depends
on a variety of  factors,  including  the  reliability,  security,  flexibility,
scalability,  price and  cost-effectiveness of our software and services as well
as our ability to market our software and services effectively.

Our failure to obtain  additional  large  clients  could  cause our  revenues to
decline

For the years ended June 30, 2001 and 2000, our five largest  clients  accounted
for approximately 25.8 % and 24.7%, respectively,  of our total revenues and our
ten largest clients accounted for approximately  34.4% and 35.2%,  respectively,
of our total  revenues.  We anticipate that revenues from large contracts with a
small number of clients will  continue to be an important  part of our operating
results in any given period.  We expect that the composition of that small group
of clients  will  continue  to change over time so that the  achievement  of our
long-term revenue goals will require us to obtain additional large clients on an
ongoing basis. Our failure to enter into a sufficient  number of large contracts
during a particular period could harm our operating results.

Because our revenues depend on service providers,  including  telecommunications
companies,  adverse  trends in these  clients'  markets  could  have a  material
adverse effect on our results of operations

We generated  approximately  80.8% of our total revenues for the year ended June
30,  2001,  from  end-users in the service  provider  industry,  which  includes
telecommunications companies, Internet service providers ("ISPs"), Internet data
centers ("IDCs"),  application  service providers ("ASPs") and outsourcers of IT
services such as management service providers ("MSPs"). A significant portion of
our revenues is expected to continue to be  attributable to sales of products to
telecommunications  clients.  Our future performance depends  significantly upon
the telecommunications  market generally.  If the economic downturn continues to
affect this market into the  foreseeable  future it could have harmful effect on
our business,  results of operations and financial condition. In particular,  if
telecommunications  clients decreased the incorporation of our solutions as part
of their  product and service  offerings to  end-users,  our  business  would be
harmed.  It would also affect our ability to collect  payments due from clients.

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<PAGE>

The actual or  potential  insolvency  of any of our  telecommunications  clients
could cause us to recognize provisions for doubtful accounts receivable or defer
additional  revenues  on new sales.  Any of these  events  could have a material
adverse effect on our business, operating results and financial condition.

Our software requires the use of third-party software and our business could be
seriously harmed if we fail to obtain or embed it effectively in our software

We license third-party  software and embed it into our products.  In particular,
we license software from eXcelon  Corporation  (formerly,  Object Design,  Inc.)
that is integrated with internally  developed  software and used in our products
to perform key  functions.  On August 23, 2000,  we entered into a contract with
eXcelon  Corporation to renew our license,  which will expire December 31, 2007.
Although  we have  negotiated  licenses  on  commercially  reasonable  terms for
third-party  software,  we  cannot  guarantee  that  such  third-party  software
licenses will continue to be available to us on commercially  reasonable  terms,
if at all. Although we believe that alternative software is available from other
third-party  suppliers for most of the  third-party  software that we use, if we
are unable to maintain the third-party software licenses we could face delays or
reductions  in our product  shipments  until  equivalent  software is  developed
internally or is identified, licensed from third parties and integrated with our
software.  Any such delays or reductions would have a material adverse effect on
our  business,  operating  results and  financial  condition.  In addition,  the
inability  of these  third  parties to enhance  their  products  in a timely and
cost-effective  manner in response to changing client needs,  industry standards
or technological  developments could adversely affect our business. Any of these
events could result in shipment delays or reductions in the sale of our software
and could require us to redesign our products.  Furthermore,  we might be forced
to limit the  features  available  in our current or future  software  products.
Either alternative could seriously harm our business and operating results.

The  inability of our products to operate with the products  used by our present
and potential clients could harm our revenues

Our  products  are  designed  to operate on a variety of hardware  and  software
platforms employed by our clients in their networks.  We must continually modify
and enhance  our  products to keep pace with  changes in hardware  and  software
platforms and database  technology.  As a result,  uncertainties  related to the
timing and nature of new product  announcements,  introductions or modifications
by hardware and software vendors could materially adversely impact our business,
operating results or financial condition. The failure of our products to operate
effectively  across the various  existing and evolving  versions of hardware and
software  platforms and database  environments  employed by clients could have a
material  adverse  effect  on  our  business,  operating  results  or  financial
condition.

Defects in our  products  could harm our  reputation  and expose us to potential
liability

Software  products  such as ours  often  contain  errors or  defects  when first
introduced  or when new  versions or  enhancements  are  released.  If errors or
defects are discovered in our current or future products,  we may not be able to
correct them in a timely manner, or at all. We believe that we maintain adequate
worldwide  product  liability  insurance.  However,  any  insurance  would  only
partially offset the cost of correcting  significant  errors or defects.  We may
therefore need to expend significant  capital resources in order to eliminate or
work around errors and defects. Errors and defects in our products may result in
the loss of, or a delay in, market acceptance of our products,  the diversion of
development  resources,  damage to our  reputation  and  increased  service  and
warranty  costs.  Many of our  clients  use our  products  to monitor and manage
business-critical  applications.  Because  of  this,  errors,  defects  or other
performance  problems in our software could result in  significant  financial or
other  damage to our  clients.  As a result,  our clients  could  pursue  claims
against  us.  A  product  liability  claim  brought  against  us,  even  if  not
successful,  would be likely to be time consuming and costly to defend and could
adversely affect our marketing efforts.

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<PAGE>

Our failure to adapt to rapid  changes in technology or to develop and introduce
new products or  enhancements to existing  products could  seriously  reduce the
demand for our products

The market in which we compete is  characterized  by rapid  changes in  customer
needs, technology and competing products.  Existing products become obsolete and
unmarketable  when  products  using  new  technologies  are  introduced  and new
industry standards emerge. For example,  our products are designed mainly to use
the  industry-standard  Simple  Network  Management  Protocol  ("SNMP")  and  to
interact  with  and  report  on   industry-standard   operating   systems.   New
technologies could change the way products like ours are sold or delivered. As a
result,  the life  cycles of our  products  may be very  short.  We will need to
develop  and  introduce  new  products  and make  enhancements  to our  existing
products.  Our products are complex,  and new products and product  enhancements
require long development and testing periods.  We may not be able to develop new
products or enhance or modify our existing  products or may experience delays in
new product releases in the future. If we fail to develop new  technologies,  or
to develop  and deploy new product  releases  or  enhanced  products on a timely
basis,  or if our products do not gain market  acceptance,  our  revenues  would
decline and market perception of our company would be harmed.

Our  products  have a long and  variable  sales  cycle  making it  difficult  to
determine if and when a sale will occur

Our products have a long and variable  sales cycle,  which is typically  between
three and six months in duration.  The reasons for the long sales cycle  include
the following:

     o    we may need to educate our  potential  clients on the use and benefits
          of our products;

     o    client purchase  decisions often require lengthy  budgeting,  approval
          and  competitive   evaluation  processes  that  accompany  significant
          capital expenditures;

     o    clients  frequently  begin by  evaluating  our  products  on a limited
          basis,  typically for 30 days,  devoting time and resources to testing
          them before they decide whether or not to purchase a license; and

     o    clients may defer orders in  anticipation  of releases of new software
          or enhancements by us or our competitors.

As a result of the long and  unpredictable  sales cycle,  we face  difficulty in
completing sales,  which can cause us to incur costs and mobilize resources with
no resulting revenue, and which, in addition,  can cause our quarterly operating
results to vary widely.

Our  failure to protect  our  intellectual  property  adequately  could harm our
competitive market position

Our success depends upon our proprietary technology. We rely on a combination of
patent,  trademark,  copyright and trade secret law and contractual restrictions
to protect the proprietary  aspects of our technology.  These legal  protections
afford only limited protection. Our failure to protect our technology adequately
may lead to the  development  of similar  technology by third parties and reduce
our software license revenues.  We have two French patents issued.  One of these
patents is for a performance  measurement and service quality  monitoring system
and process for an information  system.  The other is for a modeling process for
an   information   system,   in  particular   with  a  view  to  monitoring  the
quality-of-service,  and a measurement  and modeling  system  implementing  this
process.  Both French  patents  expire on January 29, 2017.  Both of the patents
have received  extensions in the United  States,  with two U.S.  patents  issued
which expire on January 29, 2018, and we also have extensions pending in Europe.
We expect to file an  application  to  register  an  additional  patent with the
Institut  National de la Propriete  Intellectuelle  (I.N.P.I.) before the end of
the calendar year. We have  registered the trademark  "InfoVista" in a number of

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<PAGE>

countries, including in Europe (as a Community Trademark) and the United States,
and have trademark applications pending in a number of jurisdictions. Litigation
may be necessary to enforce our  intellectual  property  rights and to determine
the validity and scope of the proprietary rights of others. Any litigation could
result in  substantial  costs to us and  diversion  of our  resources  and could
seriously harm our operating results.  We may not prevail in any such litigation
and our intellectual  property rights may be found invalid or unenforceable.  If
we do not receive a particular  patent,  our competitors  will not be restricted
from developing and operating independently technology that is similar to any of
our unpatented technology. If we do not receive a trademark registration, we can
still  use  that  trademark,  but  our  rights  may be  weaker  than  if it were
registered.  In addition, we have acquired some of the technology underlying our
software internationally, and we sell our software internationally, and the laws
of many  countries do not protect our  proprietary  rights to the same extent as
the laws of the United States and Europe.

Claims that our products  infringe the  proprietary  rights of others could harm
our sales and increase our costs

Other companies or individuals,  including our  competitors,  may have or obtain
patents or other proprietary rights that could prevent,  limit or interfere with
our ability to make,  use or sell our  software.  Furthermore,  companies in the
software market are increasingly  bringing suits alleging  infringement of their
proprietary rights by others, particularly patent rights. As a result, we may be
held by a court to have infringed on the proprietary  rights of others.  We have
received,  and  may in the  future  receive,  communications  alleging  possible
infringement by us of patents and other intellectual  property rights of others.
We could incur  substantial  costs to defend any litigation  brought against us,
regardless of its merits,  and our failure to prevail in  intellectual  property
litigation could force us to do one or more of the following:

     o    cease making, licensing or using products or services that incorporate
          the challenged intellectual property;

     o    obtain  and  pay  for  licenses  from  the  holder  of  the  infringed
          intellectual  property right, which licenses might not be available on
          acceptable terms, if at all; or

     o    redesign  our  products,  which  could be very  costly and force us to
          interrupt  product  licensing and product  releases,  and might not be
          feasible at a reasonable cost or at all.

Our  inability  to maintain  and  establish  new  relationships  with  strategic
partners  and other  indirect  sales  relationships  could cause our revenues to
decline

Our  sales   strategy   requires  that  we  establish   and  develop   long-term
relationships  through  indirect  sales  channels.  Our indirect  sales channels
include  Business  Solution  Integrators  ("BSIs") who offer IT integration  and
project  management  services to their  customers  and provide our products as a
part of a broader  solution;  original  equipment  manufacturers  ("OEMs"),  who
incorporate  our products  into their own products;  and Certified  Participants
("IVCPs") who are typically  providing wide ranging consulting services to their
clients and refer those clients either  directly to us or to one of our BSIs for
the supply of products and/or services.  We have also developed  strategic joint
product  development  and  marketing   relationships  which  include  developing
compatible products,  cross training personnel and implementing joint marketing.
We intend to continue to develop new  relationships  with  indirect  sellers and
strategic  marketing  partners.  Our  success  will  depend in large part on our
ability  to develop  and  maintain  these  additional  relationships  and on the
performance  and success of these third  parties.  We may not be able to further
develop and fully benefit from our existing relationships.  In addition, we have
established  our  relationships  recently,  and we cannot  predict the extent to
which our indirect  channels will be successful in marketing our products or the
degree to which we will develop compatible products or successfully joint market
programs.  If we are unable to establish and maintain  these new  relationships,
our future sales volume may decline.  Our current  agreements with our strategic
marketing  partners  and  indirect  channels  do not prevent  them from  selling
products  of other  companies,  including  products  that may  compete  with our

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<PAGE>

products.  These strategic  marketing  partners and indirect channels could give
higher priority to another company's software or to their own products than they
give to ours.  In  addition,  we  generally  sell our  products to our  indirect
channels at a discount to our prices for direct sales. As a result,  an increase
in sales through indirect channels would reduce our gross margins.

Our  inability to hire and retain  research  and  development  engineers,  sales
persons and qualified service personnel would limit our revenue growth

We believe that research and development is at the core of our business. We need
engineers  to develop the  programs  that  address  our  customers'  needs.  Our
engineers must not only develop new products, but also upgrade existing products
and solve  any  problems  that may arise  with our  software.  There is  intense
competition for qualified  personnel in the software industry and relatively few
people with the highly  specialized  technical  training and experience  that we
require.  Our inability to hire engineers may delay the development,  launch and
update of our products, and our reputation and revenues could be harmed.

To date, we rely upon our sales force for a significant portion of our revenues.
Over the fiscal year 2001 we have strengthened this team and we plan to continue
to hire new personnel over the coming year in order to sell  InfoVista  products
to a greater  number of clients and to  generate  increased  revenues.  However,
competition for qualified sales personnel is intense,  and we may not be able to
hire as many qualified individuals as we may require in the future. In addition,
we may not be  successful  in managing an expanded  sales force or in increasing
its productivity.  Because sales personnel need to be experienced in our market,
may require extensive training and may take six months or longer to achieve full
productivity,  it is important that we retain  experienced sales people in order
to maintain the quality of service and volume of sales.  These  factors may have
an adverse  effect on our ability to manage and  optimize our sales force and so
to realize increased sales.

We believe that growth in our product  license  revenues  depends in part on our
ability  to  provide  our  clients  with  professional  services  and to educate
third-party  resellers on how to provide similar services.  Over the last twelve
months, we have moderately increased the number of service personnel and we will
continue to recruit skilled,  qualified  people.  However,  competition for such
personnel is also very intense, and if we are unable to attract, train or retain
the  number  and  caliber  of staff that our  business  needs,  our  reputation,
revenues and customer satisfaction could be harmed.

Our inability to hire and retain our key personnel would slow our growth

Our  business is dependent  on our ability to hire,  retain and motivate  highly
qualified  senior  management and other key personnel.  A number of these people
have  recently  joined us. Our  performance  is  substantially  dependent on the
performance of key technical and senior management personnel. We do not maintain
key  person  life  insurance  policies  on  any  of  our  employees.   Qualified
individuals  are in high demand and we may not be able to attract the  personnel
we  need.  The  loss of the  services  of any of our  senior  management  or our
inability to attract qualified additional personnel could harm our business.

Our inability to manage our growth and  expansion  effectively  could  seriously
harm our ability to effectively run our business

Our historical  growth has placed,  and our intended future growth, is likely to
continue to place a significant strain on our management,  financial,  personnel
and other  resources.  We have grown from 62  employees  at June 30, 1999 to 243
employees  at June 30,  2001 and our total  revenues  have grown from (euro) 2.8
million in fiscal year 1999 to (euro) 27.7 million in fiscal year 2001.  We have
expanded  geographically in Europe,  Asia and across the continent of the United
States.  During  fiscal year ended June 30, 2001, we have opened a subsidiary in
Spain and another one in Belgium.  We have  increased our presence in Germany by
the  acquisition  of Tiss  The  Intranet  Solution,  a German  business  systems
integrator.  We have  also  recently  opened a branch  office  of our  Singapore

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<PAGE>

subsidiary in Australia.  To effectively  manage  growth,  in particular for the
more  geographically  remote  locations,  we will need to  implement  additional
management information systems, improve our operating, administrative, financial
and  accounting  systems and controls,  train new  employees and maintain  close
coordination among our executive,  engineering,  accounting, finance, marketing,
sales and  operations  organizations.  Any failure to manage growth  effectively
could seriously harm our ability to respond to clients and negatively impact the
quality of our software and services and our operating results.

We will be increasingly  susceptible to risks associated with our  international
operations, which could harm our operating results

Our international expansion will subject us to a variety of risks, including:

     o    currency exchange rate fluctuations;

     o    recessionary trends, including higher interest rates;

     o    spiraling inflation;

     o    seasonal fluctuations in purchasing patterns;

     o    tariffs, duties, export controls and other trade barriers;

     o    unexpected changes in regulatory requirements and applicable laws;

     o    government ownership or regulation of the economy;

     o    longer  accounts   receivable   payment  cycles  and  difficulties  in
          collecting accounts receivable;

     o    even lengthier sales cycles and increased selling expenses,  including
          those for travel;

     o    difficulties and costs of staffing and managing foreign operations;

     o    reduced  protection  for,  or our  inability  to secure  and  enforce,
          intellectual property rights in some countries;

     o    increased costs to defend our intellectual property rights;

     o    potentially adverse tax consequences;

     o    the  burdens of  complying  with a wide  variety  of foreign  laws and
          regulations; and

     o    political and economic instability.

Any of these  factors  could harm our  operating  results.  In  addition,  it is
possible  that the  relevant  tax  authorities  may  review our prior and future
intragroup  arrangements,  which may  adversely  impact the tax treatment of our
income for those  periods.  In the future,  our  international  revenues  may be
increasingly  denominated in local currencies.  Because we do not have a hedging
program, we are vulnerable to adverse fluctuations in foreign currency which may
reduce revenues from outside the euro zone.

Our  inability  to  acquire  and  integrate   other   businesses,   products  or
technologies could seriously harm our competitive position

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<PAGE>

In order to remain competitive,  we may acquire additional businesses,  products
or technologies.  In December 2000, we acquired Tiss The Intranet Solution GmbH,
a German  business  systems  integrator.  We are and  will  continue  to  pursue
potential  acquisition  projects in upcoming months.  Regarding such acquisition
candidates,   we  may  not  be  successful  in  negotiating  the  terms  of  the
acquisition,  financing the acquisition or effectively  integrating the acquired
business,  product or  technology  into our existing  business  and  operations.
Further, completing a potential acquisition and integrating an acquired business
will divert  significant  management  time and  resources.  If we consummate any
significant acquisitions using stock or other securities as consideration,  your
equity  in us  could  be  significantly  diluted.  If we  make  any  significant
acquisitions using cash  consideration,  we may be required to use a substantial
portion of our  available  cash.  In  addition,  we may be  required to amortize
and/or write-off  significant amounts of goodwill and other intangible assets in
connection  with future  acquisitions,  which could seriously harm our financial
results. If we acquire a loss-making  company, the acquisition will increase the
group's  losses and will  affect our  profitability  targets  and our  operating
results.  If an acquisition  project does not go to term, the external  advisers
costs incurred will be added to our general and administrative expenses and will
therefore affect our profitability target and operating results.

In the future,  we may not be able to secure financing  necessary to operate our
business as planned

We believe our current  cash  balances  and cash  provided by future  operations
should be sufficient to meet our anticipated  cash needs for working capital and
capital expenditure  requirements for at least the next 18 months, excluding any
exceptional costs such as acquisitions.  Our business and operations may consume
resources  faster  than we  anticipate.  In the  future,  we may  need to  raise
additional funds for these purposes.  Additional  financing may not be available
on favorable terms, if at all. If adequate funds are not available on acceptable
terms,  we may be unable to fund the  expansion of our sales and  marketing  and
research  and  development  efforts or take  advantage of  acquisition  or other
opportunities, which could seriously harm our business and operating results. If
we issue debt, the debtholders  would have rights senior to shareholders to make
claims on our assets and the terms of any debt could  restrict  our  operations,
including our ability to pay dividends on our common stock.  Furthermore,  if we
issue additional equity securities,  shareholders may experience  dilution,  and
the new equity securities could have rights senior to those of our shares.

We are incurring compensation and other costs relating to our stock option plans
and warrants,  which adversely affects our margins and our results of operations
and may increase our tax liability

We have  granted  options  and  issued  warrants  to our  employees  on  various
occasions.  In addition,  certain principal  shareholders sold shares to some of
our employees pursuant to a certain repurchase options granted to such employees
by such shareholders. Under U.S. GAAP, some of these grants, issues or sales are
treated  as  additional  employee  compensation,   which  we  reflect  as  stock
compensation in our financial statements. We recognized approximately (euro) 4.2
million in stock  compensation  expense from July 1, 1998 through June 30, 2001.
We expect the remaining  costs  associated with these plans to amount to a total
of  approximately  (euro) 0.4  million  for the fiscal year 2002 and (euro) 0.04
million for the fiscal year 2003.

In  addition,  French  fiscal law allows for  favorable  tax regime for  options
provided  that,  among  other  considerations,  the  shares  resulting  from the
exercise of options,  by  employees  who were  resident in France at the date of
grant,  are not sold for a period of either 4 years or 5 years  (depending  upon
the deemed date of grant) from the date of grant of the  options.  Our  existing
stock option plans are not structured to enforce this holding period.  If any of
our  employees  who were French  resident  at the date of grant of the  options,
exercises  the  options  and sells the  resulting  shares  before the end of the
relevant 4 or 5 year holding  period,  we could be required to pay French social
charges on those amounts.  If the resulting shares are sold or transferred prior
to the expiration of the applicable  holding period, a less favorable tax regime
applies to the employee.  For this reason, we do not consider the premature sale
of such shares very probable and accordingly we have not made a provision in our
financial statements for this potential risk. The amount of social charges which

                                       17
<PAGE>

would be payable by the Group in the event that such employees  exercised  their
options and sold the resulting shares prior to the expiration of the 4 or 5 year
holding  period,  we  would  have  to  pay  taxes  in an  amount  equivalent  to
approximately 45% of the difference  between the market price at the date of the
exercise and the exercise price.

We do not  currently  anticipate  effecting  a  stock  option  cancellation  and
re-grant  scheme  in  such  a way  that  it  would  generate  significant  stock
compensation  charges to the our operating  results,  however we cannot  exclude
that  possibility  in the future,  nor can we exclude the  possibility  that the
accounting  rules may be  changed  retroactively  such that we may be obliged to
record variable stock compensation  arising from a stock option  re-pricing.  If
the exercise  price of the  re-granted  options under a stock option  re-pricing
scheme is lower than the exercise  price of the  cancelled  options,  it is more
likely that the option  holders will exercise their options and thus dilute your
equity in us.

3.3.2    Risks Related to our Industry

If the SLM market, or the performance reporting segment in particular,  declines
or fails to grow, demand for our products will be reduced

We derive all of our revenues from the sale of products and services designed to
allow  our  clients  to  monitor,   analyze  and  report  on  the   performance,
availability and  quality-of-service  of IT infrastructure,  including networks,
servers and  applications.  Our products are part of the software market segment
known  as SLM.  The  market  for  SLM and  performance  reporting  solutions  is
relatively  immature,  is  rapidly  evolving  and  will  likely  consist  of  an
increasing number of competitors.  If that market fails to develop,  or develops
more slowly than expected, our business and operating results could be seriously
harmed.

Because we are subject to general economic and market  conditions,  any economic
downturn could materially  adversely affect our business,  results of operations
and financial condition

Segments  of the  software,  technology  and  telecommunications  industry  have
experienced   significant  economic  downturns  in  the  past  characterized  by
decreased  product  demand,  price  erosion,  work  slowdowns  and layoffs.  Our
operations may experience substantial  fluctuations in the future from period to
period as a consequence of general economic  conditions  affecting the timing of
orders from major clients and other factors affecting capital spending. Although
we have a diverse  client  base,  we have  targeted  certain  markets  including
telecommunications  carriers,  ISPs,  outsourcers and  integrators.  The current
economic downturn has affected the technology sector and the  telecommunications
market in particular. This has led to a decrease and or delay in such companies'
overall  investments in IT  infrastructure  on both hardware and software.  This
means that the current or future economic downturn in general or in the targeted
markets in  particular  could have a material  adverse  effect on our  business,
operating results and financial condition.

Without the  continued  demand for the  Internet and related  infrastructure  to
transport data, demand for our products would decline

Our revenues  will depend,  in large part,  upon third parties  maintaining  the
Internet  infrastructure  to  provide  a  reliable  network  backbone  with  the
necessary  speed,  data capacity,  security and hardware  necessary for reliable
Internet  access and  services.  We are  working to make our tools  increasingly
available to users through  Web-based  applications.  Rapid growth in the use of
and interest in the Internet has occurred only recently. As a result, acceptance
and use may not  continue to develop at  historical  rates,  and a  sufficiently
broad base of consumers may not adopt and continue to use the Internet and other
online  services  and  data  transmission  options  as  a  medium  for  business
transactions.  Demand and market acceptance for recently introduced services and
products over the Internet are subject to a high level of uncertainty, and there
exist few proven and profitable services and products. In addition, the Internet
may not be  accepted  in the  long-term  as a  medium  for  conducting  business
transactions  for  a  number  of  reasons,   including  potentially   inadequate
development of the necessary network  infrastructure  or delayed  development of
enabling  technologies  and  performance  improvements.   Finally,  privacy  and

                                       18
<PAGE>

security  concerns raised by governmental  bodies and consumer groups  regarding
consumer and business use of the  Internet,  and  governmental  regulation  that
seeks to address these concerns,  could impede the expected growth of e-commerce
and other business uses of the Internet.

3.3.3    Other Risks

The  price  of our  shares  and  ADSs  is  highly  volatile  and  could  decline
significantly

The price of our shares and ADSs has been highly  volatile  since our listing on
the  Nouveau  Marche of  Euronext  Paris and the  Nasdaq  on July 7,  2000.  For
example,  between our initial public  offering and the date of this report,  the
price of our shares on the Nouveau  Marche has  fluctuated  between  (euro) 2.01
(lowest  reported  price of our shares) on  September  21, 2001 and (euro) 57.00
(highest reported price of our shares) on October 24, 2000. On October 31, 2001,
the price of our shares on the Nouveau  Marche was (euro)  3.60.  See "The Offer
and listing - Price  history of the stock" for  historical  pricing  data on our
shares and ADSs. The stock market has from time to time experienced  significant
price  and  volume   fluctuations  that  have  affected  the  market  prices  of
securities,   particularly   securities  of  technology  and  computer  software
companies.  As a result,  you may  experience  a material  decline in the market
price of our shares, regardless of our operating performance.  Price declines in
our shares  could result from a variety of factors,  including  many outside our
control. These factors include:

     o    the difference between results announced by us and forecasts
          (published or not published) by analysts;

     o    the announcement of the results of competitors;

     o    important contracts, mergers, acquisitions, strategic partnerships or
          participations involving our competitors or us;

     o    a modification in analyst forecasts or their investment
          recommendations regarding InfoVista;

     o    the announcement of SLM or other technological innovations; and

     o    fluctuations in our operating results.

In the past, following periods of volatility in the market price of a particular
company's securities,  securities class action litigation has often been brought
against that company.  We may become  involved in this type of litigation in the
future.  Litigation  of this  type is  often  extremely  expensive  and  diverts
management's attention and resources.

We are controlled by a small group of our existing shareholders, who may make
decisions with which you disagree

On  October  31,  2001,  our  directors,   executive   officers  and  affiliates
beneficially owned approximately 11.33% of our shares. Accordingly,  they have a
significant influence in determining the outcome of any corporate transaction or
other matter  submitted to the  shareholders  for approval,  including  mergers,
consolidations,  the  sale  of  all or  substantially  all  of  our  assets  and
going-private  transactions,  and also the power to prevent or cause a change in
control.  They may also have the power to control the election of members of our
board of  directors.  The interests of these  shareholders  may differ from your
interests.  In addition,  this concentration of ownership may delay,  prevent or
deter a change in control and could deprive you of an  opportunity  to receive a
premium for your shares or ADSs.

                                       19
<PAGE>

The  price  of our  ADSs and the U.S.  dollar  value  of any  dividends  will be
affected by fluctuations in the U.S. dollar/euro exchange rate

The ADSs trade in U.S.  dollars.  Fluctuations  in the exchange rate between the
euro and the U.S.  dollar are likely to affect the market price of the ADSs. For
example, because our financial statements are reported in euro, a decline in the
value of the euro against the U.S.  dollar would reduce our earnings as reported
in U.S.  dollars.  This could adversely affect the price at which the ADSs trade
on the U.S. securities markets. Any dividend we might pay in the future would be
denominated in euro. A decline in the value of the euro against the U.S.  dollar
would reduce the U.S. dollar equivalent of any such dividend.

You may not be able to exercise preemptive rights for shares underlying your
ADSs

Under French law, shareholders have preemptive rights ("droits  preferentiels de
souscription")  to  subscribe  for cash for  issuances  of new  shares  or other
securities giving rights,  directly or indirectly,  to acquire additional shares
on a pro rata basis. Shareholders may waive their preemptive rights specifically
in  respect  of  any  offering,  either  individually  or  collectively,  at  an
extraordinary general meeting.  Preemptive rights, if not previously waived, are
transferable during the subscription period relating to a particular offering of
shares and may be quoted on the Nouveau Marche.  U.S. holders of ADSs may not be
able to exercise preemptive rights for the shares underlying their ADSs unless a
registration  statement  under the U.S.  Securities Act of 1933, as amended,  is
effective  with  respect to such rights or an  exemption  from the  registration
requirements  thereunder is available.  We intend to evaluate at the time of any
rights  offering the costs and potential  liabilities  associated  with any such
registration  statement,  as well  as the  indirect  benefits  of  enabling  the
exercise by the holders of ADSs of the  preemptive  rights  associated  with the
shares  underlying their ADSs, and any other factors we consider  appropriate at
the time,  and then to make a decision as to whether to file such a registration
statement.  We cannot guarantee that any registration  statement would be filed,
or, if filed, that it would be declared  effective.  If preemptive rights cannot
be exercised by an ADS holder,  The Bank of New York,  as  depositary,  will, if
possible,  sell such holder's  preemptive rights and distribute the net proceeds
of the sale to the holder. If the depositary determines, in its discretion, that
such rights cannot be sold, the  depositary  may allow such rights to lapse.  In
either case, ADS holders'  interest in us will be diluted and, if the depositary
allows  rights to lapse,  holders  of ADSs will not  realize  any value from the
granting of preemptive rights.

Holders of ADSs may be  subject  to  additional  risks  related to holding  ADSs
rather than shares

Because holders of ADSs do not hold their shares  directly,  they are subject to
the following additional risks:

     o    In the event of a dividend or other  distribution,  if exchange  rates
          fluctuate during any period of time when the depositary cannot convert
          a foreign  currency into dollars,  the ADS holder may lose some or all
          of the value of the distribution.  There can be no assurances that the
          depositary  will  be able  to  convert  any  currency  at a  specified
          exchange rate or sell any property, rights, shares or other securities
          at a  specified  price,  or  that  any  of  such  transactions  can be
          completed within a specified time period.

     o    In order to vote at  shareholders'  meetings,  ADS holders who are not
          registered  on the books of the  depositary  are  required to transfer
          their ADSs for a certain number of days before a shareholders' meeting
          into a blocked account established for that purpose by the depositary.
          Any ADS  transferred to this blocked account will not be available for
          transfer during that time. ADS holders who are registered on the books
          of the  depositary  must give  instructions  to the  depositary not to
          transfer  their ADSs  during  this  period  before  the  shareholders'
          meeting.  ADS holders must therefore receive voting materials from the
          depositary sufficiently in advance in order to make these transfers or
          give these  instructions.  There can be no guarantee  that ADS holders
          will receive  voting  materials in time to instruct the  depositary to
          vote. It is possible that ADS holders,  or persons who hold their ADSs
          through  brokers,  dealers or other third  parties,  will not have the
          opportunity to exercise a right to vote at all.

                                       20
<PAGE>

     o    ADS holders may not receive  copies of all reports from the depositary
          or us. You may have to go to the  depositary's  offices to inspect any
          reports issued.

     o    We and the  depositary  may amend or terminate  the deposit  agreement
          without  ADS  holders'  consent in a manner that could  prejudice  ADS
          holders.


ITEM 4.  INFORMATION ON THE COMPANY

4.1      GENERAL INFORMATION CONCERNING THE COMPANY

4.1.1    Name and registered office

InfoVista SA
6 rue de la Terre de Feu
91952 Courtaboeuf Cedex Les Ulis
France
Telephone: + 33 1 64 86 79 00

Agent for service in the United States in connection with the initial and
secondary offerings is InfoVista Corp., 10440 Little Patuxent Parkway, 4th
Floor, Columbia, MD 21044, tel. (410) 997-4470.


4.1.2    Legal form and applicable law

InfoVista SA is a French societe  anonyme with a Conseil  d'administration.  The
company is subject to the  provisions  of Book II of the French Code de commerce
and the  Act  n(degree)  67-236  of 23  March  1967  which  relates  to  trading
companies.


4.1.3    Date of incorporation and expiry

The company was incorporated on October 14, 1985 in the form of a French societe
a  responsabilite  limitee under the name Methodes  Futures pour  l'Informatique
M.F.I. and was registered on December 3, 1985 for a duration of 99 years. It was
transformed  into a societe anonyme on December 1, 1992. The company changed its
name to InfoVista SA on April 5, 1996.


4.1.4    Activity of the Company

The company's activities, in France and abroad, are the following:

     o    The research, study, design, development and production of software,

     o    Training,  consulting,  sales,  distribution and maintenance regarding
          all equipment,  software or services as concerns computing,  automatic
          or  automation  processes,  industrial  automation,  bureaucratic,  or
          telecommunication structures for companies or institutions,  public or
          private, whatever their area of business,

                                       21
<PAGE>

     o    generally, all industrial,  commercial, stock, property, and financial
          operations  that may have a direct or  indirect  effect on the defined
          purposes or contribute to their development.

They are also found in Article 2 of our statuts.


4.1.5    Register of chamber of commerce

The company is  registered  with the  Register  of Commerce & Companies  of Evry
under  number  334  088  275.  Its APE  code is 722 Z,  being  the  activity  of
development and commercialization of software.


4.1.6    Consultation of legal documents

The  company's  statuts,  minutes of  shareholder  meetings  and other  publicly
available documents can be consulted at the company's registered office.


4.1.7    Fiscal year

The company's fiscal year runs from July 1 to June 30.


4.1.8    Mergers & consolidations

Since June 30, 2000, there have been no material  reclassifications,  mergers or
consolidations of InfoVista SA or any of its subsidiaries;  any material changes
in the  mode of  conducting  the  business;  material  changes  in the  types of
products produced or services rendered;  or name changes.  Since the creation of
InfoVista  SA,  the  only  acquisition  of a  business  activity  has  been  the
acquisition of TISS,  achieved on December 2, 2000. It is intended to merge TISS
with  InfoVista  GmbH at the end of  this  calendar  year.  There  have  been no
bankruptcy,  receivership or similar proceedings with respect to InfoVista SA or
its subsidiaries.

The principal capital expenditure of InfoVista since June 30, 1998 is the (euro)
3.2 million  acquisition  of TISS.  There are no  additional  principal  capital
expenditures and divestitures currently in progress.

There has been no indication of any public  takeover offer by any third party in
respect of our shares or by us in respect of other companies' shares, which have
occurred during the last and current financial years.

                                       22
<PAGE>

4.2      General information concerning the Share Capital of the Company

4.2.1    Subsidiaries and Investments as of June 30, 2001

                               [GRAPHIC OMITTED]

<TABLE>
<CAPTION>


                                                   InfoVista SA
                                                     (France)
----------------------------------------------------------------------------------------------------------------
<S>              <C>               <C>             <C>            <C>             <C>            <C>
InfoVista Corp.  InfoVista AP Pte  InfoVista UK    InfoVista BNL  InfoVista GmbH  InfoVista IBE  TISS Intra GmbH
(United States)     (Singapore)   (United Kingdom)   (Belgium)       (Germany)       (Spain)        (Germany)
     100%              72.83%          100%            100%            100%           100%             100%

</TABLE>



4.2.2    Share capital as of October 31, 2001

Number of ordinary shares issued: 19,661,725, all of which are fully paid up.

Nominal value of each ordinary share :(euro)0.54

Issued Share Capital:(euro)10,617,331.50



4.3      BUSINESS OVERVIEW

InfoVista is a leading global  provider of software  solutions that help service
providers and large corporations to achieve better returns from their complex IT
infrastructures.  Our products target the Service  Assurance  segment of the OSS
market.  Our  software  monitors,  analyzes  and  reports  on  the  performance,
availability and  quality-of-service  of IT infrastructure,  including networks,
servers   and   applications.    We   market   our   solutions    primarily   to
telecommunications  companies,  as well as to other  IT-intensive  organizations
such as financial  services  companies,  outsourcers  of IT services,  including
MSPs,  application  service providers and other  multinationals.  Our solutions'
easy-to-use  interface  enables IT  managers  and  non-technical  users alike to
proactively  manage their IT resources,  analyze network  resource  activity and
trends,  anticipate  future  demands and prepare  customized  quality-of-service
reports.

Our  end-users  are  either  external  IT  service   providers  or  internal  IT
departments. They use our solutions to:

     o    monitor  and measure the  service  level they are  providing  to their
          external customers. For example, one of our clients uses our solutions
          to send periodic quality-of-service reports to its customers including
          metrics  such as traffic  volume and network  availability.  As a core
          component of our client's  network,  the  InfoVista  solution is being
          implemented to monitor and report on the status of various elements of
          the  network  and  will  then  be  used  to  provide  web   accessible
          performance reports for our client's customers.

