Accelya Solutions India Ltd Management Discussions.

INDUSTRY OUTLOOK:

Covid-19 remains as the main challenge in the industry particularly due to rising cases and emergence of the new variants. We observed how it severely impacted the aviation and we have seen many airlines filed for bankruptcy while others have already ceased operations.

To survive the crisis, airlines have implemented furloughs, re-organization, and even airline consolidations. Many countries have also closed their borders restricting airlines to operate international travel.

Over the last months, the air travel industry is optimistic towards recovery significantly driven by the leisure travel within domestic and short-haul international markets. On the other hand, corporate travel is still behind the recovery and will not return until 2022 at the earliest.

As the travel continues to rebound, international air travel outlook still depends on key factors such as borders reopening and ease of quarantine measures, as well as the progress of vaccine rollouts.

The International Air Transport Association (IATA) and Tourism Economics forecast highlights says:

• In 2021, global passenger numbers are expected to recover to 52% of pre-COVID-19 levels (2019).

• In 2022, global passenger numbers are expected to recover to 88% of pre-COVID-19 levels.

• In 2023, global passenger numbers are expected to surpass pre-COVID-19 levels (105%).

• By 2030, global passenger numbers are expected to have grown to 5.6 billion. That would be 7% below the pre-

COVID-19 forecast and an estimated loss of 2-3 years of growth due to COVID-19.

• Beyond 2030 air travel is expected to slow, due to weaker demographics and a baseline assumption of limited market liberalization, giving average annual growth between 2019 and 2039 of 3.2%. IATAs pre-COVID-19 growth forecast for this period was 3.8%.

Airlines have also been actively participating in implementing the IATA Travel Pass Initiative - a digital health app that provides accurate information of travellers certifications related to Covid-19 tests or vaccines. The initiative aims boost the consumer confidence level to travel again.

Airlines have also been shifting their focus and strategy including remodeling of aircrafts, network strategy, and digital investments such as airline retailing.

ACCELYA GROUPS STRATEGY:

Accelya continues to provide valuable services to the airline industry. With the acquisition of Farelogix, Accelya has been at the forefront of driving technology transformation within the airline industry that is undergoing structural changes. While the airline industry has been subject to tremendous stress due to COVID-19, the industry has been evolving to ensure that they continue to explore all avenues to stay nimble to bounce back as normalcy returns.

Effective financial management is at the heart of the airline business, with the significance greatly emphasized due to the disruption caused. Accelyas financial service provides vital decision support and reporting capabilities in these challenging times.

Farelogix, our new acquisition, continues to provide much-needed leadership and support airlines improve their distribution management. With NDC capabilities, Farelogix is helping the industry realize its offer and order management vision.

Our focus is to keep the long term objectives in balance with short term goals to ensure that we create the robust foundation for future growth while staying resilient in these ever-evolving business environments. We continue to evolve our products and services to ensure that we continue our leadership position in the airline commercial and financial platform domain.

We continue to work with airlines and industry partners like IATA to ensure that our end to end commercial solutions help the airline during the recovery phase and beyond.

Our employees are at the heart of our growth. We have put in place the right set of rewards and opportunities to enable us to attract, nurture and retain the best talent

ACCELYA SOLUTIONS MAJOR OFFERINGS:

The Company continues to strengthen and consolidate its key solution areas - Financial Solutions and Industry Solutions. Financial Solutions

Last years merger between Accelya Group and Farelogix, the Company is better positioned to partner with airline to cover the entire passenger journey. The Company put together roadmap to provide airlines solutions that map the entire Offer-to-Settlement cycle.

Revenue Accounting, Revenue Assurance and Cost Management continue to remain Companys key solutions.

With adoption of New Distribution Capabilities (NDC) standards, Airlines have now started their journey towards revamping their retailing capabilities. NDC provides airlines revenue opportunities through Differentiation of product offerings, Merchandizing (Ancillaries), personalization of offers and Dynamic Offers and Bundles. This year the Company has been working on providing the financial accounting side of NDC via its Order Accounting solution in line with IATA standards.

Accelya Solutions continue to partner with airlines to ensure accurate revenue declaration and control including plugging revenue leakages and improving the quality of revenue, better manage cost, risk, cash flow, profitability and overall business performance.

Revenue Accounting and Assurance: Revenue Accounting is a complex business process in an airline as it is responsible for accurate and timely revenue declaration, ensuring interline payments are billed correctly and all audit compliances are adhered with. In addition, crucial strategic decisions are made using revenue accounting data in an airline.

With over 25 years of experience and a leadership position in revenue accounting, the Company enables leading global airlines to streamline and simplify their revenue accounting processes. With adoption of NDC Accelya Order Accounting solution provides seamless transition to the new retailing world.

