Datalex Plc — Annual Report 2020

Apr 29, 2021

DATALEX PLC 2020 Annual Report and Financial Statements

Dublin, Ireland – 29 April 2021: Datalex plc (the "Company" or the "Group") (Euronext Dublin: DLE), a market leader in digital retail technology focused on the airline market, announces that it has today published an electronic version of its 2020 Annual Report and Financial Statements for the year ended 31 December 2020 (the "2020 Annual Report") on its website.

Key highlights

• 2020 was a year of meaningful progress against a backdrop of unique Covid induced challenges.
• The Group was impacted by COVID-19 in 2020. Revenues declined by 38% versus 2019, from USUS\$45.1 million in 2019 to US\$28.1 million in 2020. Excluding once-off revenues recognised in 2019, revenues declined by 29% versus 2019 on a like for like basis. This is in the context of a year where airline passenger demand fell by 65.9%i in 2020 compared to 2019. The Group's exposure was mitigated by its SaaS revenue model and geographical reach and mix.
• Foreign Currency Adjusted EBITDAii increased from US\$0.7 million in 2019 to US\$3.4 million in 2020. This increase was enabled by taking quick and decisive action to reduce costs in Q2 and through rigorous cost management throughout 2020.
• The Group incurred a loss after tax of US\$6.5 million for the year compared to loss after tax of US\$12.1 million in 2019. This loss after tax includes Exceptional Costs of US\$2.8m (US\$8.3m in 2019), Depreciation and Amortisation of US\$2.1m (US\$2.6m 2019), Foreign exchange impact US\$1.6m (\$0.2m in 2019) and Interest Costs of US\$2.9m (US\$1.5m in 2019).
• The Group managed cash flow effectively during a very difficult year. No additional funding was required during the year and no funds have been drawn from the additional debt facility provided by the Company's lender, Tireragh Limited (a company ultimately beneficially owned by Mr. Dermot Desmond, also a substantial shareholder in the Group via IIU nominees Ltd). Further, Tireragh Limited has signalled its willingness to extend the repayment date of the Company's existing loan facility to September 2022, if required.
• The Group is strongly positioned to capitalise on market opportunities once travel resumes. Due to ongoing market uncertainty, the Group feels it would be premature to issue formal guidance at this time. In 2021, we will continue to progress our strategy to drive accelerated and sustainable growth by supporting our existing customers, and by continuing to invest in our product roadmap which will further support new customer acquisition.

Commenting on the results Sean Corkery, Chief Executive Officer, said:

"In 2020, I am pleased that we continued to make solid progress in our recovery and competitiveness. Notwithstanding the disruption of COVID-19, we increased both our EBITDA and Foreign Currency Adjusted EBITDA and we were operationally cash generative. We made serious strides in product development and cloudbased delivery and are now well positioned to deliver SaaS based Product and Services to our existing and future customers in a market place ripe for transformation using digital retail. I am confident that the progress made in 2020 will support the Group's next phase of growth."

2020 Results Presentation

A management presentation on the 2020 results is available on our website at www.datalex.com/investors

2020 Annual Report

The 2020 Annual Report is available to download at www.datalex.com/investors

A copy of the 2020 Annual Report has been submitted to Euronext Dublin where it is available for inspection and copies will be posted to shareholders who have elected to receive them.

ⁱ IATA 2020 Worst Year in History for Air Travel Demand https://www.iata.org/en/pressroom/pr/2021-02-03-02

ii Foreign Currency Adjusted EBITDA is a new KPI introduced in 2020. Our functional currency is US Dollars. As explained in our debt financing note (Note 14), in 2019 the Company received €11.3m debt financing from Tireragh Limited. This loan funding was denominated in Euro.

We present this measure because we believe that the measure provides useful and necessary information to investors and other interested parties for the following reasons:

• It ensures that the underlying business performance is presented clearly in the accounts and is not adversely or favourably affected by changes in the relative exchange rates which would be outside the control of the business.
• It is the metric that is used for internal performance analysis.

The foreign exchange input is arrived at by combining the foreign exchange movements per Note 22 of the Annual Report (both realised and unrealised Foreign exchange) and the additional foreign exchange movements on those Euro denominated Trade Debtor balances fully provided at the end of 2019 and reported as an exceptional item.

About Datalex

Datalex is a market leader in transformative airline retail products and solutions. The Datalex Digital Commerce Platform provides airlines with a unique solution to drive revenue and profit as digital retailers. Today the platform enables a travel marketplace of over one billion shoppers covering every corner of the globe, driven by some of the world's most innovative airline retail brands. Datalex's customers include Air China, JetBlue Airways, Hainan Group, SAS, Philippine Airlines, Aer Lingus, Brussels Airlines, Air Transat and Trailfinders. The Group is headquartered in Dublin, Ireland, and maintains offices across Europe, the USA and China. Datalex plc is a publicly listed company on Euronext Dublin (DLE).

Learn more at www.datalex.com or follow on twitter @Datalex.

Media Enquiries Michael Moriarty FleishmanHillard +353 87 243 2550 michael.moriarty@fleishmaneurope.com

Investor Enquiries

Sean Corkery Datalex plc +353 1 806 3500 sean.corkery@datalex.com

Transforming Airline Retail Annual Report 2020

Our story is one of determination, grit, learning and innovation.

Contacts & Other Information 188

See all investor information online at datalex.com/investors

02 Strategic Report

Datalex at a Glance	2
Chairman's Statement	4
Chief Executive Officer's Review	8
Our Strategy	12
Our Products	14
Our Stakeholders	16
COVID-19	24
Financial and Operational Review	26
Risk Report	34
Going Concern	38
Financial Viability Statement	40

Board of Directors	44
Executive Leadership Team	46
Corporate Governance Report	48
Nomination & Governance Committee Report	60
Audit & Risk Committee Report	64
Remuneration Committee Report	74
Directors' Report	92
Directors' Responsibilities Statement	98

Independent Auditor's Report 102 Group Financial Statements 110 Company Financial Statements 115 Notes to the Financial Statements 118

Contents

Air China JetBlue Airways Tianjin Airlines West Air Guangxi Beibu Gulf Airlines Urumqi Air

Air Changan SAS Aer Lingus Brussels Airlines Air Transat Edelweiss

Trailfinders KLM Turkish Airlines Philippine Airlines Copa Airlines

Datalex at a Glance

Who we are

The company, founded in 1985, is headquartered in Dublin, Ireland, and has offices across Europe, America and China.

Our products are used by some of the world's most innovative airline retail brands.

Datalex is a public company and is listed on Euronext Dublin (DLE).

What we do

Datalex provides airlines with products to drive revenue and profit as digital retailers. Our products offer airlines the ability to deliver a competitive and differentiated airline retail experience on every device, across every sales channel and at every touchpoint in the customer journey.

Our Products

Our products and platform operate at scale with over one billion shoppers annually, covering every corner of the globe and used by some of the world's most innovative airline retail brands.

Our Customers

• Datalex Direct
• Datalex NDC
• Datalex Dynamic
• Datalex Merchandiser

Our strategy

Our strategy is to drive accelerated and sustainable growth by creating market leading products that enable airlines to grow revenue and profit as digital retailers.

Our values

Datalex's purpose is to transform airline retail

Our Strategic Pillars

Customer at the core

Product first and future proofed platform

People

Operational excellence

Commercial strength

2 3

2020, a new set of challenges

2020 was my first full year as Chairman of Datalex Plc. I noted in last year's Annual Report that 2019 was an exceptionally difficult year for the Group and unfortunately, I am describing 2020 as another challenging year for the Group. However, whilst 2019 and 2020 have both been difficult years, the challenges the Group has faced have been distinctly different.

Careful management of the business was required to navigate the unique trading environment created by the evolving impact of the COVID-19 pandemic.

2020 performance

Fortunately, as I outlined in last year's Annual Report, despite the rapid onset of COVID-19 in the early months of 2020, the Group was already well structured to react with a new management team in place, a resilient revenue model and strong customer relationships. The Group responded in a proactive manner and a number of cost reduction actions were taken in April 2020 to mitigate the impact to its financial performance. We continued to protect our cash position throughout the year, and I am very pleased to report that we generated a positive foreign currency adjusted earnings before interest, tax, depreciation and amortisation ("Foreign Currency Adjusted EBITDA") of US\$3.4m.

We were transparent in last year's Annual Report that COVID-19 brought an unprecedented level of uncertainty and that it would be some time before the full impact would be revealed. This statement is still the case. Datalex is a software company focused on transforming airline retail, which means the impact of the COVID-19 pandemic on airlines has affected Datalex's ability to achieve its growth plans. During 2020, the Group saw a noticeable reduction in the number of airlines tendering for airline retail solutions. Whilst the Group has seen a moderate increase in activity and airline engagement in recent months, it is difficult to determine when airlines will be in a position to invest until they have completed their own internal restructuring and have more clarity on the roadmap to recovery for the industry and their underlying business. However, crises accelerate innovation, and we are confident that this crisis has accelerated a number of trends which will be in our favour once the market returns.

The Group is using this time of uncertainty to invest wisely. We remain committed to progressing our growth strategy and continued to invest in product development, research and development ("R&D") and new talent in 2020. Our underlying and determined focus is to return Datalex to a growing, sustainable and cash generative business creating value for our

shareholders.

Lifting of the suspension of trading in the Company's shares on Euronext Dublin

A fundamental commitment of the new Board and management team was to restore the listing and trading of the Company's ordinary shares on Euronext Dublin in 2020. This was important to enable existing shareholders to trade their shares and to allow new shareholders to have the opportunity to invest in Datalex.

I am very pleased that this commitment was honoured on 14 July 2020 when the Company's listing on Euronext Dublin was restored.

The restoration of the listing was a thorough process, requiring the Directors to satisfy Euronext Dublin that the suspension of trading was no longer warranted.

The Directors have progressed the issues that led to a breakdown in internal financial controls in early 2019 and the restoration of the Group's listing is a solid indicator of the progress that has been made in this area.

Board and corporate governance

During 2020, there were no changes to the composition of the Board of Directors.

The Group continues to apply the principles and provisions of the 2018 UK Corporate Governance Code and the additional requirements of the Irish Annex, further details are set out on pages

43 to 99.

The Board continues to operate effectively with regular Board meetings and Committee meetings. The Group continues to benefit from the experience and expertise of each Board Member, and I would like to sincerely thank the Directors and the Company Secretary for their dedication and commitment and going above and beyond during 2020.

Chairman's Statement

2020 was a year of meaningful progress against a backdrop of unique challenges

From a corporate governance perspective, the lifting of the Group's suspension of trading in the Company's shares on Euronext Dublin was a primary objective in 2020. In addition to this, the Board implemented several other important governance objectives. One of these objectives was to appoint a Director of Workforce Engagement. In December 2020, Christine Ourmières-Widener, was appointed to this role. This newly appointed role will enable the Board to develop a better understanding of the workforce and improve communication between the Board and employees of the Group. Christine will spend time in the first half of 2021 engaging with people across all areas of the organisation. Another objective was to conduct an externally facilitated evaluation of the Board, its committees, and individual Directors and this was undertaken during 2020. A full overview of the enhancements we have made to our governance practices is detailed in the Governance section of this report on pages 43 to 99.

Group funding

I had said in last year's Annual Report that it was the intention of the Group to arrange a capital raise in order to strengthen the Group's balance sheet and liquidity position. That remains our intention. The Board of Directors determined not to proceed with a capital raise in 2020, due to the prevailing COVID-19 related uncertainty and stock market conditions. The timing of any fundraising will be key to its success.

At the time of writing last year's Annual Report, I noted that Tireragh Limited (a company ultimately beneficially owned by Mr. Dermot Desmond, also a substantial ultimate beneficial shareholder in the Group via IIU Nominees Limited) had signalled their intent to provide an extension of the term of the Tireragh Limited loan facility to 1 November 2021 and to provide an additional debt facility of up to €10 million. That extension and additional funding was secured in September 2020 and approved by our shareholders that month. At the time of print, this additional funding has not been required, and no drawdowns were made against this additional facility during 2020.

Subsequent to the year end, Tireragh Limited has confirmed that it is willing to extend the repayment of the loan facility to September 2022 which will allow the Company to proceed with a capital raise at the appropriate time, market and other conditions permitting.

Mr. Desmond has informed the Company that he will support the equity fundraising and will procure the participation of IIU Nominees Limited for at least its pro rata entitlement. I would like to extend my thanks to Mr. Desmond for his continued support.

Looking ahead

2021 will be another year where the Group continues to make progress whilst tackling the ongoing impact of COVID-19 on the travel industry. The International Airline Association's (IATA) baseline forecast for 2021 is for a 50.4% 1 improvement on 2020 demand, which would bring the industry to 50.6% of 2019 demand levels. Positively, the roll out of vaccinations has commenced, however, there is ongoing uncertainty regarding new variants of the virus, the designated pathway for the reopening of borders and the processes and controls that will need to be in place in order for international air travel to resume fully.

Datalex has a track record of responding and adapting to new and unforeseen circumstances and has deep reserves of resilience. I have every confidence that the Group will be able to deal with the challenges it faces in 2021 with this same agility and resilience.

I, and my colleagues on the Board, would like to thank the entire Datalex team, led by Sean Corkery, CEO, and his Executive team, for their contribution in 2020.

I would like to thank our customers for their loyalty and support, particularly in a year that has been so challenging for each of their businesses.

Finally, on behalf of the Board, I would like to thank you, our shareholders. We look forward to building on the progress achieved in 2020 to drive sustainable growth in the future.

David Hargaden Chairman 28 April 2021

1. Full year / December 2020 Air Passenger Market Analysis, International Air Transport Association (IATA).

Chief Executive Officer's Review

2020 was a year which brought unique and unforeseen challenges for our industry largely driven by the COVID-19 pandemic. These challenges not only impacted our business performance, they severely affected the customers we serve, the societies in which we live and the way in which we go about our daily business. As we have outlined previously, and detailed transparently, the challenges Datalex faced prior to 2020 and unrelated to COVID-19, had largely been progressed. This meant that the Group was in a strong position to respond to this latest challenge and I believe has given us a small advantage in terms of recovery.

Financial performance

Our commitment to timely action to protect the interests of all our stakeholders was evident throughout 2020. On 12 March 2020, we announced to the market that the pandemic would have an adverse effect on our business. At the date of publication of our last Annual Report, whilst it was difficult to accurately quantify the impact on our financial performance, the Group decided to take immediate action. This included a targeted restructuring programme, a renegotiation of business partner agreements, elimination of discretionary spending, a recruitment freeze, and reducing working hours for employees on a temporary basis for part of the year. These actions allowed us to have more cost certainty in a period of significant uncertainty.

From a financial perspective, whilst we did not achieve revenue growth in 2020, we did exceed our post-COVID-19 revenue expectations. Revenues declined by 38% versus 2019. Excluding once-off revenue items, revenues declined by 29% versus 2019 on a like for like basis (refer to Note 18). This is in the context of a year where global airline passenger demand fell by 65.9% in 2020 compared to 2019. 1 and where airlines paused or cancelled many technical initiatives, both internally and with external third-party vendors. As a Software as a Service ("Saas") company our commercial model has fixed and variable components, which buffered our exposure in 2020. In addition to this, most of our customers proceeded with service projects in 2020 leading to services revenue (excluding once-off revenue) declining at the lower rate of 19% year on year.

In terms of profitability, I am pleased to report that the Group generated a positive foreign currency adjusted EBITDA of US\$3.4m in 2020. This performance was largely driven by reducing our cost base by 39% in 2020 versus 2019. Whilst reducing our cost base, we continued investing in our products and our platform in 2020. This was critical to our product led strategy in 2020, as outlined below.

We improved financial stability in 2020 by extending and upsizing our debt facility. Despite an additional facility of €10 million being secured in September 2020, zero funds were drawn down during the year. Careful cash management resulted in a closing cash balance of US\$3.0 million.

A complete and detailed review of our financial performance is set out on pages 26 to 33.

Our strategy

In 2020 we implemented a new strategic plan focused on achieving accelerated and sustainable growth. Whilst the acceleration aspect of our strategy has been restrained by the impact of COVID-19 on our industry, our commitment to our SaaS strategy remains firm.

We are focused on building winning products that enable airlines to grow revenue as digital retailers. All of our products are now cloud-based.

With over thirty-five years' experience working in travel technology, Datalex is fortunate to have a portfolio of highly innovative airlines as customers. We have ensured that our product strategy is designed to support these airlines with their needs today and their needs in the recovery period.

COVID-19 has been a real catalyst for change, and we see this period – 2021 and beyond as a strategic inflection point for many airlines. Datalex is primed to work with any airline seeking to enhance their digital retailing as travel resumes and we return to growth.

Further detail on our strategy is set out on pages 12 and 13.

1. Full year / December 2020 Air Passenger Market Analysis, International Air Transport Association (IATA).

9

Supporting our customers when it matters most

One of our most important priorities in 2020 was to support our customers throughout this challenging year and to clearly illustrate how Datalex is a trusted and flexible business partner.

In 2020, most airlines had to make technical adjustments to respond to the ever-changing needs of their customers. For example, many changes were required regarding new health & safety measures and also in the area of cancellations and refunds. Datalex enabled airlines to make these changes as quickly and as efficiently as possible. In some cases, changes were implemented for customers in less than 24 hours.

During the year we delivered product capability that would address some of the immediate pain points experienced by our customers relating to the pandemic. For example, in 2020, we implemented a fully integrated 'Vouchers as a form of payment' product enabling airline customers to use vouchers as a method of full payment or partial payment when making new bookings. For customers that have implemented this product capability, we have seen over one third of transactions being booked using vouchers as a form of payment, thereby reducing considerably the burden on call-centre staff who would otherwise have had to manage these transactions manually.

Delivering high quality releases on time and on budget in 2020 was critical and we continue to perform in this area. All delivery and support targets were met for completed projects.

Most importantly, our customers have confirmed that they valued our support during this most difficult year. At Datalex we use the industry standard Net Promoter Score survey to regularly measure customer satisfaction. The results from the survey in Q4 2020 were the highest results Datalex has ever received and showed significant improvement versus previous years. I am pleased that the operational emphasis introduced during my time as CEO at Datalex is now reflected in some part by these results.

Notwithstanding the above, in our 2020 Guidance and Trading Update issued last November, we announced that two of our customers, one European and one Asia-Pacific based, planned to consolidate their technology leading to a reduction in scope and eventual cessation of services.

Our products

2020 was a big breakthrough year in our development as a product first company. This is a critical part of our new strategy and an area where we made strong progress during the year. Specifically, we transitioned from selling a Digital Commerce Platform to selling four cloud based flagship products – Datalex Direct, Datalex NDC, Datalex Dynamic and Datalex Merchandiser. Each of our flagship products can be deployed as a standalone product or can be used in conjunction with our other products.

Our new product strategy allows us to target more customer segments in the market while significantly improving the time required to implement our products. Digital Configurator, a self-service tool, was launched in 2020 and has helped the ease of implementation and ongoing customer change. It enables our customers to configure directly and independently, in real time, any changes they require to optimise revenue, price and ancillaries. We see this flexibility as game-changing for airline retailing.

In parallel, and in line with our SaaS strategy, we executed our cloud-hosting migration to Amazon Web Services (AWS) in order to better deliver and scale utilisation of our products. All of our products are now hosted on cloud. In November 2020, Datalex achieved AWS Travel and Hospitality Status. This designation recognises the deep domain expertise that Datalex has and our readiness to leverage the agility and breadth of services provided by AWS.

Further detail on our products is set out on pages 14 and 15.

People

Without people, there would be no performance and our result in 2020 is attributable to our team of people who demonstrated the resilience I have spoken about in previous Annual Reports.

Our teams adapted to remote working very quickly. Any concerns that we may have had about our ability to engage remotely on fastpaced delivery initiatives were quickly dispelled by the outcome, performance and productivity achieved. We will leverage this capacity into 2021 and beyond as we determine what the optimal organisational needs are, as current government restrictions are reduced.

Our culture is vital to our future success. We refined our values and saw real improvements in terms of Company values, trust and

engagement across the Company. Having introduced the Great Place to Work Trust Index Survey in 2019, the results of the 2020 survey saw a significant improvement in our results. Improvements were made across all five areas of the survey – credibility, respect, fairness, pride and camaraderie. As a result of this, I am very pleased to say that Datalex has been certified as a Great Place to Work and, perhaps more importantly, that this improved workplace experience was achieved in the most challenging of years.

We recognise that we operate as part of much larger global community and that our impact matters.

As we consider the areas of environmental, social and governance within a sustainability framework, we will prioritise the social pillars whereby we will continue to nurture our diverse and inclusive culture.

Lifting of the suspension of trading in the Company's shares on Euronext Dublin

As mentioned by our Chairman, the lifting of the suspension of trading of the Company's shares on Euronext Dublin on 14 July 2020 was a major milestone for Datalex and the final one on our RESET Transformation plan. It was a priority for the Board of Directors and the Executive Leadership Team and an important step towards establishing greater financial stability for the Company. The lifting of the suspension was also a testament to the improvements the Group made from a governance perspective.

Looking ahead

Uncertainty remains across all industries regarding the timing and trajectory of the COVID-19 recovery, not least where travel is concerned. There is general alignment that the post-COVID-19 'new normal' will be different and airlines are preparing for this new opportunity.

As a software company, specialising in Digital Retail for airlines, we are uniquely positioned to help our customers on this change journey and, at the pace of recovery, to add new airlines to our customer list. Our global footprint will be beneficial and we see early upside opportunity in China, where Datalex has a strong presence.

A number of industry trends have become more pronounced during the COVID-19 pandemic. Our view is that this accelerated change in the industry will work in Datalex's favour, These trends include:

1. Faster recovery on the digital direct channel. The direct channel is our core area of expertise and all of our customers use our Datalex Direct product.

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1. With a smaller demand pool, conversion rate optimisation will be of more importance than ever before. At Datalex, we enable airlines to make the right offer to the right customer at the right time and offer a better customer experience, which is critical for improving conversion.

2. There will be more of an appetite to innovate and this will lead to an acceleration of investment in Dynamic Offer. Datalex, with core expertise in price determination and product determination, is uniquely positioned to win market share in this new market with its Datalex Dynamic product.

3. Airlines will continue to focus on generating additional ancillary revenues across the endto-end customer journey to drive profitability. Datalex Merchandiser enables airlines to sell ancillaries at every customer touchpoint. This product can be implemented in 30 days and requires very little upfront capital investment which is important for airlines in the current climate.

4. There will be a shift from having in-house developed booking engines to outsourcing to best in class products available in the market. It is costly for airlines to keep pace with regulatory changes and retailing trends, and this will be a big area of opportunity for Datalex.

Whilst I believe there are industry tailwinds that Datalex will be able to capitalise on once the industry recovers, from a financial planning perspective, we have a conservative plan in place which assumes no material signs of recovery in 2021. The Group plans to raise additional finance through a capital raise, at the appropriate time, which will strengthen the Company's balance sheet and provide the Group with working capital to support the implementation of new revenue opportunities.

From an operational planning perspective, we are working on the basis that the recovery could happen at any time and that we need to be fully prepared. This balance between short term prudence with readiness for future growth will continue to be our modus operandi for 2021.

We will continue to adapt and respond to new challenges that arise with resilience and speed.

We remain confident that progress we have made in 2020, and the further progress we will make in 2021, will support Datalex's eventual return to demonstrable and profitable growth.

Sean Corkery Chief Executive Officer 28 April 2021

Our Strategy

Driving accelerated and sustainable growth

Our strategy is to drive accelerated and sustainable growth by creating market leading products that enable airlines to grow revenue and profit as digital retailers.

In achieving our strategy, we are creating value for our stakeholders – our customers, our people, our shareholders.

In last year's Annual Report, we outlined our 2020 strategic plan to return to growth over the next three years.

We aim to primarily drive growth organically from our existing business and from winning new customers. These growth objectives are underpinned by the following five strategic pillars outlined on this page.

Whilst revenues declined in 2020 (vs 2019), 2020 was a year that presented significant external market challenges. We achieved significant progress in all areas of our strategy that are within our control. The progress we achieved in 2020 means that the Group has strengthened its platform to achieve future growth and is well positioned to capitalise on future market opportunities.

The market opportunity

Datalex has a strong market proposition – helping airlines cut through the complexity created by legacy systems so that they can provide a modern retailing experience that is expected by their customers.

Datalex has a growing addressable market. A significant portion of this growth will be in the area of Dynamic Offer and this is a large part of our investment roadmap.

Strategic pillars to drive accelerated and sustainable growth

Customer at the Core

People Operational Excellence

Commercial Strength

What this means for Datalex

• › Customers are at the core of all that we do at Datalex.
• › Customer execution and delivery is critical.

What this means for Datalex Our product-led business strategy and investment in our platform is key to unlocking our growth potential and is central to our customer acquisition plans.

What this means for Datalex

Our people drive every part of our business model.

What this means for Datalex

A lean and efficient operating model, with the appropriate processes, structure, and measures in place to support future growth.

What this means for Datalex

In pursuing our growth and strategic objectives, we will only do so if an opportunity has commercial viability in the long term.

Examples of our 2020 Strategy in Action

• › Provided unparalleled support to our customers in a time of crisis. We enabled customers to quickly respond to the changing needs of their customers.
• › Customer delivery continued to deliver on time and on budget to our customers in 2020.
• › Received the highest Net Promoter Score ('NPS') score ever received since we first conducted this survey in 2014.

Examples of our 2020 Strategy in Action

• › Continued to invest in adding new and differentiating capability to our products, focusing on capabilities that will enable airlines to drive their retailing revenues, improve their customer's experience and reduce costs.
• › Delivered the Digital Configurator on time and on budget. The Digital Configurator enables airlines to be in control of their offering and allows our customers to easily make changes in real time.
• › Launched Datalex Merchandiser and can deliver this product to a customer in 30 days.
• › In line with our SaaS strategy, executed a data centre migration project on time and on budget which involved the migration of customers to cloud.

Examples of our 2020 Strategy in Action

• › Delivered on commitments arising from 2019 Trust Index Survey feedback. These actions included improvements in the areas of training and development, flexible work arrangements, team building, service recognition and graduate recruitment.
• › Undertook a Trust Index survey in December 2020 (facilitated by Great Place to Work). Based on the survey results, Datalex was certified as a Great Place to work and listed as a 2021 Best Workplace.
• › Implemented cross functional scrum teams at scale within engineering and rolled out a full stack development programme in 2020.

Examples of our 2020 Strategy in Action

program which has demonstrated measurable improvements in first time quality (hence reducing UAT and production support issues).

• › Introduced a new quality first Exceeded target reduction of support issues by 19%.
• › Maintained a stable velocity level with our development teams.

Examples of our 2020 Strategy in Action

• › Responded quickly to the impact of COVID-19 – execution of a cost reduction program to in response to same.
• › Completed an Financial Position and Prospects Procedures ('FPPP') process and relisted on Euronext Dublin on 14 July 2020.
• › Implemented a new ERP system.
• › Reviewed and updated our commercial model

Priorities for 2021

• › Continue to be a trusted business partner, delivering valuable capability on-time and on budget.
• › Continue to measure and improve customer satisfaction, and ensure that areas of improvement are identified and actioned.

Priorities for 2021

improvements to our operating

› Continue to make incremental business model.

model to align with our SaaS

Priorities for 2021

• › Execute a capital raise and strengthen balance sheet to ensure we have sufficient working capital for new revenue opportunities.
• › Achieve revenue and foreign currency adjusted EBITDA targets.

Priorities for 2021

• › Deliver on our commitments in response to the 2020 Employee Engagement Survey. Areas of focus include performance & recognition, wellbeing, development and CSR.
• › Carry out the Trust Index Engagement Survey in Q4 2021 to ensure that our people still believe that Datalex is a great place to work.
• › Continue to invest in retaining and developing key talent.
• › Continue to invest in the full stack development Program.
• › Continue to attract new talent in 2021, particularly in the area of graduate recruitment.

Priorities for 2021

• › Deliver our 2021 product roadmap on time and on-budget.
• › Decommission our on-premise data centre with all customers
• › Continue to deliver new capability to our existing their digital strategies.
• being hosted on cloud.
• customer base in line with

Datalex •

The Digital Configurator

Real-Time Retail Control

To truly excel in digital retailing, airlines need to be empowered with tools that enable much greater offer control and self-service capabilities across all channels and touchpoints, and with a much faster speed to market. The Digital Configurator was designed to do just this.

A key capability of the Datalex products, the Digital Configurator provides airlines with nano-second offer control, removes the reliance on IT for data configuration and enables a faster market response time than ever before. Through a highly sophisticated, cloud-based interface, the Digital Configurator provides full and real-time retail control of the rule data needed to manage fares, ancillary products, pricing and services. With a core focus on simplicity, speed and self-service, Digital Configurator enables airlines to realise significant savings in time and cost and enables airlines to be extremely agile in adapting their product and pricing in response to market, competition and customer needs.

Our Products

Datalex Direct

Powers Next Generation Omni-Channel Revenue for the Digital Airline

Datalex Direct is an innovative, customer-centric digital commerce product for travel retailing via airlines' direct channels, putting power in the hands of the airline to drive revenue and profit as digital retailers. Datalex Direct enables airlines to increase digital sales by offering their customers a smoother and improved direct booking experience, across different touchpoints and devices, allowing airlines to embrace a full and sophisticated retail model.

Datalex Direct allows for great flexibility and customisation to meet the needs of each airline while permitting rich and differentiated content management, dynamic offers, seamless order management and digital payments. It ensures airlines have more direct customer engagement at the point of sale, which is key to reassure and influence travellers to return to the skies, drive increased demand and high value revenue as airlines recover from COVID-19.