                                       23
<PAGE>

     o    monitor and measure the service  level they are  receiving  from their
          external suppliers,  such as  telecommunications  companies,  ISPs and
          ASPs. For example,  British Airways uses our solutions to monitor data
          transmission services received from its telecommunications company.

     o    monitor and  proactively  manage their own  internal IT networks.  For
          example,  First Union  Wachovia  Bank uses our solutions to manage its
          corporate intranet.  Under the bank's "next generation  network",  the
          bank's various  corporate  business units will be able to opt for, and
          pay for, appropriate service levels. Our solutions are used to monitor
          each  business  unit's  usage and the  adherence of the network to the
          agreed upon service level.

     o    monitor  Service  Level  Agreements  ("SLAs") in real-time in order to
          locate  network  troubles  before they cause a problem.  For  example,
          AimNet Solutions provides end-to-end network architecture, integration
          and  management  services  for many  mid-sized  companies  across  New
          England,  the New York  Metro  area and the  Southeast  of the  United
          States.  The company chose InfoVista for the real-time  monitoring and
          reporting of network  performance  data. Our solution allows AimNet to
          present  real-time  SLA data via its Web portal,  giving its clients a
          complete  view  of  their  managed  infrastructure.   The  ability  of
          InfoVista's  solution  to generate  exceptions  of SLA  violations  in
          real-time   allows   AimNet  to  provide  and  assign   resources   to
          troubleshoot before they affect a customer's network environment.

We have developed significant relationships in the telecommunications  industry,
including with Bell South  International,  British  Telecom,  Chung Hwa Telecom,
France Telecom,  infonet, Marconi, MCI Worldcom, Nippon Telephone and Telegraph,
Telefonica,  Tiscali,  the Sita/Equant  Group,  T-Data (a subsidiary of Deutsche
Telekom)  and  Worldport  Communications  and with ISPs,  including  BroadRiver,
Highway One, UUNET and Wanadoo.  Users of our products also include IT-intensive
organizations,  such as financial services companies like Axa, Banque de France,
Deloitte & Touche, First Union Wachovia Bank, Royal Bank and other multinational
companies like Graybar, Hoffmann--La-Roche,  Motorola, Nestle, Pfizer and Shell.
An example of an  outsourcer  of IT  services  who uses our  products  is Aimnet
Solutions.  As of June 30, 2001, we had 470 end-users of our products holding in
aggregate  4,504  licenses for our products,  including  1,306  licenses for the
InfoVista Runtime Server. We use a two-tiered sales strategy  consisting of both
a direct sales force and indirect sales channels. Our direct sales force markets
mainly to the  telecommunications and ISP industries and provides support to our
indirect  sales  channels.  Our  indirect  sales  channels,  with  whom  we have
developed long-term relationships, include:

     o    Business Solution Integrator, (BSI) A systems integrator who offers IT
          integration  and  project  management  services to its  customers  and
          provides our products as a part of a broader solution

     o    InfoVista  Certified  Participants,  (IVCP)  Typically a consultant or
          integrator who  recommends  InfoVista  Products and supplies  services
          related to InfoVista solutions

     o    Authorized  Vista  Developer,   (AVD)  Designation  indicates  partner
          expertise  in the creation of  VistaViews  and/or  advanced  InfoVista
          integrations  and  customizations  for  additional  client  and market
          value.  This  partner  type  has been  authorized  by  InfoVista  as a
          developer for value-added integration between InfoVista product(s) and
          other vendors' products. This is could take the form of development of
          a  VistaView,  access to data  collected  by  InfoVista  to be used by
          another application,  or other forms of integration that add value for
          clients. The partner member of the AVD program has access to tools and
          support  focused on its area of expertise,  works with  InfoVista with
          its  development  efforts,  and in the  case of the  development  of a
          VistaView,  the  VistaView  is  certified.   InfoVista  also  provides
          specific training and certification for each AVD participant.

                                       24
<PAGE>

     o    Prewired  Partner,  (PWP)  Designation  indicates  that the  partner's
          product and the InfoVista  product have been  integrated at a mutually
          agreed upon level.  Examples include a VistaView  created for the PWPs
          product(s) or the access by PWP to data collected by InfoVista for use
          in its own products for additional value to clients.

     o    InfoVista  Inside Partner,  (IVI),  also an OEM or Original  Equipment
          Manufacturer.  A manufacturer who integrates InfoVista Server software
          with a VistaView  specifically for the partner's  product(s) and sells
          it directly to its customers.

          The IVI Program,  is an original equipment  manufacturer (OEM) program
          that has been designed for, and necessitated by, the growing number of
          companies  who  want to embed  InfoVista's  leading  edge  performance
          reporting technology with their products and services. The IVI program
          is targeted at companies that want to complement their products with a
          premier  service  assurance  and  performance   management   reporting
          solution via  InfoVista  technology  and offer that  solution to their
          customers. IVIs will bundle a set of VistaViews, specific to their own
          product  line,  and the  InfoVista  Runtime  Server and sell this as a
          performance  management  solution for its products.  InfoVista  Inside
          Partners understand that because performance  management  reporting is
          not their core  expertise,  this  program  allows  them to offer their
          customers immediate value.

We have  also  developed  strategic  joint  product  development  and  marketing
relationships  which include  developing  compatible  products,  cross  training
personnel and  implementing  joint  marketing  campaigns.  Currently,  our joint
relationships include projects with Cisco, Network Harmoni, Orchestream, Juniper
Networks,  Ipanema  and  ILOG  Software.  A key to  success  in  our  respective
businesses is to anticipate the future needs of our clients. We believe that our
strategic  alliances with  organizations  such as Cisco,  Packeteer,  Cap Gemini
Telecom and others,  in addition  to our own  research,  have given  InfoVista a
window into the future. We consider that solutions to these new challenges, some
currently in process,  will be the foundation of the client  requirements of the
future.

We have also recently launched "VistaCosm",  a secure InfoVista Partner extranet
to enhance  support of  partners.  VistaCosm  is designed to assist  partners in
making the most of their  partnership with InfoVista,  providing access to news,
information, marketing support and technical resources.

We began our current  activities in 1995 when Alain Tingaud,  along with private
investors,  acquired a software  service company.  He has since  transformed the
company into a producer of technologically advanced SLM real-time and historical
reporting  solutions.  From 1995, we have been  developing the  technology  that
forms  the  basis of our  products  and we began  generating  sales  from  early
versions of our products in May 1997.

4.4      INDUSTRY BACKGROUND

Cost Issues Dominate in the "new" New Economy

As business drivers become  increasingly  intertwined with the IT infrastructure
technology needs of large  enterprises and service  providers,  cost issues have
gained  precedence.  Corporate  decision  makers are taking a closer look at the
bottom  line when  evaluating  IT  infrastructure  options.  With the onset of a
global  economic  downturn and consequent slow down in corporate  spending,  the
focus on performance and Return On Investment (ROI) has never been greater.  The
InfoVista  solution is directed at helping  enterprises and service providers to
address this issue.

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<PAGE>

While the information  technology and network management teams have a tremendous
volume of data available to justify the technical and functional  value of their
assets,  there has  traditionally  been an  under-emphasis on accounting for the
cost-effectiveness and business benefits of indispensable  technology solutions.
The booming "new economy"  helped to foster the urgency of gaining  market share
over generating or verifying profits as businesses  worldwide spent an estimated
$2.2 trillion on IT in 2000 (source: Meta Group : Information Week Aug. 6 2001).
In the current unstable  economic  climate,  IT investment  projects have become
subject to much greater rigorous  cost-benefit  analyses than was previously the
case.

At the same time, the role of IT in the  corporation has been steadily moving to
the forefront.  The optimized role of IT brings expectations of increased levels
of  accountability.  The scope and architecture of traditional IT was originally
tactical and targeted at basic functional  needs. Now IT has transitioned into a
fully  strategic  role as it is integrated  into the highest levels of corporate
governance  and business  planning.  The current focus on ROI can be seen as the
inevitable consequence of the changed economic conditions and the new place held
by IT infrastructure in the management of a corporation.

Measuring costs, measuring benefits

ROI tools depend on establishing  metrics that measure value.  Value metrics are
crucial to communicating success, failure and important gaps that may exist in a
company's business methods and services.  Traditionally,  ROI goes beyond simply
determining  when the  investment  will pay for  itself.  It uses  metrics  that
consider the business value of an IT project, comparing the cost of implementing
the project with the financial  benefits it provides.  Based on the  assumptions
that  are  made for the  company  calculating  its  ROI,  those  results  can be
operating-cost reductions, revenue growth or both. For major implementations the
benefits may be evident in months or could take years.

Rapid growth and  continued  advances in  networking  technology  have led to an
unprecedented   increase  in  systems,   networks,   services  and   distributed
applications which organizations rely upon for their businesses to function. Not
only have the numbers  and  diversity  of  equipment,  technologies  and vendors
increased,  the  distribution of  infrastructure  components also is increasing.
There  is a  strong  need  for  integration  and  for  managing  the  enterprise
infrastructure  at  reasonable  cost  while  providing  higher  service  levels.
Reliability  and  performance  of  the  underlying  computing,   networking  and
distributed  service  infrastructure  have  become  critical  to  any  company's
business.

SLM  software  such as ours fits into the Service  Assurance  segment of the OSS
market.  The OSS market  consists  of the  software  used by  telecommunications
service  providers  to  automate  internal  business  processes  involved in the
provision of  IP-centric  telecommunications  services,  with the  objectives of
improving  the  quality of  services  provided,  customer  care and  operational
efficiency.  OSS functionality covers the end-to-end spectrum from order-taking,
service  activation,  fault management and service level  monitoring  through to
billing; and is active from the network layer up to the final client.

Worldwide  deregulation  of  the  telecommunications   sector  has  created  the
opportunity  for new  competitors  to provide data and voice  services that were
historically  offered by a single incumbent  provider in each country or region.
This increase in competition has forced service providers to differentiate their
services on the basis of pricing,  range of  service,  quality and  reliability.
Enhanced  and  affordable  transmission  services  continue  to  accelerate  the
proliferation  of  networks,  increased  outsourcing  of  IT  services  and  the
emergence  of a range of  service  providers.  For  example,  ASPs host  certain
business  applications  on their own IT  infrastructure  and offer usage time to
their customers via the Internet.

These  developments  have created an increasing need to measure,  anticipate and
manage the  quality  and  performance  of IT  infrastructure  in the  end-to-end
execution of business functions and transactions.  Consequently,  businesses are
demanding  tangible evidence of IT service  performance,  as demonstrated by the

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<PAGE>

emergence  of formal  SLAs,  contracts  between  service  providers  and service
consumers. These contracts include performance objectives, using metrics such as
network availability,  bandwidth usage, application response times and mean time
to repair or restore.  SLM software is then used to monitor  these  metrics both
for end-to-end service and IT infrastructure,  including its hardware components
and applications,  as well as Wide Area Networks ("WAN") and Local Area Networks
("LAN") resources.

SLM software can be categorized into three areas of application:

     o    performance  reporting,  which can be both  historical  reporting  for
          trend analysis and  continuous,  real-time  performance  reporting and
          monitoring  for   interactive   resource   management.   For  example,
          performance  reporting is used both to help service provider companies
          manage the IT service they provide to their customers and also to help
          enterprises manage their own IT services.

     o    event management,  which is used to resolve a default or other service
          disruption once the event has occurred. It typically defines processes
          to resolve IT problems but only after a disruption  has occurred.  For
          example,  event  management  software  enables  a company  to  respond
          rapidly when its IT system's  operations  are disrupted by identifying
          which users are affected,  pinpointing sources of the network problems
          and automating operator responses.

     o    policy  management,  which  is  used  to set and  manage  IT  resource
          priorities.  For example,  bandwidth  management  enables a company to
          efficiently  exploit its bandwidth  utilization by setting  priorities
          for  its use so  that  important  business  needs,  such as  financial
          reporting or order entry,  are given priority over less important uses
          like interoffice e-mail.

Most  currently  available  SLM solutions are designed to respond to only one of
the three areas of application of SLM. Clients are therefore seeking performance
reporting  solutions that can be easily  integrated  with other SLM software and
provide reporting capabilities across the three SLM areas of application.

The InfoVista Value Proposition

Many global  businesses have already made significant  investments in technology
and  online  infrastructure  in recent  years.  Further  purchases  that help to
optimize their IT assets must therefore  demonstrate a significant  ROI in terms
of impact on revenue,  business  processes,  transactions  and  associated  cost
reductions.

InfoVista  solutions for  Performance  Management  and Service  Level  Assurance
create substantial  returns on the InfoVista purchase  investment.  Clients will
generally realize immediate savings on IT infrastructure  care,  maintenance and
growth.

Additional  savings are found in the main stream of Performance  Management ROI.
These include the clear benefits of managing networks,  systems and applications
by troubleshooting  problems before help desk calls are made and by reducing the
time to correct problems. Down time, and the effort required to correct, equates
to costs. This affects all of InfoVista clients to varying degrees.

Effective  management of service levels is also a cost saving.  The verification
of service  levels can ensure best use of services  purchased  or can ensure the
best  delivery of services -  depending  upon which side of the IT services  the
InfoVista's  client finds  itself.  This  assurance can prevent lost revenue due
failure to meet service level commitments.

Finally,  InfoVista  helps system  architects  to visualize  the growth of their
networks  and  systems.  With a clear  understanding  of the  current and future
capacity of their systems,  degraded  performance  due to overloaded  components
will be managed more  effectively.  Moreover,  the appropriate new equipment and

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system upgrades can be applied to their systems via information  from InfoVista,
preventing unnecessary expenditures on unneeded equipment and software.

4.5      THE INFOVISTA SOLUTION

Through  flexibility,  scalability and openness,  InfoVista's products provide a
comprehensive  solution.  InfoVista  reports  provide  service  views  showing a
complete  picture on a single report enabling the IT service to detect,  isolate
and resolve a service level problem. InfoVista also provides operational reports
detailing performance  thresholds.  InfoVista can also be easily integrated with
other management  systems to leverage existing tools and processes,  in order to
resolve  service level issues.  In addition,  the  flexibility,  scalability and
openness of our products  provide an efficient  environment  to provide  reports
that give strategic visibility and a competitive advantage.

Our products  are designed to provide the  necessary  reporting  and  monitoring
capabilities  to bridge the gap across  the three SLM areas of  application  and
have the following key advantages over most of our competitors:

     o    Real-time   and   historical   reporting.   Our  reports  can  be  run
          continuously to identify and report on IT  infrastructure  performance
          and events on a real-time basis and also perform historical  reporting
          to identify long-term trends. Most of our competitors' products either
          provide real-time reporting or historical reporting, but not both. Our
          real-time   reporting   feature  can  trigger   alarms  based  on  any
          user-defined  IT metric,  which  then can be sent to event  management
          software enabling the client to identify a potential problem before an
          actual  breakdown  occurs.  Clients can launch our reports  from their
          event management  software to obtain contextual  information to reduce
          troubleshooting  time  and  allow  continuous  monitoring  through  to
          resolution  of the  event.  Following  an event,  a client can use our
          reports to set new policies.  Our  historical  reporting  capabilities
          also facilitate capacity planning and trend analysis and provide input
          to permit managers to set and enforce IT policy.

     o    Report flexibility. The infrastructure deployed must be able to expand
          as service  offerings  evolve.  It must be possible to  customize  and
          modify processes to accommodate new monitoring elements,  new types of
          alarms,  etc. It is also critical that the architecture be flexible so
          it can be  changed  quickly to provide a  competitive  advantage  when
          introducing  new services.  Our software  allows our clients to design
          their own  reports,  creating  individualized  appearance,  layout and
          metrics.    This    flexibility   is   particularly    important   for
          telecommunications   companies  and  ISPs  enabling  them  to  fashion
          personalized   reports   for   delivery  to  their   customers,   thus
          differentiating  their service value from that offered by competitors.
          Our  clients  can also  output  data  through  a variety  of  formats,
          including  hypertext markup language  ("HTML"),  for viewing via a Web
          browser,  command  line and Windows  Clipboard  for use in a number of
          applications.

     o    Adaptability  and product  customization.  Our software can be quickly
          tailored  on-site  for each  client's  infrastructure  including  most
          standard or  proprietary  IT elements.  In this way, our products give
          our clients much broader  performance  reporting  capabilities,  going
          beyond the traditional set of standard supported  elements.  Since our
          clients' IT infrastructures  continue to evolve rapidly, our products'
          ability to be  customized  on an on going  basis is a key  competitive
          advantage. Our products can also address standard and company-specific
          protocols, such as SNMP and Cisco NetFlow,  respectively. In addition,
          our products  can collect  data from Web server log files,  enterprise
          management  platforms and other databases and third-party  systems and
          application management agents.

     o    Scalability.  Scalability is a critical requirement.  It is vital that
          the architecture be able to expand rapidly to handle growth in current
          and future service offerings.  It is important to think of scalability
          not only in terms of the nodes being managed on a per-support resource
          basis, but of all systems comprising the architecture. This includes

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<PAGE>

          trouble ticket,  change  management,  asset  management and other such
          support  systems.  It is critical  that the  interfaces  built between
          these systems take into consideration future growth  expectations.  In
          addition,  scalability must take into account the processes being used
          to  operate  the  business  and  ensure  that as demand  grows,  these
          processes  scale as  effortlessly  and  efficiently  as possible.  The
          InfoVista  solution  is  designed  from  the  ground  up to be  highly
          scalable  in large  environments.  InfoVista  servers  are part of the
          InfoVista  front office and are designed to monitor large number of IT
          resources at  high-frequency  acquisition  rates handling complex data
          and handling planned reporting and service-level violations.

          We use a fully distributed architecture,  which allows our products to
          collect and analyze data on a local level and  transmit the  processed
          data at a user-defined  rate to a global data repository.  Because our
          products  pre-process the data, and the frequency of data transmission
          can be controlled,  the user can avoid  congestion in the central data
          repository and on the network.  Our distributed  architecture  enables
          our products to be deployed incrementally over time as our clients' IT
          systems expand and to operate on the largest and most complex networks
          worldwide, making our solution an ideal product for large clients such
          as telecommunications carriers.

     o    Software integration. Our products easily integrate into most clients'
          existing software  environments as nearly all features of our software
          can be controlled via Application  Programming  Interfaces ("APIs") or
          command-line language. For example, this feature allows our clients to
          integrate our products with other SLM  solutions,  such as Micromuse's
          NetCool,  as well as with  network and systems  management  platforms,
          such as IBM Tivoli.

     o    Object  modeling.   Through  our  patented  technology,  our  software
          collects data from heterogeneous  network elements and homogenizes the
          data to produce  comprehensive  reports  using  common  metrics,  thus
          eliminating the need for multiple, specialized reports. For example, a
          company  can  measure  the  throughput  of  its  network  switches  by
          compiling data from several vendors'  products as well as by compiling
          data from different equipment versions from the same vendor.

4.6      STRATEGY

We aim to become  the  leading  worldwide  SLM  performance  reporting  software
provider  by  offering  performance  reporting  solutions  that  can  be  easily
integrated  with other SLM software  and that can report and monitor  across the
three SLM segments. Key elements of our strategy include:

     o    Further Developing Our Strong Presence with Telecommunication  Service
          Providers,  ISPs and  Other  IT-Intensive  Client  Segments,  notably,
          financial    institutions.    We   have   traditionally   focused   on
          telecommunications  carriers and Internet service providers. We intend
          to expand our market  share in these core  industries  where there are
          large,  complex  and fast  growing  IT  infrastructures.  We intend to
          leverage the expertise we have developed with these clients to further
          develop  our market  share in other  IT-intensive  industries  such as
          financial  services,  application  service providers,  outsourcers and
          other  multinational  companies and fully exploit the growth potential
          of e-business and e-commerce.

     o    Expanding into Application Service Level Management. Our ultimate goal
          is to  provide  SLM  software  that  allows our  clients to  correlate
          business IT systems  performance  with their business  objectives.  We
          will  pursue  our  goal of  extracting  more  knowledge  from the data
          collected to enable our clients to analyze their business functions.

     o    Developing  Additional  Strategic  Partnerships.  We will  continue to
          leverage our products' strong integration potential and flexibility to
          form further strategic relationships with companies offering

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<PAGE>

          complementary products and services. We have formed alliances with key
          partners including Cap Gemini Telecom,  Greenwich Technology Partners,
          Juniper Networks,  Predictive Systems,  Netigy and Alcatel. We believe
          that our  relationships  with our partners will broaden and accelerate
          the market acceptance of our products.

     o    Maintaining  and  Expanding  Technological  Leadership.  We believe we
          offer one of the most  comprehensive,  flexible and easy-to-use ranges
          of performance  reporting SLM solutions available in the market today.
          We intend to maintain our  technological  leadership  by continuing to
          devote substantial resources to product research and development.  For
          example, we intend to report on performance of wireless and fixed line
          voice  networks,  develop new  applications  around our  central  data
          repository  product  and  develop  more  of our  prepackaged  reports,
          particularly with partners. We also expect to evaluate the acquisition
          of  additional  businesses,  products  and  technologies  in  order to
          accelerate the development of our leadership  position and improve our
          time-to-market with new technologically advanced products.

     o    Expanding Our Global Presence.  We have established a strong sales and
          support presence in Europe, North America and the Asia-Pacific region,
          with offices in the United States, Europe (France, the United Kingdom,
          Germany,  Spain, Italy and Benelux),  Singapore and Australia. We also
          have an active presence  through IVCPs and BSIs in these countries and
          in other European  countries,  Japan and South America. We have opened
          new  headquarters  for  the  Asia/Pacific  region  in  Singapore,  for
          research and development, sales and marketing. We intend to extend our
          leadership  position in countries  where we see a high  potential  for
          growth  in the sales of our  products,  particularly  in  Scandinavia,
          South America and Canada,  by opening new offices and  subsidiaries in
          targeted  locations and, to the extent that appropriate  opportunities
          are available,  establishing relationships with third parties. We will
          also continue to pursue strategic  marketing  relationships and extend
          our global  distribution  capabilities  through  our network of IVCPs,
          BSIs and OEMs.

4.7      DESCRIPTION OF OUR BUSINESS

InfoVista is a global provider of software solutions that help service providers
and  enterprises  achieve better returns from their complex IT  infrastructures.
Our   software   monitors,   analyzes  and  reports  on  the   performance   and
quality-of-service  of IT  infrastructure,  including  the  Internet,  networks,
servers and applications.  We generate revenues in the form of licensing fees on
our  products and in the form of service  fees from our  professional  services,
customer support and maintenance. For the year ended June 30, 2001, we generated
70.7% of our  revenues  from  licenses and 29.3% from  services.  Our main sales
regions  are  Europe,  the United  States and Asia.  For the year ended June 30,
2001,   approximately   52.0%  of  our  revenues   were  invoiced  from  Europe,
approximately  43.7 % were invoiced from the United States and approximately 4.3
% were invoiced from Asia.

4.8      PRODUCTS

Our  products  collect  data across the user's IT  infrastructure  and  generate
reports that present a synthetic  view of performance  and service  achievements
across all of its  elements.  Our products  allow users to determine  whether IT
performance  meets the  standards of an existing  SLA or generally  meets users'
expectations or business needs in an efficient manner.

Our base product is the InfoVista  Runtime/Workshop.  The core of the product is
the InfoVista  Runtime Server,  a server based  application  that acts both as a
data  gathering  engine and a central point for managing real time users' report
requests.  Multiple  InfoVista  Servers can be organized around  VistaMart,  our
centralized global data repository.  In addition to InfoVista  Runtime/Workshop,
our base products include  VistaViews,  our series of ready-to-use  reports that
are available in bundles or individually  and our web access server  VistaPortal

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Standard  Edition,  which  allows all our real time reports to be viewed using a
Web-browser.  One license is required per InfoVista  Runtime Server or InfoVista
Workshop Server and this includes certain VistaViews.

InfoVista  Runtime Server  collects and stores data from all sources,  including
WANs and LANs, switches,  routers,  UNIX and Windows NT systems,  mainframes and
applications  such  as Web  servers  and  e-mail  servers.  It  gathers  data at
user-specified  intervals,  calculates  the  data  according  to  predefined  or
user-defined  metrics  and  deposits  the  data  into the  InfoVista  integrated
database.  It is essentially  targeted as a production platform and requires its
own license key that is linked to a MAC address.  It needs an InfoVista  Runtime
Client in order to be accessed and  configured,  but still continues to collect,
compute and store data.

InfoVista  Runtime  Client  is  the  report  viewing  interface  installed  on a
workstation. It supplies an access right to the Runtime Server so that users may
launch,  stop, publish,  manage and consult VistaView reports within the Runtime
Server.  It does not  require a license key but  end-users  must  purchase  this
access right for each user.

InfoVista Workshop Server is targeted as a development  platform and provides an
environment for creating  VistaViews and Report  Templates.  It requires its own
license key that is linked to a MAC address. It needs a Workshop Client in order
to access the report building environment.

InfoVista  Workshop  Client is the  report  building  interface  installed  on a
workstation.  It supplies an access right to the  Workshop  Server so that users
can create VistaView  report  templates within the Workshop Server  environment.
Workshop  Client does not require a license key but end-users must purchase this
access right for each user. Workshop Client replaces the Workshop Report Builder
License.

The key features of InfoVista Runtime/Workshop are:

     o    Data translations and calculations.  The InfoVista Server  homogenizes
          the data it receives from  heterogeneous  sources,  either directly or
          through a Vista  Plug-In,  by using a protocol  adapter  software that
          translates  protocols to a common format and performs  real-time  data
          calculations.

     o    Integrated   database.   The  InfoVista  Server  is  self-maintaining,
          monitoring data aging and storage  according to the needs specified by
          clients  in their  requests,  which  lowers  the  costs to the user of
          operating the system.

     o    VistaFinder.   The  InfoVista   Runtime/Workshop  comes  bundled  with
          VistaFinder,  which  enables  the  InfoVista  Server  to  maintain  an
          up-to-date  model of the client's IT  infrastructure  by automatically
          keeping track of changes as components are added, removed or modified.

VistaViews  are "out of the box" or standard  reports.  Certain  VistaViews  are
embedded  free-of-charge in the InfoVista  Runtime/Workshop  and others are sold
separately  or as  bundles.  Using  Workshop,  the  client  can also  tailor the
VistaView  reports with simple drag and drop,  Windows-based  editing tools. The
client can run VistaView reports to view both real-time and historical data.

VistaView reports:

     o    provide immediate information on exceptional  situations which enables
          IT  operations   staff  to  quickly   identify  network  or  other  IT
          disruptions  and, with the assistance of event  management  tools that
          may be available to them, correct them, and

     o    offer a synopsis  of  service  levels  and  trends  over a  designated
          period.

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The  table  below  presents  a list of  selected  VistaView  products  currently
available.

VistaView Listing (Qty 44)

Service                        VistaView

Across Domains                 VistaView for SLM (Service Level Management)

Application Level              VistaView for Application Monitoring - Newtest
                               VistaView for Internet Applications - Patrol
                               VistaView for InfoVista Tuning
                               VistaView for IP Services
                               VistaView for Oracle

System Level                   VistaView for Mail Servers - Exchange
                               VistaView for Servers - Compaq
                               VistaView for Servers - Host Resources
                               VistaView for Servers - WIN NT 4.0
                               VistaView for Servers - Patrol
                               VistaView for Servers - System Resources
                               VistaView for Web Servers - IIS
                               VistaView for Web Servers - Netscape

Network Level                  VistaView for ATM Switches - 3Com
                               VistaView for ATM Switches - Cisco
                               VistaView for ATM Switches - Fore
                               VistaView for CMTS - Cisco
                               VistaView for CMTS - Com21
                               VistaView for CMTS - Motorola
                               VistaView for DSLAM - Cisco
                               VistaView for DSLAM - Paradyne
                               VistaView for Frame Relay
                               VistaView for Frame Relay - Nortel
                               VistaView for LAN Segments
                               VistaView for LAN Switches - 3COM
                               VistaView for LAN Switches - Cisco
                               VistaView for LAN Switches - Nortel
                               VistaView for LAN Switches - Standard
                               VistaView for Network Access Servers - 3Com
                               VistaView for Network Access Servers - Cisco
                               VistaView for Network Access Servers - Lucent
                               VistaView for Network Access Servers - Nortel
                               VistaView for NetFlow
                               VistaView for Network Basics
                               VistaView for Network Inventory
                               VistaView for Network Latency
                               VistaView for Routers - 3Com
                               VistaView for Routers - Cisco
                               VistaView for Routers - Juniper
                               VistaView for Routers - Nortel
                               VistaView for Agent - Cisco
                               VistaView for Traffic Monitoring - RMON2
                               VistaView for WAN Switches - Stratacom


In  addition  to  developing  our own  VistaViews,  we have  developed  and will
continue to develop  VistaViews  with OEMs and other  partners  who bundle their
products with InfoVista Engines. We intend to promote a community of independent
developers for the creation of new VistaViews.

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VistaPortal  Standard Edition is a full Java Servlet based software which allows
viewing  of  all  our  real-time  and  historical   InfoVista  reports  using  a
Web-browser.  It also allows export of all reports  using the  industry-standard
format HTML, thus enabling any workstation  equipped with an Internet browser to
display the reports in a fully formatted and graphical manner.

VistaMart  is a global data  repository  that  consolidates  data from  multiple
InfoVista  Servers,  forming a  scalable  distributed  system.  It is  specially
adapted for those  clients who need to gather  information  from  geographically
dispersed sites.  VistaMart  provides the data for  enterprise-wide  centralized
reports of networks, systems and applications. VistaMart can also integrate with
a variety of  third-party  tools such as decision  support or data mining  tools
which exploit VistaMart's data. Additionally, it can process and merge data from
sources  other  than  the  InfoVista  Server,  such  as call  center  management
software, which can be used to create a single performance report.

Vista  Plug-Ins  are software  modules that allow  clients to monitor and record
network data beyond  InfoVista's  standard package offering.  We currently offer
several types of Vista Plug-Ins:

     o    Vista  Plug-In for IP  Services,  monitors  end-to-end  IP services by
          measuring response times and availability of web services.

     o    Vista  Plug-In for NetFlow  allows  service  providers to collect data
          from Cisco  routers  and to monitor  the nature and quality of traffic
          flowing over various operators' networks.

     o    Vista  Plug-In for Server  Analysis  includes the Host  Resources  MIB
          (RFC1514  MIB) & System  Resources  MIB which  define a uniform set of
          objects used to monitor system resources.  Data retrieved by the Vista
          Plug-in  can be  displayed  using  the  VistaView  for  Servers - Host
          Resources and VistaView for Servers - System Resources.

     o    Vista Plug-In for Traffic Analysis incorporates the RMON 1 and 2 MIBs.
          This  technology  enables you to see which machines are  communicating
          and with  which  protocols.  RMON  technology  uses a probe to monitor
          resource  activity.  The Vista Plug-in for Traffic  Analysis acts as a
          probe and is declared as such  within  InfoVista  in order to retrieve
          traffic information based on protocol and address.  Data can be viewed
          using the VistaView for Traffic Monitoring - RMON 2.

We  recently  released  version  1.2 of  VistaMart,  version  2.2  of  InfoVista
Runtime/Workshop  Server,  version  3.0 of Vista  Plug-In for Netflow and 1.0 of
Vista Plug-In for Server and Traffic Analysis.

4.9      PRODUCTS IN DEVELOPMENT

We are extending our system  architecture and are working on several new product
initiatives.  In particular, we are developing VistaPortal,  our new, Java-based
global  reporting and management  solution that will provide  unified  Web-based
reporting  for  both the  InfoVista  Runtime  and  VistaMart  components  of our
solution.

VistaPortal is currently in Beta testing and its target release is in mid fiscal
year  2002.  VistaPortal  is  InfoVista's  web-based  window to the  information
system.  It allows  users to  simultaneously  view key  service  level  metrics,
real-time  events and  strategic  information.  Its unique mix of real-time  and
long-term reporting facilitates quick resolution of issues as they arise as well
as proactive planning of information systems growth based on observed historical
patterns.  A key component of  VistaPortal  is its VistaMart  reporting  module,
enabling  Vista  Mart  users to  design  and  display  reports  containing  data
retrieved  from  a  VistaMart   Repository.   From  these  reports,   users  can
effortlessly  drill down to real-time data  retrieved  from  Infovista  servers.
VistaPortal  provides  a  single,   flexible  source  for  knowledge  about  the
information system. Where other products may provide real-time event management,
long-term  trending or important  internal or external news,  VistaPortal offers
all of  these,  side by  side,  in an easy to  configure,  web-based  interface.

                                       33
<PAGE>

Administrators  can ensure that users of VistaPortal see exactly the information
that interests them while simultaneously  ensuring that information is available
only to those authorized to access it.

We have  recently  announced  our  "On-Demand"  Network  Performance  Management
Solution,  named  Powerview.  This is an  application  developed by  InfoVista's
Professional  Services Group to address some very specific  on-demand  reporting
needs recently  identified by our clients.  It will be sold as part of a product
bundle which will also include the InfoVista 2.2 Runtime Server and  VistaPortal
SE. This new solution will address Network Operation Centers' (NOC) requirements
in a totally new way by providing an easy to use interface  that allows the user
to activate  the what  network  performance  report he needs,  when he needs it,
focused  on the period he is  interested  in (a few hours or a few  weeks).  The
reporting tool masks all the complexity of the reporting operation and offers an
easy to use interface that does not require training - meaning that users are up
and running  more  quickly at a lower cost and a quicker  return on  investment.
Users without  knowledge of InfoVista (or other  network  performance  products)
will be able to follow a few simple screens and create and manage  reports.  All
they need to know is the IP address,  SNMP  community  string,  and SNMP port of
their  devices,  and the program will perform the  discovery and show the report
template  options  that  apply  to the  device.  A user  does  NOT  need to know
indicators,  metrics, display rates, etc. All of that is handled through the CGI
scripts and VistaViews.

For telecommunications  operators,  service providers and enterprises alike, the
InfoVista   On-Demand  Network   Performance   Management  Solution  will  allow
organizations  to  dramatically  enhance the  relationship  between the "service
provider" and the "service consumer" by offering network  performance reports on
demand. It will also allow (particularly service providers) the ability to offer
new  "On-Demand"  services  and  ways  to  differentiate   themselves  from  the
competition.

We continue to work on integrating  our software with other software or standard
products in the market.  We cannot guarantee you that products under development
will result in working or marketable products.

4.10     SERVICES

We provide  services  related to our software  products,  including  consulting,
support and maintenance  services.  We invoice for our services  separately from
our  licensing  fees. We believe that a high level of  professional  service and
client support is critical to the successful  marketing and sale of our software
and solutions.  As of June 30, 2001, we had 54 employees in our services  group.
We plan to moderately  increase the number of our service teams in line with the
expansion  of our business  and to  reinforce  education  of clients,  partners,
resellers and other third parties on how to provide similar services.

The following is a list of the services we offer:

VistaService  Consulting.  We have dedicated teams of expert engineers who offer
consulting services for specified project  management,  helping our clients from
the design phase through to customization,  installation and deployment of their
InfoVista  solutions.  To further address the ever-evolving  requirements of our
clients,  we have  introduced the Solution  Integration  Customer  Center.  This
Center is responsible for the development of ready to use,  integrated  packages
to address commonly occurring customer requirements.

VistaService  Solution Support. Our range of Solution Support contracts includes
the standard  offering of 8*5,  Mission Critical Program (MCP) 24*7 and Auditing
on Site Program (AOP).  AOP comprises  regular and scheduled  on-site visits for
the  performance  and reporting of an audit of the  configuration  of the client
production site.  InfoVista is also offering  Developer  Support to those of our
Partners/Clients  who wish to  develop  their own  VistaViews  for  internal  or
external  purposes as well as support  for the  InfoVista  configuration  tool -
IVWizard.  All Support  packages  are  extensions  to the  standard 8*5 Solution
Support contract.

                                       34
<PAGE>

VistaService  Training &  Certification.  We offer regular  training  classes in
Europe (Paris,  London,  Munich,  Rome), the United States  (Baltimore) and Asia
(Singapore),  as well as on-site training.  Candidates who complete the training
classes and pass the necessary  tests can obtain  credentials  such as InfoVista
Certified  Professional,  InfoVista Certified Consultant and InfoVista Certified
Trainer.

Education is a key component in optimizing an investment in InfoVista solutions.
InfoVista's training is designed to provide comprehensive technical training for
network  engineers,  integrators,  architects  and  administrators.  Each course
provides a thorough  explanation  and  practical  hands-on  approach so that the
student  has the  ability to  optimize  the  flexible  and open  features of the
product.  Instructor-led  courses  are  delivered  within  a  lecture/laboratory
environment  allowing students to apply concepts presented during the lecture to
a classroom network, reinforce the subject matter and promote a familiarity with
InfoVista's Service Level Management solutions. InfoVista is highly committed to
training excellence and customer success.