Moving over to Accelya Solutions Revenue Assurance Services. This portfolio covers a wide gamut of audit services spanning the entire ticket lifecycle from original booking through to the completion of the journey. This is supported by comprehensive recovery services — from raising of Agent Debit Memos (ADMs) to fund collection. The services include Sales Audit, Refund Management and BIDT Audit.

Cost Management: Accelya Solutions Cost Management Solutions enable airlines to manage their costs more smartly. It automates the payables process, provides deeper insights into the costs, and facilitates wiser, more profitable decisions every day. As a result, airlines can control supplier overpayments and transform their procure-to-pay cycle.

Industry Partnerships

ATPCO: The Company continues to provide NFP (Neutral Fare Proration) under ATPCOs RASS (Revenue Accounting Settlement Services) powered by industry recognized APEX Proration Engine.

IATA: As an IATA Strategic Partner, the Company is involved in various engagements. During the Covid times the relationship has been further extended and strengthened. Some of the initiatives the Company is involved are as below:

NDC & One Order: The Company is actively involved in lATAs retailing initiative of NDC & One Order since inception of the initiative. The relationship was further extended to involve Settlement with Orders.

SIS Development & Support

The Company is providing high quality support to IATAs Simplified Invoicing Settlement (SIS) platform to meet quality, system and information security standards as expected by IATA.

ACCELYA SOLUTIONSUPDATES

Revenue Assurance

• Travel restrictions and uncertainty around lockdowns meant Airlines were suspending services which lead to an unprecedented surge in Refunds. There was a huge pressure on the Airlines to process refunds in a timely manner to retain travel partners and yet secure as much cash as possible. Given the experiences pool of resources available, the Company was able to ramp up resources to work very closely with their Refund Management customers to process these refunds as per the Airlines requirements and timelines.

Revenue Accounting

• The focus for flagship offering of the Company Revenue Accounting for the year was to align itself with IATAs NDC and One Order initiative. In line with this objective the Company was IATA certified for its One Order Accounting solution.

• The Company was also actively engaged with IATA for the extension on the Order settlement side with the Settlement with Orders (SwO) initiative. The newer version of the product will comply to Settlement with Order requirements by Q1 FY 22.

• The Company tailored its implementation processes to successfully onboard new customers remotely.

Cost Management

The Company launched a new baseline version 5.0 of Cost Management offering was launched in the market. Customers will be consolidated on the newer version which led to lower support costs for the Company and new enhanced functionality for its customers.

ACCELYA SOLUTIONS STRENGTHS AND OPPORTUNITIES:

Business Focus, Expertise and Continuous Investment in Products and Services

The Company commands a significant advantage in terms of business domain knowledge and emerging industry changes. Years of experience have provided the Company with a strong base of Intellectual Property and Intellectual Capital. It is seen as a trusted advisor to airline CFOs, placing them right next to the CEOs. The Company is in a unique position to impact the complete offer-to-settlement and procure-to-pay cycles of airlines.

A Strong Partner for Airlines, during Recovery from the Impact of COVID-19

Travel restrictions and uncertainty around lockdowns meant Airlines were suspending services which lead to an unprecedented surge in Refunds. There was a huge pressure on the Airlines to process refunds in a timely manner to retain travel partners and yet secure as much cash as possible. Given the experiences pool of resources available, Accelya Solutions were able to ramp up resources to work very closely with their Refund Management customers to process these refunds as per the Airlines requirements and timelines.

COVID-19 has made cost reduction, new revenues and transformation paramount for airlines. Accelya Solutions has strong expertise in back-office financial solutions. Now, with the Groups Farelogix acquisition, we are able to enhance our capability to deliver an integrated Offer-to-Settlement platform. By dealing with traditional transactions and new retailing operations in one place, airlines will have a greater choice to transition at their own pace while coming out of COVID-19

Ready for the Evolving Airline Distribution Landscape

The Company welcomes, and is aligned with, the upcoming industry changes with respect to lATAs NDC and One Order initiatives. The Companys accounting solution is already certified by IATA as being NDC and One Order capable and is ready to handle the distribution landscape of the future. With Farelogixs proven solutions for NDC and offer/order management, the Group (and the Company) can realize the vision of a new airline platform spanning the entire lifecycle from offer to settlement and play a larger role in the airline ecosystem.

Neutral Service Provider

Accelya Solutions is a neutral service provider and is not governed by any competing airlines. The Companys platforms and processes are independent of any airline strategic roadmap. Confidentiality and security of customer data are of utmost importance to the Company.