Datalex Dynamic

Intelligent Price and Product Determination

Datalex Dynamic arms airlines with the intelligence, ultra-flexibility, and speed to adjust offers in real-time that reflect and adapt to super-fast-moving demand trends. It equips airlines with a powerful, data-driven pricing strategy to vastly improve the relevance and conversion of fare recommendations, by dynamically matching price with travellers' personas as well as their willingness and capacity to pay.

With Datalex Dynamic, airlines can strategically and intelligently adjust fares which will be a vital strategy for airlines as they emerge from COVID-19 and will accelerate their path to customer-centric airline retailing.

Datalex Merchandiser

Unlock New Revenues Beyond the Seat

Datalex Merchandiser is an airline-controlled merchandising engine that allows airlines to create customer-centric product and service offers across all retailing touchpoints and pointsof-sale, to generate significantly increased ancillary revenue. Datalex Merchandiser does this by converting purchasing 'micro-moments' across the travel lifecycle into revenue with contextualised, personalised offers. It enables merchandising with value-add customer interactions that extend far beyond the customer's flight, that connect travellers with content that matches their need when they need it, that engages them pre, during and post journey and that extends to non-travel products as well as travel specific products.

With a fast implementation time of 30 days, airlines can quickly launch a sophisticated merchandising solution at low cost and with a high return in terms of ancillary revenue and customer engagement.

Datalex NDC

Enhanced Retailing Across All Channels

Datalex NDC offers airlines full offer and order management capabilities to control and optimise offers and enable a consistent customer experience across the indirect channels. It ensures airlines can have greater control over their indirect distribution strategies and control and manage indirect channels at the same pace as their direct channels, adjusting content and pricing of offers continuously and consistently across both. The airline has the power to determine the optimal distribution portfolio for its branded NDC API and provides Online Travel Agent's (OTA's), Corporate Travel Agents, Sellers and Aggregators with the workflows needed to fully support their shopping, booking and order servicing needs.

Datalex

• Annual Report 2020 • Strategic

Report

Our people.

As referenced in our strategy section on page 12, our people drive every part of our business and are a critical part of our strategy to drive accelerated and sustainable growth. Quite simply, Datalex's people are its most important asset. The energy, expertise, integrity, and passion of our people underpin our potential.

Datalex's People Strategy is to unlock the full potential of our talented workforce and maintain a culture of high engagement.

COVID-19 Business Continuity Task Force: In response to the COVID-19 global pandemic, our priority was to protect the health and well-being of our employees throughout this challenging and uncertain time.

A cross-functional COVID-19 Business Continuity Task Force was established in February 2020 to take timely and effective action to mitigate any health and safety risks that were within our control. This involved providing our employees with the option to work from home and also involved making our offices compliant with COVID-19 specific health & safety guidelines and regulations. As the year progressed and the virus continued to spread across the world, it became evident that most of our employees would need to continue to work from home for the foreseeable future. Our focus shifted to the impact that this was having on wellness, mental health and physical health in general and how we, as an employer, could make remote working a better environment to work in.

The Task Force continues to be actively engaged in preparing for a hybrid working model once regulations allow. Remote working has proven to be productive and will remain part of our future operating model. We also recognise that many employees look forward to returning to the office and we look forward to welcoming our employees back once safe to do so.

Culture & Engagement

Culture and engagement is important for the success of our people and teams at Datalex.

In 2020, we undertook a Trust Index Engagement Survey facilitated by Great Place to Work ("GPTW"). We had conducted this survey in 2019 and saw significant year on year improvements in 2020 across all areas of the survey, including credibility, respect, fairness, pride and camaraderie.

Our Stakeholders

At Datalex, we are committed to creating value for our stakeholders. We understand the importance of, and are committed to, ongoing and constructive engagement with our stakeholders.

Datalex engages with four key groups: our people, our customers, our shareholders, and our communities.

Women make up 38% of senior management (top two levels) in the Group

Perform

We have a motivating purpose. We have audacious goals and objectives. We know what work needs to be done. We must perform and deliver what is expected by all our stakeholders.

Do Right

We always endeavour to do what is right, to adhere to the highest standards of conduct and behaviour, to lead by example, and to make hard decisions. We keep our promises and commitments to our customers and to each other.

Results Matter

We are responsible for businesscritical enabling technology for our customers. We make a significant positive impact on their commercial performance. What matters most is that we deliver in line with their expectations and our promises.

We Innovate

We innovate, create, and generate solutions for our customers. We solve complex problems by imagining what 'possible' can look like. We do this in an efficient and resourceful way.

One team

We are one team committed to a common purpose, clear goals and high-performance. Everyone understands that we need each other to collectively achieve our shared ambitions.

In a year where most of our people were working remotely, engagement was a priority for us and we held frequent virtual All Hands meetings and conducted regular pulse surveys throughout the year. We will continue this engagement programme in 2021.

Our Values

Our values are measured through our Performance Management process and embedded in all that we do.

• › One Team
• › Perform
• › Do Right
• › Results Matter
• › We Innovate

Learning And Development:

Our success is driven by our people and it is a priority that we enable our employees to further their learning and development at Datalex.

In 2020, we continued to provide our employees with the opportunity to learn and develop their skills with a focus on how we can best do this in a remote and online context. We continued our Lunch and Learn programme with events hosted by industry partners and employees on a variety of relevant topics including sessions on our products, strategy, innovation, leadership and technology. We also ran a programme on communication styles and how to communicate effectively in a virtual environment.

Diversity:

Datalex is committed to creating an inclusive environment where diversity is valued in all its forms. Creating and sustaining a diverse and inclusive culture is core to our purpose. We endeavour to ensure that our talent and hiring process is fair. Equally, we are committed to ensuring that every employee can continue to develop and succeed at Datalex regardless of age, status, gender, ethnicity, or any other attribute.

71% of our people feel that Datalex is a great place to work and based on our 2020 survey results, Datalex was certified as a Great Place to Work and listed as a Best Workplace ® Ireland.

In our 2020 engagement survey, an average of 91% of employees indicated that they feel people are treated fairly from a diversity and inclusion perspective.

As of 31 December 2020, women made up 30% of total employees (2019: 27.7%) and 38% of senior management (top two levels) in the Group (2019: 31.8%). Throughout the Group, 18 nationalities are represented within our workforce (2019: 19).

We are participants in the Women ReBooT programme run by Technology Ireland. This programme is designed to encourage women to re-enter the workforce after prolonged absences and has proven successful in attracting a talent pipeline to the Group. In 2020, Datalex co-sponsored the Women in STEM Campaign, the aim of which was to highlight the range of opportunities for girls in STEM programmes and careers within Ireland.

We also took pride in celebrating initiatives including International Women's Day, Pride and World Mental Health Day in 2020.

A company diversity policy and Board diversity policy were implemented in 2020.

Health And Wellbeing:

Supporting employee health & wellbeing particularly during COVID-19 has been our main priority for 2020. Due to the COVID-19 pandemic, all of our employees across the globe (Ireland, UK, US, China & Netherlands) transitioned to a remote working model.

Recognising the importance of work life balance, we continue to build a better working culture by offering flexible working hours, a variety of leave types and time for colleagues to connect and provide social support to each other.

When safe for staff to return to the office environment, we have finalised a plan which offers hybrid working arrangements for those wishing to work from our offices and from home as appropriate.

During 2020, we provided support for all staff by ensuring staff are aware of where and how they can access mental health and psychological support services as well as facilitating access to such services.

The Employee Assistance Programme continues to be a valuable service to our employees during such a period of change. We maintain regular contact with colleagues at all levels in the organisation to ensure that they are receiving the advice and support that they require to protect their physical and mental well-being and remain engaged.

Code of Conduct / Whistleblowing Policy:

All colleagues are expected to abide by our general Code of Conduct, which outlines specific principles of behaviour everyone is expected to follow, always, in the key areas of integrity, confidentiality, lawful behaviour and disclosure of interests. We are committed to ensuring and maintaining an environment that is free from bullying and/or harassment and where the dignity of every person at work is respected and upheld.

We implemented a Whistleblowing Policy that sets out how a colleague can raise a concern, the way the Group will respond, and how the rights of colleagues who raise a concern, and those who are the subject of reports, are to be protected. We have an independent whistleblowing hotline that any employee can access confidentially should they not feel safe reporting a concern internally.

Stakeholder Engagement

Our customers.

Customers are at the core of what we do and are fundamental to Datalex's success. We are acutely aware that COVID-19 has been challenging for the airline industry and in 2020, we were fully focused on actively working with our customers to help and support them through this difficult period.

Feedback from our customers is critical to ensure that our products solve their business needs today, but is equally important to ensure that our product roadmap will solve their business needs of the future.

The Group engages with its customers on multiple levels and communicates with customers frequently via a range of formal and informal channels. We also conduct a Net Promoter Score survey with our customers regularly.

Our shareholders.

The Board recognises the importance of engaging with all shareholders and values regular dialogue. The Group prioritises effective dialogue with shareholders to ensure that we capture and embrace feedback relating to areas of interest and areas of concern, and to ensure that our obligations are met. During 2020, as well as

other regulatory announcements, we provided regular updates to the market detailing the impact of COVID-19 and our ongoing initiatives to manage and mitigate the impact.

We are committed to fostering long-term relationships with our shareholders through transparent communication. Our Company Secretary is available to shareholders, and our Senior Independent Director and Chairman are available to shareholders through the Company Secretary if required. The Group welcomes queries via telephone, post, or email and up to date contact details are available on the Group's website, www.datalex.com. The website also provides an archive of all relevant shareholder communications, financial results and updates, and a history of the Company's share price. Attendance by, and questions from, shareholders at the Company's general meetings are welcomed by the Board. The Board also encourages shareholders to make use of their votes at all general meetings.

In person meetings were affected by government restrictions relating to COVID-19

during 2020.

Datalex •

Annual Report 2020

•

Strategic Report

Our communities

Corporate Social Responsibility

Datalex is committed to social responsibility.

We believe that our social impact begins with living by our values in our interactions with our customers, our suppliers, our shareholders and with the global communities in which we operate.

We have a thorough on-boarding process with our suppliers, designed to ensure that we select suppliers who share our views on social impact and the importance of operating responsibly.

2020 was a challenging time for many charities and during the year, the Group continued to support causes aligned to its purpose and values. We continued our 250 Club initiative whereby all employees can apply for funding to support local charities.

Sustainability

As a software company, our main activities that have an environmental impact are the consumption of electricity and business travel.

We aim to offset our carbon footprint through a number of initiatives, including sourcing recyclable or degradable office supplies where available, using low energy lighting, providing reusable water bottles and coffee cups for all office staff to reduce plastic consumption.

Whilst we did not measure our carbon emissions generated from these activities in 2020, our impact in 2020 would have been much lower than previous years as most of our employees worked from home for a large part of the year. COVID-19 accelerated the pace of digital transformation from a workplace perspective and proved how effective it can be.

We also integrate with a carbon offsetting provider so that our customers can offer a carbon offsetting option to their customers as part of their booking flow.

We do not envisage that we will return to a position where all of our employees will work from a Datalex office location on full-time basis. As we review our office strategy in 2021, we will also review our sustainability strategy.

COVID-19

Background

The COVID-19 pandemic has resulted in a global economic shock of unprecedented speed and scale and has been a challenging period not just for Datalex, but for the airline and travel industry as a whole. The decisions by governments around the world to limit travel and in cases to impose severe travel restrictions have resulted in some airlines operating at as low as 1% of normal capacity during the year. Consequently, bookings have collapsed, with airlines retrenching and focusing on surviving this crisis.

Many airlines continue to require government or other third-party investment to support them at this time; most have furloughed large numbers of staff and are engaged in significant restructuring. COVID-19 has been catastrophic for the airline industry and we continue to work with our customers to help and support them through this difficult period.

Business impact

The Group announced on 12 March 2020 that COVID-19 would have an adverse effect on our business in 2020. One year after the crisis began, it remains difficult to accurately quantify the impact of COVID-19 on our financial and trading performance. It is not known how long the pandemic will persist and how long the recovery phase will last. On 29 September 2020, the International Air Transport Association ('IATA') released an updated global passenger forecast stating that the recovery in traffic has been slower than expected. For 2020, global passenger numbers declined by 65.9% compared to 2019 (In July 2020, IATA had forecast that the decline would be 55%). IATA predicts strong recovery in late 2021 and 2022 though global passenger traffic will not return to pre-COVID-19 levels until 2024, a year later than previously projected, and with Asia Pacific the region expected to recover first.

Actions taken

Upon the outbreak of COVID-19, immediate actions were taken by the Group including a targeted restructuring programme, re-negotiating business partner arrangements, eliminating discretionary spending, freezing recruitment, implementing voluntary leave options and temporarily reduced working hours for our employees.

Our people

As mentioned in 'Our people' section on page 17 and 18, prior to COVID-19, and as a key measure to retain and attract talent, a Remote Working Policy had already been implemented. We established a COVID-19 Business Continuity Task Force in February 2020 and were in a position to effectively implement remote working for all. We quickly mobilised all staff to work from home and cancelled all business travel. The task force provided:

• › Clear, consistent and personal messages for staff;
• › Practical support and guidance to aid working from home including early identification and sourcing of equipment, test days to ensure systems worked remotely, cyber security training and ongoing technical support;
• › Mental and physical health prioritised and regular contact to support wellbeing. Social initiatives were also implemented to combat isolation and boost morale; and
• › Flexibility and staff autonomy promoted and training provided on managing teams remotely with support and guidance from HR.

Our people adapted quickly to remote working and dealing with the operational aspects of COVID-19. Employees have indicated a strong appetite for a balanced remote/office approach post COVID-19. We will continue to offer hybrid working arrangements subject to government guidelines for those wishing to work from our offices and from home as appropriate and are confident of maintaining a high level of productivity and performance. Our IT structure has supported remote working with minimal business disruption. We are using software such as Microsoft Teams to communicate effectively within the Group and outside it.

We have adopted all government and public health authority guidelines in each of our markets. We have prepared our buildings for a return of

employees as the lockdown eases with individual building plans covering access control, physical distancing measures, cleaning/sanitising and signage. We maintain regular engagement with colleagues at all levels in the organisation to ensure that they are receiving the advice and support that they require to protect their physical and mental wellbeing.

Risks and governance

The Board and management moved quickly to evaluate the likely impact on the business and have taken the initial immediate actions described above. The Board is monitoring all developments closely and receiving frequent updates, including regular updates of financial forecasts and cash flows. The Group's strategic plan has considered a number of potential scenarios linked to the recovery of the airline industry post-COVID-19, though there is widespread acknowledgment that it is impossible to accurately predict the outcome at this point in time. The Board will continue to monitor developments closely and to take necessary actions.

Outlook in the context of COVID-19

COVID-19 has brought an unprecedented level of uncertainty to the aviation industry and airlines will face huge challenges going forward. The Group continues to monitor performance against various stress test scenarios regarding the duration of COVID-19 and the varying shapes of recovery. Throughout the pandemic, the Group has remained focused on conserving balance sheet strength and liquidity and has implemented a number of measures to ensure continued delivery over the medium term. Tentative recovery signs have been emerging from the industry recently. However, it remains difficult to make precise judgements about how consumers will react as we emerge from lockdown. Most airlines have indicated a desire to return to the air taking into account the safety of all passengers. The majority will be ready to ramp up their capacity in line with market demand and government guidelines.

It is likely to be some time before the full impact becomes known. Preparing financial forecasts for the business is challenging in this environment as there are several different outcomes, both positive and negative, which could arise as a result of COVID-19. As part of the Directors' consideration of the appropriateness of adopting the Going Concern basis in preparing the financial statements, a range of severe scenarios has been reviewed. The assumptions modelled are based on the estimated potential impact of COVID-19 restrictions and regulations, along with our proposed responses over the course of the next

12 months. These include a range of estimated impacts primarily based on length of time various levels of restrictions are in place and the severity of the consequent impact of those restrictions.

The Group continues to monitor the impact on our business on a monthly basis and will take the necessary actions for the good of the business. In addition to the actions already taken, there are a number of further cost saving measures which could be implemented if required. However, the Group has assessed the impact of COVID-19 on its future cash flow forecasts and is satisfied that the Group will have sufficient cash to meet its debts as detailed in the Going Concern Statement on page 38 and 39.

As described in our CEO's Statement, we believe that Datalex is in a strong position with our customers to help them navigate through the challenges arising from COVID-19 as the industry begins its recovery. Our focus on meeting their needs throughout 2020 has resulted in our best Net Promoter Score demonstrating that the relationships have improved over the year.

Over and above managing the business through the pandemic, we must continue to create value for our shareholders by being prepared for a recovery. Importantly, our customer relationships have demonstrated remarkable resilience through 2020 and in to 2021. We did not experience any significant payment delays from our customers during 2020, an acknowledgment of the strength of our partnership and continued relevance of our products during this time. Datalex has been able to react flexibly to customer needs and we have worked with our customers to seamlessly implement important updates and, in particular, changes in the areas of cancellations, refunds and tax policies. Post COVID-19, we will continue to leverage this flexibility as our customers adapt to a rapidly changing environment. Organic growth from our existing customer base is the Group's foundation for growth.

The Board believes that the actions taken, and the resilience of our revenue model, together with the support of our customers and ongoing flexibility from our business partners, mean that the Group is positioned as best as it can be to withstand the ongoing impact of COVID-19. We are responding dynamically to the rapidly changing situation that COVID-19 has created. We will continue with our current focused management approach to protect the Company and its key stakeholders until the impact of COVID-19 abates. Our priorities remain the health and safety of our staff, customer service, financial discipline and business continuity.

Financial and Operational Review

Datalex began 2020 confident that the reset and restructuring work completed in 2019 would position the Group well for growth in the year. In March 2020, the Global COVID-19 pandemic presented the greatest challenge ever faced by the travel industry. The Group took immediate and swift action to respond to the pandemic and as a result we are pleased to be able to report increased foreign currency adjusted EBITDA compared to 2019.

processes resulted in no material change in our closing cash balance. Datalex has maintained strong relationships with our customers during 2020. We continue to receive cash payments from our customers despite the significant challenges that they face. This is a testament to the importance that they place on our products and services to their future growth and recovery.

The Group incurred material exceptional costs in 2020. These costs were driven by 3 major factors:

• i) The restructuring programme that commenced in 2019 was extended as part of the Groups reaction to COVID-19 and resulted in further redundancy costs;
• ii) The Group incurred costs in relation to the lifting of the suspension of trading in the Company's shares on Euronext Dublin; and
• iii) The Group incurred further legal costs in relation to the recovery of balances owed by Lufthansa and Swiss Airlines.

The overall travel industry environment remains uncertain, there are changing regulatory requirements associated with air travel, including advance testing, quarantine and documentation requirements. In China, we saw some resilience and increase in activity in the second half of the year.

We are seeing domestic travel in the US starting to recover, while in Europe our customers have been focused on managing their costs and being operationally ready for when air travel traffic returns.

In a year significantly impacted by COVID-19, the Group made a loss after tax for the year of US\$6.5m. While it compares favourably with 2019 the outturn for the year is not reflective of our ambition for the Group. As outlined on pages 24 and 25 we believe that we are well positioned to exit this period of fundamental change.

During 2020, Datalex agreed with Tireragh Limited an extension to the Tireragh credit facility to November 2021 and the provision by Tireragh of an additional debt facility of up to €10 million. These arrangements were approved by shareholders in September 2020. The Group has not needed to draw down additional funds from the increased credit facility with Tireragh Limited during 2020 and, at 31 December 2020 and at the date of this report, the Group had €10 million of undrawn facilities available to support its working capital requirements. The amounts drawn down on the loan facility accrue interest at a rate of 10% per annum. We recognise the continued support of Mr. Dermot Desmond and Tireragh Limited for the Group.

The Board has identified a risk to the Going Concern assumption for the Group relating to the repayment of the Tireragh Limited loan facility. The loan facility is due to be repaid on 1 November 2021 but, subsequent to the year-end, Tireragh Limited has confirmed its willingness to provide an extension of the repayment date to September 2022 on the same terms as the existing credit facility. Further discussion on the repayment of the Tireragh Limited loan facility has been included in the Going Concern section on pages 38 and 39.

The Company intends to strengthen its financial position by completing a capital raise during 2021, market and other conditions permitting.

In my previous report for 2019, we emphasised the importance the Board has placed on strengthening the Finance Function and the Internal Control environment.

We are pleased with the progress we have made, while recognising that the programme of transformation will continue into 2021. During 2020, we appointed Mazars to provide internal audit services on an outsourced basis. We have hired additional qualified financial accountants into the financial reporting team and completed the implementation of a modern fully integrated accounting system (the Group ERP), which we have internally called Jet. Jet enables a number of systematic approval processes and enhanced management reporting capabilities. During 2021 we intend to leverage the ERP system to further reduce our month end close time and significantly improve the quality and management insight available to operate the business.

The Group completed a comprehensive, externally supported review of its Financial Position and Prospects Procedures ("FPPP") during the first half of 2020, as part of the restoration of its listing on Euronext Dublin. As part of that process, the Board has confirmed to Euronext Dublin that it has established procedures which provide a reasonable basis for it to make proper judgments on an ongoing basis as to the financial position and prospects of the Group. The review involved an extensive independent external review of the controls operating across the Group, compared to best practice. The FPPP work was supported by PwC and reviewed by our listing sponsor, Goodbody.

At this point, I would like to recognise and thank the efforts of the Finance team for their commitment and professionalism in a very challenging year. We have continued to make meaningful transformative progress, while also supporting the vital day-to-day needs of the business in a constantly changing environment.

The Group's consolidated financial statements and the Company's financial statements have been prepared on a going concern basis, which assumes that the Group and Company will be able to continue in operational existence for the foreseeable future. The Group has prepared a strategic plan and performed a detailed going concern assessment for a period of one year from the date of the approval of the consolidated financial statements.

The Board is of the opinion that Datalex is a viable business and is a market leader.

Our airline customers have seen significant decreases in booking transactions as a result of government travel restrictions, with a collapse in passenger numbers carried. This has severely impacted on our ability to generate revenues. Excluding the impact of one-off revenues in 2019 (Note 18), our 2020 revenues decreased by US\$11.4m when compared to 2019.

In response to this reduction in revenues, Datalex took action to mitigate the lost revenues by curtailing expenditure, restructuring its cost base, and ensuring active management of cashflows from operations. These actions included targeted reduction in our entire cost base, supplementing the significant savings already made in 2019. Measures included reduction in discretionary pay, reduction in the use of external contractors, application of a four-day week for part of the financial year and a comprehensive review of the entire cost base. Our total operating costs (US\$29.3m) reduced by US\$18.4m from 2019 and US\$25.6m from 2018.

Further details on these measures have been set out in the COVID-19 impact section of our Annual Report on pages 24 and 25.

As a result of the early actions taken, we were able to increase our foreign currency adjusted EBITDA from US\$0.7m in 2019 to US\$3.4m in 2020. Close control of our cash management

26

Revenue

Platform revenue

Platform revenue of US\$16.6m was down year-on-year by US\$10.2m or 38%. There are two primary drivers of the decreased revenue during 2020. Firstly, there was US\$1.7m of one-off revenue, relating to the sale of legacy historic code that was no longer supported, recognised in Platform revenues in the prior year that were not replicated in the current year. The remaining reduction of US\$8.5m is directly attributable to the lower airline flight bookings during 2020 as a result of COVID-19.

Services revenue

The overall services revenue of US\$10.1m decreased from US\$16.4m or 38% since 2019. There are two primary drivers of reduced services revenue in 2020. Firstly, there was US\$4.0million of one-off services revenue recognised in 2019, relating to the recognition of non-refundable advanced payments on a terminated contract, that was not replicated in 2020. The remaining reduction of US\$2.3m is attributable to some customers pausing or reprioritising a small number of services projects in 2020 as their business priorities changed with the onset of COVID-19.

Operating costs

Our operating costs (before exceptional items) decreased by US\$18.4m to US\$29.3m (2019: US\$47.8m) as per Note 19. The main driver of the decrease was a significant reduction in labour costs. The employee benefit expense (before exceptional items) also decreased by US\$4.7m to US\$14.6m (2019: US\$18.9m) as a result of actions taken to rebase the Groups costs in 2020. Further reductions have been achieved in consultants and contractor costs during 2020, with a reduction (before exceptional items) of US\$8.8m in 2020 to US\$6.0m. In addition, professional fees decreased by US\$0.3m to US\$1.2m (2019: US\$1.5m), reduction in deferred commission amortisation costs decreased by US\$0.5m to US\$0.1m (2019:US\$0.6m) and travel costs decreased by US\$0.5m to US\$0.2m (2019: US\$0.7m). These operating cost decreases were further supported by a significant movement in net impairment losses on financial and contract assets (before exceptional items) of US\$3.5m in the year (moving from a debit balance in 2019 of US\$1.9m to a credit balance in 2020 of US\$1.7m). This movement is the result of cash receipts from the HNA Group during 2020 which were fully provided for at the end of 2019.

Whilst labour (staff and contractor) costs (after exceptional items) continue to account for the majority of the Group's cost base, the Group as noted above has continued to reduce these costs during 2020. This large decrease was the result of the cost restructuring programme that was undertaken in 2019 and the management actions taken in 2020, including the implementation of a four-day week and additional reductions in the labour base. The Group has further reduced its costs to a more sustainable level during 2020.

We recorded a foreign currency adjusted EBITDA of US\$3.4m in 2020 which compares to US\$0.7m in 2019. This was due to the actions taken in 2019 and further early intervention and active management of our cost base

during 2020.

Despite the challenges of 2020 we continued to invest in production innovation and the development of new solutions for use by our customers. We capitalised US\$1.1m of costs associated with product development. This compares to a capitalisation of US\$0.1m in 2019. As outlined in the Chairman's report, we feel that these product developments will facilitate greater revenue generation opportunities for our airline customers. Our 2020 development spend largely represented a continuation from 2019 activity and reflected core product development work. The spend incurred was across our five key product areas Datalex Direct, Datalex Dynamic, Datalex Merchandiser, Datalex NDC and The Digital Configurator, and further supports our

project roadmap.

Exceptional costs have decreased from US\$8.3m in 2019 to US\$2.8m in 2020. The high exceptional costs in 2019 were mainly due to costs incurred relating to the events of 2018, including Professional fees of US\$1.6m, severance costs of US\$2.6m, provisions for regulatory costs US\$1m, provisions in relation to Lufthansa and Swiss litigation of US\$2.9m and impairment of contract assets of US\$0.2m. A detailed explanation of the US\$2.8m of exceptional items in 2020 is set out below

(see also Note 23):

› Professional fees in relation to investigations, business transformation programme and litigation procedures (US\$1.8m) – Further professional fees were incurred during 2020 as the business seeks to return to a normal operating model. These costs included amounts associated with the FPPP, relisting, a capital raise and further costs incurred responding to the events of 2018.

Key financial results

(1) Platform revenue is earned from the use of the Group's Digital Products by our customers. See also Note 18.

(2) Operating costs are as stated in Note 19. Amounts are stated before separately disclosed exceptional items.

(3) Adjusted EBITDA (Note 18) is defined as earnings from operations before (i) interest income and interest expense, (ii) tax expense, (iii) depreciation and amortisation expense, (iv) share-based payments cost and (v) exceptional items (see Note 23).

	2020 As Reported US\$'M	2019 As Reported US\$'M
Platform revenue (1)	16.6	26.8
Services revenue	10.1	16.4
Consultancy revenue	1.2	1.7
Other revenue	0.2	0.2
Total revenue	28.1	45.1
Operating costs (2)	29.3	47.8
Exceptional costs (including income tax)	2.8	8.3
Adjusted EBITDA (3)	1.4	0.5
Foreign exchange loss	2.0	0.2
Foreign currency adjusted EBITDA (4) basic	3.4	0.7
Loss after tax	(6.5)	(12.1)
Cash and cash equivalents	3.0	3.1
Cash generated from/(used in) in operations	3.5	(15.0)
Net working capital (5)	(23.0)	(16.5)
EPS – basic (cent)	(8.1)	(15.1)
EPS – diluted (cent)	(8.1)	(15.1)

(4) Foreign currency adjusted EBITDA (Note 18) is a new KPI introduced in 2020. Our functional currency is US\$. As explained in our debt financing note (Note 14), in 2019 the Company received €11.3m debt financing from Tireragh Limited. This loan funding was denominated in Euro as a result the adjusted EBITDA (Note 18) results of the group are subject to movements beyond managements control arising from movements in foreign exchange rates. The foreign exchange input into the foreign currency adjusted EBITDA (Note 18) KPI is arrived at by combining the foreign exchange movements per Note 18 and the additional foreign exchange movements on those Euro denominated Trade Debtor balances fully provided at the end of 2019 and reported as an exceptional item per Note 23.

(5) Net working capital is calculated as current assets less current liabilities. The current assets and current liabilities subtotals can be found in the consolidated statement of financial position on page 110. Narrative reconciling the movement in the net working capital is detailed in the "Cash and Financial Position at 31 December 2020" commentary on page 30.