VistaService  Partners.  To  provide  our  clients  with an  increased  level of
service,  InfoVista has  introduced a new program  called the InfoVista  Service
Partnership  Program.  This program is designed to assist  Partners in achieving
service  and  support  goals.  It offers  InfoVista  clients  the  security  and
competitive advantage of a fully supported InfoVista solution.

We are  identifying  potential  VistaService  Partners whom we aim to train to a
high  standard and use them to enable us to deliver the entire range of services
worldwide.  We require that all our partners have dedicated  personnel who fully
understand our products and employ at least two engineers that have been trained
and  certified by  InfoVista.  We require that they follow  documented  internal
procedures  including clear communication  channels,  so that they will have the
necessary support to assist InfoVista end users. We will perform on-going audits
of these partners to ensure a continuous high level of quality support.

Our service group is continually  seeking ways to upgrade and enrich our service
offerings.   We  have  introduced   Partner  Workshops   dedicated  to  Support,
Professional  Services  and  Education.  We are  constantly  looking  for way to
improve the  services  offered to our  clients by using  surveys,  seminars  and
strategic forums.

4.11     GEOGRAPHICAL BREAKDOWN OF REVENUES

The following  chart shows  revenues  invoiced from Asia,  the United States and
Europe  broken  down  between  license  and  service  revenues  for the  periods
indicated.


         (In thousands(euro))
                                                    Year ended June 30,
                                    --------------------------------------------
                                             2001          2000           1999
                                    --------------- ------------- --------------
Asia
Of which                                     1,198             -              -
     License revenues                          931             -              -
     Services revenues                         267             -              -

United States                               12,081         4,473          1,006
Of which
     License revenues                        8,641         3,424            516
     Services revenues                       3,440         1,049            490

Europe                                      14,380         5,868          1,799
Of which
     License revenues                        9,975         4,267          1,099
     Services revenues                       4,405         1,601            700
                                    --------------- ------------- --------------
Total                                       27,659        10,341          2,805

                                       35
<PAGE>

The following  chart shows  revenues  invoiced from Asia,  the United States and
Europe broken down by country.


        (In thousands(euro))
                                                   Year ended June 30,
                                    --------------------------------------------
                                             2001          2000           1999
                                    --------------- ------------- --------------
United States                               12,081         4,473           1,006

Asia Pacific                                 1,198             -              -

Europe                                      14,380         5,868           1,799
Of which (1)
     France                                  5,232         3,782           1,799
     Germany                                 4,360           964              -
     England                                 4,788         1,122              -
                                    --------------- ------------- --------------
Total                                       27,659        10,341           2,805

(1)  as of June 30, 2001, 2000 and 1999 the Company does not recognize revenues
     invoiced from Belgium or Spain



4.12     END USERS

We have a diverse set of end-users in a variety of business  sectors,  including
telecommunications,   Internet  services,   financial  services,   IT  services,
outsourcing and consulting.  To date, we have targeted  organizations in our key
markets  of  telecommunications,   service  providers  and  Internet  companies,
including online merchants,  ASPs, Web-hosting companies and other multinational
companies. However, a significant portion of our revenues is, and is expected to
continue  to  be,  attributable  to  sales  of  products  to  telecommunications
carriers.  For the years ended June 30,  2001,  2000 and 1999,  our five largest
end-users accounted for approximately 26.3%, 24.7% and 58.1%,  respectively,  of
our total  revenues and our ten largest  end-users  accounted for  approximately
34.9%, 35.2% and 67.8%, respectively,  of our total revenues. We anticipate that
our  operating  results  for any  given  period  will  continue  to  depend to a
significant  extent upon  revenues from large  contracts  with a small number of
clients.  We expect that the  composition  of that small group of end-users will
continue to change over time so that the  achievement  of our long-term  revenue
goals will require us to obtain additional large end-users on an ongoing basis.

The table below shows the revenues  composition from our three largest end-users
for the periods indicated.

<TABLE>
<CAPTION>

                                              Year ended June 30,
-------------------------------------------------------------------------------------------------------------
          2001                            2000                                        1999
-------------------------------------------------------------------------------------------------------------
<S>                         <C>                                      <C>
                            France                                   France
T-Data ..........10.8%      Telecom/Sita/Equant Group (2)....11.4%   Telecom/Sita/Equant Group(2).......27.7%
Client "A" (1)....5.3%      UUNet.............................4.8%   3Com...............................14.2%
Infonet ..........3.9%      Wachovia..........................3.0%   BT.North.America....................6.2%

(1)  For reasons of  confidentiality,  we cannot name our second largest client,
     which is therefore identified as Client "A"
(2)  On June 29,  2001,  two of our  largest  clients,  France  Telecom  and the
     Sita/Equant  Group,  announced the  completion of the merger of Equant with
     Global One, a wholly owned subsidiary of France Telecom.
</TABLE>

Our  failure  to enter  into a  sufficient  number of large  contracts  during a
particular period could harm our operating results.

                                       36
<PAGE>

As of June 30, 2001, we had 470 end-users in France, the United States,  Canada,
the United Kingdom, Germany, Austria, Belgium, Luxembourg,  Switzerland,  Italy,
Spain, the Netherlands,  Sweden, Brazil, Mexico, Chile, Singapore, Japan and New
Zealand,  holding in aggregate 4,504 licenses,  including 1,306 licenses for the
InfoVista  Workshop  and  InfoVista  Runtime  Server.  The table  below  shows a
representative list of companies that use our products.

<TABLE>
<CAPTION>

Telecommunications                                               Outsourcers and
Companies and ISPs                  Financial Institutions       Consulting Firms              Other Multinationals
-------------------------------     ------------------------     --------------------------    --------------------
<S>                                 <C>                          <C>                           <C>
Bouygues Telecom                    Axa                          Cap Gemini Telecom            BASF
British Telecom                     Banque de France             Debis                         British Airways
Broadwing                           BNP Paribas                  Deloitte & Touche             Chevron
Chung Hwa Telecom                   Credit Agricole-Indosuez     Hitachi Information Systems   Exxon
Concert                             First Union Bank             Info AG/Satisfactory          Hoffmann-La Roche
France Telecom                      Royal Bank                   NetEffect                     Nestle
InfoNet                                                          Siemens Business Services     Shell
Marconi                                                          Verso Technologies            Thomson-CSF
Nextel Communications
Nippon Telephone and Telegraph
Singtel
T-Data (Deutsche Telekom)
Telefonica
UUNET
Viag Interkom
Videotron
Worldport Communications
</TABLE>


4.13     SALES AND MARKETING

We use a two-tiered  sales strategy  consisting of both a direct sales force and
indirect sales channels.

Direct  sales.   Our  direct  sales  force  is  comprised  of  full-time   sales
professionals   and   applications    engineers   who   primarily   target   the
telecommunications  industry and provide support to our indirect sales channels.
As of June 30, 2001, we had a total of 92 sales and marketing  employees of whom
19 were located in France,  39 in regional  offices in the United States,  23 in
our other offices in Europe and 11 in the  Asia/Pacific  region.  As part of our
growth strategy,  we intend to extend our leadership position in countries where
we see a high potential for growth in the sales of our products, particularly in
Scandinavia,  South America and Canada,  by opening new offices and subsidiaries
in  targeted  locations  and,  to  the  extent  appropriate   opportunities  are
available, establishing relationships with third parties.

Indirect  sales.  We have  contractual  relationships  with many types of market
participants  that range from  authorized  reselling  agreements  to product OEM
contracts.  We offer our resellers  complete marketing  programs,  and sales and
technical  training  and support to help them market their  complete  technology
solutions.  In return,  we gain entry into accounts  with which these  resellers
already have established business relationships. Many of these agreements permit
the reseller or integrator  to purchase our software at discounts  from our list
prices.

For a discussion of the categories of our indirect sales channels, see "Business
Overview".

4.14     STRATEGIC RELATIONSHIPS

We  have   developed   strategic   joint  product   development   and  marketing
relationships.  Our joint marketing  relationships include agreements to develop
compatible products, cross-train and implement joint marketing campaigns.

                                       37
<PAGE>

In December 1999, InfoVista signed a worldwide agreement with Cap Gemini Ernst &
Young.  While this business is maturing in Europe,  it is only  beginning in the
United States. This group focuses entirely on the  telecommunications  Business,
with  specific  focus  on  Mediation,   Quality  of  Service  ("QoS"),  Billing,
Outsourcing and ASP Market and IT QoS.

InfoVista  has been a member of the Cisco  Ecosystem  partnership,  in Europe as
well as in the United States, since March 2000. This partnership is comprised of
certain  companies  certified  by Cisco  after a thorough  evaluation  as having
products which complement Cisco's products.  Such partnership  envisions a close
cooperation in product development, sales and marketing.

In September 2000,  InfoVista signed an agreement with Alcatel for the worldwide
distribution  by Alcatel of our product line through the use of its direct sales
force and indirect sales channels.

In July 2001 InfoVista  announced its  participation as an initial member of the
Juniper  Network's  new IP OSS  Alliance  (IOA),  with the  availability  of the
VistaView  Performance  Reporting  Module.  This will soon be  followed by other
integration pieces.

In September 2001,  Orchestream and InfoVista  announced a project to develop an
integrated software solution for the activation and measurement of IP services.

4.15     COMPETITION

The Service Assurance market is extremely  fragmented and made up of a number of
point  solutions.  It  is  fairly  common  to  find  several  products  used  in
conjunction  at a client site,  each covering a particular  area of  technology.
What makes this market  dynamic is that all  products  in the space  address the
problem of SLM, either to report the service levels or to sustain them. As such,
all  products  in this space  target the same  organization  within IT  (usually
operations) and draw on the same budget. Our software is designed for use in the
performance  management  sector of the NSM  market.  Competition  in this market
overall is intense and is characterized by rapid technological change,  evolving
industry  standards,  frequent  product  introductions  and increasing  customer
requirements.  Our existing and  potential  clients  typically  have a preset IT
budget for which we must compete with our competitors.  We expect competition to
continue to be intense in the future.

We compete principally on the basis of:

     o    breadth of functionality;

     o    flexibility;

     o    scalability;

     o    product performance;

     o    ease of deployment and use; and

     o    price.

Our primary source of competition  comes from suppliers of comparable  products,
including Concord  Communications,  Inc.,  Trinagy (recently acquired by Hewlett
Packard) the Vital Signs division of Lucent, Net IQ, Quallaby  Corporation,  and
several  smaller  software  vendors.   Other  sources  of  actual  or  potential
competition include:

                                       38
<PAGE>

     o    suppliers  of  network  and  system  management  products,   including
          Computer  Associates,  Compuware,  Hewlett  Packard,  IBM Tivoli,  Sun
          Microsystems, Aprisma and BMC;

     o    SLM  software  providers  active in adjacent  segments,  such as event
          management and policy management;

     o    large software and hardware suppliers;

     o    systems  integrators  who  generally  provide  consulting  services to
          develop client specific applications;

     o    service suppliers who act as outsourcers of SLM services; and

     o    our clients' internal technical organizations that produce proprietary
          software addressing their specific needs.

Some of our  competitors  have  longer  operating  histories  and  significantly
greater  financial,  technical and marketing  resources than we do. In addition,
other companies may enter the SLM market.

4.16     INTELLECTUAL PROPERTY

Our  success and  ability to compete  are  dependent  on our ability to develop,
maintain and protect the  proprietary  aspects of our  technology.  We rely on a
combination of patent, trademark, copyright and trade secret law and contractual
restrictions  to protect the proprietary  aspects of our technology.  Our patent
and trademark applications might not result in the issuance of any valid patents
or trademarks.

Patents.  We presently have two French patents  issued.  One of these patents is
for a performance  measurement and service quality monitoring system and process
for  an  information  system.  The  other  is  for a  modeling  process  for  an
information   system,   in   particular   with  a   view   to   monitoring   the
quality-of-service,  and a measurement  and modeling  system  implementing  this
process.  Both French  patents  expire on January 29, 2017.  Both of the patents
have received  extensions in the United  States,  with two U.S.  patents  issued
which expire on January 29, 2018, and we also have extensions pending in Europe.
We expect to file an  application  to  register  an  additional  patent with the
Institut  National de la Propriete  Intellectuelle  (I.N.P.I)] before the end of
the calendar year.

Trademarks.  We  have  registered  the  trademark  "InfoVista"  in a  number  of
countries, including in Europe (as a Community Trademark) and the United States.
We also have a trademark registration for "VistaMart" in France. In addition, we
have filed trademark applications in the United States and in the European Union
for the product names "VistaView", "VistaMart," "VistaPortal," "VistaFinder" and
"VistaService"  and for  "InfoVista"  accompanied  by its  logo  and the  phrase
"Seeing  IT." We have  applications  pending  for  protection  for some of these
trademarks in other jurisdictions.  We plan to apply for trademark registrations
for other product names containing the word "Vista" in the near future.

We seek to protect our source  code for our  software,  documentation  and other
written materials under trade secret and copyright laws. For example, we license
our products to end-users under shrink-wrap license agreements. We seek to avoid
disclosure of our intellectual property by restricting access to our source code
and by  requiring  employees  and  consultants  with  access to our  proprietary
information to execute  confidentiality  agreements  with us. Our employees sign
contracts with us agreeing not to compete for a certain period  following  their
departure from the company subject to certain limitations. We have deposited our
source codes with the Agence pour la Protection des Programmes,  one of the main
French organizations offering software escrow services.

                                       39
<PAGE>

Despite our efforts to protect our proprietary rights,  unauthorized parties may
attempt to copy aspects of our products or to obtain and use information that we
regard as  proprietary.  In addition,  the laws of many countries do not protect
our  proprietary  rights to the same extent as the laws of the United States and
France.  Litigation  may be necessary in the future to enforce our  intellectual
property rights,  to protect our trade secrets and to determine the validity and
scope  of  the  proprietary  rights  of  others.   Litigation  could  result  in
substantial costs and diversion of resources. In addition, we may not prevail in
any such litigation,  and our intellectual  property rights may be found invalid
or  unenforceable.  Any of the foregoing could have a material adverse effect on
our business and operating results.

We use a variety of third  party  software in our  products  that we license for
this  purpose.  This software  will range from a specific  application  or codes
developed by a software  provider in conjunction  with our  development  team to
software  which is made freely  available  via the  Internet.  In some cases the
software forms a key role in our products, in other cases we can use alternative
software without  significantly  impacting our performance or timetable.  In the
case of key  software,  we seek to protect  our  ability to use the  software by
negotiating  appropriate  licenses  and escrow  protection.  However,  we cannot
guarantee that the third-party  software  licenses will continue to be available
to us on commercially reasonable terms, if at all.

Our  success  and  ability to compete  also  depend  upon our ability to operate
without  infringing upon the proprietary  rights of others.  In the event of any
successful  claim of  infringement  against  us,  however,  and our  failure  or
inability to license  that  technology  on  acceptable  terms,  our business and
operating results could be significantly harmed.

4.17     INSURANCE

We maintain insurance against product liability claims. We believe the level and
geographical scope of the cover to be sufficient for our needs.

In addition,  we carry  insurance  against civil  liability  claims  against the
company and its officers  arising from the  exploitation  of our products.  This
insurance covers all countries where we have a legal presence.

4.18     COMMUNICATIONS

We  communicate  with our  investors  and the public by means of our  website at
www.infovista.com,  participation  at trade shows,  regular press statements and
meetings with the press and analysts.  We organize  trade events  ourselves,  in
partnership  with our  strategic  partners  and  clients  and we also  publish a
magazine called AVANTVIEW.

4.19     PERSONNEL - SEE "DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES"

4.20     RESEARCH AND DEVELOPMENT

Our product  and  technology  development  team is  responsible  for the design,
development  and release of our  software.  Within our  product  and  technology
development team is an advanced  research group that focuses on emerging trends,
architectural  issues and product technology  strategies.  At June 30, 2001, our
research and development  organization consisted of 54 employees. We subcontract
engineers for highly specialized discrete projects. Our research and development
employees  focus on  developing  our more  complex and  strategically  important
projects.  Our total research and development  expenses were (euro) 4.6 million,
(euro) 2.0 million and (euro) 1.1 million in 2001, 2000, and 1999, respectively.
We  expect  our  research  and  development  expenses  to  increase  as we  hire
additional  personnel  to  develop  new  products  and to enhance  our  existing
software.

                                       40
<PAGE>

4.21     OUTLOOK

We  intend  to open  operations  in Japan.  We are  reviewing  a number of other
possible  markets  such  as  Sweden,  Brazil  and  Taiwan.  We are  continuously
reviewing investment and acquisition propositions and will proceed with any such
project if it meets our investment criteria.

4.22     FACILITIES

Our  headquarters,   located  in  Les  Ulis,  outside  Paris,   France,   occupy
approximately  3,500 square meters of office space under a lease,  which expires
on June 30, 2009, with an option to terminate the contract every three years. We
also lease regional offices located in the United States in Columbia (Maryland),
New York (New York), Herndon (Virginia) and Sunnyvale (California), in Europe in
Boulogne-Billancourt  (France),  London (the United  Kingdom),  Madrid  (Spain),
Brussels (Belgium), Munich (Germany) and in Singapore for our operational center
in Asia. To our knowledge, there are no environmental issues that may affect the
utilization  of these  assets.  We  believe  that our  existing  facilities  are
adequate for our current needs and that suitable additional or alternative space
should be available in the future on commercially reasonable terms as needed.

4.23     LEGAL PROCEEDINGS

As is the case with many companies in the software  industry,  we have received,
and may in the future receive,  communications alleging possible infringement of
patents and other  intellectual  property rights of others.  Irrespective of the
validity or the successful  assertion of such claims, we could incur significant
costs with respect to the defense  thereof,  which could have a material adverse
effect on our results of operations or financial condition.  In addition,  if we
were to lose an  infringement  claim against us in the future,  we might have to
pay substantial damages or stop making, using or selling the technology that was
determined to infringe another party's rights or products that incorporate it.

We are  currently  involved in ordinary  routine  litigation  incidental  to our
business;  however,  we do not believe that the probable  resolution  of pending
legal  proceedings  would  have a  material  adverse  effect  on  our  financial
condition.

4.24     SEASONALITY

Our  business  has  experienced  and  may  continue  to  experience  significant
seasonality as described in "Key  Information - Risk Factors" and "Operating and
Financial Review and Prospects."

4.25     RAW MATERIALS

Our business is not dependent upon any raw materials.

4.26     MATERIAL EFFECT OF GOVERNMENT REGULATIONS

Our business has not suffered any material effects of governmental regulations.

4.27     ORGANIZATIONAL STRUCTURE

For a brief  description of the InfoVista group,  please see "Information on the
Company - General  Information  Concerning  the Share  Capital of the  Company -
Subsidiaries and Investments".

                                       41
<PAGE>

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You  should  read the  discussion  below in  conjunction  with our  consolidated
financial statements included elsewhere in this report, which have been prepared
in accordance with U.S. GAAP

5.1      OVERVIEW

InfoVista is a leading global  provider of software  solutions that help service
providers  and  enterprises   achieve  better  returns  from  their  complex  IT
infrastructures.   InfoVista  designs,   develops  and  markets  technologically
advanced  software which  monitors,  analyzes and reports on the performance and
quality of services of information  technology  (IT)  infrastructure,  including
networks,   servers   and   applications.   InfoVista   markets   primarily   to
telecommunications  companies,  including  British  Telecom,  Deutsche  Telekom,
France Telecom,  and Cegetel;  Internet  service  providers  including UUNET and
Wanadoo;  and  other  IT-intensive  organizations  such  as  financial  services
companies  including AXA, First Union Bank,  Fleet Capital and Banque de France,
and other multinational companies like Nestle and Shell.

5.2      RECENT DEVELOPMENTS

5.2.1     General

On December 2, 2000, we entered into an agreement to acquire TISS for (euro) 3.2
million,  including  acquisition  costs. TISS, a privately held Internet service
and  solutions  integrator,  was  headquartered  in  Munich  and at the  time of
acquisition,  it had 16  employees.  Since the  acquisition,  the  activity  and
personnel  of TISS have been  integrated  with those of our  German  subsidiary,
InfoVista GmbH, which is also based in Munich. This acquisition provided us with
additional  account,  product management and integration  expertise,  as well as
technology required by TISS's main target markets in the  telecommunications and
service provider sectors.  Founded in September 1997, TISS had been an InfoVista
business solution integrator for over a year at the date of acquisition.

We recently opened two subsidiaries:  one in Brussels (Belgium) in December 2000
and one in Madrid  (Spain)  in June 2001.  We also  opened a  Australian  branch
office of our Singapore subsidiary.

After six years of service to the  Company,  Alain  Ries  stepped  down from his
position as Director  and Chief  Financial  Officer  with effect from August 30,
2001.

5.2.2    Unaudited first quarter results

This information is incorporated by reference to Form 6-K filed on October 24th,
2001.


5.3      REVENUES

We generate  revenues from licensing fees for our products and fees for services
provided  by  our  professional  services  activities,   including  maintenance,
consulting  and  training.  For the years ended June 30, 2001,  2000,  and 1999,
revenues from licenses  represented  70.7%,  74.4% and 57.6% of total  revenues,
respectively.  We anticipate  that our revenues  from licenses will  represent a
majority of our future  revenues,  particularly  because we intend to provide an
increasing proportion of services for our products through our partner network.

We target end-users  particularly in the telecommunications  industry,  ISPs and
other  IT-intensive   organizations   such  as  financial  services   companies,
outsourcers   of  IT  services,   application   service   providers   and  other
multinationals.   Revenues  from  service  provider  end-users,  which  includes
telecommunications  companies,  ISPs,  ASPs  and  outsourcers  of  IT  services,

                                       42
<PAGE>

including  MSPs,  accounted  for 80.8% and 52.8% of our total  revenues  for the
years ended June 30, 2001 and 2000  respectively.  We expect that  revenues from
service  provider  industry  clients will  continue to  constitute a significant
portion of our future revenues,  but we intend to further enhance our enterprise
client base.

As of June 30, 2001, we had 470  end-users of our products  holding in aggregate
4,504  licenses for our  products,  including  1,306  licenses for the InfoVista
Workshop and InfoVista Runtime.

We generate revenues not only through our direct sales force but also from sales
to our BSIs and systems integrators,  who in turn sell our products and services
to their customers.  Since late 1999, we have generated a limited portion of our
revenues from products sold through OEMs,  based on a percentage of the revenues
received by them. We expect that this portion will increase in the future.

Our main sales regions are the United States,  Europe and Asia Pacific.  For the
year ended June 30, 2001,  approximately  52.0%, 43.7%, and 4.3% of our revenues
were  recognized  from  sales  invoiced  from  Europe,  the  United  States  and
Singapore.  For the year ended June 30, 2000,  approximately  56.7% and 43.3% of
our revenues  were  recognized  from sales  invoiced  from Europe and the United
States.

Under U.S. GAAP, revenues from sales of our licenses to our end-user clients are
recognized  generally when we receive a purchase  order, we deliver the software
(assuming no  significant  obligations  on our part  remain),  collection of the
resulting   receivable   is  probable  and  the  amount  of  fees  is  fixed  or
determinable.  Some clients elect to evaluate and test our products on a limited
basis for a period of 30 days during which time no revenue is recognized.  Prior
to December 31, 1999 we recognized license revenues generated from sales through
our Business Solution  Integrator and systems  integrators when we received cash
from a sale since, under our agreements, the BSI and other resellers had certain
cancellation  options.  Subsequent to December 31, 1999, BSI contracts have been
revised to exclude these  cancellation  options and,  accordingly,  we currently
recognize  BSI license  revenues on the same basis as for end-user  clients.  We
provide for allowances  for credit losses and for estimated  future returns from
our BSIs  upon  shipment.  We  recognize  license  revenues  from  our  Original
Equipment  Manufacturers  after receipt from them of a quarterly report of their
sales made in that period.

Our customers purchase  maintenance services for an initial period (typically 12
months) as part of the  purchase of the  license.  The  maintenance  contract is
automatically renewable for subsequent 12-month periods unless the client or the
Company cancels.  Payments for maintenance fees (on initial order or on renewal)
are  generally  made in advance and are  non-refundable.  We defer  revenues for
maintenance services and recognize them ratably over the term of the maintenance
agreement.  Since licenses are almost always sold with maintenance  services, we
recognize  the amount of license  revenue in a license and  maintenance  package
based on the residual value method. The fee allocated to maintenance services is
based upon the fee charged to renew these  maintenance  services.  Any discounts
offered for products or services are allocated to the delivered  license portion
of the fee.  Revenues from  consulting,  training and other support services are
generally  recognized as the services are performed.  These revenue  recognition
policies for maintenance and other services are the same regardless of the sales
channel used. Service revenues are not shared between our BSIs and us. End users
either enter into a service  contract  directly with us, in which case we record
revenues  ratably  over the term of the  service  agreement,  or with a BSI.  We
receive no portion of the service revenues generated by our BSIs.

License  revenues  and service  revenues  that have been prepaid or invoiced but
that have not yet been  recognized as revenues under our policy are reflected as
deferred revenues.

                                       43
<PAGE>

5.4      COST OF REVENUES

Our cost of  revenues  is  comprised  of cost of  license  revenues  and cost of
service revenues.  Cost of license revenues  consists  primarily of license fees
paid to third-party  software vendors whose software is embedded in our products
and,  to a  lesser  extent,  the  costs of  software  packaging,  production  of
documentation  and  shipping.  Cost of service  revenues  consists  primarily of
personnel-related   costs  (salaries  and  facilities)   incurred  in  providing
services.  The gross profit on service revenues is  significantly  lower than on
license  revenues and  accordingly,  if a higher  percentage of our revenues are
generated from sales of licenses,  we would expect our overall gross profit as a
percentage of revenues to increase. This expectation is based on our strategy to
increasingly use partners to deliver  services to our clients,  which we believe
will  result in a decrease  in our service  revenues  as a  percentage  of total
revenues.

An  important  cost  item for us is  licensing  fees for  third-party  software,
particularly software from eXcelon Corporation (formerly,  Object Design, Inc.),
that is integrated with internally  developed  software and used in our products
to perform key  functions.  On August 23, 2000,  we entered into a new licensing
agreement  with eXcelon,  which expires on December 31, 2007.  The new agreement
provides  us with  unlimited,  non-exclusive  use of the  eXcelon's  ObjectStore
software for a fixed fee. We made an initial  payment of US$1.6  million  during
fiscal year 2001 to eXcelon, and will pay an additional total of $0.6 million in
maintenance  costs over the following  five years.  We accounted for the initial
payment as "Licensed  technology and advances",  which we will amortize over the
seven-year and four months term of the agreement.

We expect to  continue to hire  additional  customer  support  and  professional
service   personnel  and  expand  our   maintenance,   consulting  and  training
activities.  Consequently,  we anticipate that our cost of service revenues will
continue to increase on an absolute basis for the foreseeable future.

Our cost of revenues is shown  exclusive of stock  compensation.  The  following
discussion of cost of revenues and the subsequent presentation of the results of
our operations,  which analyzes this expense classification and its relationship
to revenues,  also excludes stock-based  compensation costs, which are addressed
separately.  This presentation  conforms to the presentation of our statement of
income in our  consolidated  financial  statements  included  elsewhere  in this
report.  Because of the magnitude and  irregular  timing of charges  relating to
stock-based  compensation,  we believe such  presentation  will help you compare
operating results over the periods presented.

5.5      OPERATING EXPENSES

Selling and marketing  expenses  consist  primarily of salaries,  commissions to
sales personnel and agents, travel, tradeshow participation, advertising, public
relations  and other  promotional  expenses.  We  expect  that our  selling  and
marketing  expenses will continue to increase in absolute  terms at least during
the next few years,  as we  continue to hire more  people,  open new offices and
generally  increase our efforts to promote our products and build market  share.
However, we expect these expenses to decrease as a percentage of revenues in the
long-term.  Research and  development  expenses  consist  primarily of personnel
costs associated with software product  development and outsourced  research and
development.  We have not capitalized any software development costs as the time
between  technological  feasibility  and  product  release  is very  short,  and
development  costs  incurred  during  that  time  are  immaterial.  General  and
administrative   expenses   consist   primarily  of  salaries   for   financial,
administrative and management personnel and related travel expenses,  as well as
legal and accounting expenses.  General and administrative expenses increased in
absolute  terms  in  the  fiscal  years  2001,   2000  and  1999.   General  and
administrative  expenses  decreased as a percentage of revenues from fiscal year
2000 to 2001.  We expect  that these  expenses  will  continue  to decrease as a
percentage of revenues in the short and long-term.

We have  granted  options  and  issued  warrants  to our  employees  on  various
occasions.  In addition,  certain principal  shareholders sold shares to some of
our employees  that they had acquired  pursuant to a certain  repurchase  option

                                       44
<PAGE>

granted to them by other shareholders.  Under U.S. GAAP, certain of these awards
and sales are viewed as additional  employee  compensation,  which we reflect as
stock  compensation  in our financial  statements.  We recognized  approximately
(euro) 4.2 million in share plan costs from July 1, 1998  through June 30, 2001.
See Note 7 to the consolidated  financial  statements for further information on
stock-based  compensation.  Cost of services,  selling and  marketing  expenses,
research and development  expenses and general and  administrative  expenses are
all shown exclusive of this stock compensation expense.

5.6      PERIOD-TO-PERIOD VARIABILITY

Our quarterly  operating results have varied  significantly in the past and will
likely vary significantly in the future. Historically, a disproportionate amount
of our annual  revenues has been  generated by sales of our products  during our
fourth  fiscal  quarter  (ending June 30),  while  revenues in our first quarter
(ending  September  30) are  generally  our  lowest  during  the year.  Sales of
products  and  services  such as ours in Europe and  certain  other parts of the
world are typically  adversely  affected in the quarter  ending  September 30 as
many clients  reduce their  business  activities  during the summer  months.  We
believe  that  these  trends  are likely to  continue  to result in  significant
seasonal fluctuations in our quarterly results.

5.7      RESULTS OF OPERATIONS

The following  table sets forth,  for the periods  indicated,  the percentage of
total revenues represented by each item in our Statements of operations.

<TABLE>
<CAPTION>

                                                      -------------------------------------
                                                                Year ended June 30,
                                                            2001          2000        1999
                                                      -------------------------------------
                                                              All amounts in percentages
    <S>                                               <C>             <C>           <C>
    Revenues:
    License revenues....................................     70.7          74.4        57.6
    Service revenues....................................     29.3          25.6        42.4
    Total revenues......................................   100.00        100.00       100.0
    Cost of revenues:
    License costs.......................................     (3.2)         (2.1)       (2.4)
    Service costs.......................................    (21.3)        (24.6)      (55.7)
    Total cost of revenues..............................    (24.5)        (26.7)      (58.1)
    Gross profit........................................     75.5          73.4        41.9
    Operating expenses:
    Selling and marketing expenses......................    (59.9)        (83.1)     (100.1)
    Research and development expenses...................    (16.8)        (18.9)      (37.9)
    General and administrative expenses.................    (27.6)        (30.8)      (60.2)
    Stock based compensation............................     (8.1)        (13.6)      (19.8)
    Amortization of goodwill and purchased intangibles .     (1.8)
    Total operating expenses............................   (114.2)       (146.4)     (218.0)
    Operating loss......................................    (38.7)        (73.0)     (176.1)
    Other income........................................     15.6           5.6        16.5
    Loss before income taxes and minority interest......    (23.1)        (67.4)     (159.6)
    Income tax benefit..................................      0.0           0.0         0.5
    Minority interests..................................      0.3           0.1         0.0
    Net loss............................................    (22.8)        (67.3)     (159.1)
</TABLE>

                                       45
<PAGE>


The following  table sets forth,  for the periods  indicated,  our gross margins
broken out for licenses and services.



                                                         Year ended June 30,
                                                    ----------------------------
                                                      2001      2000       1999
                                                    ----------------------------
                                                     All amounts in percentages
Gross margin
License gross margin
(License gross profit as % of license revenues) ...     95.5     97.2      95.8
Service gross margin
(Service gross profit as % of service revenue).....     27.4      4.1     (31.4)



FISCAL YEARS ENDED JUNE 30, 1999, 2000 AND 2001

Revenues

Total  revenues  were (euro) 27.7  million,  (euro) 10.3  million and (euro) 2.8
million  for the  years  ended  June  30,  2001,  2000 and  1999,  respectively,
representing  increases  of 167.5% from fiscal year 2000 to fiscal year 2001 and
268.6% from fiscal year 1999 to fiscal year 2000.

License  revenues  were (euro)  19.5  million,  (euro) 7.7 million  and(euro)1.6
million  for the years ended June 30,  2001,  2000 and 1999,  respectively.  The
154.2%  increase  in license  revenues  from fiscal year 2000 to fiscal 2001 was
primarily  due to the  continued  growth of both our direct and  indirect  sales
forces and the  significant  increase  in our  average  deal  sizes.  The 376.1%
increase in license  revenues  from fiscal year 1999 to fiscal year 2000 was due
to the development of our sales and marketing forces,  the increased  acceptance
by the market of InfoVista software,  and the increase in the number of our BSIs
and their ability to sell our software.  License  revenues  accounted for 70.7%,
74.4% and 57.6% of total  revenues for the years ended June 30, 2001,  2000, and
1999, respectively.

Service revenues, including maintenance, training, and consulting services, were
(euro) 8.1  million,  (euro) 2.7  million,  and (euro) 1.2 million for the years
ended June 30, 2001,  2000,  and 1999,  respectively.  The 206.1%  increase from
fiscal year 2000 to fiscal year 2001,  and the 122.7%  increase from fiscal year
1999 to fiscal  year 2000 were due to the  follow-on  effect of the  increase in
sales of licenses and the development of our  professional  services  offerings.
Service revenues  accounted for 29.3%, 25.6% and 42.4% of total revenues for the
years ended June 30, 2001, 2000, and 1999, respectively.

Cost of Revenues

Cost of  revenues  was (euro) 6.8  million,  (euro) 2.8  million  and (euro) 1.6
million  for the years  ended  June 30,  2001,  2000,  and  1999,  respectively,
representing  an  increase  of 145.3% from fiscal year 2000 to fiscal year 2001,
and an increase  of 69.0% from  fiscal  year 1999 to fiscal  year 2000.  Cost of
revenues  accounted for 24.5%,  26.7% and 58.1% of total  revenues for the years
ended June 30, 2001, 2000, and 1999, respectively.

Cost of license revenues,  as a percentage of license  revenues,  was 4.5%, 2.8%
and 4.2% for the years ended June 30, 2001,  2000, and 1999,  respectively.  The
percentage  decrease  in fiscal  year 2000  compared  with  fiscal year 1999 was
primarily due to the lower costs of production associated with larger quantities
of software products.  The percentage increase in fiscal year 2001 compared with
fiscal  year  2000  was  primarily  due  to  additional  costs  related  to  the
amortization of the newly purchased Licensed  Technology and Royalty Advance for
eXcelon's ObjectStore software.

                                    46
<PAGE>

Cost of service revenues, as a percentage of service revenues, was 72.6%, 95.9%,
and 131.4% for the years ended June 30, 2001, 2000, and 1999, respectively.  The
percentage  decreases from fiscal year 2000 to fiscal 2001, and from fiscal year
1999 to  2000  were  due to the  progressive  deployment  of our  newly  trained
personnel to revenue-generating activities.

Selling and Marketing Expenses

Selling and marketing expenses were (euro) 16.6 million, (euro) 8.6 million, and
(euro) 2.8 for the years ended June 30, 2001, 2000, and, 1999, respectively. The
93.0%  increase  from  fiscal  year 2000 to fiscal  year  2001,  and the  206.0%
increase from fiscal year 1999 to fiscal year 2000 were due to increased selling
and marketing  personnel  expense,  higher  commission  expenses from  increased
revenues and increased participation in industry trade shows, seminars and other
promotional  activities to support the  introduction of new product releases and
continually  increase  market  awareness.  In  addition,  in fiscal year 2000 we
incurred  a  non-recurring  expenditure  of  (euro)  1.0  million  related  to a
marketing/brand awareness campaign. Selling and marketing expenses accounted for
59.9%,  83.1% and 100.1% of total  revenues  for the years ended June 30,  2001,
2000,  and, 1999,  respectively.  Headcount in selling and marketing at June 30,
2001, 2000, and 1999 was 92, 58, and 18 employees, respectively.

Research and Development Expenses

Research and development  expenses were (euro) 4.6 million,  (euro) 2.0 million,
and  1.1  million  for  the  years  ended  June  30,  2001,   2000,  and,  1999,
respectively. The percentage increases of 137.7% from fiscal year 2000 to fiscal
year  2001,  and 83.7% from  fiscal  1999 to fiscal  2000 were due to  continued
investments  made to enhance and  develope  the  InfoVista  Runtime and Workshop
Servers and add new products, such as VistaPortal SE and various Vista Plug-ins.
Research and development expenses accounted for 16.8%, 18.9%, and 37.9% of total
revenues  for the years  ended  June 30,  2001,  2000,  and 1999,  respectively.
Headcount in research and  development at June 30, 2001,  2000, and 1999 was 54,
28 and 10 employees, respectively.