Data Protection

The Company takes data privacy very seriously and has relevant controls and compliances in place including PCI DSS 3.2 and ISO 27001: 2015. All of the Companys products and services meet the new privacy standards as per the EU General Data Protection Regulation (GDPR) regulations.

Single Vendor Accountability

Accelya Solutions has pioneered the concept of platform-based outsourcing in the airline industry. The Company takes complete accountability of the outcome as per the Service Level Agreements (SLAs). It also takes the responsibility for maintaining and upgrading the platform, processes and people skills in line with industry best practices and client requirements.

Relationship with Customers

Accelya Solutions values long-term relationship with its customers. The ability to forge effective and lasting partnerships with large, global airlines is the Companys strength. Over the years, Accelya Solutions airline customers have extended their association with the Company. During the impact of the pandemic in the second half of FY 20, the Company supported the customers with webinars and other content that helped them understand and respond to the crisis. The Company also learned insights from the customers, understanding their problems, adapting and creating value that aligns with their current and future objectives.

Pay-as-you-use Model

Accelya Solutions offers its solutions on a pay-per-use model. It enables airlines to have a low capex and variable costs. At the same time, this model ensures the Company annuity revenue streams resulting in revenue visibility and foundation for growth. A win-win for customers and the Company.

Financial Analysis Shareholders funds

Shareholders funds decreased from R 23,594.27 lakhs to R 22,949.91 lakhs during the year 2020-21.

Equity

During the year, Share Capital and Securities Premium stand at R 1,492.69 lakhs and R 3,169.84 lakhs respectively. Presently, Accelya Solutions has 14,926,261 shares (Previous Year 14,926,261) of R 10 each fully paid up.

Profit and Loss Account

Accelya Solutions retained earnings as at June 30, 2021 amount to R 15,800.48 lakhs.

As at 30th June, 2021, Accelya Solutions book value per share decreased to R 153.75 per share as compared to R 158.07 per share as at 30th June, 2020.

General Reserves Account

During the year, General Reserve stands at ^ 2,391.52 lakhs. There is no change to this balance in the current year. Capital Redemption Reserve

During the year, Capital redemption Reserve stands at ^ 95.38 lakhs. There is no change to this balance in the current year.

Investment

Accelya Solutions Investments at cost, as at 30th June, 2021 stands at ^ 4,741.05 lakhs decrease from ^ 4,741.55 lakhs, as at 30th June, 2020.

Fixed Assets

Product Development

During the year, product development cost amounting to ^ 980.14 lakhs has been capitalised as intangible assets.

Other Fixed Assets

Accelya Solutions added ^ 987.22 lakhs to the gross block comprising of ^ 380.08 lakhs in Plant and Machinery, ^ 9.36 lakhs in purchase of Software, ^ 69.76 lakhs in purchase of Furniture and fixtures and the balance ^ 528.02 lakhs in Leasehold improvements.

Sale / Disposal of Assets

During the year, Accelya Solutions sold/ disposed of assets with a Gross Book value of ^ 356.25 lakhs and a depreciated Net Value of ^ 345.27 lakhs. The sold assets included old plant & machinery, furniture & fixtures and vehicles.

Accelya Solutions Gross Block as at June 30, 2021 stood at Rs 22,412.29 lakhs as compared to Rs 20,801.18 lakhs as at June 30, 2020. The corresponding Net Block as at June 30, 2021 is R 6,369.77 lakhs as compared to R 6,815.41 lakhs as at June 30, 2020.

Trades Receivables

Accelya Solutions Net Receivables as at June 30, 2021 amounted to Rs 5,114.47 lakhs as compared to ^ 6,102.31 lakhs as at June 30, 2020. These debtors are considered good and realisable.

The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates and general economic factors which could affect the customers ability to settle and finally depending on the managements perception of the risk. The total provision for doubtful debts as at 30th June 2021 stands at R 228.34 lakhs compared to R 280.32 lakhs as at 30th June, 2020.

Trade receivables as a percentage of total revenue is 18.96% as at 30th June 2021 as against 16.50% as at 30th June, 2020. Non-current Liabilities

As at 30th June, 2021 Accelya Solutions non-current liabilities amount to Rs 3,387.93 lakhs as compared to Rs 4,437.16 lakhs as at 30th June, 2020.

Current Liabilities

As at 30th June, 2021 Accelya Solutions current liabilities amount to Rs 5,628.41 lakhs as compared to ^ 6,878.10 lakhs as at 30th June, 2020.

Result of Operations Sale of services

For the year ended 30th June, 2021, Accelya Solutions recorded operating income of ^ 25,101.04 lakhs.