• › Severance pay costs (US\$0.5m) Charges in relation to a voluntary severance programme, carried out in 2020 as part of the Group's response to COVID-19. The Group identified 14 roles across the Group which were included in the severance programme. As of the year end date all identified roles have departed with US\$0.5m being paid out during 2020.
• › Provision for costs associated with complying with regulatory investigations (US\$0.03m) – In prior year the Group recognised a provision which relates to legal and compliance costs of ongoing regulatory investigations and the necessary requirements to obtain an end to the suspension order on the trading of the Company's shares on the Euronext Dublin exchange. The charges in the current year relate to the unwinding of the discount rate on this provision.
• › Provision for non-recovery of customer receivable balances, which are subject to litigation (US\$0.2m) - On 4 September 2019, the Group received a termination notice from Lufthansa AG ("Lufthansa"). The Group strongly disputes the legality of this notice and has commenced proceedings against Lufthansa in Landgericht Frankfurt (Regional Court of Frankfurt) in order to achieve resolution of the matter and to recover amounts due and general business damages. On 5 March 2020, the Group issued a notice of dispute and invocation of a contractual arbitration clause to recover amounts owed to the Group by Deutsche Lufthansa AG in connection with services provided to its subsidiary, Swiss International Airlines Limited. At 31 December 2020, the invoiced balances due by Lufthansa and its subsidiary company, Swiss International Airlines Limited, amounted to US\$2.9 million. The additional balance in 2020 relates to contractual amounts due from Swiss Airlines invoiced during the year.
• › Impairment of & closure of Atlanta office (US\$0.3m) - Following a review of the Group's real estate the Atlanta office was deemed to be surplus to the needs of the Group. Subsequent to the review, the Group entered into a sub-lease arrangement for the entire building. The sub-lease rental payments are less than those on the head lease with the landlord, and as such the IFRS 16 Right-ofuse asset recorded in the Group Balance Sheet was deemed to be impaired. The Group recorded as a charge in the current year an impairment on the discount cash flows associated with the sub-lease arrangement along with certain costs incurred to prepare the building for sub-lease.

Key performance indicators

Foreign currency adjusted EBITDA is a new KPI introduced in 2020. Our functional currency is US\$. As explained in our debt financing note (Note 14), in 2019 the Company received €11.3m debt financing from Tireragh Limited. This loan funding was denominated in Euro as a result the adjusted EBITDA results of the group are subject to movements beyond managements control arising from movements in foreign exchange rates. The foreign exchange input into the foreign currency adjusted EBITDA KPI is arrived at by combining the foreign exchange movements per Note 18 and the additional foreign exchange movements on those Euro denominated Trade Debtor balances full provided at the end of 2019 and reported as an exceptional item per Note 23.

Cash and financial position at 31 December 2020

Our cash and short-term investments at 31 December 2020 totalled US\$3.0 m (2019: US\$3.1m). Cash generated from operations was US\$3.5m (2019 Cash used in operations: US\$15.0 m), which is further explained in Note 26 to the consolidated financial statements. Throughout the year, we maintained very close control over our cash management. We conducted regular updates of cash forecasting and ensured very close links between our finance and customer facing teams.

Net current liabilities at 31 December 2020 were US\$23.0m (2019: US\$16.5m) which represents a year-on-year decrease of US\$6.5m in working capital. This increase in the net current liabilities is primarily driven by the reduction in contract assets at the year end date. Strong management of the working capital resulted in minor movements in the trade debtors and trade creditors balances year on year whilst maintaining our year end cash balances.

Reconciliation of loss after tax to adjusted EBITDA and Foreign currency adjusted EBITDA

2020 US\$'000	2019 US\$'000
-	(4)

	2020 US\$'000	2019 US\$'000
Loss after tax	(6,477)	(12,061)
Adjustments:
Tax (credit)/charge	(59)	66
Interest expense	2,897	1,503
Interest income	-	(4)
Depreciation and amortisation expense	2,142	2,615
Share-based payment cost	67	83
Total adjustments before exceptional items	5,047	4,263
Exceptional costs (before income tax) (see Note 23)	2,772	8,293
Total adjustments after exceptional items	7,819	12,556
Adjusted EBITDA	1,342	495
Foreign exchange loss	2,013	198
Foreign currency adjusted EBITDA	3,355	693

Subsequent events

On 31 March 2021, Datalex Ireland gave notice of termination to the landlord on the lease on our global headquarters in Block U, Eastpoint, Dublin, D03 H704, Ireland. This notice issued to the landlord is part of the Group's intention to review the existing office requirements to support the continued operations of the Group going forward.

On 1 of April 2021, Tireragh Limited notified the Board of Directors, by way of letter, confirming that it would be willing to extend the Termination date of the loan facility to 30 September 2022 on the basis that all other provisions of the loan facility agreement remain in place.

The Directors deem the above subsequent events to be non-adjusting events. There have been no other subsequent events that impact on the 2020 consolidated financial statements up to the date of this report.

Financing completed in 2020 and further financing requirements

During 2020 the Group obtained shareholder approval for the extension of the repayment date of the loan facility with Tireragh Limited (a company ultimately beneficially owned by Mr. Dermot Desmond, also a substantial ultimate beneficial shareholder in the Group via IIU Nominees Limited) to 1 November 2021. As part of this facility, the Group currently has access to an undrawn facility in the amount of €10m. There have been no additional draw downs on the Tireragh loan facility since December 2019 (please see Note 14 & Note 31). The Company has achieved the relevant financial covenant targets to date. During 2020, Tireragh Limited waived obligations to provide certain financial information within specified time limits, including delivery of the Group's 2019 annual report within 120 days of year end (as permitted by the European Securities and Markets Authority and the Central Bank of Ireland) and the time limits within which budget projections and other periodic reporting obligations were provided during the year. Further, Tireragh Limited provided a waiver extending the time to deliver specified security documents in connection with a subsidiary of the Group and provided a waiver permitting the Group flexibility to negotiate extended payment terms with key suppliers in connection with COVID-19 measures taken by the Group.

On 1 April 2021, Tireragh indicated by way of a letter to the Board of its willingness to extend the repayment date of the loan facility to the 30 September 2022. The Board is grateful for the continued support of Tireragh Limited. The Board is keeping the issue of funding under ongoing review and as signalled in the 2019 Annual Report, and elsewhere in this document, intends to raise additional capital to facilitate the repayment of the loan facilities.

Dividends

The Board is not recommending that a dividend be paid in respect of 2020 (2019: US\$nil).

Taxation

The effective rate of tax in the Group remains at zero due to the losses incurred in 2020 and 2019. The Group also has historic tax losses. Due to the uncertainties of whether there will be sufficient taxable profits in the future, the Directors have decided that the recognition of a deferred income tax asset for the losses carried forward is not yet appropriate, and no deferred tax asset has been recognised at 31 December 2020.

Conclusion

2020 has been a challenging year for the Group. The corrective actions that the management team has undertaken with the support of the Board are continuing to show benefits. The restructuring of the cost base has resulted in a leaner and more agile Datalex, as can be seen in our response to COVID-19. The work that has been undertaken to improve the control environment, along with the implementation of the new Group ERP system will result in richer, more in-depth information being available to management and the Board. This will allow for faster and better decision making as Datalex partners with customers to chart a route to success and return to growth of the airline industry. Datalex is on a journey of continual improvement as we strive to develop a world class organisation for all our stakeholders.

Risk Report

The intention of the Board is that the Group's risk management systems should ensure that business risks, whether to the integrity of key processes, systems and data, or the successful execution of our growth strategy, are fully incorporated into decision making and performance reporting.

Function	Responsibilities
Board of Directors	Overall responsibility for determining the nature and extent of the significant risks it is willing to take in achieving the Group's strategic objectives.
Audit & Risk Committee	Risk oversight with responsibility for approving risk management policy and procedures, the risk register and risk appetite prior to their submission to the Board.
Executive Leadership Team	Risk monitoring within the business with responsibility for ensuring policies are implemented throughout the Group.
Chief Risk Officer	Executive with specific responsibility for the operation, development and reporting on of the Group's risk management framework.
Heads of Department/ Risk Owners	Risk owners within the business with responsibility for ensuring risk management is embedded in day-to-day activities, taking a proactive approach to risk identification and mitigation.
All Staff	Responsible for identifying and managing risks and promptly reporting any exceptions, near miss, risk incidents, concerns and/or control issues to the relevant Head of Department or Chief Risk Officer.

Risk Management in Action

Risk management is led from the top of an organisation and operated based on clearly defined structures and responsibilities. It is embedded in the normal working routines and activities of the organisation, with all staff conscious of the relevance of risk to achieving their objectives.

In 2021, the Board conducted a thorough review of the Group's risk management processes. This included adoption of a new Risk Management Policy, a robust assessment of the principal risks facing the business, consideration of the Group's risk appetite statement and the appointment of a Chief Risk Officer for the Group.

Emerging Risks

In addition to principal risks and uncertainties, the Board assesses and monitors emerging risks which, while not currently having a significant impact on the business, have the potential to adversely impact the business in the future. The emerging risks identified and discussed with management and the Audit and Risk Committee as part of the risk management process included the availability of and competition for high quality personnel in the markets in which we operate and the execution risk of a rapid increase in customer activity as airlines recover from the COVID-19 crisis and normalise their operations. These emerging risks will be subject to detailed and continuous review and assessment in order to identify any changes to the risk profile.

Our Strategic Pillars
Customer at the core
Product first & future proofed platform
People
Operational excellence
Commercial strength

Risk	Potential Impact	Mitigation	Strategic Pillar
COVID-19 and its impact on our customers Risk Trend	COVID-19 has had a significant adverse impact on the aviation industry and there remains uncertainty as to when the industry will recover. This leads to the risk that airlines could	During 2020, we provided unparalleled support to our customers in a time of crisis enabling them to quickly respond to the changing needs of their customers.
	fail in the near future due to the travel restrictions imposed by governments throughout the world. There is also a risk that potential new customers may be unwilling to contract	The Group has developed a plan assessing a number of scenarios that ensures the Group's continuance. The plan has been developed to support a post COVID-19 environment return to growth.
	in the current environment.	The Group has increased the frequency of cashflow and financial reporting to the ELT and the Board to facilitate accurate business continuity planning during this unprecedented period. In addition, during 2020, the Group secured an extension to its credit facility with Tireragh Limited and an additional facility of €10 million to ensure the Group has adequate resources and liquidity to support its operations as it recovers from the impact of the COVID-19 pandemic and as it prepares for a capital raise in 2021.
Financing Risk Risk Trend	If the Group is unable to attract appropriate finance, this would impact our ability to continue as a going concern. This could also result in the Group breaching financial covenants on its loan facility with Tireragh Limited. The Group's ability to invest	In July 2020, trading in the Company's shares was restored on Euronext Dublin establishing greater financial stability for the Company. Further, during 2020, the Group secured an extension to its credit facility with Tireragh Limited and an additional facility of €10 million. In 2021, the Group intends to raise capital to repay outstanding debt and
	and grow is dependent on having the required financial resources. The events of the past two years have caused a significant reduction in the	strengthen the Company's balance sheet.

Group's financial resources.

Risk	Potential Impact	Mitigation	Strategic Pillar
Competition Risk Trend	Increased competitor activity could adversely impact the Group's market share and its ability to win new customers. The Group must continue to invest in its products and technology to ensure it remains competitive.	In 2020, the Group implemented a new strategic plan focused on achieving accelerated and sustainable growth. Execution of this plan involves: › Retention of existing customers and targeting new customer acquisition. › Cementing our product first approach and investing in areas that will enable airlines to grow as digital retailers. › Increasing our product management interactions with customers to ensure they derive maximum value from the Datalex product offering.
Ability to implement new customer wins Risk Trend	The Group's ability to implement new customer wins is dependent on having appropriately skilled employees and business partners available to meet deliverables in a timely manner which might otherwise result in delays or increased costs.	The Group has implemented a new organisation structure and added expertise in key areas. The Group engages in regular resource planning meetings with delivery partners where new opportunities for growth are considered.
Inadequate Management of New Projects Risk Trend	Inadequate management of the development and implementation of the Group's products could adversely affect expected revenue and profitability margin.	The Group has significantly improved its project management and financial planning systems overseen by experienced and qualified commercial, finance, legal and project management personnel. In 2020 the Group implemented a new ERP system facilitating rigorous financial planning and continuous monitoring of budgeted versus actual costings which are monitored by the ELT and Board on a regular basis.
Business interruption and IT Systems Security and Compliance Risk Trend	Any failure of the Group's IT or security systems, or those upon which it relies, could result in significant business disruption, reputational damage, or the unauthorised access to sensitive financial, personal and commercial information.	The Group has extended its business continuity and disaster recovery plans which are tested on a regular basis and continues to invest in infrastructure in these areas. Our COVID-19 response has resulted in the Group enabling all employees to work remotely through the use of appropriate modern technology.
Foreign Exchange Rates Risk Trend	There are inherent risks associated with fluctuations in foreign exchange rates which could impact the Group's financial results.	The level of risk has increased principally due to the impact of the global COVID-19 pandemic on global capital markets. The Group intends to raise capital in 2021 to repay outstanding debt which will mitigate foreign exchange risk on our outstanding debt and facilitate improved treasury and foreign exchange risk management processes.

Principal Risks and Uncertainties

The Group maintains a risk register, which records identified risks across Delivery, Product Performance, Customer Satisfaction, Organisation Development, Financial, Cyber Security and Business Continuity, and Business Growth. Each risk is measured in terms of financial impact and probability. Mitigating actions are listed which inform the residual risk rating. The risk register is reviewed and updated periodically and was most recently reviewed by the ELT, the Audit & Risk Committee and the Board in April 2021. The main risk categories that the Board considered are the following:

Datalex • Annual Report 2020 • Strategic Report

Going Concern

The Group and Parent Company financial statements have been prepared on the going concern basis, which assumes that the Group (including Datalex plc) will be able to continue in operational existence for the foreseeable future. The time period that the Board has considered in evaluating the appropriateness of the going concern basis in preparing the Group and Parent Company financial statements for 2020 is a period of twelve months from the date of approval of these financial statements.

The Group incurred a loss of US\$6.5m in 2020 (2019: US\$12.1m). At 31 December 2020, the Group had net liabilities of US\$23.7m (2019: US\$17.1m) and net current liabilities of US\$23.0m (2019: US\$16.5m). The total decrease in cash was US\$0.03m (2019: decrease of US\$5.3m).

The Group and Parent Company continues to operate in a competitive environment which has been further impacted by the global COVID-19 pandemic. COVID-19 has had a significant adverse impact on the aviation industry to date and there remains uncertainty as to when the industry will recover from it. This leads to the risk that airlines could fail in the near future due to the travel restrictions imposed by governments throughout the world. This gives rise to material uncertainties for the business that may cast significant doubt on the Group and Parent Company's ability to continue as a going concern.

The actions taken by the Group and Parent Company in 2019 and 2020 have assisted in navigating the challenges associated with COVID-19. Over the course of 2020, the Group and Parent Company:

• › Secured the lifting of the suspension of trading of the Company shares on Euronext Dublin. This facilitates greater liquidity in the shares and allows the Group and Parent Company to raise capital with the market to assist with the funding requirements of the Group and Parent Company. The Board are assessing the current market conditions and waiting for the appropriate time to raise additional capital.
• › Obtained shareholder approval for the extension of the repayment date of the loan facility with Tireragh Limited (a company ultimately beneficially owned by Mr. Dermot Desmond, also a substantial shareholder in the Group via IIU Nominees Limited) to 1 November 2021. As part of this facility, the Group currently has access to an undrawn facility in the amount of €10m. There have been no additional draw downs on the Tireragh loan facility since December 2019. The Company has achieved the relevant financial covenant targets to date. During 2020, Tireragh Limited waived obligations to provide certain financial information within specified time limits, including delivery of the Group's 2019 annual report within 120 days of year end (as permitted by the European Securities and Markets Authority and the Central Bank of Ireland) and the time limits within which budget projections and other periodic reporting obligations were provided during the year. Further, Tireragh Limited provided a waiver extending the time to deliver specified security documents in connection with a subsidiary of the Group and provided a waiver permitting the Group flexibility to negotiate extended payment terms with key suppliers in connection with COVID-19 measures taken by the Group. (Refer to Note 14 and 31).
• › Took early & decisive action by reducing operating expenses and improving cash flows. These actions include a targeted redundancy programme, re-negotiating business partner arrangements, eliminating discretionary spending, freezing recruitment, implementing voluntary leave options and temporary reduced working hours for all employees.
• › Continued to successfully negotiate extended payment terms with key suppliers.

The significant reduction in costs incurred in the financial year has mitigated some of the impact of the loss of revenues from our customers.

In evaluating our cash flow needs for the next twelve months, the Directors have taken into account our commitments to customers in both deployment and ongoing service commitments.

The UK Corporate Governance Code requires the Board to assess and report on the prospects of the Group and whether the business is a going concern. In considering this requirement, the Directors have taken into account the Group's (including Datalex plc) forecast cash flows, liquidity, borrowing facilities and related covenant requirements and the expected operational activities of the Group.

To prepare financial forecasts for the business is challenging in this environment, as there are a number of different outcomes, both positive and negative which could arise as a result of COVID-19. The Directors have prepared its 12 month future forecast to take into account the potential impacts that COVID-19 could have on the Group, such as:

• › Slow recovery of transaction volumes as the Group emerges from COVID-19. The Group expects transaction volumes to be 56% of 2019 levels in H1 2021, improving to 68% in H2 2021 and 74% in H1 2022;
• › A material reduction in the assumed cash collected from the HNA Group subsidiaries and related companies, whom have been impacted by the HNA Group restructuring process in China;
• › Except for customers whom have indicated their intention to migrate away from the Group over the next 12 months, the Group will retain all customers;
• › The extended delay to a large project implementation;
• › The continued delay to new win opportunities due to the impact of COVID-19 on airlines;
• › Significant reduction across all operating costs of the business; and
• › Continued ability to negotiate extended payment terms with some suppliers.

In their sensitivity analysis, the Directors made further assumptions to reflect COVID-19 having a more adverse impact on the global economy, the aviation industry & Datalex, together with certain actions the Group would take in these circumstances, such as:

› Slower recovery in transaction volumes and post go-live services versus forecast;

› The assumed loss of a small number of

- customers;

› The removal of further anticipated cash collections from HNA Group subsidiaries and related companies; and

› Additional cost saving measures across the business being implemented, impacting headcount, contractors and operating costs.

Based on the forecasts prepared by management, and the additional sensitivity analysis performed, both of which have been approved by the Board, following drawdown of the available €10m facility, no cash shortfalls are anticipated in the 12 month period to 30 April 2022.

The Group is currently required to repay the Tireragh Limited loan facility - which at the year end date consisted of a principal of €11.3m, accrued interest of €1.3m and facility arrangement fees of €2.7m on 1 November 2021. The Group's current forecasts indicate that there will not be sufficient resources to repay the loan facility as it falls due, and additional funding will be required by the Group in order to repay the amount owing. However, subsequent to the year-end, the Board has received from Tireragh Limited, confirmation of its willingness to extend the facility repayment date to 30 September 2022. This extension, should it be required, would be subject to independent shareholder approval as a related party transaction under Euronext Dublin Listing Rules.

During 2021, the Company intends to raise sufficient capital, net of expenses, for the repayment of the loan facility, including related interest charges and arrangement fees, and the funding of the Group's working capital needs. The extension of the repayment date on the loan facility will provide the Group with the capability to choose the most optimal time and structure to raise such capital. Capital fundraising remains the preferred source of funding for the Group. Mr. Desmond has informed the Group that he will support the capital fundraising and will procure the participation of IIU Nominees Limited, the Groups largest shareholder, for at least its pro rata entitlement.

The Directors recognise that, there are material uncertainties which may cast significant doubt as to the Group and Parent Company's ability to continue as a going concern. Nevertheless, on the basis of Tireragh Limited's intention to continue to support the Group (including Datalex plc), including the availability of the undrawn loan facilities as detailed above, the Directors have a reasonable expectation that the Group and Parent Company will be able to successfully navigate the present uncertainties and as a result, are satisfied that the financial statements be prepared on a going concern basis.

Financial Viability Statement

In accordance with provision 31 of the 2018 UK Corporate Governance Code, the Board of Directors (the "Board" or the "Directors") have assessed the viability of the Group and its ability to continue to operate and meet its liabilities as they fall due for the remainder of 2021 and through to December 2023.

A three-year period has been deemed an appropriate time frame for the Directors' assessment as it is in line with the strategic plan presented to and approved by the Board. This plan takes into account the strategy of the Group, the Board's risk appetite, the market and competitive landscape and assesses the impact of COVID-19 on our Group and the wider aviation industry.

As the impact of COVID-19 on the airline industry begins to stabilise, the Group expects to win new customers which will drive increased licence and services revenues going forward and will help to grow foreign currency adjusted EBITDA each year. The three-year strategic plan makes certain assumptions, including:

• › Airline booking transactions will continue to improve throughout the period 2021 to 2023;
• › The Group will win new customers in both 2022 and 2023;
• › Except for customers whom have indicated their intention to migrate away from the Group over the next 12 months, the Group will retain all customers;
• › Continued active management of the cost control levers; and
• › Sufficient product investment and capital expenditure to support the product strategy and growth.

In performing the assessment of the Group's financial viability, the Board assessed the resilience of the Group, its current position and the principal risks that it faces. Each of these principal risks, along with their potential impact and mitigating factors are conveyed in the "Principal Risk and Uncertainties" section on page 36 of the Annual Report. This assessment has considered the potential impacts of these risks on the business model, future performance, solvency and liquidity over the period.

As set out in some detail in the Going Concern Statement above and within Note 2.5 to the consolidated financial statements, preparing a financial plan is challenging as there are a number of possible outcomes. The Group relies on a small number of significant customers. The loss of any customer could result in a significant impact on the Group's financial position, and the loss of a number of customers would threaten the Group's viability.

In the Going Concern Statement on pages 38 and 39, it is noted that Tireragh Limited has signalled its intent to provide an extension of the loan facility repayment date on the loan facility to 30 September 2022 with no change to the pre-existing loan terms and conditions. This will result in a significant debt balance of a principal of €11.3m, accrued interest of €1.3m, and facility arrangement fees of €2.7m becoming repayable on 30 September 2022.

During 2021, the Company intends to raise sufficient capital, net of expenses, for the repayment of the loan facility, including related interest charges and arrangement fees, and the funding of the Group's working capital needs until at least December 2023. The extension of the repayment date on the loan facility will provide the Group with the capability to choose the most optimal time and structure to raise such capital. A capital raise remains the preferred source of funding for the Group.

Raising sufficient capital remains subject to significant third party, internal and external risks. In particular, the market uncertainty resulting from COVID-19 is a significant risk to the capital raising. In addition, a capital raise, depending on its structure, may require the convening of an Extraordinary General Meeting at which shareholder approval of the arrangements would be sought. There is a risk that one or more of these steps may not be completed, or may not be completed in time, and any capital raise may not successfully complete.

The financial viability is dependent on the satisfactory outcome of the assumptions underlying the going concern assertion as described on pages 38 and 39. The Directors are satisfied that appropriate disclosures have been included on the basis on which the Viability Statement is supported.

Whilst the Board acknowledges that the potential severity of the risks assessed may change, based on their assessment of viability, the Board has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three-year period to 31 December 2023.

41

David Hargaden Chairman

Age: 64 Nationality: Irish Appointed to Board: 7 November 2019 Independent: N/A Independent on appointment Committee Memberships: Audit & Risk, Remuneration

Christine Ourmières-Widener

Non-Executive Director Director for Workforce Engagement

Age: 56

Nationality: French & British Appointed to Board: 3 October 2019 Independent: Yes Committee Memberships: Audit & Risk, Nomination & Governance

Skills and experience:

Christine Ourmieres-Widener is a highly respected Chief Executive Officer (CEO) and senior business leader in the Travel & Transport Infrastructure sectors. She was CEO of Flybe until July 2019, CEO of CityJet for five years and has represented Air France-KLM in Europe and in North America. Christine has significant board experience; Flybe Group, IATA, the Irish Sports Council and today The Met Office . Supporter of Diversity, she received the inaugural IATA "Inspirational Role Model Award" during her term on the board of governors of IATA. Passionate about Corporate Sustainability and Climate Change, she is a board member of ZeroAvia, builder of the first practical zeroemission aviation powertrain.

Peter Lennon

Non-Executive Director

Age: 64

Nationality: Irish Appointed to Board: 4 August 2000(1) Independent: No Committee Memberships: Remuneration (Chair), Nomination & Governance

Skills and experience: Peter Lennon brings a wealth of specialised legal and industry expertise. A practicing lawyer and partner in the law firm Ronan Daly Jermyn, he specialises in litigation and advises many Irish and English underwriters and airlines on liability claims matters.

(1) Peter Lennon has been a Director of the Datalex Group since 1993, prior to the incorporation of Datalex plc on 4 August 2000.

Sean Corkery

Chief Executive Officer

Age: 63 Nationality: Irish Appointed to Board: 12 April 2019 Independent: No Committee Memberships: None

Skills and experience:

Skills and experience: David Hargaden is an experienced Board member and technology investor and is the CEO of Unity Technology Solutions, one of Ireland's leading IT Managed Services businesses. He is currently a Non-Executive Director of ding.com, the international mobile top-up provider (2006 to present); a former Non-Executive Chairman of Cartrawler.com, Europe's largest car rental site (2004 to 2011); and a founder and former Non-Executive Chairman of myHome.ie, Ireland's largest property portal (2001 to 2006). David was Head of Corporate Finance at BDO Ireland (2001 to 2008) and Managing Partner at Hargaden Moor, Chartered Accountants from 1992 to 2001. He has also been Chairman of Point Information Systems and eWare, software development companies specialising in CRM. 44 45

Sean was appointed as Non-Executive Director and Interim Chief Executive Officer of Datalex in April 2019 and was subsequently appointed as the permanent CEO in October 2019. He also served as Acting Chairman between June and November 2019. Sean is a highly experienced executive having held multiple senior positions in the technology industry including Senior Vice President of Global Operations at Dell Inc; COO at Esat Telecom; Vice President of Global Operations at AST / Samsung and Director of Pacific Operations at Apple Inc. Prior to joining Datalex, Sean was Chairman and CEO at Actavo and he is a non-executive director of a number of private companies.

Mike McGearty

Lead Independent Director

Age: 47 Nationality: Irish Appointed to Board: 9 December 2019 Independent: Yes Committee Memberships: Audit & Risk (Chair), Remuneration

Skills and experience: Mike McGearty is the former CEO of CarTrawler and a qualified Chartered Management Accountant. Under his leadership, CarTrawler consistently recorded high doubledigit year on year growth, completed two major private equity investments as well as the acquisition of the online assets of Holiday Autos from Lastminute.com. Revenue increased from €1m to more than €200m annually. Prior to joining CarTrawler, Mike worked for eWare, a leading developer of CRM software which was acquired by the software accounting giant, SAGE plc. He also worked at Point Information Systems, a CRM provider, which was acquired by S1. He is currently Chairman of the Board at CitySwift, a high growth technology platform for Bus companies.

Niall O'Sullivan

Chief Financial Officer

Age: 56 Nationality: Irish Appointed to Board: 4 June 2019 Independent: No Committee Memberships: None

Skills and experience: Niall was appointed as Chief Financial Officer and Director of Datalex plc in June 2019. Niall is an expert in financial strategy, transformation, accounting and compliance in high tech industries. Prior to joining Datalex, Niall was Finance Director, EMEA at Google Inc. where he led accounting, financial compliance and controls for the EMEA region. Niall has also led global finance operations and executed complex finance transformation projects for technology PLCs such as Pearson PLC, Vodafone PLC and for corporations such as Oracle and Dell. Within Vodafone, Niall was CFO for Eircell, Vodafone Ireland and Vodafone Portugal prior to leading Global Finance Transformation and Operations for all Vodafone worldwide subsidiaries.

John Bateson

Non-Executive Director

Age: 57 Nationality: Irish Appointed to Board:

20 November 2006 Independent: No Committee Memberships: Remuneration, Nomination & Governance (Chair)

Skills and experience:

John Bateson is the Managing Director of International Investment and Underwriting, Unlimited Company ("IIU") a related party. John is a Business Studies graduate of Trinity College Dublin and, having qualified with KPMG, is a Fellow of the Institute of Chartered Accountants in Ireland. Prior to joining IIU, John spent six years with the corporate finance arm of NCB Group.

Board of Directors

Alison Bell SVP Global Sales Marketing

Alison has held senior management roles in technology and business consulting for the airline, hospitality, and travel agency sectors, including positions at Travelport, Mobile Travel Technologies and TravelClick. She has extensive experience in travel distribution, digital marketing and enterprise software sales and was the founder of her own startup online business.

JJ Cahill VP Commercial Finance & Partner Management

JJ has significant finance & corporate finance experience from both public & private companies across a diverse range of industries. JJ spent 4 years in CRH plc, working in strategy, acquisitions & integration as well as his role as Financial Performance Director for the Asia-Pacific division, based in Singapore. Immediately prior to joining Datalex, JJ was CFO for WaterWipes.

Ryan Estes VP Technology & Academy

Prior to joining Datalex, Ryan has previously held advisory, senior management and board roles in IT startups across Europe and the US. He brings with him over 18 years of experience in the software and technology field, including expertise in delivering large, complex, and distributed e-commerce products and systems.

Ellen Treacy VP of Operations

Ellen has comprehensive operations and software process management experience and prior to her current role, was Director of Operations and Software Process Management at Datalex. She has held senior software technical roles at Fujitsu and at IONA Technologies.

Avril Halpin Director of Human Resources

Avril is an experienced HR Leader and active member of the HR Tech community. With wide experience in the tech industry, she takes pride in partnering with both employees and Senior Leaders to provide the best HR solutions possible within a fast-paced global environment.