General and Administrative Expenses

General and administrative expenses were (euro) 7.6 million, (euro) 3.2 million,
and (euro)  1.7  million  for the years  ended June 30,  2001,  2000,  and 1999,
respectively. The percentage increases of 139.6% from fiscal year 2000 to fiscal
year  2001,  and 88.5%  from  fiscal  year 1999 to fiscal  year 2000 were due to
increased size of our corporate structure.  During fiscal year 2001, general and
administrative  expenses  increased in part as a result of additional  costs for
professional services to meet our legal and accounting  requirements as a public
company.  General and  administrative  expenses declined from 60.2% to 30.8%, to
27.6% of total  revenues  for the  years  ended  June 30,  1999,  2000 and 2001,
respectively.  Headcount in finance and  administration  at June 30, 2001, 2000,
and 1999 was 43, 26 and 14, respectively.

Stock Compensation Expense

Stock compensation  expense totaled (euro) 2.2 million,  (euro) 1.4 million, and
(euro)  0.6  million  for the  years  ended  June  30,  2001,  2000,  and  1999,
respectively.  The  increase  coincides  with  the rise in the  number  of stock
options and  warrants  that were granted  prior to the IPO at an exercise  price
lower than fair market value at the date of grant.  Since September 2000,  stock
options and  warrants  have  generally  been issued at a price equal to the fair
market value at the date of grant. As a result, we expect stock  compensation to
decrease in the future short and long-term periods.

                                       47
<PAGE>

Other Income

Other income was (euro) 4.3  million,  (euro) 0.6 million and (euro) 0.5 million
for the years ended June 30,  2001,  2000,  and 1999,  respectively.  The 652.4%
increase from fiscal year 2000 to fiscal year 2001 was primarily due to interest
income earned on short-term deposits that arose from our public offering in July
2000. In addition,  a significant portion of the increase relates to net foreign
currency  transaction  gains  that  resulted  primarily  from the  effect of the
increase  in the  exchange  rate for the U.S.  dollar  against  the euro on U.S.
dollar  deposits in France.  The 23.8%  increase from fiscal year 1999 to fiscal
year 2000 were due  primarily to the effect of the increase in the exchange rate
for the U.S. dollar against the euro on U.S. dollar deposits in France,  as well
as on our  dollar-denominated  net investments in our subsidiaries.  On March 1,
2001, we modified all  intercompany  loan  agreements and  reclassified  the net
intercompany  investments  as long-term in nature,  which  generally  eliminated
future net  foreign  currency  exchange  transaction  gains/(losses)  related to
intercompany  balances denominated in non-euro currencies.  Any foreign currency
transaction  gains/(losses) that are derived from intercompany  investments that
are  considered  long-term in nature shall be  accounted  for in the  cumulative
translation adjustment account within stockholder's equity.

Income Tax Expense/(Benefit)

We had income tax  expense/(benefit)  of (euro) 1,753,  (euro) zero,  and (euro)
(12,992) for the years ended June 30, 2001,  2000, and 1999,  respectively.  The
income tax expense for the year ended June 30, 2001 represented the fixed annual
minimum income tax payable in France.  The income tax benefit for the year ended
June 30, 1999  represented a tax credit received from the French  government for
eligible research and development expenses.

Impact of Changes in Exchange Rates

Fluctuations in the value of the euro against other  currencies,  especially the
US dollar, have, in the past, affected our results of operations,  in particular
our  net  financial  income  and  cumulative   translation   adjustment.   These
fluctuations  are due to the combined effect of accounting gains and losses upon
conversion  for  accounting   purposes  of  our  foreign  currency   denominated
investment accounts,  primarily the U.S. dollar, and the accounting treatment of
our foreign  currency  denominated  intercompany  net investments to our various
foreign subsidiaries.

Our foreign  currency net investments are not hedged by currency  borrowings and
other  hedging   instruments.   See  "Item  11.   Quantitative  and  Qualitative
Disclosures About Market Risk". The effects of these  fluctuations  could have a
material adverse impact on the results of operations and the financial condition
of both our subsidiary and ourselves.

Impact of Inflation

We  believe  that  inflation  has not had a  material  effect on our  results of
operations during the periods presented.

5.8      LIQUIDITY AND CAPITAL RESOURCES

We have financed our operations primarily through the sale of equity securities.
We also received a (euro) 0.7 million  interest-free  cash advance from ANVAR, a
French  governmental  agency, to be used for research and development  purposes.
The cash advance was not subject to conditions relating to intellectual property
rights such as with respect to royalty  payments or ownership.  On July 7, 2000,
we completed an initial public offering of 6,000,000  common shares at the issue
price of (euro) 12.80 per share.  The net  proceeds to us of the initial  public
offering were (euro) 68.65 million,  after  deduction of expenses of (euro) 8.15
million.  The  proceeds  from the  exercise  of  options  and  warrants  for the
subscription  of shares  during  fiscal year 2001 was  approximately  (euro) 1.9
million.

As of June 30,  2001,  we had working  capital,  defined as current  assets less
current liabilities,  of (euro) 62.8 million,  (euro) 4.6 million and (euro) 1.5
million  as of  June  30  2001,  2000  and  1999  respectively.  Cash  and  cash
equivalents were (euro) 62.9 million,  (euro) 2.9 million and (euro) 2.3 million
at June 30, 2001, 2000, and 1999, respectively. Because we do not yet generate a
positive cash position from our operations,  the main indicator of our liquidity

                                       48
<PAGE>

is our net cash provided by financing activities,  which includes funds from our
capital increases. These have led to a significant cash position throughout each
of the three years ended June 30, 2001.

Net cash used by  operating  activities  was  (euro)  1.6  million,  (euro)  7.8
million,  and (euro) 3.5 million for the years ended June 30,  2001,  2000,  and
1999,  respectively.  The  significant  decrease  in the cash used by  operating
activities  from fiscal year 2000 to 2001 was due  primarily to a lower net loss
in  fiscal  year  2001,   excluding   non-cash   items  such  as   depreciation,
amortization,  and  stock-compensation  based  expenses  and  also to a  greater
reduction in the current  liabilities  against  current  assets in the course of
fiscal year 2001.  The  increase  from fiscal year 1999 to 2000 was in line with
the growth of our business.

Net cash used by  investing  activities  was  (euro)  8.8  million,  (euro)  0.9
million,  and (euro) 0.5 million for the years ended June 30,  2001,  2000,  and
1999,  respectively.  During  fiscal year 2001,  investing  activities  not only
included a significant  amount of capital  expenditures  for office and computer
equipment  related to the growth of the  company  and the move to new office for
the corporate and operational headquarters,  but also (euro) 1.8 million for the
purchase of licensed technology in connection with the agreement we entered into
with  eXcelon and the  acquisition  of TISS for (euro) 3 million,  inclusive  of
acquisition  expenses and net of cash acquired.  For fiscal years 2000 and 1999,
investing  activities  primarily  consisted of the  acquisition  of computer and
networking  equipment,  to  support  our  growing  employee  base and  corporate
infrastructure.

We had available net operating loss carry forwards of approximately  (euro) 26.9
million and research-related tax credits net of approximately (euro) 0.4 million
as of June 30, 2001 which can be used to reduce future income taxes or, if after
three years they are not so used, they can be reclaimed.  Of these net operating
loss carry  forwards,  (euro) 5.6 million expire  between 2002 and 2006,  (euro)
15.8  million  expire  between  2013 and 2022 and  (euro)  5.4  million  have no
expiration  date.  They are  subject to review and  possible  adjustment  by the
appropriate taxing authorities.

We believe  that our  current  cash  balances  and the cash flows  generated  by
operations,  if any, will be sufficient to meet our  anticipated  cash needs for
working capital and capital expenditures for the next 18 months.  Thereafter, if
cash  generated  from  operations  is  insufficient  to  satisfy  our  liquidity
requirements,  we may  seek  to  sell  additional  equity  or  convertible  debt
securities or obtain credit  facilities.  The decision to sell additional equity
or debt  securities  could  be made at any  time  and  would  likely  result  in
additional  dilution to our  stockholders.  A portion of our cash may be used to
acquire or invest in complementary businesses or products or to obtain the right
to use complementary technologies.  From time to time, in the ordinary course of
business,  we evaluate  potential  acquisitions of such businesses,  products or
technologies.

5.9      THE EURO

On January 1, 1999,  the euro was  introduced  as the common  legal  currency of
eleven  member  states of the European  Economic and Monetary  Union,  including
France.  We have adopted the euro as our reporting  currency in our consolidated
financial  statements  and  translated  all  French  franc  amounts at the fixed
exchange rate of FF 6.55957 per (euro) 1.00. Although our consolidated financial
statements  depict  the same  trends  as would  have  been  shown  had they been
presented in French francs, they may not be directly comparable to the financial
statements of other companies that have also been restated in euro. Prior to the
adoption of the euro, the currencies of other countries  fluctuated  against the
French  franc,  but  because  the euro did not exist  prior to  January 1, 1999,
historical  exchange  rates  for euro are not  available.  A  comparison  of our
financial  statements and those of another company that had historically  used a
reporting  currency  other than the French franc that takes into account  actual
fluctuations  in exchange rates could be materially  different from a comparison
of the financial  statements  and those of another  company as  translated  into
euros.

                                       49
<PAGE>

5.10     FORWARD LOOKING STATEMENTS

This  report   includes   forward-looking   statements.   We  have  based  these
forward-looking  statements on our current  expectations  and projections  about
future   events.   These   forward-looking   statements  are  subject  to  risk,
uncertainties, and assumptions about us, including, among other things:

     o    the risks and  uncertainties  encountered  by  emerging  companies  in
          rapidly evolving  markets,  particularly  companies in the competitive
          software industry,

     o    the assumption that market acceptance of our products will increase or
          remain at current levels,

     o    the  assumption  that a large portion of our revenues will continue to
          come from telecommunications clients,

     o    the assumption  that we will continue to obtain  third-party  software
          licenses on commercially reasonable terms,

     o    the risk that we may fail to develop new  technologies,  or to develop
          and deploy new  product  releases  or  enhanced  products  on a timely
          basis,

     o    the  risk  that we may fail to  adequately  protect  our  intellectual
          property or trademarks, and

     o    the  uncertainty  of  continued  demand for the  Internet  and related
          infrastructure.

Except as required by law, we do not undertake any obligation to publicly update
or  revise  any  forward-looking   statements,   whether  as  a  result  of  new
information,  future events or otherwise. In light of these risks, uncertainties
and assumptions,  the forward-looking  events discussed in this report might not
occur.



ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

In  accordance  with  French law  governing a societe  anonyme,  our affairs are
managed by our board of directors and our Chairman and Chief  Executive  Officer
(President  Directeur  General).  Our statuts  (by-laws)  grant the Chairman and
Chief Executive Officer full executive authority to manage our affairs,  subject
to prior  authorization  of the board of directors or the general  shareholders'
meeting for  certain  decisions  designated  by law.  French  company law number
2001-420  dated May 15,  2001,  published  on May 16,  2001 (the "Law of May 15,
2001"),  gives to the board of directors the right to elect one person to assume
the  position of Chairman and Chief  Executive  Officer or to split the function
between two different  persons.  Our statuts currently do not provide for such a
choice.  As  provided  for in  the  Law  of  May  15,  2001,  we  will  hold  an
extraordinary  shareholders'  meeting within 18 months of the publication of the
Law of May 15, 2001, to amend our statuts to comply with such law.

6.1      BOARD OF DIRECTORS

Presently, the board of directors consists of six members. Our statuts currently
provide  that the board of  directors  consist of  between  three and 24 members
elected by the general shareholders' meeting. Under the Law of May 15, 2001, the
board of directors must be composed of no more than 18 members. French companies
have three  years  from the date of  publication  of the Law of May 15,  2001 to
comply  with  this  requirement.  Each  director  must own at least one share of
InfoVista.  Our statuts  provide that each director is elected for a term of one

                                       50
<PAGE>

year, which may be extended.  Our board of directors has met twelve times during
the course of fiscal year 2001. None of our shareholders has the exclusive right
to appoint a director  to the board of  directors.  There is no  arrangement  or
understanding with major shareholders, clients, suppliers or others, pursuant to
which any person  referred  to below was  selected  as a  director  or member of
senior management.

The board of directors cannot increase the number of members of the board.  Only
the  shareholders,  acting as a simple  majority,  can do so. Each director must
also be a  shareholder.  Under French law, a director may be an  individual or a
legal  entity,  but the  Chairman  and/or the Chief  Executive  Officer  must be
individuals.  The  Chairman  and/or Chief  Executive  Officer are elected by the
board of directors.  Directors are elected by the  shareholders  and serve until
the expiry of their  respective  terms,  or until  their  resignation,  death or
removal,  with or without cause by the shareholders.  Under certain  conditions,
the board of directors may fill vacancies on the board of directors, pending the
next  shareholders'  meeting,  however,  the board of directors has the power to
appoint and remove the Chairman and/or Chief Executive Officer at any time.

In  consideration  for their  services on the board,  directors  are entitled to
receive  directors'  fees  ("jetons de  presence").  The total annual  amount of
directors' fees is fixed by the shareholders'  meeting, but the board determines
their allocation among the directors.  In addition,  remuneration may be granted
to directors on a case-by-case basis for special assignments. A director may not
vote for his or her own  remuneration.  If he or she does vote,  the decision is
void. The board may also authorize the reimbursement of travel and accommodation
expenses  as well as other  expenses  incurred  by  directors  in the  corporate
interest.

French law permits the board of  directors  to appoint up to five persons to who
the Board of  directors  may  delegate  general or specific  powers  (Directeurs
Generaux delegues). The Chief Executive Officer proposes the Directeurs Generaux
delegues and the board of directors  determines their specific management powers
and  responsibilities.  Under French law, a Directeur General delegue,  like the
Chief Executive  Officer,  has broad powers to represent and bind the company in
dealing with third parties.  The Directeur General delegue may be removed by the
board of directors at any time upon proposal of the Chief Executive Officer. The
Directeur  General  delegue  may be held  individually  responsible  for his/her
actions  if they  are  deemed  contrary  to the  company's  interests.  There is
currently no Directeur General delegue.

The Chairman and/or Chief Executive Officer are entitled to receive remuneration
in addition to the jetons de presence granted by the shareholders' meeting. This
additional  remuneration  is  determined  by the board of directors  and in this
case,  the  Chairman  and/or  Chief  Executive  Officer can vote on a resolution
concerning  his or her  remuneration.  We did not pay any jetons de  presence in
fiscal year 2001. Under French law, the board of directors prepares and presents
the year-end accounts to the shareholders and convenes  shareholders'  meetings.
In addition, the board of directors reviews and monitors the economic, financial
and technical strategies of the company.

Meetings of the board of  directors,  which are held as often as required in the
corporate  interest,  are normally  convened and presided  over by the Chairman.
According to French  company law, if the board of directors has not met for more
than two months, at least one-third of the members of the board of directors may
request  that the  Chairman  convene the board of  directors  regarding  matters
listed on the agenda for the  meeting.  A quorum  consists  of  one-half  of the
members  of the  board of  directors  and  decisions  are taken by a vote of the
majority of the members  present or represented by other members of the board of
directors. A director may give a proxy to another director but a director cannot
represent more than one other member at any particular  meeting.  Members of the
board of directors  represented  by another  member at meetings do not count for
purposes of determining  the existence of a quorum.  A director may not vote for
an arrangement or contract in which he or she is materially interested. If he or
she does vote,  the  decision is void. A  resolution  was  submitted at the last
annual  general  shareholders'  meeting to amend the  statuts to provide for the
possibility  for any director to attend,  participate and vote at any meeting by
videoconference, subject to applicable regulations.

                                       51
<PAGE>

Under  French  law and our  statuts,  our board of  directors  must  give  prior
authorization  for  any  security,   pledge  or  guarantee  by  InfoVista.  This
authorization  is generally  granted for a period of one year.  If the security,
pledge  or  guarantee  has  not  been  previously  authorized  by the  board  of
directors,  this security,  pledge or guarantee shall have no effect with regard
to InfoVista.

The  French  Commercial  Code (Code de  Commerce)  strictly  forbids  loans by a
company to its  directors.  No company may provide  overdrafts  for directors or
guarantee any director's obligations. This prohibition also applies to specified
executive  officers  (Directeurs  Generaux and  Directeurs  Generaux  delegues),
permanent  representatives  of companies on the board of  directors,  spouses or
heirs of such persons and other intermediaries.

The French Commercial Code requires directors who are considering  entering into
an agreement  with the company,  either  directly or  indirectly,  personally or
through an  intermediary,  to inform the company's board of directors as well as
its auditors  before the  transaction is  consummated.  French law also requires
such an agreement to be authorized by the board of directors and the director in
question  may  not  vote on the  issue.  French  law  further  requires  such an
agreement  to be  submitted to an ordinary  general  meeting for  approval  once
entered into, upon presentation of a special report from the company's auditors.
Any agreement  entered into in violation of these  requirements may be voided by
the  Commercial  Court at the request of the company or of any  shareholder,  if
such agreement is contrary to the interests of the company.

Under  French  law,  directors  are liable  for  violations  of French  legal or
regulatory  requirements  applicable  to  societes  anonymes,  violation  of our
statuts or  mismanagement.  A director  may be held liable for such actions both
individually and jointly with the other directors.

Our  statuts  determine  the  retirement  age of our  directors.  Our  board  of
directors  may not have more than a third of its  members  who exceed the age of
75. If this limit is reached,  the oldest  director  is deemed to have  resigned
during the next  shareholders'  meeting following his or her 75th birthday.  The
mandate of a Directeur General delegue may not continue beyond the shareholders'
meeting following his or her 70th birthday.

The table below sets forth,  as of October 31, 2001,  the name and year of birth
of each of our directors, their current positions with our company, the dates of
their initial  appointment as directors,  the expiration  dates of their current
terms (which dates,  with respect to the legal entities  listed below,  refer to
the  appointment  and term of such legal  entity)  and their  current  principal
occupation or  employment.  There is no family  relationship  between any of the
persons listed in this table.
<TABLE>
<CAPTION>

Name (Year of birth)                Current Position            Initially   Term          Present Principal Occupation
--------------------                ----------------            ---------   ----          ----------------------------
                                    with InfoVista              Appointed   Expires       or Employment
                                    --------------              ---------   -------       -------------
<S>                                 <C>                         <C>         <C>           <C>
Alain Tingaud (1954)                Director, Chairman and      1995        Dec. 2001     Chairman   and  Chief   Executive
                                    Chief Executive Officer                               Officer of InfoVista SA
Jean-Paul Bernardini (1962)         Director                    1998(1)     Dec. 2001     Partner  of PAI  Management  (BNP
                                                                                          Paribas Capital)
Herbert May (1949)                  Director                    2000        Dec. 2001     Management      Consultant     in
                                                                                          Strategy,    Sales,    Multimedia
                                                                                          Telecommunications,    Technology
                                                                                          and e-commerce
Vertex   Technology   Fund   Ltd.,  Director                    1998        Dec. 2001     Senior Vice  President  of Vertex
represented  by  Frankie  Tan Siew                                                        Management II PTE Ltd.
Teck (1956)
Hubert L.  Tardieu (1945)           Director                    1998        Dec. 2001     Senior  Vice  President  of  SEMA
                                                                                          Group
Peter C.  Waal (1932)               Director                    2000        Dec. 2001     Principal of Waal Associates
-----------
(1)  Mr.  Bernardini  has been one of our directors  since May 23, 2000.  Before
     then, he  represented  Paribas  Investissement  Developpement  (now Societe
     Centrale d'Investissements), which was a director from June 30, 1998 to May
     23, 2000.
</TABLE>

                                       52
<PAGE>

Directors Business Activities

For  information on Alain Tingaud,  please see "Executive  Officers'Biographies"
below.

Jean-Paul  Bernardini is a partner of PAI Management  which is a division of BNP
Paribas Capital. He is also a director of Orange A/S, Fibercorp NV, KeeBoo Corp,
Mediapps, and is a "censeur" of Bouygues Telecom and LD Com.

Herbert May is a management  consultant  and  specializes  in  strategy,  sales,
multimedia,  telecommunications,  technology and e-commerce. He is a director of
Spectris, Mediapps and Deuromedia.

Vertex  Technology  Fund Ltd. is  represented  by Frankie Tan Siew Teck. Mr. Tan
Siew Teck is currently based in Vertex Management (UK) with  responsibility  for
all Europe based investment  activities.  He holds  directorships in a number of
the investment portfolio  companies,  including Integra SA, Ortems and Quadratec
SA (France),  EuropeanInvestor.com (Belgium), Digiquant A/S (Denmark) Xeneration
Holdings Ltd (Ireland)Eyestorm Media Ltd (UK) and Qbiogene Inc (Canada).

Hubert Tardieu is Senior Vice President of the SEMA Group.

Peter Waal is one of the senior partners of Waal  Associates,  a consulting firm
specializing in  telecommunications.  He is also director of XO  Communications,
Inc. (merged with Concentric Network Corporation), an Internet access provider.

Alain Tingaud may be contacted at InfoVista SA's head office, 6, rue de la Terre
de Feu, 91952 Courtaboeuf Cedex Les Ulis,  France.  Jean-Paul  Bernardini may be
contacted at PAI Management,  BNP Paribas Capital, 43, avenue de l'Opera,  75002
Paris,  France.  Herbert  May  may be  contacted  at  Management  Beratungs  und
Beteiligungs-GmbH,  Friedrichstr.  90, D-10117 Berlin, Germany. Frankie Tan Siew
Teck may be contacted at Vertex  Technology  PTE , Ltd, 77,  Science Park Drive,
#02-15, Cintech III, Singapore Science Park, Singapore 118256. Hubert L. Tardieu
may be contacted at Sema Group, 16 rue Barbes, 92126 Montrouge Cedex, France and
Peter C. Waal may be contacted at PO Box 796249, Dallas, TX 75379-6249, USA.

6.2      EXECUTIVE OFFICERS

The table below  shows,  as of October 31,  2001,  the name and year of birth of
each  of  our  executive  officers  (Executive   Committee  members)  and  their
responsibilities at InfoVista.

                                      53
<PAGE>
<TABLE>
<CAPTION>


Name (year of birth)         Initially     Current position with InfoVista
--------------------         ---------     -------------------------------
                             appointed
                             ---------
<S>                          <C>           <C>
Alain Tingaud (1954)         1995          Chairman and Chief Executive Officer
Manuel Stopnicki (1963)      1995          Executive Vice President, Chief Technical Officer
Philippe Ozanian (1963)      2000          Executive Vice President, Chief Financial Officer & Corporate Services
Peter Mao Lawn Fah (1958)    2000          Executive  Vice  President,   Asia/Pacific  Operations,  Chief  Executive
                                           Officer of InfoVista (Asia-Pacific) Pte. Ltd.
Didier Lesteven              2001          Executive Vice President WorldWide Operations
</TABLE>

There is no family relationship between any of the persons listed in this table.

Executive Officers' Biographies

Alain  Tingaud has served as Chairman and Chief  Executive  Officer  since 1995.
Since  1998,  he has  substantially  devoted  all his  professional  time to our
business.  From 1991 to 1995, Mr.  Tingaud was the Chairman and Chief  Executive
Officer of ARCHE  Communications,  since 1995 a subsidiary of Siemens. From 1995
to 1998,  Mr.  Tingaud held various other  positions  within the Siemens  group,
including  Chairman and Chief Executive Officer of Groupe Siemens Nixdorf France
S.A. (1997-1998) and of Siemens Business Service France S.A.  (1996-1998).  From
1987 to 1991,  Mr.  Tingaud  held  various  positions  at 3Com,  including  Vice
President  of 3Com  Southern  Europe and Vice  President  of Strategy & Business
Development. Mr. Tingaud created Alain Tingaud Innovations EURL and that company
is a director of a number of other companies,  including  ClarITeam SA, Mediapps
and Chateau on line. Mr. Tingaud is also a director of InfoVista Corp, InfoVista
UK and  InfoVista  (Asia-Pacific)  Pte  Ltd.  Mr.  Tingaud  holds a  diploma  in
Technology from the University of Poitiers.

Philippe  Ozanian is Executive  Vice  President,  Chief  Financial  Officer and,
Corporate Services. Prior to joining InfoVista in November 2000, Mr. Ozanian was
director of Human Resources and  Communications  at Johnson & Johnson France and
Benelux  from 1999 to 2000.  Mr.  Ozanian  served as director  of  Strategy  and
Development at Siemens from 1996 to 1999, and from 1987 to 1996, he was director
of Human Resources at Olivetti France. Mr. Ozanian has a Masters in private law,
a Masters in  Management  and  further  postgraduate  studies  in labor law.  Mr
Ozanian is a director of InfoVista BNL S.A.

Manuel Stopnicki has served as Executive Vice President Product and Technology
since June 1995. Mr. Stopnicki heads the Solution Management Group and oversees
the functions of the Product Management Group. Before 1995, Mr. Stopnicki served
in various positions at M.F.I. (1987-1995), the software service company that
was the predecessor company to InfoVista SA. Mr. Stopnicki is a graduate of
Ecole Superieure d'Informatique in Paris with a Masters in Engineering and
Computer Science.Philippe Ozanian has served as Executive Vice President,
Corporate Services since November 2000. Prior to joining InfoVista, Mr. Ozanian
was director of Human Resources and Communications at Johnson & Johnson consumer
France and Benelux from 1999 to 2000. Mr. Ozanian also served as director of
Strategy and Development at Siemens from 1996 to 1999, and from 1987 to 1996, he
was director of Human Resources at Olivetti France. Mr. Ozanian has a Masters in
private law, a Masters in Management and further postgraduate studies in labor
law. Mr Ozanian is a director of InfoVista BNL S.A.

Peter Mao Lawn Fah has served as Executive Vice President, Asia/Pacific
Operations since May 2000. Prior to joining InfoVista, Mr. Mao was director of
Business Development and director of Special Projects at Kent Ridge Digital
Labs, a research institute in Singapore from 1999 to 2000. Mr. Mao also served
as General Manager, New Business Development at Alcatel Singapore Pte. Ltd., a
subsidiary of Alcatel providing telecommunication services, from 1997 to 1999,

                                       54
<PAGE>

and as Senior Manager in charge of special projects at Singapore
Telecommunications Technologies, a regional telecommunications operator and an
affiliate of Vertex Technology Fund PTE Ltd., from 1995 to 1997. Mr. Mao holds a
degree from the Ecole Superieure d'Informatique in Paris.

Didier  Lesteven is Executive  Vice  President in charge of InfoVista  WorldWide
Operations.  Before joining InfoVista in September 2001, Mr. Lesteven was Senior
Vice  President  of  Sterling  Commerce   International  (a  subsidiary  of  SBC
Communications)  from 1999 to 2001.  From 1997 to 1999, he was Vice President of
Sales with Candle Corporation,  in charge of Candle's West European  operations.
From 1991 to 1997, he was General  Manager of Chipcom France (which was acquired
by 3Com in 1995).  Mr.  Lesteven holds an MBA in Finance from l'Ecole des Cadres
in Paris.

All of our executive officers may be contacted at InfoVista SA's head office, 6,
rue de la Terre de Feu, 91952 Courtaboeuf Cedex Les Ulis, France.

6.3      CORPORATE GOVERNANCE

We established three committees of the board of directors on January 11, 1999.

6.3.1    Audit Committee

The board of directors has an audit committee,  comprised of Messrs.  Bernardini
and Waal.  This  committee is responsible  for providing  advice to the board of
directors on financial and accounting matters, in particular with respect to our
financial  statements,  the audit of our  investment  program  and the choice of
accountants.  The audit  committee  established  by the board of directors is in
compliance  with  generally  accepted  business  practices  in France.  For this
reason,  on September 7, 2000,  we were granted a permanent  exemption  from the
Nasdaq's Independent Director and Audit Committee requirements.

6.3.2    Compensation Committee

The board of  directors  has a  compensation  committee,  comprised  of  Messrs.
Bernardini,  Tan Siew Teck and May, which is responsible for proposing  salaries
and incentives,  including stock options and other profit sharing  programs,  of
our officers and key personnel to the board of directors.

6.3.3    Investment Committee

The board of directors has an investment  committee,  comprised of Messrs.  May,
Tardieu  and  Waal,  which  is  responsible  for  defining  general   investment
priorities,  including potential  acquisitions,  our goals for return on equity,
and financial oversight procedures.

6.4      [RESERVED]

6.5      COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Until  October 31,  2000,  Mr Tingaud was  compensated  through his wholly owned
company, Alain Tingaud Innovations EURL. Mr Tingaud's company received an amount
of (euro) 76,225 for services rendered by Mr Tingaud during the period from July
1 to October  31,  2000.  Mr Tingaud  has  received a salary from the company of
(euro) 319,272 since November 1, 2000.

The aggregate amount of compensation that we paid to our executive officers as a
group (5 persons in all), for services in all capacities  during the fiscal year
ended June 30, 2001, was approximately (euro) 1.17 million.  Part of this amount
was in the form of  performance-related  bonuses paid to our executive officers,
the calculation of which is based on revenues.  The aggregate amount that we set

                                       55
<PAGE>

aside or accrued to provide  pension,  retirement  or similar  benefits  for our
executive  officers as a group during the fiscal year ended June 30,  2001,  was
approximatively  (euro)  13,872.  The  compensation  of  our  officers  and  key
personnel is proposed by the  compensation  committee of the board of directors.
See "Corporate Governance - Compensation Committee" above.

We do not currently compensate our directors for their services. Remuneration of
directors for their services  requires approval from the shareholders in general
meeting. The board of directors has resolved in principle to propose a directors
remuneration  plan to the  shareholders  at the  general  meeting  to be held in
December. The details of such proposal will be defined by the board prior to the
shareholder  meeting  being called.  There are  currently no director's  service
contracts with InfoVista or any of its subsidiaries  providing for benefits upon
termination of employment.

The  following  table sets out the  holdings of shares and warrants by directors
and executive officers as at September 30, 2001.

   Security type                    Directors (1)      Executive Officers (2)
   Options (3)                                  0               340,000
   Warrants (3)                            18,750                 1,000
   Shares                               2,095,772               129,815
   Total                                2,115,771               470,815

   (1) 6 persons including 1 Executive Officer
   (2) 4 persons  excluding  the 1  Executive  Officer who is also a Director
   (3) Number of issuable shares


6.6      OPTIONS AND WARRANTS TO PURCHASE OUR SECURITIES

6.6.1    Options.

We currently  have four stock option plans.  The following  discussion  has been
adjusted to reflect the 1:2 reverse stock split approved by our  shareholders on
May 25, 2000.

Authorization information

French  law  requires  that the  grant  of stock  options  be  authorized  by an
extraordinary   shareholders   meeting,   with  a   two-thirds   majority.   The
authorization  includes the number of issuable  shares and the minimum  exercise
price.  The shareholders may delegate power to the board of directors to fix the
details  of the plan and to grant  the  options.  The  authority  is given for a
limited  time.  Our  shareholders  have  delegated to the board of directors the
authority to grant  options to employees  and members of management to subscribe
for our shares.


                                       56
<PAGE>


The  following  table  sets  forth  the key dates and  figures  relating  to the
authorization of our option plans currently in force.
<TABLE>
<CAPTION>

     Name of     Date of shareholder     Date of expiry of     Number of issuable shares
      Plan          authorization          authorization             authorized(1)
   <S>           <C>                     <C>                   <C>
    1996 Plan       April 5, 1996          April 4, 1999                 250,000(2)
    1999 Plan       April 9, 1999          April 9, 2004               1,126,000
    2000 Plan     December 9, 1999       December 9, 2004                250,000
                    May 11, 2000         December 9, 2004                500,000
    2001 Plan     December 18, 2000      December 18, 2005             2,000,000


(1) When an option  holder  leaves the  Company,  his/her  un-exercised  options
revert to the Company and may be re-issued, subject to the authorization period.

(2) The shareholders'  meeting of April 9, 1999 revoked the authorization  given
to the Board in respect of the 234 000  options  which  were  un-issued  at that
date.
</TABLE>


Vesting Information

Under the 1996 Plan, each year after the date of grant,  the holder may exercise
25% of the total number of options held.  Under all the other plans, the vesting
rules are  generally  that the holder may exercise 25% of the options  after the
first anniversary of the date of grant, 50% after the second  anniversary of the
date of grant,  75% after the thirtieth month (2 1/2 years) of the date of grant
and 100% after the third anniversary of the date of grant.  Under all the plans,
the board of directors has the right to vary these dates and percentages  either
at the date of grant or at any time  thereafter  with the  consent of the option
holder.


                                       57
<PAGE>


Grant Information

The following table sets out the key dates and figures  relating to the grant of
stock options as at October 31, 2001.

<TABLE>
<CAPTION>

   Grant dates             Period during which optionnee may  Exercise Price in     No. of issuable shares at
                                   exercise options                 (euro)             September 30, 2001
<S>                        <C>                                <C>                   <C>
   1996 Plan
   September 26, 1996      September 1997 - September 2001          0.305                       0
   December 12, 1996       December 1997 - December 2001            0.305                       0
   September 10, 1997      September 1998 - September 2002          1.217                  19,375
   October 27, 1997        October 1998 - October 2002              1.460                     625
   February 5, 1998        February 1999 - February 2003            1.753                   1,500
   Totals per plan                                                                         21,500

   1999 Plan
   April 9, 1999           May 2000 - April 2007                    1.768                  57,162
   July 9, 1999            August 2000 - July 2007                  1.768                 113,473
   October 28, 1999        November 2000 - October 2007             3.049                  91,501
   January 28, 2000        February 2001 - January 2008             4.878                  79,000
   March 31, 2000          March 2001 - March 2008                  12.20                  13,000
   Totals per plan                                                                        354,136

   2000 Plan
   January 28, 2000        January 2001 - January 2008              4.878                  71,250
   March 10, 2000          March 2001 - March 2008                  12.196                 83,500
   March 31, 2000          March 2001 - March 2008                  12.20                  33,250
   September 4, 2000       September 2001 - September 2008          37.53                 178,000
   October 19, 2000        October 2001 - October 2008              38.50                  39,250
   Totals per plan                                                                        405,250

   2001 Plan
   January 24, 2001        January 2002 - January 2011              31.00                 625,695
   April 23, 2001          April 2002 - April 2011                  10.83                 260,600
   June 23, 2001           June 2002 - June 2011                     8.14                 139,850
   September 26, 2001      September 2002 - September 2011           2.44                 116,100
   Totals per plan                                                                      1,142,245

As adjusted for the reverse stock split of May 25, 2000
-------------------------------------------------------

(1)      All French franc amounts have been converted from French francs to euro
         at the official conversion rate of (euro) 1.00 = FF 6.55957, unless the
         exercise price was fixed in both euro and francs.
</TABLE>

Under French law, we cannot  grant  options to members of the board of directors
(other than the Chairman and/or Chief Executive  Officer) who are not employees.
All options  granted under the 1996 Plan have a term of five years,  all options
granted under the 1999 Plan and the 2000 Plan have a maximum term of eight years
and all options  granted under the 2001 Plan have a maximum term of 10 years. If
employees  subject  to paying  social  charges in France do not  transfer  their
shares for a specified  holding period following the grant of the option,  under
certain  conditions,  they  benefit  from a  favorable  tax  treatment  upon the
subsequent  sales of the shares  granted upon the  exercise of the  options.  In
general, if an optionee dies during his or her employment, such person's options
may be exercised up to six months after his or her death to the extent vested at
the time of his or her death or termination. No option may be transferred by the
optionee other than by will or the laws of intestacy.

                                       58
<PAGE>

If an  employee  subject  to  social  charges  in France at the date of grant of
options,  sells or otherwise  transfers the shares resulting from an exercise of
such options  prior to the  expiration of the  applicable  holding  period,  the
employer is required to pay French social contributions and certain salary-based
taxes, which may represent,  for us, approximately 45% of the taxable salary, on
the difference  between the exercise price of a stock option and the fair market
value of the underlying  shares on the exercise date. The law is consistent with
French  personal  income tax law  pursuant to which the  difference  between the
option  exercise  price and the fair  value of the  shares at the grant  date is
treated as salary income if the shares are sold or otherwise  disposed of within
the said holding  period.  This rule  applies to all our  options,  whatever the
grant date.  Because our  existing  stock  option  plans are not  structured  to
enforce this holding period,  if any of our employees  exercise options and sell
the resulting shares before the end of the relevant holding period,  we could be
required to pay French social charges to the French  government on the resulting
taxable income to those  employees.  In the case of options granted before April
27,  2000 the holding  period is five years from the date of grant.  For options
granted on or after that date, the holding period is reduced to four years.

