Use these links to rapidly review the documentTABLE OF CONTENTS INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on October 23, 2003

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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 20-F

|o                                       | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|--------------------------------------- | ----------------------------------------------------------------------------------------------
|OR                                     
|ý                                       | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934          
|For the fiscal year ended June 30, 2003
|OR                                     
|o                                       | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      

Commission file number 000-30838

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INFOVISTA S.A.(Exact name of Registrant as specified in its charter)

|Not Applicable(Translation of Registrant's
name into English) |  | 6, rue de la Terre de Feu
91940 Les Ulis
France
(33-1) 64-86-79-00(Address of principal
executive offices) |  | Republic of France(Jurisdiction of incorporation
or organization)
|------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------

Securities
registered or to be registered pursuant to Section 12(b) of the Act:None

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

Title of Class:

American
Depositary Shares, each representing one Ordinary Share, nominal value (euro) 0.54 per share

Ordinary
Shares, nominal value (euro) 0.54 per share*

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Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:None

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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

18,038,003


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.

ý  Yes    o  No

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

o  Item
17    ý  Item 18

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TABLE OF CONTENTS



|        |  |                                                       |  |                                                                
|------- |  | ----------------------------------------------------- |  | ---------------------------------------------------------------
|PART I 
|ITEM 1. |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|ITEM 2. |  | OFFER STATISTICS AND EXPECTED TIMETABLE              
|ITEM 3. |  | KEY INFORMATION                                      
|        |  | 3.1                                                   |  | Selected Financial Data                                        
|        |  | 3.2                                                   |  | Exchange Rate Information                                      
|        |  | 3.3                                                   |  | Risk factors                                                   
|ITEM 4. |  | INFORMATION ON THE COMPANY                           
|        |  | 4.1                                                   |  | General Information concerning the Company                     
|        |  | 4.2                                                   |  | General Information concerning the Share Capital of the Company
|        |  | 4.3                                                   |  | Business Overview                                              
|        |  | 4.4                                                   |  | Industry Background                                            
|        |  | 4.5                                                   |  | The InfoVista solution                                         
|        |  | 4.6                                                   |  | Strategy                                                       
|        |  | 4.7                                                   |  | Products                                                       
|        |  | 4.8                                                   |  | Products in Development                                        
|        |  | 4.9                                                   |  | Services                                                       
|        |  | 4.10                                                  |  | Geographical Breakdown of Revenues                             
|        |  | 4.11                                                  |  | End-users                                                      
|        |  | 4.12                                                  |  | Sales and Marketing                                            
|        |  | 4.13                                                  |  | Strategic Relationships                                        
|        |  | 4.14                                                  |  | Competition                                                    
|        |  | 4.15                                                  |  | Intellectual Property                                          
|        |  | 4.16                                                  |  | Insurance                                                      
|        |  | 4.17                                                  |  | Communications                                                 
|        |  | 4.18                                                  |  | Personnel                                                      
|        |  | 4.19                                                  |  | Research and Development                                       
|        |  | 4.20                                                  |  | Facilities                                                     
|        |  | 4.21                                                  |  | Legal Proceedings                                              
|        |  | 4.22                                                  |  | Seasonality                                                    
|        |  | 4.23                                                  |  | Raw Materials                                                  
|        |  | 4.24                                                  |  | Material Effect of Government Regulations                      
|        |  | 4.25                                                  |  | Industrial and Environmental risks                             
|ITEM 5. |  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS         
|        |  | 5.1                                                   |  | Overview                                                       
|        |  | 5.2                                                   |  | Recent Developments                                            
|        |  | 5.3                                                   |  | Revenues                                                       
|        |  | 5.4                                                   |  | Cost of Revenues                                               
|        |  | 5.5                                                   |  | Operating Expenses                                             
|        |  | 5.6                                                   |  | Period-to-Period Variability                                   
|        |  | 5.7                                                   |  | Results of Operations                                          
|        |  | 5.8                                                   |  | Liquidity and Capital Resources                                
|        |  |                                                       |  |                                                                

1

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|         |  | 5.9                                               |  | Critical Accounting Policies                                         
|-------- |  | ------------------------------------------------- |  | ---------------------------------------------------------------------
|         |  | 5.10                                              |  | Forward Looking Statements                                           
|         |  | 5.11                                              |  | Off-balance Sheet Commitments                                        
|ITEM 6.  |  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES       
|         |  | 6.1                                               |  | Board of Directors                                                   
|         |  | 6.2                                               |  | Executive Officers                                                   
|         |  | 6.3                                               |  | Corporate Governance                                                 
|         |  | 6.4                                               |  | (Reserved)                                                           
|         |  | 6.5                                               |  | Compensation of Directors and Executive Officers                     
|         |  | 6.6                                               |  | Options and Warrants to Subscribe/Purchase our Securities            
|         |  | 6.7                                               |  | Employees                                                            
|         |  | 6.8                                               |  | Share Ownership                                                      
|ITEM 7.  |  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|         |  | 7.1                                               |  | Major Shareholders as at September 25, 2003                          
|         |  | 7.2                                               |  | Significant Changes to shareholdings over the last three fiscal years
|         |  | 7.3                                               |  | Related Party Transactions                                           
|ITEM 8.  |  | FINANCIAL INFORMATION                            
|         |  | 8.1                                               |  | Consolidated Statements and Other Financial Information              
|         |  | 8.2                                               |  | Legal Proceedings                                                    
|         |  | 8.3                                               |  | Dividend Policy                                                      
|         |  | 8.4                                               |  | Significant Changes                                                  
|ITEM 9.  |  | THE OFFER AND LISTING                            
|         |  | 9.1                                               |  | Markets                                                              
|         |  | 9.2                                               |  | Price History of the Stock                                           
|         |  | 9.3                                               |  | General                                                              
|         |  | 9.4                                               |  | The Nouveau Marché                                                   
|ITEM 10. |  | ADDITIONAL INFORMATION                           
|         |  | 10.1                                              |  | Memorandum and Articles of Association                               
|         |  | 10.2                                              |  | Shareholders' Meetings and Voting Rights                             
|         |  | 10.3                                              |  | Financial Statements and Other Communications with Shareholders      
|         |  | 10.4                                              |  | Dividends                                                            
|         |  | 10.5                                              |  | Changes in Share Capital                                             
|         |  | 10.6                                              |  | Preemptive Subscription Rights                                       
|         |  | 10.7                                              |  | Form, Holding and Transfer of Shares                                 
|         |  | 10.8                                              |  | Liquidation Rights                                                   
|         |  | 10.9                                              |  | Requirements for Holdings Exceeding Certain Percentages              
|         |  | 10.10                                             |  | Purchase of Our Own Shares                                           
|         |  | 10.11                                             |  | Trading in Our Own Shares                                            
|         |  | 10.12                                             |  | Ownership of Shares by Non-French Persons                            
|         |  | 10.13                                             |  | Material Contracts                                                   
|         |  | 10.14                                             |  | Exchange Controls                                                    
|         |  | 10.15                                             |  | Other                                                                
|         |  | 10.16                                             |  | French Taxation                                                      
|         |  |                                                   |  |                                                                      

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|ITEM 11.                                       |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|---------------------------------------------- |  | ----------------------------------------------------------
|                                               |  | 11.1                                                      
|                                               |  | 11.2                                                      
|                                               |  | 11.3                                                      
|                                               |  | 11.4                                                      
|                                               |  | 11.5                                                      
|ITEM 12.                                       |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES    
|PART II                                       
|ITEM 13.                                       |  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES           
|ITEM 14.                                       |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS  
|ITEM 15.                                       |  | CONTROLS AND PROCEDURES                                   
|ITEM 16.                                       |  | PRINCIPAL INDEPENDENT AUDITOR FEES AND SERVICES           
|ITEM 17.                                       |  | FINANCIAL STATEMENTS                                      
|ITEM 18.                                       |  | FINANCIAL STATEMENTS                                      
|INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
|ITEM 19.                                       |  | EXHIBITS                                                  

3

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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 years ended June 30, 2003, 2002, 2001, 2000 and 1999. The data for the years ended
and at June 30, 2003,
2002, 2001, 2000 and 1999 are derived from our consolidated financial statements, which have been audited by independent accountants, PricewaterhouseCoopers. The audited consolidated financial
statements for the years ended June 30, 2003, 2002 and 2001 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 United
States of America ("U.S.") dollar amounts, calculated at the rate of U.S. $1.00 = €0.8701 (€1.00 = U.S. $ 1.1493), which was the noon buying rate on
September 25, 2003.

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|                                                                                                             |                                                                                                                                     | Year ended June 30 |           
|------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------- | ------------------ | ----------
|
|
|
|Consolidated Statement of Income and Comprehensive Income Data:                                              |                                                                                                                                     |                    |           
|Revenues                                                                                                     |                                                                                                                                     |                    |           
|                                                                                                             | License revenues                                                                                                                    |                    | 15,224    
|                                                                                                             | Service revenues                                                                                                                    |                    | 14,109    
|                                                                                                             |                                                                                                                                     |                    |           
|                                                                                                             |                                                                                                                                     | Total revenues     |           
|Cost of revenues(exclusive of non-cash compensation expense of $6, €5, €83, €146, €215 and €32 respectively) |                                                                                                                                     |                    |           
|                                                                                                             | Cost of licenses                                                                                                                    |                    | 1,050     
|                                                                                                             | Cost of services                                                                                                                    |                    | 7,143     
|                                                                                                             |                                                                                                                                     |                    |           
|                                                                                                             | Total cost of revenues                                                                                                              |                    | 8,193     
|                                                                                                             |                                                                                                                                     |                    |           
|                                                                                                             |                                                                                                                                     | Gross profit       |           
|Operating expenses:                                                                                          |                                                                                                                                     |                    |           
|                                                                                                             | Selling and marketing expenses (exclusive of non-cash compensation expense of $28, €24, €129, €309, €361 and €43 respectively)      |                    | 18,978    
|                                                                                                             | Research and development expenses (exclusive of non-cash compensation expense of $7, €6, €51, €155, €231 and €38 respectively)      |                    | 8,086     
|                                                                                                             | General and administrative expenses (exclusive of non-cash compensation expense of $3, €3, €54, €1,619, €600 and €441 respectively) |                    | 5,938     
|                                                                                                             | Stock compensation expense                                                                                                          |                    | 44        
|                                                                                                             | Restructuring costs and consulting fee                                                                                              |                    | 1,827     
|                                                                                                             | Write-off of goodwill                                                                                                               |                    |          
|                                                                                                             | Amortization of goodwill and purchased intangibles assets                                                                           |                    | 437       
|                                                                                                             |                                                                                                                                     |                    |           
|                                                                                                             | Total operating expenses                                                                                                            |                    | 35,311    
|                                                                                                             |                                                                                                                                     |                    |           
|                                                                                                             |                                                                                                                                     | Operating loss     |           
|                                                                                                             |                                                                                                                                     |                    |           
|                                                                                                             | Other income                                                                                                                        |                    | 968       
|                                                                                                             |                                                                                                                                     |                    |           
|                                                                                                             | Loss before income taxes and minority interest                                                                                      |                    | (13,204   
|                                                                                                             | Income tax (expense) benefit                                                                                                        |                    | (41       
|                                                                                                             | Minority interest                                                                                                                   |                    |          
|                                                                                                             |                                                                                                                                     |                    |           
|                                                                                                             |                                                                                                                                     | Net loss           |           
|                                                                                                             | Other comprehensive (loss) gain, net of tax:                                                                                        |                    |           
|                                                                                                             | Foreign currency translation adjustments                                                                                            |                    | (425      
|                                                                                                             | Unrealized losses on available for sales securities                                                                                 |                    | 387       
|                                                                                                             |                                                                                                                                     |                    |           
|                                                                                                             |                                                                                                                                     | Comprehensive loss |           
|                                                                                                             |                                                                                                                                     |                    |           
|                                                                                                             | Basic and diluted loss per share                                                                                                    |                    | (0.70     
|                                                                                                             | Basic and diluted weighted average shares outstanding                                                                               |                    | 18,843,308
|Other Financial Data:                                                                                        |                                                                                                                                     |                    |           
|                                                                                                             | Purchase of fixed assets                                                                                                            |                    | (807      
|                                                                                                             | Net cash used by operating activities                                                                                               |                    | (8,635    
|                                                                                                             | Depreciation and amortization                                                                                                       |                    | 2,114     

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|                                                          |  | As of June 30,
|--------------------------------------------------------- |  | --------------
|
|
|
|Consolidated Balance Sheet Data:                          |  |               
|Cash and cash equivalents                                 |  | 43,558        
|Working capital (current assets less current liabilities) |  | 45,605        
|Fixed assets, net                                         |  | 4,079         
|Total assets                                              |  | 67,157        
|Total current liabilities                                 |  | 13,727        
|Total non-current liabilities                             |  | 82            
|Shareholders' equity                                      |  | 53,348        
|Capital stock(1)                                          |  | 11,669        

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3.2    EXCHANGE RATE INFORMATION

In this report, all references to the "euro" or "€" are to the lawful currency of the French Republic and certain other member states of the
European Union ("E.U.") participating in the European Monetary Union. Beginning January 1, 2002, the participating member states have issued new euro-denominated bills and coins for
use in cash transactions. On February 17, 2002, France withdrew the bills and coins denominated in local currency from circulation, and these bills and coins are no longer legal currency for
any transaction. All references to the "U.S. dollar" or "$" are to the lawful currency of the U.S. and all references to the "French franc" are to the former lawful currency of the French Republic.

For
your convenience, this report contains translations of certain euro amounts into U.S. dollars. Unless otherwise indicated, dollar amounts have been translated from euros at the rate
of $1.00 = €0.8701, the noon buying rate in euros on September 25, 2003. 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. 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 American
Depository Shares, ("ADSs") on the Nasdaq National Market ("Nasdaq").

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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 euro/U.S. dollar
exchange rate based on the noon buying rate expressed in euros per $1.00.

Period
end rate

Average
rate(1)

High

Loweuro/U.S. dollarSeptember 2003 (through September 25, 2003)

1.15

1.12

1.15

1.08August 2003

1.09

1.11

1.14

1.08July 2003

1.13

1.14

1.15

1.11June 2003

1.14

1.17

1.19

1.14May 2003

1.18

1.16

1.19

1.12April 2003

1.11

1.08

1.70

1.06Year ended June 30,euro/U.S. dollar2003

1.14

1.05

1.19

0.962002

1.00

1.12

1.19

1.002001

1.18

1.12

1.21

1.052000

1.05

1.01

1.12

0.921999(2)

0.97

1.11

1.18

1.05


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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. From that time, we 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 Production/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. 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 €11.5 million,
€11.9 million and €6.3 million for the fiscal years 2003, 2002, and 2001, respectively. As of June 30, 2003, cumulative losses amounted to
€46.1 million.

Our
current business plan targets profitability in fiscal year 2005, although we may experience one or more profitable quarters during fiscal year 2004. We cannot guarantee that we shall
attain this target of

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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 our operating expenses to remain stable, therefore, to achieve and maintain profitability in light of stabilization in
operating expenses, we shall have to increase revenues. We cannot assure you that our revenues will increase. If we do not 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:



Our
business has experienced and may continue to experience significant seasonality. Sales of our products and services 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. In addition, the typical timing of budget and investment
spending at our clients for the quarter ending March 31 has historically experienced an adverse seasonal effect. We believe that these trends are likely to continue to result in significant
seasonal fluctuations in our quarterly results.

As
we tend to focus on larger business accounts, the average size of individual client orders shall be significant compared to our revenues. As a result, a delay in receiving an order,
even from just one account, could have a significant negative impact on 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

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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
Server, the InfoVista Production Server, VistaViews, VistaPortal Standard Edition, VistaMart, VistaPortal, and additional products. As we acquire companies or businesses, we shall have additional
products in our range. We expect that revenues from our product line and related services will continue to account for a substantial part of our revenues for the foreseeable future.

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. Broad market acceptance of these products is, therefore, critical to our future success.

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

Our software is designed for use in the rapidly evolving and highly competitive SLM market, where competition 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. For sources of actual or potential competition please see "Item 4.15. Competition".

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 also have more extensive client bases and broader client relationships than we have, including relationships with many of our current and potential
clients. Moreover, some of these companies 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.

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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 telecommunications and service
provider 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.

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. In the enterprise market, competition is even more intense. Our ability to attract new enterprise clients
shall largely depend on our ability to release cost effective solutions that contain "plug and play" features along with solutions that address performance management reporting on the application
level.

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

For the years ended June 30, 2003, 2002 and 2001, our five largest clients accounted for approximately 22.9%, 26.3% and 26.3%, respectively, of our total
revenues and our ten largest clients accounted for approximately 34.8%, 38.1% and 34.9%, 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

For the year ended June 30, 2003, we generated approximately 66.6% of our total revenue from end-users in the service provider industry, which
includes telecommunications companies, Internet Service Providers ("ISPs"), 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. In particular, if the willingness of the telecommunication sector to use our solutions for internal purposes or to incorporate our solutions into their product or service
offerings decreased, our business would be harmed.

Accordingly,
if the economic downturn continues to affect this market into the foreseeable future, it could have harmful effects on our business, operating results and financial
condition. It could also affect our ability to collect payments due from clients. The actual or potential insolvency of any of our telecommunications clients could cause us to recognize provisions for
doubtful accounts 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

10

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guarantee
that such third-party software licenses will continue to be available to us on commercially reasonable terms, if at all.

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, operating results and financial
conditions.

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 inability of our products to operate with the hardware and software platforms used by our present and potential clients could harm
our revenue, 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 offset financial consequences borne by third parties and not 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.

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.

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Our
products are complex, and new products and product enhancements may require long development 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.

We
will need to develop and introduce new products and make enhancements to our existing products. We consider that it is essential that we manage to develop new technologies, or to
develop and deploy new product releases or enhanced products on a timely basis, in order to maintain our level of revenues as well as our market perception.

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 four and nine months in duration. The reasons for the long sales cycle include the
following:



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 adequately protect our intellectual property 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 U.S., with two U.S. patents issued
which expire on January 29, 2018, and we also have extensions pending in Europe. A third patent is pending registration (application was filed in France on December 7, 2001 and extension
in the U.S. was requested on December 6, 2002). We have registered
the trademark "InfoVista" in a number of countries, including Europe (as a Community Trademark) and the U.S., 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 the diversion of 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 U.S. and Europe.

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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:



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
systems integrators 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 technology consultants who are typically providing wide ranging consulting services to their clients and refer those clients either directly to us
or to one of our systems integrators 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 these 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 be able to develop compatible products or successful 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 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 higher discount than direct sales. As
a result, an increase in sales through indirect channels would reduce our net revenues.

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

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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. Our reputation and revenues
could be harmed by these types of delays.

To
date, we rely upon our sales force for a significant portion of our revenues. 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, it may require extensive training and it 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 in order to increase sales.

We
believe that growth in our product license revenues depends in part on our ability to provide clients with the required professional services and to educate third-party resellers on
how to provide similar services. However, competition for such personnel is also very intense, and if we are unable to attract, train or retain high caliber staff that our business needs, our
reputation, customer satisfaction and revenues could be harmed.

Our inability to hire and retain 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. Our performance is substantially
dependent on the performance of key technical and senior management personnel. We do not maintain key 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.

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:



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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 business may be harmed by incidents of and consequences of acts of domestic and international terrorism, war and revolutions

The unstable political environment that preceded the war between the U.S. and Iraq in February 2003 had a negative impact on us. Capital investment
decisions of certain clients were frozen temporarily during that period.

Any
future similar events or domestic or international conflict, terrorism, war or revolution may have further adverse consequences for our business.

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

In order to remain competitive, we may acquire additional businesses, products or technologies. We are pursuing 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 an acquisition, financing an acquisition or effectively integrating an 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, shareholder 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 may increase our losses and will affect our profitability targets and our operating results. If we perform due-diligence procedures for potential acquisitions that are not
consummated, the external advisors costs incurred will increase our general and administrative expenses and 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 our operating activities or take advantage of acquisition or other opportunities, which could seriously
harm our business and operating results. If we issue debt, the debt holders 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.

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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 stock options to our employees on various occasions. 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 €2.6 million in stock compensation expense for years ended
June 30, 2003, 2002 and 2001. We do not expect significant costs associated with these plans for the fiscal year 2004.

In
addition, French fiscal law allows for a favorable tax regime for stock options provided that, among other considerations, the shares resulting from the exercise of stock options, by
employees who were resident in France at the date of grant, are not sold for a period of either four or five years (depending upon the deemed date of grant) from the date of grant of the stock
options. Our existing stock option plans are not structured to enforce this holding period. If any of our employees who were French residents at the date of grant of the stock options, exercises the
stock options and sells the resulting shares before the end of the relevant four or five 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. In the event that such employees exercised their stock options and sold the
resulting shares prior to the expiration of the four or five year holding period, we would have to pay social charges in an amount equivalent to approximately 45% of the difference between the market
price at the date of the exercise and the exercise price.

During
the year ended June 30, 2002, we carried out a stock option cancellation and re-grant scheme in such a way that it did not generate stock compensation charges.
We do not currently anticipate effecting a new stock option cancellation and re-grant scheme in such a way that it would generate significant stock compensation charges to our future
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 stock compensation arising from a stock option re-pricing. If the exercise price of the re-granted stock options under a stock option re-pricing scheme is
lower than the exercise price of the cancelled stock options, it is more likely that the stock option holders will exercise their stock options and thus dilute shareholders' equity in us.

3.3.2    Risks Related to our Industry

If the SLM market or the Performance Management 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 a part of the software market segment known as SLM. The market for
SLM and performance reporting solutions is relatively immature; 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 have a material adverse effect on 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. Although we have a diverse client base, we have targeted certain markets including

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telecommunications
carriers, ISPs, outsourcers and integrators. The current economic downturn has affected the technology sector and the telecommunications market in particular, which has led to a
decrease of or delay in such companies' overall investments in IT infrastructure on both hardware and software.

General
economic and market conditions may affect the timing of the receipt of orders from major clients and capital spending of our clients. As a result, our business, operating results
and financial conditions may be adversely affected.

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 network backbone with the necessary speed, data
capacity, security and hardware 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. In addition, few proven and profitable services and products exist. 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 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 theNouveau Marchéof Euronext Paris and Nasdaq on July 7, 2000. For example, between our initial public offering and the date of this report, the price of our shares on theNouveau
Marchéhas fluctuated between €1.15 on July 11, 2002 and €57.00 on October 24, 2000. On September 25, 2003,
the price of our shares on theNouveau Marchéwas €2.13. See "Item 9. 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, shareholders 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:



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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. In
the future, we may become involved in this type of litigation which is often expensive and diverts management's attention and resources.

In
order to stabilize our share price and in accordance with French regulations, we have recently implemented a series of successive share buy-back programs, the most recent
of which was approved at the December 5, 2002 general shareholders' meeting. See "Item 10.10. Purchase of Our Own Shares"

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

Our 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 and our financial position 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 most likely be denominated in euros. A decline in
the value of the euro against the U.S. dollar would reduce the U.S. dollar equivalent of any such dividend.

The effects of fluctuations in international currency exchange rates could have a material adverse impact on the results of our operations and the
financial condition of our customers, our subsidiaries and us

A portion of our assets, earnings and cash flows are denominated in currencies other than the euro, principally the U.S. dollar, the Singapore dollar and the
British pound. Fluctuations in the relative value of these currencies to one another could have a material adverse effect on our results of operations and financial condition. To date, we have not
engaged in currency hedging as we do not believe such activity would be beneficial. Appreciation of the euro against the U.S. dollar could reduce our competitiveness against our competitors whose
expenses are principally denominated in U.S. dollars.

The effects of fluctuations in interest rates could have a material adverse impact on the results of our operations and the financial condition of our
customers, our subsidiaries and us

We are exposed to interest rate risk on our deposits, which represent a significant part of our assets. To date, we have not engaged in interest rate hedging as
we do not believe such activity would be beneficial.

Certain shareholders may not be able to exercise preemptive rights for shares underlying their ADSs

Under French law, shareholders have preemptive rights ("droits préférentiels 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 theNouveau
Marché. 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 there under 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

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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:



The value of the shares that we hold may fluctuate

As of June 30, 2003, we held shares in Network Physics and treasury stock that had a historical cost of €0.9 million and
€1.1 million, respectively. The investment in Network Physics is valued at the lower of historical cost or net realizable value, which is based on our assessment of future value
of Network Physics. The treasury stock is recorded at historical cost. The value of those shares is subject to fluctuation which could adversely affect our operating results and financial conditions.
To date, we have not engaged in any hedging of these shares.

Passive Foreign Investment Company Status under the U.S. Internal Revenue Code

We believe we were classified as a passive foreign investment company (a "PFIC") for the year ended June 30, 2002 and will be so classified for the year
ended June 30, 2003. If you are a U.S. shareholder of our shares or ADSs, the PFIC rules generally subject you to potential adverse U.S. tax consequences, including:



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There
is no assurance that we will not continue to be a PFIC in future years. U.S. shareholders should refer to Item 10 the section below "Taxation of U.S. InvestorsPassive
Foreign Investment Company Status" and are urged to consult their own tax advisors regarding the application of the PFIC rules to their ownership of shares or ADSs.

We will be obligated to adopt new accounting standards in 2005 that may impact our financial reporting

In June 2002, the Council of Ministers of the EU approved a new regulation proposed by the European Commission that shall require us along with all other
EU-listed companies, to apply International Financial Reporting Standards ("IFRS") in preparing our financial statements for fiscal years ending no later than 2006. Because IFRS emphasizes
the measure of the fair value of a company's assets and liabilities, applying these standards to our financial statements may have a considerable impact on a number of important areas, including,
among others, accounting for share-based compensation, goodwill and intangibles, asset depreciation, employee benefit plans, marketable securities and derivative financial instruments and financing
arrangements. Although we have not yet determined the full effect of the application of IFRS to our financial statements, we generally disclose our on and off-balance sheet obligations in
our financial statements. Nevertheless, because financial statements prepared in accordance with IFRS could differ from our financial statements prepared in accordance with either U.S. or French GAAP,
the methods used by the financial community to assess our financial performance and value our publicly-traded securities may be affected.

ITEM 4.    INFORMATION ON THE COMPANY

4.1    GENERAL INFORMATION CONCERNING THE COMPANY

4.1.1    Name and registered office

InfoVista
S.A.
6, rue de la Terre de Feu
91940 Les Ulis
France
Telephone: + 33 (1) 64 86 79 00

4.1.2    Legal form and applicable law

InfoVista S.A., the parent company, is a Frenchsociété anonymewith a Conseil
d'administration. We are subject to the provisions of Book II of the FrenchCode de commerceand
the Act no 67-236 of March 23, 1967 which relates to trading companies.