Neil McLoughlin Group General Counsel & Company Secretary

Neil brings significant legal and management experience having held a number of leadership roles in public and private companies. Prior to joining Datalex, Neil was Chief Operating Officer at Malin Corporation plc and before that spent 10 years at Elan plc where he served as Associate General Counsel and Assistant Secretary.

Andrei Grigoriev VP of Engineering

Andrei has 20 years of diverse international organizational leadership. He joined Datalex industry-first AI/ML powered cloud analytics automotive and aerospace.

experience in enterprise software development, product management and from Aptiv where he was responsible for the global analytics platform. Before that Andrei was Vice-President of Engineering at SAP where he led the development of solutions for IoT & digital supply chain in co-innovation with leading brands in

Emma Holohan VP of Strategy & Transformation

Emma has a wide range of experience in strategy and transformation. Prior to joining Datalex, Emma worked in management consulting in KPMG advising organisations across a range of industries including infrastructure, aviation, banking, and retail. Prior to this, Emma worked in strategy and corporate development at Aesop. Emma is a fellow of Chartered Accountants Ireland and completed her training in Corporate Finance in Deloitte.

Conor O'Sullivan Chief Product Officer

Conor has extensive product management and technology leadership experience. Having joined Datalex as a graduate, he was promoted to roles as Head of Architecture and Head of Engineering. He has intimate knowledge of our platform and product capabilities and has carved a role as a thought leader in the airline industry.

Executive Leadership Team

Sean Corkery Chief Executive Officer

Refer to Board of Directors Section for biographical information.

Niall O'Sullivan Chief Financial Officer

Refer to Board of Directors Section for biographical information.

Corporate Governance Report

Dear Shareholder,

I am pleased to present our 2020 Corporate Governance Report, which describes our governance structures and practices. Datalex has adopted the provisions of the 2018 UK Corporate Governance Code ("the Governance Code") and the additional requirements of the Irish Annex. The Governance Code can be obtained from the Financial Reporting Council's website, www.frc.org.uk. The Irish Corporate Governance Annex is available on Euronext Dublin's website, www.euronext.com. Under the interpretative provisions of the Irish Annex, Datalex is not regarded as being an equivalent size to a company included in the FTSE 350 Index on the basis of its market capitalisation.

In the following pages we describe our corporate governance framework, the roles and responsibilities of each component of that framework and outline the work of the Board and each of the Board Committees. Reports of the Chairs of our Nomination & Governance Committee, Audit & Risk Committee and Remuneration Committee are set out between pages 60 and 91.

Despite the very challenging market conditions in 2020, the Company made significant progress over the course of the year. The priority areas of Board focus in 2020 are set out in my introduction to this Annual Report on page 4. From a corporate governance perspective restoration of the Company's listing on Euronext Dublin was a key objective for 2020. Allied to this, we undertook meaningful shareholder and broader stakeholder engagement as we rebuilt trust with all who depend on, and interact with, our Company. We also achieved a number of important governance objectives set by the Board in 2020 including the appointment of a designated Director for Workforce Engagement, an externally facilitated Board evaluation and the implementation of further robust governance processes to demonstrate our commitment to the highest standards of corporate governance.

I hope you find this report informative and I look forward to speaking with you at our Annual General Meeting in 2021.

David Hargaden Chairman 28 April 2021

Corporate Governance Framework

Board of Directors

The Board of Directors ("Board") is responsible for the overall leadership and strategic direction of the Group and for overseeing and guiding the management of the business. The Board's responsibilities are active and not passive and include the responsibility for setting strategy, regularly evaluating management policies and the effectiveness with which management implements strategy and policies. The Board is also responsible for establishing a framework to assess and manage risk.

Board Committees

The Board has three standing Committees which support the operation of the Board through their focus on specific areas of governance. Each Committee has formal terms of reference approved by the Board which set out how it should operate including its role, membership, authority and duties and is governed by a statement of general principles and rules of procedure adopted by the Board. These are available on request from the Company Secretary.

The role of the Nomination & Governance Committee is to: › Ensure the board composition is regularly reviewed and refreshed. › Oversee the development of
a diverse pipeline for orderly succession to positions on the Board and as regards senior executives, including the Company secretary (senior management). › Monitoring the Company's compliance with corporate governance best practice, legal, regulatory and
listing requirements. The Report of the Nomination & Governance Committee is set out on pages 60 to 63.
The responsibilities of the Chief Executive Officer (the "CEO") are set out in the Board Roles and Responsibilities section.

Board Roles and Responsibilities Chairman David Hargaden The roles of Chairman and Chief Executive Officer are separate with a clear division of responsibilities between them. The Chairman is responsible for the leadership and management of the Board, establishing and maintaining an effective working relationship with the CEO and for ensuring there is transparent and appropriate communication with shareholders and broader stakeholders. Chief Executive Officer Sean Corkery The CEO is responsible for the operation of the business of the Group and for the implementation of strategy and policies agreed by the Board. In executing his responsibilities, the CEO is supported by the Chief Financial Officer ("CFO") and the Company Secretary who, with the CEO, are responsible for ensuring that high quality information is provided to the Board on the Group's operational, financial and strategic performance. Lead Independent Director Mike McGearty The Lead Independent Director coordinates, in a lead capacity, the other independent Directors and his duties include providing ongoing and direct feedback from the Directors to the Chairman and the CEO; communicating the Board's annual evaluation of the Chairman and the CEO; organising and leading the periodic review of the Board's governance procedures. The Lead Independent Director is available to shareholders who have concerns that cannot be addressed through the Chairman, CEO, CFO or Company Secretary, and he is also available to meet major shareholders on request. Non-Executive Directors – Listed on pages 44 and 45 The Non-Executive Directors have varied backgrounds and experience and bring constructive challenge to bear on issues of strategy, performance, resources and standards of conduct. Collectively, the Non-Executive Directors possess a wide range of financial, commercial and general management experience, investment expertise and software industry expertise. The experience and skills of the individual Board members are set out on pages 44 and 45. Chief Financial Officer Niall O'Sullivan The CFO is primarily responsible for managing the financial affairs of the Company and positioning the Company for optimal financial performance. The CFO is also responsible for taxation matters. Company Secretary Neil McLoughlin All Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that Board procedures are followed, for advising the Board on all governance matters and for ensuring that applicable rules and regulations are complied with. The appointment and removal of the Company Secretary is a matter for the Board as a whole. The Company Secretary is also responsible for risk management at an executive level.

Board of Directors

At 31 December 2020 and at the date of publication, the Board comprised of seven Directors: the non-executive Chairman, two Executive Directors and four Non-Executive Directors, two of whom are considered Independent Non-Executive Directors under the interpretative provisions of the Governance Code and the Irish Annex.

In the past two years there were five new appointments to the Board reflecting the Board's desire to ensure that the composition of the Board has the diversity, skills and expertise necessary to drive the Group's future success. The Board is aware of the other commitments of its Directors and is satisfied these did not or do not conflict with their duties as Non-Executive Directors of the Company. The CEO and CFO do not hold any directorships in public companies outside of the Datalex Group.

The Board is responsible for the success of the Company but, given the size and complexity of its operations, the day-to-day operations of the Company are managed on a delegated basis by certain board committees, the CEO and the senior executives working with the CEO. However, certain matters are reserved for decision by the Board as a whole. These include approving annual operating and capital budgets, and decisions on strategic investments and direction. The Board also monitors Group performance against agreed objectives and considers the sustainability of the Group's business model. The Non-Executive Directors meet without executive management present on a regular basis.

The Board routinely meets at least 9 times a year and additionally as required. In 2020, given the significant workload on the Board including activities related to the reinstatement of the Company's listing on Euronext Dublin, the Board met 34 times. Details of Directors' attendance at these meetings are set out below.

The Chairman sets the agenda for each meeting in consultation with the CEO, the Company Secretary and, where appropriate, the Lead Independent Director. The agenda and Board papers are circulated prior to each meeting to provide the Directors with relevant information and to enable them to fully consider the agenda items in advance of the meeting. In the event a Director is unavailable to attend a Board meeting, he or she will receive the Board papers in advance of the meeting and can communicate their views on any items, to be raised through the Chairman at the meeting.

The matters considered by the Board at each meeting include a review of actual performance against approved budget and forecast performance through to the end of the period, the Group's operational performance and customer satisfaction, the current status of the sales pipeline and any market and/ or product developments since the previous meeting, and any changes to the business risk environment, including any credit risk events. The Board also periodically reviews the strategic development of

the business.

Board Member	Meeting Attendance		Tenure
	Scheduled	Unscheduled
David Hargaden	9/9	25/25	1 year
Sean Corkery	9/9	22/25	2 years
John Bateson	9/9	25/25	14 years
Christine Ourmieres-Widener	9/9	24/25	1 year
Peter Lennon	9/9	25/25	20 years (1)
Mike McGearty	9/9	25/25	1 year
Niall O'Sullivan	9/9	22/25	1 year

(1) Peter Lennon has been a Director of the Datalex Group since 1993 prior to the incorporation of Datalex plc on 4 August 2000.

Date of appointment (and length of service to date of this Annual Report) to the Board of Directors and Committees of Datalex plc

Name	Datalex plc Board of Directors	Audit & Risk Committee	Remuneration Committee	Nomination & Governance Committee
David Hargaden	7 November 2019 (1 year 5 months)	30 January 2020 (1 year 3 months)	30 January 2020 (1 year 3 months)	-
Sean Corkery	12 April 2019 (2 years)	-	-	-
John Bateson	20 November 2006 (14 years 5 months)	-	21 April 2010 (11 years)	21 April 2010 (11 years)
Christine Ourmières-Widener	3 October 2019 (1 year 6 months)	30 January 2020 (1 year 3 months)	-	30 January 2020 (1 year 3 months)
Peter Lennon (1)	4 August 2000 (20 years 8 months)	-	4 August 2000 (20 years 8 months)	30 January 2020 (1 year 3 months)
Mike McGearty	9 December 2019 (1 year 4 months)	30 January 2020 (1 year 3 months)	30 January 2020 (1 year 3 months)	-
Niall O'Sullivan	4 June 2019 (1 year 10 months)	-	-	-

(1) Peter Lennon has been a Director of the Datalex Group since 1993 prior to the incorporation of Datalex plc on 4 August 2000.

Board Engagement with Stakeholders

Communications with shareholders are given high priority and there is regular

Shareholders and Investors	Communications with shareholders are given high priority and there is regular dialogue with individual shareholders, as well as general presentations at the time of the release of the annual and interim results.
	During 2020, there was significant engagement with the Company's shareholders and there were three general meetings held at which shareholders had the opportunity to ask questions of the Board. In addition, a number of trading updates were issued to the market during the year. Periodically, the CEO, CFO and Company Secretary meet with shareholders and regular updates are provided to the Board on matters raised by shareholders to ensure the Non Executive Directors have a full understanding of the views of shareholders. When necessary, the Board and Committee Chairpersons engage with shareholders on specific topics and where relevant provide feedback to the Directors. The Lead Independent Director is available to shareholders if contact through normal channels is inappropriate or has failed to resolve concerns.
Workforce	In 2020, the Board appointed Christine Ourmières-Widener, as Director of Workforce Engagement. This newly appointed role will enable the Board to develop a better understanding of the workforce and improve communication and engagement between the Board and employees of the Group.
	Our people drive every part of our business model. The Board engage with our workforce in various ways, including meetings with management and employees around Board meeting, employee engagement surveys, the annual kick off meeting, hackathons and recognition programmes. A detailed People update is included at every scheduled meeting of the Board and the Board receives regular updates from the designated Director for Workforce Engagement.
	In 2020, a cross-functional COVID-19 Business Continuity Task Force was established in order to remain informed and to recommend action to mitigate against any associated health and safety risks.
Customers and Suppliers	We have deep and long-standing relationships with our customers and suppliers who are fundamental to Datalex success. The Board is regularly updated on the engagement and relationships with our customers and suppliers. We are acutely aware that COVID-19 has been catastrophic for the airline industry and we are actively working with our customers, and with the support of our major suppliers, to help and support them through this difficult period.
Communities	The Board are regularly updated on CSR and sustainability initiatives.

Director for Workforce Engagement

In December 2020, Christine Ourmières-Widener was appointed by the Board as the designated Non-Executive Director for the purposes of engagement with the workforce, in accordance with Provision 5 of the Governance Code. The purpose of the role is to assist the Board in understanding the views of the workforce and in taking account of employees interests in its discussions and decisions.

A formal engagement plan was agreed by the Board, which envisages the key responsibilities of the designated Non-Executive Director as being:

› Engage with a representation of the workforce at the Company's annual Kick-Off meetings;

• › Meet with Executive Leadership Team members on a regular basis to review the employee engagement framework across the organisation;
• findings; and

› review the results of the annual HR engagement surveys and provide strategic input to key initiatives arising from the survey

› update the Board regularly on the activities of the designated Director for Workforce Engagement and their findings on the views and needs of the workforce.

Since Christine's appointment, Christine has met with the Director of HR to review the key findings of the Employee Engagement Survey. In addition, Christine joined the Company's 2021 Hackathon where a team developed the key initiatives arising from the Employee Engagement Survey findings. Christine will act as Board sponsor to the team implementing those initiatives in 2021.

Culture and Values

The Company's core values were reviewed and updated in 2020 and communicated to the organisation at Datalex's 2020 Kick-Off meeting. Performance on values is a mandatory element of all employees' annual performance review.

The Board monitors culture to ensure it is aligned with purpose, values and strategy. The Board does this by interaction with management teams and employees at Company events, review of employee surveys and through the work and briefings of the Director for workforce engagement.

Board Balance, Effectiveness and Independence

A key element of ensuring the Board continues to operate effectively is independent oversight, which allows Non-Executive Directors to scrutinise and, when necessary, challenge management proposals and strategy. The Board has evaluated the independence of each Non-Executive Director by considering a number of factors, including:

• › Has any Director been an employee of the Company within the last five years?
• › Has any Director had a material business relationship with the Company, directly or indirectly, in the last three years?
• › Does any Director receive additional remuneration from the Company, apart from Directors' fees?
• › Does any Director have links to other Directors, or family ties with the Company's senior managers or advisors?
• › Does any Director hold cross-Directorships or have significant links with other Directors through involvement in other companies or bodies?
• › Does any Director represent a significant shareholder?
• › Has any Director served on the Board for more than nine years from the date of their first election?

The Board has concluded that Peter Lennon and John Bateson were not deemed to be Independent under the considerations outlined above and in accordance with provision 10 of the Governance Code. Specifically:

• › Peter Lennon has served on the Board since 1993, and is a partner of the firm Ronan Daly Jermyn, which has provided legal services to the Group.
• › John Bateson has served on the Board since 2006 and is a director of the largest shareholder in the Company, IIU Nominees Limited.

The Board believes that the Group benefits from the continuity of tenure and considerable experience that Mr. Lennon and Mr. Bateson bring to bear on the Group's governance. David Hargaden was considered independent on his appointment as Chairman on 7 November 2019 and his other commitments are set out on page 44.

Under provision 11 of the Governance Code, at least half the Board, excluding the Chairman should be Non- Executive Directors whom the Board considers independent. Datalex does not meet this requirement as, of the six Directors (excluding the Chairman) only Christine Ourmières-Widener and Mike McGearty are considered Independent Non-Executive Directors at the date of publication of this Annual Report. The Board, in conjunction with the Nomination & Governance Committee intends to address the composition of the Board in 2021.

Induction and Development

On appointment, Non-Executive Directors undertake a structured induction programme which includes meetings with the Executive Leadership Team, meetings with the Company's financial and legal advisors and with the External Auditor. In addition, new Non-Executive Directors receive a detailed induction pack describing the structure and operations of the Board, Group and business.

The Chairman invites external experts to attend and present at specific Board meetings to inform the directors on key areas of relevance to the business. Individual Directors may seek independent professional advice at the Group's expense, where they judge it necessary to discharge their responsibility as a Director.

Terms of Appointment

Non-Executive Directors are engaged under a letter of appointment. A copy of the standard letter of appointment is available on request from the Company Secretary. On appointment, Directors are provided with briefing materials on the Group and its operations. Visits to the business and meetings with management are arranged, and ongoing briefings are provided as appropriate.

Conflicts of Interest

The Board has adopted a Conflicts of Interest Policy and actively manages conflicts of interest including those resulting from significant shareholdings. For example, John Bateson did not participate in any discussions in 2020 involving the proposal, which was subsequently approved by shareholders, to enter into financing arrangements with Tireragh Limited a company associated with our largest shareholder, IIU Nominees Limited.

Retirement and Re-election

In accordance with the requirements of the Governance Code, each of the Directors will submit themselves for re-election each year at the Annual General Meeting of the Company.

Remuneration and share-ownership

Details of Directors' remuneration and interests in share options and share awards together with details of Directors' beneficial interests in the share capital of the Company are set out in the report of the Remuneration Committee on Directors' remuneration on pages 74 to 91.

D&O Cover

The Group maintains insurance cover in respect of the liability of its Directors and officers.

Board Performance Evaluation

The annual Board evaluation process is an important element in ensuring and enhancing the effective and efficient operation of the Board. The Group has established a formal process for the annual evaluation of the performance of the Board and its principal Committees, including a triennial external evaluation which was conducted in 2020. The external evaluation supplements the internal Board performance evaluation processes. Led by the Lead Independent Director, the nonexecutive directors meet annually, without the Chair present, to evaluate the performance of the Chair. On behalf of the Board, the Nomination & Governance Committee conducts the annual evaluations of the CEO,

the results of which will be reviewed with the other independent directors. The Remuneration Committee will use the evaluation of the CEO in the course of its deliberations when reviewing and considering his compensation.

In 2020, external consultants, The Governance Company, were engaged to facilitate the external evaluation of the effectiveness of the Chairman, the Board and its Committees', the purpose of which was to review and further improve the Board's and Committees performance and identify any development needs. The Governance Company was retained following a detailed selection process undertaken by the Committee which involved detailed evaluation of four providers. The Governance Company has no other connection with the Group or any individual director. The process that was followed for the 2020 review and the conclusions of the evaluation are set out below:

1. Each Director completed a detailed online questionnaire produced by The Governance Company;

2. The Governance Company conducted a review of the Board and Committee papers and key governance policies and procedures;

3. The Governance Company conducted interviews with each Board member and key members of senior management;

4. The results of stages 1-3 were collected and analysed by The Governance Company and a report was prepared and discussed with the Group Chairman, the Chairman of the Nomination & Governance Committee and the Company Secretary; and

5. The results were presented by The Governance Company to Nomination & Governance Committee in February 2021 and to the Board and discussed at its meeting in

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• March 2021.

An action plan for 2021, listing areas of focus from the evaluation, was agreed at a Board meeting in March 2021.

Compliance

Code of Conduct

The Group adopted a new Code of Conduct in 2020 which was provided to every employee of the Group. The Code of Conduct provides guidance to employees on the standards that are expected across a range of areas applicable to the business, including personal obligations, discrimination, conflict of interest, anti-bribery, insider trading, antitrust, use and protection of business assets and information and compliance with the law. The Company strives to ensure that our business partners understand our standards and, wherever possible, act accordingly in all areas of concern.

Whistleblowing

The Group's whistleblowing arrangement includes an externally facilitated hotline through which all employees and third parties can raise concerns in confidence about possible wrong doings in financial reporting and other matters, 24 hours a day by phone or online. All whistleblowing incidents are reviewed by the Lead Independent Director and formally investigated by the Board depending on the nature of the concern raised. The Board is satisfied that the Group's whistleblowing arrangements are operating effectively.

Share Ownership and Dealing

The Group has a Share Dealing Policy which provides guidance to all directors and employees to ensure that they do not misuse, or place themselves under suspicion of misuse, information about the Group which they may have and which is not public. The Group also has a Share Dealing Code which applies to all Directors and certain employees and which, in addition to providing guidance on non-public information, sets out the rules and procedures to be followed when dealing in the shares of the Company or any other type of securities issued by or related to the Company.

Accountability and Audit

The Directors' responsibility for preparing the consolidated financial statements is explained in the Directors' Responsibilities Statement and the auditor's responsibilities are set out in the Independent Auditor's Report. The Board is responsible by law for keeping adequate accounting records, which disclose at any time the financial position of the Company and the Group. The Board is also responsible for overall management of the Company and the Group including strategy, policy and reporting. In discharging these mandates, the Board pays particular attention to economic issues, strategy, investment programmes, financial performance and personnel matters.

Risk Management and Internal Control

In accordance with provision 29 of the Governance Code, the Board is responsible for reviewing the effectiveness of the risk management and the internal control systems.

During 2020, the Board has directly, and through delegated authority to the Audit & Risk Committee, overseen and reviewed the performance and evolution of risk management activities and practices and internal control systems within the Group. These systems include financial controls which enable the Board to meet its responsibilities for the integrity and accuracy of the Group's accounting records, operational controls in each functional area of the Group, and an assessment of general business risks. The Audit & Risk Committee has reported in the past on the risk of manual intervention and need for process improvements. During 2020 the Audit Committee has overseen the implementation of the group ERP system. Further work is required to minimise manual intervention, reliance on complex excel sheets and cross training within the finance team.

The Board acknowledges its responsibility for reviewing the risk management and the internal control systems and notes the following with regards to the FRC's 2014 "Guidance on Risk Management, Internal Control and Related Financial and Business Reporting" with respect to 2020:

Confirmed

Statement on Risk Management and Internal Control	Board Assessment
That there is an on-going process for identifying, evaluating and managing the principal risks faced by the Group	Confirmed
That the systems have been in place for the year under review and up to the date of approval of the Annual Report and accounts
That they are regularly reviewed by the Board	Confirmed
The extent to which the systems accord with the guidance in this document

See conclusion on the effectiveness of the Group's risk management and internal control systems on page 56

See conclusion on the effectiveness of the Group's risk management and internal control systems on page 56

The Audit & Risk Committee, in 2020, continued the significant level of oversight outlined in the 2019 Annual Report , with 11 meetings in 2020 and reviewed and satisfied itself as to the adequacy of the Group's internal control and risk systems. The CFO and Head of Finance attended each of these meetings, and outside the formal meetings have been in regular dialogue with the Chair of the Audit & Risk Committee.

The main features of the Group's systems of internal controls and risk management which operated in the period are as follows:

• › Key risks, with reference to achievement of the Group's business objectives are assessed and revised periodically. The risk register was reviewed throughout 2020 and updated in April 2021. This update was approved by both the Board and the Audit & Risk Committee. The Audit & Risk Committee is also currently undertaking an in-depth review of the Group's overall risk environment, with respect to both risks to the achievement of the Group's business objectives, and risks to the integrity and effectiveness of the Group's key systems and processes. In particular, the Committee recognises the importance of successful customer delivery, and pays particular attention to areas such as the availability of key domain resources and skills, the performance and integrity of critical infrastructure in our hosting facility, and control over the Group's cost base. The Committee also recognises the competitive dynamics of our market, and closely monitors any changes in pricing or product offerings that may impact on our ability to continue to win new business and retain existing customers. Any mitigating actions required are monitored and reported to the Audit & Risk Committee on a periodic basis. A summary of key risks, together with mitigating actions, is set out on pages 34 to 37;
• › The Group has written procedures and authority limits for all operating and capital expenditure; and

› A new ERP system was implemented during the year including new processes and procedures across the Financial Control environment.

Financial Reporting Process

The Group has in place procedures to identify, evaluate and manage significant risks in accordance with the Governance Code. These procedures were in place for the full year under review, and up to and including the date of approval of the consolidated financial statements. The process is subject to review by the Board.

The key procedures established by the Board, with a view to reviewing the effectiveness of the internal control environment, include

the following:

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› The organisation structure has clearly defined lines of authority;

› There is a formal schedule of matters reserved for the Board, as outlined in the Company's Board Control Manual;

› A comprehensive system of financial reporting involving periodic reporting, budgeting, variance analysis and forecasting, of all business units;

› An Audit & Risk Committee, made up of Non-Executive Directors which reviews key control matters;

› There are policies and procedures in relation to key financial controls, capital expenditure, operational risk and treasury and credit risk management;

› All investment decisions are subject to formal levels of authorisation and approval; and

› Where professional expertise is necessary, professional advisors are engaged.

The Group has also put in place a system to identify and report on risks and associated controls. The Board has reviewed the outputs from this process during the year and adopted the risks and controls as appropriate for monitoring and reporting. The Board has also reviewed the risks identified to ensure they are still relevant for monitoring.

The Group have appointed Mazars as a suitably qualified, independent third party to provide internal audit services on an outsourced basis. Please see page 72 for further details. As outlined on pages 66 and 68, members of the Audit & Risk Committee periodically examine the operation of key accounting processes in the business and report back to the Committee.

Fair, balanced and understandable

The Annual Report and Financial Statements present a fair, balanced and understandable assessment of the Group's position and prospects and provides the information necessary for shareholders to assess the Group's position, performance, business model and strategy. This assessment was completed by the Audit Committee as outlined in its Report on page 66.

Governance Compliance Statement

The Group has applied the principles and provisions of the Governance Code and the Irish Annex throughout the year ended 31 December 2020, with the following exceptions:

› Board composition: Provision 11 of the Governance Code recommends at least half the Board, excluding the Chairman should be Non-Executive Directors whom the Board considers independent. Datalex does not meet this requirement as, of the six Directors (excluding the Chairman) only Christine Ourmières-Widener and Mike McGearty are considered Independent Non-Executive Directors at the date of publication of this Annual Report. The Board, in conjunction with the Nomination & Governance Committee, is committed to addressing this issue in 2021 and is in the process of initiating a formal, rigorous and transparent process for the appointment of new Board members in 2021.

• › Audit & Risk Committee composition: Provision 24 of the Governance Code recommends that Audit & Risk Committee's consist of a minimum of two Independent Non-Executive Directors (smaller company provisions). On 30 January 2020, the Audit & Risk Committee was reconstituted to comprise Mike McGearty (Chairman), David Hargaden and Christine Ourmières-Widener. The Board, on appointment of David Hargaden to the Audit & Risk Committee, recognised that the appointment of the Chairman of the Board as a member of the Audit & Risk Committee is not in accordance with provision 24 of the Governance Code, however, the Board considered it appropriate for Mr. Hargaden to serve on the committee given the expected workload of the committee in 2020 and Mr. Hargaden's relevant knowledge, experience and financial expertise. The membership of the Audit & Risk Committee will be reviewed by the Nomination & Governance Committee in 2021.
• › Remuneration Committee Composition: Provision 32 of the Governance Code recommends that all of the members of the Remuneration Committee should be independent. During 2020 Peter Lennon, who is not considered independent, was Chairman of the Remuneration Committee. Given that Mr. Lennon had significant experience serving on Remuneration Committees, the Board had considered this and wanted to take advantage of Mr. Lennon's skills and experience in this area. The membership of the Remuneration Committee will be reviewed by the Nomination & Governance Committee in 2021.
• › Nomination & Governance Committee composition: Provision 17 of the Governance Code recommends that a majority of members of the Nomination Committee should be independent non-executive directors. On 30 January 2020, the committee was reconstituted to comprise John Bateson (Chairman), Peter Lennon and Christine Ourmières-Widener. As John Bateson and Peter Lennon are not considered independent the committee does not comply with Provision 17 of the Governance Code. The membership of the Nomination & Remuneration Committee will be reviewed in 2021.
• › Board Diversity Policy: Provision 23 of the Governance Code states that the Board should describe its policy on diversity and inclusion, its objectives and linkage to company strategy, how it has been implemented and progress on achieving the objectives. In May 2020 the Board adopted a Board Diversity Policy but has not yet evaluated the progress towards achieving its objectives. Therefore the Group did not comply with this provision in 2020 but intends to complete this work in 2021, including adopting and implementing a policy for inclusion.
• › Director for Workforce Engagement: Provision 5 of the Governance Code requires the Board to state their methods for workforce engagement. Christine Ourmières-Widener was appointed Director for Workforce engagement in 2020 meaning that although the Company now complies with this provision, it did not for the full year. Further information on the work of the Director for Workforce Engagement is set out on page 53.
• › Remuneration Policy: The Company adopted and shareholders approved a new Remuneration Policy in September 2020 in accordance with Provision 40 of the Governance Code and as required by the European Union (Shareholders' Rights) Regulations 2020.
• › Internal Audit: The Company did not have an internal audit function for the full financial year. In September 2020, the Audit & Risk Committee appointed Mazars as a suitably qualified, independent third party to provide internal audit services on an outsourced basis.

The Committee met twice in 2020. Member attendance at meetings is detailed below.

Committee Member(1)	Meeting Attendance	Committee Tenure
John Bateson (Chair)	2/2	1 year(2)
Peter Lennon	2/2	1 year
Christine Ourmières-Widener	2/2	1 year

(1) With effect from 30 January 2020, the members of the Committee are John Bateson (Chairman), Peter Lennon and Christine Ourmières-Widener.

(2) Tenure as Chair. Mr. Bateson was a member of the Committee prior to his appointment as Chair.

In 2020, a majority of the members of the Committee were not independent as required by the Governance Code. As detailed below this issue will be considered by the Committee in 2021.

Dear Shareholder

The Board appointed me as Chairman of the Nomination & Governance Committee (the "Committee") with effect from 30 January 2020 and I am pleased to present the report of the Committee for the year ended 31 December 2020. The report outlines the main areas of focus of the Committee in the past year and the areas of priority going forward.

Role of the Committee

The Committee assists the Board in discharging its responsibilities relating to the composition of the Board and corporate governance. The Committee is responsible for reviewing, identifying and recommending suitable candidates for appointment as Directors. The Committee also has responsibility for recommending to the Board best practice corporate governance principles including providing insights on culture and values which support the Company's strategic priorities.