On July 23, 2001, in the context of a severance  package for Mr.  Vidal,  former
Executive  Vice-President  North American  Operations and President of InfoVista
Corp, the board of directors resolved to reduce the vesting period applicable to
100,000  options,  giving the right to subscribe to 50,000 new shares granted on
April  9,  1999  under  the  1999  Plan by six  months  and the  vesting  period
applicable to 15,000 options,  giving the right to subscribe to 7,500 new shares
granted on October 28, 1999 under the 1999 Plan by twelve  months.  The board of
directors  also  resolved to extend the period  during  which the  employee  may
exercise  options after giving or receiving  notice of termination of employment
to cover the whole of the notice period from July 31, 2001 to June 30, 2001.

On July 23, 2001 the board of directors resolved,  under certain conditions,  to
make available to employees  holding  options with an exercise price higher than
(euro) 30.00 per share, an offer to surrender all or some of the options granted
to them on or after September 1, 2001,  without limitation as to exercise price.
In  exchange,   such  employees  would  have  the  possibility,   under  certain
conditions,  to be granted new options giving the right to subscribe to the same
number of shares as the surrendered  options. The grant date for the new options
would be no sooner than six months and one day after the date of cancellation of
the options. The exercise price for the new options would be fixed in accordance
with the rules of the 2001 Plan and  otherwise  subject  to the  conditions  set
forth in the  Schedule  TO  documents  filed with the  Securities  and  Exchange
Commission  on August  30,  2001,  the  commencement  date of the offer  period.
1,021,945  options  in total were  eligible  for  cancellation  under the scheme
 .950,265 options were cancelled under the terms of the Offer.

6.6.2   Warrants

We have issued six series of warrants, two of which remain outstanding.  The key
dates and figures relating to the warrants as at October 31, 2001 are set out in
the following a table. Most of the warrants were issued to current  shareholders
and/or members of management.  However, Mr. Gilles Assant holds 38,000 warrants,
Mr.  Troy  was  granted  10,000  warrants  and  Mr.  Philippe  Ozanian,  who has
subsequently become an employee, was granted 2,000 warrants, all of which may be
exercised for shares in a two-to-one ratio.

                                       59
<PAGE>
<TABLE>
<CAPTION>

Table of key dates and  figures  relating to the grant of warrants as at October
--------------------------------------------------------------------------------
31, 2001 (as adjusted for the reverse stock split of May 25, 2000).
-------------------------------------------------------------------

                                                               Maximum no. of                                Of which,     No. of
                                                              ---------------                                ---------     ------
                Date of                                       issuable shares  Subscription                  granted to   Executive
                -------                                       ---------------  ------------                  ----------   ---------
Name of       shareholder      Period during which holder     at September 30,    price     Exercise price   Executive    Officers
-------      -------------      -------------------------     ----------------    -----     --------------   ----------   --------
Series       authorization        may exercise warrants            2001         in(euro)(1)   in(euro)(1)     Officers    concerned
------       -------------        ---------------------            ----         ----------    -----------     --------    ---------
<S>         <C>                <C>                            <C>              <C>           <C>             <C>          <C>
Series O        30-Jun-98        Jun 30, 1998 - Jun 30, 2003        212,710          0.02         1.22 (2)            0          0

Series C        9-Dec-99         Dec 9, 1999 to Dec 9, 2004          28,750 (4)      0.02         4.88 (3)        1,000          1
Series E       13-Dec-2001      Dec 13, 1999 to Dec 13, 2006        195,624           (5)            (5)              0          0
            Totals per series                                       437,084                                       1,000



(1)  All amounts have been  converted from French francs to euro at the official
     conversion rate of (euro) 1.00 = FF 6.55957.
(2)  Includes(euro)0.67 of share premiums.
(3)  which includes(euro)4.33 of share premiums.
(4)  On June 6, 2000, we repurchased and cancelled 5,000 Series C warrants which
     gave the right to subscribe to 2,500 shares.
(5)  Series E will be proposed to the shareholders at the extraordinary  general
     meeting to be held in December  2001.  The  subscription  price will be not
     less  than 1% of the  average  closing  price of  InfoVista  shares  on the
     Nouveau  Marche  over the 20  trading  days  prior to the issue  date.  The
     subscription price for each share will be fixed at no less than the highest
     of (1) 85% of the average closing price of InfoVista  shares on the Nouveau
     Marche over the 20 trading  days prior to the issue  date;  (2) the closing
     price of InfoVista shares on the Nouveau Marche on the trading day prior to
     the issue of the  warrants and (3) the closing  price of InfoVista  ADSs on
     the Nouveau Marche on the trading day prior to the issue of the warrants
</TABLE>



6.7      EMPLOYEES

As of June 30, 2001, we employed 243 people, excluding independent contractors.

6.7.1    Distribution by sector

The following  chart  indicates the  distribution  of  InfoVista's  employees by
sectors as of June 30, 2001, 2000, and 1999.

                                                    As of June 30,
                                         ------------------------------------
                                           2001           2000         1999
                                         -------         ------       -------
  InfoVista employees                      243            147            62
  which:
  Administrative                            43             26            14
  Sales and marketing                       92             58            18
  Research and development                  54             28            10
  Customer service                          54             35            20



                                       60
<PAGE>

6.7.2   Geographic distribution

The following chart indicates InfoVista's  employees by geographic  distribution
as of June 30, 2001, 2000, and1999.

                                               As of June 30,
                                     -------------------------------
                                       2001         2000       1999
                                     -------       ------     ------
  Employees
  Europe                               153           97          44
  United States                         70           47          18
  Asia                                  20            3           0
  Total                                243          147          62


Employees  of  InfoVista  are  mainly  engineers  and  managers.  The  number of
employees  has grown  strongly  during the last  three  fiscal  years,  with the
departure  of only 49, 15 and 19 persons in fiscal years 2001,  2000,  and 1999,
respectively.  We are  committed  to  ongoing  recruitment  efforts  to meet the
demands  of  our  growth,  particularly  for  sales  personnel  and  development
engineers.  We have an open communication  policy with our employees and we hold
informational  meetings  regularly.  We do not  employ a  significant  number of
temporary employees.

6.7.3    Profit sharing and Share purchase schemes

On  March  6,  2000,  we  entered  into  a  profit   sharing   agreement   (Plan
d'Interessement) with our employees in France for the duration of three years.

On June 1,  2001 we put in place an  employee  savings  scheme  (Plan  d'Epargne
Entreprise)  for our  employees  in France as a  complement  to the above profit
sharing scheme. The scheme is managed by AXA Gestion Interessement and it allows
the French  employees to invest either the funds derived from the profit sharing
agreement  mentioned above or their private sources into a choice of three funds
balancing risk against projected investment return. One of the funds is composed
of 100% InfoVista shares.

6.7.4    Collective agreements

As of February 1, 2000,  French  employers  became subject to a new law reducing
the workweek to 35 hours. In this respect,  we have signed an agreement with the
representatives of our employees on March 8, 2000, by which the reduction in the
number of working hours was established with  retroactive  effect to February 1,
2000.

In  addition,  employment  contracts  with all of our  employees  in France  are
subject to the provisions of the convention  collective  SYNTEC,  the collective
bargaining agreement applicable to employees in our industry.

6.8      SHARE OWNERSHIP

With respect to directors and senior  management,  information  concerning their
share ownership in our company is addressed in "Item 7. Major  Shareholders  and
Related Party Transactions".

                                       61
<PAGE>

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.1      MAJOR SHAREHOLDERS AS AT OCTOBER 31, 2001

The table below sets forth  information as at October 31, 2001,  with respect to
each  person  known by us to  beneficially  own more than 5% of our  outstanding
shares and all of our  directors  and  executive  officers as a group as of such
date. The voting rights of our principal  shareholders are identical to those of
our other shareholders.
<TABLE>
<CAPTION>

Shareholder                                    Number of        % of share      % of voting
                                                 shares           capital         rights
<S>                                            <C>              <C>             <C>
Societe Centrale d'Investissements              1,918,012           9.75           9.76
Vertex Technology Fund Ltd (1)                  1,169,170           5.95           5.95
Innovacom (2)                                   1,088,665           5.54           5.54
FMR Corp. / Fidelity International Ltd (3)      1,815,881           9.24           9.24

Directors & Executive Officers
Alain Tingaud (4)                                 917,223           4.67           4.67
Jean-Paul Bernardini                                    1           0.00           0.00
Herbert May                                             1           0.00           0.00
Hubert Tardieu                                      1,250           0.01           0.01
Peter Waal                                          9,376           0.05           0.05
Philippe Ozanian                                      533           0.00           0.00
Manuel Stopnicki                                  128,436           0.65           0.65
Peter Mao                                             846           0.00           0.00
Didier Lesteven                                         0           0.00           0.00

InfoVista S.A.                                      6,753           0.03           0.00
Others(5)                                      12,605,578          64.11          64.13

  Total                                        19,661,725            100            100

(1)  Vertex Technology Fund Ltd is also a Director
(2)  Includes  247,867  shares held by  Innovacom  1 and 840,798  shares held by
     Innovacom 2.
(3)  Directly or indirectly.  Declaration made on September 18, 2001. FMR Corp /
     FIL notified us that its holdings exceeded 5% on April 11, 2001.
(4)  Includes  50 shares held by Mr.  Tingaud  and 917,173  shares held by Alain
     Tingaud  Innovations  EURL,  all of which may be deemed to be  beneficially
     owned by Alain  Tingaud.  Mr.  Tingaud  disclaims  beneficial  ownership of
     shares held by Alain Tingaud Innovations
(5)  Includes shares issued upon the exercise of stock options by our employees.
</TABLE>


To our knowledge,  as of October 31, 2001,  (i) number of  outstanding  ADSs was
840,404  and (ii) the  number  of  Registered  ADR  holders  was  three.  To our
knowledge,  we are not directly or  indirectly  owned or  controlled  by another
corporation,  any  foreign  government  or any other  national  or legal  person
separately  or jointly.  There is no  arrangement  known to us, the operation of
which may at any subsequent date result in a change of control of InfoVista SA.

                                       62
<PAGE>

We are not aware of any lock-up or other holding  obligation in force  affecting
InfoVista shares or ADSs held by management or other shareholders.

7.2      SIGNIFICANT CHANGES TO SHAREHOLDINGS OVER THE LAST 3 FISCAL YEARS

The table  below  shows  the  significant  changes  of which we are aware in the
percentage of ownership of our shares by our major shareholders  during the past
three years. The table shows the percentage  ownership of our major shareholders
on the date of our principal capital increases and/or sales of shares during the
period.
<TABLE>
<CAPTION>

  Shareholder                        March 16, 2001     July 7, 2000     Mar. 31, 2000    Jan. 28, 2000     June 30, 1999
  -----------
<S>                                  <C>                <C>              <C>              <C>               <C>

  Societe Centrale d'Investissements.         10.04              12.5             17.2             16.5               21.5

  Vertex Technology Fund Ltd.........          6.12               7.9             13.1             12.8               12.1
  Innovacom.........................           5.70               7.1              3.7              3.0                1.1
  Strategic European Technologies
  N.V................................          5.77               7.0              6.2              6.1                5.7
  Alain Tingaud(1)..................           2.88               6.4              8.3              8.8               10.8
  CV Sofinnova Ventures Partners III           3.15               4.1              6.2              6.0                5.5
  Alain Ries(1)......................          2.04               4.3              5.5              5.8                6.4
  Dassault Developpement.............          1.97               2.9              4.4              4.4                4.1
  3Com Corporation...................          1.45               3.0              4.4              4.6                5.2
  Others(2)..........................         60.88              44.8             31.0             32.0               27.6
                                     --------------     -------------     ------------    -------------     ---------------
  Total..............................           .00             100.0            100.0            100.0              100.0

-------------------------------------------------------------------------------------------------------------------
(1)  Directly and indirectly.
(2)  Includes shares issued upon the exercise of stock options by our employees.
</TABLE>

7.4      RELATED PARTY TRANSACTIONS

See Note 11of the Consolidated financial statements .

ITEM 8.  FINANCIAL INFORMATION

See "Financial  Statements",  for a list of the financial  statements filed with
this document.

ITEM 9.  THE OFFER AND LISTING

9.1      MARKETS

The shares of InfoVista have been listed on the Nouveau Marche of Euronext Paris
S.A.  ("Euronext  Paris") and the ADSs have been  listed on the Nasdaq  National
Market in the United  States since July 7, 2000.  InfoVista has been included in
the  Euronext  Paris  I.T.  CAC since  July,  2000,  on the SBF 250 index  since
December 21, 2000,  and the Euronext  Paris I.T. CAC 50 since June 15, 2001. The
SBF 250 is an index of shares of 250 companies selected by Euronext Paris as the
most representative of the French equities listed on Euronext Paris, from twelve
economic sectors. The I.T. CAC index is an index of French technology companies,
which  included 177 listed  securities as of September  15, 2001.  The IT CAC 50
indexes the 50 largest and most liquid stocks from the IT CAC.

                                       63
<PAGE>

9.2      PRICE HISTORY OF THE STOCK

This  table  provides  the high and low  closing  prices  for our  shares on the
Nouveau Marche and our ADSs on the Nasdaq  National  Market for since our shares
began trading on July 7, 2000.
<TABLE>
<CAPTION>

Volume of transactions and closing price evolution on the Nouveau Marche, in euros


                                    Closing price of Shares in euros (1)  Volume in  Closing price of ADSs in dollars (2)  Volume in
                                    ------------------------------------  ---------  ------------------------------------  ---------
                                    High            Low          Average     000s      High          Low        Average      000s
                                    ----            ---          -------     ----      ----          ---        -------      ----
<S>                                 <C>            <C>           <C>        <C>       <C>          <C>          <C>          <C>
6 months to October 31, 2001

2001         May                    11.80           8.20           10.10    1,236     10.15         7.40          8.73        329
2001         June                   12.20           4.90            7.41    1,377      9.81         4.25          6.42        419
2001         July                    6.20           4.17            4.79    1,608      5.15         3.70          4.09        397
2001         August                  5.38           3.45            4.44      986      4.46         3.15          3.93        241
2001         September               3.30           2.10            2.65    3,474      2.80         2.00          2.27        235
2001         October                 3.80           2.28            2.74    4,319      3.60         2.00          2.49        336

Fiscal year 2002 by quarter ended   High            Low                                High          Low
                                    ----            ---                                ----          ---
September 30,                        3.30           2.10                               2.80         2.00

Fiscal year 2001 by quarter ended   High            Low                                High          Low
                                    ----            ---                                ----          ---
September 30,                       45.50          18.01                              39.19        20.75
December 31                         54.50          18.20                              47.94        15.00
March 31                            34.00          10.30                              32.06         8.00
June 30                             12.20           4.90                              10.29         4.25

Fiscal year 2001                    High            Low                                High          Low
                                    ----            ---                                ----          ---
July 1 2000 to June 30 2001         54.50           4.90                              47.94         4.25

(1) Source: Euronext
(2) Source: Nasdaq
</TABLE>


                                       64
<PAGE>


The  following  charts  represent  the price history of the stock on the Nouveau
Marche and the Nasdaq from July 7, 2000 to October 31, 2001.


                Price history of the stock on the Nouveau Marche
                                [OBJECT OMITTED]





                    Price History of the stock on the NASDAQ
                                [OBJECT OMITTED]


                                       65
<PAGE>


9.3      GENERAL

On September 22, 2000,  upon  successful  completion of an exchange  offer,  the
ParisBourseSBF  SA, or the "SBF," the Amsterdam Stock Exchanges and the Brussels
Stock Exchanges  merged to create  Euronext,  the first  pan-European  exchange.
Through the exchange  offer,  all the  shareholders  of SBF, the Amsterdam Stock
Exchanges and the Brussels Stock Exchanges  contributed their shares to Euronext
N.V., a Dutch  holding  company.  Following  the  creation of Euronext,  the SBF
changed its name to Euronext Paris. Securities quoted on exchanges participating
in  Euronext  will be  traded  over a common  Euronext  platform,  with  central
clearinghouse, settlement and custody structures. However, these securities will
remain  listed on their local  exchanges.  As part of Euronext,  Euronext  Paris
retains  responsibility  for the admission of shares to Euronext  Paris' trading
markets as well as the regulation of those markets.

Securities  approved  for listing by  Euronext  Paris are traded in one of three
markets. The securities of most large public companies are listed on the Premier
Marche,  with the Second Marche available for small and medium-sized  companies.
Trading on the Nouveau  Marche was  introduced in March 1996 to allow  companies
seeking development capital to access the stock market. In addition,  securities
of  certain  other  companies  are  traded on a  non-regulated  over-the-counter
market, the Marche Libre OTC.

9.4      THE NOUVEAU MARCHE

The Nouveau Marche is a regulated market managed and operated by Euronext Paris.
The Nouveau Marche, however, is neither a new section of an existing market, nor
a stepping-stone to Euronext Paris's Second Marche.

The Nouveau  Marche is an electronic  market which combines a central order book
with  market-making  to ensure  greater  liquidity.  Member firms of the Nouveau
Marche  may  act in  one  or  more  capacities:  Listing  Advisers/Market-Makers
(Introducteurs/Teneurs    de    Marche,    or    "ITMs")    or    broker-dealers
(Negociateurs-Courtiers).

Admission  to the  Nouveau  Marche is subject to certain  capital  adequacy  and
liquidity  requirements  determined by Euronext  Paris.  In addition,  companies
applying for listing on the Nouveau Marche are required to publish comprehensive
information regularly and to keep the public informed of events likely to affect
the market  price of their  securities.  The  Nouveau  Marche  may also  require
certain current  shareholders to enter into lock-up  arrangements at the time of
offerings of securities.

Shares  listed  on the  Nouveau  Marche  are  placed  in  one of two  categories
depending on the volume of transactions, continu or fixing.

In October  1998,  Euronext  Paris  introduced  continuous  trading for the most
actively traded shares on the Nouveau  Marche.  Such trading takes place on each
business day from 9:00 a.m. to 5:30 p.m.,  with a pre-opening  session from 7:15
a.m. to 9:00 a.m.  and a  pre-closing  session  from 5:25 to 5:30  during  which
transactions are recorded but not executed and a closing auction of 5:30 p.m.

For shares that are not traded continuously, retail orders on the Nouveau Marche
are matched by the central system at two daily  fixings,  at 10:30 a.m. and 4:00
p.m. Between such fixings,  ITMs display  bid/asked spreads for a minimum number
of each of the securities for which they act as  market-makers,  and trades with
the ITM are  executed  from time to time  throughout  the day.  Our shares trade
continuously.  Trading in the  securities  listed on the  Nouveau  Marche may be
suspended by Euronext Paris if quoted prices exceed certain price limits defined
by the regulations of Euronext  Paris.  In particular,  if the quoted price of a
Continu  security varies by more than 10% from the previous day's closing price,
trading may be  suspended  for 4 minutes.  Once trading has  commenced,  further
suspensions  for up to 4 minutes are also  possible if the price varies again by
more than 10% from the threshold at which the suspension  was initiated.  During
the continuous  trading  session,  Euronext Paris may also suspend trading for a

                                       66
<PAGE>

4-minute  period if the price varies by more than 2% from the last traded price.
Euronext  Paris may also  suspend  trading of a security  listed on the  Nouveau
Marche in certain  other  limited  circumstances,  including,  for example,  the
occurrence  of unusual  trading  activity  in such  security.  In  addition,  in
exceptional  cases, the Conseil des Marches  Financiers ("CMF") may also suspend
trading.

Trades of securities listed on the Nouveau Marche are settled on a cash basis on
the third  trading  day  following  the trade.  Market  intermediaries  are also
permitted to offer investors a deferred settlement service (service de reglement
differe) for a fee. The deferred settlement service is only available for trades
in securities which either (i) are a component of the Index SBF 120 or (ii) have
both a total  market  capitalization  of at least  (euro) 1 billion  and a daily
average  volume of trades  of at least  (euro) 1  million.  Our  shares  are not
eligible  for the  deferred  settlement  service.  Investors  can  elect  on the
determination date (date de liquidation),  which is the fifth trading day before
the end of the month,  either to settle the trade by the last trading day of the
month or to pay an additional  fee and postpone the  settlement  decision to the
determination date of the following month.

Equity securities  traded on a deferred  settlement basis are considered to have
been  transferred  only  after  they have  been  registered  in the  purchaser's
account. Under French securities regulations, any sale of a security traded on a
deferred  settlement  basis  during the month of a  dividend  is deemed to occur
after the dividend has been paid. If the sale takes place before, but during the
month of, a dividend payment date, the purchaser's account will be credited with
an amount equal to the dividend paid and the seller's account will be debited by
the same amount.

Prior to any  transfer  of  securities  held in  registered  form on the Nouveau
Marche,  such  securities  must be  converted  into bearer form and  accordingly
inscribed in an account maintained by an accredited  intermediary with Euroclear
France, a settlement  organization.  Transactions in securities are initiated by
the owner giving instructions (through an agent, if appropriate) to the relevant
accredited  intermediary.  Trades of securities listed on the Nouveau Marche are
cleared by clearnet and settled through Euroclear France. A fee or commission is
payable to the ITM or broker-dealer or other agent involved in the transaction.

Lehman Brothers International (Europe) and BNP Equities France act as Teneurs de
Marche with respect to the shares traded on the Nouveau Marche.



ITEM 10. ADDITIONAL INFORMATION

10.1     MEMORANDUM AND ARTICLES OF ASSOCIATION

For the company's purposes,  please see "Information on the Company - Objects of
the Company".

In this section, we summarize material information concerning our share capital,
together  with  material  provisions  of  applicable  French law and our statuts
(by-laws).  An unofficial  English  translation of our statuts is included as an
exhibit to this report.  You may obtain copies of our statuts in French from the
Greffe of the Registry of Commerce and Companies of Evry,  France.  Please refer
to those full documents for additional details.

10.2     SHAREHOLDERS' MEETINGS AND VOTING RIGHTS

10.2.1   General

In accordance  with Book II of the French  commercial code and Decree no. 67-236
of March 1967, there are two types of shareholders'  general meetings,  ordinary
and extraordinary.

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Ordinary general meetings of shareholders are required for matters such as:

     o    electing, replacing and removing directors,

     o    appointing independent auditors,

     o    approving the annual accounts,

     o    declaring dividends or authorizing dividends to be paid in shares, and

     o    issuing debt securities.

Extraordinary  general  meetings of  shareholders  are  required for approval of
matters such as amendments to our statuts,  including any amendment  required in
connection with extraordinary corporate actions. Extraordinary corporate actions
include:

     o    changing our company's name or corporate purpose,

     o    increasing or decreasing our share capital,

     o    creating a new class of equity securities,

     o    authorizing  the issuance of investment  certificates,  convertible or
          exchangeable securities,

     o    establishing any other rights to equity securities, and

     o    the voluntary liquidation of our company.

10.2.2   Annual Ordinary Meetings

The French  company law  requires  our board of  directors  to convene an annual
ordinary  general meeting of shareholders  for approval of the annual  accounts.
This meeting must be held within six months of the end of each fiscal year. This
period may be extended by an order of the  President of the Tribunal de Commerce
(Commercial  Court).  The board of  directors  may also  convene an  ordinary or
extraordinary  meeting of shareholders upon proper notice at any time during the
year. If the board of directors  fails to convene a shareholders'  meeting,  our
independent  auditors may call the meeting.  In a bankruptcy,  our liquidator or
court-appointed  agent may also call a shareholders'  meeting in some instances.
Any of the following may request the court to appoint an agent:

     o    one or several shareholders holding at least 5% of our share capital,

     o    any interested party in cases of urgency, or

     o    duly qualified associations of shareholders who have held their shares
          in  registered  form for at least two years and who  together  hold at
          least 5% of the voting rights of our company.

10.2.3   Notice of Shareholders' Meetings

We must  announce  general  meetings  at least 30 days in  advance by means of a
preliminary  notice  ("avis de reunion")  which is published in the Bulletin des
Annonces Legales Obligatoires,  or "BALO." The preliminary notice must have been
previously sent to the Commission des operations de bourse (the "COB").  It must

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contain,  among  other  things,  the time,  date and place of the  meeting,  the
agenda,  a draft of the  resolutions  to be  submitted  to the  shareholders,  a
description  of the  procedures  which  holders of bearer  shares must follow to
attend the meeting,  the procedure for voting by mail and a notice  stating that
the  shareholders  have ten days  from the  date of  publication  to send  their
proposals for resolutions.

At least 15 days  prior to the date set for the  meeting on first  call,  and at
least six days  before any second  call,  we must send a final  notice  (avis de
convocation)  containing,  among  other  things,  the  final  agenda  and  other
information  for  the  meeting.  The  final  notice  must be sent by mail to all
registered  shareholders  who have held  shares for more than one month prior to
the date of the  preliminary  notice and published in a newspaper  authorized to
publish legal announcements in the local administrative department (departement)
in which our company is  registered  as well as in the BALO,  with prior  notice
having been given to the COB.

In  general,  shareholders  can only take  action at  shareholders'  meetings on
matters  listed on the agenda for the  meeting.  In an  exception  to this rule,
shareholders  may take action with respect to the  appointment  and dismissal of
directors.   Additional   resolutions  to  be  submitted  for  approval  by  the
shareholders at the meeting may be proposed to the board of directors  within 10
days of the publication of the preliminary notice in the BALO by:

     o    one or several shareholders holding a specified percentage of shares,

     o    a duly  qualified  association  of  shareholders  who have held  their
          shares in registered form for at least two years and who together hold
          at least 5% of our voting rights.

The  board  of  directors  must  submit  these  resolutions  to a  vote  of  the
shareholders.

During the two weeks  preceding a meeting of  shareholders,  any shareholder may
submit  written  questions to the board of directors  relating to the agenda for
the meeting. The board of directors must respond to these questions.

10.2.4   Attendance and Voting at Shareholders' Meetings

Each share confers on the  shareholder the right to one vote.  Shareholders  may
attend ordinary general meetings and extraordinary general meetings and exercise
their voting rights  subject to the  conditions  specified in the French company
law and our statuts.  There is no requirement  that a shareholder have a minimum
number  of shares in order to attend  or to be  represented  at an  ordinary  or
extraordinary general meeting.

In order to  participate  in any  general  meeting,  a holder of shares  held in
registered  form must have its shares  registered  in its name in a  shareholder
account  maintained by us or on our behalf by an agent  appointed by us at least
five days prior to the date set for the meeting.  A holder of bearer shares must
obtain a certificate from the accredited  intermediary  with whom the holder has
deposited its shares. This certificate must indicate the number of bearer shares
the holder owns and must state that these shares are not transferable  until the
time fixed for the  meeting.  The holder must deposit  this  certificate  at the
place  specified  in the notice of the  meeting  at least  five days  before the
meeting.

10.2.5   Proxies and Votes by Mail

In general,  all shareholders who have properly  registered their shares or duly
presented  a  certificate  from  their  accredited  financial  intermediary  may
participate  in  general  meetings.  Shareholders  may  participate  in  general
meetings either in person, by proxy or, if it is provided for by the statuts, by
videoconference  or by any means of  telecommunication  which  allow  them to be
identified.  An  amendment to the statuts was  approved by  shareholders  at the
annual general meeting held December 13, 2001.  Shareholders may vote in person,
by proxy or by mail.

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Proxies will be sent to any shareholder on request with,  among other things,  a
draft of the resolutions.  In order to be counted, such proxies must be received
at our  registered  office,  or at any other  address  indicated  on the  notice
convening the meeting, prior to the date of the meeting. A shareholder may grant
proxies to his or her spouse or to another shareholder.  A shareholder that is a
corporation  may grant  proxies to a legal  representative.  Alternatively,  the
shareholder  may send us a blank proxy dated and signed  without  nominating any
representative.  In this case,  the  chairman of the meeting will vote the blank
proxies  in favor of all  resolutions  proposed  by the board of  directors  and
against all others.

With respect to votes by mail,  we must send  shareholders  a voting  form.  The
completed  form must be  returned to us at least three days prior to the date of
the shareholders' meeting.

10.2.6   Quorum

The French  company law requires  that  shareholders  having at least 25% of the
shares entitled to voting rights must be present in person or voting by mail, by
proxy or  by videoconference or by any means of telecommunications  which allows
them to be identified to fulfill the quorum requirement for:

     o    an ordinary general meeting, and

     o    an  extraordinary  general  meeting  where an  increase  in our  share
          capital is proposed  through  incorporation  of  reserves,  profits or
          share premium.

The quorum  requirement is 33 1/3% of the shares  entitled to voting rights,  on
the same basis, for any other extraordinary general meeting.

If a quorum is not  present at a meeting,  the  meeting  is  adjourned.  When an
adjourned ordinary meeting is resumed, there is no quorum requirement. No quorum
is required when an adjourned  extraordinary  general meeting is resumed only to
approve an increase in our share  capital  through  incorporation  of  reserves,
profits or share premium. In the case of any other resumed extraordinary general
meeting,  shareholders  having at least 25% of outstanding voting rights must be
present  in person or voting by mail,  by proxy or by  videoconference  or other
means of telecommunication which allows them to be identified for a quorum. If a
quorum is not present,  the reconvened meeting may be adjourned for a maximum of
two months. No deliberation by the shareholders may take place without a quorum.
However, only questions which were on the agenda of the adjourned meeting may be
discussed and voted upon.

10.2.7   Majority

A simple  majority of  shareholders  may pass a resolution  concerning a capital
increase by  incorporation  of reserves,  profits or share  premium at either an
ordinary  general  meeting or an  extraordinary  general  meeting.  At any other
extraordinary  general meeting,  a two-thirds  majority of the shareholder votes
cast is required.

A  unanimous   shareholder   vote  is  required  to  increase   liabilities   of
shareholders.

Abstention from voting by those present in person or by videoconference or other
identifiable  means of  telecommunication  which allows them to be identified or
those  represented  by proxy or voting by mail is counted as a vote  against the
resolution submitted to a shareholder vote.

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In general,  each  shareholder  is entitled to one vote per share at any general
meeting.  Under the French  company  law,  shares of a company  held by entities
controlled  directly or  indirectly  by that  company are not entitled to voting
rights and do not count for quorum or majority purposes.

10.3      FINANCIAL STATEMENTS AND OTHER COMMUNICATIONS WITH SHAREHOLDERS

In connection with any shareholders' meeting, we must provide a set of documents
including  our annual  report and a summary of the results of the five  previous
fiscal  years in French  GAAP to any  shareholder  who so  requests.  The French
company law also requires that a special report must be provided to the ordinary
shareholders'  meeting regarding stock options  authorized and/or granted by the
company.

10.4     DIVIDENDS

We may only distribute  dividends out of our  "distributable  profits," plus any
amounts held in our reserve which the shareholders  decide to make available for
distribution,  other than those reserves which are specifically  required by law
or our statuts. "Distributable profits" consist of our unconsolidated net profit
in each  fiscal  year,  as  increased  or reduced by any profit or loss  carried
forward  from  prior  years,  less any  contributions  to the  reserve  accounts
pursuant to law or our statuts.

10.4.1   Legal Reserve

The French  company law  provides  that  French  societes  anonymes  such as our
company must allocate 5% of their  unconsolidated  statutory net profit for each
year to their legal  reserve fund before  dividends  may be paid with respect to
that year.  Funds  must be  allocated  until the amount in the legal  reserve is
equal to 10% of the aggregate  nominal value of the issued and outstanding share
capital.  This  restriction  on the payment of dividends also applies to each of
our French subsidiaries on an unconsolidated  basis. At June 30, 2001, our legal
reserve was (euro)  4,941.94.  The legal reserve of any company  subject to this
requirement  may only be distributed  to  shareholders  upon  liquidation of the
company.

10.4.2   Approval of Dividends

According  to the French  company  law,  the board of  directors  may  propose a
dividend  for  approval by the  shareholders  at the annual  general  meeting of
shareholders.  If we have  earned  distributable  profits  since  the end of the
preceding fiscal year, as reflected in an interim income statement  certified by
our auditors,  the board of directors  may  distribute  interim  dividends for a
minimum  amount  of  (euro)  0.76  (FF  5)  per  share,  to  the  extent  of the
distributable  profits for the period covered by the interim  income  statement.
The board of directors  may declare such  dividends,  subject to French law, and
may do so, for interim  dividends paid in cash,  without  obtaining  shareholder
approval.  For  interim  dividends  paid in  shares,  prior  authorization  by a
shareholders' meeting is required.

10.4.3   Distribution of Dividends

If such a  priority  dividend  is paid in full,  dividends  are  distributed  to
shareholders  pro  rata  according  to  their  respective  holdings  of  shares.
Outstanding   dividends  are  payable  to   shareholders  on  the  date  of  the
shareholders' meeting at which the distribution of dividends is approved. In the
case of interim dividends, distributions are made to shareholders on the date of
the board of directors'  meeting in which the distribution of interim  dividends
is approved.  The actual dividend payment date is decided by the shareholders in
an ordinary  general  meeting.  We have not distributed any dividends during the
past three fiscal years.


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10.4.4   Timing of Payment

According  to the French  company  law,  we must pay any  dividends  within nine
months of the end of our  fiscal  year,  unless  otherwise  authorized  by court
order. Dividends on shares that are not claimed within five years of the date of
declared payment revert to the French State.

10.5     CHANGES IN SHARE CAPITAL

10.5.1   Increases in Share Capital

As provided by French  company law, our share capital may be increased only with
the  shareholders'  approval at an  extraordinary  general  meeting  following a
recommendation of the board of directors.  Increases in our share capital may be
effected by:

     o    issuing additional shares,

     o    increasing the nominal value of existing shares, or

     o    creating a new class of equity securities.

Increases in share capital by issuing  additional  securities may be effected by
issuing such securities:

     o    for cash,

     o    for assets contributed in kind,

     o    by conversion of debt securities previously issued,

     o    by capitalization of profits, reserves or share premiums,

     o    subject to various conditions, in satisfaction of debt incurred by our
          company, or

     o    any combination of the above.

Decisions to increase the share capital through the  capitalization of reserves,
profits and/or share premiums require the approval of an  extraordinary  general
meeting,  acting  under the  quorum  and  majority  requirements  applicable  to
shareholders'  meetings.  Increases effected by an increase in the nominal value
of shares require  unanimous  approval of the  shareholders,  unless effected by
capitalization  of  reserves,  profits  or share  premiums.  All  other  capital
increases  require  the  approval  of  an  extraordinary  general  meeting.  See
"Shareholders' Meetings and Voting Rights."

The  shareholders  may  delegate  the right to carry out any  increase  in share
capital  to the  board  of  directors,  provided  that  the  increase  has  been
previously  authorized by the  shareholders.  The board of directors may further
delegate this right to the Chairman and/or Chief Executive Officer.

Each time the shareholders decide on a capital increase or decide to delegate to
the board of  directors  the right to carry  out a capital  increase,  they must
decide  on  whether  or not to  proceed  with a  capital  increase  reserved  to
employees of our company and its  subsidiaries  or on whether or not to delegate
to the board of directors the right to carry out such reserved capital increase.

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10.5.2   Decreases in Share Capital

According to French  company law,  any  decrease in our share  capital  requires
approval  by the  shareholders  entitled  to  vote at an  extraordinary  general
meeting.  In the case of a capital  reduction,  other than a reduction to absorb
losses or a  reduction  as part of a program to  purchase  our own  shares,  all
holders of shares  must be offered  the  possibility  to  participate  in such a
reduction.  The share capital may be reduced  either by  decreasing  the nominal
value of the outstanding  share capital or by reducing the number of outstanding
shares. The number of outstanding shares may be reduced either by an exchange of
shares or by the repurchase and cancellation of shares. Holders of each class of
shares  must  be  treated  equally  unless  each  affected   shareholder  agrees
otherwise.

10.6     PREEMPTIVE SUBSCRIPTION RIGHTS

According  to French  company  law,  if we issue  specific  kinds of  additional
securities,  current  shareholders will have preemptive  subscription  rights to
these securities on a pro rata basis. These preemptive rights require us to give
priority treatment to those  shareholders.  The rights entitle the individual or
entity  that  holds them to  subscribe  to an issue of any  securities  that may
increase  the share  capital  of our  company  by means of a cash  payment  or a
settling of cash debts.  Preemptive  subscription rights are transferable during
the subscription period relating to a particular offering. These rights may also
be listed on Euronext Paris.

A two-thirds majority of the shares entitled to vote at an extraordinary general
meeting may vote to waive  preemptive  subscription  rights with  respect to any
particular  offering.  French law requires  that the board of directors  and our
independent  auditors present reports that specifically  address any proposal to
waive preemptive  subscription  rights.  In the event of a waiver,  the issue of
securities  must  be  completed  within  the  period   prescribed  by  law.  The
shareholders  may also decide at an  extraordinary  general  meeting to give the
existing  shareholders a non transferable priority right to subscribe to the new
securities, during a limited period of time. A two-thirds majority of the shares
entitled to vote at an extraordinary  general meeting also may grant to existing
shareholders a  non-transferable  form of preemptive  rights to subscribe to any
new securities that may affect our share capital.  Shareholders  also may notify
us that they wish to waive their own preemptive subscription rights with respect
to any particular offering if they so choose.

10.7     FORM, HOLDING AND TRANSFER OF SHARES

10.7.1   Form of Shares

Our statuts provide that the shares may be held in registered or bearer form.