4.1.3    Date of incorporation and expiry

InfoVista S.A. was incorporated on October 14, 1985 in the form of a Frenchsociété à
responsabilité limitéeunder the nameMéthodes Futures pour l'Informatique M.F.I.,and was registered on December 3, 1985 for a duration of 99 years. We were transformed into asociété
anonymeon December 1, 1992. We changed our name to InfoVista S.A. on April 5, 1996.

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4.1.4    Activity

Our activities, in France as well as internationally, are the following:



Our
activities are also found in Article 2 of ourstatuts('by-laws').

4.1.5    Registry of Commerce and Companies

InfoVista S.A. is registered with the Register of Commerce & Companies of Evry (France) under number 334 088 275. Our APE code is 722 C, being the activity
of development of software.

4.1.6    Consultation of legal documents

InfoVista S.A.'sstatuts, minutes of shareholders meetings and other publicly available documents can be consulted
at our registered office.

4.1.7    Fiscal year

Our fiscal year runs from July 1 to June 30.

4.1.8    Mergers & consolidations

Since June 30, 2001, there have been no material reclassifications, mergers or consolidations of us or any of our 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 our creation, the only acquisition of a business activity has been the
acquisition of TISS, achieved on December 2, 2000. This entity has been fully merged with InfoVista GmbH with effect from January 1, 2002. There have been no bankruptcy, receivership or
similar proceedings with respect to our subsidiaries or us.

Since
June 30, 2000, our principal investment or capital expenditures have consisted of the €6.0 million purchase of a marketable security, KLEBER 2006 in
January 2002, €3.2 million acquisition of TISS in December 2000, €1.8 million purchase of licensed technology in connection with an
agreement entered into with eXcelon Corporation in August 2000, €1.0 million purchase of Network Physics shares during the year ended June 30, 2003, as well as
expenditures relating to office and computer equipment. There are no additional major 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 to other companies' shares, which have occurred during the last
and current fiscal years.

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4.2    GENERAL INFORMATION CONCERNING THE SHARE CAPITAL OF THE COMPANY

4.2.1    Subsidiaries and unconsolidated investments as of June 30, 2003

CHART

InfoVista
S.A. is the primary office for our operations where all senior executives are located and the majority of research and development activities are performed. The subsidiaries
are financed by InfoVista S.A. InfoVista S.A. is the parent company. In accordance to proper accounting practice, Network Physics is not consolidated in our financial results and position. We address
the local markets for sale and support of our software and services. Worldwide marketing activities are primarily managed from our U.S. subsidiary with some local presence in other various entities.
Executive officers of InfoVista S.A. are also officers of certain subsidiaries. The costs related to services rendered amongst InfoVista S.A. and each subsidiary are allocated based upon their
respective annual revenues.

InfoVista
S.A. owns the majority of our intellectual property rights and trademarks. As a result, royalties are invoiced to subsidiaries for the sale of software licenses.

4.2.2    Share capital as of September 25, 2003

Number of ordinary shares issued: 18,805,262, all of which are fully paid up.

Nominal
value of each ordinary share: €0.54

Issued
Share Capital: €10,154,841.48

4.3    BUSINESS OVERVIEW

We are a leading global provider of intelligent performance management solutions. We help organizations maximize the business value of their IT services. Our
software extracts, organizes, and presents information that enables decision makers at every level to continuously align IT services with business priorities. Our fully personalized and interactive
portal provides visibility into real-time and historical information essential to optimize the service experience for end-users. We generate revenues in the form

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of
licensing fees on our products and in the form of service fees from our professional services, customer support and training.

Our
solutions target the Performance Management segment for both service provider and enterprise customers. Our intelligent performance management software supports requirements ranging
from real-time network performance analysis to customer-centric SLM programs. Our technology approach is based on partnering with customers to drive industry-leading innovations into our
software.

80%
of the world's largest service providers (as ranked byFortune®, in December 2002), as well as leading Global 2000
enterprises, have selected our software to maximize the value of their IT infrastructure. In December 2002, we were ranked number one in the Deloitte & Touche Technology Fast 50 2002
Program in France, which lists French technological companies with the highest growth of revenue between 1998 and 2001. In December 2002, we also received a special award from Euronext for the
same program and period.

Our
clients use our solutions for:



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Our
telecommunications and managed service provider clients include AAPT (part of Telecom New Zealand Group), Bell South International, Brazil Telecom, British Telecom, Cable &
Wireless, Chung Hwa Telecom, Cingular Wireless, ComTel, Deutsche Telekom, France Télécom, infonet, LambdaNet, Nippon Telegraph and Telephone, SingTel,
Telefonica, Telewest and Wanadoo. Enterprise clients include ABN Amro, AXA, Banques Populaires, BNP Paribas, BASF, Deloitte & Touche, First Union Wachovia Bank, Graybar,
Hoffmann-La-Roche, Motorola, Pfizer, Royal Bank of Scotland and Shell.

We
sell our products and solutions through a direct sales force and a number of indirect sales channels. We have more than 35 solution partners in over 30 countries already participating
in the program. Channel partners include:



Our
Partner Program ("Vista PartnerNet"), announced in June 2002, has helped us achieve significantly greater distribution velocity with the leading systems integrators and
value-added resellers in the Americas, Europe, and the Asia-Pacific region.

Vista
PartnerNet provides benefits to both our Partners and us, focusing on expanding opportunities, increasing revenues, realizing quicker profitability, making it easier to do
business, enhancing the value we bring to our customers and contributing to higher customer satisfaction.

Program
benefits delivered under our Vista PartnerNet include:



We
are continually seeking ways to upgrade and enrich our program. During fiscal year 2002, we introduced a Presales Support Program to add more value through a strong and focused
investment on Partner Presales needs. The program offers specialized modules and on-site knowledge transfer. In addition, our dedicated partner website provides business and technical
information to support our partners.

In
addition to the above channel partners, we continue to work with other technology vendors to jointly develop and co-market Performance Management solutions. Representative
technology partners include Cisco, Ipanema, Juniper Networks and Orchestream (which was acquired by MetaSolv in January 2003) and more recently, Ericsson and Network Physics.

24

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4.4    INDUSTRY BACKGROUND

We market our solutions to both the service provider and enterprise market. Below is a description of the current environment for purchasing Performance
Management and SLM solutions in each market.

Service Provider Market

The broad adoption of IP services, which utilize shared bandwidth, requires service providers to implement next generation Performance Management and SLM
solutions. These solutions enable service providers to differentiate services, demonstrate quality of service, and optimize the cost to deliver these new services.

Today,
service providers must offer business customers tangible evidence of IT service performance, as demonstrated by a formal SLA. 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:



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.

Enterprise Market

In today's economic environment, corporate decision makers are taking a closer look at the bottom line when evaluating IT infrastructure options. The current
focus on cost containment is creating demand for Performance Management solutions that can help organizations, especially large enterprises, maximize the cost-effectiveness of their IT
infrastructure.

While
the IT 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). However, in the
current unstable economic climate, IT investment projects have become subject to much more rigorous cost-benefit analyses than was previously the case.

25

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In addition, 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 Return on Investment ("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.

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.

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

Fundamental
savings are found in the main stream of Performance Management ROI. These include the clear benefits of managing network, system and application uptime 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 our 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 our client finds itself. This assurance can prevent lost revenue caused by failure to meet service level commitments.

Finally,
we help 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, appropriate new equipment and system upgrades can be applied to their systems using information from us, preventing
unnecessary expenditures on unneeded equipment and software.

4.5    THE INFOVISTA SOLUTION

Our software is designed to meet the emerging performance management requirements of organizations worldwide. We recognize that the value of an organization's
infrastructure is more than the sum of its underlying assets; it is a function of the services delivered by that infrastructure. The focus on service quality is driving infrastructure managers to
measure performance along a service value chain. This paradigm requires rich, real-time visibility across infrastructure management functions, as well as deep visibility into each
layernetwork, system, and application. In today's internetworked world, real-time visibility into infrastructure performance for both internal and external customers is a
strategic necessity.

We
enable service providers and large enterprises that view their global infrastructures as strategic assets to:



26

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A
holistic, integrated view of performance management is necessary to support true SLMan essential approach for managing user-centric Quality of Service (QoS)
and Quality of Experience (QoE). Service providers and large enterprises want to generate quick wins and minimize risks when implementing performance and SLM programs, especially in today's
capital-constrained environment. Therefore, our software is completely modular, enabling customers to implement discrete components for specific performance management requirements (e.g.,
real-time threshold analysis). The components can be seamlessly combined to scale into the most comprehensive SLM solutions.

Our
software is based on a multi-tier architecture that is uniquely capable of supporting the most challenging performance management requirements. The architecture includes
three layers: Collection and Analysis, Data Consolidation, and Information Presentation. We offer a powerful Automation and Management module to manage the software environment, as well as
pre-built Infrastructure Integrations that leverage an "adapter" technology.

This
architecture supports a range of powerful solutions that provide service level views of the performance of connections and components throughout the entire infrastructure, enabling
IT Managers to detect, isolate and resolve service level problems. Our products can also be easily integrated with other management systems to leverage existing tools and processes, in order to
resolve service level issues. The flexibility, scalability and openness of our products provide an efficient environment to provide any IT decision maker the necessary visibility to leverage IT
infrastructure to competitive advantage.

Our
solutions are optimized for the continuously increasing challenges of managing infrastructure performance in a dynamic, service-centric business environment. Our solutions offer the
following technical differentiators:



27

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4.6    STRATEGY

We aim to become the leading worldwide provider of Intelligent Performance Management Solutions. Key elements of our strategy include:



28

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4.7    PRODUCTS

Our products collect data from the IT infrastructure and generate reports on the performance and service achievements across all system 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 Server. The core of the product is the InfoVista Production 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 Server,
our base products include VistaViews, our series of ready-to-use reports that are available in bundles or individually, and our web access portals products, VistaPortal
Standard Edition and VistaPortal, which allow aggregated and real time reports to be viewed using a Web-browser.

InfoVista Production Servercollects 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.

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

InfoVistaWorkshop Serveris targeted as a development platform and provides an environment for customizing and creating VistaViews and
report templates.

InfoVista Workshop Clientis the report building interface installed on a workstation. It supplies an access right to the Workshop Server
so that users can customize and create VistaView report templates within the Workshop Server environment.

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The
key features of InfoVista Server are:



VistaViewsare "out-of-the-box" or standard reports that target specific technologies and services,
such as the performance of network devices, LANs, WANs,
servers and applications, as well as popular vendor-specific technologies. Certain VistaViews are embedded free-of-charge in the InfoVista Server 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.

As
new technologies emerge, new VistaViews are released, enabling a comprehensive view into any infrastructure. In addition, existing VistaViews can be customized and new VistaViews
created to meet both simple and highly sophisticated requirements.

The
following presents a list of VistaView products currently available.

VistaView Listing (Quantity: 74)

Solution VistaViews

VistaView
for Capacity Planning
VistaView for SLA Planning

Standard VistaViews

VistaView
for InfoVista Tuning
VistaView for Network Inventory
VistaView for Network Basics
VistaView for Network Latency
VistaView for LAN Segment
VistaView for SLM
VistaView for Standard Model

VistaViews for Network Infrastructure

VistaView
for RoutersCisco
VistaView for Routers3Com
VistaView for RoutersNortel
VistaView for RoutersJuniper
VistaView for RoutersRiverstone
VistaView for ATM RoutersCisco
VistaView for ATM RoutersJuniper
VistaView for Wi-FiStandard
VistaView for Wi-FiCisco
VistaView for CMTSCisco
VistaView for CMTSMotorola

30

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VistaView
for CMTSCOM21
VistaView for LAN SwitchesCisco
VistaView for LAN Switches3Com
VistaView for LAN SwitchesNortel
VistaView for LAN SwitchesStandard
VistaView for ATM SwitchesCisco
VistaView for ATM Switches3Com
VistaView for ATM SwitchesFore
VistaView for DSLAMCisco
VistaView for DSLAMLucent
VistaView for DSLAMParadyne
VistaView for Network Access ServersLucent
VistaView for Network Access Servers3COM
VistaView for Network Access ServersCisco
VistaView for Network Access ServersNortel
VistaView for Network LatencyCisco
VistaView for Network LatencyNortel
VistaView for Network LatencyRFC 2925 (Juniper, Riverstone)

VistaViews for Server Infrastructure

VistaView
for ServersPatrol
VistaView for ServersCompaq
VistaView for ServersWinNT4.0
VistaView for ServersHost Resources
VistaView for ServersSystem Resources

VistaViews for Wan Switches

VistaView
for WAN SwitchesLucent
VistaView for WAN SwitchesPassport
VistaView for WAN SwitchesAlcatel
VistaView for WAN SwitchesStratacom
VistaView for Frame Relay
VistaView for Frame RelayNortel

VistaViews for Application Servers

VistaView
for Mail ServersExchange
VistaView for Web ServersIIS
VistaView for Web ServersNetscape
VistaView for Oracle
VistaView for Internet ApplicationsPatrol

VistaViews for Application End-To-End Performance

VistaView
for Traceroute Analysis
VistaView for Transaction Analysis
VistaView for ApplicationSLA
VistaView for Application MonitoringNewtest
VistaView for Application MonitoringART (Application Response Time)
VistaView for Traffic ShapingPacketeer

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VistaView
for Traffic MonitoringRMON2
VistaView for Traffic MonitoringCisco NBAR

VistaViews for IP Networking Services

VistaView
for Service Assurance AgentCisco
VistaView for IP VPN model
VistaView for IPQOS CAR MibCisco
VistaView for IPQOS CBQoS MibCisco
VistaView for VoIPCisco
VistaView for MPLSJuniper
VistaView for IPQOS CoSJuniper
VistaView for IP PolicyJuniper Firewall
VistaView for Network Flow Analysis
VistaView for IP Services

VistaViews for Network Security

VistaView
for DoS AttackCisco NBAR
VistaView for DoS AttackJuniper Firewall

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.

VistaPortal Standard Editionis a full Java Servlet-based software that 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.

VistaMartis a global data repository that consolidates data from multiple InfoVista Servers, forming a scalable distributed system. It is
specially adapted for 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 that 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.

VistaPortalgives visibility into the VistaMart global SLM solution, enabling clients to design and display reports containing performance
information from multiple InfoVista Servers. VistaPortal is a web-based interactive window to the IT infrastructure. Its secured XML-based architecture contains fully
configurable components of SLM oriented applications. It allows users to simultaneously view key service level metrics, real-time notifications and strategic information. From these global
overview reports, clients can drill down to real-time reports provided by VistaPortal Standard Edition. In addition, VistaPortal's standards-based architecture and openness allows seamless
integration with user's existing applications and can be easily embedded into other Web portals.

VistaNextis a completely web-based troubleshooting version of InfoVista Performance Management, SLM software. It is designed
specifically for troubleshooting by letting clients quickly start high resolution, high polling rate, real-time reports. It has an intuitive interface that requires no knowledge of how
InfoVista software works. Combined with the inherent low maintenance aspects of the InfoVista Server, VistaNext is a self managed, no training required, troubleshooting tool.

In
just three easy steps, clients can start high-resolution performance reports against most anything in the IT environment. The client identifies a device to be monitored
and VistaNext determines which reports

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are
available from a customized VistaView library that has been created specifically for troubleshooting purposes. Of those choices, the client selects the polling interval and report life span. The
reports are then immediately available on InfoVista's Web server, VistaPortal Standard Edition. VistaNext manages the display of the reports in segregated areas so they can be shared with private
audiences (customer organizations, IT management, etc.).

Vista Plug-insare intelligent agents that reside on local and remote servers and workstations. They gather traffic statistics
and performance information on IT service levels not readily available using traditional SNMP. Performance data is gathered by polling the Vista Plug-in agents, instead of IT devices.



VistaAPIis a software development kit that allows third party software vendors, systems integrators and technology consultants to have
the same tools as our research and development engineers, giving them the ability to integrate InfoVista with other OSS software or in-house IT management applications.

VistaAPI
allows developers to build custom applications on multiple platforms including Sun Solaris and Microsoft Windows using industry-standard programming languages including C, Java
and Perl. VistaAPI comes with annual technical support for developers, a full set of documentation as well as code samples that demonstrate InfoVista API features. Several InfoVista products have
already been developed using this software development kit, including VistaNext, VistaBridge and VistaProvisioner.

VistaBridgeenables organizations to import data into our rich reporting environment. Using VistaBridge, data can be easily moved from
virtually any source into InfoVista software where it can be displayed visually, in the form of graphs, charts, or tables, along with service level metrics. This creates unified views for an
understanding of the relationship between IT performance and business operations, thereby enhancing the strategic value of SLM.

VistaBridge
provides the ability to import data from business applications, Element Management Systems, or any device, into either the InfoVista Engine or VistaMart. VistaBridge can
import data from non-standard IT devices, legacy devices or devices that cannot be polled via SNMP, for whatever reason. Legacy data can also be imported to get the perspective of past
performance history.

VistaLinksare a suite of pre-built integrations with leading vendors in the major categories of the OSS
marketservice activation; fault management; inventory management; and billing and mediation. VistaLinks leverage InfoVista's open, documented and supported API to create substantial
customer

33

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value.
VistaLinks provide customers the benefits of best-of-breed, off-the-shelf software without the typical costs and risks of complex software
integration.



VistaProvisioner(released in September 2002) manages the InfoVista Performance Management reporting solution. VistaProvisioner
enables service providers and large enterprises to leverage existing network and customer topology information and achieve accurate, proactive Performance and Availability Management reporting
solutions within ever-changing, complex environments. VistaProvisioner is an innovative change management solution that brings scalable provisioning to InfoVista's powerful reporting
environment.

VistaDiscovery(released in April 2003) ensures an accurate, up to date InfoVista Performance Management solution by discovering
networks, systems and IP services within large infrastructures. VistaDiscovery features the ability to support complex network relationships with an advance discovery engine and automatically
configures our solution according to scheduled processes. By easily integrating with inventory systems, device libraries and other Network Management Systems, our solution dynamically maintains
complex IT resource relationships with business functions, groups of users, locations and other business properties. By doing so, VistaDiscovery automatically instantiates modeling of technologies,
services and business systems within ever-changing infrastructures so that a business driven IT environment can be managed at a low level of effort.

Service Level Navigator(released in April 2003) enhances VistaPortal functionality for customer-centric service level views by
displaying real-time, performance-based service level notifications from across the infrastructure, end to end. To simplify and accelerate the investigation of performance problems, these
notifications appear within logical views that are intuitively organized and grouped by business-oriented function. This enables users to dynamically navigate through notifications of performance
problems to understand the impact of specific problem-elements, their location, which users they affect and whether critical business operations are involved. Users can also view service level
notifications by severity, type, service and other properties and allows the ability to summarize status at a high level, and then drill down for more detailed information. Service Level Navigator's
powerful performance problem navigation capabilities enable users to efficiently prioritise problem remediation workflow and meet business needs.

VistaOperations Center(released in April 2003) enables rapid identification, diagnosis and resolution of the most vexing,
business-critical IT performance problems. VistaOperations Center uses flow measures to identify potential performance problems; determine whether the problem is at the network, server, or application
level; and isolate the specific resource(s) associated with the problem. In addition, native integrations with VistaPortal and third-party fault-management systems, facilitates performance-driven and
event-driven problem resolution activities. Upon proactive identification performance degradations, users can apply VistaOperations Center's understanding of user communities, mission-critical
applications, or business processes to determine the potential impact to the business operation. This enables users to apply business-driven factors to prioritise performance problems and launch
automated performance troubleshooting tasks from a single, integrated environment.

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4.8    PRODUCTS IN DEVELOPMENT

We continue to enhance our VistaPortal product with a new module that creates a more dynamic user experience and speeds navigation to critical analysis available
within the portal. The new module will also increase the types of analysis that a user of VistaPortal will be able to accomplish.

We
are building a new product to simplify and centralize the management of our large-scale implementations. This product will enable the person or group responsible for us to manage the
entire implementation from one interface. For large implementations, this will speed deployment time significantly. At the same time, it will simplify the support of our solutions and will reduce the
overall cost of ownership.

We
continue to add new content to our reporting solutions. As technology evolves, we are regularly adapting to the requirements of our customers to manage their systems.

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.

4.9    SERVICES

We provide services related to our software products, including consulting, education, support and services. We generally 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, 2003,
we had 43 employees in our services group of which 40%, 44%, and 16% were part of Consulting, Solution Support, and Training & Certification, respectively. We plan to remain moderately flat in
the number of our service teams in line with our business objectives of profitability, while continuing to reinforce the 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:



35

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We
continue to identify Solution Support Partners to 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 four engineers that have been trained and certified by us. We require that they follow documented
internal procedures including clear communication channels so that they will have the necessary support to assist our end users. We performed more than 10 audits of these partners during the last year
to ensure a continuous high level of quality support.

4.10    GEOGRAPHICAL BREAKDOWN OF REVENUES

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

Year ended June 30,2003

2002

2001(In thousands)Europe

€
12,584

€
17,084

€
14,513Of whichLicense revenues


5,229


10,797


9,975Services revenues


7,355


6,287


4,538Americas


9,603


10,087


12,187Of whichLicense revenues


5,655


6,087


8,641Services revenues


3,948


4,000


3,546Asia-Pacific


3,335


2,232


1,198Of whichLicense revenues


2,362


1,410


931Services revenues


973


822


267Total

€
25,522

€
29,403

€
27,898


36

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The following chart shows revenues invoiced from Europe, the Americas and Asia-Pacific broken down by country.

Year ended June 30,2003

2002

2001(In thousands)Europe

€
12,584

€
17,084

€
14,513Of which(1)France


3,645


6,028


5,267Germany


2,631


3,886


4,445United Kingdom


3,827


4,928


4,801Belgium


822


1,266


Spain


1,659


976


Americas


9,603


10,087


12,187Asia-Pacific


3,335


2,232


1,198Total

€
25,522

€
29,403

€
27,898


---

4.11    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, 2003, 2002 and 2001, our five largest end-users accounted for approximately 22.9%, 26.2% and 26.1%, respectively, of our
total revenues and our ten largest end-users accounted for approximately 34.8%, 37.8% and 34.6%, 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.

|Year ended June 30, | 
|------------------- | 
|
|Cable & Wireless    | 
|Telefonica          | 
|Client "A"(1)       | 

---

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Our failure to enter into a sufficient number of large contracts during a particular period could harm our operating results. As of June 30, 2003, we had 281 active
end-users (active end-user is defined by us as a group that has purchased and still uses one of our software solutions) in countries including France, the U.S., the United
Kingdom, Germany, Spain, Singapore and Japan. The table below shows a representative list of companies that use our products.

|Telecommunications
Companies and ISPs                                                                                                                                                                                                                                                                                              |  | Financial Institutions                                                                                               |  | Outsourcers and
Consulting Firms                                                                                              |  | Other Enterprises                                                                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------
|AAPT
BellSouth
Bouygues Telecom
British Telecom
Cable & Wireless
Cingular Wireless
Chung Hwa Telecom
Czech Telecom
EasyNet
France Télécom
Globe Telecom
infonet
Interoute
H3G
MCI
Nextel Communications
Nippon Telegraph and Telephone
SingTel
T-COM (T-Data, Deutsche Telekom)
Telecom Asia
Telefonica
VeriSign
Videotron
Verizon |  | AXA
Banque de France
Banque Populaire
BNP Paribas
Crédit Agricole-Indosuez
Royal Bank of Scotland
Wachovia
Wellpoint |  | Callahan
Cap Gemini Telecom
Hitachi Information Systems
Info AG/Satisfactory
Siemens Business Services
Spherion
T/Systems ITS |  | AGIS
Acasia
BASF
British Airways
Chevron
Hoffmann-La Roche
Norfolk Southern
Royal Canadian Mounted Police
Shell
Thales

4.12    SALES AND MARKETING

As of June 30, 2003, we had a total of 76 sales and marketing employees (approximately 86% in sales and 14% in marketing) of whom 19 were located in
France, 34 in the U.S., 15 in Europe (outside France) and 8 in the Asia-Pacific.

Sales

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



For
a discussion of the categories of our indirect sales channels, see "Item 4.3. Business Overview".

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Marketing

Our worldwide marketing functions include strategic, product and field marketing, along with analyst and media relations. As of June 30, 2003, we had
marketing personnel stationed in France and the U.S.

4.13    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.

We
have been a member of the Cisco Ecosystem partnership, in Europe as well as in the U.S., 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. Our solutions are
installed in Cisco's Executive Briefing Center (EBC lab) where demonstrations and presentations are given to service provider and large enterprise customers.

In
July 2001, we announced our participation as an initial member of the Juniper Network's new IP OSS Alliance (IOA), with the availability of a first set of VistaView Performance
Reporting Module supporting Juniper Network's technology. Since then, other integration pieces have been implemented to reinforce the alliance. The partnership includes classification as a Premium
Juniper partner for Performance Management where we are engaged with Juniper in several large opportunities.

In
January and June 2003, we made equity investments in Network Physics representing approximately 13% of their outstanding voting stock for €0.9 million as
of June 30, 2003, whose
network appliance, among other things, allows end users to associate abnormal performance with specific business functions, thereby, providing a critical link between IT performance and business
impact.

In
February 2003, we signed an OEM agreement with Ericsson for the pre-integration of our solution with Ericsson's IP Packet Backbone Network management suite. In a
later stage, integration with service provisioning and other core elements will be offered. With this agreement, Ericsson enables operators to control costs and improve the profitability of
multi-service networks.

4.14    COMPETITION

The Performance Management 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 Network System Management ("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:



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Our
primary source of direct competition comes from suppliers of comparable products, including Concord Communications eHealth suite, Hewlett Packard OpenView Performance Insight
(formerly Trinagy's Trend), Lucent Technologies Navis iOperations Software, VitalSuite, Net IQ, Quallaby Corporation and several smaller software vendors. Other sources of actual or potential
competition include:



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.

4.15    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 U.S. and in Europe, with two U.S. and two European patents issued which expire on January 29, 2018. A third patent is pending registration (application was filed in France on
December 7, 2001 and extension in the United-States was requested on December 6, 2002).

Trademarks.We have registered the trademark "InfoVista" in a number of countries, including in Europe (as a Community
Trademark) and the U.S. We also have a trademark registration for "VistaMart" in France. In addition, we have filed trademark applications in a number of countries, including the U.S. and the EU for
the product names "VistaView", "VistaMart," "VistaPortal," "VistaFinder", "VistaService", "VistaFoundation", "VistaNotifier", "VistaLink", "VistaBridge", "Vista Plug-in", "VistaNext",
"VistaProvisioner", "VistaDiscovery", "VistaOperations Center", "VistaCockpit", "VistaTroubleshooter" 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

40

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information
to execute confidentiality agreements with us. Our employees generally sign contracts with us agreeing not to compete for a certain period following their departure from our company
subject to certain limitations. We have deposited our source codes with theAgence pour la Protection des Programmes, one of the main French
organizations offering software escrow services.