The Company Secretary acts as secretary to the Committee and provides support as required. The Terms of Reference of the Nomination & Governance Committee, including its role and the authority delegated to it by the Board, and the standard letter of terms and conditions of appointment to the Board, are available on demand from the Company Secretary.

Nomination & Governance Committee Report

Diversity

The Group recognises the importance and benefit of ensuring diversity throughout the organisation. In 2020, the Board adopted a Board Diversity Policy the objective of which is to ensure that all Board appointments are made on merit, in the context of the skills, experience, independence and knowledge which the Board as a whole requires to be effective. The policy also acknowledges that an effective Board will include and make good use of differences in the skills, regional and industry experience, background, race, gender and other distinctions between directors. These differences are considered in determining the optimum composition of the Board and when possible will be balanced appropriately. In 2021 the Committee intends to update its policies to incorporate a policy on inclusion and report on how these policies have been implemented, including progress on achieving their objectives.

Throughout the Group, a total of 18 nationalities are represented within our workforce, and we strive to ensure that our culture promotes and respects everyone, irrespective of nationality or gender. The Board also acknowledges the importance of promoting female participation at all levels in the Group. At 31 December 2020, women made up 27.7% (2019: 27.7%) of total employees and 31.8% (2019: 31.8%) of senior management (top two levels) in the Group. At 31 December 2020, women made up 14% (2019: 14%) of the Board following the appointment of Christine Ourmières-Widener in October 2019.

Priorities for the Year Ahead

Our priorities for the coming year will include the appointment of new Board members in 2021 and an appropriate reconstitution of the Board Committees in light of the requirements of the Governance Code. In addition, the Committee will oversee implementation of the recommendations arising from the externally facilitated board evaluation conducted in 2020.

On behalf of the Nomination & Governance Committee.

Chair, Nomination & Governance Committee

John Bateson 28 April 2021

Key Areas of Activity During 2020

Board Composition and Renewal

On an annual basis the Committee reviews the size, structure and composition of the Board, and makes recommendations to the Board with regard to any changes required, within the context of the ongoing development and evolution of the business.

The Committee ensures that prior to the appointment of any new Director, the candidate has sufficient available time to discharge their duties as a Director. Prior to the appointment of Directors, the Committee evaluates the balance of skill, knowledge, experience and diversity of the Board, and in light of this evaluation, prepares a description of the roles and capabilities required for the appointments. To facilitate the search for suitable candidates, the Committee may use the services of external consultants.

Under provision 11 of the Governance Code, at least half the Board, excluding the Chairman should be Non-Executive Directors whom the Board considers independent. Datalex does not meet this requirement as, of the 6 Directors (excluding the Chairman) only Christine Ourmières-Widener and Mike McGearty are considered Independent Non-Executive Directors at the date of publication of this Annual Report. The Committee is committed to addressing this issue in 2021 and is in the process of initiating a formal, rigorous and transparent process for the appointment of new Board members.

Board Evaluation

The Group has established a formal process for the annual evaluation of the performance of the Board and its principal Committees, including a triennial externally facilitated which was conducted in 2020 and presented to the Committee in February 2021. The external evaluation is described in the Corporate Governance Report on page 55.

The conclusion from the 2020 process was that the performance of the Committee and of the Chairman of the Committee were satisfactory. The Committee will focus on agreed actions arising from the 2020 evaluation process.

Workforce Engagement

In accordance with Provision 5 of the Governance Code, the Committee recommended to the Board in 2020 that one of the Non-Executive Directors be appointed as the designated Non-Executive Director for workforce engagement and included recommendations on the proposed work programme for that director over the course of a year. Christine Ourmières-Widener was appointed as the director for workforce engagement in December 2020. The role, remit and planned 2021 activity of the director for workforce engagement is described on page 53.

Experience and Skills

The Committee is responsible for ensuring that, through effective succession planning, the Board, its Committees and senior management have the correct balance of skills, knowledge and experience to effectively lead the Group both now and in the longer term. During 2020, the Committee continued to consider the longer-term talent strategy to understand the changing competencies required to ensure the development of a skilled workforce which will support the Group's strategy, purpose, culture and values.

Corporate Governance Developments

The Committee advises the Board on significant developments in the law and practice of corporate governance and monitors the Company's compliance with corporate governance best practice, with particular reference to the Governance Code. The areas of divergence from the Governance Code for the year ended 31 December 2020 are set out on pages 58 and 59.

David Hargaden, Christine Ourmières-Widener and I all have recent and relevant experience working with financial and accounting matters with competence in accounting and experience of preparing consolidated financial statements under IFRS. All members of the Committee have financial and commercial experience relevant to the industry and the broader commercial environment within which we operate. Therefore, the Committee, the Nomination Committee and the Board are satisfied that the Committee, as a whole, has competence relevant to the sector in which the Group operates.

Until the reconstitution of the Committee on 30 January 2020, the Committee did not consist of a minimum of two Independent Non-Executive Directors, as required under provision 24 of the Governance Code. The Board, on appointment of David Hargaden to the Audit & Risk Committee, recognised that the appointment of the Chairman of the Board as a member of the Audit & Risk Committee is not in accordance with provision 24 of the Governance Code, however, the Board considered it appropriate for Mr. Hargaden to serve on the Committee given the workload of the Committee in 2020 and Mr. Hargaden's relevant knowledge, experience and financial expertise.

Key Areas of Activity During 2020

2020 was a very busy year for the Audit & Risk Committee with considerable time being spent dealing with the 2019 audit, overviewing the enhancements to the Group's financial and operational internal control environment, overseeing the implementation of the Group's new ERP system, overseeing the completing of the FPPP activities and appointing a new internal auditor. The Audit & Risk Committee continues to engage with management to drive control and oversight improvements.

The Audit & Risk Committee continues to oversee the process to resolve the control deficiencies that gave rise to the 2018 and 2019 audit opinion disclaimers. Further enhancements have been made during 2020 with additional manual oversight, the engagement of new personnel in finance, newly introduced processes and the implementation of the Group's new ERP system.

Throughout 2020 the Audit Committee received regular updates on the progress of the Implementation of the new ERP system, Jet, which went live on 1st September. Jet was part of an overall finance transformation programme, which included the FPPP programme and recruitment of new and qualified staff.

Our auditors, Deloitte were appointed on 31 December 2019. On an annual basis, the Committee reviews the appointment of the external auditor, taking into account the auditor's effectiveness and independence. On that basis, the Committee recommended to the Board that Deloitte should continue in office as the auditor to the Group in respect of the year ending 31 December 2020.

In addition to having Terms of Reference, the Audit & Risk Committee also agrees a committee schedule of items which it considers to be of significance in order to ensure that all items are discussed appropriately and on a timely basis.

Dear Shareholder

The Board appointed me as Chairman of the Audit & Risk Committee (the "Committee") with effect from 30 January 2020 and I am pleased to present the report of the Committee for the year ended 31 December 2020. The report outlines the main areas of focus of the Committee in the past year and the areas of priority going forward.

Role of the Committee

The Committee has been charged by the Board of Directors ("Board") with the task of providing governance and oversight over the integrity of the accounting, financial reporting, internal control and risk management processes of the Group. It also monitors the performance of the external auditors.

The Committee has written terms of reference which set out its role, responsibilities and duties. These can be obtained from the Datalex website at the following link: https://www.datalex.com/ investor/ or via a written request to the Company Secretary.

To discharge its responsibilities effectively, the Committee has unrestricted access to the Group's external auditor, the Group's internal auditor, and the Finance function, with whom it meets throughout the year with, and without, management, as appropriate. These meetings with the external and internal auditors ensure that there are no restrictions on the scope of their audits and allow discussion of any matters that the auditors might not wish to raise in the presence of management.

The Committee may obtain, at the Group's expense, outside legal or other professional advice needed to perform its duties. The Chair of the Committee reports to the Board on the key outcomes from each meeting and on how the Committee has discharged its duties. The minutes of all Committee meetings are circulated to the Board for information.

Only members of the Committee have a right to attend Committee meetings. Regular attendees include the Chief Executive Officer, Chief Financial Officer and employees from a variety of departments to aid their understanding of the business and to assist in discharging their duties. The external auditor, Deloitte Ireland LLP ("Deloitte"), also attends Committee meetings and has direct access to the Chair of the Committee. The Company Secretary acts as secretary to the Committee and provides support as required.

The Committee met 11 times in 2020. Member attendance at meetings is detailed below.

Committee Member	Meeting Attendance	Committee Tenure
Mike McGearty (Chair)	11/11	1 year
Christine Ourmières-Widener	11/11	1 year
David Hargaden	11/11	1 year

Audit & Risk Committee Report

The Audit & Risk Committee assists the Board in discharging its responsibilities with regard to:

Matter Considered	Actions Taken	Matter Considered	Actions Taken
Financial reporting	› Monitoring the integrity of the financial statements and the formal announcements relating to the Group's financial performance.	Internal audit	The Committee appointed Mazars as a suitably qualified, independent third party to provide internal audit services on an outsourced basis.
	› Reviewing significant financial reporting judgements.
	› Assessing and reporting on the Group's viability in line with the 2018 UK Code requirements and the appropriateness of the going concern basis.		Since its appointment, Mazars has identified risk management, cyber security, revenue recognition, remote working and GDPR as the main areas of focus. During 2020, they commenced their review over risk management.
	› Considering the report of the external auditor on the financial statements and the year-end audit.		The Audit & Risk Committee is responsible for:
	› Ensuring compliance with relevant regulations for financial reporting.		› Monitoring and reviewing the effectiveness of the Group's Internal Audit function.
	In advance of the year-end audit work, the Committee received the external auditor's 2020 year-end audit plan. Throughout the final audit process, the Chairman of the Audit & Risk Committee held a number of meetings with the external audit		› Considering the results of internal audits undertaken and management's responses to the findings, including updates on actions identified.
	partner to discuss the status of the field work and areas of focus arising.		› Approving any changes to the Internal Audit Plan for 2020 and approval of the Internal Audit Plan for 2021.
Fair, balanced and	› The Committee has considered whether the Annual Report and accounts, taken as a whole, is fair, balanced and understandable and provides the		› Reviewing and approving amendments to the Internal Audit Charter.
understandable	information necessary for shareholders to assess the Company's position and performance, business model and strategy. In conducting this assessment, the Committee assessed the work undertaken by management in the preparation of the accounts and the Annual Report, the analysis performed of changes to applicable standards and reporting requirements, and the arrangements for review and verification of the information contained in the Annual Report. The Committee also considered that the content of the Annual Report provides both positive and negative aspects of performance and developments in a clear and meaningful way as well as the links between discussions of performance, financial position and cash flows. The Committee was provided with all relevant information and, in particular, with detailed briefings from management on how specific issues are managed and challenged management as required.	Risk management	The Audit & Risk Committee is responsible for:
		and internal control	› Assessing the appropriateness of the Group's overall risk management and internal control framework.
			› Ensuring that there is a robust process in place to monitor and evaluate the principal risks to which the Group is exposed, including those that would threaten its business model, future performance, solvency or liquidity.
			› Reviewing the Group's whistleblowing arrangements by which employees may, in confidence, simply and anonymously, raise concerns about possible improprieties in matters of financial reporting or indeed any other matters of concern.
External audit	The Audit & Risk Committee is responsible for:		› Reviewing processes for detecting fraud, misconduct and control weaknesses and considering responses to any such occurrence.
	› Reviewing and making a recommendation to the Board in relation to the continued appointment of Deloitte as the external auditor and, as a Committee, approving Deloitte's remuneration and terms of engagement for	Accounting Review	The Audit & Risk Committee has active oversight over the finance function:
	the 2020 financial year.		The Audit & Risk Committee:
	› Considered the External Audit Plan for 2020 presented by Deloitte, including consideration of its key areas of risk and the audit approach applied by Deloitte, the proposed areas of coverage of Deloitte's audit and any changes thereto		› Has a regular schedule of meetings with the CFO and Head of Finance; a total of 11 meetings were held in 2020, at which all members attended.
	during the year.		› Considered the proposed new finance structure and its implementation.
	› Considering Deloitte's updates during 2020 in relation to the External Audit		› Reviewed the interim financial statements for the period 30th June 2020.
	Plan and related actions.		› Reviewed Euronext Announcements regarding market guidance and updates.
	› Evaluating the performance of Deloitte, including its independence and objectivity and monitoring any non-audit services provided by Deloitte.		› Received regular updates on the progress of the 2019 external audit.
	› Reviewing and approving the Group's Non-Audit Services Policy (the Non-Audit		› Received regular updates on the progress of the 2020 external audit.
	Policy) and, in advance, approving any non-audit services and related fees to be provided by Deloitte during 2020.		› Approved the appointment of Mazars as our internal auditors for 2020.

Matter	Actions Taken	Significant Areas
Considered			The Audit & Risk Committee's reporting remit requires specific discussion in respect of the work the Audit & Risk Committee undertook during the year in discharging its responsibilities, and the significant issues
Internal controls review	During 2020, the Committee with the support of management undertook a number of actions to strengthen and enhance the control environment. These actions included the successful completion the Financial Position and Prospects	it dealt with, and how such issues were addressed. Most importantly perhaps, it is expected that such matters would at least include those items communicated to the Board by the external auditor during the year.
	Procedures ('FPPP'). The FPPP is a prerequisite requirement before obtaining clearance for a company's shares to be traded on Euronext Dublin. The FPPP required management to document the control environment operating across the	The significant areas considered by the Committee were:
	organisation which was then subject to an independent review. The Group also deployed a new Enterprise Resource Planning ('ERP') during 2020 and appointed an internal auditor during 2020. The new ERP system replaced the Group's legacy	Matter Considered	Actions Taken
	accounting system. Throughout 2020 there has been a continuous improvement in the quality of quantitative and qualitative reporting to the Board along with appropriate levels of challenge and questioning which are designed to ensure robust internal and external reporting. The operation of a delegated control framework across the Group ensures that significant transactions and contracts are reviewed, challenged	Going Concern assessment	The Committee was fully involved in the Going Concern assessment, including review and challenge of the detail in each of the going concern scenarios, key assumptions used by management in forecasting cashflow projections which incorporate the impact of COIVD-19 and any mitigating actions that are available to the Group.
	and assessed prior to the Group entering into new commercial arrangements. The Committee continues to provide oversight of and continually assesses	IFRS 15 Revenue Recognition	The key judgments considered by the Committee in relation to revenue recognition for 2020 included:
	the Group's material risks and effectiveness of internal controls. The ongoing development of risk management and internal controls to ensure that they remain effective is a priority for the Board.		› Determining contract term, considering renewal/termination clauses; › Identification of performance obligations (performed at contract inception);
			› Assessing whether performance obligations are distinct;
Other	In addition to the above areas, the Audit & Risk Committee has undertaken the following:		› Establishing standalone selling prices for each performance obligation;
	› Reviewing arrangements by which staff of the Group may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters.		› Determining transaction price, inclusion of "variable consideration", bonuses, penalties; and › Recognition of revenue for each performance obligation.
	› Reviewing the effectiveness of the Group's internal control system through delegated authority from the Board. In particular, the Audit & Risk Committee is mindful of the requirements in relation to the risk management and internal control systems arising from provision 25 of the Governance Code. In this regard, the Audit & Risk Committee reviews the Group Internal Risk Register periodically, as noted above.		The Committee reviewed the assessment of each key judgments in accordance with accounting standard IFRS 15, Revenue from Contracts with Customers. Following these discussions, the Committee is satisfied that the significant judgement exercised in determining individual performance obligations, determining appropriate Standalone Selling Prices, whether certain performance obligations should be bundled and the identification of material rights are
	› The Committee closely monitors effectiveness of key business processes,		appropriate.
	internal control systems and the overall risk environment of the Group, for example critical resource levels, pricing of new contracts, and controls around service and quality levels.	Classification of exceptional	The Committee reviewed all elements of the exceptional items. In particular, the Committee reviewed the classification of Statement of Profit & Loss
	› Reviewing the communications with regulators.	iItems	items as exceptional, including a review of the professional fee details relating to investigations, the business transformation programme and litigation
	› Reviewing and monitoring the implementation of process improvements identified both by management and the external auditor during the year and in prior years.		procedures. The Committee considered the assessment and content of the provision for costs associated with complying with regulatory investigations.
	› Reviewing the effectiveness of key accounting processes, such as the capitalisation of development expenditure and the revenue recognition process.
	› Reviewing the analysis underpinning the Viability and Going Concern statements arising from the requirements included in the Governance Code.
	› Reviewing the Committee's Terms of Reference.
	› Reviewing the Committee's schedule of proposed matters for its 2021 meetings.

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Matter Considered	Actions Taken
Capitalisation of development	New procedures and controls were introduced over development costs, led by new personnel in finance.
costs	A total balance of US\$1.1m was capitalised in 2020. Recognising the judgments involved, the Committee reviewed the process and value of product development expenditure during 2020. The review included consideration of an accounting paper prepared by management and a review of the key elements of spend in 2020. The Committee was satisfied with the treatment of development expenditures in 2020.
Deferred tax	The Committee reviewed the assumptions underlying the amount of the deferred income tax assets at 31 December 2020. Similarly, this topic was also addressed over time during 2020 with papers tabled by management for review and discussion. Having considered the uncertainties as to the future profitability of the Group, it was determined that it continued to be not appropriate to recognise deferred tax assets in respect of losses carried forward and R&D tax credits.
Impairment of investments in subsidiaries (Company)	The Committee reviewed the judgements regarding the future financial performance of the subsidiaries.
	Investments in subsidiaries are tested for impairment at each statement of financial position date or earlier if events or circumstances indicate that the carrying amount exceeds its recoverable amount, this test includes a range of assumptions as well as subsequent events.
Legal and compliance costs	The Committee reviewed the judgements used by management in arriving at the potential provision in respect of the costs relating to the ongoing regulatory investigations and suspension of trading of the Group's shares.
Uncertain tax positions	Uncertain tax positions arise as a result of tax reviews undertaken by the Group across multiple jurisdictions. The Committee has reviewed the judgement and estimates involved in determining the provision and the amount of any associated liabilities.
Expected credit losses	The Committee has reviewed the yield spreads provided by a third party which are used in managements methodology to calculate the expected credit loss under IFRS.

Independence of External Auditor

Our external auditor, Deloitte, was appointed for the 2019 year-end on 31 December 2019 and continue to act as external auditors. Our lead audit engagement partner is Daniel Murray.

The Committee's policy on the provision of non-audit services by the external auditor is that, whilst it is appropriate and cost effective for the external auditor to provide tax compliance services to the Group, other services should only be provided where alternative providers do not exist or where it is cost effective or in the Group's interest for the external auditor to provide such services. In all cases the provision of non-audit services is carefully monitored by, and subject to, the prior approval of the Committee.

The external auditor would not be invited to provide any non-audit services where it was felt that this could conflict with their independence or objectivity. Such services would include the provision of internal audit and management consulting services. The policy exists to ensure that the external auditor does not audit its own work, participate in activities that would normally be undertaken by management, have a mutuality of financial interests with the Group or act in an advocacy role to the Group. No non-audit services were provided by Deloitte in the period.

Effectiveness of External Audit

The Committee has reviewed the effectiveness of external audit. The Board received the Audit Plan including judgments about materiality, selection of areas of focus and related audit approach including the applicable key audit evidence tailored to the Group's operations and systems. The Committee monitored the conduct and effectiveness of external audit during the year through a review of:

• › The experience and expertise of the audit firm and its key audit team members; › The fulfilment of the external audit plan and any variations from this plan;
• › The auditor's understanding of the Group's business and industry, the environment in which the Group operates and of the applicable legal and regulatory framework;
• › The auditor's assessment of key areas of focus throughout the audit;
• › Interaction between management and the auditor, including ensuring that management dedicates sufficient time to the audit process;
• › Communication with, and support to, the Committee including their assessment of new accounting and corporate governance developments;
• › The content of external reports and their ability to raise potential issues as they become aware thereof;
• › Independence, objectivity and scepticism; and

• › The auditor's recommendations on internal controls.

• Private discussions are held with the external auditor at the Audit & Risk Committee meeting when the audit findings are presented to provide additional opportunity for open dialogue and feedback from the Committee and the auditor without management being present. In addition to these private meetings, the Chairman met with the external audit partner to facilitate effective and timely communication.

Internal Audit

During 2020, the Group appointed Mazars a suitably qualified, independent third party to provide internal audit services on an outsourced basis. Since its appointment, Mazars has identified the below as its main areas of activity:

• › Risk Management Advise on the adequacy and effectiveness of the risk management arrangements in place. Assess risk management practices against the relevant specific requirements of ISO 31000 (as appropriate). This review was carried out in November 2020.
• › Cyber Security Review of the existence, adequacy and operating effectiveness controls in operation to reduce the risk of Datalex being exposed to a cyber attack.
• › Order to Sales, Contract Management and Revenue Recognition - Review of the internal control framework with respect to Order to Sales processes, to ensure that there are adequate key controls, segregation of duties and appropriate approval processes in place. Review could also focus on the arrangements in place for onboarding new contracts, agreeing terms of contracts, monitoring the performance of contractual arrangements and the decision-making processes to extend/renew a contract.
• › Corporate Governance Datalex has adopted the provisions of the UK Corporate Governance Code 2018 – 'UK Code'. Mazars will perform a review of compliance with relevant provisions of the UK Code.
• › Office365 and Remote Working Utilising industry security standards (CIS Security Benchmarks) this activity will conduct a full review of Datalex's Office365 security configuration against the industry standard.
• › Procure to Pay Review of the internal control framework with respect to Procure to Pay processes to ensure that there are adequate key controls, segregation of duties and appropriate approval processes in place.
• › Data Privacy/GDPR Review arrangements in line with specific Articles of GDPR.
• › Technical Disaster Recovery and Business Continuity Planning - Review of the existence, adequacy and operating effectiveness controls to ensure the availability of Datalex systems and data in the event of a disaster scenario.
• › Internal Financial Controls A key focus for all organisations is to ensure that internal financial controls are adequate and effective.
• › Cultural Audit The Cultural Audit would assess and highlight any potential gaps between the desired and actual culture within the organisation.

As at year end, the risk management review was finalised. The remaining reviews are to be performed in 2021.

Annual Evaluation of Performance

As detailed on page 55, the Board conducts an annual evaluation of its own performance and that of its Committees, Committee Chairmen and individual Directors. The conclusion from the 2020 process was that the performance of the Audit & Risk Committee and of the Chairman of the Committee were satisfactory. The Committee will focus on agreed actions arising from the 2020 evaluation process.

Priorities for the Year Ahead

The focus of the Audit & Risk Committee for 2021 has been and continues to be the ongoing strengthening of internal controls, risk management framework and financial reporting.

The Committee will continue to monitor governance and ensure adequate oversight over the integrity of the Group's financial reporting and the Group's internal control and risk management frameworks as well as the Internal Audit function and Deloitte as the external auditor.

On behalf of the Audit & Risk Committee.

Mike McGearty Chair, Audit & Risk Committee 28 April 2021

Datalex • Annual Report 2020 • Directors' Report

As evidenced by the Board member biographies on page 44, the Committee, both individually and collectively, possess significant experience and expertise in remuneration matters across a range of companies and industries. None of the Committee members have any financial interest other than as shareholders in the matters to be decided by the Committee and no potential conflicts of interests arising from cross -directorships.

The Board considered the positions of Mr. Lennon and Mr. Bateson as members of the Committee, both of whom do not meet the independence criteria of the Governance Code. The Board considered it appropriate for Mr. Lennon to continue to serve as Chairman of the Committee given his experience serving on remuneration committees and in light of the requirement under the Governance Code that the Chairman of the Remuneration Committee should have served on a remuneration committee for at least 12 months prior to their appointment. The Board considered it appropriate for Mr. Bateson to serve on the Committee for the purpose of continuity. The Chairman of the Board, who is a member of the Committee, was considered independent on appointment in accordance with the requirements of the Governance Code. The Chairman absents himself from discussion around his own remuneration.

COVID-19 and 2020 Business Performance

2020 was an unprecedented year for our business. Management and the Board adjusted rapidly to the impact of the COVID-19 pandemic and took immediate actions for the good of the business. However, our financial performance was nonetheless negatively impacted in 2020. The Committee has been very conscious, and sensitive to, the duration and full impact of the pandemic on all of our stakeholders, including our employees, customers, partners, shareholders and wider stakeholders. Whilst the future remains uncertain, the Committee believes that the actions taken, and the resilience of our revenue model, mean that the Group is positioned well to withstand the impact of COVID-19.

2020 Remuneration Policy

At our AGM in September 2020, shareholders overwhelming endorsed the new Datalex Remuneration Policy. The Policy incorporates the use of awards under a new long-term incentive plan - The Datalex PLC Long Term Incentive Plan 2020 - and the introduction of a new SAYE Scheme both of which were also approved by shareholders at the 2020 AGM. Willis Towers Watson provided advice to the Remuneration Committee in relation to competitive positioning and developments in remuneration policy and practice. Willis Tower Watson has no other connection with the Group or its individual

directors.

The Group's policy in respect of the remuneration of Executive Directors is based on attracting, retaining and motivating executives to ensure that that they are incentivised to successfully implement the Board's strategy and that remuneration is aligned with the interests of shareholders and other stakeholders over the longer term.

Performance related elements of remuneration are designed to form an appropriate portion of the overall remuneration package of Executive Directors and link remuneration to business performance and individual performance, while aligning the interests of Executive Directors with those of shareholders. The Directors' Remuneration Policy focuses on incentivising the successful implementation of our corporate strategy, consistent with our risk management framework.

In its decision-making process regarding the determination of the revised Remuneration Policy, the Remuneration Committee considered its appropriateness to support the business, its alignment with shareholders' interests and evolving best practice and regulatory developments. The Committee developed the Policy taking into account the views and consulted with the Company's major shareholders, whose views were overall very positive. The Committee was mindful of managing any conflicts of interest during the process and no individual was involved in determining his/her own arrangements.

The Remuneration Policy will provide the framework for remuneration decisions made by the Remuneration Committee from the date of the 2020 Annual General Meeting. It is intended that the policy will apply until the 2024 Annual General Meeting unless a new policy is put to shareholder vote at an earlier date.

Dear Shareholder,

I am pleased to present our Remuneration Report for the year ended 31 December 2020.

The Report includes the following sections:

• › This Chairman's Introduction
• › Remuneration Policy Summary
• › Annual Report on Remuneration

Role Of The Committee

The Committee has responsibility for determining, within agreed terms of reference, the Group's policy on compensation of Directors and senior executives and making recommendations to the Board of Directors ("Board") on the Group's policy on executive remuneration, determining the remuneration and benefits of the Executive Directors and Company Secretary and recommending and monitoring the remuneration of senior management below Board level.

The Terms of Reference of the Remuneration Committee, including its role and the authority delegated to it by the Board, are available on demand from the Company Secretary. The Company Secretary acts as secretary to the Committee and provides support as required.

The Committee met 11 times in 2020. Member attendance at meetings is detailed below.

Committee Member	Meeting Attendance	Committee Tenure
Peter Lennon (Chair)	11/11	21 years
John Bateson	11/11	11 years
David Hargaden(1)	11/11	1 year
Mike McGearty(1)	11/11	1 year

(1) Appointed on 30 January 2020.

Remuneration Committee Report

Priorities for the Year Ahead

Our priorities for the coming year will include implementation of the new Remuneration Policy as approved by shareholders in September 2020 and taking appropriate account of the impact of COVID-19 on the business.

Conclusion

I am satisfied that the Remuneration Policy adopted by the Board and overwhelmingly endorsed by shareholders in 2020 successfully incentivises the implementation of our corporate strategy, consistent with our risk management framework. In 2021 the Committee will focus on the implementation of the Group's Remuneration Policy in a manner that properly reflects the performance of the Group in the year.

We hope to receive your support for the Annual Report on Remuneration at the 2021 AGM.

On behalf of the Remuneration Committee

Peter Lennon

Chair, Remuneration Committee 28 April 2021

Performance for the Year

As described in the Chairman's statement 2020 was a very difficult year dominated by the COVID-19 crisis. The Group reported a positive foreign currency adjusted EBITDA of US\$3.4m being an increase on 2019 performance US\$0.7m.

The Group responded in a proactive manner to these challenges, in particular with strong cost saving measures and active management of the Group's cash position. The increase in the customer Net Promoter Score is an important indicator that the Group is well positioned to serve our customers as they reposition for growth following the COVID-19 crisis.

Bonuses

Datalex offers an annual bonus to incentivise and reward delivery of the Group's business strategy and financial targets. Due to the impact of COVID-19 on the Group's business, bonuses were not paid to Executive Directors in 2020.

Long Term Incentive Plan and Save As You Earn Scheme

At our AGM in September 2020, shareholders approved the Datalex Long Term Incentive Plan 2020 (the "LTIP 2020") and a new Irish Revenue approved savings related share option scheme (the "SAYE Scheme"). The purpose of LTIP 2020 is to support the recruitment and retention of key executives, align the interests of executives with those of the Group's shareholders and reflect the Group's policy of long-term performance-based incentives. The SAYE Scheme will give all eligible employees of the Company and its subsidiaries the opportunity to invest in the Company's Ordinary Shares in a tax efficient way.

Shareholder Engagement

During 2020, the Committee took into account shareholder views and expectations as expressed in investor guidelines and has sought to align the Remuneration Policy with these expectations, as well as market best practice and relevant regulatory requirements. Datalex is committed to an ongoing dialogue with our shareholders on remuneration arrangements and is always open to hearing and carefully considering any investor feedback.