Operating Profit

Accelya Solutions reported profit before exceptional items and tax of ^ 5,875.22 lakhs for the year ended 30th June, 2021. Profit after Tax

Accelya Solutions recorded a PAT of ^ 4,519.34 lakhs for the year ended 30th June, 2021.

Dividend

The Company had declared and paid an interim dividend of ^ 35 per equity share during the year.

IPR Assets and Amortisation

As a value innovator, Accelya Solutions has always believed in developing its own Intellectual Property (IP) and over the years has invested significant amount of resources in this development. All these products have been viewed as the best of the breed products by the industry and highly appreciated by the customers.

Details of IPR assets and amortisation are as follows:

Product IPR Rs lakhs
Opening Net Block 2,407.14
Additions 980.14
Amortisation 685.02
Closing Net Block 2,702.26

RISKS, CONCERNS AND RISK MITIGATION:

Increasing Competition

New providers and existing technology vendors are constantly foraying into the airline IT and finance domain. Accelya Solutions is constantly investing in people, solutions and processes to ensure maximum value to its customers. The companys in-depth knowledge of the industry and its requirements makes it the partner of choice for airlines.

Impact of the COVID-19 Pandemic on the Business

The COVID-19 pandemic, the country-wide lockdown and the far-reaching travel restrictions in various geographies across the globe have affected the airline and travel industry in an unprecedented way. As the Companys business model is principally based on per transaction pricing, the Companys revenue which is linked to airline passenger transactions buffered from larger impact due to minimum billing agreements with customers. The Board and the management are closely overseeing the Companys efforts in navigating this global crisis, which include, amongst other initiatives, ensuring business continuity, extensive customer out-reach through webinars and video conferencing, managing costs and ensuring safety of our employees. A Special Oversight Committee (SOC) has been constituted to oversee the Companys COVID-19 planning and responses and report to the Board.

Uncertain Economic Environment

The airline industry is amongst the first to be impacted by any major economic or political situations. Accelya Solutions is in a good position to mitigate this risk. The Company has a global customer base. The Company has long term contracts with its customers which generates annuity revenues and provides good visibility on business.

Regulatory Risk

Proposed legislation in certain countries in which Accelya Solutions operates, may restrict airlines in those countries from outsourcing work to the Company, or may limit its ability to send employees to certain client sites.

Accelya Solutions has employees of different nationalities which helps in mitigating this risk to a certain extent.

Cyber Security and Data Privacy Risk

Global cyber security and data privacy threats are ever increasing. Accelya Solutions has relevant controls and compliances in place to address these. The Companys Privacy Management Program covers continuous risk analysis and mitigation for all its products, services and processes.

Currency Volatility

Being a global organization dealing with global customers, volatility in currency exchange movements may affect the results of Accelya Solutions operations.

The Company has currency hedging policies and practices in place which are regularly reviewed to mitigate this risk. Resource Availability

Accelya Solutions is in an industry driven by domain knowledge and intellectual property and the Companys success depends in large part on its ability to attract and retain talent.

Internal Financial Control Systems and their Adequacy

The Companys internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies. The Company has a well-defined delegation of power with authority limits for approving contracts as well as expenditure. Processes for formulating and reviewing annual and long-term business plans have been laid down.

The Companys management assessed the effectiveness of internal control over financial reporting (as defined in Clause 17 of SEBI Regulations 2015) as of June 30, 2021.

The Company has appointed Grant Thornton India LLP to oversee and carry out internal audit of its activities. The audit is based on an internal audit plan, which is reviewed each year and approved by the audit committee. The conduct of internal audit is oriented towards the review of internal controls and risks in the companys operations such as operations review, , accounting and finance, treasury management, procurement, pre-sales & sales processes, statutory compliances, human resource, travel and cyber security & IT processes.

The audit committee reviews reports submitted by the management and audit reports submitted by internal auditors and statutory auditors. Suggestions for improvement are considered and the audit committee follows up on corrective action.

Based on its evaluation (as defined in section 177 of Companies Act 2013 and Clause 18 of SEBI Regulations 2015), the audit committee has concluded that, as of June 30, 2021, the internal financial controls were adequate and operating effectively.