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 U.S. 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.

4.16    INSURANCE

We have maintained an appropriate level of insurance coverage with conditions that are in line with our industry standards. We have put into effect a worldwide
insurance program that provides coverage for significant risks and activities.

We
maintain insurance against potential civil and product liability claims. We also maintain insurance policies against the following risks: directors and officers' liability, civil
liability including general liability. This insurance covers all countries where we have a legal presence. We have not obtained any insurance for net losses in any of the countries in which we have
operations.

We
maintain a comprehensive portfolio of insurance policies covering our principal risks, including damage to physical property, legal liability for third party damage, product liability
and professional errors and omissions liability as well as directors and officers liability. We regularly review the level of coverage in force with the risks that we may encounter. We believe that
the level and geographical scope of our coverage is appropriate for the risks encountered, and is in line with the practices in the insurance market.

4.17    COMMUNICATIONS

We communicate with our investors and the public by means of our website at www.infovista.com and participation at trade shows and trade events. We also conduct
regular press statements and meetings with the press and analysts and embark on road shows from time to time.

4.18    PERSONNELSee "Item 6. Directors, Senior Management and Employees"

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4.19    RESEARCH AND DEVELOPMENT

Our research and development team is responsible for the design, development and release of our software. As of June 30, 2003 and 2002, our research and
development organization consisted of 47 and 63 employees, respectively. We subcontract engineers for highly specialized and discrete projects. Our research and development team focuses on developing
our more complex and strategically important projects. Our total research and development expenses were €7.0 million,
€7.2 million and €4.6 million for the years ended June 30, 2003, 2002, and 2001, respectively.

4.20    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 U.S. in Herndon (Virginia), New York (New York), Columbia (Maryland) and
Dallas (Texas), as well as in Europe, London (United Kingdom), Madrid (Spain), Munich (Germany) and in Singapore for our operational center in the Asia-Pacific region with offices in
Sydney (Australia), Tokyo (Japan) and Shanghai (China). 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.

4.21    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 operating results 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 or arbitration incidental to our business; however, we do not believe that we are party to any pending litigation or arbitration,
which has had or could have a material, adverse effect on our financial condition, activity or results.

4.22    SEASONALITY

Our business has experienced and may continue to experience significant seasonality as described in "Item 3. Key InformationRisk Factors" and "Item
5. Operating and Financial Review and Prospects."

4.23    RAW MATERIALS

Our business is not dependent upon any raw materials.

4.24    MATERIAL EFFECT OF GOVERNMENT REGULATIONS

During the fiscal year 2003, there were no changes to governmental regulations in any jurisdiction in which we do business which had a material adverse effect on
our operations or financial condition.

4.25    INDUSTRIAL AND ENVIRONMENTAL RISKS

Given our business activities, we are not particularly exposed to industrial and environmental risks. We do not store flammable or dangerous material or products
at any of our facilities, nor are we subject to any specific constraints with respect to any potential environmental risks.

42

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We
are not aware of any industrial or environmental risk known or suspected to be associated with the development, manufacture, transport or use of our products and services. We are not
aware of any industrial or environmental risks, which affect or may affect the utilization of any of our facilities.

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.

During
the year ended June 30, 2003, we implemented a new key metric "active end-users" that is defined as a company group that has purchased one of our software
solutions. In addition, we adopted Staff Announcement Topic D-103, "Income Statement Characterization of Reimbursement Received for "Out-of-Pocket" Expenses
Incurred", which states that reimbursements received for "Out-of-Pocket" expenses should be reported as revenues and costs. As a result, the figures below have been restated
for the years ended June 30, 2002 and 2001 in order to reflect the application of this new rule.

5.1    OVERVIEW

We are a leading global provider of intelligent performance management solutions. We help organizations maximize the business value of their IT services. Our
software extracts, organizes, and presents information that enables decision makers at every level to continuously align IT services with business priorities. Our fully personalized and interactive
portal provides visibility into real-time and historical information essential to optimize the service experience for end-users. Our solutions target the Performance Management
segment for both service provider and enterprise customers. Our intelligent performance management software supports requirements ranging from real-time network performance analysis to
customer-centric SLM programs. Our technology approach is based on partnering with customers to drive industry-leading innovations into our software. 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.

5.2    RECENT DEVELOPMENTS

5.2.1    Stock option grants

On August 19, 2003, the board of directors granted to our officers and employees and our subsidiaries stock options to subscribe for shares and to purchase
shares, for up to 948,810 shares. Each stock option will give the right to subscribe for new shares or to purchase existing shares with a nominal value of €0.54 at the price
of €2.15 per share.

Stock
options giving the right to subscribe for 653,630 new shares were granted under the 1999 and 2000 Plans. 330,830 of these stock options which were granted to seven employees were
modified by the board of directors. The stock options shall vest by the earlier of 25% at the end of each quarter for which we will reach or exceed the break even point ("adjusted net profit") or
under the terms of the 2000 Plan in case the break even point is not reached.

Stock
options giving the right to purchase 295,180 shares of treasury stock out of the 300,000 authorized by the general shareholders' meeting of December 5, 2002 were granted
under the 2003 Plan. The terms and conditions of the 2003 Plan are identical to those of the 2001 Plan.

5.2.2    Restructuring

During the first quarter of fiscal year 2004, we effected a reduction in our workforce in the United States and Europe and adopted an office rationalization plan
in the United States and Germany. Costs associated with exiting facilities included estimated present value of sublease losses, commissions and concessions, and other facility closing costs including
rent expense while our office space is vacant. The

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restructuring
costs and related loss on disposal and impairment of fixed assets should amount to approximately €3.0 million for the three months ended September 30, 2003.

5.2.3    Employment termination of the Executive Vice-President and Chief Operating Officer (Worldwide)

After a two-year period as our Executive Vice-President and Chief Operating Officer (Worldwide), Mr. Didier Lesteven's employment
was terminated in September 2003. As a result, our Chairman and Chief Executive Officer shall propose to the board of directors to end his designation ofDirecteur
Général Déléguéat the next board meeting.

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, 2003, 2002, and 2001, revenues from licenses represented 51.9%, 62.2%, and 70.1% of total revenues, respectively.

As
of June 30, 2003 and 2002, we had 281 and 278 active end-users of our products, respectively. We target end-users particularly in the telecommunications
and service provider industry, along with large enterprise organizations such as financial institutions, transportation/logistics companies, insurance companies and healthcare services. Revenues from
service provider
end-users, which include telecommunications and service provider companies, such as ISPs, ASPs and outsourcers of IT services, accounted for 66.6%, 69.5%, and 80.8% of our total revenues
for the years ended June 30, 2003, 2002 and 2001, respectively. We expect that revenues from service provider industry end-users shall continue to constitute a significant portion
of our future revenues, but we intend to further enhance our large enterprise client base.

We
generate revenues not only through our direct sales force but also from indirect sales through channel resellers, who in turn sell our products and services to their customers. In
addition, a portion of our direct revenues is influenced by referral partners, who we compensate for their assistance in the sales cycle of a particular customer order. For the year ended
June 30, 2003, 56.6%, 32.2%, 5.3%, and 5.9% of our revenues were recognized from direct sales, resellers, OEMs, and direct sales from partner referrals, respectively. For the year ended
June 30, 2002, 65.1%, 29.4%, 3.2%, and 2.3% of our revenues were recognized from direct sales, resellers, OEMs, and direct sales from partner referrals, respectively. For the year ended
June 30, 2001, 61.9%, 33.3%, 0.0%, and 4.8% of our revenues were recognized from direct sales, resellers, OEMs, and direct sales from partner referrals, respectively. We expect revenues from
the different above-mentioned channels to remain fairly consistent with a moderate shift toward reseller and partner referral revenues.

Our
main sales regions are Europe, Americas, and the Asia-Pacific. For the year ended June 30, 2003, approximately 49.3%, 37.6% and 13.1% of our revenues were
recognized from sales invoiced from Europe, Americas, and Asia-Pacific, respectively. For the year ended June 30, 2002, approximately 58.1%, 34.3%, and 7.6% of our revenues were
recognized from sales invoiced from Europe, Americas and Asia-Pacific, respectively. 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, Americas and Asia-Pacific, respectively. We expect revenues from the Americas to increase in percentage of total revenues, while Europe's
percentage shall decrease in comparison with fiscal year 2003. Asia-Pacific should remain relatively consistent.

Revenues
from sales of our licenses to our end-user clients are recognized generally when we receive a purchase order and/or other written contractual documentation
(depending on the requirement of the client), 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. We provide for allowances for estimated future returns from our clients upon shipment. We recognize reseller license revenues on the same basis as for direct sales to
end-user clients, except for an additional procedure in which we receive

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either
a copy of the purchase order between the reseller and end-user or a written certification from the reseller that confirms that the licenses have been sold through a named
end-user. We recognize license revenues from our OEMs either after receipt of a quarterly report of their sales made in a given period or upon receipt of a purchase order.

Our
customers purchase maintenance services for an initial period (typically 12 months) as part of the purchase of the license. Generally, the subsequent year maintenance services
are automatically renewable for subsequent 12-month periods, unless either party cancels. Payments for maintenance fees (on initial or renewal orders) 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 sold. Revenues from purchase orders received for consulting, training
and other support services are generally recognized as the services are performed. The revenue recognition policies for services are the same regardless of the sales channel used. Service revenues are
not shared between our resellers and us. End-users either enter into a service contract directly with us or with a reseller.

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 significant discounts offered on other services are generally allocated to the delivered
license portion of the fee. 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.

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 directly to our clients, which we believe will result in a decrease in our service revenues as a percentage of total revenues.

As
service revenues evolve, we expect to adapt our customer support and professional service personnel to our maintenance, consulting and training activities. Consequently, we anticipate
that our cost of service revenues will remain relatively flat for the near term.

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 compensation expense, 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 compensation expense, we
believe such presentation will help you compare operating results over the periods presented.

5.5    OPERATING EXPENSES

Sales 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 decrease as a percentage of revenues for the near term. Research and development expenses consist
primarily of personnel costs associated with software product development and outsourced research and development. We expect that our research and development expenses will remain relatively flat as a
percentage of revenues for the near term. We have not capitalized

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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. We expect that these
expenses will continue to decrease as a percentage of revenues in the short and long-term.

We
have granted stock options and issued warrants to our employees and officers on various occasions. 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 €2.6 million in share plan costs from July 1, 2000 through
June 30, 2003. See Note 13 to the consolidated financial statements for further information on stock compensation expense. 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 business has experienced and may continue to experience significant seasonality. Sales of our products and services 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. In addition, the typical timing of budget
and investment spending at our clients for the quarter ending March 31 has historically experienced an adverse seasonal effect. We believe that these trends are likely to continue to result in
significant seasonal fluctuations in our quarterly results.

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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.

Year ended June 30,2003

2002

2001All amounts in percentagesRevenuesLicense revenues

51.9

62.2

70.1Service revenues

48.1

37.8

29.9Total revenues

100

100

100Cost of revenuesCost of licenses

(3.6
)
(3.2
)
(3.2
)Cost of services

(24,4
)
(20.9
)
(22.0
)Total cost of revenues

(28,0
)
(24.2
)
(25.2
)Gross profit

72.0

75.8

74.8Operating expensesSales and marketing expenses

(64.7
)
(56.5
)
(59.4
)Research and development expenses

(27.6
)
(24.4
)
(16.6
)General and administrative expenses

(20.2
)
(23.7
)
(27.3
)Stock compensation expense

(0.1
)
(1.1
)
(8.0
)Restructuring costs and consulting fee

(6.2
)
(8.1
)
Impairment charge for goodwill



(6.3
)
Amortization of goodwill and intangibles

(1.5
)
(1.3
)
(1.8
)Total operating expenses

(120.4
)
(121.3
)
(113.2
)Operating loss

(48.3
)
(45.5
)
(38.4
)Other income

3.3

5.0

15.5Loss before income taxes and minority interest

(45.0
)
(40.6
)
(22.9
)Income tax expense

(0.1
)


Minority interest



0.1

0.2Net loss

(45.2
)
(40.6
)
(22.6
)


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

Year ended June 30,2003

2002

2001All amounts in percentagesGross marginLicense gross margin(License gross profit as % of license revenues)

93.1

94.8

95.5Service gross margin(Service gross profit as % of service revenues)

49.4

44.6

26.6


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Years Ended June 30, 2003, 2002 and 2001

Revenues

Total revenues were €25.5 million, €29.4 million, and €27.9 million for the years ended
June 30, 2003, 2002 and 2001, respectively, representing a decrease of 13.3% from fiscal year 2002 to fiscal year 2003 and 5.4% increase from fiscal year 2001 to fiscal year 2002. On a constant
exchange rate basis between fiscal year 2002 and 2003, total revenues for the year ended June 30, 2003 would have been €27.6 million. Total revenues for Europe decreased
26.3% from fiscal year 2002 to 2003 with no exchange rate impact. We were disappointed with the sales performance and intend to put corrective actions in place during fiscal year 2004 to restore
revenue growth. Total revenues for the Americas decreased 4.8% from fiscal year 2002 to 2003, while on a constant exchange rate basis, total Americas revenues increased 12.5%. Despite the negative
exchange rate impact, we have experienced some positive benefits from the reorganization that we implemented during the first half of fiscal year 2003, along with positive penetration in the Americas'
enterprise market. Total revenues for Asia-Pacific increased by 49.4% from fiscal year 2002 to 2003, while on a constant exchange rate basis, total Asia-Pacific revenues
increased by 71.6%. We have experienced significant revenue growth from the reorganization that we implemented during the end of fiscal year 2002, along with positive penetration in the
Asia-Pacific service provider market, particularly in terms of developing sound relationships with indirect channels and an intense focus on service providers.

License
revenues were €13.2 million, €18.3 million, and €19.5 million for the years ended June 30, 2003, 2002
and 2001, respectively. The 27.9% decrease in license revenues from fiscal year 2002 to fiscal year 2003 was primarily due to the unsuccessful implementation of our solutions-oriented sales model in
Europe and the decline of the US dollar against the euro, which were netted against a strong increase in license revenues in Asia-Pacific. On a constant exchange rate basis between fiscal
year 2002 and 2003, license revenues for the year ended June 30, 2003 would have been €14.5 million. The 6.2% decrease in license revenues from fiscal year 2001 to fiscal
year 2002 was primarily due to the deterioration of market and economic conditions in the Americas and the Central Eastern Europe regions.

Service
revenues, including maintenance, training, and consulting services, were €12.3 million, €11.1 million, and
€8.4 million for the years ended June 30, 2003, 2002, and 2001, respectively. Service revenues accounted for 48.1%, 37.8% and 29.9% of total revenues for the years ended
June 30, 2003, 2002, and 2001, respectively. The 10.8% increase from fiscal year 2002 to fiscal year 2003 was primarily due to the increase of maintenance revenues by 27.6% that resulted from
both the increased install base and strong maintenance renewal rates, netted by a decrease in both consulting and training revenues by 13.9% that resulted from the decrease in license revenues. On a
constant exchange rate basis between fiscal year 2002 and 2003, service revenues for the year ended June 30, 2003 would have been
€13.1 million. The 32.1% increase from fiscal year 2001 to fiscal year 2002 was primarily due to the increase of maintenance revenues that resulted from the increased install
base.

Cost of Revenues

Cost of revenues was €7.1 million, €7.1 million and €7.0 million for the years ended
June 30, 2003, 2002, and 2001, respectively. Cost of revenues has been relatively flat over the past three fiscal years, which is primarily due to our continued push to improve service margins.
Cost of revenues accounted for 27.9%, 24.2% and 25.2% of total revenues for the years ended June 30, 2003, 2002, and 2001, respectively.

Cost
of license revenues, as a percentage of license revenues, was 6.9%, 5.2% and 4.5% for the years ended June 30, 2003, 2002, and 2001, respectively. The percentage increase in
fiscal year 2003 compared with fiscal year 2002 was primarily due to the decrease of license revenues coupled with certain royalty arrangements that are fixed in nature. The percentage increase in
fiscal year 2002 compared with fiscal year 2001 was primarily due to additional royalty costs related to third party software integrated into our VistaPlugin licenses and the decrease of license
revenue.

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Cost
of service revenues, as a percentage of service revenues, was 50.6%, 55.4%, and 73.4% for the years ended June 30, 2003, 2002, and 2001, respectively. The percentage
decreases were due to an increase in maintenance service revenues, which carry less cost of revenues than consulting and training revenues.

Selling and Marketing Expenses

Sales and marketing expenses were €16.5 million, €16.6 million, and €16.6 million for the
years ended June 30, 2003, 2002, and, 2001, respectively. We have maintained our annual spending on sales force and marketing/sales support teams along with discretionary marketing spending
over the past three fiscal years. Sales and marketing expenses accounted for 64.7%, 56.5% and 59.4% of total revenues for the years ended June 30, 2003, 2002, and 2001, respectively. Headcount
in selling and marketing as of June 30, 2003, 2002, and 2001 was 76, 84, and 92 employees, respectively.

Research and Development Expenses

Research and development expenses were €7.0 million, €7.2 million, and €4.6 million for the
years ended June 30, 2003, 2002, and 2001, respectively. The percentage decrease of 2.8% from fiscal year 2002 to fiscal year 2003 was primarily due to a reduction of research and development
personnel, netted by the increase in technology acquisitions of €0.8 million. The percentage increase of 56.5% from fiscal year 2001 to fiscal year 2002 was due to continued
investments made to enhance and develop the InfoVista Production and Workshop Servers and to add new products, such as VistaPortal, VistaLink, VistaBridge and various Vista Plug-ins and
VistaViews. Research and development expenses accounted for 27.6%, 24.4%, and 16.6% of total revenues for the years ended June 30, 2003, 2002, and 2001, respectively. Headcount in research and
development as of June 30, 2003, 2002, and 2001 was 47, 63, and 54 employees, respectively.

General and Administrative Expenses

General and administrative expenses were €5.2 million, €7.0 million, and €7.6 million for the
years ended June 30, 2003, 2002, and 2001, respectively. The percentage decreases of 25.7% from fiscal year 2002 to fiscal year 2003 and 7.9% from fiscal year 2001 to fiscal year 2002 were due
to the reduced headcount in administrative positions along with the continued reduction of legal and accounting fees. General and administrative expenses accounted for 20.2%, 23.7%, and 27.3% of total
revenues for the years ended June 30, 2003, 2002, and 2001, respectively. Headcount in general and administration as of June 30, 2003, 2002, and 2001 was 23, 35 and 43 employees,
respectively.

Restructuring Charges

During each fiscal year ended June 30, 2003 and 2002, we effected a reduction in workforce of approximately 30 employees and adopted an office
rationalization plan to re-focus our commercial activities in the U.S. and Germany. As a result of the restructuring, we accounted for restructuring charges of
€1.6 million and €1.7 million for the years ended June 30, 2003 and 2002, respectively. We did not incur any restructuring charges during the year
ended June 30, 2001. We implemented a restructuring plan during the first quarter of fiscal year 2004, which shall lead to approximately €3.0 million of restructuring
charges.

Consulting Fee

During the year ended June 30, 2002, we appointed a leading management consultancy firm, to help assess our global strategy and positioning. U.S. and
European teams were selected and worked with our executives and employees to develop a three-year strategic plan that includes execution and implementation. During the year ended
June 30, 2002, €0.8 million of consulting fees were incurred of which €0.1 million were included as part of the restructuring charges. We did not
incur any significant consulting

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fees
during the year ended June 30, 2003 and 2001. We do not expect to incur any additional significant consulting fees in the near or mid-term.

Impairment Charge for Goodwill

During the year ended June 30, 2002, we reclassified the carrying value of the workforce as of July 1, 2001 into goodwill in accordance with a new
accounting rule on goodwill in U.S. GAAP. In June 2002, we performed the annual impairment test of goodwill that resulted from our acquisition of TISS and wrote-off its entire
carrying value of €1.8 million. As a result of economic conditions in Central Eastern Europe, our future cash flows forecast for this reporting unit were lowered, which led to
an impairment charge for the entire carrying value of the goodwill. We did not incur goodwill impairment charges during the year ended June 30, 2003 and 2001. We do not expect to incur any
additional goodwill impairment charges in the near or mid-term.

Stock Compensation Expense

Stock compensation expense totaled €38 thousand, €0.3 million, and €2.2 million for the years
ended June 30, 2003, 2002, and 2001, respectively. The significant expenses in 2001 coincide with a €1.5 million charge taken in 2001, as a result of warrants granted to
senior managers due to the success of our Initial Public Offering ("IPO"). 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. Since all deferred compensation relating to stock options granted before September 2000 has been fully amortized, we do not expect stock compensation expenses in the near
term or mid-term.

Other Income

Other income was €0.8 million, €1.5 million, and €4.3 million for the years ended
June 30, 2003, 2002, and 2001, respectively. The 46.7% decrease from fiscal year 2002 to fiscal year 2003 was primarily due to the lower income earned from short-term deposits. The
65.1% decrease from fiscal year 2001 to fiscal year 2002 was due primarily to the effect of the decrease in the exchange rate of the U.S. dollar against the euro on our U.S. dollar-denominated net
investments in our subsidiaries that were considered short-term during the fiscal year. On March 1, 2001, we modified 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, while any foreign currency transaction gains/(losses) that are derived from intercompany investments that are
considered short-term in nature shall be accounted for in the income statement.

Income Tax Expense

We had income tax expense of approximately €36 thousand, €12 thousand and €2 thousand for the
years ended June 30, 2003, 2002, and 2001, respectively. The minimal income tax expenses represented the fixed annual minimum income tax payable in various European countries. In addition, we
expense withholding taxes on customer cash receipts. We do not expect significant income tax expenses/benefits in the near term or mid-term.

Impact of Changes in Exchange Rates

Fluctuations in the value of the euro against other currencies, especially the U.S. dollar, have, 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

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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
impact of these fluctuations may adversely affect our financial position and operating results.

Impact of Inflation

We believe that inflation has not had a material effect on our results of operations during each of the three years ended June 30, 2003.

5.8    LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2003 and 2002, we had cash and cash equivalents amounting to €37.9 million, and
€50.2 million. As of June 30, 2003, cash and cash equivalents were primarily held in euros, U.S. dollar and British pound for an amount equivalent to
€34.3 million, €2.9 million and €0.5 million respectively.

We
have financed our operations primarily through the sale of equity securities. We also received interest-free cash advances amounting to
€0.7 million froml'Agence Pour la Valorisation de la Recherche("ANVAR"), a French state organization, to be used for research
and development purposes. The cash advances were not subject to conditions relating to intellectual property rights such as royalty payments or ownership. As of June 30, 2003 and 2002, we had
€0 million and €0.3 million respectively of outstanding debt related to the ANVAR cash advances. On July 7, 2000, we completed an IPO of 6,000,000
common shares at the issue price of €12.80 per share. The net proceeds to us of the IPO were €68.7 million, after deduction of expenses of
€8.2 million. The proceeds from the exercise of stock options and warrants for the subscription of shares during fiscal year 2003, 2002 and 2001 were approximately
€23 thousand, €0.3 million and €1.9 million, respectively. As of June 30, 2003, we have no indebtedness, since the ANVAR
cash advance has been repaid.

As
of June 30, 2003 and 2002, we had working capital, defined as current assets less current liabilities, of €39.7 million and
€53.2 million, respectively. Cash, cash equivalents, and marketable securities were €43.8 million and €55.7 million as of
June 30, 2003 and 2002, respectively. Because we do not yet generate a positive cash position from our operations, the main indicator of our liquidity is our net cash provided by financing
activities, which includes funds from our capital increases. These have led to a significant positive cash position as of June 30, 2003 and 2002.

For
the years ended June 30, 2003 and 2002, we have a Days Sales Outstanding ("DSO") of 75 and 99 days, respectively. We calculate DSO by dividing net accounts receivable
at the end of a period by yearly revenues, which is then multiplied by the number of days in the given year. This improvement primarily resulted from a lower receivable balance as of June 30,
2003, which resulted from the continuous enhancements in the account receivable aging balances combined with the full payment of a €0.9 million license revenue booked in
June 2003. We expect that we will be able to maintain our normal level of DSO at around 90 days during fiscal year 2004.

Net
cash used by operating activities was €7.5 million, €5.3 million, and €1.6 million for the years ended
June 30, 2003, 2002, and 2001, respectively. The increase in cash used by operating activities from fiscal year 2001 to 2002 was primarily due to a higher net loss in fiscal year 2003,
excluding non-cash items such as the write-off of goodwill and stock compensation expenses. During the year ended June 30, 2003, €3.7 million of
cash was spent on exceptional operating activities, which includes technical acquisitions, payment on restructuring charges and consulting fee. The increase in cash used by operating activities from
fiscal year 2001 to 2002 was due to a higher net loss in fiscal year 2002, excluding non-cash items such as depreciation, amortization, and stock compensation expenses.

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Net cash used by investing activities was €1.6 million, €7.6 million, and €8.8 million for the years ended
June 30, 2003, 2002, and 2001, respectively. For the year ended June 30, 2003, investing activities primarily consisted of the €0.9 million purchase of shares in
Network Physics and the acquisition of computer and networking equipment. For the year ended June 30, 2002, investing activities primarily consisted of the €6.0 million
purchase of a marketable security, KLEBER 2006, and the acquisition of computer and networking equipment and leasehold improvements for new office space. For the year ended June 30, 2001,
investing activities not only included a significant amount of capital expenditures for office and computer equipment related to our growth and the move to new office in France for the corporate and
operational headquarters, but also €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 €3.0 million, inclusive of acquisition expenses and net of cash acquired.

Net
cash (used) generated by financing activities was €(3.0) million, €28 thousand and €70.1 million for the years ended
June 30, 2003, 2002 and 2001, respectively. Net cash generated by financing activities for the year ended June 30, 2003 primarily consisted of the €2.7 million
purchase of treasury stock net of proceeds from issuance of treasury stock and the €0.3 million final repayment of the ANVAR cash advance. Net cash generated by financing
activities for the year ended June 30, 2002 primarily consisted of the €259 thousand partial repayment of the ANVAR cash advance and the
€287 thousand proceeds from exercise of stock options and from subscription and exercise of warrants. Net cash generated by financing activities for the year ended
June 30, 2001 primarily consisted of the €68.7 million net proceeds of the IPO, the €1.9 million proceeds from exercise of stock options and from
subscription and exercise of warrants, the €0.2 million partial repayment of the ANVAR cash advance and the €0.1 million purchase of treasury stock net of
proceeds from issuance of treasury stock.