10.7.2   Holding of Shares

In  accordance  with  French law  concerning  dematerialization  of  securities,
shareholders'  ownership rights are represented by book entries instead of share
certificates.  We maintain a share account with Euroclear  France for all shares
in  registered  form,  which is  administered  by BNP Paribas.  In addition,  we
maintain separate  accounts in the name of each shareholder  either directly or,
at a shareholder's request,  through the shareholder's  accredited intermediary.
Each  shareholder  account shows the name of the holder and the number of shares
held and, in the case of shares held  through an  accredited  intermediary,  the
shareholder  account  shows that the shares are held through such  intermediary.
BNP Paribas,  as a matter of course,  issues  confirmations  to each  registered
shareholder  as to shares  registered in the  shareholder's  account,  but these
confirmations are not documents of title.

Shares  held in bearer form are held on the  shareholder's  behalf in an account
maintained by an accredited  intermediary and are registered in an account which
the accredited  intermediary  maintains with Euroclear  France.  That account is

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separate from our company's share account with Euroclear France. Each accredited
intermediary  maintains  a record  of  shares  held  through  it and will  issue
certificates of registration for the shares that it holds. Shares held in bearer
form may only be transferred  through  accredited  intermediaries  and Euroclear
France. Our statuts permit us to request that Euroclear  Franceprovide us at any
time with the identity of the holders of our shares or other securities granting
immediate or future voting  rights,  held in bearer form, and with the number of
shares or other securities so held.

French  company law states that shares held by any  non-French  resident  may be
held  on  the  shareholder's  behalf  in a  collective  account  or  in  several
individual accounts by the intermediary.

10.7.3   Transfer of Shares

Our statuts do not contain any restrictions relating to the transfer of shares.

Registered shares must be converted into bearer form before being transferred on
Euronext Paris, and accordingly,  must be registered in an account maintained by
an  accredited  intermediary.  A  shareholder  may initiate a transfer by giving
instructions  to the relevant  accredited  intermediary.  A fee or commission is
payable to the broker  involved in the  transaction,  regardless  of whether the
transaction  occurs within or outside France.  No registration  duty is normally
payable in France, unless a transfer instrument has been executed in France.

10.8     LIQUIDATION RIGHTS

If we  are  liquidated,  any  assets  remaining  after  payment  of  our  debts,
liquidation  expenses and all of our remaining  obligations  will be distributed
first to repay in full the  nominal  value of our shares.  Any  surplus  will be
distributed  pro rata among  shareholders  in proportion to the nominal value of
their shareholdings.

10.9     REQUIREMENTS FOR HOLDINGS EXCEEDING CERTAIN PERCENTAGES

French  company law provides that any  individual or entity,  acting alone or in
concert with others,  that becomes the owner,  directly or  indirectly,  of more
than 5%, 10%, 20%, 33 1/3%, 50% or 66 2/3% of the  outstanding  shares or voting
rights of a listed company in France,  such as our company, or that increases or
decreases  its  shareholding  or  voting  rights  above  or  below  any of those
thresholds,  must  notify the  company  within 15  calendar  days of the date it
crosses the threshold of the number of shares and ADSs it holds and their voting
rights.  The  individual  or entity  must also  notify the  Conseil  des Marches
Financiers,  or "CMF,"  within  five  trading  days of the date it  crosses  the
threshold.

French law and the COB regulations impose additional  reporting  requirements on
persons who  acquire  more than 10% or 20% of the  outstanding  shares or voting
rights of a listed  company.  These persons must file a report with the company,
the COB and the CMF within 15 days of the date they cross the threshold.  In the
report,  the acquirer must specify its  intentions  for the  following  12-month
period,  including  whether or not it  intends to  continue  its  purchases,  to
acquire control of the company in question or to seek nomination to the board of
directors.  The CMF makes the notice  public.  The acquirer  must also publish a
press  release  stating  its  intentions  in a financial  newspaper  of national
circulation in France.  The acquirer may amend its stated  intentions,  provided
that it does so on the basis of  significant  changes  in its own  situation  or
shareholders. Upon any change of intention, it must file a new report.

Under CMF regulations, and subject to limited exemptions granted by the CMF, any
person or persons  acting in  concert  owning in excess of 33 1/3 % of the share
capital  or voting  rights of a French  listed  company  must  initiate a public
tender offer for the balance of the share capital of such company.

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In  addition,  and subject to the listing of our  shares,  provisions  have been
included in our statuts to the effect that any person acting alone or in concert
who  becomes,  directly  or  indirectly,  the owner of more than 2% of our share
capital  or voting  rights  must  notify us within 15 days by  registered  mail,
return  receipt  requested,   of  the  number  of  shares  it  holds.  The  same
notification  requirement  applies  to  each  subsequent  increase,  up  to  and
including  50%, or decrease in  ownership  of 2% or whole  multiples of 2%. If a
person  does  not  comply  with  this  notification  requirement,  one  or  more
shareholders  holding  2% or more of our  share  capital  or voting  rights  may
require a shareholders'  meeting to deprive the shares in excess of the relevant
threshold  of  voting  rights  for all  shareholders'  meetings  for  two  years
following  the  date  on  which  the  owner   complies  with  the   notification
requirements.

In order to permit holders to give the required  notice,  we must publish in the
BALO, not later than 15 calendar days after the annual ordinary  general meeting
of  shareholders,  information with respect to the total number of voting rights
outstanding  as of the date of such  meeting.  In  addition,  if the  number  of
outstanding  voting  rights  changes by 5% or more  between two annual  ordinary
general  meetings,  we must publish in the BALO, within 15 calendar days of such
change,  the number of voting  rights  outstanding  and  provide  the CMF with a
written notice.  The CMF publishes the total number of voting rights so notified
by all listed companies in a weekly notice (avis), mentioning the date each such
number was last updated. In order to facilitate compliance with the notification
requirements,  a  holder  of ADSs  may  deliver  any  such  notification  to the
depositary  and the  depositary  shall,  as soon as  practicable,  forward  such
notification to us and to the CMF.

If any  person  fails to comply  with the legal  notification  requirement,  the
shares or voting rights in excess of the relevant  threshold will be deprived of
voting rights for all shareholders'  meetings until the end of a two-year period
following  the date on which the owner thereof  complies  with the  notification
requirements.  In  addition,  any  shareholder  who fails to comply  with  these
requirements  may have all or part of its voting rights suspended for up to five
years by the Commercial Court at the request of our Chairman, any shareholder or
the COB, and may be subject to a FF 120,000 fine.

10.10    PURCHASE OF OUR OWN SHARES

Under French law, our company may not issue shares to itself.  However,  we may,
either  directly  or  through a  financial  intermediary  acting on our  behalf,
purchase our shares for one of three purposes:

     o    to reduce our share capital by canceling the shares we purchase,  with
          our shareholders' approval at an extraordinary general meeting,

     o    to provide  shares to our  employees  under a  profit-sharing  plan or
          stock option plan, or

     o    to  acquire  up to 10% of  our  share  capital  in  connection  with a
          corporate share repurchase program,  provided our shares are listed on
          a regulated market (e.g., the Premier Marche, the Second Marche or the
          Nouveau  Marche)  subject to the approval by the general  shareholders
          meeting and the filing of a Note  d'Information  that has received the
          visa from the Commission des Operations de Bourse ("COB").

We may not  cancel  more  than 10% of our  outstanding  share  capital  over any
21-month period. In addition, we may not repurchase under either 2 or 3 above an
amount of shares that would result in our company holding, directly or through a
person acting on our behalf,  more than 10% of our outstanding share capital, or
if we have different classes of shares, 10% of the shares in each class.

We must hold any shares we repurchase in registered form. These shares also must
be fully paid up. Shares  repurchased by us are deemed  outstanding under French
law but are not entitled to dividends or voting rights,  and we may not exercise
the preemptive subscription rights attached to them.

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The shareholders,  at an extraordinary  general meeting,  may decide not to take
these shares into account in  determining  the  preemptive  subscription  rights
attached to the other shares.  However,  if the shareholders decide to take them
into account,  we must either sell the rights  attached to the shares we hold on
the market before the end of the  subscription  period or distribute them to the
other shareholders on a pro rata basis.

On December  18, 2000,  the  shareholders  authorized  our board of directors to
repurchase up to 10% of our total  outstanding share capital on that date, which
was 1,906,660 shares. The total amount of such purchase may not exceed (euro) 30
million.  This authorization will expire on the date of the annual shareholders'
meeting called to approve the accounts for the fiscal year ending June 30, 2001.
The shareholders  also authorized the board to cancel  repurchased  shares which
amount up to 10% of our  outstanding  share capital  within any 24 month period.
This  share  repurchase  program  has  been  registered  by  the  COB  in a Note
d'information  under  the visa  number  00-1902  on  November  27,  2000.  A new
authorization  was approved by the general  annual  meeting held on December 13,
2001.


10.11    TRADING IN OUR OWN SHARES

Under  Reglement  no. 90-04 of the COB, as amended,  we may not trade in our own
shares for the purpose of manipulating the market.  There are three requirements
for trades by a company in its own shares to be considered valid.  Specifically,
in order to be valid:

     o    trades  must  be  executed  on  behalf  of the  company  by  only  one
          intermediary  or, if the issuer uses its share  repurchase  program in
          part by way of derivatives,  by two  intermediaries  provided that the
          issuer is able to  ensure  an  appropriate  coordination  between  the
          intermediaries,  in each  trading  session,  except  during  the issue
          period of any  securities  and one  month  after  the  listing  of the
          securities  if the  trades  are  made to  ensure  the  success  of the
          issuance,

     o    any block  trades may not be made at a price above the current  market
          price, and

     o    each trade must be made at a price that falls  between  the lowest and
          the highest  trading price of the trading  session  during which it is
          executed.

If a company's  shares are  continuously  quoted  (cotation en continu),  then a
trade must meet the following further requirements to be considered valid:

     o    the trade must not  influence  the  determination  of the quoted price
          before  the  opening of  trading,  at the  opening  of the  trading or
          session, at the first trade of the shares, at the reopening of trading
          following a suspension,  or, as  applicable,  in the last half-hour of
          any trading session or at the fixing of the closing price,

     o    the trade must not be carried out in order to influence the price of a
          derivative instrument relating to the company's shares, and

     o    the trade  must not  account  for more than 25% of the  average  total
          daily trading volume on the Nouveau Marche in the shares during the 15
          trading days  immediately  preceding the trade.  This last requirement
          applies only to trades in shares that, like our shares,  are traded on
          the immediate settlement market.

If a company's shares are quoted at fixings,  then a trade must meet one further
requirement to be considered valid:

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     o    the trade  must not  account  for more than 25% of the  average  daily
          trading  volume on the  Nouveau  Marche in the  shares  during  the 15
          trading days immediately preceding the trade.

However, there are two periods during which we are not permitted to trade in our
own  securities:  the  15-day  period  before  the  date on  which  we make  our
consolidated or annual accounts public,  and the period beginning on the date at
which  we  become  aware  of  information  that,  if  disclosed,  would  have  a
significant  impact on the market price of our securities and ending on the date
this information is made public.

After making an initial purchase of our own shares, we must file monthly reports
with the COB and the CMF that contain  specified  information  about  subsequent
transactions. The CMF makes this information publicly available.

10.12    OWNERSHIP OF SHARES BY NON-FRENCH PERSONS

Under  French  law,  there is no  limitation  on the right of  non-residents  or
non-French  shareholders  to own or, where  applicable,  to vote securities of a
French company.

A French law dated February 14, 1996 abolished the requirement that a person who
is  not a  resident  of the  European  Union  ("E.U.")  obtain  an  autorisation
prealable, or prior authorization,  prior to acquiring a controlling interest in
a French  company.  However,  both  E.U.  and  non-E.U.  residents  must  file a
declaration administrative, or administrative notice, with French authorities in
connection with the acquisition of a controlling interest in any French company.
Under  existing  administrative  rulings,  ownership of 20 % or more of a listed
company's  share  capital is regarded  as a  controlling  interest,  but a lower
percentage  may be held to be a  controlling  interest in certain  circumstances
(depending upon such factors as the acquiring party's intentions, its ability to
elect  directors or financial  reliance by the French  company on the  acquiring
party).

10.13    MATERIAL CONTRACTS

Please see "Information on the Company - Intellectual Property".

10.14    EXCHANGE CONTROLS

Under current French exchange control  regulations,  there are no limitations on
the  amount  of  payments   that  may  be  remitted  by  a  French   company  to
non-residents.  Laws and regulations  concerning  foreign  exchange  controls do
require,  however,  that all  payments  or  transfers  of funds made by a French
resident to a non-resident be handled by an accredited intermediary.  In France,
all registered banks and substantially all credit  establishments are accredited
intermediaries.

10.15    OTHER

For other limitations affecting shareholders, see "Form, Holding and Transfer of
Shares" and "Requirements for Holdings Exceeding Certain Percentages."

10.16    TAXATION

10.17    FRENCH TAXATION

The following is a general  summary of the material  French tax  consequences of
owning and  disposing  of the shares of our  company.  This  summary may only be
relevant  to you if you are not a  resident  of France  and you do not hold your
shares in connection  with a permanent  establishment  or a fixed base in France
through which you carry on a business or perform personal services.

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<PAGE>

This discussion is intended only as a descriptive  summary.  It does not address
all  aspects  of French  tax laws that may be  relevant  to you in light of your
particular  circumstances.  It is based on the laws, conventions and treaties in
force as of the  date of this  report,  all of  which  are  subject  to  change,
possibly with retroactive effect, or different interpretations.

However,  you are urged to consult your own tax advisor  about the potential tax
effects of owning or disposing of shares in your particular situation.

10.17.1  Taxation on Sale or Disposal of Shares

Generally, you will not be subject to any French income tax or capital gains tax
when you sell or dispose of shares of our company if both of the following apply
to you:

     o    you are not a French resident for French tax purposes, and

     o    you have  held not more  than 25% of our  company's  dividend  rights,
          known  as  droits  aux  benefices  sociaux,  at any  time  during  the
          preceding five years,  either directly or indirectly and as related to
          individuals alone or with relatives.

If a double tax treaty between  France and your country  contains more favorable
provisions, you may not be subject to any French income tax or capital gains tax
when you sell or dispose of any  shares of our  company,  even if one or both of
the above statements applies to you.

Subject to specific conditions,  foreign states, international organizations and
a number of foreign public bodies are not considered  French residents for these
purposes.

If you transfer  listed shares using a written  agreement,  that  agreement must
generally be registered.  You will be required to pay a registration  duty of 1%
of either  the  purchase  price or the market  value of the shares  transferred,
whichever is higher.  The maximum duty is FF 20,000 per  transfer.  However,  in
some circumstances, if the agreement is executed outside France, you will not be
required to pay this duty.

10.17.2  Taxation of Dividends

In France,  companies may only pay dividends out of income  remaining  after tax
has been paid.  When  shareholders  resident in France  receive  dividends  from
French companies, they are entitled to a tax credit, known as the avoir fiscal.

The amount of the avoir fiscal is generally equal to:

     o    50% of the dividend paid for (i)  individuals and (ii) companies which
          own at least 5% of the capital of the French distributing  company and
          meet the  conditions  to qualify  under the  French  parent-subsidiary
          regime;

     o    25% of the dividend paid for the other  shareholders who use the avoir
          fiscal  in  2001,  and  15%  of  the  dividend  paid  for  such  other
          shareholders who will use the avoir fiscal as of January 1, 2002.

In addition, if the distribution of dividends by us gives rise to the precompte,
shareholders  entitled to the avoir  fiscal at the rate of 25% and then 15% will
generally be entitled to an additional amount of avoir fiscal equal to:

     o    50% of the  precompte  paid in cash by the  company  for  shareholders
          entitled to use the avoir fiscal at the rate of 25%;

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     o    70% of the  precompte  paid in cash by the  company  for  shareholders
          entitled to use the avoir fiscal at the rate of 15%.

As indicated  below,  the  precompte is a tax which is paid by French  companies
when they  distribute  dividends  out of certain  profits (see  paragraph  below
relating to the precompte).

French  companies  must  generally  deduct  a 25%  French  withholding  tax from
dividends paid to non-residents and, under French domestic law, shareholders who
are not resident in France are not eligible for the avoir fiscal. Under most tax
treaties  between France and other  countries,  the rate of this withholding tax
may  be  reduced  in  specific  circumstances.  Generally,  a  holder  who  is a
non-French  resident  is  subsequently  entitled  to a tax  credit in his or her
country of  residence  for the amount of tax actually  withheld.  Under some tax
treaties, the withholding tax is eliminated altogether.

The following  countries,  French  overseas  territories,  known as  Territoires
d'Outre-Mer,  and other  territories  have entered into income tax treaties with
France that provide for the arrangements summarized below:

Australia         Israel            Niger                French Territotires
Austria           Italy             Norway               d'Outre-Mer and
Belgium           Ivory Coast       Pakistan             others :
Bolivia           Japan             Senegal
Brazil            Latvia            Singapore            Mayotte
Burkina Faso      Lithuania         South Korea          New Caledonia
Cameroon          Luxembourg        Spain                Saint-Pierre & Miquelon
Canada            Malaysia          Sweden
Estonia           Mali              Switzerland
Finland           Malta             Togo
Gabon             Mauritius         Turkey
Germany 1         Mexico            Ukraine
Ghana             Namibia           United Kingdom
Iceland           Netherlands       United States
India             New Zealand       Venezuela




--------


1 According to a common statement of the French and German tax authorities dated
July 13, 2001, dividends paid to German resident holders who are not individuals
no longer give right to the avoir fiscal. Discussions are currently taking place
between  the  French  and  German tax  authorities,  which  could  result in the
suppression  of the transfer of the avoir fiscal to German  resident  individual
holders.  German  holders  are urged to  consult  teir own tax  advisor  in this
respect.


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Under these  treaties,  a  shareholder  who  fulfills  specific  conditions  may
generally apply to the French tax authorities for the following:

     o    a lower rate of withholding tax, generally 15%, and

     o    a refund equal to the avoir fiscal, after deduction of withholding tax
          payable on the avoir fiscal.

Except for the United States,  none of the countries or territories listed above
has a treaty  granting  benefits  to  holders  of ADSs,  as  opposed  to shares.
Accordingly, this discussion of treaty benefits does not apply to ADS holders.

If these arrangements  provided for by any of the above-listed treaties apply to
a  shareholder,  we will  generally  withhold tax from the dividend at the lower
rate, provided that the shareholder has established,  before the date of payment
of the  dividend,  that he or she is entitled to the lower rate and has complied
with the filing formalities. Otherwise, we must withhold tax at the full rate of
25%, and the shareholder may subsequently claim the excess tax paid.

Some of the countries and territories listed above impose additional  conditions
for corporate  entities wishing to receive the avoir fiscal.  In other countries
and territories, individual residents may receive the avoir fiscal but corporate
entities may not.

10.17.3  The Precompte

A  French  company  must pay a tax  known as the  precompte  to the  French  tax
authorities if it distributes dividends out of:

     o    profits which have not been taxed at the ordinary corporate income tax
          rate; or

     o    profits  which have been earned and taxed more than five years  before
          the distribution.

The amount of the precompte is 50% of the net dividends before withholding tax.

A  shareholder  that is not a  French  resident  for  French  tax  purposes  may
generally  obtain a refund of all or part of the  precompte  we actually  pay in
cash, net of applicable withholding tax, in two cases:

     o    if the shareholder is entitled to the benefits of a tax treaty but the
          treaty does not provide for a refund of the avoir fiscal, or

     o    if the  shareholder is entitled to the benefits of a tax treaty but is
          not entitled to a refund of all of the avoir fiscal.

10.17.4  Estate and Gift Tax

France imposes estate and gift tax where an individual or entity acquires shares
of a French company from a non-resident of France by way of inheritance or gift.
France has entered into estate and gift tax treaties with a number of countries.
Under these  treaties,  residents of those countries may be exempt from this tax
or obtain a tax credit, assuming specific conditions are met. You should consult
your own tax advisor about whether  French estate and gift tax will apply to you
and whether you may claim an exemption or tax credit.

10.17.5  Wealth Tax

You will not be subject to French wealth tax,  known as impot de solidarite  sur
la fortune, if both of the following apply to you:

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     o    you are not a French resident for French tax purposes, and

     o    you own less than 10% of our company's capital stock,  either directly
          or indirectly.

If a double tax treaty between  France and your country  contains more favorable
provisions,  you may not be subject to French  wealth tax even if one or both of
the above statements applies to you.

10.17.6  Taxation of U.S. Investors

The following is a general  summary of the material U.S.  federal income tax and
French  tax  consequences  of owning  and  disposing  of our  shares or ADSs and
applies to you if you are the beneficial  owner of shares or ADSs and all of the
following five points apply to you:

     1.   You own, directly or indirectly or through attribution,  less than 10%
          of our company's share capital,

     2.   You are any one of the following:

          (a)  an  individual  who is a citizen or resident of the United States
               for U.S. federal income tax purposes;
          (b)  a United States domestic corporation;
          (c)  an estate whose income is subject to U.S. federal income taxation
               regardless of its source; or
          (d)  a trust  if a court  in the  United  States  is able to  exercise
               primary  supervision over the administration of the trust, and if
               one or more  U.S.  persons  have the  authority  to  control  all
               substantial decisions of the trust.

     3.   You are entitled to the benefits of the U.S.-France  income tax treaty
          under the "Limitation on Benefits" article of that treaty,

     4.   You hold your shares or ADSs of our company as capital assets, and

     5.   Your functional currency is the U.S. dollar.

When referring to the U.S.-France  income tax treaty, we refer to the income tax
treaty currently in force between the United States and France,  the "Convention
between the Government of the United States of America and the Government of the
French  Republic for the  Avoidance of Double  Taxation  and the  Prevention  of
Fiscal  Evasion with Respect to Taxes on Income and  Capital,"  signed on August
31, 1994.

For purposes of the U.S.-France  income tax treaty and U.S.  federal income tax,
deposits  or  withdrawals  of shares by you for ADSs will not be subject to U.S.
federal income tax.

Special rules may apply to U.S.  expatriates,  insurance  companies,  tax-exempt
organizations,  financial  institutions,  persons  subject  to  the  alternative
minimum tax, securities broker-dealers,  persons holding their shares or ADSs as
part of a hedging transaction,  straddle or conversion transaction,  persons who
acquired their shares or ADSs pursuant to the exercise of employee stock options
or similar  derivative  securities or otherwise as  compensation,  among others.
Those  special  rules,  except  certain rules  applicable to certain  tax-exempt
investors,  are not discussed in this report.  Furthermore,  this  discussion is
based  upon U.S.  and French law and  practice.  This  summary is subject to any
changes to U.S. or French law or practice  occurring  after the date hereof.  In
addition,  this  summary is based,  in part,  upon  representations  made by the
depositary to us and assumes that the Deposit  Agreement,  and all other related
agreements,  will be performed in  accordance  with its terms.  Investors of our
shares or ADSs should consult their own tax advisors concerning the U.S. federal
state and local tax consequences in light of their particular situations as well
as any consequences arising under the laws of any other taxing jurisdiction.

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(i)      Taxation of Dividends

Withholding Tax and Avoir Fiscal

In France,  companies may only pay dividends out of income  remaining  after tax
has been paid.  When  shareholders  resident in France  receive  dividends  from
French companies, they are entitled to a tax credit, known as the avoir fiscal.

The amount of the avoir fiscal is generally equal to:

     o    50% of the dividend paid for (i)  individuals and (ii) companies which
          own at least 5% of the capital of the French distributing  company and
          meet the  conditions  to qualify  under the  French  parent-subsidiary
          regime; or

     o    25% of the dividend paid for the other  shareholders who use the avoir
          fiscal  in  2001,  and  15%  of  the  dividend  paid  for  such  other
          shareholders who will use the avoir fiscal as of January 1, 2002.

In addition, if the distribution of dividends by us gives rise to the precompte,
shareholders entitled to the avoir fiscal at the rate of 25%, and then 15%, will
generally be entitled to an additional amount of avoir fiscal equal to:

     o    50% of the  precompte  paid in cash by the  company  for  shareholders
          entitled to use the avoir fiscal at the rate of 25%; and

     o    70% of the  precompte  paid in cash by the  company  for  shareholders
          entitled to use the avoir fiscal at the rate of 15%.

As indicated  below,  the  precompte is a tax which is paid by French  companies
when they  distribute  dividends  out of certain  profits (see  paragraph  below
relating to the precompte).

French  companies  must  normally  deduct  a 25%  French  withholding  tax  from
dividends paid to non-residents and, under French domestic law, shareholders who
are not  resident in France are not  eligible  for the avoir  fiscal.  Under the
U.S.-France  income tax treaty,  this  withholding tax is reduced to 15% if your
ownership of the shares or ADSs is not  effectively  connected  with a permanent
establishment  or a fixed  base  that  you  have in  France  and  certain  other
requirements are satisfied.

Additional  provisions  apply if you are  considered an eligible U.S.  holder of
shares or ADSs.  You are eligible if your ownership of the shares or ADSs is not
effectively  connected with a permanent  establishment  or a fixed base that you
have in France and any one of the following four points applies to you:

1.   You are an individual or other  non-corporate  holder that is a resident of
     the United States for purposes of the U.S.-France income tax treaty;

2.   You are a U.S. corporation, other than a regulated investment company;

3.   You  are a  U.S.  corporation  which  is a  regulated  investment  company,
     provided  that  less  than 20% of your  shares  are  beneficially  owned by
     persons who are neither citizens nor residents of the United States; or

4.   You are a  partnership,  estate or trust that is a  resident  of the United
     States for purposes of the U.S.-France  income tax treaty,  but only to the
     extent  that your  partners,  beneficiaries  or grantors  would  qualify as
     eligible under point 1 or point 2 above.

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<PAGE>

If you are an eligible U.S.  holder,  we will withhold tax from your dividend at
the reduced rate of 15%, provided that you have previously  established that you
are a resident of the United States under the  U.S.-France  income tax treaty in
accordance with the following procedures:

     1.   You must complete French Treasury Form RF I A EU-No.  5052 and send it
          to the  French  tax  authorities  before  the date of  payment  of the
          dividend. If you are not an individual,  you must also send the French
          tax  authorities  an affidavit  attesting  that you are the beneficial
          owner of all the rights  attached to the full  ownership of the shares
          or ADSs, including, among other things, the dividend rights,

     2.   If you  cannot  complete  Form RF I A EU-No.  5052  before the date of
          payment of the dividend, you may complete a simplified certificate and
          send it to the French tax authorities. This certificate must state all
          of the following five points:

          a.   You are a resident  of the  United  States  for  purposes  of the
               U.S.-France income tax treaty;
          b.   Your ownership of our shares or ADSs is not effectively connected
               with a permanent establishment or a fixed base in France;
          c.   You own all the  rights  attached  to the full  ownership  of the
               shares or ADSs,  including,  among  other  things,  the  dividend
               rights;
          d.   You fulfill all the requirements under the U.S.-France income tax
               treaty to be entitled to the reduced rate of withholding  tax and
               to be entitled to receive the avoir fiscal; and
          e.   You claim the reduced rate of withholding  tax and payment of the
               avoir fiscal.

If you are not an eligible U.S. holder, or if you have not completed Form RF I A
EU-No. 5052 or the five-point  certificate  before the dividend payment date, we
will deduct  French  withholding  tax at the rate of 25%. In that case,  you may
claim a refund from the French tax authorities of the excess withholding tax.

If you are an eligible U.S.  holder,  you may also be entitled to a payment from
the French Treasury equal to the avoir fiscal, which you may claim by completing
Form RF I A EU-No.  5052 and  sending it to the French  tax  authorities  before
December 31 of the year  following  the year during  which the dividend is paid.
You  will be  entitled  to a  payment  equal  to the  avoir  fiscal,  less a 15%
withholding tax on the avoir fiscal.  As noted below,  you will not receive this
payment  until after the close of the  calendar  year in which the  dividend was
paid.  To  receive  the  payment,  you must  submit a claim  to the  French  tax
authorities and attest that you are subject to U.S.  federal income taxes on the
payment of the avoir fiscal and the related dividend. For partnerships,  estates
or trusts, the partners, beneficiaries or grantors must make the attestation.

Specific rules apply to the following:

     o    tax-exempt U.S. pension funds,  which include the exempt pension funds
          established and managed in order to pay retirement benefits subject to
          the  provisions  of  Section  401(a)  of  the  Internal  Revenue  Code
          (qualified  retirement plans),  Section 403(b) of the Internal Revenue
          Code (tax deferred  annuity  contracts) or Section 457 of the Internal
          Revenue Code (deferred compensation plans), and

     o    various  other  tax-exempt  entities,  including  certain  state-owned
          institutions,   not-for-profit   organizations  and  individuals  with
          respect to dividends which they beneficially own and which are derived
          from an investment retirement account.

Entities in these two  categories are eligible for the reduced  withholding  tax
rate  of  15%  on  dividends,   subject  to  the  same  withholding  tax  filing
requirements  as  eligible  U.S.  holders,  except  that they may have to supply
additional  documentation  evidencing their entitlement to these benefits. These
entities are not entitled to the full avoir fiscal.  However,  such entities may
claim a partial  avoir  fiscal  equal to 30/85 of the gross avoir  fiscal,  less
withholding tax on such amount,  provided that they own, directly or indirectly,
less than 10% of our company's capital and they satisfy the filing  requirements
specified in Internal Revenue Service regulations.

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<PAGE>

The avoir fiscal or partial avoir fiscal and any French  withholding  tax refund
are generally expected to be paid within 12 months after the holder of shares or
ADSs  files  Form RF I A EU-No.  5052.  However,  they  will not be paid  before
January 15 following the end of the calendar year in which the dividend is paid.

The Form RF I A EU-No.  5052 or the  certificate,  together with its  respective
instructions,  will be provided by the  depositary  to all U.S.  holders of ADSs
registered  with the  depositary  and are also  available from the United States
Internal  Revenue  Service.  The depositary will arrange for the filing with the
French tax authorities of all Forms or Certificates completed by U.S. holders of
ADSs that are returned to the depositary in sufficient time.

For U.S.  federal income tax purposes,  the gross amount of any distribution and
any related avoir fiscal, including any French tax withheld, will be included in
your gross  income as ordinary  income when any such  payment is received by you
(or the  depositary,  if you hold  ADSs),  to the extent they are paid or deemed
paid out of our current or  accumulated  earnings and profits as calculated  for
U.S.  federal  income tax purposes.  Dividends paid by our company will not give
rise to the dividends received deduction generally allowed to U.S.  corporations
with respect to dividends received from other U.S. corporations.  Such dividends
generally  constitute  foreign  source  "passive"  income for foreign tax credit
purposes (or, for some holders, foreign source "financial services" income).

Further, the amount of any dividend paid in euro or French francs, including any
French tax withheld, will, for U.S. federal income tax purposes, be equal to the
U.S.  dollar value of the euro or French  francs  calculated by reference to the
exchange rate in effect on the date the dividend is received by you, in the case
of shares, or by the depositary,  in the case of ADSs, regardless of whether the
payment is in fact converted into U.S.  dollars.  If you do not convert any such
foreign  currency that is distributed  to you into U.S.  dollars on the date you
receive  it, you will have a basis in that  foreign  currency  equal to its U.S.
dollar value on the date of receipt.  Any gain or loss  resulting  from currency
exchange fluctuations during the period from the date the dividend is includible
in your gross  income to the date such payment is  converted  into U.S.  dollars
will be treated as U.S. source ordinary income or loss. You may also be required
to  recognize  foreign  currency  gain or loss if you receive a refund under the
U.S.-France income tax treaty of tax withheld in excess of the treaty rate. This
foreign  currency gain or loss generally will be U.S.  source ordinary income or
loss.

To the extent that any  distributions  paid  exceed our current and  accumulated
earnings and profits as calculated  for U.S.  federal  income tax purposes,  the
distribution will be treated as follows:

     o    First, as a tax-free  return of capital,  which will cause a reduction
          in the  adjusted  basis of your  shares or ADSs in our  company.  This
          adjustment will increase the amount of gain, or decrease the amount of
          loss, which you will recognize if you later dispose of those shares or
          ADSs; and

     o    Second,  the  balance of the  distribution  in excess of the  adjusted
          basis will be taxed as capital gain recognized on a sale or exchange.

French  withholding  tax imposed on the  dividends  you receive and on any avoir
fiscal at 15% under the U.S.-France income tax treaty is treated as payment of a
foreign  income  tax.  You may take this  amount as a credit  against  your U.S.
federal income tax liability,  subject to complex conditions and limitations, or
you may  alternatively  choose  to deduct  all  foreign  taxes  paid by you in a
particular year as an itemized deduction.

The Precompte

A French  company  must pay an  equalization  tax known as the  precompte to the
French tax authorities if it distributes dividends out of :

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<PAGE>

     o    profits which have not been taxed at the ordinary corporate income tax
          rate; or

     o    profits  which have been earned and taxed more than five years  before
          the distribution.

The amount of the precompte is 50% of the net dividends before withholding tax.

If you are not entitled to the full avoir  fiscal,  you may  generally  obtain a
refund from the French tax  authorities of any precompte paid by us with respect
to dividends  distributed to you. Under the U.S.-France  income tax treaty,  the
amount  of the  precompte  refunded  to U.S.  residents  is  reduced  by the 15%
withholding tax applicable to dividends and by the partial avoir fiscal, if any.
You are entitled to a refund of any precompte which we actually pay in cash, but
not to any  precompte  which we pay by  off-setting  French  and/or  foreign tax
credits. To apply for a refund of the precompte, you should file French Treasury
Form RF I B EU-No.  5053 before the end of the year  following the year in which
the dividend was paid.  The form and its  instructions  are  available  from the
United States Internal  Revenue Service or from the French Centre des Impots des
Non-Residents whose address is 9, rue d'Uzes, 75094 Paris Cedex 2, France.

For U.S. federal income tax purposes,  the gross amount of the precompte will be
included in your gross income as ordinary  income in the year you receive it. It
will generally constitute foreign source "passive" income for foreign tax credit
purposes (or, for some holders, foreign source "financial services" income). The
amount of any  precompte  paid in euro or French  francs,  including  any French
withholding  taxes, will be equal to the U.S. dollar value of the euro or French
francs on the date the precompte is included in income which,  for a U.S. holder
of ADSs,  will be the date of receipt by the  depositary,  regardless of whether
the payment is in fact converted into U.S.  dollars.  Any gain or loss resulting
from currency exchange fluctuations during the period from the date the dividend
is  includible  in your gross income to the date such payment is converted  into
U.S. dollars will be treated as U.S. source ordinary income or loss.

(ii)     Taxation of Capital Gains

If you are a resident  of the  United  States for  purposes  of the  U.S.-France
income tax treaty,  you will not be subject to French tax on any capital gain if
you  sell  or  exchange  your  shares  or  ADSs,  unless  you  have a  permanent
establishment  or  fixed  base in  France  and the  shares  or ADSs  you sold or
exchanged were part of the business property of that permanent  establishment or
fixed base.  Special rules apply to  individuals  who are residents of more than
one country.

In general,  for U.S.  federal income tax purposes,  you will recognize  capital
gain or loss if you sell, exchange or dispose of your shares or ADSs in the same
manner as you would if you were to sell, exchange or dispose of any other shares
or ADSs held as capital  assets,  in an amount equal to the U.S. dollar value of
the  difference  between  the  amount  realized  for the  share  or ADS and your
adjusted  basis in the share or ADS.  Such gain or loss  generally  will be U.S.
source  gain or loss and will be treated as  long-term  capital  gain or loss if
your holding period in the shares or ADSs exceeds one year. The deductibility of
capital losses is subject to significant limitations.  If you are an individual,
any capital gain or loss generally will be subject to U.S. federal income tax at
preferential rates if you meet specified minimum holding periods.

 (iii)   French Estate and Gift Taxes

Under the  Convention  Between  the  United  States of  America  and the  French
Republic for the  Avoidance  of Double  Taxation  and the  Prevention  of Fiscal
Evasion with Respect to Taxes on Estates, Inheritance and Gifts, signed November
24,  1978,  if you  transfer  your  shares  or ADSs  by  gift,  or if  they  are
transferred  by reason of your  death,  that  transfer  will only be  subject to
French gift or inheritance tax if one of the following applies:

     o    you are  domiciled in France at the time of making the gift, or at the
          time of your death, or

                                       85
<PAGE>

     o    you used  the  shares  or ADSs in  conducting  a  business  through  a
          permanent  establishment  or  fixed  base in  France,  or you held the
          shares or ADSs for that use.

(iv)     French Wealth Tax

French wealth tax does not generally  apply to shares or ADSs if the holder is a
resident of the United States for purposes of the U.S.-France income tax treaty.