The Committee acknowledges that shareholders have a right to have a 'say on pay' by putting the Remuneration Report and the Remuneration Policy, as required, to advisory votes at the AGM. At the 2021 AGM, a resolution on the Remuneration Report (excluding the Remuneration Policy) will be put to shareholders, on an advisory rather than on a binding basis. The Chair of the Remuneration Committee attends the Annual General Meeting to answer questions on the Report, on the Committee's activities and matters within the scope of the Committee's responsibilities.

Details of shareholders' proxy votes on the Remuneration Policy in 2020 are set out on page 91.

UK Corporate Governance Code and Shareholders Rights Directive II

In 2020 the Committee refined the Company's approach to remuneration to reflect the updated principles and provisions of the Governance Code and the European Union (Shareholders' Rights) Regulations 2020. As an Irish incorporated company, the Company is not subject to the UK executive remuneration requirements as set out in the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013.

External Advice

The Committee seeks independent advice when necessary from external consultants. During the year, Willis Towers Watson provided advice to the Remuneration Committee in relation to competitive positioning and developments in remuneration policy and practice. Willis Towers Watson have no connection with the Group or any individual director and the Committee is satisfied that the advice from Willis Towers Watson was objective and independent.

Annual Evaluation of Performance

As detailed on page 55, the Board conducts an annual evaluation of its own performance and that of its Committees, Committee Chairmen and individual Directors. The conclusion from the 2020 process was that the performance of the Remuneration Committee and of the Chairman of the Committee were satisfactory. The Committee will focus on agreed actions arising from the 2020 evaluation process.

Element and link to strategy Operation Maximum Opportunity

Base Salary

Attract and retain skilled and experienced senior executives.

The Committee's policy is to set base salaries that are competitive, that attract and retain executives, reflect the size and scope of the role and business, and the market for similar roles.

Salaries are reviewed annually, though there is no guaranteed annual increase. In setting and reviewing salary levels, the Committee takes into account the performance of Group and the Executive Directors (their progression in the role and individual performance, informed by the Nominations Committee), skills and experience, and pay levels of similar sized companies and peers.

There is no maximum salary opportunity. However, any increases will be made in the context of the financial performance of the Group and will normally be in line with increases awarded to colleagues in the wider business.
In addition, the Committee will take into account the factors as outlined under 'Operation' in determining salary increases.
Where warranted, for example, in cases of promotion, the Committee may make more significant salary awards to colleagues to reflect progression in the role (for example, staged increases over time following appointment to a new role).
The cost of providing benefits can vary from year to year, dependent on the nature of the benefit and insurance premium costs. As such, there is no maximum benefits opportunity, and benefits will be maintained at a level to ensure
market competitiveness.
Executive Directors are eligible to receive a matched pension contribution up to a maximum of 7.5% of salary, which is aligned with the rate available to the wider workforce.

Benefits
To provide market competitive benefits	The Group provides benefits that are competitive with market practice to support the recruitment and retention talent.
	Executive Directors are entitled to benefits including, but not limited to, a car allowance (and other car/transport benefits), private health provision, life assurance, income protection scheme, and contributions toward professional membership subscriptions.
Pension
To reward sustained contribution.	Current and new hire Executive Directors are entitled to participate in the Datalex Pension Scheme (a defined contribution scheme).

This scheme is offered to ensure the Group is market competitive in its pension offering.

In 2020, Datalex, for the first time, presented a Remuneration Policy to shareholders under the European Union (Shareholders' Rights) Regulations 2020. The Policy was put to an advisory vote at the 2020 AGM, held on 24 September 2020.

Performance related elements of remuneration are designed to form an appropriate portion of the overall remuneration package of Executive Directors and link remuneration to business performance and individual performance, while aligning the interests of Executive Directors with those of shareholders. In setting remuneration levels, the Remuneration Committee takes into consideration the remuneration practices of other international companies of similar size and scope and trends in executive remuneration generally. The Remuneration Committee seeks to ensure:

• › that the Group will attract, motivate and retain individuals of the highest calibre;
• › that executives are rewarded in a fair and balanced way for their individual and team contribution to the Group's performance;
• › that executives receive a level of remuneration that is appropriate to their scale of responsibility and individual performance;
• › that the executives are sufficiently incentivised to successfully implement the Board's strategy and that remuneration is aligned with the interests of shareholders and other stakeholders over the longer term;
• › that risk is properly considered in setting remuneration policy and in determining remuneration packages.

In its decision-making process regarding the determination of the revised Remuneration Policy, the Remuneration Committee considered its appropriateness to support the business, its alignment with shareholders' interests and evolving best practice and regulatory developments. Willis Towers Watson were engaged by the Committee to support the drafting of the Remuneration Policy. The Committee was mindful of managing any conflicts of interest during the process and no individual was involved in determining his/her own arrangements. The key elements of the remuneration for Executive Directors and other senior management under the Policy are set out in the table below.

Datalex • Annual Report 2020 • Directors' Report

Maximum Opportunity

Remuneration Policy

Element and link

to strategy

Operation Maximum Opportunity

Incentive
sts of
eholders
tegic
f
of strategy.

Long Term Incentive Plan

To align the interests of executives with those of the Group's shareholders and to reflect the Group's culture of longterm performance based incentivisation Awards under The Datalex PLC Long Term Incentive Plan 2020 are designed to align the interests of the Executive Directors with those of shareholders and reward the delivery of long-term strategic performance objectives and the creation of shareholder value through the execution of strategy.

Annual awards of share options will be allocated at the discretion of the Remuneration Committee. To facilitate recruitment, the Remuneration Committee may authorise 'off-cycle' awards.

Awards will normally vest a third, a third, a third annually but will not be exercisable until the third anniversary of their grant. Participants are not eligible for any dividends/ dividend equivalent payments on the award prior to the exercising of any award made.

Awards are subject to malus and clawback provisions under the following circumstances where:

• › there has been a material misstatement of the Group's financial accounts;
• › an Executive Director (as a participant) is guilty of gross misconduct or fraud;
• › the Committee determines that the Company suffered reputational damage as a result of the actions or inactions of an Executive Director (as a Participant).

The clawback provision lasts for two years following the vesting of an award.

For future awards, the Committee has discretion to implement a post-vesting holding period on any award.

The scheme cannot be altered to the advantage of the participants without the prior approval of shareholders in general meeting (except minor amendments to benefit the administration of the scheme, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for participants in the scheme or for the company operating the scheme or for members of its group).

LTIP Awards will not form part of a participant's pensionable earnings.

The maximum annual face value award level to an individual participant may not in normal circumstances exceed 100% of salary.

The initial vesting of the LTI awards will be determined by performance against performance targets agreed by the Committee at the time of grant. The Committee will select appropriate performance metrics, for example Revenue, EBITDA, Earnings per Share, Return on Invested Capital or Total Shareholder Value. The initial grant under the 2020 LTIP vest (to the extent that performance conditions are met) on the basis of one third, one third, one third annually.

Achievement of threshold performance level (90%) will ordinarily result in vesting of 90% of the award, with 100% vesting for maximum performance, with straight-line vesting between 90% and 100%.

The vesting of LTIP awards is also subject to the Remuneration Committee being satisfied that the Company's underlying financial performance has shown a sustained improvement in the period since the date of grant.

The measures, weightings and operation of the LTI are reviewed and set by the Committee on an annual basis, including removing and changing performance measures to align with Company and shareholders' best interests, and any such changes will be clearly disclosed in the Remuneration Report.

The number of shares that may be issued under the LTIP and any other discretionary employee share plan (other than shares that may be issued under awards granted prior to the approval of the LTIP under a historic share plan) is limited to 10% of the aggregate issued ordinary shares of the Company over a ten-year period.

LTIP Awards are granted subject to performance conditions that will be determined by the Committee at the time of grant. Performance will normally be measured on an annual basis over the three year performance period.

Element and link to strategy	Operation	Maximum Opportunity
Annual Bonus
To reward the achievement of annual performance targets.	Datalex offers an annual bonus to incentivise and reward delivery of the Group's business strategy and financial targets.	The maximum annual bonus award level for Executive Directors under the plan is 50% of salary.
	Bonus awards are made annually and are reflective of achievement of both financial and non-financial performance measures.	Annual bonus awards are currently subject to the following performance measures: › Company financial performance
	In determining bonus outcomes, the Committee independently assesses performance conditions applicable to the annual bonus. The Committee has the ability to exercise discretion when authorising
		› Individual performance
		› Values performance
	outcomes under the Annual Bonus plan to adjust outcomes upward or downward (including to zero), taking account of company and individual performance and wider circumstances.	Bonus payment is contingent on achievement of budgeted EBITDA (Earnings before interest, tax, depreciation and amortisation).
		The measures, weightings and operation are reviewed and set by the Committee on an annual basis, including removing and changing performance measures to align with Company and shareholders' best interests, and any such changes will be clearly disclosed in the

Remuneration Report on a retrospective basis.

The Committee applies independent judgement and discretion when authorising outcomes under the Annual Bonus plan and has the ability to reduce the payout of any awards (including to zero) should the Committee consider it

appropriate to do so.

LTIP awards are subject to malus and clawback provisions, which apply for two years following the vesting of a given LTIP award. The vesting of LTIP awards is also subject to the Remuneration Committee being satisfied that the Company's underlying financial performance has shown a sustained improvement in the period since the date of grant. LTIP awards may be clawed

• back or subject to a malus adjustment in the following circumstances:
• › there has been a material misstatement of the Group's financial statements;
• › an Executive Director (as a participant) is guilty of gross misconduct or fraud;
• › the Committee determines that the Company suffered reputational damage as a result of the actions or inactions of an Executive Director (as a Participant).

Policy for Non-Executive Directors

Fees for Non-Executive Directors (excluding the Chairman) are determined by the Chairman and the Executive Directors. No Director shall be involved in any decisions as to their own remuneration. Levels of fees may be reviewed from time to time during the policy period, having regard to any significant changes in the size and scope of the role and the business, the necessary time commitment, and material changes in comparative market data for

Non-Executive Director remuneration levels were reviewed in December 2019 and changed so that, with effect from 1 January 2020 the fee paid to each Non-Executive Director is €50,000 per annum in respect of their services as Directors and the Chairman is paid an annual fee of €100,000 per annum. There was no change to the fees payable to Non-Executive Directors during the year. The Non-Executive Directors fees paid in 2020 are outlined on page 87.

Element and link	Operation	Maximum Opportunity	Remuneration for the Wider Business
to strategy			The Committee reviews wider colleague
SAYE			remuneration and related policies, aligning incentives and rewards with the Group's
To align the interests of executives with	The Save As You Earn ("SAYE") Scheme provides for grants of awards over Ordinary Shares in the form of	All eligible employees who wish to participate must enter into a savings contract, to make	culture, and oversees any major benefits structure changes. The Committee takes the remuneration arrangements of employees
those of the Group's shareholders and to reflect the Group's	options in conjunction with a formal saving scheme with a qualifying institution.	36 monthly savings contributions. The current maximum individual savings contribution cannot exceed €500 per month. Executive Directors	generally into account when determining the arrangements for Executive Directors. For
culture of long term performance based incentivisation	The purpose of the SAYE Scheme is to support the recruitment and retention of employees, align the interests of employees with those of the Group's	may contribute up to this limit (or to the same limit as other colleagues if amended – for example, because of changes in legislation).	example, base salary increases for Executive Directors will normally be aligned with increases awarded to the wider workforce.
efficient manner.	shareholders and provide employees with a vehicle where they can purchase shares in Datalex in a tax	At the end of the savings period, it is envisaged that employees will have sufficient capital to fund the exercise of the options and thus acquire the underlying shares. meeting its strategic goals. Each employee joining the SAYE Scheme will be granted an option to acquire shares in the	The annual bonus operates in exactly the same way throughout the business, with the same
	Employees of the Group, including Executive Directors, are eligible to participate in the SAYE Scheme. The SAYE Scheme is an all employee		overall financial measures and targets. This alignment plays an important role in the Group
	scheme and will be offered to all employees on similar terms and is a Revenue approved plan for Irish tax purposes.	Company, at market value. The number of shares subject to the option will be determined	Datalex employs over 130 people in 6 countries. Remuneration arrangements across the Group differ depending on the specific role
		at the time of grant and will be directly proportional to the level of savings to which the employee commits. The number of shares that may be issued in respect of the SAYE Scheme or any other discretionary employee share plan (other than	being undertaken, the industry in which the business operates, the level of seniority and
			responsibilities, the location of the role and local market practice.	similar roles.
		shares that may be issued under awards granted prior to the approval of the SAYE Scheme under	Malus and Clawback Policy

The Non-Executive Directors have letters of appointment detailing the basis of their appointment. The terms and conditions of appointment of Non-Executive Directors are available for inspection at the Company's registered office during normal business hours and at the AGM of the Company.

Fees Operation Maximum Opportunity

A basic fee is paid for Board membership. Additional fees are payable to the Chairman.

The remuneration of the Chairman is determined by the Remuneration Committee for approval by the Board

(excluding the Chairman).

The remuneration of the other Non-Executive Directors is determined by the Chairman and the Chief Executive Officer

for approval by the Board.

The fees are reviewed from time to time, taking account of any changes in responsibilities and market practice

• No prescribed maximum annual increase but benchmarking and market practice will determine any change in fees.
• Non-Executive Directors do not participate in the Company's Annual Incentive and LTIP and do not receive any retirement benefits from the Company.

a historic share plan) may not exceed 10% of the issued ordinary share capital of the Company in SAYE Options will vest in the ordinary course

any 10-year period.

three years from the date of grant.

SAYE Options shall be exercisable during the period commencing on the vesting date and ending six months following the vesting date.

Policy for Leavers

The following table sets out how different elements of remuneration that would normally be treated for Executive Directors whose service with the Group terminates:

Termination reason	Salary	Contractual benfits (including pension)	Annual Bonus	LTIP
Resignation or gross misconduct	Paid to date of termination.	Paid to date of termination.	Eligibility ceases upon date notice commences (date of termination if summary dismissal for gross misconduct).	All unvested options will lapse immediately, unless at its absolute discretion the Committee decides otherwise. Vested options will become exercisable on termination unless termination is for gross misconduct where vested but unexercised options will lapse.
Injury/ill health, disability, death, retirement (with agreement of Datalex)	Paid to date of termination. Note that in the case of ill-health, salary will be paid in full for the first 26 weeks of any absence.	Paid to date of termination.	Eligible to be considered for a bonus, normally calculated on a time pro-rata basis.	All unvested options will vest (subject to the achievement of the performance conditions) at the end of the performance period.
Negotiated Termination	Paid to date of termination.	Paid to date of termination.	Eligibility ceases upon date of termination, however, the Committee retains discretion to override such outcomes.	All unvested options will vest (subject to the achievement of the performance conditions) at the end of the performance period.

Change of Control

In the event of a reorganisation or takeover, LTIP awards will automatically vest.

Derogation from the Policy

The Policy will operate for a four-year period or until an amended Remuneration Policy is put to shareholders for approval. In line with the European Union (Shareholders' Rights) Regulations 2020, the Committee may derogate from this policy where doing so is necessary in exceptional circumstances, to serve the longterm interests and sustainability of the Group as a whole or to assure its viability.

Any such derogation would only be undertaken in exceptional circumstances, and whereby not doing so, would result in significant detrimental impact to the Group and/or shareholders. Under any such derogation, the Committee would have the ability to vary any part of the Remuneration Policy (as described above), and its implementation to mitigate against any significant detrimental forces. If such a circumstance were to apply, the Company would commit to disclosing to shareholders as soon as practicably able to do so.

Policy on External Board Appointments

The board recognises that there are benefits to both the Group and Executive Directors serving as non-executive board members for other companies. As such, Executive Directors are permitted to take on external appointments with other companies, with the prior approval of the Board. Any fees paid in respect of these appointments are retained by the Executive Director.

Remuneration Policy for Recruitment of New Executive Directors

The Group's policy when recruiting new Executive Directors is to pay what is necessary to attract candidates with sufficient skills and experience to effectively deliver the Group's strategy.

In doing so, the Committee will take into account remuneration across the Group, including other Executive Directors, and that offered in similar positions in the market and other companies of similar size and complexity.

The Committee will look to appoint new Executive Directors with remuneration packages with the same structure and pay elements as described in the Policy Table above, whilst taking into account the individual circumstances (including current arrangements for internal promotions, and compensation for loss of remuneration from a previous employer) of candidates and existing Executive Directors.

The maximum variable pay opportunity will be in line with the above elements in the Policy table:

• › Annual Bonus: Maximum performance can result in 50% of salary being earned
• › LTIP: The maximum annual award level to individual executive directors is a face value 100% of salary.

If necessary, to facilitate an appointment, reasonable relocation benefits may be provided.

If an internal appointment is made, remuneration arrangements awarded prior to promotion to Executive Director level will continue to run in line with the schedule and conditions determined at time of grant.

In circumstances where the Committee determines that it is necessary for the recruitment of an Executive Director, additional cash and/or sharebased payments may be awarded to compensate the Executive Director for the forfeiture of incentive awards made by the previous employer. In determining any such 'buy out', the Committee will undertake a review of the awards that the individual will lose and consider the likelihood of the awards vesting should the candidate have remained in their previous employment, the form in which they were awarded and the time over which they would have vested.

If it is determined that a buyout award is to be made, the structure and level will be carefully designed by the Committee taking the above into account and will reflect and replicate the previous awards as accurately as possible in terms of level and time horizon. Incentive buyouts will be liable to forfeiture or clawback in the event of early departure.

Service Contracts

The Group's policy is for Executive Directors to have rolling service contracts, with a notice period of six months. At its discretion, the Group may pay in lieu of notice, and the Committee will give careful consideration to any remuneration payable on any termination of employment to minimise the total cost of severance to the business.

The service agreements of the Executive Directors are summarised in the table below:

Name	Contract Effective Date	Notice Period (Director)	Notice Period (Company)
Sean Corkery	15 July 2020	6 months	6 months
Niall O'Sullivan	4 June 2019	6 months	6 months

Non-Executive Director Remuneration Payments 2020

Non-Executive Director	Base Fee US\$'000	Chair Fee US\$'000	Total US\$'000	2019 Total US\$'000	% change in remuneration 2020 vs 2019 (annualised)
John Bateson	55	-	55	54	2%
David Hargaden	-	112	112	16	4%
Christine Ourmieres-Widener	55	-	55	13	-
Mike McGearty	55	-	55	4	-
Peter Lennon	55	-	55	54	2%

John Bateson	55
David Hargaden		112
Christine Ourmieres-Widener	55
Mike McGearty	55
Peter Lennon	55

No changes were proposed or made to Non-Executive Director fees during 2020.

In line with the requirements of the European Union (Shareholders' Rights) Regulations 2020, the table below shows the year on year change and percentage change in Directors' remuneration and the year on year change and percentage change in the average remuneration of employees during the year ended 31 December 2020 compared to the year ended 31 December 2019.

Average remuneration on an FTE basis of employees of the Group

	2020	2019
Average remuneration per FTE employee (1)	US\$95.1k	US\$97.3k
Percentage change versus prior year	(2%)	-
Company Performance
Loss after tax	US\$6.5m	US\$12.1m
Percentage change versus prior year	46%	-

(1) Average employee remuneration is calculated as the sum of wages and salaries, retirement benefit costs and other staff expense but excluding those costs related to directors of Datalex plc. Social security costs and voluntary redundancy payments are not included. Divided by the average number of staff for the Group on a full time equivalent basis excluding directors of Datalex plc

2020 Annual Bonus

Executive Directors participate in an annual performance incentive scheme based on a combination of individual objectives and Group performance targets. The maximum annual bonus award level for Executive Directors under

the plan is 50% of salary.

The measures, weightings and operation are reviewed and set by the Committee on an annual basis, including removing and changing performance measures to align with Company and shareholders' best interests, and any such changes will be clearly disclosed in the Remuneration Report on a retrospective basis. In 2020 Annual Bonus awards were subject to the

following performance measures:

› Individual performance

of budgeted EBITDA.

• › Company Financial performance
• › Values performance
• Bonus payment is contingent on achievement
• For the year ending 31 December 2020 the Executive Directors and targeted employees met their bonus performance targets, however due to the impact of the COVID-19 pandemic on the financial performance of the Group it was decided that no discretionary cash bonuses be paid or accrued in respect of 2020.

The following section sets out our Annual Report on Remuneration, outlines decisions made by the Remuneration Committee in relation to Directors' remuneration in respect of 2020 and how the Committee intends to apply the 2020 Remuneration Policy for in 2021. The 2020 Remuneration Policy was approved following an advisory shareholder vote at the Annual General Meeting ('AGM') of the Company held in September 2020. This Annual Report on Remuneration will be subject to an advisory shareholder vote at the 2021 AGM of the Company.

The information on pages 86 to 91 has been audited.

Summary

Component	Sean Corkery – CEO US\$	Niall O'Sullivan - CFO US\$
Salary 2020(1)	367,000	304,000
Pension Contributions 2020	28,000	25,000
Annual Bonus 2020	-	-
LTIP Vesting 2020	-	-
LTIP Awards Granted 2020	181% of salary(2)	186% of salary(2)

(1) The salary in 2020 includes a salary waiver as a result of the 4 day working week implemented as a response to COVID-19.

(2) Calculated by reference to the number of options awarded multiplied by the market price of shares of Datalex plc on the date of grant. As described in the resolution proposing the Remuneration Policy at the 2020 AGM, the Board, on recommendation of the Remuneration Committee, awarded options to the CEO and CFO were made in the recruitment of those directors and therefore were in excess of 100% of salary.

Executive Director Remuneration Payments 2020

Fixed Pay				Incentive Pay
Executive Director	Full Year	Base Salary	Pension Contribution	Other Benefits	Annual Incentive (payable in cash)	Annual Incentive (options)	% change in annualised remuneration
Sean	2020	367	28	-	-	-	-
Corkery	2019(1)	299	7	-	-	-	-
Niall O'Sullivan	2020	304	25	64	-	-	-
	2019(1)	185	14	32	-	-	-

(1) Sean Corkery and Niall O'Sullivan were appointed on 12 April 2019 and 4 June 2019 respectively.

Annual Report on Remuneration

Directors' & Secretary's Interests in the Long-Term Incentive Plan Details of outstanding share awards, with performance conditions, granted to the Directors and the Company Secretary under the 2020 LTIP are set out below:

	At 1 Jan 20 Granted during the year	At 31 Dec 20	Exercise Price	Date of Award	Exercisable Date	Expiry Date
Sean Corkery
-	1,000,000	1,000,000	€0.55	2 December 2020	2 December 2023	2 December 2025
Niall O'Sullivan
-	850,000	850,000	€0.55	2 December 2020	2 December 2023	2 December 2025
Neil McLoughlin
-	250,000	250,000	€0.55	2 December 2020	2 December 2023	2 December 2025

No shares were exercised or lapsed during the year.

Directors' & Secretary's Interests in Ordinary Share Capital

The interests of the Directors and Company Secretary who held office at 31 December 2020 in the issued ordinary share capital of the Company are set out in the table below. The interests disclosed below include both direct and indirect interests in shares.

Director and Secretary	No. of Ordinary Shares at 31 December 2020	No. of Ordinary Shares at 31 December 2019
John Bateson	-	-
David Hargaden	164,166	-
Christine Ourmieres-Widener	-	-
Mike McGearty	-	-
Sean Corkery	500,000	-
Peter Lennon	325,935	325,935
Niall O'Sullivan	-	-
Neil McLoughlin	100,000	-

There have been no changes to the Directors' or Secretary's interests outlined above between the yearend date and the date of approval of the consolidated financial statements.

The table below sets out the percentage of base salary held in shares in the Company by the current Executive Directors as at 31 December 2020.

Executive Directo r	% of base salary(1)
Sean Corkery	109%
Niall O'Sullivan	-

(1) Calculated by reference to the Datalex plc closing share price on Euronext Dublin on 31 December 2020 Retirement Benefits

Long Term Incentives

The purpose of the Company's Long Term Incentive Plan is to align the interests of executives with those of the Group's shareholders and to reflect the Group's culture of long-term performance based incentivisation.

2020 LTIP

Awards under The Datalex PLC Long Term Incentive Plan 2020 ("LTIP 2020") are designed to align the interests of the Executive Directors with those of shareholders and reward the delivery of long-term strategic performance objectives and the creation of shareholder value through the execution of strategy.

Awards will normally vest one third annually over three years but will not be exercisable until the third anniversary of their grant. Participants are not eligible for any dividends or dividend equivalent payments on the award prior to the exercising of any award made.

In 2020, the Company made the first award under the LTIP 2020 and in accordance with the Remuneration Policy approved by shareholders in September 2020.

Awards were made to both of the Executive Directors, along with other key employees in

Performance condition	Revenue	EBITDA
Weighting	50%	50%
Definition	Achievement as against the Revenue Target for 2020.	Achievement as against the EBITDA Target for 2020.
Vesting level	Below 90% of Revenue target, none of the Award shall vest. Between 90% and 100% of Revenue target, straight line vesting shall occur.	Below 90% of EBITA target, none of the Award shall vest. Between 90% and 100% of EBITDA target, straight line vesting shall occur.
Vesting level for 2020	100%	100%

1. Sean Corkery was granted an award equivalent to 185% of salary to recognise his appointment as CEO given that no awards had been made since he joined the Company in 2019. Niall O'Sullivan was granted an award equivalent to 190% of salary to recognise his appointment as CFO given that no awards had been made since he joined the Company in 2019.

Performance Criteria and Vesting

LTIP Awards are granted subject to performance conditions that will be determined by the Committee at the time of grant. Performance will normally be measured on an annual basis over the three-year performance period.

The 2020 LTIP shall, subject to the terms of this Award Agreement and the rules of the Plan, vest as follows:

• › one-third shall vest on the achievement of the performance conditions for 2020;
• › one-third shall vest on the achievement of the performance conditions for 2021;
• › one-third shall vest on the achievement of the performance conditions for 2022;

The 2020 LTIP performance conditions and performance against those targets were as follows:

The breakdown and resulting bonus outcomes for 2020 for the Executive Directors were:

	Maximum Incentive (% of Salary)	2020 Bonus (% of Salary)
Sean Corkery	50%	-
Niall O'Sullivan	50%	-

During the year ended 31 December 2020, a contractual commitment to Niall O'Sullivan of US\$58k (2019: US\$27k) was incurred.

Remuneration Policy Implementation in 2021

A summary of how the Remuneration Policy will be applied in 2021 is set out below. The Committee has considered the balance and metrics of each element of remuneration for the Executive Directors and believe that they are appropriate for the scale of the Company whilst reflecting evolving market practice and shareholder views.

Salary

The base salary of the CEO and CFO are detailed below.

Executive Director	1 January 2021 (US \$'000)	1 January 2020 (US \$'000)
Sean Corkery	398	398
Niall O'Sullivan	330	330

Annual Bonus Metrics

As at the date of this Annual Report, due to the continued impact of COVID-19 on the financial performance of the Group and the current ongoing uncertainty, the Company does not expect that a performance related discretionary cash bonus will be paid to the Executive Directors in respect of 2021.

This position may be reviewed should market conditions improve over the course of 2021 and in such an event the maximum annual bonus award level for Executive Directors under the plan in 2021 will be 50% of salary. Any bonus payment would be contingent on achievement of budgeted EBITDA.

2020 LTIP Performance Metrics for 2021

The 2021 Performance Criteria for the 2020 LTIP Award have been set as follows:

	Revenue	EBITDA	Relative Total Shareholder Return ("RTSR")
Weighting 33%		33%	34%
	Definition Achievement as against the Revenue Target for 2021	Achievement as against the EBITDA Target for 2021	Achievement as against the RTSR Target for 2021
Vesting Level	Below 90% of Revenue target, none of the Award shall vest. Between 90% and 100% of Revenue target, straight line vesting shall occur.	Below 90% of EBITA target, none of the Award shall vest. Between 90% and 100% of EBITDA target, straight line vesting shall occur.	Below 90% of RTSR target, none of the Award shall vest. Between 90% and 100% of RTSR target, straight line vesting shall occur.

The 2022 Performance Criteria will be established by the Remuneration Committee and communicated to shareholders in 2022.

Pension

The pension contributions for the CEO and CFO are in line with the general workforce. No changes are proposed in 2021.

Shareholders Vote on Remuneration

In 2020, a resolution to approve the Remuneration Policy was put to shareholders at the Company's AGM. Details of the votes case are set out below.

Vote	Total votes	Total votes	Total votes	Total
	cast	for	against	abstentions
Advisory vote on 2020 Annual Report on Remuneration	47,781,572	47,152,600	628,972	2,779

At the 2021 AGM the Company intends to propose its 2020 Remuneration Report to shareholders.

Pensions for Executive Directors are provided under a defined contribution pension scheme. During 2020, there were two Directors who are members of the Company defined contribution pension scheme (2019: four).

The total contributions accrued under the scheme at 31 December 2020 for Sean Corkery was US\$2,684 (2019: US\$2,458) and for Niall O'Sullivan was US\$2,224 (2019: US\$1,813).

Payments for Loss of Office

No payments for loss of office were made during the year under review.

Payments to Past Directors

There were no payments to former Directors during the year.

Directors' and Secretary's Interests in Shares

Directors are encouraged to acquire and maintain equity stakes in the Company to strengthen the alignment of interests between the directors and the shareholders.