We
had available net operating loss carry forwards of approximately €41.9 million. Of these net operating loss carry forwards, €9.6 million
will expire between years ended June 30, 2004 and 2008, €20.0 million will expire between the years ended June 30, 2014 and 2024 and
€12.3 million have no expiration date. They are subject to review and possible adjustment by the appropriate tax 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. Information regarding operating leases is available in Note 11 to our consolidated financial statements. 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. Information regarding technological acquisitions is available in Note 15 to our consolidated financial statements.

5.9    CRITICAL ACCOUNTING POLICIES

We consider the accounting policies described below as critical in preparing our consolidated financial statements. These policies include significant estimates
made by management using information available at the time the estimations are made. A more detailed description of the significant accounting policies used by us in preparing our financial statements
is included in Note 1 to the consolidated financial statements.

Revenue recognition

Our revenue recognition policy is significant because revenue is a key component of our result from operations.

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Revenues
from sales of our licenses to our end-user clients are recognized generally when we receive a purchase order and/or other written contractual documentation
(depending on the requirement of the client), 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. We provide for allowances for estimated future returns from our clients upon shipment. We recognize reseller license revenues on the same basis as for direct sales to
end-user clients, except for an additional procedure in which we receive either a copy of the purchase order between the reseller and end-user or a written certification from
the reseller that confirms that the licenses have been sold through a named end-user. We recognize license revenues from our OEMs either after receipt of a quarterly report of their
sales made in a given period or upon receipt of a purchase order.

Our
customers purchase maintenance services for an initial period (typically 12 months) as part of the purchase of the license. Generally, the subsequent year maintenance services
are automatically renewable for subsequent 12-month periods, unless either party cancels. Payments for maintenance fees (on initial or renewal orders) 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 sold. Revenues from purchase orders received for consulting, training
and other support services are generally recognized as the services are performed. The revenue recognition policies for services are the same regardless of the sales channel used. Service revenues are
not shared between our resellers and us. End-users either enter into a service contract directly with us or with a reseller.

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. Significant discounts offered on other services are generally allocated to the delivered
license portion of the fee. 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.

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.

For
the years ended June 30, 2003, 2002 and 2001, bad debt expense amounted to €(3), €(3) and €487 thousand, respectively.

Foreign currency translation

Generally, our functional currency and our subsidiaries is the applicable local currencies in accordance with Statement of Financial Accounting Standards ("SFAS")
52, "Foreign Currency Translation", while our reporting currency is the euro.

All
our assets and liabilities and our 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.

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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 risks, uncertainties, and assumptions about us, including, among other things:



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.

Forward Looking Discussion of Available Trend Information

The statements below are part of a forward-looking discussion on available trend information based on our current knowledge and beliefs. Actual results may differ
significantly from those indicated below for the reasons set forth above under the captions "Forward Looking Statements" and "Risk Factors":

On
July 24, 2003, we announced three strategic objectives for fiscal year 2004:



We
believe that the recent difficulties faced in fiscal year 2003 by our European sales organization resulting from the low number of new clients gained overshadowed the successes
witnessed in the Asia-Pacific and Americas. On July 24, 2003, we indicated that we predict double-digit growth compounded over the next fiscal year in the Americas. A primary
objective for fiscal year 2004 shall be to ensure success of the European region. As a first step, we have reorganized the region's sales organization that shall result in an increase in the number of
quota-carrying salespeople by reallocating resources to revenue generating resources.

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5.11    OFF-BALANCE SHEET COMMITMENTS

The following table represents our contractual obligations as of June 30, 2003:

|                                  |  |   |        | Payments due by period
|--------------------------------- |  | - | ------ | ----------------------
|
|
|Long-term debt obligations        |  | € |       |                       
|Capital finance lease obligations |  |   |       |                       
|Operating lease obligations       |  |   | 10,255 |                       
|Purchase obligations              |  |   |       |                       
|Other long-term liabilities       |  |   | 71     |                       
|                                  |  |   |        |                       
|                                  |  | € | 10,326 |                       
|                                  |  |   |        |                       

ITEM 6.    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

In accordance with French law governing asociété anonyme, our affairs are managed
by our board of directors, which determines our strategy and oversees its implementation, along with our Chairman and Chief Executive Officer (Président
Directeur Général). Ourstatutsgrant 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 the board of directors the right to elect one person to assume the position
of Chairman and Chief Executive Officer or to split these functions between two different persons (the Chairman of the Board and another natural person bearing the title of Chief Executive Officer or
"Directeur Général"). Ourstatutswere modified at our general
shareholders' meeting on December 13, 2001, to provide for such a choice. (See "Item 10.2.2 General Shareholders' Meeting"). The board of directors has not yet decided to split these two
functions, which are currently performed by the same person.

6.1    BOARD OF DIRECTORS

Currently, the board of directors consists of seven members of which five are considered independent (i.e. with no relation of whatever nature with us or our
management, which may influence their judgment, according to the definition proposed by the FrenchRapport Boutondated September 23, 2002, which
provides for recommendations on corporate governance). Ourstatutscurrently provide that our board of directors shall consist of between three and
eighteen members elected by a general shareholders' meeting. Each director must own at least one of our shares. Ourstatutsprovide that each director
is elected for a term of one year, which may be renewed. Our board of directors has met nine times during the course of fiscal year 2003. Our directors' attendance rate to the nine board meetings held
during the course of fiscal year 2003 was 77%. 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. None of our directors were appointed by employees
and there is no advisor within the board of directors.

The
board of directors intends to adopt internal regulations in the coming months. Among other things, these internal regulations would provide for measures aimed at evaluating the board
of directors' performance.

The
board of directors cannot increase the number of members of the board. Only the shareholders, acting pursuant to a simple majority, can do so. Under French law, a director may be an
individual or a legal entity, but the Chairman and/or the Chief Executive Officer must be individual(s). The board of

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directors
elects the Chairman and/or Chief Executive Officer. 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 general shareholders' meeting,
however, the board of directors has the power to appoint and remove the Chairman of the board at any time.

In
consideration for their services on the board, directors are entitled to receivejetons de présence("directors'
fees"). The total annual amount ofjetons de présenceis fixed by the general
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. In April 2001, the compensation committee and the board of directors discussed and adopted rules determining the
directors' fees allocation. These rules are updated from time to time. They currently provide for a fixed and a variable remuneration to
be allocated to directors according to their regular attendance to board meetings and active participation in one or several committees.

The
Chairman and/or Chief Executive Officer are entitled to receive remuneration in addition to thejetons de présencegranted by the general shareholders' meeting. The board of directors determines this additional remuneration and in this case, the Chairman and/or Chief Executive Officer can vote on a resolution
concerning his or her remuneration.

Under
French law, the board of directors presents the year-end accounts to the shareholders and convenes general shareholders' meetings. In addition, the board of directors
reviews and monitors our economic, financial and technical strategies.

French
law and ourstatutspermit the board of directors to appoint up to five persons to whom the board of directors may delegate general
or specific powers (Directeurs Généraux Délégués).The Chief Executive
Officer proposes theDirecteurs Généraux Déléguésand the board of directors
determines their specific management powers and responsibilities. Under French law and ourstatuts, aDirecteur
Général Délégué, like the Chief Executive Officer, has broad powers to represent and bind us in
dealing with third parties. TheDirecteur Général Déléguémay be removed by
the board of directors at any time upon the proposal of the Chief Executive Officer. TheDirecteur Général
Déléguémay be held individually responsible for his/her actions if they are deemed contrary to our interests. Philippe Ozanian was
appointedDirecteur Général Déléguéby the board of directors on
September 26, 2001. Didier Lesteven was appointedDirecteur Général
Déléguéby the board of directors on July 23, 2002.

Meetings
of the board of directors, which are held as often as required in the corporate interest, are normally convened by the Chairman. According to our statuts, directors who take part in a meeting of the
board by means of a videoconference are deemed to be present, for calculating the quorum and the
majority. According to French company law and ourstatuts,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. According to our statuts, a quorum
consists of one-half of the members of the board of directors (with a minimum of two members) and decisions are taken by a
vote of the majority of the members present, deemed to be 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.

Under
French law and ourstatuts, our board of directors must give prior authorization for any security, pledge or guarantee by us. This
authorization is generally granted for a period of one year. If the

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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 us.

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 (Directeur Général and Directeurs
Généraux Délégués), permanent representatives of companies on the board of directors, spouses or
heirs of such persons and other intermediaries.

The
French Commercial Code requires directors,Directeur Général, one of its Directeurs Généraux Délégués, one
of our shareholders having a fraction of
the voting rights greater than 10%, or if a shareholder company, the company controlling it, that are considering either directly or indirectly, personally or through an intermediary, entering into an
agreement with the company, to inform the company's board of directors as well as its independent 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 independent's auditors. Any agreement entered into in violation of these requirements may be voided by the Commercial Court at our
request or any shareholder, if such agreement is contrary to the interests of the company. Moreover, French law also states that agreements which are entered into in the ordinary course of business
and with terms and conditions which are not out of the ordinary are not subject to the prior authorization of the board of directors. Nevertheless, such agreements must be disclosed by the interested
party to the Chairman of the board except when they are not significant for any parties because of their purpose or financial impact. The list and purpose of such agreements must be communicated by
the Chairman of the board and to the independent auditors.

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

Ourstatutsdetermine 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 general shareholders' meeting following his or her 75th birthday. The mandates of
aDirecteur Généralor aDirecteur Général
Déléguémay not continue beyond the general shareholders' meeting following his or her 70th birthday.

The
table below sets forth, as of September 25, 2003, 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

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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 the table below.

|Name (Year of birth)        |  | Date of
appointment |     | Term
expiry date(1) |  | Current title
with InfoVista                   |  | Main occupation outside
InfoVista |  | Other positions
or employment                                                                     
|--------------------------- |  | ------------------- | --- | ------------------- |  | ---------------------------------------------- |  | --------------------------------- |  | --------------------------------------------------------------------------------------------------
|Alain Tingaud (1954)        |  | 1995                |     | Dec. 2004           |  | Chairman, Chief Executive Officer and Director |  |                                   |  |                                                                                                   
|                            |  |                     |     |                     |  |                                                |  |                                   |  |                                                                                                   
|Jean-Paul Bernardini (1962) |  | 1998                | (2) | Dec. 2004           |  | Director                                       |  |                                  |  | Partner of PAI Partners (BNP Paribas Capital)                                                     
|                            |  |                     |     |                     |  |                                                |  |                                   |  |                                                                                                   
|Herbert May (1949)          |  | 2000                |     | Dec. 2004           |  | Director                                       |  |                                  |  | Management Consultant in Strategy, Sales, Multimedia Telecommunications, Technology and e-commerce
|Hubert Tardieu (1945)       |  | 1998                |     | Dec. 2004           |  | Director                                       |  |                                  |  | Vice-President of Global Systems Integration at Schlumberger SEMA                                 
|Peter Waal (1932)           |  | 2000                |     | Dec. 2004           |  | Director                                       |  |                                  |  | Principal of Waal Associates (consulting)                                                         
|                            |  |                     |     |                     |  |                                                |  |                                   |  |                                                                                                   
|Bruce Cohen (1943)          |  | 2001                |     | Dec. 2004           |  | Director                                       |  |                                  |  | Principal of Bruce L. Cohen & Associates                                                          
|Marco Landi (1943)          |  | 2002                |     | Dec. 2004           |  | Director                                       |  |                                  |  | Chairman of Atlantis Ventures                                                                     
|                            |  |                     |     |                     |  |                                                |  |                                   |  |                                                                                                   

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Directors Business Activities

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

Jean-Paul Bernardiniis a partner of PAI Partners that manages and advises dedicated buy-out funds and BNP
PARIBAS's private equity portfolio. He is also a director of Orange A/S, Carbone Lorraine, and is an advisor of Bouygues Telecom and LD Com.

Jean-Paul
Bernardini may be contacted at PAI Management, BNP PARIBAS Capital, 43, avenue de l'Opéra, 75002 Paris, France.

Herbert Mayis a management consultant and investor. He specializes in strategy, sales, multimedia, telecommunications, technology and
e-commerce. He is a director of In-Fusio, Inventel, POET, Netlinx and o3sis. He is also a member of the advisory Board of Danet GmbH.

Herbert
May may be contacted at Management Beratungs und Beteiligungs-GmbH, Johannisstr. 20, D-10117 Berlin, Germany.

Hubert Tardieuis Vice-President Global Systems Integration at Schlumberger SEMA Group.

Hubert
Tardieu may be contacted at Schlumberger Sema Group, 50 avenue Jean Jaurès, 92542 Montrouge Cedex, France.

Peter Waalis one of the senior partners of Waal Associates, a consulting firm specializing in telecommunications. He also currently
serves on the Technical Advisory Board of Teloptica Inc. He has previously served as a director and member of the Audit and Compensation committees of XO Communications, Inc. until
January 16, 2003.

Peter
Waal may be contacted at PO Box 796249, Dallas, TX 75379-6249, USA.

Bruce Cohenis President of Bruce L. Cohen and Associates.

Bruce
Cohen may be contacted at 163 Plymouth Road, Newton Highlands, MA 02461-1033, USA.

Marco Landiis President of Atlantis Ventures, a venture capital firm which provides assistance to senior management of
start-up companies in the technology sector, while serving as a board member at Minerva, TrustItalia and Silicon Recognition. He is also a member of the Advisory Board of Network
Physics Inc.

Marco
Landi may be contacted at Atlantis Ventures, Les TaissounièresHB3 1681 Route des Dolines, 06560 Valbonne, Sophia Antipolis, France.

6.2    EXECUTIVE OFFICERS

The table below shows, as of September 25, 2003, the name and year of birth of each of our executive officers (Executive Committee members) and their
responsibilities at our company.

|Name (Year of birth)    |  | Initially
appointed |  | Current position with InfoVista                                           
|----------------------- |  | ------------------- |  | --------------------------------------------------------------------------
|Alain Tingaud (1954)    |  | 1995                |  | Chairman and Chief Executive Officer                                      
|Philippe Ozanian (1963) |  | 2000                |  | Directeur Général Délégué,Chief Financial Officer
Executive Vice-President
|Manuel Stopnicki (1963) |  | 1995                |  | Chief Technical Officer
Executive Vice-President                          
|Didier Lesteven (1960)  |  | 2001                |  | Directeur Général Délégué,Chief Operating Officer
Executive Vice-President

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As
of September 25, 2003, no family relationships existed between any of the persons listed in this table. In addition, none of our company's material assets were employed by any
of our executive officers, directly or indirectly.

Executive Officers' Biographies

Alain Tingaudhas served as Chairman and Chief Executive Officer since 1995 (this mandate was renewed by the board
of directors on December 5, 2002). 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 ClarITeam S.A., Mediapps,
Château-on-line, Maneos Ltd, RealViz S.A. and Ecensity Corp. Mr. Tingaud is also a director of InfoVista Corp, InfoVista UK, InfoVista
(Asia-Pacific) Pte Ltd and Chairman of the board of directors of InfoVista Enterprise Solutions. Mr. Tingaud holds a diploma in Technology from the University of Poitiers.

Philippe Ozanianwas appointedDirecteur Général
Déléguéby the board of directors on September 26, 2001 (this mandate was renewed by the board of directors on
December 5, 2002) and serves as Chief Financial Officer and Executive Vice-President. Prior to joining InfoVista S.A. 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 law, a Masters in Management and further postgraduate studies in law and management.
Mr. Ozanian is a director of InfoVista Corp., InfoVista (Asia-Pacific) Pte Ltd, InfoVista BNL, InfoVista GmbH, InfoVista UK Ltd and InfoVista Enterprise Solutions.

Manuel Stopnickihas served as Chief Technology Officer and Executive Vice-President since June 1995. 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 S.A... Mr. Stopnicki is a graduate
ofEcole Supérieure d'Informatiquein Paris with a Masters in Engineering and Computer Science. Mr. Stopnicki is a director of
InfoVista Enterprise Solutions.

Didier Lestevenwas appointedDirecteur Général
Déléguéby the board of directors on July 23, 2002 (this mandate was renewed by the board of directors on December 5,
2002) and serves as Chief Operating Officer and Executive Vice-President. Before joining our Company 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 Cadresin Paris.

All
of our executive officers may be contacted at our head office, 6, rue de la Terre de Feu, 91940, Les Ulis, France.

6.3    CORPORATE GOVERNANCE

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

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6.3.1    Audit Committee

The board of directors has an audit committee, which meets at least four times a year, 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 Nasdaq's Independent Director and Audit Committee requirements.

During
the year ended June 30, 2003, the Audit committee met four times and its two members attended all meetings. Over the same period, the committee's main activities consisted
in advising and assisting the board of directors with the monitoring of:



In
addition to the Audit Committee's contact with management, our Audit Committee freely meets with our directors of finance and independent auditors, in and outside the presence of our mandataires sociauxand other senior managers.

6.3.2    Compensation Committee

The board of directors has a compensation committee, comprised of Messrs. Bernardini, Cohen, Landi and May. The compensation committee meets at least four
times a year and 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.

During
the year ended June 30, 2003, the members of the compensation committee had approximately 10 meetings. The mission of the compensation committee primarily consists of
examining, verify and/or propose and more precisely of the following:



61

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6.3.3    Investment Committee

The board of directors has an investment committee, comprised of Messrs. Cohen, Landi, 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.

During
the year ended June 30, 2003, the investment committee met on an "as needed" basis to review certain technology acquisition projects and the decisions to purchase shares in
Network Physics and related opportunities.

6.4    (RESERVED)

6.5    COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

During the fiscal year 2003, the total value of all compensation, emoluments and benefits in kind remitted to the "mandataires
sociaux" was €229,413 for Mr. Tingaud (Chairman of the Board of directors), €199,366 for Mr. Ozanian
(Directeur Général Délégué) and €304,369 for
Mr. Didier Lesteven (Directeur Général Délégué).

During
the year ended June 30, 2003, directors have not received any benefits in kind but have received fees relating to services rendered during fiscal years 2002 and 2003,
within the limits specified by the shareholders during the general shareholders' meeting held on December 13, 2001. At the general shareholders' meeting held on December 13, 2001, the
shareholders approvedjetons de presenceof €150,000 as the amount that may be allocated to the directors for the year ended
June 30, 2002 and for every fiscal year thereafter until a contrary decision of the shareholders is made, and granted the board of directors full authority to allocate these fees between
directors, in full or in part, in accordance with the terms to be established by the board of directors.

During
the year ended June 30, 2003, the fees paid to non-executive directors for services rendered during the year ended June 30, 2002 amounted to
€97,657. The fees paid to non-executive directors for services rendered during the fiscal year ended June 30, 2003 amounted to €104,688
(€76,563 paid during the year ended June 30, 2003 for services rendered during the first three quarters of that fiscal year and €28,125 paid during the fiscal
year 2004 for services rendered during the last quarter of the year ended June 30, 2003).

The
table below sets out the directors' fees paid during fiscal year 2003 and 2002 and/or for service rendered during fiscal year 2003.

Fees paid for services
rendered during
fiscal year 2002

Fees paid for services
rendered during
fiscal year 2003

Total paymentsMr. Bernardini

€
19,395

€
19,669

€
39,064Mr. Cohen(1)


9,447


18,669


28,117Mr. Landi(2)





11,057


11,057Mr. May


22,494


19,669


42,163Vertex(3) (represented by Mr. Tan)


9,531





9,531Mr. Tardieu


18,395


16,954


35,349Mr. Waal


18,395


18,669


37,064Total

€
97,657

€
104,688

€
202,344


---

62

---

The aggregate amount of gross compensation that we paid to our executive officers as a group (4 persons in all, as of June 30, 2003), for
services in all capacities during the fiscal year ended June 30, 2002 was €853,306. 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 compensation of our officers and key personnel is proposed by the compensation committee of the board of directors. See "Item 6.3.2.
Corporate GovernanceCompensation Committee" above.

There
are currently no director's service contracts between any of our directors and InfoVista S.A. or any of its subsidiaries providing for benefits upon termination of employment.

The
following table sets out the holdings of shares, stock options and warrants by directors and executive officers as of September 25, 2003.

Security type

Directors(1)

Executive
Officers(2)Options(3)

130,755(4)

713,097(5)Warrants(3)

299,998(6)

1,000(7)Shares

935,692

18,227Total

1,366,445

732,324


---

During fiscal year ended June 30, 2003, the board of directors granted a total of 120,000 stock options giving right to subscribe for the
same number of shares to only twomandataires sociauxas follows:

|                 |  | Total number of stock options granted
during fiscal year 2003 |  |                                                          |  |   
|---------------- |  | ------------------------------------------------------------- |  | -------------------------------------------------------- |  | --
|
|
|Didier Lesteven  |  | 50,000                                                        |  | 50,000
(Board Feb. 10, 2003)                             |  | € 
|Philippe Ozanian |  | 70,000                                                        |  | 50,000
(Board Feb. 10, 2003)
20,000
(Board Aug. 8, 2002) |  | €€

63

---

The table below indicates the information, which relates to the twelve employees who were granted the greatest number of stock options during year
ended June 30, 2003:

|                                                              |  | Total number of stock options granted
during fiscal year 2003 |  |                                                         |  |   
|------------------------------------------------------------- |  | ------------------------------------------------------------- |  | ------------------------------------------------------- |  | --
|
|
|Robert Seebold
(ceased to be an employee as of June 30, 2003) |  | 150,000                                                       |  | 150,000
(Board Aug. 8, 2002)                            |  | € 
|Rick Lanpher                                                  |  | 75,000                                                        |  | 75,000
(Board Feb 10, 2003)                             |  | € 
|Manuel Stopnicki                                              |  | 65,000                                                        |  | 50,000
(Board Feb 10, 2003)
15,000
(Board Aug. 8, 2002) |  | €€
|Jack Allen                                                    |  | 50,000                                                        |  | 50,000
(Board Feb 10, 2003)                             |  | € 
|Julien Dahan                                                  |  | 40,000                                                        |  | 40,000
(Board Aug. 8, 2002)                             |  | € 
|Joe Bergera                                                   |  | 20,000                                                        |  | 20,000
(Board Feb 10, 2003)                             |  | € 
|Bernard Henry                                                 |  | 19,000                                                        |  | 15,000
(Board Aug. 8, 2002)
4,000
(Board Feb 10, 2003)  |  | €€
|Pascal Pottier                                                |  | 15,500                                                        |  | 12,500
(Board Aug. 8, 2002)
3,000
(Board Feb 10, 2003)  |  | €€
|David Chapman                                                 |  | 15,000                                                        |  | 15,000
(Board Aug. 8, 2002)                             |  | € 
|Joerg Deibert                                                 |  | 15,000                                                        |  | 15,000
(Board Feb 10, 2003)                             |  | € 
|Serge Genetet                                                 |  | 15,000                                                        |  | 15,000
(Board Aug. 8, 2002)                             |  | € 
|Patrick Villeneuve                                            |  | 15,000                                                        |  | 15,000
(Board Aug. 8, 2002)                             |  | € 

64

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The table below indicates the information which relates to the three employees who exercised the greatest number of stock options during the year ended June 30, 2003:

Total number of shares exercised
during fiscal year 2003Name of the 3 employees

Exercise pricetotal

per date of grantManuel Stopnicki

10,000

10,000
(Board Sept 10, 1997)

€
1.22Jean-François Allot

5,000

5,000
(Board Sept 10, 1997)

€
1.22Serge Adda

1,250

1,250
(Board Sept 10, 1997)

€
1.22


6.6    OPTIONS AND WARRANTS TO SUBSCRIBE / PURCHASE OUR SECURITIES

6.6.1    Options giving the right to subscribe for new shares

We currently have four stock option plans giving the right to subscribe for new shares. 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 an extraordinary shareholders' meeting be convened for the shareholders to authorize the grant of stock options, with a
two-thirds majority vote. The authorization includes amongst other things the number of issuable shares and the conditions of exercise price determination. The shareholders may delegate
power to the board of directors to fix the terms and conditions of the plan and to grant the options. The authority is given for a limited period of time. Our shareholders have delegated to the board
of directors the authority to grant options, in all circumstances, giving the right to subscribe for our shares to employees and executive officers, for specified periods of time.

The
following table sets forth the key dates and figures relating to the authorization of our stock option plans currently in force and the number of issuable shares authorized.

|Name of Plan |  | Date of
shareholders
authorization |  | Date of expiry of
authorization   |  | Number of issuable
shares authorized(1) |    
|------------ |  | ---------------------------------- |  | --------------------------------- |  | --------------------------------------- | ---
|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
May 11, 2000      |  | December 9, 2004
December 9, 2004 |  | 250,000
500,000                         |    
|2001 Plan(3) |  | December 18, 2000                  |  | December 18, 2005                 |  | 2,000,000                               |    

---

Vesting information

Under the 1996 Plan, each year after the date of grant, the holder may exercise 25% of the total number of stock options held. Under all the other plans, the
vesting rules are generally that the holder may

65

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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 (21/2 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 stock option holder.

However,
our board of directors decided to modify the above vesting rules of certain stock options granted on August 19, 2003, giving the right to subscribe for 330,830 shares.
These stock options shall vest by the earlier of 25% at the end of each quarter for which we will reach break even point ("adjusted net profit"), or under the terms of the 2000 Plan.