(v)      United States Information Reporting and Backup Withholding

Dividend  payments  made to you and  proceeds  paid from the sale,  exchange  or
disposal of your shares or ADSs may be subject to  information  reporting to the
Internal  Revenue  Service and possible U.S.  federal  backup  withholding  at a
current rate of up to 30.5%.  Certain exempt  recipients  (such as corporations)
are not subject to these information reporting requirements.  Backup withholding
will not  apply to a holder  who  furnishes  a correct  taxpayer  identification
number  or   certificate   of  foreign  status  and  makes  any  other  required
certification,  or who is otherwise exempt from backup withholding. U.S. persons
who are required to establish  their exempt status  generally must file Internal
Revenue Service Form W-9 (entitled "Request for Taxpayer  Identification  Number
and  Certification").  Non-U.S.  holders  generally  are  not  subject  to  U.S.
information  reporting  or backup  withholding.  However,  such  holders  may be
required to provide certification of non-U.S. status in connection with payments
received in the United States or through U.S.-related financial intermediaries.

Backup  withholding  is  not an  additional  tax.  Amounts  withheld  as  backup
withholding may be credited against your U.S. federal income tax liability.  You
may obtain a refund of any excess amounts withheld under the backup  withholding
rules by filing the  appropriate  claim for  refund  with the  Internal  Revenue
Service and furnishing any required information.

10.17.7  Where You Can Find More Information

We are subject to the reporting  requirements of the Securities  Exchange Act of
1934, as amended (the "Exchange  Act"),  and file reports and other  information
with the SEC.  This annual  report on Form 20-F is being  filed  pursuant to the
Exchange  Act.  This  report  summarizes  the  content  of  contracts  and other
documents  that we refer you to.  Since this  report may not  contain all of the
information  that is important to you, you should  review the full text of these
documents.

Since we are a foreign private issuer,  we and our  shareholders are exempt from
some of the Exchange Act reporting requirements. The reporting requirements that
do not apply to us or our shareholders  include the proxy solicitation rules and
Section 16 short-swing  profit  reporting for our officers and directors and for
holders of more than 10% of our shares. In addition, we are not required to file
annual,  quarterly or current  reports and financial  statements with the SEC as
frequently or as promptly as U.S.  companies  whose  securities  are  registered
under the Exchange  Act.  However,  we will file with the SEC, as long as we are
required to do so,  within 180 days after the end of each fiscal year, an annual
report on Form 20-F containing  financial  statements  audited by an independent
accounting firm. We also intend to file semi-annual reports on Form 6-K. You may
read and copy any document we file with the SEC at its public reference rooms at
450 Fifth Street,  N.W.,  Washington D.C. 20549,  and at its regional offices at
Seven World Trade Center,  Suite 1300, New York,  New York 10048,  and Northwest
Atrium Center,  500 West Madison Street,  Suite 1400,  Chicago,  Illinois 60662.
Please  call  the SEC at  1-800-SEC-0330  for  more  information  on the  public
reference rooms and their copy charges.

                                       86
<PAGE>

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

11.1     CURRENCIES

As our assets,  earnings and cash flows are influenced by our foreign operations
in the United States,  the United Kingdom and the  Asia/Pacific  region,  we are
exposed to foreign  currency  risk.  We expect  this risk to  increase  with our
planned  expansion into the  Asia/Pacific  region,  where our subsidiary will be
affected by exchange rate fluctuations  between the U.S. dollar,  which is often
used as a currency in that region,  and the Singapore dollar,  which will be its
reporting  currency.  In addition,  as our  subsidiary in Singapore  grows,  our
assets,  earnings  and cash flows will be affected by  fluctuations  between the
Singapore  dollar and the euro. To date, we have not engaged in currency hedging
as we do  not  believe  such  activity  would  provide  long-term  benefits.  We
periodically reassess this policy.

Most of our sales  are  denominated  in euro and the euro is the most  important
currency  influencing our costs.  Our cash is primarily  denominated in euro and
U.S. dollars and all of our long-term debt is in euro. We hold modest amounts of
cash in British pounds against outflows for short-term operational reasons.

We estimate  that a  ten-percent  adverse  change  between the euro and the U.S.
dollar exchange rate would impact reported  financial results for the year ended
June  30,  2001  by  approximately  (euro)  2.2  million.  We  estimate  that  a
ten-percent  adverse  change  between  the euro and the  British  pound  foreign
exchange rate would impact  reported  financial  results for the year ended June
30, 2001 by approximately (euro) 0.4 million.

In  addition,  we  have  an  interest-free  loan  from  ANVAR,  a  French  state
organization  created to foster  research,  and we would be exposed to  interest
rate risk if we were required to refinance this loan.

11.2     FINANCIAL INSTRUMENTS
<TABLE>
<CAPTION>

The  carrying  amount  and fair  value of cash and cash  equivalents,  long-term
receivables, and long-term debt are set forth below.

                       (In thousands(euro))                          As of June 30, 2001
                                                       -------------------------------------------
                                                       Carrying Amount               Fair Value
                                                       -------------------------------------------
<S>                                                    <C>                           <C>
Cash and cash equivalents.......................                62,904                    62,904
Deposits and other assets.......................                   777                       614
Long-term debt..................................                  (305)                     (290)
Current-portion of long-term debt...............                  (259)                     (259)
</TABLE>

<TABLE>
<CAPTION>

Long-term debt is repayable as follows:

              (In thousands(euro))                               At June 30,
                                       2002      2003      2004      2005     2006    Fair value
<S>                                    <C>       <C>       <C>       <C>      <C>     <C>
Long-term debt                          259       305        -         -        -         549

</TABLE>


                                       87
<PAGE>


ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.




PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

To our knowledge, there has been no material default in the payment of principal
or interest or any other  material  default not cured within 30 days relating to
indebtedness of InfoVista or any of its significant subsidiaries.



ITEM 14.  MATERIAL  MODIFICATIONS  TO THE RIGHTS OF SECURITY  HOLDERS AND USE OF
          PROCEEDS


14.1     MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS

To our knowledge,  no one (i) has modified  materially the instruments  defining
the rights of holders of our shares or (ii) has modified materially or qualified
the rights  evidenced by our shares by issuing or  modifying  any other class of
securities.



14.2     USE OF PROCEEDS

The  registration  statement for our initial public  offering,  Commission  File
Number  333-12160,  was declared  effective on July 7, 2000.  Our initial public
offering took place on July 7, 2000

We  registered  6,900,000  common  shares  with a par value of (euro)  .54 at an
offering price of $ 12.23. The aggregate price of the offering amount registered
was $ 84,387,000.  We sold 6,000,000 shares and the aggregate  offering price of
the  amount  sold  was  $73,380,000.   The  underwriters   fully  exercised  the
overallotment option of 900,000 shares.

The  proceeds  derived  from the  listing  of our  shares on July 7, 2000 on the
Nouveau  Marche  of  Euronext  Paris  and on  Nasdaq  in the  form  of  American
Depositary Shares totaled (euro) 68,649,972 ($ 61,736,920 using noon buying rate
on October 31, 2001), after deducting such fees and commissions.

These  proceeds  have been used in the  following  manner during the year ending
June 30, 2001.

o    acquisition of TISS The Intranet Service Solution GmbH

o    investment on deposit accounts in euros.

                                       88
<PAGE>

PART III

ITEM 15. [RESERVED]

ITEM 16. [RESERVED]

ITEM 17. FINANCIAL STATEMENTS

Not applicable.



ITEM 18. FINANCIAL STATEMENTS

The   following   financial   statements,    together   with   the   report   of
PricewaterhouseCoopers thereon, are filed as part of this annual report.

<TABLE>
<CAPTION>

Consolidated Financial Statements                                                                    Page(s)
<S>                                                                                                  <C>
Report of independent accountant                                                                         93

Consolidated Statements of Operations for the years ended June 30, 2001, 2000 and 1999                   94

Consolidated Balance Sheets as of June 30, 2001 and 2000                                                 95

Consolidated Statements of Stockholders' Equity for the years ended June 30, 2001, 2000 and 1999         96

Consolidated Statements of Cash Flows for the years ended June 30, 2001, 2000 and 1999                   97

Notes to the Consolidated Financial Statements                                                        98 - 114
</TABLE>



                                       89
<PAGE>


ITEM 19.  EXHIBITS

The following exhibits are filed as part of this annual report :



1    Statuts, or by-laws, of InfoVista (unofficial English translation).

4.1  License to Commercialize  "ObjectStore,"  "ObjectStore  Performance Expert"
     and "ObjectStore  Runtime," between eXcelon Corporation and InfoVista dated
     August 23,  2000*(incorporated  by  reference  to exhibit 4.1 to Form 20-F,
     Commission File Number 000-30838).

4.2  1996 Stock Option Plan (unofficial English  translation).  (incorporated by
     reference to exhibit 10.5 to Form F-1, Commission File Number 333-12160)

4.3  1999 Stock Option Plan (unofficial English  translation).  (incorporated by
     reference to exhibit 10.6 to Form F-1, Commission File Number 333-12160)

4.4  2000 Stock  Option  Plan,  as  amended  (unofficial  English  translation).
     (incorporated  by reference to exhibit  10.7 to Form F-1,  Commission  File
     Number 333-12160)

4.5  2001 Stock  Option  Plan,  as  amended  (unofficial  English  translation).
     (incorporated  by reference to exhibit  (D)(1) to Form SC TO-I,  Commission
     File Number 005-61129)

8    Subsidiaries of the Registrant  (see  "Information on the Company - General
     Information  Concerning the Share Capital of the Company - Subsidiaries and
     Investments ").

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

*    Confidential  treatment has been requested with respect to certain portions
     of this  exhibit.  Omitted  portions  have been filed  separately  with the
     Securities and Exchange Commission.
*    Financial  statement  schedules are omitted because they are not applicable
     or because the information required is included in the financial statements
     or notes thereto.


                                       90
<PAGE>


19.1     GLOSSARY OF TERMS

<TABLE>
<CAPTION>

       <S>                           <C>
       API.........................  application programming interface
       ASP.......................... application   service  providers,   service  providers  that  offer  access  to  software
                                     applications,  infrastructure,  and related services over the Internet;  applications are
                                     not installed at the end-user  location,  but are instead remotely  installed and managed
                                     on infrastructure provided by the ASP
       ATM.......................... asynchronous transfer mode
       HTML......................... hypertext markup language
       IP .......................... Internet protocol
       ISP.......................... Internet service provider
       IT .......................... information technology
       ITinfrastructure............. the collection of hardware and software components used to collect,  store and manipulate
                                     data
       LAN.......................... local  area  network,  a system  connecting  two or more  closely  located  communicating
                                     devices  with  full  connectivity  so that  every  user  device  on the  network  has the
                                     potential to communicate with any other device
       MAC address ................. specific  address for a single network  interface card - used as a unique  identifier for
                                     one machine
       MSP.......................... management  service  provider,  an ASP  specializing  in the  hosting  of  infrastructure
                                     management applications such as quality-of-service
       OEM.......................... original equipment manufacturer
       OSS.......................... Operational support systems
       SLA.......................... service  level  agreement,  made between the IT  department  and end users,  or a service
                                     provider and customer,  to specify what, when, and how information  services are expected
                                     to be rendered
       SLM.......................... service level management
       SNMP......................... simple network management protocol
       UNIX ........................ industrial-strength operating  system  used for large servers, data centers, etc.  Well-known
                                     versions include Sun Solaris, HPUX, IBM AIX, and SCO
       VAR.......................... value added reseller
       WAN.......................... wide area  network,  a network  that  generally  spans  distances  greater than one city,
                                     including regional networks such as local telephone  companies or international  networks
                                     such as global telecommunications service providers
       Windows NT .................. Windows New Technology:  Microsoft  Windows version designed for  professional  users and
                                     servers


</TABLE>

                                       91
<PAGE>


INFOVISTA SA

<TABLE>
<CAPTION>

Index to the Consolidated Financial Statements

Consolidated Financial Statements                                                                     Page(s)
<S>                                                                                                   <C>

Report of independent accountant                                                                          93

Consolidated Statements of Operations for the years ended June 30, 2001, 2000 and 1999                    94

Consolidated Balance Sheets as of June 30, 2001 and 2000                                                  95

Consolidated Statements of Stockholders' Equity for the years ended June 30, 2001, 2000 and 1999          96

Consolidated Statements of Cash Flows for the years ended June 30, 2001, 2000 and 1999                    97

Notes to the Consolidated Financial Statements                                                         98 - 114
</TABLE>



                                       92
<PAGE>





                                  InfoVista SA
                                  ------------

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of InfoVista SA


In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated statements of income and comprehensive income, of cash flows and of
changes in stockholders' equity,  present fairly, in all material respects,  the
financial  position of InfoVista SA and its subsidiaries (the "Company") at June
30, 2000 and 2001, and the results of their  operations and their cash flows for
each of the three  years in the period  ended June 30, 2001 in  conformity  with
accounting principles generally accepted in the United States of America.  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 of these  statements in accordance with the
auditing  standards  generally  accepted in the United  States of America  which
require that we plan and perform the audit to obtain reasonable  assurance about
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,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.



Paris, France
July 25, 2001

Coopers & Lybrand Audit
Member of PricewaterhouseCoopers





Jean-Francois Chatel
Partner

                                       93
<PAGE>
<TABLE>
<CAPTION>


                                                     InfoVista SA
                                                     ------------

                                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In thousands, except for share and per share data)

                                                                                 Year Ended June 30,
                                                                  --------------------------------------------------
                                                                        2001             2000             1999
                                                                  ----------------- ---------------- ---------------
<S>                                                              <C>                <C>              <C>
Revenues
   License revenues                                               (euro)    19,548  (euro)    7,691  (euro)   1,615
   Service revenues                                                          8,111            2,650           1,190
                                                                  ----------------- ---------------- ---------------
Total revenues                                                              27,659           10,341           2,805

Cost of revenues
   Costs of license                                                            882              216              67
   Costs of services (exclusive of non-cash compensation expense
   of     (euro) 146,(euro)215 and(euro)32, respectively)                    5,893            2,540           1,564
                                                                  ----------------- ---------------- ---------------
Total cost of revenues                                                       6,775            2,756           1,631

                                                                  ----------------- ---------------- ---------------
Gross profit                                                                20,884            7,585           1,174

Operating expenses
   Selling and marketing expenses (exclusive of non-cash
   compensation expense of(euro)309,(euro)361 and(euro)43, respectively)    16,574            8,589           2,807

   Research and development expenses (exclusive of non-cash
   compensation expense of(euro)155,(euro)231 and(euro)38, respectively)     4,640            1,952           1,063

   General and administrative expenses (exclusive of non-cash
   compensation expense of(euro)1,619,(euro)600 and(euro)442,
   respectively)                                                             7,629            3,184           1,689

   Stock compensation expense                                                2,229            1,407             554
   Amortization of goodwill and purchased intangibles assets                   513                -               -

                                                                  ----------------- ---------------- ---------------
Total operating expenses                                                    31,585           15,132           6,113

                                                                  ----------------- ---------------- ---------------
Operating loss                                                            (10,701)          (7,547)          (4,939)

Other income:
   Interest income                                                           3,105              116              76
   Net foreign currency transaction gains                                    1,214              458             388

                                                                  ----------------- ---------------- ---------------
Loss before income taxes and minority interests                            (6,382)          (6,973)          (4,475)

   Income tax (expense) benefit                                                (2)                -              13
   Minority interest                                                            68               17               -
                                                                  ----------------- ---------------- ---------------
Net loss                                                         (euro)     (6,316) (euro)   (6,956) (euro)  (4,462)
                                                                  ================= ================ ===============

Basic and diluted loss per share                                 (euro)      (0.34) (euro)    (0.89) (euro)   (0.65)
                                                                  ================= ================ ===============

Basic and diluted weighted average shares outstanding                   18,851,731        7,772,868       6,884,708

The consolidated  statements of income for the year ended June 30, 1999 has been
restated  from French  francs to Euros using the exchange  rate as of January 1,
1999.

The notes on pages 104 to 119 are an integral part of the consolidated financial
statements.
</TABLE>

                                                         94
<PAGE>
<TABLE>
<CAPTION>

                                                InfoVista SA
                                                ------------

                                         CONSOLIDATED BALANCE SHEETS
                             (In thousands, except for share and per share data)

                                                                              As of June 30
                                                               --------------------------------------------
                                                                       2001                   2000
                                                               ---------------------  ---------------------
<S>                                                            <C>                    <C>
ASSETS

Cash and cash equivalents                                      (euro)        62,904   (euro)         2,950
Trade receivables, net of allowance of(euro)632 and(euro)145,                 9,289                  9,710
respectively)
Prepaid IPO fees                                                                  -                    989
Prepaid expenses and other current assets                                     2,565                  4,421
                                                               ---------------------  ---------------------
     Total current assets                                                    74,758                 18,070
                                                               ---------------------  ---------------------

Fixed assets, net                                                             4,758                  1,326
Licensed technology and advances, net                                         1,568                      -
Goodwill and other purchased intangible assets, net                           3,139                      -
Deposits and other assets                                                       777                    750
                                                               ---------------------  ---------------------
     Total non current assets                                                10,242                  2,076
                                                               ---------------------  ---------------------

                                                               ---------------------  ---------------------
Total assets                                                   (euro)        85,000   (euro)        20,146
                                                               ---------------------  ---------------------

LIABILITIES & STOCKHOLDERS' EQUITY

Trade payables                                                 (euro)         3,708   (euro)         4,124
Current portion of long-term debt                                               259                    183
Accrued salaries and commissions                                              1,526                    770
Accrued social security and other payroll taxes                                 763                    607
Deferred revenue                                                              4,465                  6,736
Other current liabilities                                                     1,262                  1,001
                                                               ---------------------  ---------------------
     Total current liabilities                                               11,983                 13,421
                                                               ---------------------  ---------------------

Long-term debt                                                                  305                    564
Other long term liabilities                                                     143                    104
Commitments and contingencies (Note 11)
                                                               ---------------------  ---------------------
     Total non-current liabilities                                              448                    668
                                                               ---------------------  ---------------------

Minority interest                                                                 -                     53

Stockholders' equity
Preferred stock, par value of(euro) 0.54 per share (0 and                         -                  2,133
3,950,607 shares authorized, issued and outstanding)
Common stock, par value of(euro)0.54 per share (19,641,414 and
8,978,871 shares authorized and issued, and 19,634,661 and                   10,606                  4,849
8,978,871 shares outstanding)
Capital in excess of par value of stock                                      85,701                 17,578
Accumulated deficit                                                        (22,680)               (16,364)
Other reserves                                                                   16                     16
Cumulative translation adjustement                                            (603)                  (901)
Deferred compensation                                                         (399)                (1,307)
Less common stock in treasury, (6,753 and 0 shares)                            (72)                      -
Total stockholders' equity                                                   72,569                  6,004
                                                               ---------------------  ---------------------

                                                               ---------------------  ---------------------
Total liabilities and stockholders' equity                     (euro)        85,000   (euro)        20,146
                                                               =====================  =====================

The notes on pages 104 to 119 are an integral part of the consolidated financial statements.
</TABLE>

                                                     95
<PAGE>
<TABLE>
<CAPTION>

                                                        InfoVista SA
                                                        ------------

                                             STATEMENTS OF STOCKHOLDER'S EQUITY
                                     (In thousands, except for share and per share data)



                                     Number of        Number of      Number
                                     preferred        ordinary         of        Preferred      Common
                                     shares -         shares -      treasury      stock -       stock -           Treasury
                                     Series P         Series O       shares      Series P       Series O            stock
---------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>               <C>           <C>         <C>            <C>              <C>
Balance, as of June 30, 1998            5,809,720     13,769,415           --   (euro) 1,594  (euro)    3,779          --
===========================================================================================================================

Exercise of stock warrants              2,091,494           --             --            574             --             --
Issuance of stock options                    --             --             --             --             --             --
Stock compensation expense                   --             --             --             --             --             --
Components of comprehensive income:
Cumulative translation adjustment            --             --             --             --             --             --
Net loss                                     --             --             --             --             --             --

Comprehensive loss                           --             --             --             --             --             --

---------------------------------------------------------------------------------------------------------------------------
Balance, as of June 30, 1999            7,901,214     13,769,415           --            2,168          3,779           --
===========================================================================================================================

Issuance of common stock                     --        2,800,000           --             --              768           --
Exercise of stock warrants                   --        1,200,000           --             --              324           --
Exercise of employee stock options           --          188,326           --             --               51           --
Reverse stock split                    (3,950,607)    (8,978,870)          --             --             --             --
Issuance of stock options                    --             --             --             --             --             --
Stock compensation expense                   --             --             --             --             --             --
Change in par value                          --             --             --              (35)           (73)          --
Components of comprehensive income:
Net loss                                     --             --             --             --             --             --
Cumulative translation adjustment            --             --             --             --             --             --

Comprehensive loss                           --             --             --             --             --             --

---------------------------------------------------------------------------------------------------------------------------
Balance, as of June, 30, 2000           3,950,607      8,978,871           --            2,133          4,849           --
===========================================================================================================================

Issuance of common stock                     --        6,000,000           --             --            3,240           --
IPO fees and commissions                     --             --             --             --             --             --
Conversion of preferred stock          (3,950,607)     3,950,607           --           (2,133)         2,133           --
into common stock
Exercise of stock warrants                   --          526,039           --             --              284           --
Exercise of employee stock options           --          185,897           --             --              100           --
Reversal of deferred compensation            --             --             --             --             --             --
related to forfeited stock options
Stock compensation expense                   --             --             --             --             --             --
Purchase of treasury stock, at               --             --           19,942           --             --             (434)
cost
Common stock issued from treasury            --             --          (13,189)          --             --              362
Components of comprehensive income:
Net loss                                     --             --             --             --             --             --
Cumulative translation adjustment            --             --             --             --             --             --

Comprehensive loss                           --             --             --             --             --             --

-----------------------------------------------------------------------------------------------------------------------------
Balance, as of June, 30, 2001                --       19,641,414          6,753           --     (euro)10,606    (euro) (72)
=============================================================================================================================





<PAGE>

                                       Capital       Accumulated
                                     in excess of      other
                                      par value     comprehensive       Other      Deferred
                                       of stock         loss           reserves   compensation    Total
-----------------------------------------------------------------------------------------------------------
Balance, as of June 30, 1998         (euro) 4,210    (euro)(4,974) (euro)   (33)   (euro) (11) (euro) 4,631
-----------------------------------------------------------------------------------------------------------

Exercise of stock warrants                  1,285           --             --             --          1,859
Issuance of stock options                   1,270           --             --            (1,270)        --
Stock compensation expense                    388           --             --               166        554
Components of comprehensive income:
Cumulative translation adjustment             --            (258)          --             --           (258)
Net loss                                      --          (4,462)          --             --         (4,462)
                                              --      -----------                               -----------
Comprehensive loss                            --          (4,720)          --             --         (4,720)

-----------------------------------------------------------------------------------------------------------
Balance, as of June 30, 1999               (7,153)        (9,694)            33          (1,115)      2,324
===========================================================================================================

Issuance of common stock                    6,091           --             --             --          6,859
Exercise of stock warrants                  2,603           --             --             --          2,927
Exercise of employee stock options             24           --              (17)          --             58
Reverse stock split                          --             --             --             --
Issuance of stock options                   1,244           --             --            (1,244)         --
Stock compensation expense                    355           --             --             1,052       1,407
Change in par value                           108           --             --             --             --
Components of comprehensive income:
Net loss                                     --           (6,956)          --             --         (6,956)
Cumulative translation adjustment            --             (615)          --             --           (615)
                                                      -----------    -----------                ------------
Comprehensive loss                           --           (7,571)          --             --         (7,571)

-----------------------------------------------------------------------------------------------------------
Balance, as of June, 30, 2000              17,578        (17,265)            16          (1,307)      6,004
===========================================================================================================

Issuance of common stock                   73,560           --             --             --         76,800
IPO fees and commissions                   (8,150)          --             --             --         (8,150)
Conversion of preferred stock
into common stock                            --             --             --             --             --
Exercise of stock warrants                  1,237           --             --             --          1,521
Exercise of employee stock options            231           --             --             --            331
Reversal of deferred compensation            (161)          --             --               161          --
related to forfeited stock options
Stock compensation expense                  1,482           --             --               747       2,229
Purchase of treasury stock, at               --             --             --             --           (434)
cost
Common stock issued from treasury             (76)          --             --             --            286
Components of comprehensive income:
Net loss                                     --            (6,316)         --             --         (6,316)
Cumulative translation adjustment            --               298          --             --            298
                                                       -----------    -----------                 ----------
Comprehensive loss                           --            (6,018)         --             --         (6,018)

------------------------------------------------------------------------------------------------------------
Balance, as of June, 30, 2001       (euro) 85,701   (euro)(23,283)  (euro)   16     (euro)(399) (euro)72,569
============================================================================================================

</TABLE>

The consolidated  statements of stockholders' equity for the year ended June 30,
1999 has been restated from French francs to Euros using the exchange rate as of
January 1, 1999.

The notes on pages 104 to 119 are an integral part of the consolidated financial
statements.

                                                             96
<PAGE>
<TABLE>
<CAPTION>

                                                     InfoVista SA
                                                     ------------

                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands, except for share and per share data)

                                                                                Year ended June 30
                                                                ----------------------------------------------------
                                                                      2001             2000             1999
                                                                ----------------------------------------------------
<S>                                                             <C>                <C>                <C>
Cash flows from operating activities:
Net loss                                                        (euro)    (6,316)  (euro)  (6,956)    (euro) (4,462)
Adjustments to reconcile net loss to net cash used by
 operating activities:
   Depreciation                                                              811              222               142
   Amortization of goodwill and intangibles                                  513                -                 -
   Amortization of licensed technologies and royalty advances                201                -                 -
   Stock compensation expense                                              2,229            1,407               554
   Provision for bad debt                                                    487              138                29
   Minority interest                                                         (53)              53                 -
Changes in operating assets and liabilities:
   Trade receivables                                                        (247)          (8,574)             (846)
   Prepaid expenses and other current assets                               3,160           (4,857)             (250)
   Deposits and other assets                                                 (27)             (25)             (138)
   Accounts payable                                                         (496)           3,490               240
   Accrued expenses                                                        1,269            1,403               192
   Deferred revenues                                                      (2,559)           5,722               818
   Other current liabilities                                                (616)             139               202
   Other long term liabilities                                                40               60                42
                                                                ----------------------------------------------------
Net cash used by operating activities                                     (1,604)          (7,778)           (3,477)
                                                                ----------------------------------------------------
Cash flows from investing activities:
   Acquisition of businesses, net of cash acquired                        (2,959)               -                 -
   Purchase of fixed assets                                               (4,082)            (934)             (479)
   Purchase of licensed technologies and royalty advances                 (1,769)               -                 -
                                                                ----------------------------------------------------
Net cash used by investing activities                                     (8,810)            (934)             (479)
                                                                ----------------------------------------------------
Cash flows from financing activities:
   Proceeds from issuance of debt                                              -              305                 -
   Payment of debt                                                          (183)            (122)             (122)
   Payments on acquired debt                                                (101)               -                 -
   Proceeds from exercise of stock options                                   331               58                 -
   Proceeds from exercise of stock warrants                                1,521            2,927             1,859
   Proceeds from issuance of common stock                                 68,650            6,859                 -
   Purchase of treasury stock                                               (434)               -                 -
   Proceeds from issuance of treasury stock                                  287                -                 -
                                                                ----------------------------------------------------
Net cash provided by financing activities                                 70,071           10,027             1,737
                                                                ----------------------------------------------------

                                                                ----------------------------------------------------
Net change in cash                                                        59,657            1,315            (2,219)
                                                                ----------------------------------------------------
      Effects of exchange rate changes                                       297             (615)             (258)
                                                                ----------------------------------------------------
Increase in cash and cash equivalents                           (euro)    59,954    (euro)    700   (euro)   (2,477)
                                                                ====================================================
Cash and cash equivalents at beginning of period                (euro)     2,950    (euro)  2,250   (euro)    4,727
Cash and cash equivalents at end of period                      (euro)    62,904    (euro)  2,950   (euro)    2,250
Supplemental disclosure of non-cash transactions
   Recognition of deferred compensation related to grants of
   stock options                                                (euro)    (1,482)   (euro) (1,244)  (euro)   (1,270)
   Reversal of deferred compensation on cancellation of
   related options                                              (euro)       161    (euro)      -   (euro)        -
   Conversion of preferred stock to common stock                (euro)     2,133    (euro)      -   (euro)        -
   Debt acquired through acquisition of business                (euro)       101    (euro)      -   (euro)        -

The  consolidated  statements  of cash flow for the year ended June 30, 1999 has been  restated from French francs
to Euros using the exchange rate as of January 1, 1999.

The notes on pages 104 to 119 are an integral part of the consolidated financial statements.
</TABLE>

                                                         97
<PAGE>


                                  InfoVista SA
                                  ------------

                  NOTE TO THE CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)

1 - SIGNIFICANT ACCOUNTING POLICIES

     Description of business

InfoVista SA and its subsidiaries  (the "Company")  design and develop software,
which monitors,  analyses, and reports on the performance and quality of service
of information technology ("IT") infrastructure, including networks, servers and
applications.  In addition,  we provide  service  support for the  installation,
implementation,  training and maintenance of our products. Our products are part
of the software  market segment known as Service Level  Management  ("SLM").  We
market our products to telecommunication  companies,  Internet Service Providers
("ISPs")  and  other IT  intensive  organizations.  The  Company  maintains  its
headquarters in Les Ulis (outside Paris), France with seven subsidiaries located
in Europe, North America and Asia.


     Financial statements presented in euros

The 1999 consolidated  financial  statements,  which were initially  prepared in
French francs,  have been restated to be presented in Euros,  using the official
exchange  rate as of January 1, 1999.  The  exchange  rate used for all  periods
presented is 1 Euro = 6.55957 French francs.

Consolidated  financial  statements  reported in Euros  depict the same trend as
they  would  have  depicted   should  they  have  been  reported  prior  to  the
introduction of the Euro. However, consolidated financial statements reported in
Euros may not be comparable to financial statements of other companies that have
been restated in Euros from a local currency other than the French franc.


     Principles of consolidation and basis of presentation

The  consolidated  financial  statements  of the Company  have been  prepared in
conformity with accounting principles generally accepted in the United States of
America.  Certain  prior year amounts have been  reclassified  to conform to the
current year presentation.

The accompanying  consolidated  financial statements include the accounts of the
Company  and  its  subsidiaries.   All  significant  intercompany  balances  and
transactions  have been eliminated.  InfoVista BNL was created in December 2000,
and  InfoVista  IBE in June 2001.  TISS Intra GmbH was  acquired  on December 2,
2000.

<TABLE>
<CAPTION>

Consolidated companies are the following:

Company                              Country of incorporation          % of ownership       Fiscal year of incorporation
-------                              ------------------------          --------------       ----------------------------
<S>                                  <C>                               <C>                   <C>
InfoVista SA (parent)                         France                         -                           -
InfoVista Corp                                  USA                        100 %                        1998
InfoVista UK                               Great Britain                   100 %                        1999
InfoVista GmbH                                Germany                      100 %                        1999
InfoVista Asia-Pacific Pte Ltd               Singapore                    72.83 %                       2000
TISS Intra GmbH                               Germany                      100 %                        2001
InfoVista BNL                                 Belgium                      100 %                        2001
InfoVista IBE                                  Spain                       100 %                        2001
</TABLE>


                                       98
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)


     Foreign currency translation

Generally,  the functional  currency of the Company and its  subsidiaries is the
applicable local currencies in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 52, "Foreign Currency  Translation",  while the Company's
reporting currency is the euro.

All assets and liabilities of the Company and its  subsidiaries  with functional
currencies other than euro are translated into euro equivalents at exchange rate
as follows:  (1) asset and liability  accounts at the rate of exchange in effect
on the balance  sheet date,  (2)  revenues  and  expenses at the average rate of
exchange  for the year,  and (3)  shareholder's  equity  accounts at  historical
exchange  rates.  Generally,  transaction  gains or losses are  reflected in net
income  (loss).  Transaction  gains or losses that are  related to  intercompany
investments  that are considered  long-term in nature are recorded in cumulative
translation adjustment as a separate component of shareholder's equity.


     Cash and cash equivalents

The Company  considers highly liquid  investments  with an original  maturity of
three months or less to be cash equivalents.


     Trade receivables

Trade  receivables  are carried at anticipated  net realizable  value.  Doubtful
accounts are provided for on the basis of  anticipated  collection  losses.  The
estimated  losses are determined  from  historical  collection  experience and a
review of outstanding accounts receivable.


     Fixed assets

Fixed assets are recorded at their historical  cost.  Depreciation is calculated
on a  straight-line  basis over the  estimated  useful  lives of the  respective
assets, which are as follows:

Furniture and fixtures                                           10 years
Computers and hardware                                            5 years
Leasehold Improvements                                           10 years
Purchased software                                                3 years

Leasehold improvements are depreciated over the lesser of its useful life or the
remaining period of the existing leases. Repairs and maintenance are expensed as
incurred.  When  assets are  retired or  otherwise  disposed  of, the assets and
related  allowances for  depreciation  are eliminated  from the accounts and any
resulting gain or loss is recognized in other income/expense.

Fixed assets are reviewed for  impairment if events or changes in  circumstances
indicate that the carrying amount may not be recoverable in accordance with SFAS
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to Be Disposed Of."



                                       99
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)


     Research and development of computer software

The Company accounts for software  development costs in accordance with SFAS 86,
"Accounting for the Costs of Computer Software to be Sold,  Leased, or Otherwise
Marketed." Costs incurred prior to  establishment  of technological  feasibility
are expensed as incurred and reflected as research and development  costs in the
Consolidated statement of operations.
To  date,  the  establishment  of  technological  feasibility  of the  Company's
products and their general  release  substantially  coincide.  As a result,  the
Company has not capitalized any software  development cost since such costs have
not been significant.


     Goodwill and other purchased intangible assets

The  Company  records  goodwill  when the  cost of net  identifiable  assets  it
acquires in a purchase business  combination exceeds their fair value.  Goodwill
and the cost of identified  intangible  assets are amortized on a  straight-line
basis over five and four years,  respectively.  The Company  regularly  performs
reviews to determine if the  carrying  value of assets is impaired.  The purpose
for the review is to identify  any facts or  circumstances,  either  internal or
external,  which  indicate  that the  carrying  value  of the  asset  cannot  be
recovered.  No such  impairment  has been  indicated to date. If, in the future,
management determines the existence of impairment indicators,  the Company would
use undiscounted cash flows to initially  determine whether impairment should be
recognized.  If necessary, the Company would perform a subsequent calculation to
measure the amount of the  impairment  loss based on the excess of the  carrying
value over the fair value of the impaired  assets.  If quoted  market prices for
the  assets are not  available,  the fair value  would be  calculated  using the
present value of estimated expected future cash flows. The cash flow calculation
would be based on management's best estimates, using appropriate assumptions and
projections at that time.


     Licensed technology and royalty advances

Licensed  technology  and  royalty  advances,  which  pertain to payments by the
Company for the license of technology used in the Company's products, are stated
at cost less accumulated amortization.  Costs of Licensed technology and royalty
advances are amortized  using the greater of (1) the  straight-line  method over
their  estimated  economic  lives or (2) current  period  revenue to anticipated
total revenues during the license period.


     Revenue recognition

Under U.S. GAAP  ("Generally  Accepted  Accounting  Principles"),  revenues from
sales of our licenses to our end-user  clients are recognized  when we receive a
purchase order, we deliver the software (assuming no significant  obligations on
our part remain),  collection  of the  resulting  receivable is probable and the
amount of fees is fixed or determinable. Some clients elect to evaluate and test
our  products on a limited  basis for a period of 30 days  during  which time no
revenue is recognized. Prior to December 31, 1999 we recognized license revenues
generated  from sales  through  our  Business  Solution  Integrator  ("BSI") and
systems  integrators  when  we  received  cash  from a  sale  since,  under  our
agreements,  the BSI and  other  resellers  had  certain  cancellation  options.
Subsequent  to December 31,  1999,  BSI  contracts  have been revised to exclude
these cancellation options and, accordingly,  we currently recognize BSI license
revenues on the same basis as for end-user  clients.  We provide for  allowances
for credit losses and for estimated  future returns from our BSIs upon shipment.
We recognize license revenues from our Original Equipment Manufacturers ("OEMs")
after  receipt  from  them of a  quarterly  report of their  sales  made in that
period.


                                      100
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)

Our customers purchase  maintenance services for an initial period (typically 12
months) as part of the  purchase of the  license.  The  maintenance  contract is
automatically renewable for subsequent 12-month periods unless the client or the
Company cancels.  Payments for maintenance fees (on initial order or on renewal)
are  generally  made in advance and are  non-refundable.  We defer  revenues for
maintenance services and recognize them ratably over the term of the maintenance
agreement.  Since licenses are almost always sold with maintenance  services, we
recognize  the amount of license  revenue in a license and  maintenance  package
based on the residual value method. The fee allocated to maintenance services is
based upon the fee charged to renew these  maintenance  services.  Any discounts
offered for products or services are allocated to the delivered  license portion
of the fee.  Revenues from  consulting,  training and other support services are
generally  recognized as the services are performed.  These revenue  recognition
policies for maintenance and other services are the same regardless of the sales
channel used. Service revenues are not shared between our BSIs and us. End users
either enter into a service  contract  directly with us, in which case we record
revenues  ratably  over the term of the  service  agreement,  or with a BSI.  We
receive no portion of the service revenues generated by our BSIs.