The Directors and Secretary (including the interests of spouses and minor children), who were in office at 31 December 2020, and their families, had the following beneficial interests in the share capital of Datalex plc at 31 December 2020

Historical Incentive Plans

2012 Share Option Plan

The Datalex Share Option Plan 2012 ("2012 Plan") was approved by shareholders on 6 February 2012. Each option award currently outstanding under the 2012 Plan has been granted subject to performance conditions relating to the achievement by the Group of Adjusted EBITDA and cash performance targets, as established by the Remuneration Committee, in the three-year period commencing on grant date, with each condition applicable to one third, respectively, of the number of options subject to the award. No options have been granted to the Directors under the 2012 Plan. Please refer to Note 13 for further information.

Joint Share Ownership Plan

The Board approved the establishment of the Datalex Joint Share Ownership Plan ("JSOP") in January 2012. The JSOP was intended to incentivise senior management in the Group (excluding Executive Directors) towards the achievement of challenging Adjusted EBITDA and cash performance targets, as established by the Remuneration Committee. Key members of the Group's senior management (excluding the Executive Directors) acquired interests under the plan in January 2012. Please refer to Note 13 for further information.

2015 Long Term Incentive Plan

A Long-Term Incentive Plan (the "2015 LTIP) was approved by shareholders at the 2015 AGM. The LTIP was intended to enable the retention and reward of key employees and operated under similar terms to the Company's Share Option Plan, with vesting of cash bonuses based on the achievement of non-market performance conditions over a three-year period. The Group granted awards under the Plan in 2016, 2017 and 2018. No awards were granted under this plan in 2020 or 2019. The final payment on the 2015 LTIP was made during 2020 and no further balance is outstanding.

third calendar year before the current year shall retire by rotation. However, in accordance with the requirements of the Governance Code, all Directors will retire and will offer themselves for re-election at the AGM in 2021.

Directors' and Secretary's Interests

Details of the Directors' and Company Secretary's share interests and interests in unvested share awards of the Company are set out in the Remuneration Committee Report, which is incorporated by reference into this Directors Report, on page 89.

Corporate Governance

The Directors' Statement on Corporate Governance on pages 48 to 59 sets out the Group's application of the principles and compliance with the provisions of the Governance Code, published by the Financial Reporting Council in July 2018 and the Irish Corporate Governance Annex, published by Euronext Dublin and forms part of this Directors' Report.

The Company's Annual General Meeting ("AGM") affords shareholders the opportunity to question the Chairman and the Board. A description of the rights of shareholders is set out in Note 12 to these consolidated financial statements. Attendance of, and questions from, shareholders at the Company's AGM are welcomed by the Board. The AGM also provides an opportunity for the Board to deliver presentations on the business to shareholders, both institutional and private.

Principal Risks and Uncertainties

Under Irish law (Regulation 5(4)(c)(ii) of the Transparency (Directive 2004/109/Ec) Regulations 2007), the Group is required to give a description of the principal risks and uncertainties which it faces. The principal risks and uncertainties reflect our competitive environment and the operating characteristics of our industry and a summary of these risks and uncertainties, together with details of how they are managed, is set out in the Risk Report on pages 34 to 37 and which is incorporated by reference into this Directors Report.

Details of the financial risks to which the Group's operations are exposed and an understanding of how these risks are managed are set out in Note 31 to the consolidated financial statements.

Employees

The Group's employees continue to be its most valuable asset and the health and safety of its employees is of particular importance to the Board. The provision of a safe working environment amid COVID-19 is of paramount importance to the Group. As a result, the Board has formed a COVID-19 Business Continuity Task Force to ensure that the Group responds and acts appropriately during this dynamic and evolving situation. Flexible working arrangements have been instigated to facilitate employee safety whilst maintaining high levels of customer delivery and support. Please see Note 20 to these consolidated financial statements for details of our average number of employees.

Share Capital

As at 31 December 2020 and 2019, the Company's authorised share capital comprised US\$10,494,000, divided into 100,000,000 ordinary shares of US\$0.10 each, representing 95.3% of the total share capital value, 3,000,000 'A', and 1,500,000 'B' convertible redeemable shares of US\$0.10 each, representing 4.3% of the total share capital value and 30,000 deferred shares of €1.269738 each, representing 0.4% of the total share capital value.

At 31 December 2020, the Company had 82,153,842 ordinary shares in issue (31 December 2019: 81,983,842), including 430,000 ordinary shares that were held by The Datalex Employee Benefit Trust at that date (31 December 2019: 430,000). The ordinary shares are listed on the regulated market of Euronext Dublin. The rights attaching to these shares are set out in the notes to these consolidated financial statements, in particular Note 12 and are deemed to form part

of this report.

General Meetings

The Company's Annual General Meeting ("AGM") affords shareholders the opportunity to meet and ask questions of the Chairman and the Board. The notice of the Annual General Meeting, the Form of Proxy and the Annual Report are issued to shareholders at least 21 clear days before the meeting. At the meeting, resolutions are usually voted on by a show of hands of those shareholders attending, in person or by proxy. After each resolution has been dealt with, details are given of the level of proxy votes cast on each resolution and the number of votes for, against and withheld. If validly requested, resolutions can be voted by way of a poll whereby the votes of shareholders present and voting at the meeting are added to the proxy

The Directors present their report to the shareholders with the audited financial statements for the year ended 31 December 2020.

Principal Activity, Review of Business and Future Development

The principal activity of the Group (which consists of Datalex plc and its subsidiary companies as listed in Note 28 to the consolidated financial statements) is the development and sale of a variety of direct and indirect distribution and retailing software products and solutions to the airline industry. Shareholders are referred to the Chairman's Statement, Chief Executive Officer's Review, the Financial and Operational Review and the Risk Report which contain a review of operations and the financial performance of the Group for 2020, the outlook for 2021 and the key performance indicators used to assess the performance of the Group. These are deemed to be incorporated in the Directors' Report.

Results for the Year

The Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2020 and the Consolidated Statement of Financial Position at that date are set out on pages 111 and 110 respectively. The Group's loss for the year ended 31 December 2020 was US\$6.5m (2019: US\$12.1m).

Dividends

The Board of Directors is not recommending that a dividend be paid in respect of the year ended 31 December 2020 (2019: US\$nil cents per share).

Directors and Secretary

The names of the persons who were Directors at any time during the year ended 31 December 2020, and up to the date of this report, and a biographical note on each appear on pages 44 and 45. The Company Secretary's details are set out in the Executive Leadership Team on page 47.

In accordance with the provisions contained in the 2018 UK Corporate Governance Code (the "Governance Code"), all Directors retired at the Annual General Meeting of the Company on 24 September 2020 and, being eligible, offered themselves for re-election, and all were reelected to the Board on the same day.

The constitution of the Company contains provisions regarding the appointment and retirement of Directors. At the Annual General Meeting (AGM) each year at least one-third of the board shall retire by rotation and each Director who has not been appointed or reappointed at or before the AGM held in the

Directors' Report

	At 31 December 2020		At 28 April 2021
Name of Holder	Number of US\$0.10 ordinary shares	% of issued share capital	Number of US\$0.10 ordinary shares	% of issued share capital
IIU Nominess Limited	24,503,981	29.8%	24,503,981	29.8%
Pageant Investments Limited	5,145,000	6.3%	5,145,000	6.3%
Nick Furlong	2,670,936	3.3%	2,670,936	3.3%

Except as disclosed above, the Company has not been notified of any other interest of 3% or more in its issued ordinary share capital nor is it aware of any person who directly or indirectly, jointly or severally, exercises or could exercise control over the Company.

Subsidiary Companies

The information required by the Companies Act, 2014 in relation to subsidiary undertakings is provided in Note 28 to these consolidated

financial statements.

Accounting Records

The Directors are responsible for ensuring that adequate accounting records are maintained by the Group. The Directors believe that they have complied with this requirement through the

Section	Topic	Location
1	Interest capitalised	Note 14
2	Publication of unaudited financial information	Not applicable
3	Small related party transactions	Remuneration Report and Note 29
4	Details of long-term incentive schemes	Remuneration Report and Note 15
5	Waiver of emoluments by Directors	Remuneration Report
Jun-14	Sections 6 – 14 of listing rule 6.1.77	Not applicable

All information cross-referenced above is hereby incorporated by reference into this Directors' Report.

employment of suitably qualified accounting personnel and the maintenance of appropriate accounting systems. The accounting records are kept at the Company's registered office in Block U, EastPoint, Clontarf, Dublin 3, D03

H704, Ireland.

Going Concern And Longer-Term Viability

The Directors' statements on going concern and longer term viability are included in the Risk Report on page 34 and Note 2.5 in the financial statements.

Information Required to be Disclosed by Euronext Dublin Listing Rule LR 6.1.77

For the purposes of LR.6.1.77, the information required to be disclosed by LR 6.1.77 can be found at the following locations:

votes received in advance of the meeting and the total number of votes for, against and withheld for each resolution are announced. Details of proxy votes received are made available on the Company's website following the meeting.

All other general meetings of the Company are are called Extraordinary General Meetings ("EGMs"). An EGM called for the passing of a special resolution must be called by providing at least 21 clear days' notice. Provided shareholders have passed a special resolution at the immediately preceding Annual General Meeting and the Company allows shareholders to vote by electronic means, an EGM to consider an ordinary resolution may, if the Board deems it appropriate, be called by providing at least 14 clear days' notice.

A quorum for a general meeting of the Company is constituted by three or more shareholders present in person or by proxy and entitled to vote. The passing of resolutions at a meeting of the Company, other than special resolutions, requires a simple majority. The Company's Articles of Association provide that the Chairman has a casting vote in the event of a tie. To be passed, a special resolution requires a majority of at least 75% of the votes cast. Shareholders have the right to attend, speak, and ask questions and vote at general meetings. A member entitled to attend, speak and vote at a general meeting is entitled to appoint a proxy to attend, speak and vote on his or her behalf. A proxy need not be a member of the Company. Under the Act, the Company must answer any question a member asks relating to the business being dealt with at the general meeting unless: (i) answering the question would interfere unduly with the preparation for the general meeting or the confidentiality and business interests of the Company; (ii) the answer has already been given on a website in the form of an answer to a question; or (iii) it appears to the Chairman of the meeting that it is undesirable in the interests of good order of the meeting that the question be answered.

In accordance with Irish Company Law, the Company specifies record dates for general meetings, by which date shareholders must be registered in the register of members of the Company to be entitled to attend. Record dates are specified in the notice of general meeting. Shareholders may exercise their right to vote by appointing a proxy/proxies, by electronic means or in writing, to vote some or all of their shares. The requirements for the receipt of valid proxy forms are set out in the notice of general meeting. A shareholder, or a group of shareholders, holding at least five percent of the issued share capital of the Company, has the right to requisition a general meeting.

A shareholder, or a group of shareholders, holding at least three percent of the issued share capital of the Company, has the right to put an item on the agenda or to table a draft resolution for inclusion on the agenda of a general meeting, subject to any contrary provision in Irish Company Law.

The business of the Company is managed by the Board who may exercise all the powers of the Company as are not by the Act or by the Articles required to be exercised by the Company in the general meeting. Matters reserved by the Act to the shareholders in the general meeting include:

• › Election of Directors;
• › Payment of dividends;
• › Appointment of external auditors;
• › Amendments of the Constitution;
• › Measures to increase or reduce the share capital; and
• › Authority to issue shares.

EGMS Held in 2020 and 2021 to Date

• › In February 2020 shareholders approved the election of David Hargaden, Mike McGearty and Christine Ourmières-Widener to the Board.
• › In September 2020 shareholders approved a related party transaction.
• › In February 2021 shareholders approved the CSD Migration.

Constitution

The Company's Constitution sets out the objects and powers of the Company and may be amended by a special resolution passed by the shareholders at a general meeting of the Company.

Substantial Holdings

As at 31 December 2020 and 28 April 2021 (being the latest practicable date before approval of this Annual Report), the Company had been notified of the following details of interests of over 3% in the ordinary share capital of the Company.

94 95

Audit & Risk Committee

The Company has an Audit & Risk Committee, details of which have been included on pages 64 to 73.

Information to the Auditor

The Directors in office at the date of this report have each confirmed that:

• › As far as they are aware, there is no relevant audit information of which the Company's auditor is unaware; and
• › They have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditor

The Board, pursuant to a process to appoint an auditor for the year ending 31 December 2019, appointed Deloitte on 31 December 2019. The auditor, Deloitte, will continue in office in accordance with the provisions of Section 383 of the Companies Act 2014.

As required under Section 381 (1)(b) of the Companies Act 2014, a resolution authorising the Board to determine the remuneration of the auditor will be proposed at the 2021 AGM.

Approval of Financial Statements

The financial statements were approved by the Board on 28 April 2021.

Signed on behalf of the Board

Sean Corkery Niall O'Sullivan Chief Executive Officer Chief Financial Officer

Takeover Regulations

With the exception of change of control provisions in the loan facility agreement with Tireragh Limited, the Company is not party to any significant agreements that would take effect, alter or terminate upon a change of control following a takeover bid other than if an airline was to take a controlling stake in the Group, which then could result in the termination of certain revenue contracts. If certain change of control events occur, Tireragh Limited have the right to cancel the loan facility and require Datalex to repay all outstanding loans together with accrued interest, and all other amounts, if any. The Company does not have any agreements with any Director or employee that would provide compensation for loss of office or employment resulting from a takeover except that provisions of the Company's Employee Share Option Schemes and Long-Term Incentive Plan may cause options and cash awards, respectively, granted to employees under such schemes to vest in the event of a takeover.

Transparency Regulations

As required by 277/2007 "Transparency (Directive 2004/109/EC) Regulations 2007" concerning the development and performance of the Group, the following sections of this Annual Report shall be treated as forming part of this Directors' Report: The Chairman's Statement on pages 4 to 7, the Chief Executive Officer's Review on pages 8 to 11 and the Financial and Operational Review on pages 26 to 33, The Corporate Governance Report on pages 48 to 59. The Principal Risks and Uncertainties on page 93, details of Earnings Per Share in note 25 and details of the Capital Structure of the Company in note 12.

Subsequent Events

Information in respect of events since the year end is contained in note 32 to the consolidated financial statements.

Political Donations

The Group and the Company did not make any political donations during the year ended 31 December 2020 (2019: US\$nil).

Development Activities

The Group actively engages in research and development activities relevant to its business. Expenditure on research and development amounted to US\$1.4m in 2020 (2019: US\$1.8m), of which US\$1.1m (2019: US\$0.1m) was capitalised as development expenditure as disclosed in Note 5 to the financial statements.

Details of development expenditure are also discussed in the CEO Statement and the Financial and Operational Review.

Directors' Compliance Statement

It is the Company's policy to comply with its relevant obligations (as defined by Section 225(2)(a) of the Companies Act 2014). The Directors have drawn up a compliance policy statement (as defined in section 225(3)(a) of the Companies Act 2014) and arrangements and structures are in place that are, in the Directors' opinion, designed to secure material compliance with the Company's relevant obligations. The Directors confirm that these arrangements and structures were reviewed during the financial year.

As required by Section 225(2) of the Companies Act 2014, the Directors acknowledge that they are responsible for the Company's compliance with the relevant obligations. In discharging their responsibilities under Section 225, the Directors relied on the advice both of persons employed by the Company and of persons retained by the Company under contract, who they believe have the requisite knowledge and experience to advise the Company on compliance with its relevant obligations.

Datalex • Annual Report 2020 • Directors' Report

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website www.datalex.com. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors, whose names and functions are listed on pages 44 and 45 of the Annual Report confirms that, to the best of each person's knowledge and belief:

• › The Group and Company financial statements, prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities and financial position of the Company and the Group and of the loss of the Group;
• › The Directors' Report contained in the Annual Report includes a fair review of the development and performance of the business and the position of the Company and Group, together with a description of the principal risks and uncertainties that they face; and
• › The Directors consider that the Annual Report and Group and Company financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's and the Group's position, performance, business model and strategy.

The Directors' Report for the purpose of the Transparency Directive (Directive 2004/109/EC) Regulations 2007, the Central Bank (Investment Market Conduct) Rules 2019, the Companies Act 2014 and the Listing Rules issued by Euronext Dublin consists of pages 43 to 99.

Directors' Responsibilities Statement

Directors' Responsibilities for Financial Statements

The Directors are responsible for preparing the Directors' Report and the Group and Company financial statements in accordance with Irish law.

Irish law requires the Directors to prepare Group and Company financial statements for each financial year. Under that law, the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and Article 4 of the IAS Regulation and elected to prepare the Company Financial Statements in accordance with IFRS as adopted by the European Union, as applied in accordance with the provisions of the Companies Act 2014.

Under Irish law the Directors shall not approve the Group and Company financial statements unless they are satisfied that they give a true and fair view of the Group and Company's assets, liabilities and financial position as at the end of the financial year and of the profit or loss of the Group for the financial year and otherwise comply with the Companies Act 2014.

In preparing these Group and Company financial statements, the Directors are required to:

• › Select suitable accounting policies and then apply them consistently;
• › Make judgements and estimates that are reasonable and prudent;
• › State whether the Group financial statements have been prepared in accordance with IFRS as adopted by the European Union and ensure that they contain the additional information required by the Companies Act 2014 and as regards the Company Financial Statements as applied in accordance with the provision of the Companies Act 2014; and

› Prepare the Group and Company financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

The Directors are also required by applicable law and the Listing Rules issued by Euronext Dublin, to prepare a Directors' Report and reports relating to Directors' remuneration and corporate governance.

In accordance with the Transparency (Directive 2004/109/Ec) Regulations 2007 (the "Transparency Regulations"), the Directors are required to include a management report containing a fair review of the business and a description of the principal risks and uncertainties facing the Group.

The Directors are responsible for keeping adequate accounting records that are sufficient to:

• › Correctly record and explain the transactions of the Company;
• › Enable, at any time, the assets, liabilities, financial position and profit or loss of the Company and the Group to be determined with reasonable accuracy;
• › Enable the Directors to ensure that the Group and Company financial statements comply with the Companies Act 2014 and as regards the Group Financial Statements Article 4 of the IAS Regulation; and
• › Enable those financial statements to be audited.

The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Financial Statements

Independent auditor's report to the members of Datalex Plc

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

QUALIFIED OPINION

In our opinion, except for the possible effects on the comparative figures of the matter described in the basis for qualified opinion section of our report, the Group and Parent Company financial statements:

• › give a true and fair view of the financial position of the Group and Parent Company as at 31 December 2020, and of the loss of the Group for the financial year then ended; and
• › have been properly prepared in accordance with the relevant financial reporting framework and, in particular, with the requirements of the Companies Act 2014 and, as regards the Group financial statements, Article 4 of the IAS Regulation.

The financial statements we have audited comprise:

The Group financial statements:

• › the Consolidated Statement of Financial Position;
• › the Consolidated Statement of Profit and Loss;
• › the Consolidated Statement of Comprehensive Income;
• › the Consolidated Statement of Cash Flows;
• › the Consolidated Statement of Changes in Equity; and
• › the related notes 1 to 34, including a summary of significant accounting policies as set out in note 2.

The Parent Company financial statements:

• › the Company Statement of Financial Position;
• › the Company Statement of Cash Flows;
• › the Company Statement of Changes in Equity; and
• › the related notes 1 to 34, including a summary of significant accounting policies as set out in note 2.

The relevant financial reporting framework that has been applied in the preparation of the Group and Parent Company financial statements is the Companies Act 2014 and International Financial Reporting Standards (IFRS) as adopted by the European Union ("the relevant financial reporting framework").

BASIS FOR QUALIFIED OPINION

We were appointed auditors of Datalex plc ("the Company") during 2019 to audit the financial statements for the financial year ended 31 December 2019. In conducting that audit, in light of the disclaimer of audit opinion for the year ended 31 December 2018, and the substantial changes in management during 2019, we were unable to obtain sufficient appropriate audit evidence over the opening balances as at 1 January 2019 and the associated allocation of income and expenses between the financial years ended 31 December 2018 and 31 December 2019. As a result, we disclaimed our audit opinion on the financial statements for the year ended 31 December 2019. Our opinion on the current year's financial statements is also modified because of the possible effect of this matter on the comparability of the current year's figures and the comparative figures. In addition, the effect of this would also impact the discussion of financial performance in any other information contained within the Annual Report, which includes the directors report and corporate governance disclosures.

We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are described below in the "Auditor's responsibilities for the audit of the financial statements" section of our report.

We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), as applied to public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

MATERIAL UNCERTAINTIES RELATING TO GOING CONCERN

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

We draw your attention to Note 2.5 in the financial statements, which indicates that the Group incurred a loss of US\$6.5m for the financial year ended 31 December 2020, and, at that date had net current liabilities and net liabilities of US\$23.0m and US\$23.7m respectively. As stated in Note 2.5, the COVID-19 pandemic has had a significant adverse impact on the aviation industry to date and there remains uncertainty as to when the industry will recover from it, this indicates that a material uncertainty exists that may cast significant doubt on the Group and Parent Company's ability to continue as a going concern.

Furthermore, the ability of the Group and Parent Company to continue as a going concern is dependent on continuing support from Tireragh Limited (a company ultimately beneficially owned by Mr.Dermot Desmond, also a substantial shareholder in the Parent Company via IIU Nominees Limited), to extend the repayment date of the existing debt facilities out to 30 September 2022, and successfully implementing its revenue growth and cost containment strategies. This debt facility extension would be subject to independent shareholder approval as a related party transaction under Euronext Dublin Listing Rules.

Cash flow projections prepared by the directors (subject to obtaining a successful rescheduling of the repayment date on the existing debt facility, as noted above) indicate that the funds available are sufficient to meet the obligations of the Group and Parent Company for a period of at least twelve months from the date of approval of the financial statements.

As stated in Note 2.5, these events or conditions, along with the other matters as set forth in Note 2.5, indicate that material uncertainties exist that may cast significant doubt on the Group's and Parent Company's ability to continue as a going concern. Our qualified opinion is not modified further in respect of this matter.

Our evaluation of the directors' assessment of the Group's and Parent Company's ability to continue to adopt the going concern basis of accounting included:

• › obtaining an understanding of the Group's relevant controls over the preparation of cash flow projections and approval of the projections and assumptions used in the cash flow forecasts to support the going concern assumption and assessed the design and determined the implementation of these controls;
• › performing an assessment of the historical accuracy of forecasts prepared by management;
• › testing the clerical accuracy of the cash flow forecast model;
• › engaging our internal specialists to assist in challenging the key assumptions used in the cash flow forecasts;
• › performing sensitivity analysis on the cash flow forecasts, including applying alternative reasonable downside scenarios, to assess the impact of a change in underlying assumptions on the Group and Parent Company's ability to continue as a going concern;
• › assessing the financing facilities including nature of facilities, repayment terms and covenants;
• › assessing the letter of intention of support received by the Group from Mr. Dermot Desmond, through his vehicle Tireragh Limited, which comprises a rescheduling of the repayment date of the existing debt facility out to 30 September 2022; and
• › assessing the adequacy of the disclosures in the financial statements.

In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to:

• › the directors' statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting; and
• › the directors' identification in the financial statements of the material uncertainties related to the Group's and Parent Company's ability to continue as a going concern over a period of at least twelve months from the date of approval of the financial statements.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

• Summary of our audit approach
• Key audit matters

The key audit matters that we identified in the current year were:

• › Revenue recognition;
• › Exceptional items;
• › Management override of controls;
• › Capitalisation of developments costs; and
• › Going concern (see 'material uncertainties relating to going concern' section)
• Materiality

The materiality for the Group that we used in the current year was US\$145k which was determined on the basis of revenue, representing 0.5% of this benchmark (2019: US\$224k, representing 0.5% of revenue).

The materiality for the Parent Company that we used in the current year was US\$132k which was determined on the basis of third party debt representing 1% of this benchmark (2019: US\$114k, representing 1% of third party debt).

● Scoping

We determined the scope of our Group audit by obtaining an understanding of the Group and its environment, including Group-wide internal financial controls, and assessing the risks of material misstatement at the Group level.

Based on that assessment, we focused our Group audit scope primarily on the audit work in 7 components. 5 of these were subject to a full audit, whilst the remaining 2 were subject to audits of specified procedures where the extent of our testing was based on our assessment of the associated risks of material misstatement and of the materiality of the component's operations to the Group. Analytical review procedures were performed by the Group engagement team on all other components within the Group.

● Significant changes in our approach

Impact of COVID-19 on our audit approach

The COVID-19 pandemic has had an impact on all elements of local and international economies. We have considered the impact of COVID-19 on the Group and Parent Company's business as part of our audit risk assessment and planning. This assessment resulted in an increased audit scope on key audit areas including the consideration of changes in manual internal controls as a result of remote working by Datalex personnel and increased focus on the Group's and Parent Company's key judgement and estimates in relation to future strategic plans and profitability forecasts which are key inputs into the Group's and Parent Company's going concern assessment.

Key audit matters

Key audit matters considered in the prior year were broadly aligned with the items identified above, but also included opening balances which are no longer relevant for the current financial year.

Capitalisation of development costs is a new key audit matter in the current year. Capitalisation of development costs was identified as a key audit matter, as in determining the amount to be capitalised, management make judgements regarding expected future cash generation of the asset and expected period of benefit. As a result, there is a risk that items are inappropriately capitalised prior to meeting the recognition criteria of IAS 38 'Intangible assets' ('IAS 38').

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in

our audit of the financial statements of the current financial year and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the 'material uncertainty related to going concern' section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matters considered in the prior year were broadly aligned with the items identified above, but also included opening balances which are no longer relevant for the current financial year.

Capitalisation of development costs is a new key audit matter in the current year. Capitalisation of development costs was identified as a key audit matter, as in determining the amount to be capitalised, the directors make judgements regarding expected future cash generation of the asset and expected period of benefit. As a result, there is a risk that items are inappropriately capitalised prior to meeting the recognition criteria of IAS 38 'Intangible assets' ('IAS 38').

• Revenue Recognition
• Key audit matter description

As described in Note 2.7, the Group derives a significant portion of its revenue from contracts containing multiple performance obligations, including fixed fee elements – Platform revenue and services revenue.

Professional service revenue contracts which remain open at the financial year end involve key project milestones, and ongoing uncertainties around expected costs to complete and the Group's future obligations. This requires the exercise of significant judgement in the assessment of the extent of progress towards completion which is estimated by reference to labour hours incurred to date as a percentage of the total estimated labour hours to service the project. Therefore, the revenue, costs and gross profit realisation can vary during the execution and reassessment of these projects against the contracted project milestones.

The application of IFRS15 requires the recognition of deferred contract fulfilment costs. Such costs represent those already incurred in executing and delivering contractual obligations to customers for which the associated revenue has not been recognised at the statement of financial position date. Significant judgement is exercised in determining what type of expenditure meets the criteria for recognition as deferred contract fulfilment costs, in particular the amount of time incurred by staff and contractors on customer contracts.

The Audit Committee's discussion of this key audit matter is set out on page 69.

● How the scope of our audit responded to the key audit matter

We obtained an understanding of the revenue recognition process and assessed the design and determined the implementation of the relevant controls therein including how management determine the percentage of completion on customer contracts. As a result of the deficiencies identified, primarily relating to management review controls and segregation of duties, we determined that a wholly substantive approach was appropriate.

We independently obtained confirmations from customers of the contracts in place during the year ended 31 December 2020. These customer confirmations validated the work order status as at the financial year end date and the completeness of the contracts.

We agreed the fixed fee amounts for each contract to the signed agreements and challenged the percentage of completion calculation by independently obtaining confirmations from customers, confirming date of completion and inquiring of management (Team Lead, PMO, and Customer Manager) of the rationale behind determining the percentage of completion.

On a sample basis, we recalculated the revenue to be recognised in respect of the financial year ended 31 December 2020 and the related accrued/deferred revenue balances.

On a sample basis, we recalculated the deferred contract fulfilment costs including agreement of rates to source contracts and invoices.

We evaluated the adequacy of disclosures as detailed in the Note of the consolidated financial statements.

● Exceptional items

● Key audit matter description

As described in Note 2 (accounting policies, judgements and estimates) and Note 23 (exceptional items) to the financial statements, the Group classified a number of significant expenses totalling US\$2.8m as exceptional items. These costs include professional fees in relation to the business transformation programme and litigation procedures, and severance costs.

The classification of items as exceptional affects adjusted earnings per share and is inherently judgemental. As a result, there is a risk that items are inappropriately classified as exceptional items in line with the stated accounting policy.

The Audit Committee's discussion of this key audit matter is set out on page 69.

● How the scope of our audit responded to the key audit matter

We obtained an understanding of the process the directors undertook to identify and present exceptional items and assessed the design and determined the implementation of the relevant controls therein.

We evaluated and challenged the nature and classification of transactions as exceptional in accordance with the Group accounting policy, whilst also, evaluating whether the accounting policy for exceptional items is appropriate and is consistent with previous periods.

We evaluated the presentation of exceptional items and adequacy of the related disclosures in the Group's financial statements against requirements under IFRS and Irish Company Law. Our work focused on items of income and expense that could impact the quality of earnings.

• Management override of controls
• Key audit matter description

We conducted an assessment of the fraud risks arising from management override of controls by considering potential areas where the Group and Parent Company's financial statements could be manipulated, including:

• › Inappropriate accounting estimates and judgements;
• › The posting of fictitious or fraudulent journal entries; or
• › Accounting for significant unusual transactions arising from changes to the business.

We have considered the impact of COVID-19 on the Group and Parent Company's business as part of our audit risk assessment and planning, including the consideration of changes in manual internal controls as a result of remote working by Datalex personnel and increased focus on the Group's and Parent Company's key judgement and estimates in relation to future strategic plans and profitability forecasts which are key inputs into the Group's and Parent Company's going concern and capitalisation of development costs assessments.