Grant information

The following table sets out the key dates and figures relating to the grant of stock options as of September 25, 2003 (as adjusted
for the reverse stock split of May 25, 2000).

|Grant dates          |  | Period during which stock option-holder
may exercise stock options |  | Exercise
Price per
stock option
in €(1) |  | No. of issuable
shares
|-------------------- |  | ------------------------------------------------------------------ |  | --------------------------------------- |  | ----------------------
|1996 Plan            |  |                                                                    |  |                                         |  |                       
|September 26, 1996   |  | September 1997 - September 2001                                    |  | 0.30                                    |  | 0                     
|December 12, 1996    |  | December 1997 - December 2001                                      |  | 0.30                                    |  | 0                     
|September 10, 1997   |  | September 1998 - September 2002                                    |  | 1.22                                    |  | 0                     
|October 27, 1997     |  | October 1998 - October 2002                                        |  | 1.46                                    |  | 0                     
|February 5, 1998     |  | February 1999 - February 2003                                      |  | 1.75                                    |  | 0                     
|                     |  |                                                                    |  |                                         |  |                       
|Totals per plan      |  | 0                                                                 
|                     |  |                                                                    |  |                                         |  |                       
|1999 Plan            |  |                                                                    |  |                                         |  |                       
|April 9, 1999        |  | May 2000 - April 2007                                              |  | 1.77                                    |  | 461,912               
|July 9, 1999         |  | August 2000 - July 2007                                            |  | 1.77                                    |  | 69,410                
|October 28, 1999     |  | November 2000 - October 2007                                       |  | 3.05                                    |  | 74,751                
|January 28, 2000     |  | February 2001 - January 2008                                       |  | 4.88                                    |  | 45,750                
|March 31, 2000       |  | March 2001 - March 2008                                            |  | 12.20                                   |  | 5,500                 
|August 19, 2003      |  | August 19, 2004 - August 19, 2011                                  |  | 2.15                                    |  | 257,100               
|                     |  |                                                                    |  |                                         |  |                       
|Totals per plan      |  | 914,423                                                           
|                     |  |                                                                    |  |                                         |  |                       
|2000 Plan            |  |                                                                    |  |                                         |  |                       
|January 28, 2000     |  | January 2001 - January 2008                                        |  | 4.88                                    |  | 41,625                
|March 10, 2000       |  | March 2001 - March 2008                                            |  | 12.20                                   |  | 47,500                
|March 31, 2000       |  | March 2001 - March 2008                                            |  | 12.20                                   |  | 30,750                
|September 4, 2000(2) |  | September 2001 - September 2008                                    |  | 37.53                                   |  | 2,500                 
|October 19, 2000(3)  |  | October 2001 - October 2008                                        |  | 38.50                                   |  | 1,000                 
|February 10, 2003    |  | February 2004 - February 2011                                      |  | 1.52                                    |  | 150,000               
|August 19, 2003      |  | August 2004(8) - August 2011                                       |  | 2.15                                    |  | 396,530               
|                     |  |                                                                    |  |                                         |  |                       
|Totals per plan      |  | 669,905                                                           
|                     |  |                                                                    |  |                                         |  |                       
|                     |  |                                                                    |  |                                         |  |                       

66

---

|2001 Plan           |  |                                 |  |       |  |        
|------------------- |  | ------------------------------- |  | ----- |  | -------
|January 24, 2001(4) |  | January 2002 - January 2011     |  | 31.00 |  | 21,500 
|April 23, 2001(5)   |  | April 2002 - April 2011         |  | 10.83 |  | 45,850 
|June 20, 2001(6)    |  | June 2002 - June 2011           |  | 8.14  |  | 43,150 
|September 26, 2001  |  | September 2002 - September 2011 |  | 2.44  |  | 83,600 
|December 13, 2001   |  | December 2002 - December 2012   |  | 4.26  |  | 23,650 
|February 7, 2002    |  | February 2003 - February 2012   |  | 4.31  |  | 0      
|May 13, 2002(7)     |  | September 2001 - May 2012       |  | 2.80  |  | 775,655
|August 8, 2002      |  | August 2003 - August 2012       |  | 1.84  |  | 344,400
|February 10, 2003   |  | February 2004 - February 2013   |  | 1.52  |  | 242,000
|                    |  |                                 |  |       |  |        
|Totals per plan     |  | 1,579,805                      
|                    |  |                                 |  |       |  |        

---

Under French law, we cannot grant stock options to members of the board of directors (other than the Chairman and/or Chief Executive Officer or Directeurs
Généraux Délégués) who are not employees. All stock options
granted under the 1996 Plan have a term of five years, all stock options granted under the 1999 Plan and the 2000 Plan have a maximum term of eight years and all stock options granted under the 2001
Plan have a maximum term of ten years. If stock option holders, French residents and subject to paying social charges in France do not transfer their shares for a specified holding period following
the grant of the stock option, under certain conditions, they benefit from a favorable tax treatment on the realized gain upon the subsequent sales of the shares issued upon the exercise of the stock
options. In general, if a stock option holder dies during the period of the options, such person's stock 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. No stock option may be transferred by the stock option holder other than by will or the laws of intestacy.

If
a stock option holder subject to social charges in France at the date of grant of stock options, sells or otherwise converts the shares in bearer form issued from an exercise of such
stock 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 stock option exercise price and the fair value of the shares at the exercise date is treated as salary income if the
shares are sold or otherwise disposed of within the said holding period. As a reminder, any underwatered options only leads to the payment by the employees of social charges as of the date of

67

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This
rule applies to all our stock options, whatever the grant date. Because our existing stock option plans are not structured to enforce this holding period, if any of our stock option
holders exercise stock 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 stock options granted before April 27, 2000, the holding period is five years from the date of grant. For stock options granted on or after
that date, the holding period is reduced to four years.

On
July 23, 2001, the board of directors resolved, under certain conditions, to make available to employees holding stock options with an exercise price higher than
€30.00 per share, an offer to surrender all or some of the stock options granted to them on or after September 1, 2000, without limitation as to exercise price. In exchange,
under certain conditions, such employees were granted new stock options giving the right to subscribe to the same number of shares as the surrendered stock options by the board of directors, on
May 13, 2002. The exercise price for the new stock options was fixed at €2.80 in accordance with the rules of the 2001 Plan and otherwise subject to the conditions set forth in
the Schedule TO filed with the Securities and Exchange Commission ("SEC") on August 30, 2001, the commencement date of the offer period. 1,021,945 stock
options in total were eligible for cancellation of which 950,265 stock options were cancelled under the terms of the offer. On May 13, 2002, 884,365 stock options were re-granted.

Stock
options generally expire thirty days after we receive or give notice of a stock option holder's termination of employment. In the past, the board of directors has modified this
expiration term for certain employees. As of September 25, 2003, stock options giving the right to subscribe to 317,750 shares were subject to such modifications.

6.6.2    Options giving the right to purchase existing shares

We currently have one stock option plan giving the right to purchase existing shares. Pursuant to the authorization granted by the general shareholders' meeting
held on December 5, 2002 giving the right to purchase up to an aggregate of 300,000 existing shares, our board of directors adopted a new plan on August 19, 2003 ("2003 Plan").

Authorization information

French law requires that an extraordinary shareholders' meeting be convened for the shareholders to authorize the grant of stock options, with a
two-thirds majority vote. The authorization includes amongst other things the number of issuable shares and the determination exercise price. The shareholders may delegate power to the
board of directors to fix the terms and conditions of the plan and to grant the stock options. The authority is given for a limited period of time. Our shareholders have delegated to the board of
directors, the authority to grant stock options, in all circumstances, giving the right to subscribe for our shares to employees and executive officers, for specified periods of time.

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

Name of Plan

Date of
shareholders
authorization

Date of expiry of
authorization

Number of
issuable shares
authorized(1)2003 Plan

December 5, 2002

February 4, 2006

300,000


---

68

---



Vesting information

Under the 2003 Plan, the vesting rules are generally that the holder may exercise 25% of the stock 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 (21/2 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 stock option holder.

Grant information

The following table sets out the key dates and figures relating to the grant of stock options as of September 25, 2003 (as adjusted for the reverse stock
split of May 25, 2000)

|Grant dates     |  | Period during which stock option-holder
may exercise stock options |  | Exercise
Price per
stock option |      | No. of issuable
shares
|--------------- |  | ------------------------------------------------------------------ |  | ------------------------------- | ---- | ----------------------
|2003 Plan       |  |                                                                    |  |                                 |      |                       
|August 19, 2003 |  | August 19, 2004 - August 19, 2013                                  |  | €                               | 2.15 |                       
|                |  |                                                                    |  |                                 |      |                       
|Total per plan  |  | 295,180                                                           
|                |  |                                                                    |  |                                 |      |                       

Under
French law, we cannot grant stock options to members of the board of directors (other than the Chairman and/or Chief Executive Officer orDirecteurs
Généraux Délégués) who are not employees. All stock options granted under the 2003 Plan have a
maximum term of ten years. If stock option holders who have to pay social charges in France do not transfer their shares for a specified holding period following the grant of the stock option, under
certain conditions, they benefit from a favorable tax treatment on the realized gain upon the subsequent sales of the shares issued upon the exercise of the stock options. In general, if a stock
option holder dies during his or her employment, such person's stock 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. No stock
option may be transferred by the stock option holder other than by will or the laws of intestacy.

If
a stock option holder who is subjected to social charges in France at the date of grant of stock options, sells or otherwise transfers the shares resulting from an exercise of such
stock 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 stock option exercise price and the fair value of the shares at the exercise 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 stock options, whatever the grant date. Because our existing stock option plans are not structured
to enforce this holding period, if any of our stock option holders exercise stock 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 stock option holders. For stock options granted under 2003 Plan, the holding period is four years from the date
of grant.

6.6.3 Warrants

We have issued eight series of warrants, three of which remain outstanding. The key dates and figures relating to the warrants as of September 25, 2003 are
set out in the following table. Most of the warrants were issued to current shareholders and/or executive officers and/or directors. However, Mr. Gilles Assant holds 38,000 warrants,
Mr. Robert Troy was granted 10,000 warrants and Mr. Ozanian, who has subsequently become an employee, was granted 2,000 warrants, all of which may be exercised for shares in a

69

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two-to-one
ratio; Mr. P. Balachandran holds 15,000 warrants and Mr. Frank Chen 10,000 warrants (one warrant giving the right to subscribe for one share).

On
February 10, 2003, the board of directors granted 165,624 warrants out of the 195,624 warrants authorized. Consequently, the warrants which have been duly subscribed for are
held by the following
persons: Mr Waal, 15,624 warrants; Mr. Bernardini, 25,000 warrants; Mr. May, 25,000 warrants; Mr. Cohen, 25,000 warrants; Mr. Tardieu, 25,000 warrants, Mr. Landi,
25,000 warrants and Mr. Tingaud, 25,000 warrants.

Table
of key dates and figures relating to the grant of warrants as of September 25, 2003 (as adjusted for the reverse stock split of May 25, 2000).

|Name of series |  | Date of
shareholders'
authorization |  | Period during
which holder
may exercise
warrants |  | Maximum no. of
shares
authorized by the
shareholders |  | Maximum no. of
issuable shares |     | Subscription
price in |      | Exercise
price per
warrant in
€(1) |   | No. of
warrants
granted to
executive
officers |     | No. of
executive
officers
concerned
|-------------- |  | ----------------------------------- |  | ------------------------------------------------ |  | ---------------------------------------------------- |  | ------------------------------ | --- | --------------------- | ---- | ---------------------------------- | - | --------------------------------------------- | --- | -----------------------------------
|Series C       |  | December 9, 1999                    |  | December 9, 1999 to December 9, 2004             |  | 50,000                                               |  | 28,750                         | (2) | €                     | 0.02 |                                    | € | 4.88                                          |     | 1,000                              
|Series E       |  | December, 13 2001                   |  | February 7, 2002 to February 6, 2007             |  | 195,624                                              |  | 140,624                        |     | €                     | 0.04 |                                    | € | 4.31                                          |     | 0                                  
|Series F(3)    |  | December 5, 2002                    |  | February 10, 2003 to February 9, 2008            |  | 190,624                                              |  | 165,624                        |     | €                     | 0.02 | (3)                                | € | 1.52                                          | (3) | 25,000                             
|               |  |                                     |  |                                                  |  |                                                      |  |                                |     |                       |      |                                    |   |                                               |     |                                    
|               |  | Total per series                    |  | 436,248                                          |  | 334,998                                              |  |                                |     |                       |      |                                    |   | 26,000                                        |     |                                    
|               |  |                                     |  |                                                  |  |                                                      |  |                                |     |                       |      |                                    |   |                                               |     |                                    

---

6.7    EMPLOYEES

6.7.1    Employee distribution

As of June 30, 2003, we employed 189 persons, excluding independent workers, trainees and temporary workers.



As of June 30,2003

2002

2001General and administrative

23

35

43Sales and marketing

76

84

92Research and development

47

63

54Customer service

43

45

54Total Employees

189

227

243


70

---



As of June 30,2003

2002

2001Employees

10

19

21Engineers/Managers

175

204

216Executive officers

4

4

6Total Employees

189

227

243




As of June 30,2003

2002

2001Europe

124

151

153Americas

51

57

70Asia-Pacific

14

19

20Total Employees

189

227

243


Generally,
employees are hired for an unlimited period of time. Other employment contracts are used to replace employees who are temporarily absent.

As
of June 30, 2003, the average age of our employees was 35 years old. For the year ended June 30, 2003, our employee turnover rate, defined as the voluntarily and
involuntarily departures divided by the average number of employees, was 38.8%.

6.7.2    Reduction in workforce

During the fiscal year 2003, we implemented a restructuring plan that evoked a reduction in workforce of 30 employees. This reduction primarily resulted from
restructuring of our organization to better align our operating expenses with revenues. In France, the reduction in workforce was mainly completed through a social plan related to the termination of
seven employees.

6.7.3    Remuneration

Remuneration policy

We believe that our salary policy is equitable and linked to individual and collective performance, especially at a time when each employee has to give his or her
best efforts to contribute to our objectives of profitability.

For
the year ended June 30, 2003, personnel costs amounted to €20.9 million and the average annual salary of our employees was approximately
€71 thousand.

Profit sharing and Share purchase schemes

On March 6, 2000, we entered into a profit sharing agreement ("Plan d'Intéressement") with
our employees in France for the duration of three years. On July 1, 2002 a new three-year profit sharing agreement was implemented, which replaced the plan of March 6, 2000.

On
June 1, 2001, we put in place an employee savings plan ("Plan d'Epargne d'Entreprise") for our employees in France as a
complement to the above profit sharing plan. AXA Gestion Intéressement manages the plan, which allows the French employees to invest either the funds derived from the

71

---

aforementioned
profit sharing agreement or their individual contributions into a choice of three funds. One of the funds represents an investment in our shares.

For
the year ended June 30, 2003, the amount of payments made to employees under our profit sharing agreement was €193,725 of which €118,358 was
invested in the employee savings plan.

The
executive officers beneficiating from the employee savings plan are Mr. Stopnicki, Mr. Ozanian and Mr. Lesteven. Certain employees benefit from group life
insurance policies.

6.7.4    Social relations and collective agreements

Social relations

A work council exists in France, whose members are our employees that meet regularly in order to discuss issues related to our personnel and the economic
situation. Our social and professional relations are generally good with our employees.

Collective agreements

As of February 1, 2000, French employers became subject to a new law reducing the workweek to 35 hours for French-based employees. Accordingly, we
signed an agreement with the work council on March 8, 2000, which retroactively reduced the number of working hours for French-based employees from February 1, 2000.

In
addition, employment contracts with all of our employees in France are subject to the provisions of the collective agreement SYNTEC ("convention collective
nationale des bureaux d'études techniques, cabinets d'ingénieurs-conseils et sociétés de conseils"), the collective
bargaining agreement applicable to employees in our industry.

6.7.5    Health and safety conditions

We maintain good work and health conditions for our employees by providing them with pleasant and comfortable premises. In each country, we adapt our health
policy to local requirements. In France, members of the health and safety committee meet regularly, in order to discuss health and safety issues.

6.7.6    Training for personnel

During the years ended June 30, 2003 and 2002, we expensed €0.1 million for the training and development of our personnel,
corresponding to 0.4% and 0.3% of our revenues, respectively. The majority of the training was for the benefit of personnel in Europe for the departments of sales and marketing, research and
development and customer service. The purpose of the aforementioned training was to reinforce the professional competencies and to facilitate organizational changes. We consider that training and
development represent an important element to our overall strategy. We seek to develop three main competencies: professions, techniques and personal development.

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".

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ITEM 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.1    MAJOR SHAREHOLDERS AS OF SEPTEMBER 25, 2003

We obtained the information, as set forth in the table below, as of September 25, 2003 with respect to each person known by us to beneficially own more
than 2% 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.

|                                        |  | Number
of shares |  | % of share
capital |  | % of voting
rights
|--------------------------------------- |  | ---------------- |  | ------------------ |  | ------------------
|Shareholders                            |  |                  |  |                    |  |                   
|Société Centrale d'Investissements      |  | 1,918,012        |  | 10.20              |  | 10.63             
|FMR Corp./Fidelity International Ltd(1) |  | 1,880,264        |  | 10.00              |  | 10.42             
|Odyssée Venture S.A.S.                  |  | 1,309,936        |  | 6.97               |  | 7.26              
|CV Sofinnova Ventures                   |  | 602,066          |  | 3.20               |  | 3.34              
|Directors & Executive Officers          |  |                  |  |                    |  |                   
|Alain Tingaud(2)                        |  | 924,053          |  | 4.91               |  | 5.12              
|Jean-Paul Bernardini                    |  | 1                |  | 0.00               |  | 0.00              
|Herbert May                             |  | 1                |  | 0.00               |  | 0.00              
|Hubert Tardieu(1)                       |  | 2 128            |  | 0.01               |  | 0.01              
|Peter Waal                              |  | 9,376            |  | 0.05               |  | 0.05              
|Bruce Cohen                             |  | 10               |  | 0.00               |  | 0.00              
|Marco Landi                             |  | 1,000            |  | 0.01               |  | 0.01              
|Philippe Ozanian                        |  | 6,482            |  | 0.03               |  | 0.04              
|Manuel Stopnicki                        |  | 8,263            |  | 0.04               |  | 0.05              
|Didier Lesteven                         |  | 3,482            |  | 0.02               |  | 0.02              
|InfoVista S.A.                          |  | 764,634          |  | 4.07               |  | 0.00              
|Others(3)                               |  | 11,375,554       |  | 60.49              |  | 63.05             
|                                        |  |                  |  |                    |  |                   
|Total                                   |  | 18,805,262       |  | 100.00             |  | 100.00            
|                                        |  |                  |  |                    |  |                   

---

We are not aware of any lock-up or other holding obligations in force affecting our shares or ADSs held by our directors, executive
officers, or any shareholders.

To
our knowledge, as of September 25, 2003, (i) the number of outstanding ADSs was 887,352 and (ii) the number of registered ADS holders was nine.

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 over us.

We
are not aware of any shareholders agreement, or of any other shareholders controlling directly or indirectly more than 2% of our shares or voting rights.

7.2    SIGNIFICANT CHANGES TO SHAREHOLDINGS OVER THE LAST THREE 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 number of shares, percentage ownership of share capital and voting rights of our major shareholders on the date of our

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principal
capital increases and/or sales of shares during the period. We generally do not have any knowledge behind the reasons of the fluctuations in our stock price.

|                                                 |  | June 30, 2003 |  | June 30, 2002 |  | June 30, 2001
|------------------------------------------------ |  | ------------- |  | ------------- |  | -------------
|
|Société Centrale d'Investissements               |  | 1,918,012     |  | 10.20         |  | 10.63        
|FMR Corp et Fidelity International Limited(1)(2) |  | 1,842,713     |  | 9.80          |  | 10.22        
|Odyssée Venture S.A.S.(1)(3)                     |  | 1,309,936     |  | 6.97          |  | 7.26         
|Alain Tingaud(1)                                 |  | 924,053       |  | 4.91          |  | 5.12         
|Vertex Technology Fund Ltd(4)                    |  | 805,670       |  | 4.29          |  | 4.47         
|CV Sofinnova Ventures Partners III               |  | 602,066       |  | 3.20          |  | 3.34         
|Innovacom 1 & 2(5)                               |  | 0             |  | 0             |  | 0            
|Strategic European Technologie N.V.(6)           |  | 0             |  | 0             |  | 0            
|Alain Ries(1)                                    |  | 0             |  | 0             |  | 0            
|InfoVista S.A                                    |  | 764,634       |  | 4.07          |  | 0.00         
|Others(7)                                        |  | 10,635,553    |  | 56.56         |  | 58.96        
|                                                 |  |               |  |               |  |              
|Total                                            |  | 18,802,637    |  | 100           |  | 100          
|                                                 |  |               |  |               |  |              

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7.3    RELATED PARTY TRANSACTIONS

Other than as identified in Note 16 of the consolidated financial statements, we are not a party to any material transaction with a related party, or to a
transaction in which we have received commercial terms not available to other independent third parties.

ITEM 8.    FINANCIAL INFORMATION

8.1    CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

See "Item 18. Financial Statements", for a list of the financial statements filed with this document

8.2    LEGAL PROCEEDINGS

We are involved in various routine legal proceedings incidental to the ordinary course of our business. We believe that the outcome of all pending legal
proceedings will not have a significant effect on our financial condition or operational results. For additional information see "Item 4. Information on the CompanyLegal
Proceedings". There is currently no litigation in which a director or an executive officer has interests which contradict ours.

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8.3    DIVIDEND POLICY

We have not declared dividends for the past three fiscal years. We expect to use all available funds for the financing of our activities, as a result we do not
plan on declaring dividends in the near future. For additional information on our dividend policy see "Item 10. Additional informationDividends".

8.4    SIGNIFICANT CHANGES

We have set forth our financial condition as of June 30, 2003 in "Item 5. Operating and Financial Review and Prospects", "Item 11.
Quantitative and Qualitative Disclosures About Market Risks" and "Item 18. Financial Statements." Other than as set forth in Note 14 to the Consolidated Financial Statements, we are not
aware of any significant changes affecting our financial condition since June 30, 2003.

ITEM 9.    THE OFFER AND LISTING

A new law has been recently enacted in France, (law no 2003-706 dated August 1, 2003 relating to financial security) which
provides for the creation of a new entity, theAutorités des Marchés Financiers(the "AMF") resulting from the merger of
theCommission des Opérations de Bourse(the "COB") and theConseil de Discipline de la Gestion
Financière(the "CDGF"). The AMF, an independent governmental authority, will be in charge of the protection of investors, investors' information and proper
running of the securities markets. However, this merger has not been implemented yet but should be in the near future.

Therefore,
this Annual Report on Form 20-F will describe the French regulatory organization as it exists as of the date of this report.

9.1    MARKETS

Our shares have been listed on theNouveau Marchéof Euronext Paris S.A. ("Euronext Paris") and our
ADSs have been listed on Nasdaq in the U.S. since July 7, 2000. We have been included in the Euronext Paris IT CAC since July, 2000, on the SBF 250 index since December 21, 2000, the
Euronext Paris IT 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 IT CAC index is an index of French technology companies, which included 165 listed securities as of September 25, 2003. The IT CAC 50 indexes the 50
largest and most liquid stocks from the IT CAC.

9.2    PRICE HISTORY OF THE STOCK

This table provides the high and low closing prices for our shares on theNouveau Marchéand our
ADSs on Nasdaq since July 1, 2002.

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Volume of transactions and closing price evolution on theNouveau Marchéand on Nasdaq

|                               |  | Price of Shares in euros(1) |  | Price of ADSs in US
dollars(2)
|------------------------------ |  | --------------------------- |  | ------------------------------
|
|6 months to September 25, 2003 |  |                             |  |                               
|2003    September              |  | 2.55                        |  | 2.11                          
|2003    August                 |  | 2.28                        |  | 2.10                          
|2003    July                   |  | 2.63                        |  | 2.02                          
|2003    June                   |  | 2.20                        |  | 1.80                          
|2003    May                    |  | 1.85                        |  | 1.55                          
|2003    April                  |  | 1.74                        |  | 1.21                          
|
|June 30, 2003                  |  | 2.20                        |  | 1.21                          
|March 31, 2003                 |  | 1.90                        |  | 1.21                          
|December 31, 2002              |  | 2.31                        |  | 1.32                          
|September 30, 2002             |  | 2.05                        |  | 1.15                          
|
|June 30, 2002                  |  | 4.00                        |  | 1.62                          
|March 31, 2002                 |  | 4.79                        |  | 3.40                          
|December 31, 2001              |  | 4.83                        |  | 2.28                          
|September 30, 2001             |  | 6.20                        |  | 2.10                          
|
|July 1, 2002 to June 30, 2003  |  | 2.31                        |  | 1.15                          
|July 1, 2001 to June 30, 2002  |  | 6.20                        |  | 1.62                          

---

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The following charts represent the price history of the stock on theNouveau Marchéand Nasdaq from July 7, 2000 to September 25, 2003.

LOGO

LOGO

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9.3    GENERAL

On September 22, 2000, upon successful completion of an exchange offer, the ParisBourseSBF S.A., 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 cash markets are traded and cleared over common Euronext platforms. NSC is the common platform for trading and Clearing 21 for the clearing, LIFFE
CONNECT; the LIFFE trading platform is to be used for all Euronext futures and options trading. In addition, Euronext anticipates the implementation of a central clearinghouse platform
and of settlement and custody structures over a common system. 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.

Euronext
N.V. is listed on thePremier Marchéof Euronext Paris since July 2001. In January 2002, Euronext
N.V acquired the London International Financial Futures and Options Exchange (LIFFE), London's derivatives market. The combination of LIFFE and Euronext N.V. will enable, among other things, the
volume of derivatives business conducted through LIFFE CONNECT trading platform to treble.

Since
February 6, 2002,Bolsa de Valores de Lisboa e Porto(BVLP) has become a wholly-owned subsidiary of Euronext N.V. and is
therefore renamed Euronext Lisbon.

Securities
approved for listing by Euronext Paris are traded in one of three markets. The securities of most large public companies are listed on thePremier
Marché, with theSecond Marchéavailable for small and medium-sized companies. Trading on the Nouveau Marchéwas 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, theMarché Libre OTC, which is also operated by Euronext Paris.

9.4    THE NOUVEAU MARCHÉ

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

TheNouveau Marchéis an electronic market which combines a central order book with market-making to ensure greater
liquidity. Member firms of theNouveau Marchémay act in one or more capacities: Listing Advisers/Market-Makers
(Introducteurs/Teneurs de Marché, or "ITMs") or broker-dealers
(Négociateurs-Courtiers).

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

Shares
listed on theNouveau Marchéare placed in one of two categories depending on the volume of transactions, continuorfixing.

The
Shares of InfoVista are placed in the categorycontinuwhich includes the most actively traded shares on the Nouveau Marché. Such trading takes
place on each business day from 9:00 a.m. to 5:25 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 at
5:30 p.m.

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For shares that are not traded continuously, retail orders on theNouveau Marchéare 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 theNouveau
Marchémay 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 aContinusecurity 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 4-minute period if the price varies by more than 5% from the last traded price. Euronext Paris may also suspend trading of a security
listed on theNouveau Marchéin certain other limited circumstances, including, for example, the occurrence of unusual trading activity
in such security. In addition, in exceptional cases, theConseil des Marchés Financiers("CMF") and the Commission des opérations de bourse("COB") may also suspend trading.

Trades
of securities listed on theNouveau Marchéare settled on a cash basis on the third trading day following the trade.
However, market intermediaries are also permitted to offer investors a deferred settlement service (service de règlement
différéor SRD) for a fee. The SRD allows investors who elect this service to benefit from leverage and other special features of the monthly
settlement market. The deferred settlement service is only available for trades in securities which have both a total market capitalization of at least €1 billion and a daily
average volume of trades of at least €1 million. Our shares are not eligible for the deferred settlement service.

Prior
to any transfer of securities held in registered form on theNouveau Marché, 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 theNouveau
Marchéare cleared by Clearnet and settled through Clearing 21 and Euroclear France. A fee or commission is payable to the ITM or broker-dealer or other agent
involved in the transaction.

BNP
Paribas Equities France acts asTeneur de Marchéwith respect to the shares traded on the Nouveau Marché.

ITEM 10.    ADDITIONAL INFORMATION

10.1    MEMORANDUM AND ARTICLES OF ASSOCIATION

For our registration details as well as legal objects see "Item 4. Information on the Company".