License  revenues and services  revenues  that have been prepaid or invoiced but
that have not yet been  recognized as revenues under our policy are reflected as
deferred revenues.


     Income taxes

The Company  accounts for income taxes in accordance with SFAS 109,  "Accounting
for Income Taxes." Deferred tax assets and liabilities are computed based on the
difference  between the  financial  statement and income tax bases of assets and
liabilities using currently enacted applicable tax rates. SFAS 109 requires that
the net deferred tax asset be reduced by a valuation  allowance if, based on the
weight of  available  evidence,  it is more likely than not that some portion or
all of the net deferred tax asset will not be realized.


     Loss per share

Basic loss per share is computed  using the  weighted  average  number of shares
outstanding  during the period.  Diluted  loss per share is  computed  using the
weighted  average number of shares and dilutive  equivalent  shares  outstanding
during the  period.  Dilutive  equivalent  shares  consist of stock  options and
warrants  granted and not yet exercised,  and the conversion of preferred stock.
All dilutive  equivalent  shares that have an  antidilutive  effect are excluded
from the computation of loss per share.


     Fair value of financial instruments

As of June  30,  2001  and  2000,  the  carrying  values  of  current  financial
instruments such as cash and cash  equivalents,  accounts  receivable,  accounts
payable,  other  receivables,  accrued  liabilities  and the current  portion of
long-term  debt  approximated  their  market  values,  based  on the  short-term
maturities of these instruments. As of June 30, 2001 and 2000, the fair value of
long-term  debt was (euro) 290 and (euro)  519  respectively,  compared  to book
values of (euro) 305 and (euro) 564 respectively.  As of June 30, 2001 and 2000,
the fair value of long-term deposits and other non current assets was (euro) 614
and (euro) 532  respectively,  compared  to book values of (euro) 777 and (euro)
750 respectively.  Fair value is determined based on expected future cash flows,
discounted  at  market  interest   rates,   and  other   appropriate   valuation
methodologies.


     Concentrations of credit risk

Financial  instruments  that  potentially  subject  the  Company to  significant
concentrations  of credit risk consist  principally of cash and cash equivalents
and accounts  receivable.  The Company  maintains its cash and cash  equivalents
with high credit quality financial  institutions.  Trade receivables potentially
subject the  Company to  concentrations  of credit  risk.  The  Company  closely
monitors extensions of credit and has not experienced  significant credit losses
in the past.

                                      101
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)


     Stock purchase options and warrants

The Company  accounts  for its stock  options and  purchase  warrants  issued to
employees pursuant to the provisions of Accounting  Principles Board ("APB") 25,
"Accounting for Stock Issued to Employees," and related  interpretations whereby
compensation  cost is  measured,  at the  measurement  date,  as the  difference
between the market value of stock and the exercise  price (the  intrinsic  value
method).  The measurement  date corresponds to the date on which both the number
of shares subject to grant and the exercise price per share are known.


     Recent accounting pronouncements

In July 2001, the Financial  Accounting Standard Board ("FASB") issued SFAS 141,
Business Combinations.  Under SFAS 141, entities are required to account for all
business  combinations  initiated  after  June 30,  2001 using one  method,  the
purchase method.  The Company adopted SFAS 141 on July 1, 2001. The adoption did
not have an effect on the Company's  consolidated  financial position or results
of operations.

In July 2001, the FASB issued SFAS 142,  Goodwill and Other  Intangible  Assets.
SFAS 142 addresses financial  accounting and reporting for acquired goodwill and
other  intangible  assets.  SFAS 142 changes the accounting for goodwill from an
amortization  method to an  impairment-only  approach.  Goodwill  will be tested
annually and whenever  events or  circumstances  occur  indicating that goodwill
might be impaired.  Upon adoption of SFAS 142, amortization of goodwill recorded
for  business  combinations  consummated  prior to July 1, 2001 will cease,  and
intangible  assets  acquired prior to July 1, 2001 that do not meet the criteria
for recognition  under SFAS 141 will be reclassified to goodwill.  Companies are
required to adopt SFAS 142 for fiscal years  beginning  after December 15, 2001,
but early  adoption is permitted.  The Company has not yet determined the impact
that  this  standard  will  have on its  results  of  operations  and  financial
position.  As of June 30,  2001,  the Company  has a goodwill  balance of (euro)
3,139, to be amortized in future periods.

In July  2001,  The  FASB  issued  SFAS No.  143,  "Accounting  for  Obligations
Associated with the Retirement of Long-Lived  Assets." SFAS 143 is effective for
companies  with fiscal years  beginning  after June 20, 2002;  early adoption is
permitted.  The standard  provides the  accounting  requirements  for retirement
obligations  associated with tangible  long-lived  assets. The standard requires
that the obligations  associated with the retirement of the tangible  long-lived
assets be  capitalized  into the asset cost at the time of initial  recognition.
The liability is then  discounted  to its fair value at the time of  recognition
using the guidance provided by the standard. The Company is currently evaluating
the effect this  statement  will have on its results of operations and financial
position.  We believe  that the  adoption  of SFAS No. 143 won't have a material
effect on the Company.


     Estimates and assumptions

The  preparation  of  consolidated   financial  statements  in  conformity  with
generally accepted  accounting  principles 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 revenues and expenses  during
the reporting period. Actual results could differ from these estimates.

                                      102
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)



2 - SEGMENT INFORMATION

     Reportable segments

For  management  purposes,  the Company is currently  organized on the following
basis: (1) it operates in a single business segment,  software sales and related
services and (2) its operations focus on three geographical areas, Europe, North
America and Asia, where its eight operating entities are located.

The  enterprise's  chief  operating  decision-maker,  as  defined  in SFAS  131,
"Disclosures about Segments of an Enterprise and Related Information," the Board
of Directors,  reviews  operating  results on the basis of the  organization  as
described above.


     Geographic areas

The following  tables present revenue by country based on country of invoice and
long-lived assets by country based on the location of assets:

 Revenue analysis
<TABLE>
<CAPTION>

                                                       Year Ended June 30,
                                       -----------------------------------------------------
                                             2001              2000             1999
                                       -----------------------------------------------------
<S>                                    <C>                 <C>               <C>
Europe
     France                           (euro)       5,231   (euro)   3,782    (euro)   1,799
     Others                                        9,149            2,086                 -
                                       -----------------------------------------------------
     Total                                        14,380            5,868             1,799

Asia                                               1,198                -                 -

United States of America                          12,081            4,473             1,006

                                       -----------------------------------------------------
Total sales to external customers     (euro)      27,659            10,341           2,805
                                       =====================================================
</TABLE>

Carrying amount of long-lived assets

Long-lived assets reflect net fixed assets.
                                                       As of June 30,
                                             -----------------------------------
                                                   2001             2000
                                             -----------------------------------
Europe
     France                                  (euro)     2,342   (euro)      729
     Others                                               356                39
                                             -----------------------------------
     Total                                              2,698               768

Asia                                                      241                14

United States of America                                1,819               544

                                             -----------------------------------
Total carrying amount of long-lived assets  (euro)      4,758   (euro)    1,326
                                             ===================================



                                      103
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)



     Information about major customers

The  Company  derives  a  substantial  portion  of  its  revenues  from  certain
customers.

For the year ended June 30, 2001, revenues amounted to greater than 10% of total
revenues  for one  customer,  located in Germany for (euro)  2,998.  No customer
individually  accounted for more than 10% of  consolidated  net revenues for the
year ended June 30, 2000. For the year ended June 30, 1999, revenues amounted to
greater than 10% of total  revenues for three  different  customers,  located in
France for (euro) 486 and (euro) 290, and the United States for (euro) 363.


3 - INCOME TAXES
<TABLE>
<CAPTION>

The income tax (expense) benefit consisted of:

                                                                      Year Ended June 30,
                                                      -----------------------------------------------------
                                                            2001              2000             1999
                                                      -----------------------------------------------------
<S>                                                   <C>               <C>                <C>
Current income tax (expense) benefit                  (euro)    (2)     (euro)     -       (euro)     13
Deferred income tax (expense) benefit                            -                 -       (euro)      -
                                                      -----------------------------------------------------
                                                      (euro)    (2)     (euro)     -       (euro)     13
                                                      =====================================================
</TABLE>

The 1999 tax benefit  recognized in the income statement is mainly  attributable
to research-related tax credits in France.


     Effective tax rate

Actual  income  tax  differs  from the amount  that  would  arise from using the
statutory tax rate in France as follows:
<TABLE>
<CAPTION>

                                                                      Year Ended June 30,
                                                      -----------------------------------------------------
                                                            2001               2000              1999
                                                      -----------------------------------------------------
<S>                                                   <C>                   <C>               <C>
Statutory tax rate in France                                     35.32%           36.67%            40.00%
   Deferred  tax  assets  on  operating   losses  and          (67.27)%         (16.75)%          (24.03)%
   temporary differences -Valuation allowance
   Effect of differences in foreign tax rates                     6.98%         (11.23)%          (11.94)%
   Research-related tax credits                                       -                -             0.38%
   Permanent differences and others                              24.97%          (8.69)%           (4.09)%
                                                      -----------------------------------------------------
Effective tax rate                                                0.00%            0.00%             0.32%
                                                      =====================================================

</TABLE>


                                      104
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)



     Deferred tax assets and valuation allowance

For the years ended June 30,  2001,  2000 and 1999,  the Company  provided for a
valuation   allowance   of  (euro)   10,570,   (euro)  3,914  and  (euro)  2,655
respectively,  against  net  deferred  tax assets  primarily  related to the net
operating loss carryforwards.

As of June 30, 2001, the approximate income tax effects of the temporary book to
tax differences are as follows:

Deferred tax assets on tax loss carryforwards            (euro)     10,168

Deferred tax on temporary differences:
     Depreciation                                                     (167)
     Deferred revenues                                                 641
     Others                                                            (72)
                                                         ------------------
     Total                                                             402

                                                         ------------------
Net deferred tax assets                                             10,570
Valuation allowance                                                (10,570)
                                                         ------------------
                                                         (euro)          0
                                                         ==================

Management believes that it is reasonably possible that a material adjustment to
the valuation  allowance will occur during the next fiscal year as result of its
potential use of deferred tax assets on tax loss carryforwards.


     Net operating loss carryforwards

As of June 30, 2001,  expiration dates of net operating loss  carryforwards were
as follows:

Expiration date:
      2002                                                (euro)        671
      2003                                                            1,071
      2004                                                              567
      2005                                                               68
      2006                                                            3,195
      Between 2013 and 2022                                          15,841
      No expiration date                                              5,457
                                                          ------------------
Total net operating loss carryforwards                    (euro)     26,870
                                                          ==================

Fully reserved tax loss  carryforwards of (euro) 473 were acquired in the TISS's
acquisition.  Any  subsequent  recognition  of the  tax  benefit  for  tax  loss
carryforwards  related to the acquired company will be allocated first to reduce
goodwill and then any other  intangible  assets  identified  during the purchase
price  allocation;  any  remaining tax benefit for tax loss  carryforwards  will
thereafter be a reduction of tax expense.

Fiscal  years ended from June 30, 1996 to June 30, 2001 are subject to tax audit
from the  respective  tax  authorities  in the  countries  where  the  Company's
subsidiaries are  incorporated.  The Company's  management does not believe that
adjustments, if any, arising from such audits would have a significant effect on
the Company's financial position or results of operations.


                                      105
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)



Loss before income taxes and minority interest was as follows:

                                   Year Ended June 30,
                   -----------------------------------------------------
                         2001              2000             1999
                   -----------------------------------------------------

France             (euro)     (8,139)  (euro) (5,186)   (euro)  (2,674)
Others                         1,757          (1,787)           (1,801)
                   -----------------------------------------------------
Total              (euro)     (6,382)  (euro) (6,973)   (euro)  (4,475)
                   =====================================================


     Research-related tax credit

As of June 30,  2001 and 2000,  the  Company  had  research-related  tax  credit
receivables,  net that  amounted  to (euro)  409 and (euro)  577,  respectively.
Research-related  tax  credits  are  granted  on the  basis of the  increase  in
qualifying  research and development costs. These tax credits can be utilized to
pay corporate  income tax or they are  reimbursed  to the Company,  within three
years after the tax credits have been filed with the tax authorities.


4 - FIXED ASSETS, NET

                                               As of June 30
                                     -----------------------------------
                                           2001             2000
                                     -----------------------------------

Computers and hardware              (euro)      2,784    (euro)     978
Purchased software                              1,034               370
Furniture and fixtures                          1,093               326
Leasehold improvements                          1,248               162
                                     -----------------------------------
                                                6,159             1,836
Accumulated depreciation                       (1,401)             (510)
                                     -----------------------------------
                                     (euro)     4,758    (euro)   1,326
                                     ===================================


5 - GOODWILL AND OTHER PURCHASED INTANGIBLE ASSETS, NET

                                                 As of June 30
                                       -----------------------------------
                                             2001             2000
                                       -----------------------------------

Goodwill                              (euro)      1,912    (euro)       -
Workforce                                           220                 -
Existing technologies                             1,520                 -
                                       -----------------------------------
                                                  3,652
Accumulated amortization                           (513)                 -
                                       -----------------------------------
                                       (euro)     3,139    (euro)        -
                                       ===================================


                                      106
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)


6 - ACQUISITION OF TISS

On December 2, 2000, the Company entered into an agreement to acquire all of the
outstanding common shares of TISS Intra GmbH ("TISS"), a privately-held  company
that was an  InfoVista  Business  Solution  Integrator  ("BSI") for over a year,
implementing  complete Service Level  Management  ("SLM")  solutions,  including
training,  maintenance  and  support  for  clients  such as AUDI,  Concert,  and
Deutsche  Telekom.  Under the terms of the  acquisition  agreement,  the Company
assumed  approximately (euro) 1,896 of liabilities and paid approximately (euro)
3,158  (includes  (euro) 125 of  transaction  costs) in cash to acquire  TISS in
January 2001.  The  transaction  was accounted for under the purchase  method of
accounting.  TISS's  results of  operations  have been included in the Company's
consolidated  financial  statements,   from  December  2000  (the  date  of  the
acquisition).

The Company has performed a formal purchase price  allocation.  A summary of the
allocation of the purchase price is as follows:

Total net assets                                     (euro)        (494)
Intangible assets:
   Assembled workforce                                              220
   Core technology                                                1,520
   Goodwill                                                       1,912
Total intangible assets                                           3,652
                                                      ------------------
                                                      (euro)      3,158
                                                      ==================


All of  TISS's  research  and  development  efforts  had  reached  technological
feasibility before the acquisition date,  therefore,  no in-process research and
development existed. Goodwill, which represents the excess of the purchase price
over the fair value of  identifiable  tangible and intangible  assets  acquired,
less  liabilities  assumed,  is being  amortized over the estimated life of five
years.  The other  intangible  assets are being  amortized over their  estimated
lives of four years.


7 - CAPITAL (PREFERRED STOCK, COMMON STOCK AND CAPITAL IN EXCESS OF PAR VALUE)

     Preferred stock

The Series P Preferred  shares had a  liquidation  preference  over the Series O
Common Shares.  The holders of Series P were entitled to receive dividends equal
to 7% of distributable earnings (earnings for the year less statutory reserves),
subject to approval by the Company's  shareholders to distribute such dividends.
Such dividends were  non-cumulative.  There had been no  distributable  earnings
and, therefore, no preferred dividends have been declared.

In June 1998, the Company authorized and issued 2,904,860 shares of its Series P
Preferred  Shares at par value of (euro)  0.5488.  The issuance  included  stock
purchase  warrants that allowed the holder to subscribe to  additional  Series P
shares in the  proportion of 0.18 shares for one warrant at an exercise price of
(euro)  1.76  for each  preferred  share.  In  April  1999,  the  warrants  were
exercised, which resulted in the issuance of 1,045,747 Series P shares, of which
the Company received (euro) 1,859 in proceeds.

The Series P  Preferred  shares  were  automatically  converted  one for one, to
Series O Ordinary  shares on July 7, 2000 when the Company  began trading on the
Nouveau Marche.



                                      107
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)


     Common stock

In December  1999,  the Company  raised  (euro) 6,859 of net  proceeds  from the
private placement of 1,400,000 ordinary shares for (euro) 4.90 per share.

In May 2000,  the Board of  Directors  of the  Company  approved  a  one-for-two
reverse stock split  effective  immediately.  Accordingly,  the par value of the
Company's  stock has been  increased from (euro) 0.27 to (euro) 0.54. The effect
of the stock  split  has been  reflected  in the  financial  statements  for all
periods  presented  and earnings per share have been adjusted  accordingly.  All
references throughout this annual report to number of shares, per share amounts,
stock  option data and market  prices of the  Company's  common  stock have been
restated with the exception of the statement of changes in stockholder's equity.

On July 7, 2000,  the Company  completed an Initial Public  Offering  ("IPO") of
6,000,000 common shares in the form of American  Depositary Shares on the NASDAQ
National Market System and Series O Ordinary shares on the Nouveau Marche of the
Paris  Bourse.  The net  proceeds,  after related costs of issuance of shares of
approximately (euro) 8,150, amounted to approximately (euro) 68,650.


     Treasury Stock

In December 2000, the Shareholder's  meeting  authorized the repurchase of up to
10 % of our  outstanding  common  stock.  As of June 30,  2001,  the Company had
repurchased  19,942  shares of its  outstanding  common stock for  approximately
(euro) 434 and sold 13,189 shares for approximately  (euro) 287, pursuant to the
repurchase  program.  At June 30, 2001,  6,753 shares are held as treasury stock
and are available for general corporate  purposes  including  issuance under our
stock option and employee stock purchase plans.


     Sale of stock to employee

On  October  13,  1995,  in  connection  with the sale of shares to third  party
investors,  a shareholder's  agreement between the founding  shareholders of the
Company and these third parties provided the founding  shareholders with a right
to  repurchase  certain of those shares (the " repurchase  option") if specified
valuation targets were met in future periods.
In December  1998, the  expiration  date of the  repurchase  option was extended
until  June 30,  1999,  and the  exercise  price of the  repurchase  option  was
increased  for all founding  shareholders  that  continued  to hold  unexercised
options.  These  modifications to the repurchase option required a remeasurement
of the option value.  Accordingly,  the Company  recognized an additional (euro)
388 of compensation expense related to the number of extended options.

In July 1999,  two  principal  shareholders  transferred  shares  acquired  upon
exercise  of the  repurchase  option to  certain  employees  and  vendors at the
repurchase  option  price.  As that  price was less  than the fair  value of the
shares at that date, compensation expense of (euro) 355 was recognized.


     Stock options

The Company has adopted five separate  stock option plans (the "1996 Plan",  the
"1999  Plan",  the "2000  Plan",  the  "2000  bis Plan" and the "2001  Plan" or,
collectively,  the  "Plans")  pursuant to which stock  options may be granted to
officers and  employees of the Company to purchase a specified  number of shares
at a price  determined by the Board of Directors.  Each option granted under the
1996 Plan,  1999 Plan or 2000 Plan  entitles  the option  holder to acquire  0.5
shares of the Company's common stock at a specified  price.  Each option granted
under the 2000 bis Plan or 2001 Plan  entitles  the  option  holder to acquire 1
share of the Company's common stock at a specified price

                                      108
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)

The 1996 Plan provided for the grant of up to 500,000 stock  options.  Under the
terms of the 1996 Plan, stock options granted vest ratably over a period of four
years,  with 25% vesting on each year  anniversary of the grant date, and expire
five years from the date of grant.

The 1999  Plan,  2000  Plan and 2000 bis Plan  provided  for the  grant of up to
2,252,000, 500,000 and 500,000 stock options,  respectively.  Under the terms of
the 1999 Plan,  2000 Plan and 2000 bis Plan,  stock options  granted vest over a
period of three years with 25% vesting on each of the one year,  two year, 2 1/2
year, and third year  anniversary  of the date of grant,  and expire eight years
from the date of grant.

The 2001 Plan provided for the grant of up to 2,000,000 stock options. Under the
terms of the 2001 Plan,  stock options granted vest over a period of three years
with 25% vesting on each of the one year,  two year, 2 1/2 year,  and third year
anniversary of the date of grant, and expire 10 years from the date of grant.

A summary of the status of the Company's options under the Plans is as follows:

                                          Number of         Weighted
                                           Shares           Average
                                                         Exercise Price
                                       ---------------- -----------------
Balance as of June 30, 1998                    226,750  (euro)     0.874
                                       ---------------- -----------------

Granted                                        758,000             1.768
Forfeited                                     (111,250)           (1.328)
                                       ---------------- -----------------
Balance as of June 30, 1999                    873,500             1.598
                                       ---------------- -----------------

Granted                                        652,250             5.882
Forfeited                                      (20,500)           (2.424)
Exercised                                      (94,163)           (0.618)
                                       ---------------- -----------------
Balance as of June 30, 2000                  1,411,087             3.627
                                       ---------------- -----------------

Granted                                      1,514,585            27.321
Forfeited                                     (242,692)          (28.946)
Exercised                                     (185,897)           (1.780)
                                       ---------------- -----------------
Balance as of June 30, 2001                  2,497,083  (euro)    15.675
                                       ---------------- -----------------

As of June 30, 2001, the Company had 1,348,857 options available to grant.

The  following  table   summarizes   information   concerning   outstanding  and
exercisable options under the Plans as of June 30, 2001:
<TABLE>
<CAPTION>
                                                 Outstanding                                      Exercisable
                           --------------------------------------------------------- ------------------------------------
    Range of Exercise                         Weighted-Average    Weighted-Average                    Weighted-Average
      Prices/ Share           Number of      Remaining Life (in       Exercise         Number of          Exercise
                               Shares              Years)              Price            Shares              Price
-------------------------- ---------------- --------------------- ------------------ -------------- --------------------
<S>                        <C>              <C>                   <C>                <C>            <C>
Under (euro)1.00                   6,875         0.334             (euro)   0.305           6,875   (euro)      0.305
From (euro)1.01 to 2.00          724,410         5.678                      1.753        252,097                1.741
From (euro)2.01 to 5.00          270,063         6.469                      4.089         58,376                4.230
From (euro)5.01 to 10.00         142,350         9.973                      8.140              -                    -
From (euro)10.01 to 20.00        418,350         8.658                     11.339         38,938               12.197
Over (euro)20.01                 935,035         8.861                     33.008              -                    -
-------------------------- ---------------- --------------------- ------------------ -------------- --------------------
Total                          2,497,083         7.685            (euro)  15.675         356,286    (euro)      3.264
========================== ================ ===================== ================== ============== ====================
</TABLE>

                                      109
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)

The Company  accounts for its stock  options in  accordance  with the  intrinsic
value method of APB 25, "Accounting for Stock Issued to Employees,"  pursuant to
which  employees'  stock  based  compensation   expense  is  calculated  at  the
measurement  date (generally,  the date of grant) as the difference  between the
fair market value of the Company's stock and the option  exercise  price.  Stock
based compensation  expense is recognized over the related service period, which
is generally the vesting period of the stock options.  Based on this method, the
Company has  recorded  deferred  stock  compensation  directly to  shareholders'
equity of (euro) 0, (euro) 1,244 and (euro) 1,270 as of June 30, 2001,  2000 and
1999, respectively. Such amounts are being amortized to expense over the vesting
periods of the  related  options.  For the year ended June 30,  2001,  all stock
options were granted at an exercise  price equal to the market price at the date
of grant. Therefore, no compensation expense was recognized.

The Company recognized stock  compensation  expense related to its stock options
of (euro) 747,  (euro)  1,052 and (euro) 166 for the years ended June 30,  2001,
2000 and 1999, respectively.

     Stock purchase warrants

The Company has granted warrants to certain members of executive  management and
certain investors. Each warrant entitles the holder to acquire 0.5 shares of the
Company's common stock at a specified price.

On June 30, 1998, the Company issued  1,000,000  warrants to certain  members of
management for aggregate  consideration  of (euro) 15. Two warrants  entitle the
holder to  purchase  one common  share of the Company for (euro) 1.22 per share.
These warrants expire June 30, 2003. As of June 30, 2001,  574,578 warrants have
been exercised and 2 have been cancelled.

On December 9, 1999, and in connection  with the issuance of common shares,  the
Company also issued to certain  investors  and members of  management  1,600,000
warrants to purchase 800,000 ordinary shares at an exercise price of (euro) 4.88
per  share for  aggregate  consideration  of  (euro)  24.  These  warrants  were
immediately fully vested and expire on December 8, 2004. No compensation expense
will be  recognized  on the  warrants  issued to members of  management,  as the
strike price equals the fair market value of the stock at the measurement  date.
As of June 30, 2001,  1,537,500 warrants have been exercised and 5,000 have been
repurchased and cancelled.

On  December  9, 1999,  the Company  also  issued  300,000  warrants to purchase
150,000   ordinary  shares  to  certain  members  of  management  for  aggregate
consideration  of (euro) 5. The  exercise  price of each of these  warrants  was
determined  based on the  Company's  ability to  consummate  an  initial  public
offering at a  stipulated  price  level.  If the initial  public  offering  were
consummated at $ 14.00 per share or above,  or if at the date of exercise of the
warrant,  the share price of the  preceding  trading day was at least equal to $
14.00 or a shareholder or third party makes a firm written offer to purchase the
majority of our shares for at least $ 14.00, the warrant holder would be able to
purchase common stock for (euro) 4.88 per share. Otherwise,  the warrants may be
exercised for a price of (euro) 487.84 per share.

During  the first day of  trading  on July 7, 2000,  the  Company  achieved  the
required $ 14 share price to allow  exercise of these  warrants  for an exercise
price of  (euro)  4.88 per  share.  Accordingly,  (euro)  1,482 of  compensation
expense was  recognized in the first quarter of the 2001 fiscal year. As of June
30, 2001,  140,000 warrants have been exercised.  The remaining 160,000 warrants
expired,  unexercised on June 30, 2001. Therefore, none of these warrants remain
outstanding at June 30, 2001.


     SFAS 123 disclosures

Had  compensation  cost for the  Company's  stock  options  and  stock  purchase
warrants been determined in a manner  consistent with SFAS 123,  "Accounting for
Stock-Based  Compensation,"  the  Company's  net income would have  decreased by
(euro)  11,034,  (euro) 524 and  (euro) 43 for each of the years  ended June 30,
2001,  2000 and 1999,  respectively.  Net loss per share, on a basic and diluted
basis,  would have been (euro) 0.92, (euro) 0.96 and (euro) 0.65 for each of the
years ended June 30, 2001, 2000 and 1999, respectively.

                                      110
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)

<TABLE>
<CAPTION>

Information  with respect to the Company's  option grants and the computation of
fair value, using the Black Scholes evaluation model method, follows:

                                                                      Year Ended June 30,
                                                      -----------------------------------------------------
                                                            2001              2000             1999
                                                      -----------------------------------------------------
<S>                                                   <C>                 <C>              <C>
Weighted average fair value of options granted        (euro)   21.665     (euro)  1.707    (euro)  1.032
Total fair value of options granted                   (euro)   32,813     (euro)  2,227    (euro)  1,565
Weighted average assumptions
     Expected holding period (years)                              3.6                 5                5
     Risk-free interest rate                                     4.79%             5.94%            5.08%
     Volatility                                                135.19%              N/A              N/A
     Expected dividend yield                                      N/A               N/A              N/A
</TABLE>


8 - EMPLOYEE RETIREMENT PLANS

     French employee retirement plan

The Company  contributes to pensions for personnel in France in accordance  with
French  law  by  contributing  based  on  salaries  to the  relevant  government
agencies.  There exists no actuarial  liability in connection  with these plans.
French law also requires payment of a lump sum retirement indemnity to employees
based upon years of service and compensation at retirement. Benefits do not vest
prior to retirement.  The Company's  obligation as of June 30, 2001 and 2000 was
immaterial.

     U.S. defined contribution plan

The  U.S.  subsidiary  has a  contributory  profit-sharing  plan,  which  covers
substantially  all  employees.  Generally,  eligible  employees  are  allowed to
contribute  an amount not to exceed the lesser of 15% of their  compensation  or
USD 10. The company may make  additional  discretionary  contributions  that are
allocable  to those  participants  who are  employed on the last day of the plan
year and have completed at least 1,000 hours of service during the plan year. In
the event that the plan is determined to be a "top-heavy plan" as defined by the
Internal  Revenue  Code,  annual  employer  contributions  are required  under a
formula based upon the compensation of the plan participants.

The subsidiary has made no contributions to the plan since inception.



                                      111
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)


9 - DEBT

     ANVAR advance

In 1996,  the  Company was granted a (euro) 686  interest  free cash  advance by
ANVAR (a French  State  organization  to foster  research).  In June  2000,  the
Company was  granted a new  interest  free  advance by ANVAR for (euro) 305 that
will be due by December 2002.

Debt consists of the following:

                                                       As of June 30,
                                              ----------------------------------
                                                   2001              2000
                                              ---------------- -----------------

ANVAR interest free loan, due June 2002      (euro)       259  (euro)       442
ANVAR interest free loan, due December 2002               305               305
                                              ---------------- -----------------
                                                          564               747
Less current portion                                     (259)             (183)
                                              ---------------- -----------------
                                              (euro)      305  (euro)       564
                                              ================ =================


10 - COMMITMENTS AND CONTINGENCIES

     Operating leases

The Company leases its facilities and certain  equipment under lease  agreements
expiring  through  December 31,  2011.  Certain  leases have renewal  options to
extend the lease periods up to an additional three to six years.

As of June  30,  2001,  future  minimum  rental  payments  under  these  leases,
summarized by fiscal years, are as follows:

Year ending June 30,
     2002                                                  2,207
     2003                                                  2,061
     2004                                                  1,911
     2005                                                  1,710
     2006                                                  1,636
     Thereafter                                            2,565
                                               ------------------
    Total                                      (euro)     12,090
                                               ==================

For the years ended June 30, 2001,  2000,  and 1999, the operating rent expenses
were (euro) 1,665, (euro) 270, and (euro) 109, respectively.


     Stock options

Under French tax law,  favorable tax treatment is accorded to the Company and to
the employees  if, among other things,  the shares are held for at least four or
five  years,   depending   on  the  grant  date.   Except  in  certain   limited
circumstances,  if the shares are disposed of prior to the end of this four-year
or five-year  period,  social security charges will be borne by both the Company
and the employee.


                                      112
<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)


Due to the unfavorable  tax  consequences to the employees of disposing of these
shares  before the  expiration  of the  four-year  or  five-year  period,  it is
considered  unlikely  that such  disposals  would take  place.  Accordingly,  no
liability  for the  Company's  portion of the social  security  charges has been
recorded in the financial  statements.  The amount payable by the Company in the
event an  employee  did  exercise  and sell the  shares so  obtained  before the
four-year  or  five-year  period  elapsed  would  be  approximately  45%  of the
difference  between the market price of the stock at the  exercise  date and the
exercise price.
Assuming the exercise of all options  vested at June 30, 2001, the taxes payable
for the Company would have amounted to (euro) 752,  calculated using the closing
price of the shares on June 29, 2001.  Depending on the future  fluctuations  of
our share price, the taxes payable could be significantly higher. However, based
on the significant  adverse tax  consequences to our employees,  we believe that
the sale of these shares by a significant number of our employees is improbable.
Therefore,  we have not  recognized a provision  for such taxes in our financial
statements.


     Potential legal contingencies

The Company has various lawsuits, claims, commitments and contingent liabilities
arising from ordinary conduct of its business. However, they are not expected to
have a material adverse effect on its operating results,  financial position and
cash flows of the Company.


11 - RELATED PARTY TRANSACTIONS

InfoVista  sells  licenses  and services to 3Com,  which has been a  significant
shareholder  of  InfoVista  (ownership  percentage  between 3% and 5% during the
years ended June 30,  2001,  2000 and 1999).  For the years ended June 30, 2001,
2000 and 1999, the Company  recognized  revenues from sales to 3Com amounting to
(euro)  259,  (euro) 602 and (euro) 363,  respectively.  As of June 30, 2001 and
2000, the Company recorded trade receivables from 3Com amounting to (euro) 0 and
(euro) 52, respectively.  Since May 2001, 3Com is no longer a shareholder of the
Company.

InfoVista sells licenses and services to Clariteam.  The Company'  Chairman is a
director of Clariteam  and the  Chairman,  other  officers and  investors of our
Company are also significant shareholders of Clariteam. For the years ended June
30, 2001, 2000 and 1999, the Company recognized revenues from sales to Clariteam
amounting to (euro) 69, (euro) 0 and (euro) 0, respectively. As of June 30, 2001
and 2000, the Company  recorded trade  receivables  from Clariteam  amounting to
(euro) 42 and (euro) 0, respectively.

On December1,  1998, the Company entered into a management  consulting  contract
with an enterprise,  Alain Tingaud  Innovations  EURL,  which is operated by the
Company's  Chairman and Chief  Executive  Officer.  For the years ended June 30,
2001 and 2000,  the Company  paid  management  consulting  fees of  respectively
(euro) 76 and (euro) 229. The contract ended October 31, 2000.

On February 8, 2001,  the Company  completed a Second Public  Offering  ("SPO").
Pursuant to which, certain InfoVista's shareholders sold 3,562,500 shares of our
company (including 464,674 shares as over-allotment option) in a public offering
on the Nouveau Marche of Euronext and on the NASDAQ  National  Market System (in
the form of American  Depositary Shares). As of June 30, 2001 InfoVista recorded
accounts  receivables  from officers and investors of our Company related to the
Second Public  Offering fees completed on February 8, 2001,  amounting to (euro)
347.



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<PAGE>

                                  InfoVista SA
                                  ------------

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
               (In thousands, except for share and per share data)


12 - SUBSEQUENT EVENT

     Stock option surrender and re-grant scheme

On August 30, 2001, the Company offered to eligible employees the opportunity to
renounce the right to the benefit from outstanding stock options to subscribe in
Ordinary  shares  granted on or after  September  1st, 2000 under the 2000 Stock
Option Plan and the 2001 Stock Option Plan,  with an exercise price greater than
30 euros, for new stock options to subscribe in Ordinary shares,  subject to the
terms and conditions described in the Offer to Grant (Form TO filed with the SEC
on August 30, 2001) Subject to the terms and  conditions of this offer,  the new
options  will be  granted  at least  six  months  and one day after the date the
options were cancelled. The number of new options to be granted to each eligible
employee will be the same number of the options that were cancelled. The Company
does not  expect to incur any stock  compensation  expenses,  as a result of the
stock option surrender and re-grant scheme.








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<PAGE>



                                    SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and that it has duly caused and authorized the  undersigned to sign
this annual report on its behalf.


                                           INFOVISTA SA

Dated: December 19th, 2001                 By : /s/ ALAIN TINGAUD
                                           Alain TINGAUD
                                           Chairman and Chief Executive Officer





                                      115
<PAGE>






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



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


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


                                    EXHIBITS




                                   FILED WITH



                                    FORM 20-F


                                  ANNUAL REPORT


                                      UNDER


                       THE SECURITIES EXCHANGE ACT OF 1934

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


                                  INFOVISTA SA


             (Exact name of registrant as specified in its charter)

                                     France
                          (State or other jurisdiction
                        of incorporation or organization)

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



<PAGE>



Exhibits Index


1    Statuts, or by-laws, of InfoVista (unofficial English translation).

4.1  License to Commercialize  "ObjectStore,"  "ObjectStore  Performance Expert"
     and "ObjectStore  Runtime," between eXcelon Corporation and InfoVista dated
     August 23,  2000*(incorporated  by  reference  to exhibit 4.1 to Form 20-F,
     Commission File Number 000-30838).

4.2  1996 Stock Option Plan (unofficial English  translation).  (incorporated by
     reference to exhibit 10.5 to Form F-1, Commission File Number 333-12160)

4.3  1999 Stock Option Plan (unofficial English  translation).  (incorporated by
     reference to exhibit 10.6 to Form F-1, Commission File Number 333-12160)

4.4  2000 Stock  Option  Plan,  as  amended  (unofficial  English  translation).
     (incorporated  by reference to exhibit  10.7 to Form F-1,  Commission  File
     Number 333-12160)

4.5  2001 Stock  Option  Plan,  as  amended  (unofficial  English  translation).
     (incorporated  by reference to exhibit  (D)(1) to Form SC TO-I,  Commission
     File Number 005-61129)

8    Subsidiaries of the Registrant  (see  "Information on the Company - General
     Information  Concerning the Share Capital of the Company - Subsidiaries and
     Investments").

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

*    Confidential  treatment has been requested with respect to certain portions
     of this  exhibit.  Omitted  portions  have been filed  separately  with the
     Securities and Exchange Commission.

*    Financial  statement  schedules are omitted because they are not applicable
     or because the information required