Human Capital

We recognize that people are important assets, keeping this into consideration we recruit the best talent, provide training to enhance capabilities, coach and mentor the right people and reward our employees in meaningful ways. We continuously track human capital metrics to make sure we attract, develop and retain the best talent. It is our endeavor to

Attract qualified talent. Educational Qualifications

Post Graduates Engineering /Other Graduates IATA Certified / Diploma holders Undergraduates
19% 66% 12% 3%

... With deep experience in our domain & technology... Total Experience

Less than 2 years 2-5 years 5-10 years More than 10 years
8% 11% 23% 58%

.... and encourage practices of inclusion and diversity to bring forth the best in our people.... Gender Diversity

Men Women
60% 40%

... while making all efforts to retain the best people and enable them grow in their roles Attrition

Attrition for FY 20-21: 8.8%

Voluntary attrition for the last 3 years:

Year ITS BPO Others
2021 (July 2020 to June 2021) 17.6% 4.0% 10.6%
2020 (July 2019 to June 2020) 16.8% 11.2% 20.2%
2019 (July 2018 to June 2019) 20.5% 8.8% 14.9%

It has been a year of change and transformation at Accelya. The multitude of changes externally were further compounded with the transformational changes we are going though internally. With a lot happening this year, our focus has been to provide our employees the information and support so that they can feel empowered and be a part of the journey of change we are on. Here are a few highlights from this past year.

• Care for our Employees

o Through these tough times, Accelyas prime focus has been on assessing and contributing to the well-being of our employees. We designed strategies for business continuation that also addresses how our employees can stay psychologically resilient. From supporting employees for Remote working, activating Emergency Response Team, Communicating consistently & providing financial assistance to the affected employees. Here are a few highlights from this past year.

• COVID 19 helpline service to provide 24x7 support to address all COVID 19 related queries

• Covid 19 Vaccination Drive for employee and their family members.

• Monthly Live and interactive sessions by specialized doctors from the medical fraternity covering topics like:

o Mental Health and Well-being -Mindfulness

o Maintaining Healthy Weight

o Cancer Myths and Facts

o Basics of Skin and Hair Care

o Common Kidney Disorder & Prevention o Eye Care

o Pulmonary Rehabilitation in COVID 19 - Strengthen your lungs o Impact of COVID 19 during Monsoon We also assisted our employees during the pandemic with: o Additional medical leave

o Additional Financial assistance to the family of the deceased employee

o Assistance for Insurance cases wherein hospitalization cost was more than the insured amount o One-time fixed amount assistance for staff and professional level

• LearnX for Remote Collaboration Tools:

With a large majority of our employees working remotely and collaborating through virtual tools, we took the opportunity this year to upskill employees on remote collaboration & communication tools available to them. We partnered with our Microsoft implementation partner to deliver a series of LearnX sessions with experts focused on helping employees fully leverage the office 365 virtual communication and collaboration suite. These sessions were very well received and 1000+ employees attended the sessions and rated the workshops 4.5/ 5. We supported this initiative by creating and offering byte sized learning courses on our LMS on a variety of topics related to effective remote working.

• Transforming into New Accelya

To ensure that the company is structured in a way that allows us to accelerate our growth and innovation, expand into new areas of our industry and scale effectively; Accelya has reorganised into a new functional structure designed to make our organization more agile, decisive, efficient, adaptable and flexible. In our earlier structure the Line of Business (LoB) held all the functional capabilities within their own structure - a decentralised model. However, in the new structure each Division holds a specific set of functional capabilities within it, and supports the rest of the organization - a functional model. The functional structure is designed to be more efficient, whilst at the same allowing the different functions to focus and deliver much more effectively, as each division will be focused specifically on their area of expertise with a much more robust support structure across the entire organization. Through last year, we supported this transformation of Accelya through regular communication and support activities. Besides All employee townhalls, we also designed a special series of Learn X sessions with ExComs and Leaders where through informal conversations, ExCom Members and other leaders shared their perspectives and helped employees understand and participate in new Accelyas transformation journey.

• Pulse - Integrated Global HRMS for Employees

In our endeavor to have the most simple and efficient tool for employees, we have tried to incorporate new responsive and mobile enabled layouts for the different modules that encompass the HR Lifecyle. We incorporated new Organizational structure i.e. Accelya 2.0.

• Leveraging new age technologies to provide the best employee experience

With our engagement with Oracle we have tried to utilize the full portfolio on offer. One of the latest additions to our Pulse has been the Recruiting platform. The new age platform has led to simplified hiring and at the same time an increased engagement with candidates. Thus, leading to a successful exhibition of the Accelya brand to the candidates. We have improvised our Onboarding and Offboarding handling of activities on the system using the new tools available. Thereby completing the restructuring of the entire employee lifecycle while being able to maintain the Accelya brand and image proposition.

• Employer Brand

We are building an employer brand in the market that demonstrates our capability as a Solution company in aviation industry. We use best in class assessment tools and techniques to evaluate candidates whilst providing a great candidate experience. We are increasing our talent pipeline through technology and building programs to ensure we can keep the talent pools engaged.