For
a complete description of the board of directors' powers under French law and ourstatuts,see "Item 6. Directors, Senior
Management, and Employees-Board of Directors"

In
this section, we summarize material information concerning our share capital, together with material provisions of applicable French law and our statuts. This information does not purport to be complete
and is qualified in its entirety by reference to our statuts, and to the applicable provisions of French law. An unofficial English translation of our statutsis included as an exhibit to this report. You may obtain copies of ourstatutsin French from
theGreffeof the Registry of Commerce and Companies of Evry, France. Please refer to those full documents for additional details.

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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 general
shareholders' meetings: ordinary and extraordinary.

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



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



10.2.2    General Shareholders' Meetings

French company law requires our board of directors to convene a general shareholders' meeting 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 theTribunal 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
general shareholders' meeting, our independent auditors may call the meeting. In a bankruptcy, our liquidator or court-appointed agent may also call a general shareholders' meeting in some instances.
Any of the following may request the court to appoint an agent:



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10.2.3    Notice of Shareholders' Meetings

We must announce general meetings at least thirty days in advance by means ofavis de reunion(a preliminary
notice) which is published in theBulletin des Annonces Légales Obligatoires, ("BALO"). The preliminary notice must have been previously
sent to the COB. It must 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 fifteen days prior to the date set for the meeting on first call, and at least six days before any second call, we must send anavis de
convocation(final notice) containing, among other things, the final agenda, time and place of the meeting and other information. The final notice must be sent by mail to all
registered shareholders who have held shares for at least one month prior to the date of the preliminary notice and published in a newspaper authorized to publish legal announcements in the département(local administrative region) 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 general shareholders' meeting s 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 ten days of the publication of the preliminary notice in the BALO by:



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

In
addition, 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 ourstatuts. 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.

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Ourstatutsprovide that, if our board of directors so decide it, the shareholders may participate in the general shareholders' meetings
by videoconference or by other means of telecommunication permitting shareholders' identification in accordance with the applicable laws and regulations.

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 and vote in general meetings either in person, by proxy or by videoconference or by any means of telecommunication which allow them to be
identified.

Proxies
will be sent to any shareholder on request with, among other things, a draft of the resolutions to be passed at the relevant meeting. 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 or if the shareholder is not a French resident by an intermediary registered under the conditions set forth by French law. 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 general 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:



The
quorum requirement is 331/3% 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 duly reconvened, a further failure to establish a quorum will not prevent
business being transacted. 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.

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

Abstention
from voting by those present in person or by videoconference or any 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.

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 general 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 French law or ourstatuts. "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 French company
law or ourstatuts.

10.4.1    Legal Reserve

The French company law provides that Frenchsociétés anonymessuch as our company
must allocate five percent 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. As of June 30, 2003, our legal reserve was €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 general shareholders' meeting. 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 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 general shareholders' meeting is required.

In
addition, ourstatutsauthorize our shareholders, in an ordinary general meeting, to authorize the grant to each shareholder of an
option to receive all or part of any dividends either in cash or in our shares.

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 general 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

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shareholders
in an ordinary general meeting. We have not distributed any dividends during the past three fiscal years.

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:



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



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 general 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 "Item 10.2. Shareholders' Meetings and Voting
Rights."

The
shareholders may delegate the right to carry out any increase in share capital (other than for contribution in-kind) 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 (except for a contribution in kind or
when its results from an earlier issue of securities giving right to shares), 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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On
December 13, 2001, the shareholders authorized our board of directors for a period of 26 months to:



On
December 5, 2002, the shareholders authorized our board of directors, for a period of one year, to use the authorizations referred to above to increase the share capital in the
context of a tender offer or exchange offer.

Additionally,
at the December 5, 2002 shareholders' meeting, the shareholders authorized the board of directors to increase the share capital up to an annual nominal amount equal
to 400,000 new shares with a nominal value of €0.54 per share through the issuance of shares or any other securities giving rights to subscribe to our share capital for those employees
participating in the employee savings plan.

New
resolutions with respect to the aforementioned authorizations will be submitted to the next general shareholders' meeting called to approve our financial statements for the year
ended June 30, 2003.

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 shareholders 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 apro ratabasis. 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 of shares. 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

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a
limited period of time. Shareholders also may notify us that they wish to waive their own preemptive subscription rights with respect to any particular offering of shares if they so choose.

10.7    FORM, HOLDING AND TRANSFER OF SHARES

10.7.1    Form of Shares

Ourstatutsprovide 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 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 statutspermit us to request
that Euroclear France provide 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. The intermediary must declare his position as an intermediary holding shares on behalf of the beneficial owner. Consequently, the owner of the shares recorded in the collective account
or in several individual accounts by an intermediary will be represented in the general shareholders' meetings by this intermediary.

10.7.3    Transfer of Shares

Ourstatutsdo 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 distributedpro rataamong shareholders in proportion to the nominal value of their
shareholdings.

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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%, 331/3%, 50% or 662/3% 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 five trading 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 CMF (Conseil des Marchés Financiers), 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 ten trading 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 who comes to own in excess of 331/3% 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.

In
addition, ourstatutsprovide that any person acting alone or in concert who becomes, directly or indirectly, the owner of more than
two percent of our share capital or voting rights must notify us within fifteen 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 two percent or whole multiples of two percent. If a person does not comply with this notification requirement,
one or more shareholders holding two percent or more of our share capital or voting rights may require a general shareholders' meeting to deprive the shares in excess of the relevant threshold of
voting rights for all general shareholders' meetings for two years following the date on which the owner complies with the notification requirements.

In
order to permit shareholders to give the required notice, we must publish in the BALO, not later than fifteen calendar days after the general shareholders' meeting, 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 general shareholders'
meetings, we must publish in the BALO, within fifteen 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 weeklyavis(notice), 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 general
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 €18,000 fine.

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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:



We
may not cancel more than 10% of our outstanding share capital over any 24-month period. In addition, we may not repurchase under either of the second or third case cited
above, for 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.

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 apro ratabasis.

Pursuant
to the authorization granted by the general shareholders' meeting held on December 5, 2002, our board of directors is authorized to repurchase up to 10% of our total
outstanding share capital at a maximum price per share of €6.89 and a minimum price per share of €1.30 per share. The total amount of purchase may not exceed
€15 million. This authorization will expire on the date of the general shareholders' meeting called to approve the accounts for the fiscal year ending June 30, 2003. The
board may use this authorization for the purpose of implementing stock purchase plans for the benefit of our employees or executives or those of our affiliates; providing consideration in the context
of an acquisition or an exchange of company shares (especially as part of external growth operations); delivering securities upon the exercise of convertible or exchangeable securities; stabilizing
the price of our shares; purchasing and selling shares depending on market conditions and in compliance with the relevant regulations; and canceling shares, subject the adoption of a specific
resolution by the extraordinary general meeting of shareholders. Anote d'informationwas filed with the COB on November 20, 2002 and the COB has
granted the visa number 02-1160. A new resolution will be submitted to this effect to the next general shareholders' meeting called to approve our financial statements for the year ended
June 30, 2003. We intend to file anote d'informationwith the COB about the new share repurchase program before the next general
shareholders' meeting.

In
addition, at the December 5, 2002 general shareholders' meeting, the shareholders granted the board of directors the authorization to cancel some or all of the shares purchased
under the share repurchase program up to a limit of 10% of our share capital in any one 24-month period. This authorization will expire on the date of the general shareholders' meeting
called to approve the accounts for the fiscal year ending June 30, 2003.

Between
July 1, 2000 and September 25, 2003, under authorization that our board of directors received from the shareholders on December 18, 2000, December 13,
2001 and December 5, 2002, we

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repurchased
1,957,996 shares for a total of €3.3 million and sold 113,189 shares for a total of €0.5 million and canceled 1,080,173 shares for a total of
€1.2 million. On September 25, 2003, we held 764,634 shares or 4.07% of our share capital in treasury. We have not used any financial derivative instruments in relation
to our share buy-back program.

10.11    TRADING IN OUR OWN SHARES

UnderRèglement no. 90-04of 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:



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



Prescriptions
regarding volume of purchases do not apply to purchase of securities on behalf of an issuer by aprestataire de services
d'investissement("an authorized investment firm") acting pursuant to a contrat de
liquidité("liquidity
agreement") in conformity with acharte de déontologie("code of ethics") that has been approved by the COB. The first code of ethics was adopted by the "Association française des
entreprises d'investissement"(AFEI) and approved by the COB on February 13, 2001.

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



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.

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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 E.U. obtain anautorisation
préalable, (prior authorization), prior to acquiring a controlling interest in a French company. However, pursuant to the French Decree number
2003-196 of March 7, 2003, the acquirer / investor must file adéclaration administrative, (administrative
notice), with French authorities in connection with certain cases of foreign investments, direct investments and indirect foreign investments in any French company. Under existing administrative
rulings, ownership of more than 33.33% of a French company's share capital or voting rights is regarded as a direct investment subject to a "déclaration
administrative".

10.13    MATERIAL CONTRACTS

See "Item 4. 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 in France are accredited intermediaries.

10.15    OTHER

For other limitations affecting shareholders, please see "Item 10.7. Form, Holding and Transfer of Shares" and "Item 10.9. Requirements for Holdings Exceeding
Certain Percentages."

10.16    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.

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.

In
particular, investors should be aware that the French Bill of Finance for 2004 provides for the elimination of theavoir fiscaland the
relatedprécomptemechanism. According to the Bill of Finance for 2004, this elimination would be applicable to dividends paid as of
January 1, 2005. However, non-individual shareholders would no longer be entitled to use theavoir fiscalas of January 1,
2005. In addition, the Bill of Finance for 2004 provides for the implementation for temporary tax equalization for 25% of the net dividends (before withholding tax) paid in 2005 on the profits that
have not been taxed at the ordinary corporate income tax rate or that have been earned more than five years before the distribution. Such temporary tax equalization would not be refundable to our
shareholders.

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

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10.16.1    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:



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 €3,049 per transfer. However, in some circumstances, if the agreement is executed outside
France, you will not be required to pay this duty.

10.16.2    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 generally entitled to a tax credit, known as theavoir fiscal.

The
amount of theavoir fiscalis generally equal to:



In
addition, if the distribution of dividends by us gives rise to theprécompte, (see "Item 10.17.3. The Précompte") shareholders entitled to
theavoir fiscalat the rate of 25% and then 15%
will generally be entitled to an additional amount ofavoir fiscalequal to:



As
indicated below, theprécompteis a tax which is paid by French companies when they distribute dividends out of certain
profits and such dividends carry anavoir fiscal(see paragraph below relating to the précompte).

Under
French domestic law, French companies must generally deduct a 25% French withholding tax from dividends paid to non-residents, and shareholders who are not resident in
France are not eligible for theavoir 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.

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

|Australia
Austria
Belgium
Bolivia
Brazil
Burkina Faso
Cameroon(1)
Canada
Estonia
Finland
Gabon
Germany(2)
Ghana
Iceland
India |  | Israel
Italy
Ivory Coast
Japan
Latvia
Lithuania
Luxembourg
Malaysia
Mali
Malta
Mauritius
Mexico
Namibia
Netherlands
New Zealand |  | Niger
Norway
Pakistan
Senegal
Singapore
South Korea
Spain
Sweden
Switzerland
Togo
Turkey
Ukraine
United Kingdom
U.S.
Venezuela |  | French Territotires
d'Outre-Mer and
others:Mayotte
New Caledonia
Saint-Pierre & Miquelon
|----------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------

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



Except
for the U.S., 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 theavoir
fiscal. In other countries and territories, individual residents may receive theavoir fiscalbut corporate entities may not.

10.16.3    The Précompte

A French company must pay a tax known as theprécompteto the French tax authorities if it
distributes dividends which carry anavoir fiscalout of:



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The
amount of theprécompteis 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 précomptewe actually pay in cash, net of applicable withholding tax, in two
cases:



10.16.4    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.

10.16.5    Wealth Tax

You will not be subject to theimpôt de solidarité sur la fortune(French wealth
tax) if both of the following apply to you:



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.

10.16.6    Taxation of U.S. Investors

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



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When
referring to the U.S.-France income tax treaty, we refer to the income tax treaty currently in force between the U.S. 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.

If
a partnership holds shares or ADSs, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. If you are a partner in
a partnership that holds shares or ADSs, you are urged to consult your own tax advisor regarding the specific tax consequences of owning and disposing of the shares or ADSs.

This
discussion is based on the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), existing, proposed, and temporary U.S. Treasury regulations thereunder, judicial
decisions, administrative pronouncements, French law and regulations and the U.S.-France income tax treaty, all as currently in effect as of the date hereof, and all of which are subject to change or
changes in interpretation possibly with retroactive effect. 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.

In
particular, investors should be aware that the French Bill of Finance for 2004 provides for the elimination of theavoir fiscaland the
relatedprécomptemechanism. According to the Bill of Finance for 2004, this elimination would be applicable to dividends paid as of
January 1, 2005. However, non-individual shareholders would no longer be entitled to use theavoir fiscalas of January 1,
2005. In addition, the Bill of Finance for 2004 provides for the implementation for temporary tax equalization for 25% of the net dividends (before withholding tax) paid in 2005 on the profits that
have not been taxed at the ordinary corporate income tax rate or that have been earned more than five years before the distribution. Such temporary tax equalization would not be refundable to our
shareholders.

(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 generally entitled to theavoir fiscal.

The
amount of theavoir fiscalis generally equal to:



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In
addition, if the distribution of dividends by us gives rise to theprécompte, shareholders entitled to the avoir fiscalat the rate of 15%, and then
10%, will generally be entitled to an additional amount ofavoir
fiscalequal to:



As
indicated below, theprécompteis a tax which is paid by French companies when they distribute dividends out of certain
profits and such dividends carry anavoir fiscal(see paragraph below relating to the précompte).

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 theavoir 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:



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 U.S.
under the U.S.-France income tax treaty in accordance with the following procedures:



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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 theavoir 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 second year following the year during which the
dividend is paid. You will be entitled to a payment equal to theavoir fiscal, less a 15% withholding tax on theavoir
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 theavoir fiscaland the related
dividend. For partnerships, estates or trusts, the partners, beneficiaries or grantors must make the attestation.

Specific
rules apply to the following:



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 fullavoir
fiscal. However, such entities may claim a partialavoir fiscalequal to 30/85 of the grossavoir
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.

Theavoir fiscalor partialavoir fiscaland 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.

Subject
to the discussion in "Passive Foreign Investment Company Status" below, 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. Distributions
in excess of our current and accumulated earnings and profits will be treated first as a tax-free return of capital to the extent of your tax basis in the shares or ADSs, and to the extent
in excess of such tax basis,

96

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will
be treated as a gain from a sale or exchange of the shares or ADSs. 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 will 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 euros, including any French tax withheld, will, for U.S. federal income tax purposes, be included in gross income in an amount equal to the
U.S. dollar value of the euro 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.

French
withholding tax imposed on the dividends you receive and on anyavoir fiscalat 15% under the U.S.-France income tax treaty is
treated as payment of a foreign income tax. You may claim this amount as a credit against your U.S. federal income tax liability, subject to detailed conditions and limitations, or you may
alternatively choose to claim a deduction, provided a deduction is claimed for all of the foreign taxes you pay in a particular year. A deduction does not reduce U.S. federal income
tax on a dollar-for-dollar basis like a tax credit. The deduction, however, is not subject to the limitations applicable to foreign tax credits. The U.S. Treasury has expressed
concerns that parties to whom ADSs are released may be taking actions that are inconsistent with the claiming of foreign tax credits for U.S. Holders of ADSs. Accordingly, the creditability of French
withholding tax on dividends could be affected by future actions that may be taken by the U.S. Treasury.

The Précompte

A French company must pay an equalization tax known as theprécompteto the French tax authorities
if it distributes dividends, which carry anavoir fiscalout of:



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

If
you are not entitled to the fullavoir fiscal, you may generally obtain a refund from the French tax authorities of any précomptepaid by us with
respect to dividends distributed to you. Under the U.S.-France income tax treaty, the amount of the précompterefunded 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 anyprécomptewhich we actually pay
in cash, but not to anyprécomptewhich we pay by off-setting French and/or foreign tax credits. To apply for a refund of the précompte, you
should file French Treasury Form RF I B EU-No. 5053 before the end of the second 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 FrenchCentre des
Impôts des Non-Résidents,whose address is 9, rue d'Uzès, 75094 Paris Cedex 2, France.

Subject
to the discussion in "Passive Foreign Investment Company Status" below, for U.S. federal income tax purposes, the gross amount of the précompte,including any French withholding tax, 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

97

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"financial
services" income). The amount of anyprécomptepaid in euros, including any French withholding taxes, will be equal to the
U.S. dollar value of the euro on the date theprécompteis 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 U.S. 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.

Please
see the discussion below under "Passive Foreign Investment Company Status" for a discussion of the consequences of a sale of our shares or ADSs if you have owned our shares or
ADSs during any year in which we were a PFIC (as defined below), including 2002 and 2003. If you did not own any shares or ADSs while we were a PFIC, or if you have made the deemed sale election
discussed below, for U.S. federal income tax purposes, you will generally recognize capital gain or loss if you sell, exchange or dispose of your shares or ADSs 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)    Passive Foreign Investment Company Status

We believe, based on the review of our June 2003 year-end financial statements, and based upon the advice of Shearman & Sterling,
our tax counsel, as to the legal requirements relating to PFIC status, that we will be classified as a PFIC for U.S. federal income tax purposes for the year ended June 30, 2003. We also were
classified as a PFIC for the year ended June 30, 2002. A
non-U.S. corporation is classified as a PFIC for any taxable year, if at least 75% of its gross income consists of passive income (such as dividends, interest, rents, royalties (other than
royalties derived from the licensing of computer software that the licensor developed, created or produced), or gains on the disposition of certain minority interests) or at least 50% of the average
value of its assets (determined on the basis of a quarterly average) consist of assets that produce, or are held for the production of, passive income.

Our
determination that we are a PFIC is based on a current valuation of our passive assets, such as cash, and our non-passive assets (including goodwill, which is derived
from the market value of our shares and therefore is subject to change). The determination of whether we are or will continue to be a PFIC must be made annually as at the close date of each taxable
year and is a function of all the facts and circumstances. Accordingly, it is possible that we may continue to be classified as a PFIC in future taxable years.

If
you are a U.S. Holder of our shares or ADSs, the PFIC rules may subject you to the following potential adverse U.S. tax consequences:

Any
excess distributions (generally, your ratable share of distributions received in any taxable year that are greater than 125% of the average annual distributions received by you in
the three preceding taxable years (or your holding period, if shorter)) and any gain realized on the sale or other disposition (or deemed to be realized by reason of a pledge) of the shares or ADSs
would be treated as ordinary income and would be subject to tax as if the excess distribution or gain had been realized ratably over the holding period of the shares or ADSs;

98

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All gains or excess distributions allocated to prior years generally would be taxed at the highest applicable tax rate for each prior year;

An
interest charge in respect of the deemed deferral benefit would be imposed on the resulting tax attributable to each of these prior taxable years; and

Dividends
paid by a company that was classified as a PFIC in the year of the dividend, or the company's previous taxable year, will not qualify for "qualified dividend income" status and
are not eligible for the reduced rates of taxation available to some individual shareholders under recent U.S. tax law changes.

Certain
elections are available to U.S. Holders of shares or ADSs that may serve to alleviate some of the adverse tax consequences of PFIC status.

Mark to Market Election

Under an alternative tax regime, you can avoid the interest charge by making a mark-to-market election with respect to your shares or
ADSs, provided that the shares or ADSs are "marketable". Shares or ADSs will be marketable if they are regularly traded on certain U.S. stock exchanges (including Nasdaq), or on certain
non-U.S. stock exchanges (including the Nouveau Marché of the Euronext Paris). For these purposes, the shares will be considered regularly traded during any calendar year
during which they are traded, other than in negligible quantities, on at least 15 days during each calendar quarter. (Any trades that have as their principal purposes meeting this requirement
will be disregarded).

If
you choose to make a mark-to-market election, you must include in ordinary income for each taxable year for which the election is in effect an amount equal to
the excess, if any, of the fair market value of your shares or ADSs as of the close of the taxable year over your adjusted tax basis in the shares or ADSs. In addition, you may claim an ordinary loss
deduction of the excess, if any, of your adjusted tax basis in the shares or ADSs over the fair market value of the shares or ADSs at the close of the taxable year, but only to the extent of any prior
net mark-to-market gains. Your adjusted tax basis will be increased by the income recognized under the mark-to-market election and decreased by the
deductions allowed under the election. Gain upon an actual sale or other disposition of the shares
or ADSs will be treated as ordinary income, and any losses incurred on a sale or other disposition of the shares or ADSs will be treated as an ordinary loss to the extent of any prior net
mark-to-market gains. Persons considering the mark-to-market election should note that although it avoids the interest charge associated with the PFIC
regime, all income derived from the affected shares will be taxable as ordinary income (and capital gain treatment will be unavailable). A mark-to-market election applies to
the taxable year in which the election is made and to each subsequent year and therefore in general is irrevocable. (Exceptions are provided if either the shares or ADSs cease to be marketable or the
IRS consents to revocation of the election.) If you do not make a mark-to-market election for the first year in which you own your shares or ADSs and we are a PFIC, the
interest charge will apply to any market-to-market gain recognized in the later year that the election is first made.

Deemed Sale Election

If you decide not to make a market-to-market election, you nevertheless may elect to make a "deemed sale election" pursuant to which you
will be treated as having sold your shares or ADSs on the last day of the last taxable year in which we quality as a PFIC. Any gain on the deemed sale will be considered to have been earned pro rata
over your holding period in the shares or ADSs and must be included in ordinary income. The tax on the gain is based on the value of the tax deferral and will include an interest charge as described
above in the case of the general PFIC rules. After making a deemed sale election, you must increase your adjusted tax basis in the shares or ADSs by the amount of gain recognized. You cannot recognize
any loss realized on the deemed sale, and your basis would not be affected in such case.

99

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To
make this election, you must not have previously made a mark-to-market election at any time. You must file an amended income tax return for your taxable year
that includes our last taxable year in which we qualified as a PFIC and you must do so within three years of the due date, as extended, for your return for that taxable year. You must attach to the
amended return either IRS Form 8621 or a statement containing the information required therein.

We
will continue to monitor our PFIC status annually, and will notify you should we cease to be classified as a PFIC.

YOU SHOULD CONSULT WITH YOUR OWN TAX ADVISOR REGARDING ANY DECISION TO MAKE (OR REFRAIN FROM MAKING) ANY ELECTION THAT MAY BE AVAILABLE TO YOU.
BECAUSE ANY SUCH DECISION WILL DEPEND UPON YOUR OWN PARTICULAR TAX SITUATION AND MAY HAVE SIGNIFICANT AND CONTINUING U.S. TAX CONSEQUENCES, WE ARE UNABLE TO GIVE ADVICE IN THIS REGARD. FOR ADDITIONAL
INFORMATION, PLEASE CONSULT THE INSTRUCTIONS TO IRS FORM 8621 "Return by a Shareholder of a Passive Foreign Investment Company or Qualified Election Fund."

(iv)    Recent U.S. Tax Law Changes Applicable to Individuals

Recent U.S. tax legislation (the "2003 Tax Act") generally has reduced the rates of tax payable by individuals (as well as certain trusts and estates) on many
items of income. Some of these changes may not apply to ownership of our shares for years in which we qualify as a PFIC. Under the 2003 Tax Act, the marginal tax rates applicable to ordinary income
generally have been lowered effective January 1, 2003. In addition, for capital assets held for over one year and sold or exchanged on or after May 6, 2003 but in taxable years beginning
before January 1, 2009, the maximum applicable U.S. federal rate of tax generally will be 15% (rather than the higher rates of tax generally applicable to items of ordinary income).
Furthermore, "qualified dividend income" received by individuals in taxable years beginning after December 31, 2002 and beginning before January 1, 2009, generally will be taxed at the
rates applicable to capital gains, including the 15% maximum rate (rather than the higher rates of tax generally applicable to other items of ordinary income). For this purpose, "qualified dividend
income" generally includes dividends paid on stock in U.S. corporations as well as dividends paid on stock in certain non-U.S. corporations if, among other things, the company is not a
passive foreign investment company for the corporation's taxable year in which the dividend was paid, or the preceding year, and (i) the shares of the non-U.S. corporation
(including ADRs backed by such shares) are readily tradable on an established securities market in the U.S., or (ii) the non-U.S. corporation is eligible with respect to
substantially all of its income for the benefits of a comprehensive income tax treaty with the U.S. which contains an exchange of information program. (The U.S.-France income tax treaty has been
identified as a qualifying treaty.) We currently anticipate that if we were to pay any dividends in 2003-2004 with respect to our shares and ADSs, they would not constitute "qualified
dividend income" for U.S. federal income tax purposes and that U.S. Holders would not be entitled to the reduced rates of tax because of our passive foreign investment company status (see "Passive
Foreign Investment Company Status" above). You are urged to consult your own tax adviser regarding the impact of the provisions of the 2003 Tax Act on your particular situation.

(v)    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:



100

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(vi)    French Wealth Tax

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

(vii)    U.S. 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 28%. 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 provide Internal Revenue Service Form W-9 (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 U.S. 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.

10.16.7    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. Documents submitted to or filed with the SEC are available
on the SEC's website at www.sec.gov. 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 233 Broadway, New York, NY 10279 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.

101

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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 U.S., the United Kingdom and the Asia-Pacific, we are exposed
to foreign currency risk. 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. 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,
2003 by approximately €227,000. 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, 2003 by approximately €109,000.

11.2    INTEREST RATES

As of June 30, 2003, we are only exposed to interest rate risk on our cash and cash equivalents, since we have no long-term indebtedness. To
date, we have not engaged in any interest rate hedging.

The
following chart presents the term of assets ("+") and liabilities ("-") subject to variable interest rates as of June 30, 2003:

0 to 1 year

1 to 5 years

More than 5 years(in thousands)Financial assets

€
35,738

€


€
Financial liabilities








Balance before hedging


35,738





Hedging








Balance after hedging

€
35,738

€


€



We
estimate that a one percent adverse change in the interest rate would impact reported financial results by €0.4 million over a twelve month period. This amount
can be compared to our interest income that amounted to €1.6 million for the year ended June 30, 2003.

11.3    SHARES

As of June 30, 2003, we held shares in Network Physics and treasury stock that had a historical cost of €0.9 million and
€1.1 million, respectively. The investment in Network Physics is valued at the lower of historical cost or net realizable value, which is based on our assessment of future value
of Network Physics. The treasury stock is recorded at historical cost. The value of those shares is subject to fluctuation which could adversely affect our operating results and financial conditions.
To date, we have not engaged in any hedging of these shares.

11.4    LIQUIDITY SITUATION

We do not have any liquidity risk since the maturity of our assets doesn't exceed the maturity of our debts. We face short or very short term cash requirement
thanks to our cash and cash equivalents.

102

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11.5    FINANCIAL INSTRUMENTS

The carrying amount and fair value of cash and cash equivalents, and deposits and other assets are set forth below. Since these assets have a
short-term maturity, their fair value is not significantly different from their carrying amount.

As of June 30, 2003Carrying Amount

Fair Value(In thousands €)Cash and cash equivalents

€
37,900

€
37,900Deposits and other assets


560


382


The
interest rate used to calculate the fair values of the above financial instruments was 4.58%.

ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

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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 thirty days relating
to our indebtedness.

To
our knowledge, no payment of dividends is in arrears.

ITEM 14.    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. Part III

ITEM 15.    CONTROLS AND PROCEDURES

ITEM 16.    PRINCIPAL INDEPENDENT AUDITOR FEES AND SERVICES

Principal independent auditor fees recorded in our accounts for the year ended June 30, 2003 were as follows:

PricewaterhouseCoopers
and other member firms

%

S&W Associés

%(in thousand)Audit-fees

€
330

0

€
37

0Audit-related fees


4

0




0Sub-total


334

89


37

100Legal, tax and social


40

0


0

0Services' fees


0

0




0All other fees


1Sub-total


41

11


0

0Total

€
375

100

€
37

100


104

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ITEM 17.    FINANCIAL STATEMENTS

ITEM 18.    FINANCIAL STATEMENTS

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                                
|------------------------------------------------------------------------------------------------
|Consolidated Financial Statements                                                               
|Report of independent accountant                                                                
|Consolidated Statements of Operations for the years ended June 30, 2003, 2002 and 2001          
|Consolidated Balance Sheets as of June 30, 2003 and 2002                                        
|Consolidated Statements of Stockholders' Equity for the years ended June 30, 2003, 2002 and 2001
|Consolidated Statements of Cash Flows for the years ended June 30, 2003, 2002 and 2001          
|Notes to the Consolidated Financial Statements                                                  

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ITEM 19.    EXHIBITS

|1    |  | Statuts, or by-laws, of InfoVista (unofficial English translation up to date as of August 19, 2003)                                                                                                                                                             
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 4.3 to Form S-8, Commission File Number 333-81300)                                                                                                    
|4.6  |  | 2003 Stock Option Plan (unofficial English translation)                                                                                                                                                                                                         
|8    |  | Subsidiaries of the Registrant (see "Information on the CompanyGeneral Information Concerning the Share capital of the CompanySubsidiaries and Investments").                                                                                                 
|10.1 |  | Consent of independent auditors                                                                                                                                                                                                                                 
|12.1 |  | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.                                                                                                                                                         
|12.2 |  | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.                                                                                                                                                         
|13.1 |  | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002.                                                                                                                                                         
|13.2 |  | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002.                                                                                                                                                         

106

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REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of InfoVista S.A.

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 S.A. and its subsidiaries (the "Company") at June 30, 2003 and 2002, and the results of their operations
and their cash flows for each of the three years in the period ended June 30, 2003 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, 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.

Paris,
France
July 24, 2003, except for note 20 as to which the date is October 16, 2003

PricewaterhouseCoopers
Audit

/s/JEAN FRANCOIS CHATELJean-François Châtel
Partner

F-1

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CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for share and per share data)

|                                                      |                                                                                                                           | Year ended June 30, |           
|----------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------- | ------------------- | ----------
|
|Revenues                                              |                                                                                                                           |                     |           
|                                                      | License revenues                                                                                                          |                     | €         
|                                                      | Service revenues                                                                                                          |                     |           
|                                                      |                                                                                                                           |                     |           
|Total revenues (Note 14)                              |                                                                                                                           |                     | 25,522    
|Cost of revenues                                      |                                                                                                                           |                     |           
|                                                      | Cost of licenses                                                                                                          |                     |           
|                                                      | Cost of services (exclusive of non-cash compensation expense of €5, €83 and €146, respectively)                           |                     |           
|                                                      |                                                                                                                           |                     |           
|Total cost of revenues                                |                                                                                                                           |                     | 7,129     
|                                                      |                                                                                                                           |                     |           
|Gross profit                                          |                                                                                                                           |                     | 18,393    
|Operating expenses                                    |                                                                                                                           |                     |           
|                                                      | Sales and marketing expenses (exclusive of non-cash compensation expense of €24, €129 and €309, respectively)             |                     |           
|                                                      | Research and development expenses (exclusive of non-cash compensation expense of €6, €51 and €155, respectively)(Note 15) |                     |           
|                                                      | General and administrative expenses (exclusive of non-cash compensation expense of €3, €54 and €1,619, respectively)      |                     |           
|                                                      | Stock compensation expense                                                                                                |                     |           
|                                                      | Restructuring costs and consulting fee(Note 17)                                                                           |                     |           
|                                                      | Impairment charge for goodwill(Note 7)                                                                                    |                     |           
|                                                      | Amortization of goodwill and intangibles(Note 7)                                                                          |                     |           
|                                                      |                                                                                                                           |                     |           
|Total operating expenses                              |                                                                                                                           |                     | 30,724    
|                                                      |                                                                                                                           |                     |           
|Operating loss                                        |                                                                                                                           |                     | (12,331   
|Other income (expense):                               |                                                                                                                           |                     |           
|                                                      | Interest income                                                                                                           |                     |           
|                                                      | Net foreign currency transaction (losses) gains                                                                           |                     |           
|                                                      | Other                                                                                                                     |                     |           
|                                                      |                                                                                                                           |                     |           
|Loss before income taxes and minority interest        |                                                                                                                           |                     | (11,489   
|                                                      | Income tax expense(Note 9)                                                                                                |                     |           
|                                                      | Minority interest                                                                                                         |                     |           
|                                                      |                                                                                                                           |                     |           
|Net loss                                              |                                                                                                                           | €                   | (11,525   
|                                                      |                                                                                                                           |                     |           
|Basic and diluted loss per share                      |                                                                                                                           | €                   | (0.61     
|                                                      |                                                                                                                           |                     |           
|Basic and diluted weighted average shares outstanding |                                                                                                                           |                     | 18,843,308

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

F-2

---

CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)

|                                                                                                                                                               |                               | As of June 30 |        
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ------------- | -------
|
|ASSETS                                                                                                                                                         |                               |               |        
|Cash and cash equivalents(Note 2)                                                                                                                              |                               | €             | 37,900 
|Marketable securities(Note 3)                                                                                                                                  |                               |               | 5,850  
|Trade receivables, net of allowance of €460 and €586, respectively(Note 18)                                                                                    |                               |               | 5,259  
|Prepaid expenses and other current assets(Note 4)                                                                                                              |                               |               | 2,616  
|                                                                                                                                                               |                               |               |        
|                                                                                                                                                               | Total current assets          |               |        
|Fixed assets, net(Note 5 & 14)                                                                                                                                 |                               |               | 3,549  
|Licensed technology and advances, net                                                                                                                          |                               |               | 1,086  
|Investment in affiliate(Note 6)                                                                                                                                |                               |               | 937    
|Deposits and other assets(Note 8)                                                                                                                              |                               |               | 1,236  
|                                                                                                                                                               |                               |               |        
|                                                                                                                                                               | Total non-current assets      |               |        
|                                                                                                                                                               |                               |               |        
|Total assets                                                                                                                                                   |                               | €             | 58,433 
|                                                                                                                                                               |                               |               |        
|LIABILITIES & STOCKHOLDERS' EQUITY                                                                                                                             |                               |               |        
|Trade payables                                                                                                                                                 |                               | €             | 3,347  
|Current portion of long-term debt                                                                                                                              |                               |               |       
|Accrued salaries and commissions                                                                                                                               |                               |               | 1,772  
|Accrued social security and other payroll taxes                                                                                                                |                               |               | 680    
|Deferred revenue                                                                                                                                               |                               |               | 4,294  
|Accrued VAT                                                                                                                                                    |                               |               | 1,042  
|Other current liabilities                                                                                                                                      |                               |               | 809    
|                                                                                                                                                               |                               |               |        
|                                                                                                                                                               | Total current liabilities     |               |        
|Other long term liabilities                                                                                                                                    |                               |               | 71     
|                                                                                                                                                               |                               |               |        
|                                                                                                                                                               | Total non-current liabilities |               |        
|Commitments and contingencies                                                                                                                                  |                               |               |        
|Stockholders' equity                                                                                                                                           |                               |               |        
|Common stock, par value of €0.54 per share (18,802,637 and 19,866,560 shares authorized and issued, and 18,038,003 and 19,859,807 shares outstanding)(Note 13) |                               |               | 10,153 
|Capital in excess of par value of stock                                                                                                                        |                               |               | 84,716 
|Accumulated deficit                                                                                                                                            |                               |               | (46,109
|Unrealized losses on available for sale securities                                                                                                             |                               |               | (150   
|Cumulative translation adjustment                                                                                                                              |                               |               | (1,138 
|Deferred compensation                                                                                                                                          |                               |               |       
|Less common stock in treasury (764,634 and 6,753 shares), at cost                                                                                              |                               |               | (1,054 
|                                                                                                                                                               |                               |               |        
|Total stockholders' equity                                                                                                                                     |                               |               | 46,418 
|                                                                                                                                                               |                               |               |        
|Total liabilities and stockholders' equity                                                                                                                     |                               | €             | 58,433 
|                                                                                                                                                               |                               |               |        

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

F-3

---

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except for share and per share data)

|                                                                     |  | Number of
preferred
shares |   | Numbers of
ordinary
shares |   | Numbers
of treasury
shares |   | Preferred
stock |        | Common
stock |   | Treasury
stock |   | Capital in
excess of par
value of stock |        | Accumulated
other
comprehensive
loss |   | Deferred
compensation |   | Total |        
|-------------------------------------------------------------------- |  | -------------------------- | - | -------------------------- | - | -------------------------- | - | --------------- | ------ | ------------ | - | -------------- | - | --------------------------------------- | ------ | ------------------------------------ | - | --------------------- | - | ----- | -------
|Balance, June 30, 2000                                               |  | 3,950,607                  |   | 8,978,871                  |   | 0                          |   | €               | 2,133  |              | € | 4,849          |   | €                                       | 0      |                                      | € | 17,594                |   | €     | (17,265
|Issuance of common stock                                             |  |                            |   | 6,000,000                  |   |                            |   |                 |        |              |   | 3,240          |   |                                         |        |                                      |   | 73,560                |   |       |        
|IPO fees and commissions                                             |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   | (8,150                | ) |       |        
|Preferred shares converted in ordinary shares                        |  | (3,950,607                 | ) | 3,950,607                  |   |                            |   |                 | (2,133 | )            |   | 2,133          |   |                                         |        |                                      |   | 0                     |   |       |        
|Exercise of stock warrants                                           |  |                            |   | 526,039                    |   |                            |   |                 |        |              |   | 284            |   |                                         |        |                                      |   | 1,237                 |   |       |        
|Exercise of stock options                                            |  |                            |   | 185,897                    |   |                            |   |                 |        |              |   | 100            |   |                                         |        |                                      |   | 231                   |   |       |        
|Reversal of deferred compensation related to forfeited stock options |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   | (161                  | ) |       |        
|Stock compensation expense                                           |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   | 1,482                 |   |       |        
|Purchase of treasury stock                                           |  |                            |   |                            |   | 19,942                     |   |                 |        |              |   |                |   |                                         | (434   | )                                    |   |                       |   |       |        
|Common stock issued from treasury                                    |  |                            |   |                            |   | (13,189                    | ) |                 |        |              |   |                |   |                                         | 362    |                                      |   | (76                   | ) |       |        
|Components of comprehensive income:                                  |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|Net loss                                                             |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       | (6,316 
|Currency translation adjustment                                      |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       | 298    
|                                                                     |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|Comprehensive income                                                 |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|                                                                     |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|Balance, June 30, 2001                                               |  | 0                          |   | 19,641,414                 |   | 6,753                      |   |                 | 0      |              |   | 10,606         |   |                                         | (72    | )                                    |   | 85,717                |   |       | (23,283
|Exercise of stock warrants                                           |  |                            |   | 197,710                    |   |                            |   |                 |        |              |   | 107            |   |                                         |        |                                      |   | 135                   |   |       |        
|Exercise of stock options                                            |  |                            |   | 27,436                     |   |                            |   |                 |        |              |   | 15             |   |                                         |        |                                      |   | 25                    |   |       |        
|Subscription of stock warrants                                       |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   | 6                     |   |       |        
|Reversal of deferred compensation on forfeited stock options         |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   | (107                  | ) |       |        
|Stock compensation expense                                           |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   | 63                    |   |       |        
|Components of comprehensive income:                                  |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|Net loss                                                             |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       | (11,904
|Currency translation adjustment                                      |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       | (165   
|Unrealized losses on available for sale securities                   |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       | (487   
|                                                                     |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|Comprehensive income                                                 |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|                                                                     |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|Balance, June 30, 2002                                               |  | 0                          |   | 19,866,560                 |   | 6,753                      |   |                 | 0      |              |   | 10,728         |   |                                         | (72    | )                                    |   | 85,839                |   |       | (35,839
|Exercise of stock options                                            |  |                            |   | 16,250                     |   |                            |   |                 |        |              |   | 9              |   |                                         |        |                                      |   | 10                    |   |       |        
|Subscription of stock warrants                                       |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   | 3                     |   |       |        
|Stock compensation expense                                           |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|Purchase of treasury stock                                           |  |                            |   |                            |   | 1,938,054                  |   |                 |        |              |   |                |   |                                         | (2,912 | )                                    |   |                       |   |       |        
|Common stock issued from treasury                                    |  |                            |   |                            |   | (100,000                   | ) |                 |        |              |   |                |   |                                         | 193    |                                      |   | 17                    |   |       |        
|Cancellation of treasury stock                                       |  |                            |   | (1,080,173                 | ) | (1,080,173                 | ) |                 |        |              |   | (584           | ) |                                         | 1,737  |                                      |   | (1,153                | ) |       |        
|Components of comprehensive income:                                  |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|Net loss                                                             |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       | (11,525
|Currency translation adjustment                                      |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       | (370   
|Unrealized losses on available for sale securities                   |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       | 337    
|                                                                     |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|Comprehensive income                                                 |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|                                                                     |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        
|Balance, June 30, 2003                                               |  | 0                          |   | 18,802,637                 |   | 764,634                    |   | €               | 0      |              | € | 10,153         |   | €                                       | (1,054 | )                                    | € | 84,716                |   | €     | (46,109
|                                                                     |  |                            |   |                            |   |                            |   |                 |        |              |   |                |   |                                         |        |                                      |   |                       |   |       |        

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

F-4

---

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, except for share and per share data)

|                                                                            |                                                                            | Year ended June 30 |        
|--------------------------------------------------------------------------- | -------------------------------------------------------------------------- | ------------------ | -------
|
|Cash flows from operating activities:                                       |                                                                            |                    |        
|Net loss                                                                    |                                                                            | €                  | (11,525
|Adjustments to reconcile net loss to net cash used by operating activities: |                                                                            |                    |        
|                                                                            | Depreciation                                                               |                    |        
|                                                                            | Loss on disposal of fixed assets                                           |                    |        
|                                                                            | Amortization of goodwill and intangibles                                   |                    |        
|                                                                            | Impairment charge for goodwill                                             |                    |        
|                                                                            | Amortization of licensed technologies and royalties advances               |                    |        
|                                                                            | Stock compensation expense                                                 |                    |        
|                                                                            | Provision for bad debt                                                     |                    |        
|                                                                            | Minority interest                                                          |                    |        
|Changes in operating assets and liabilities:                                |                                                                            |                    |        
|                                                                            | Trade receivables                                                          |                    |        
|                                                                            | Prepaid expenses and other current assets                                  |                    |        
|                                                                            | Deposits and other assets                                                  |                    |        
|                                                                            | Trade payables                                                             |                    |        
|                                                                            | Accrued expenses                                                           |                    |        
|                                                                            | Deferred revenues                                                          |                    |        
|                                                                            | Other current liabilities                                                  |                    |        
|                                                                            | Other long term liabilities                                                |                    |        
|                                                                            |                                                                            |                    |        
|Net cash used by operating activities                                       |                                                                            |                    | (7,513 
|Cash flows from investing activities:                                       |                                                                            |                    |        
|                                                                            | Purchase of fixed assets                                                   |                    |        
|                                                                            | Purchase of an investment in affiliate                                     |                    |        
|                                                                            | Purchase of marketable securities                                          |                    |        
|                                                                            | Acquisition of businesses, net of cash acquired                            |                    |        
|                                                                            | Purchase of licensed technologies and royalty advances                     |                    |        
|                                                                            |                                                                            |                    |        
|Net cash used by investing activities                                       |                                                                            |                    | (1,639 
|Cash flows from financing activities:                                       |                                                                            |                    |        
|                                                                            | Payments of debt                                                           |                    |        
|                                                                            | Proceeds from exercise of stock options                                    |                    |        
|                                                                            | Proceeds from subscription and exercise of stock warrants                  |                    |        
|                                                                            | Purchase of treasury stock                                                 |                    |        
|                                                                            | Proceeds from issuance of treasury stock                                   |                    |        
|                                                                            | Payments on acquired debt                                                  |                    |        
|                                                                            | Proceeds from issuance of common stock                                     |                    |        
|                                                                            |                                                                            |                    |        
|Net cash (used) provided by financing activities                            |                                                                            |                    | (2,985 
|                                                                            |                                                                            |                    |        
|Net change in cash                                                          |                                                                            |                    | (12,137
|                                                                            | Effects of exchange rate changes                                           |                    |        
|                                                                            |                                                                            |                    |        
|(Decrease) increase in cash and cash equivalents                            |                                                                            | €                  | (12,326
|Cash and cash equivalents at beginning of period                            |                                                                            | €                  | 50,226 
|                                                                            |                                                                            |                    |        
|Cash and cash equivalents at end of period                                  |                                                                            | €                  | 37,900 
|                                                                            |                                                                            |                    |        
|Supplemental disclosure of non-cash transactions                            |                                                                            |                    |        
|                                                                            | Recognition of deferred compensation related to of stock option grants     |                    | €      
|                                                                            | Reversal of deferred compensation on cancellation of related stock options |                    | €      
|                                                                            | Conversion of preferred stock to common stock                              |                    | €      
|                                                                            | Debt acquired through acquisition of business                              |                    | €      

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

F-5

---



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS        (In thousands, except for share and per share data)

1.     SIGNIFICANT ACCOUNTING POLICIES



InfoVista S.A. 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, the Company provides service support for the installation, implementation, training and
maintenance of its products. The Company products are part of the software market segment known as Service Level Management ("SLM"). The Company markets its products to telecommunication companies,
Internet Service Providers ("ISPs") and large enterprises. The Company maintains its headquarters in Les Ulis (outside Paris), France with subsidiaries located in Europe, Americas and Asia.



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.
During the year ended June 30, 2003, InfoVista Enterprise Solution ("IES") was created in October 2002 and the Company purchased a significant portion of minority shares in
July 2002 for InfoVista (Asia-Pacific) Pte Ltd. During the year ended June 30, 2002, InfoVista GmbH and TISS Intra GmbH were merged together as of January 1,
2002. During the year ended June 30, 2001, InfoVista BNL was created in December 2000, and InfoVista IBE in June 2001, while TISS Intra GmbH was acquired by InfoVista S.A. on
December 2, 2000.

Consolidated
companies are the following as of June 30, 2003:

|Company                          |  | Country of
incorporation |  | % of
ownership |  | Commencement of
inclusion in
consolidated
financial
statements
|-------------------------------- |  | ------------------------ |  | -------------- |  | --------------------------------------------------------------
|InfoVista S.A. (parent)          |  | France                   |  |               |  |                                                              
|InfoVista Corp.                  |  | USA                      |  | 100.00         |  | 1997                                                          
|InfoVista UK                     |  | Great Britain            |  | 100.00         |  | 1999                                                          
|InfoVista GmbH                   |  | Germany                  |  | 100.00         |  | 1999                                                          
|InfoVista (Asia-Pacific) Pte Ltd |  | Singapore                |  | 98.04          |  | 2000                                                          
|InfoVista BNL                    |  | Belgium                  |  | 100.00         |  | 2001                                                          
|InfoVista IBE                    |  | Spain                    |  | 100.00         |  | 2001                                                          
|InfoVista IES                    |  | France                   |  | 100.00         |  | 2002                                                          



Generally, the functional currency of the Company and its subsidiaries is the applicable local currencies in accordance with Statement of Financial Accounting
Standards ("SFAS") 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

F-6

---

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.



The Company records goodwill when the cost of net identifiable assets that it acquires in a purchase business combination exceeds their fair value. Goodwill and
intangible assets are tested annually and whenever events or circumstances occur indicating these assets may be impaired. The purpose of these tests is to identify any facts or circumstances, either
internal or external, which indicate that the carrying value of the asset cannot be recovered. The Company compares future undiscounted cash flows that are generated by the asset to its carrying value
in order to initially test whether an impairment charge should be recognized. If the future undiscounted cash flows are lesser than the carrying value, the Company then performs 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 calculated using the present value of estimated expected future cash flows. The cash flow calculation is based on management's best
estimates, using appropriate assumptions and projections at that time.



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.



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 yearsComputers and hardware

5 yearsLeasehold Improvements

10 yearsPurchased 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.

The
Company has adopted the SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," which requires impairment losses to be recorded for
long-lived assets used in operations, such as property, equipment and improvements, and intangible assets, when indicators of impairment are present

F-7

---

and
the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of the assets.



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.



The Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company has classified its
marketable securities as available-for-sale and recorded them at fair value with the unrealized gains and losses reported as a separate component of stockholders' equity.



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.



Revenues from sales of licenses to end-user clients are recognized generally when the Company receives a purchase order and/or other written
contractual documentation (depending on the requirement of the end-user client), the Company delivers the software (assuming no significant obligations exist), collection of the resulting
receivable is probable and the amount of fees is fixed or determinable. The Company provides for allowances for estimated future returns from clients upon shipment. The Company recognizes reseller
license revenues on the same basis as for direct sales to end-user clients, except for an additional procedure in which the Company receives either a copy of the purchase order between the
reseller and end-user or a written certification from the reseller that confirms that the licenses have been sold through a named end-user. The Company recognizes license
revenues from OEMs either after receipt of a quarterly report of their sales made in a given period or upon receipt of a purchase order.

Customers
purchase maintenance services for an initial period (typically 12 months) as part of the purchase of the license. Generally, the subsequent year maintenance services are
automatically renewable for subsequent 12-month periods, unless either party cancels. Payments for maintenance fees (on initial or renewal orders) are generally made in advance and are
non-refundable. The Company defers revenues for maintenance services and recognizes them ratably over the term of the maintenance sold. Revenues from purchase orders received for
consulting, training and other support services are generally recognized as the services are performed. The revenue recognition policies for services are the same regardless of the sales channel used.
Service revenues are not shared between resellers and the Company. End-users either enter into a service contract directly with the Company or with a reseller.

F-8

---

Since
licenses are almost always sold with maintenance services, the Company recognizes 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. Significant discounts offered on other services are generally allocated to the
delivered license portion of the fee. License revenues and service revenues that have been prepaid or invoiced but that have not yet been recognized as revenues under the policy are reflected as
deferred revenues.

In
November 2001, the Financial Accounting Standards Board ("FASB") issued a Staff Announcement Topic D-103, "Income Statement Characterization of Reimbursement
Received for "Out-of-Pocket" Expenses Incurred". Topic D-103 establishes that reimbursements received for "Out-of-Pocket" expenses should be
reported as revenues and costs. The services revenues and costs, as reported, reflect the implementation of this new rule. This change increased both services revenues and costs by
€207 and €239 for the years ended June 30, 2002 and 2001,
respectively. The Company's adoption of this rule does not and will not affect earnings in any past or future periods.



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 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.

Research
and development expenses consist primarily of personnel costs (salaries and facilities) associated with software development, amortization of any capitalized software costs, and
technological acquisitions of third party software (which are not considered to have reached technological feasibility at the date of acquisition).

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 costs since such costs have not been significant.



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.

F-9

---



As of June 30, 2003 and 2002, 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.



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.



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 stock 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.



Advertising costs are expensed as incurred.



The Company accounts for its stock options and purchase stock 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.



In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based CompensationTransition and Disclosure". SFAS 148 amends
SFAS 123, "Accounting for Stock-Based Compensation", to provide alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee
compensation. It also requires additional disclosures about the effects on reported net income of an entity's accounting policy with respect to stock-based employee compensation.

In
January 2003, the FASB issued Interpretation 46, "Consolidation of Variable Interest Entities ("FIN 46")." FIN 46 requires an investor with a majority of the variable interests
in a Variable Interest Entity ("VIE") to consolidate the entity and also requires majority and significant variable interest investors to provide certain disclosures. The provisions of FIN 46 are
effective immediately for all arrangements entered into with new VIEs created after January 31, 2003. To date, the Company has not

F-10

---

invested
in any VIE's and does not expect the adoption of FIN 46 to be material to its operations, financial position or cash flows.

In
April 2003, FASB Statement 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" was issued. FASB Statements 133, "Accounting for Derivative
Instruments and Hedging Activities", and 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities",establish accounting and
reporting standards for derivative instruments including derivatives embedded in other contracts (collectively referred to as derivatives) and for hedging activities. SFAS 149 amends Statement
133 for certain decisions made by the Board as part of the Derivatives Implementation Group (DIG) process and are effective for contracts entered into or modified after June 30, 2003 with some
exceptions and for hedging relationships designated after June 30, 2003. All provisions of this Statement should be applied prospectively. The implementation of SFAS 149 is not expected
to have a material effect on the Company's consolidated financial statements.

In
May 2003, the FASB issued SFAS 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." SFAS 150 addresses certain
financial instruments that, under previous guidance, could be accounted for as equity, but now must be classified as liabilities in statements of financial position. These financial instruments
include: 1) mandatory redeemable financial instruments, 2) obligations to repurchase the issuer's equity shares by transferring assets, and 3) obligations to issue a variable
number of shares. SFAS 150 is effective for all financial instruments entered into or modified after May 31, 2003, and otherwise effective at the beginning of the first interim period
beginning after June 15, 2003. The implementation of SFAS 150 is not expected to have a material effect on the Company's consolidated financial statements.

2.     CASH AND CASH EQUIVALENTS

As of June 302003

2002Cash

€
4,779

€
3,316Short-term deposits


33,121


46,910Total cash and cash equivalents

€
37,900

€
50,226


3.     MARKETABLE SECURITITES

The Company maintains a liquid investment portfolio with the intention to support current operations and take advantage of investment opportunities. As a result,
all marketable securities are considered to be available-for-sale and are classified as current assets. On January 17, 2002, the Company invested €6,000
in KLEBER 2006. The Company has the ability to sell the security on a weekly basis before its maturity date at published market rates. The value of KLEBER 2006 is benchmarked against a collection of
equity investments, but the original cost of €6,000 is guaranteed if held to the maturity date, which is January 2006. As of June 30, 2003, marketable securities
available-for-sale had a historical cost of €6,000, unrealized losses of €150, and fair value of €5,850. As of June 30,
2002, marketable securities available-for-sale had a historical cost of €6,000, unrealized losses of €487, and fair value of
€5,513. No realized gains or losses on marketable securities available-for-sale have been included in net loss for the years ended June 30, 2003, 2002,
and 2001.

F-11

---



4.     PREPAID EXPENSES AND OTHER CURRENT ASSETS

As of June 302003

2002Prepaid expenses

€
1,230

€
784Value Added Taxes receivable


1,291


850Research and development tax credits





409Other


95


179Total prepaid expenses and other current assets

€
2,616

€
2,222


5.     FIXED ASSETS, NET

|Gross Value            |  | Opening |       | Additions |   | Disposals and
write-offs |  | Currency
variation |     | Closing
|---------------------- |  | ------- | ----- | --------- | - | ------------------------ |  | ------------------ | --- | -------
|Purchase software      |  | €       | 1,295 |           | € | 196                      |  | €                  | 14  |        
|Computers & Hardware   |  |         | 2,962 |           |   | 329                      |  |                    | 313 |        
|Leasehold improvements |  |         | 1,440 |           |   | 101                      |  |                    | 4   |        
|Furniture & Fixtures   |  |         | 945   |           |   | 63                       |  |                    | 20  |        
|                       |  |         |       |           |   |                          |  |                    |     |        
|Total                  |  | €       | 6,642 |           | € | 689                      |  | €                  | 351 |        
|                       |  |         |       |           |   |                          |  |                    |     |        

|Accumulated Depreciation |  | Opening |       | Additions |   | Disposals and
write-offs |  | Currency
variation |     | Closing
|------------------------ |  | ------- | ----- | --------- | - | ------------------------ |  | ------------------ | --- | -------
|Purchase software        |  | €       | 671   |           | € | 334                      |  | €                  | 86  |        
|Computers & Hardware     |  |         | 1,086 |           |   | 635                      |  |                    | 266 |        
|Leasehold improvements   |  |         | 279   |           |   | 246                      |  |                    |    |        
|Furniture & Fixtures     |  |         | 165   |           |   | 157                      |  |                    | 4   |        
|                         |  |         |       |           |   |                          |  |                    |     |        
|Total                    |  | €       | 2,201 |           | € | 1,372                    |  | €                  | 356 |        
|                         |  |         |       |           |   |                          |  |                    |     |        

6.     INVESTMENT IN AFFILIATE

As of June 30, 2003, the investment in affiliate of €937 corresponds to non-cumulative, redeemable preferred stock shares in
Network Physics, a private U.S.-based corporation. The Company does not believe that it currently has significant influence over Network Physics. As a result, the Company has accounted for this
Investment in Affiliate at cost as of June 30, 2003. As of June 30, 2003, the Company's investment in Network Physics represents approximately 13% of their outstanding voting stock and
the Company has accounted for this Investment in Affiliate at cost. Network Physics, a development stage company, is a related party mentioned in note 16 Related Party Transactions.

7.     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 "SLM" solutions, including training, maintenance and support for
clients such as AUDI, Concert, and Deutsche Telekom. Under the terms of

F-12

---

the
acquisition agreement, the Company assumed approximately €1,896 of liabilities and paid approximately €3,158 (includes €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).

During
the year ended June 30, 2001, the Company finalized the purchase price allocation. A summary of this allocation of the purchase price was as follows:

Total net assets

€
(494
)Intangible assets:Assembled workforce


220Core technology


1,520Goodwill


1,912Total intangible assets


3,652€
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 represented the excess of the purchase price over the fair value of identifiable tangible and intangible assets acquired, less liabilities assumed, was being amortized over the
estimated life of five years up to June 30, 2001.

In
accordance with SFAS 142, the Company reclassified the carrying value of the workforce as of July 1, 2001 into goodwill. During June 2002, the Company performed
the annual impairment test of goodwill carrying value of €1,841. As a result of economic conditions in Central Eastern Europe, the Company's future cash flows forecast for this
reporting unit was lowered, which led to an impairment charge for the entire carrying value of the goodwill.

8.     FAIR VALUE OF INSTRUMENTS

As of June 30, 2003 and 2002, the fair value of long-term deposits was €382 and €603 respectively, compared to
book values of €560 and €767 respectively. Fair value is determined based on expected future cash flows, discounted at market interest rates, and other appropriate
valuation methodologies.

9.     INCOME TAXES

The income tax expense consisted of:

Year ended June 30,2003

2002

2001Current income tax expense

€
(36
)
€
(12
)
€
(2
)Deferred income tax expense








€
(36
)
€
(12
)
€
(2
)


F-13

---



Actual income tax differs from the amount that would arise from using the statutory tax rate in France as follows:

Year ended June 30,2003

2002

2001Statutory tax rate in France

34.32
%
34.32
%
35.32
%Deferred tax assets on operating losses and temporary differencesValuation allowance

(34.91
)%
(33.80
)%
(67.27
)%Effect of differences in foreign tax rates

0.07
%
(2.06
)%
6.98
%Permanent differences and others

0.52
%
1.54
%
24.97
%Effective tax rate

0.00
%
0.00
%
0.00
%




The approximate income tax effects of the temporary book to tax differences are as follows:

As of June 302003

2002

2001Deferred tax assets on tax loss carry forwards

€
14,748

€
12,056

€
10,168Deferred tax on temporary differences:Depreciation


(124
)

(110
)

(167
)Deferred revenues





460


641Others


1,861


(333
)

(72
)Total deferred tax assets


16,485


12,073


10,570Valuation allowance


(16,485
)

(12,073
)

(10,570
)Net deferred tax assets

€
0

€
0

€
0




As of June 30, 2003, expiration dates of net operating loss carryforwards were as follows:

Expiration date:2003

€
5672004


2005


1,6712006


4,8442007


2,465Between 2013 and 2023


20,023No expiration date


12,338Total net operating loss carryforwards

€
41,908


F-14

---



Fiscal years ended from June 30, 1996 to June 30, 2003 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.

Loss
before income taxes and minority interest was as follows:

Year ended June 30,2003

2002

2001France

€
(13,784
)
€
(13,553
)
€
(8,139
)Others


2,295


1,627


1,757Total

€
(11,489
)
€
(11,926
)
€
(6,382
)


10.   DEBT



In June 2000, the Company was granted an interest free advance by ANVAR (a French State organization to foster research) for €305 with a
maturity date of December 2002. As of June 30, 2003 and 2002, the Company had €0 and €305 of outstanding debt, which was classified as a current
liability.



As of June 30, 2003, 2002, and 2001, the Company did not have any available lines of credit.

11.   COMMITMENTS AND CONTINGENCIES



The Company leases its facilities and certain equipment under lease agreements expiring through December 2012. Certain leases have renewal options to
extend the lease periods up to an additional three to six years.

As
of June 30, 2003, future minimum rental payments under these leases, summarized by fiscal year, are as follows:

Year ending June 30,2004

€
1,9072005


1,7042006


1,5032007


1,2982008


1,263Thereafter


2,580Total

€
10,255


For
the years ended June 30, 2003, 2002, and 2001, the operating rent expenses were €2,154, €2,383, and €1,665, respectively.

F-15

---



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.

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 stock options vested as of June 30, 2003, the taxes payable for the Company would have amounted to €95 calculated using the closing
price of the shares on June 30, 2003. Depending on the future fluctuations of the Company's share price, the taxes payable could be significantly higher. However, based on the significant
adverse tax consequences to the Company's employees, management believes that the sale of these shares by a significant number of employees is improbable. Therefore, the Company has not recognized a
provision for such taxes in the financial statements.



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.

12.   EMPLOYEE RETIREMENT PLANS



Under French law, the Company must make contributions to government regulated schemes for retirement plans. There is 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, 2003 and 2002 was immaterial.



The U.S. subsidiary has a contributory retirement 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 US$ 12. 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.

For
the year ended June 30, 2003, the U.S. subsidiary made a contribution to the plan of €21. For the years ended June 30, 2002 and 2001, the U.S.
subsidiary made no contributions to the plan.

F-16

---

13.   CAPITAL (PREFERRED STOCK, COMMON STOCK AND CAPITAL IN EXCESS OF PAR VALUE)



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.

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
Marché of the Paris Bourse. As a result the Company had zero shares of Preferred stock outstanding as of June 30, 2003 and 2002.



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 Marché of the Paris Bourse. The net proceeds, after related costs of issuance of shares of approximately
€8,150, amounted to approximately €68,650.



During the year ended June 30, 2003 and in the frame of the program of repurchase of the Company's shares authorized by the annual Shareholder's meeting on
December 13, 2001 and December the 5, 2002, the Group repurchased repurchased 1,938,054 shares for €2,912, sold 100,000 shares that had been repurchased for
€209 and cancelled 1,080,173 shares for €1,738. During the year ended June 30, 2002, the Company did not repurchase any shares. During the year ended
June 30, 2001 the Company repurchased 19,942 shares for €434 and sold 13,189 shares that had been repurchased for €287. As of June 30, 2003 and 2002,
764,634 and 6,753 shares respectively were held as treasury stock and available for general corporate purposes including issuance under the Company's stock option and employee stock purchase plans.



The Company has adopted four separate stock option plans (the "1996 Plan", the "1999 Plan", the "2000 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.

The
1999 Plan and the 2000 Plan provided for the grant of stock options giving the right to subscribe for 1,126,000 and 750,000 shares, 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, two and a half 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 stock options giving the right to subscribe for 2,000,000 shares. 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, two and a half year, and third year anniversary of the date of grant, and expire ten years from the date of grant.

F-17

---

A
summary of the status of the Company's stock options under the Plans is as follows:

Number
of Shares

Weighted
Average
Exercise PriceBalance as of June 30, 2000

1,411,087

€
3.63Granted

1,514,585


27.32Forfeited

(242,692
)

(28.95
)Exercised

(185,897
)

(1.78
)Balance as of June 30, 2001

2,497,083


15.68Granted

1,267,915


2.84Forfeited/Cancelled

(1,229,861
)

(26.63
)Exercised

(27,436
)

(1.45
)Balance as of June 30, 2002

2,507,701


3.97Granted

960,800


1.71Forfeited/Cancelled

(668,858
)

(4.11
)Exercised

(16,250
)

(1.22
)Balance as of June 30, 2003

2,783,393

€
3.17


As
of June 30, 2003, the Company had 893,643 stock options available to grant.

The
following table summarizes information concerning outstanding and exercisable stock options under the Plans as of June 30, 2003:

|                     |  | Outstanding |  |      |  |  
|-------------------- |  | ----------- |  | ---- |  | -
|
|
|
|From €1.01 to 2.00   |  | 1,441,922   |  | 7.07 |  | €
|From €2.01 to 5.00   |  | 1,118,221   |  | 8.16 |  |  
|From €5.01 to 10.00  |  | 43,650      |  | 7.97 |  |  
|From €10.01 to 20.00 |  | 153,350     |  | 5.70 |  |  
|Over €20.01          |  | 26,250      |  | 7.25 |  |  
|                     |  |             |  |      |  |  
|Total                |  | 2,783,393   |  | 7.45 |  | €
|                     |  |             |  |      |  |  

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 stock option exercise price.
Stock based compensation expense is recognized over the related service period, which is generally the vesting period of the stock options. For the years ended June 30, 2003, 2002 and 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 in relation to these stock options grants.

F-18

---

The
Company recognized stock compensation expense related to its stock options primarily granted before the IPO of €38, €317 and €747 for
the years ended June 30, 2003, 2002 and 2001, respectively.

On
August 30, 2001, the Company offered eligible employees the opportunity to surrender 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 per share, 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 stock options were granted on May 13, 2002. The number of new stock options granted to each eligible employee was equal to the number of the stock options that was
cancelled. The Company did not incur any stock compensation expense as a result of the stock option surrender and re-grant scheme.



A summary of the status of the Company's stock purchase warrants under the Plans is as follows:

|                            |  | Series O
Warrants |   | Series A
Warrants |   | Series B
Warrants |   | Series C
Warrants |   | Series E
Warrants |  | Series F
Warrants |  | Total
Warrants |   | Total
Issuable
Shares |  
|--------------------------- |  | ----------------- | - | ----------------- | - | ----------------- | - | ----------------- | - | ----------------- |  | ----------------- |  | -------------- | - | --------------------- | -
|Balance as of June 30, 2000 |  | 999,998           |   | 300,000           |   | 300,000           |   | 95,000            |   |                  |  |                  |  | 1,694,998      |   | 847,499               |  
|                            |  |                   |   |                   |   |                   |   |                   |   |                   |  |                   |  |                |   |                       |  
|Granted                     |  |                  |   |                  |   |                  |   |                  |   |                  |  |                  |  |               |   |                      |  
|Forfeited                   |  |                  |   |                  |   | (160,000          | ) |                  |   |                  |  |                  |  | (160,000       | ) | (80,000               | )
|Exercised                   |  | (574,578          | ) | (300,000          | ) | (140,000          | ) | (37,500           | ) |                  |  |                  |  | (1,052,078     | ) | (526,039              | )
|                            |  |                   |   |                   |   |                   |   |                   |   |                   |  |                   |  |                |   |                       |  
|Balance as of June 30, 2001 |  | 425,420           |   | 0                 |   | 0                 |   | 57,500            |   | 0                 |  | 0                 |  | 482,920        |   | 241,460               |  
|Granted                     |  |                  |   |                  |   |                  |   |                  |   | 140,624           |  |                  |  | 140,624        |   | 140,624               |  
|Forfeited                   |  |                  |   |                  |   |                  |   |                  |   |                  |  |                  |  |               |   |                       |  
|Exercised                   |  | (395,420          | ) |                  |   |                  |   |                  |   |                  |  |                  |  | (395,420       | ) | (197,710              | )
|                            |  |                   |   |                   |   |                   |   |                   |   |                   |  |                   |  |                |   |                       |  
|Balance as of June 30, 2002 |  | 30,000            |   | 0                 |   | 0                 |   | 57,500            |   | 140,624           |  | 0                 |  | 228,124        |   | 184,374               |  
|Granted                     |  |                  |   |                  |   |                  |   |                  |   |                  |  | 165,624           |  | 165,624        |   | 165,624               |  
|Forfeited                   |  | (30,000           | ) |                  |   |                  |   |                  |   |                  |  |                  |  | (30,000        | ) | (15,000               | )
|Exercised                   |  |                  |   |                  |   |                  |   |                  |   |                  |  |                  |  |               |   |                      |  
|                            |  |                   |   |                   |   |                   |   |                   |   |                   |  |                   |  |                |   |                       |  
|Balance as of June 30, 2003 |  | 0                 |   | 0                 |   | 0                 |   | 57,500            |   | 140,624           |  | 165,624           |  | 363,748        |   | 334,998               |  
|                            |  |                   |   |                   |   |                   |   |                   |   |                   |  |                   |  |                |   |                       |  

On
June 30, 1998, the Company issued 1,000,000 Series O stock warrants to certain members of management for aggregate consideration of €15. Two stock
warrants entitle the holder to purchase one common share of the Company for €1.22 per share. These stock warrants were immediately fully vested and expired on June 30, 2003.

On
December 9, 1999, the Company also issued 300,000 Series B stock warrants to purchase 150,000 ordinary shares to certain members of management for aggregate
consideration of €5. The exercise price

F-19

---

of
each of these stock 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 stock warrant, the share price of the preceding trading day was at least equal to $14.00 or if a shareholder or third party makes a firm
written offer to purchase the majority of the Company's shares for at least $14.00, the stock warrant holder would be able to purchase common stock for €4.88 per share. Otherwise, the
stock warrants may be exercised for a price of €487.84 per share. During the first day of trading on July 7, 2000, the Company achieved the required $14.00 share price to allow
exercise of these stock warrants for an exercise price of €4.88 per share. Accordingly, €1,482 of compensation expense was recognized in the first quarter of the 2001
fiscal year. These stock warrants expired on June 30, 2001.

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 Series C stock
warrants to purchase 800,000 ordinary shares at an exercise price of €4.88 per share for aggregate consideration of €24. These stock warrants were immediately fully
vested and expire on December 8, 2004.

Further
to the authorization granted during the Shareholders' meeting held on December 13, 2001, the Company issued on February 7, 2002 140,624 Series E stock
warrants (out of the 195,624 stock warrants authorized) to six directors of the Company, one director of its subsidiary InfoVista (Asia-Pacific) Pte Ltd and the members of the
Advisory Committee of InfoVista (Asia-Pacific) Pte Ltd. for aggregate consideration of €6. These stock warrants give right to the subscription of the same number of
ordinary shares at an exercise price of €4.31 per share. These stock warrants vest over a period of two years with 1/3 vesting on the issue date, first year and second
year anniversary of the date. The stock warrants expire February 6, 2007.

Further
to the authorization granted during the Shareholders' meeting held on December 5, 2002, the Company issued on February 10, 2003 165,624 Series F stock
warrants (out of the 190,624 stock warrants authorized) to seven directors of the Company for aggregate consideration of €3. These 165,624 stock warrants give right to the subscription
of the same number of ordinary shares at an exercise price of €1.52 per share. The issue price of all these stock warrants was paid by the beneficiaries. These stock warrants vest over
a period of two years with 1/3 vesting on each of the issue date, first year and second year anniversary of the issue date and expire February 9, 2008.

F-20

---





The following table illustrates the effect on net income and earnings per share if the company had applied the fair value recognition provisions of
SFAS 123, "Accounting for Stock-Based Compensation", to stock-based employee compensation.

Year ended June 30,2003

2002

2001Net loss, as reported

€
(11,525
)
€
(11,904
)
€
(6,316
)Total stock-based employee compensation expense included in the determination of net income as reported, net of related tax effects


38


317


2,229Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects


(7,646
)

(14,441
)

(13,263
)Pro forma net loss

€
(19,133
)
€
(26,028
)
€
(17,350
)Earnings per share:Basic and dilutedas reported

€
(0.61
)
€
(0.60
)
€
(0.34
)Basic and dilutedpro forma

€
(1.02
)
€
(1.32
)
€
(0.92
)


Information
with respect to the Company's stock option grants and the computation of fair value, using the Black Scholes evaluation model method, follows:

Year ended June 30,2003

2002

2001Weighted average fair value of stock options and stock

€
1.09

€
2.22

€
21.67Total fair value of stock options and stock warrants granted

€
1,231

€
851

€
32,813Weighted average assumptionsExpected holding period (years)


3.6


4.3


3.6Risk-free interest rate


3.67
%

4.90
%

4.79
%Volatility


102.40
%

115.36
%

135.19
%Expected dividend yield


N/A


N/A


N/A


14.   SEGMENT INFORMATION



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, Americas and Asia-Pacific, 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.

F-21

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The following tables present revenue by country based on country of invoice and long-lived assets by country based on the location of assets:



Year ended June 30,2003

2002

2001EuropeFrance

€
3,645

€
6,028

€
5,266Others


8,939


11,056


9,247Total


12,584


17,084


14,513Americas


9,603


10,087


12,187Asia-Pacific


3,335


2,232


1,198Total sales to external customers

€
25,522

€
29,403

€
27,898




Long-lived assets reflect net fixed assets.

As of June 30,2003

2002EuropeFrance

€
2,258

€
2,497Others


166


269Total


2,424


2,766Americas


1,025


1,486Asia-Pacific


100


189Total carrying amount of long-lived assets

€
3,549

€
4,441




For the years ended June 30, 2003 and 2002, no customer individually accounted for more than 10% of consolidated net revenues. For the year ended
June 30, 2001, revenues amounted to greater than 10% of total revenues for one customer, located in Germany for €2,998.

15.   RESEARCH AND DEVELOPMENT EXPENSES

For the years ended June 30, 2003, 2002, and 2001, technological acquisitions of third party software costs included in research and development expenses
were €781, and €0, and €0, respectively.

F-22

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16.   RELATED PARTY TRANSACTIONS

On February 8, 2001, the Company completed a Second Public Offering ("SPO"). Pursuant to which, certain of the Company's shareholders sold 3,562,500 shares
of the Company (including 464,674 shares as over-allotment option) in a public offering on the Nouveau Marché of Euronext and on NASDAQ (in the form of American Depositary
Shares). For the year ended June 30, 2002, the Company recorded €312 of income from administrative fees related to the services provided for the Secondary Public Offering.

The
Company sells licenses and services to ClariTeam. The Company's Chairman and CEO is a board director of ClariTeam and the Chairman and CEO along with other officers and investors of
the Company are also significant shareholders of ClariTeam. For the years ended June 30, 2003, 2002 and 2001, the Company recognized revenues from sales to ClariTeam amounting to
€52, €132 and €69, respectively. As of June 30, 2003 and 2002, the Company recorded €8 and €5 trade receivables
from ClariTeam, respectively. As of June 30, 2003 and 2002, the Company recorded €0 and €15 trade payables to ClariTeam, respectively.

Network
Physics, a U.S.-based corporation, develops products within the network service management sector that has developed a network appliance to analyze and improve enterprise
application performance across the Internet. During June 2003, the Company executed a reseller agreement with Network Physics so that the Company may purchase Network Physics appliances for
resale to third parties.

During
May 2003, the Company signed an OEM agreement with Ecensity in order to embed their technology into certain software products. The Company's Chairman and CEO is a board
director of Ecensity and the Chairman and CEO along with other officers and investors of the Company are also significant shareholders of Ecensity Corporation. For the year ended June 30, 2003,
the Company incurred €9 of charges related to the OEM agreement. The Company had €0 trade payables with Ecensity as of June 30, 2003.

17.   RESTRUCTURING COSTS AND CONSULTING FEE

Year ended June 30,2003

2002

2001Reduction in its workforce

€
1,514

€
998

€
Office rationalization


76


699


Consulting fee





680


Total restructuring costs and consulting fee

€
1,590

€
2,377

€
0


During
the year ended June 30, 2003, the Company effected a reduction in its worldwide workforce of 30 employees and adopted an office rationalization plan to further consolidate
and reduce the size of the Munich office. Costs associated with exiting facilities included estimated sublease losses, commissions and concessions, and other facility closing costs including rent
expense while the office space was vacant.

During
the year ended June 30, 2002, the Company effected a reduction in its workforce of 30 employees and adopted an office rationalization plan. Costs associated with exiting
facilities included estimated sublease losses, commissions and concessions, and other facility closing costs including rent expense while the office space was vacant.

As
of June 30, 2003 and 2002, unpaid amounts of €62 and €701 have been classified in other current liabilities in the accompanying consolidated
balance sheet. Remaining cash expenditures relating to accrued restructuring costs will be substantially paid before the end of the first quarter of fiscal year 2004.

F-23

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During
the year ended June 30, 2002, the Company appointed a leading management consultancy, to help assess our global strategy and positioning. During the year ended
June 30, 2002, €800 of consulting fees were incurred of which €120 were included as part of the reduction in its workforce costs.

18.   VALUATION AND QUALIFYING ACCOUNTS

The following table sets forth activity in the Company's accounts receivable reserve account:

|                 |  | Balance at
beginning
of Year |     | Charges
to income
statement |   | Write-offs |  | Currency
variation |      | Balance
at End
of Year
|---------------- |  | ---------------------------- | --- | --------------------------- | - | ---------- |  | ------------------ | ---- | ----------------------
|Fiscal year 2001 |  | €                            | 145 |                             | € | 482        |  | €                  |     |                       
|Fiscal year 2002 |  | €                            | 632 |                             | € | 305        |  | €                  | (330 | )                     
|Fiscal year 2003 |  | €                            | 586 |                             | € | 46         |  | €                  | (122 | )                     

19.   PERSONNEL COSTS

For the years ended June 30, 2003, 2002, and 2001, total personnel costs (salaries, bonus and related social charges) amounted to €20,880,
€24,140, and €21,229, respectively. For the years ended June 30, 2003, 2002, and 2001, the aggregate salary costs for the Company's executive management team and
board directors amounted to €1,026 (11 persons), €889 (10 persons), and €1,062 (11 persons), respectively. As of June 30, 2003 and 2002, the
Company's total headcount was 189 and 227 persons. As of June 30, 2003 and 2002, the Company had no loans or cash advances due from any of the executive management team or board directors.

20.   SUBSEQUENT EVENTS

Stock options grants

On August 19, 2003, the Board of Directors granted to officers and employees of the Company stock options to subscribe for shares and to purchase shares,
for up to 948,810 shares. Each stock option will give the right to subscribe for new shares or to purchase existing shares at the price of €2.15 per share.

Stock
options giving the right to subscribe for 653,630 shares were granted under the 1999 and 2000 Plans. 330,830 of these stock options were granted to seven employees with a
modification to the Plan vesting period. The stock options shall vest by the earlier of 25% at the end of each quarter for which the Company will be break even ("adjusted net profit"), or under the
terms of the 2000 Plan.

Stock
options giving the right to purchase 295,180 shares of treasury stock out of the 300,000 authorized by the general shareholders' meeting of December 5, 2002 were granted
under the 2003 Plan. The terms and conditions of the 2003 Plan are the same as those of the 2001 Plan.

Restructuring

During the first quarter of fiscal year 2004, the Company effected a reduction in its worldwide workforce and adopted an office rationalization plan in the United
States and Germany. Costs associated with exiting facilities included estimated sublease losses, commissions and concessions, and other facility closing costs including rent expense while the office
space is vacant. The restructuring costs and related loss on disposal and impairment of fixed assets should amount to approximately €3.0 million for the three months ended
September 30, 2003.

F-24

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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 S.A.
|----------------------- |  | --------------
|Dated: October 23, 2003 |  | By:           

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EXHIBITS INDEX

|1    |  | Statuts, or by-laws, of InfoVista (unofficial English translation up to date as of August 19, 2003)                                                                                                                                                             
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 4.3 to Form S-8, Commission File Number 333-81300)                                                                                                    
|4.6  |  | 2003 Stock Option Plan (unofficial English translation)                                                                                                                                                                                                         
|8    |  | Subsidiaries of the Registrant (see "Information on the CompanyGeneral Information Concerning the Share capital of the CompanySubsidiaries and Investments").                                                                                                 
|10.1 |  | Consent of independent accountants                                                                                                                                                                                                                              
|12.1 |  | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.                                                                                                                                                         
|12.2 |  | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.                                                                                                                                                         
|13.1 |  | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002.                                                                                                                                                         
|13.2 |  | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002.                                                                                                                                                         

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