There are a number of areas requiring the application of judgement and estimation techniques, such as revenue recognition, capitalisation of development costs, classification of exceptional costs and going concern, which creates additional risk of bias in accounting estimates. As noted within certain Key Audit Matters, during our 2020 audit we identified control design deficiencies relating to areas of judgement and estimation.

This risk can manifest itself through the posting of invalid journals, recorded to influence the financial statements, which circumvent the controls in place to stop the recording of inappropriate journals.

This had a bearing on the allocation of resources in the audit, and the direction of effort of the audit team. Accordingly, we identified this as a key audit matter.

● How the scope of our audit responded to the key audit matter

We obtained an understanding of the financial reporting process and assessed the design and determined the implementation of the relevant controls therein. We identified deficiencies in the design of controls at significant components where testing was performed in respect of journal entries. Therefore we determined that a wholly substantive approach was appropriate.

We incorporated specific, directed and focused fraud criteria, in our selection of journal entries processed during the reporting period for testing, in the Significant Component ledgers, utilising data analytics tools.

We performed a retrospective review of management's judgements and assumptions relating to significant estimates reflected in the prior year's financial statements.

We evaluated certain accounting estimates for bias including revenue recognition and going concern, incorporating the following procedures:

• › We engaged our internal specialists to assist in key judgement areas including cashflow forecasts as part of the going concern assessment.
• › We engaged our internal specialists to assist in challenging the key assumptions used in the cash flow forecasts, in particular to assess the discount rate used as part of our assessment of capitalisation of development costs;
• › In respect of revenue recognition, we independently obtained confirmations from customers of the contracts in place during the year ended 31 December 2020. These customer confirmations validated the work order status as at the financial year end date and the completeness of the contracts in issue.

We obtained an understanding of the business rationale of significant transactions, with a specific focus on the extended loan facility received from a related party, Mr Dermot Desmond through his vehicle Tireragh Limited, during the year. We reviewed the shareholder approval for the loan and obtained external confirmation of the balance as at 31 December 2020.

● Capitalisation of development costs

● Key audit matter description

As described in Note 5, the Group capitalised development costs of US\$1.1m during the year ended 31 December 2020. Development expenditure in relation to internally generated intangible assets is capitalised when all of the criteria as set out in IAS 38 "Intangible Assets" are met. There is a risk that additions are made to capitalised development costs before all the required capitalisation criteria are met.

Expenditure is capitalised from the date when the intangible asset first meets the recognition criteria and in determining the amount to be capitalised, directors make judgements regarding expected future cash generation of the asset.

The Audit Committee has included their assessment of this risk on page 70.

● How the scope of our audit responded to the key audit matter

We obtained an understanding of the process and related controls for ensuring appropriate capitalisation of development costs and assessed the design and determined the implementation of the relevant controls therein. As a result of a deficiency identified relating to management review controls, we determined that a wholly substantive approach was appropriate

We reviewed the capitalised project register and completed procedures to determine whether the expenditure was recorded accurately and whether it met the required capitalisation criteria in accordance with IAS 38.

We agreed the amount of development costs capitalised to underlying documentation detailing cost per project, including timesheet data.

We engaged our internal specialists to assist in challenging the key assumptions used in the cash flow forecasts, in particular to assess the discount rate used; and

We performed sensitivity analysis on the underlying cash flow forecasts.

Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to express an opinion on individual accounts or disclosures. Our opinion on the financial statements is not modified with respect to any of the risks described above, and we do not express an opinion on these individual matters.

OUR APPLICATION OF MATERIALITY

We define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a reasonably knowledgeable person, relying on the financial statements, would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.

We determined materiality for the Group to be US\$145k which is approximately 0.5% of revenue (2019: US\$224k, representing 0.5% of revenue). We have considered revenue to be the critical component for determining materiality because it is the most important measure for users of the Group's financial statements.

We determined materiality for the Parent Company to be US\$132k which is approximately 1% of third party debt (2019: US\$114k, representing 1% of third party debt), as the most significant driver of the Parent Company financial statements.

We have considered quantitative and qualitative factors such as understanding the entity and its environment, history of mistatements, complexity of the Company, and reliabity of control environment. Component materialities were set on a similar basis, giving the range \$26.4k to \$83.6k.

We agreed with the Audit Committee that we would report to them any audit differences in excess of US\$7.25k, as well as differences below that threshold which, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

AN OVERVIEW OF THE SCOPE OF OUR AUDIT

The structure of the Group's finance function is such that the central Group finance team in Dublin provides support to Group entities for the accounting of the majority of transactions and balances. The audit work was undertaken and performed by an audit team working remotely in the current year due to COVID-19 restrictions.

We determined the scope of our Group audit on an entity level basis, assessing components against the risk of material misstatement at the Group level. Based on this assessment, we focussed our work on 7 components covering 100% of revenue and 99% of net assets. 5 of these were subject to a full audit, whilst the remaining 2 were subject to audits of specified procedures where the extent of our testing was based on our assessment of the associated risks of material misstatement and of the materiality of the component's operations to the Group. The legal entities, which were subject to a full scope audit, were Datalex plc, Datalex (Ireland) Limited, Datalex Solutions (UK) Limited, Datalex Netherlands BV, and Datalex USA Inc. We also carried out specified audit procedures on Datalex China Limited and Datalex Employee Benefit Trust.

At the Parent Company level, we also tested the consolidation process and carried out analytical procedures to confirm our conclusion that there were no significant risks of material misstatement of the aggregated financial information of the remaining components not subject to a full scope audit or specified audit procedures.

OTHER INFORMATION

The other information comprises the information included in the Annual Report 2020, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, we have nothing to report in this regard.

RESPONSIBILITIES OF DIRECTORS

As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group and Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and Parent Company or to cease operations, or have no realistic alternative but to do so.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs (Ireland), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• › Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• › Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group and Parent Company's internal control.
• › Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• › Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group and Parent Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor's report. However, future events or conditions may cause the entity (or where relevant, the Group) to cease to continue as a going concern.
• › Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• › Obtain sufficient appropriate audit evidence regarding the financial information of the business activities within the Group to express an opinion on the consolidated financial statements. The Group auditor is responsible for the direction, supervision and performance of the Group audit. The Group auditor remains solely responsible for the audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that the auditor identifies during the audit.

For listed entities and public interest entities, the auditor also provides those charged with governance with a statement that the auditor has complied with relevant ethical requirements regarding independence, including the Ethical Standard for Auditors (Ireland) 2016, and communicates with them all relationships and other matters that may reasonably be thought to bear on the auditor's independence, and where applicable, related safeguards.

Where the auditor is required to report on key audit matters, from the matters communicated with those charged with governance, the auditor determines those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. The auditor describes these matters in the auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, the auditor determines that a matter should not be communicated in the auditor's report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2014

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, based solely on the work undertaken in the course of the audit, we report that:

› the information given in the directors' report is consistent with the financial statements and the directors' report has been prepared in accordance with the Companies Act 2014.

Based solely on the work undertaken in the course of the audit, we report that:

• › We have obtained all the information and explanations which we consider necessary for the purposes of our audit;
• › In our opinion, the accounting records of the Parent Company were sufficient to permit the financial statements to be readily and properly audited; and
• › The Parent Company statement of financial position is in agreement with the accounting records.

CORPORATE GOVERNANCE STATEMENT REQUIRED BY THE COMPANIES ACT 2014

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, we report, in relation to information given in the Corporate Governance Statement on pages 48 to 59 that:

• › In our opinion, based on the work undertaken during the course of the audit, the information given in the Corporate Governance Statement pursuant to subsections 2(c) and (d) of section 1373 of the Companies Act 2014 is consistent with the Parent Company's statutory financial statements in respect of the financial year concerned and such information has been prepared in accordance with the Companies Act 2014. Based on our knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified any material misstatements in this information.
• › In our opinion, based on the work undertaken during the course of the audit, the Corporate Governance Statement contains the information required by Regulation 6(2) of the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and Groups) Regulations 2017 (as amended); and
• › In our opinion, based on the work undertaken during the course of the audit, the information required pursuant to section 1373(2)(a),(b),(e) and (f) of the Companies Act 2014 is contained in the Corporate Governance Statement.

CORPORATE GOVERNANCE STATEMENT

The Listing Rules and ISAs (Ireland) require us to review the directors' statement in relation to longer-term viability and the part of the Corporate Governance Statement relating to the Group's compliance with the provisions of the UK Corporate Governance Code and Irish Corporate Governance Annex specified for our review.

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement are materially consistent with the financial statements and our knowledge obtained during the audit:

• › the directors' explanation as to its assessment of the Group's prospects, the period this assessment covers and why the period is appropriate set out on pages 40 to 41;
• › the directors' statement on fair, balanced and understandable set out on pages 58 and 66;
• › the board's confirmation that it has carried out a robust assessment of the emerging and principal risks and the disclosures in the annual report that describe the principal risks and the procedures in place to identify emerging risks and an explanation of how they are being managed or mitigated set out on pages 34 to 37;
• › the section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on pages 34 to 37 and 56 to 58;
• › and the section describing the work of the audit committee set out on pages 64 to 73.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, based on the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report.

The Companies Act 2014 also requires us to report to you if, in our opinion, the Company has not provided the information required by Section 1110N in relation to its remuneration report. We have nothing to report in this regard.

We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you if, in our opinion, the disclosures of directors' remuneration and transactions specified by law are not made.

The Listing Rules of the Euronext Dublin require us to review six specified elements of disclosures in the report to shareholders by the Board of Directors' remuneration committee. We have nothing to report in this regard.

OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS

We were appointed by Datalex Plc on 31 December 2019 to audit the financial statements for the financial year ended 31 December 2019 and subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments of the firm is two years, covering the years ending 31 December 2019 to 31 December 2020.

The non-audit services prohibited by IAASA's Ethical Standard were not provided and we remained independent of the Company in conducting the audit.

Our qualified audit opinion is consistent with the additional report to the audit committee we are required to provide in accordance with ISA (Ireland) 260.

USE OF OUR REPORT

This report is made solely to the Company's members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Daniel Murray For and on behalf of Deloitte Ireland LLP Chartered Accountants and Statutory Audit Firm Deloitte & Touche House, EarlsfortTerrace, Dublin 2, Ireland

Date: 28 April 2021

Notes: An audit does not provide assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular on whether any changes may have occurred to the financial statements since first published. These matters are the responsibility of the directors but no control procedures can provide absolute assurance in this area.

Legislation in Ireland governing the preparation and dissemination of financial statements differs from legislation in other jurisdictions.

Consolidated Statement of Financial Position

as at 31 December 2020

	Notes	2020	2019
		US\$'000	US\$'000
ASSETS
Non-current assets
Property, plant and equipment	4	509	1,077
Intangible assets	5	1,798	228
Right-of-use assets	6	4,614	5,789
Deferred contract fulfilment costs	7	2,863	2,161
Contract acquisition costs	8	-	190
Trade and other receivables	10	665	255
Total non-current assets		10,449	9,700
Current assets
Contract acquisition costs	8	62	-
Trade and other receivables	10	6,427	7,247
Contract assets	10	853	2,561
Cash and cash equivalents	11	3,025	3,051
Total current assets		10,367	12,859
Total assets		20,816	22,559
EQUITY
Capital and reserves attributable to the equity holders of the Company
Issued ordinary share capital	12	8,215	8,198
Other issued equity share capital	12	262	262
Other reserves	13	11,777	11,892
Retained loss		(43,952)	(37,475)
Total equity		(23,698)	(17,123)
LIABILITIES
Non-current liabilities
Borrowings	14	4,818	5,487
Provisions	15	526	941
Contract liabilities	17	5,766	3,858
Total non-current liabilities		11,110	10,286
Current liabilities
Borrowings	14	17,009	13,376
Provisions	15	914	1,236
Trade and other payables	16	10,862	10,963
Contract liabilities	17	4,419	3,561
Current income tax liabilities		200	260
Total current liabilities		33,404	29,396
Total equity and liabilities		20,816	22,559

For and on behalf of the Board Sean Corkery Niall O'Sullivan 28 April 2020

Consolidated Statement of Profit and Loss

	Notes	2020	2020	2020	2019	2019	2019
		Before	Exceptional		Before	Exceptional
		exceptional	items		exceptional	items
		items	(Note 23)	Total	items	(Note 23)	Total
		US\$'000	US\$'000 US\$'000		US\$'000	US\$'000 US\$'000
Revenue from contracts with customers	18	28,070	-	28,070	45,148		45,148
Cost of sales	19	(19,234)	-	(19,234)	(30,583)	(2,596)	(33,179)
Gross profit / (loss)		8,836	-	8,836	14,565	(2,596)	11,969
Selling and marketing costs	19	(1,116)	-	(1,116)	(1,654)	-	(1,654)
Administrative expenses	19	(9,102)	(2,567)	(11,669)	(13,392)	(2,821)	(16,213)
Net impairment gains/(losses) on financial
and contract assets	10	1,729	(205)	1,524	(1,933)	(2,876)	(4,809)
Other income	21	401	-	401	410	-	410
Other losses	22	(1,615)	-	(1,615)	(199)	-	(199)
Operating loss		(867)	(2,772)	(3,639)	(2,203)	(8,293)	(10,496)
Finance income	24	-	-	-	4	-	4
Finance costs	24	(2,897)	-	(2,897)	(1,503)	-	(1,503)
Loss before income tax		(3,764)	(2,772)	(6,536)	(3,702)	(8,293)	(11,995)
Income tax credit/(charge)	9	59	-	59	(66)	-	(66)
Loss for the year		(3,705)	(2,772)	(6,477)	(3,768)	(8,293)	(12,061)
Loss per share (in US\$ cents per share):
Basic	25			(8.1)			(15.1)
Diluted	25			(8.1)			(15.1)

Consolidated Statement of Comprehensive Income

	Notes	2020 US\$'000	2019 US\$'000
Loss for the financial year		(6,477)	(12,061)
Other comprehensive income:
Items that may subsequently be reclassified to profit or loss
Foreign currency translation adjustments:
- Arising in the year	13	(276)	7
Total movement in items that may subsequently be reclassified to profit or loss		(276)	7
Comprehensive loss for the year		(6,753)	(12,054)

Consolidated Statement of Cash Flows

	Notes	2020	2019
		US\$'000	US\$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from/(used in) operations	26	3,514	(15,003)
Income tax paid		-	(192)
Net cash generated from/(used in) from operating activities		3,514	(15,195)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment		38	(280)
Additions to intangible assets		(1,669)	(155)
Contract fulfilment cost payments		(702)	(4,201)
Interest received		-	5
Restricted cash		-	500
Net cash used in investing activities		(2,333)	(4,131)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares (including share premium)	12 & 13	17	4,223
Proceeds from borrowings		-	12,220
Costs paid on entering new leases and agreements for leases		180	-
Payment of interest on lease liabilities		(630)	(706)
Payment of capital on lease liabilities		(820)	(1,247)
Interest paid		-	(481)
Net cash (used in)/generated from financing activities		(1,253)	14,009
Net decrease in cash and cash equivalents		(72)	(5,317)
Foreign exchange gain/(loss) on cash and cash equivalents		45	(12)
Cash and cash equivalents at beginning of year		3,051	8,380
Cash and cash equivalents at end of year	11	3,025	3,051

Consolidated Statement of Changes in Equity

	Issued Other issued
	ordinary	equity share	Other	Retained	Total
	share capital	capital	reserves	loss	equity
	US\$'000	US\$'000	US\$'000	US\$'000 US\$'000
Balance at 1 January 2019	7,810	262	7,783	(25,230)	(9,375)
Loss for the year	-	-	-	(12,061)	(12,061)
Other comprehensive loss	-	-	7	-	7
Total comprehensive loss for the year	-	-	7	(12,061)	(12,054)
Share-based payments credit (Note 13)	-	-	83	-	83
Issue of ordinary shares on exercise of options (Notes 12 & 13)	2	-	-	-	2
Issue of ordinary shares from share placement (Notes 12 & 13)	386	-	4,019	-	4,405
Share issue costs	-	-	-	(184)	(184)
Balance at 31 December 2019	8,198	262	11,892	(37,475)	(17,123)
Balance at 1 January 2020	8,198	262	11,892	(37,475)	(17,123)
Loss for the year	-	-	-	(6,477)	(6,477)
Other comprehensive loss	-	-	(195)	-	(195)
Total comprehensive loss for the year	-	-	(195)	(6,477)	(6,672)
Share based payments credit (Note 13)	-	-	67	-	67
Premium on shares issued (Note 13)	-	-	13	-	13
Issue of ordinary shares on exercise of options (Notes 12 & 13)	17	-	-	-	17
Balance at 31 December 2020	8,215	262	11,777	(43,952)	(23,698)

Company Statement of Financial Position

as at 31 December 2020

	Notes	2020	2019
		US\$'000	US\$'000
ASSETS
Non-current assets
Investments in subsidiaries	28	-	-
Total non-current assets		-	-
Current Assets
Trade and other receivables	10	61	25
Cash and cash equivalents	11	92	86
Total current assets		153	111
Total assets		153	111
EQUITY
Capital and reserves attribute to equity holders of the company
Issued ordinary share capital	12	8,215	8,198
Other issued equity share capital	12	262	262
Other reserves	13	50,817	50,737
Retained loss		(77,590)	(72,742)
Total equity		(18,296)	(13,545)
Current liabilities
Trade and other payables	16	2,716	1,234
Borrowings	14	15,733	12,422
Total current liabilities		18,449	13,656
Total equity and liabilities		153	111

As permitted by Section 304 of the Companies Act 2014, the Company is availing of the exemption from presenting its separate statement of profit and loss in the financial statements and from filing it with the Registrar of Companies. The Company's loss for the financial year is US\$4.8m (2019: US\$18.1m).

On behalf of the board

Sean Corkery Niall O'Sullivan 28 April 2021

Company Statement of Cash Flows

	Notes	2020 US\$'000	2019 US\$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash (used in)/generated from operations	26	(77)	287
Loans to subsidiary undertakings		-	(16,808)
Net cash used in from operating activities		(77)	(16,521)
CASH FLOWS FROM INVESTING ACTIVITIES			-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital	12 & 13	17	4,518
Proceeds from shareholder loan		-	12,262
Dividends paid to shareholders	27	-	-
Net cash generated from financing activities		17	16,780
Net (decrease)/increase in cash and cash equivalents		(60)	259
Foreign exchange gain/(loss) on cash and cash equivalents		66	(291)
Cash and cash equivalents at beginning of year		86	118
Cash and cash equivalents at end of year	11	92	86

Company Statement of Changes in Equity

	Ordinary	Other equity	Other	Retained
	share capital	share capital	reserves	earnings	Total equity
	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000
Balance at 1 January 2019	7,810	262	46,635	(54,477)	230
Loss for the year	-	-	-	(18,081)	(18,081)
Other comprehensive income	-	-	-	-	-
Total comprehensive loss for the year	-	-	-	(18,081)	(18,081)
Share-based payments cost (Note 13)	-	-	83	-	83
Shares issued during the year	388	-	4,019	-	4,407
Share issue costs	-	-	-	(184)	(184)
Balance at 31 December 2019	8,198	262	50,737	(72,742)	(13,545)
Balance at 1 January 2020	8,198	262	50,737	(72,742)	(13,545)
Loss for the year	-	-	-	(4,848)	(4,848)
Other comprehensive income	-	-	-	-	-
Total comprehensive loss for the year	-	-	-	(4,848)	(4,848)
Share-based payments costs (Note 13)	-	-	67	-	67
Shares issued during the year (Note 12)	17	-	-	-	17
Premium on shares issued (Note 13)	-	-	13	-	13
Balance at 31 December 2020	8,215	262	50,817	(77,590)	(18,296)

For the year ended 31 December 2020

1 GENERAL INFORMATION

The principal activity of the Group (which consists of Datalex plc and its subsidiary companies as listed in Note 28) is the development and sale of digital retail products and solutions to the airline industry.

Datalex plc ("the Company") is a public limited company incorporated and domiciled in Ireland and is listed on Euronext Dublin. The company registration number is 329175, and the registered office is Block U, EastPoint, Clontarf, Dublin 3, D03 H704, Ireland. Euronext Dublin restored the listing and trading of the Company's ordinary shares on the 14 July 2020.

These Group and Company financial statements were authorised for issue by the Board of Directors on 28 April 2020.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied.

2.1 STATEMENT OF COMPLIANCE

The Consolidated and Company financial statements of Datalex plc have been prepared in accordance with IFRS and their interpretations approved by the International Accounting Standards Board ('IASB') as adopted by the European Union ("EU") and those parts of the Companies Act, 2014 applicable to companies reporting under IFRS. IFRS as adopted by the EU differ in certain respects from IFRS as issued by the IASB. References to IFRS hereafter should be read as references to IFRS as adopted by the EU. The IFRS applied in these financial statements were those effective for accounting periods ending on 31 December 2020. The Consolidated financial statements are also prepared in compliance with the Companies Act, 2014 and Article 4 of the IAS Regulation. In presenting the Company financial statements together with the Consolidated financial statements, the Company has availed of the exemption in Section 304(2) of the Companies Act, 2014 not to present or file its individual Statement of Profit and Loss and related notes that form part of the approved Company financial statements.

2.2 BASIS OF PREPARATION

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates. The Consolidated financial statements are presented in US dollars ('US\$') being the presentation currency of the Group. All amounts have been rounded to the nearest thousand, unless otherwise indicated. The financial statements have been prepared on the going concern basis of accounting and under the historical cost convention, as modified by the measurement at the fair value of share options and derivative financial instruments.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's and Group's accounting policies. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the entity and Group financial statements are disclosed in Note 3.

2.3 NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

This section includes information on new accounting standards, amendments and interpretations, whether they are effective for the current year or in later years, and how they are expected to impact the financial position and performance of the Group.

Adoption of New Accounting Standards & Interpretations

In the current year, the Group has applied the below amendments to IFRS Standards and Interpretations issued by the Board that are effective for an annual period that begins on or after 1 January 2020. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

Amendments to IFRS 3 Definition of a business

The amendments clarify that while businesses usually have outputs, outputs are not required for an integrated set of activities and assets to qualify as a business. To be considered a business an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs.

Additional guidance is provided that helps to determine whether a substantive process has been acquired.

For the year ended 31 December 2020 (continued)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (CONTINUED)

The amendments introduce an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business. Under the optional concentration test, the acquired set of activities and assets is not a business if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar assets.

The amendments are applied prospectively to all business combinations and asset acquisitions for which the acquisition date is on or after the first annual reporting period beginning on or after 1 January 2020, with early application permitted. This amendment did not have a material impact on the Group or Company in 2020.

Amendments to IAS 1 and IAS 8 Definition of material

The amendments are intended to make the definition of material in IAS 1 easier to understand and are not intended to alter the underlying concept of materiality in IFRS Standards. The concept of 'obscuring' material information with immaterial information has been included as part of the new definition.

The threshold for materiality influencing users has been changed from 'could influence' to 'could reasonably be expected to influence'.

The definition of material in IAS 8 has been replaced by a reference to the definition of material in IAS 1. In addition, the IASB amended other Standards and the Conceptual Framework that contain a definition of material or refer to the term 'material' to ensure consistency.

The amendments are applied prospectively for annual periods beginning on or after 1 January 2020, with earlier application permitted. This amendment did not have a material impact on the Group or Company in 2020.

Amendments to References to the Conceptual Framework in IFRS Standards

Together with the revised Conceptual Framework, which became effective upon publication on 29 March 2018, the IASB has also issued Amendments to References to the Conceptual Framework in IFRS Standards. The document contains amendments to IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, and SIC-32.

Not all amendments, however, update those pronouncements with regard to references to and quotes from the framework so that they refer to the revised Conceptual Framework. Some pronouncements are only updated to indicate which version of the Framework they are referencing to (the IASC Framework adopted by the IASB in 2001, the IASB Framework of 2010, or the new revised Framework of 2018) or to indicate that definitions in the Standard have not been updated with the new definitions developed in the revised Conceptual Framework.

The amendments, where they actually are updates, are effective for annual periods beginning on or after 1 January 2020, with early application permitted. This amendment did not have a material impact on the Group or Company in 2020.

Amendments to IFRS 9, IAS 39 and IFRS 7 - Interest Rate Benchmark Reform

In September 2019, the IASB issued amendments to IFRS 9, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures, which concludes phase one of its work to respond to the effects of Interbank Offered Rates (IBOR) reform on financial reporting.

The amendments provide mandatory temporary reliefs which enable hedge accounting to continue during the period of uncertainty before the replacement of an existing interest rate benchmark with an alternative nearly risk-free interest rate (an RFR). To the extent that a hedging instrument is altered so that its cash flows are based on an RFR, but the hedged item is still based on IBOR (or vice versa), there is no relief from measuring and recording any ineffectiveness that arises due to differences in their changes in fair value. The amendments are effective from 1 January 2020 and must be applied retrospectively. However, any hedge relationships that have previously been dedesignated cannot be reinstated upon application, nor can any hedge relationships be designated with the benefit of hindsight. This amendment did not have a material impact on the Group or Company in 2020.

Amendment to IFRS 16 - COVID-19-Related Rent Concessions

The impact of COVID-19 to financial reporting is widespread and uncertain in duration. Entities are severely impacted by the COVID-19 pandemic, which is why many lessors around the world have provided or are expected to provide an economic relief in the form of rent concessions to lessees that are, in some cases, encouraged or required by governments or jurisdictional authorities. Rent concessions include rent holidays or reduced rent payments for a period, possibly followed by increased rent payments in future periods.

For the year ended 31 December 2020 (continued)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (CONTINUED)

In May 2020 the IASB provided a practical expedient that permits lessees (not lessors) to not assess whether rent concessions that occur as a direct consequence of the COVID-19 pandemic and meet specified conditions are lease modifications and, instead, to account for those rent concessions in profit or loss as if they were not lease modifications.

The practical expedient only applies to rent concessions occurring as a direct consequence of the COVID-19 pandemic and only if all of the following conditions are met:

• › the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;
• › any reduction in lease payments affects only payments due on or before 30 June 2021; and
• › there is no substantive change to other terms and conditions of the lease.

When applying the practical expedient, the rent relief could be treated as either:

• 1. a variable rent expense in profit or loss against the lease liability to derecognise the part of the lease liability that has been forgiven or waived, or;
• 1. a deferral of lease payments from one period to another, which only affects the timing of payments. A lessee would continue to recognise interest on the lease liability and reduce that liability for lease payments, or;
• 1. a combination of the above.

This amendment did not have a material impact on the Group or Company in 2020.

New and revised IFRS Standards in issue but not yet effective

At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRS Standards that have been issued but are not yet effective:

IFRS 10 and IAS 28 (amendments)	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
Amendments to IAS 1	Classification of Liabilities as Current or Non-current
Amendments to IFRS 3	Reference to the Conceptual Framework
Amendments to IAS 16	Property, Plant and Equipment—Proceeds before Intended Use
Amendments to IAS 37	Onerous Contracts – Cost of Fulfilling a Contract
Annual Improvements to IFRS Standards 2018-2020 Cycle	Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IFRS 16 Leases, and IAS 41 Agriculture
Amendment to IFRS 16	COVID-19-Related Rent Concessions
Amendments to IFRS 17	Insurance Contracts
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16	Interest Rate Benchmark Reform – Phase 2
Amendments to IAS 1 and IFRS Practice Statement 2	Disclosure of Accounting Policies
Amendments to IAS 8	Definition of Accounting Estimates

The directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods, except as noted below:

For the year ended 31 December 2020 (continued)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (CONTINUED)

Amendments to IFRS 10 and IAS 28 – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The amendments to IFRS 10 and IAS 28 deal with situations where there is a sale or contribution of assets between an investor and its associate or joint venture. Specifically, the amendments state that gains or losses resulting from the loss of control of a subsidiary that does not contain a business in a transaction with an associate or a joint venture that is accounted for using the equity method, are recognised in the parent's profit or loss only to the extent of the unrelated investors' interests in that associate or joint venture. Similarly, gains and losses resulting from the remeasurement of investments retained in any former subsidiary (that has become an associate or a joint venture that is accounted for using the equity method) to fair value are recognised in the former parent's profit or loss only to the extent of the unrelated investors' interests in the new associate or joint venture.

The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments will not have an impact on the Group's consolidated financial statements in future periods.

Amendments to IAS 1 – Classification of Liabilities as Current or Non-current

The amendments to IAS 1 affect only the presentation of liabilities as current or non-current in the statement of financial position and not the amount or timing of recognition of any asset, liability, income or expenses, or the information disclosed about those items.

The amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period, specify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the end of the reporting period, and introduce a definition of 'settlement' to make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

The amendments are applied retrospectively for annual periods beginning on or after 1 January 2023, with early application permitted.

Amendments to IFRS 3 – Reference to the Conceptual Framework

The amendments update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Framework. They also add to IFRS 3 a requirement that, for obligations within the scope of IAS 37, an acquirer applies IAS 37 to determine whether at the acquisition date a present obligation exists as a result of past events. For a levy that would be within the scope of IFRIC 21 Levies, the acquirer applies IFRIC 21 to determine whether the obligating event that gives rise to a liability to pay the levy has occurred by the acquisition date.

Finally, the amendments add an explicit statement that an acquirer does not recognise contingent assets acquired in a business combination.

The amendments are effective for business combinations for which the date of acquisition is on or after the beginning of the first annual period beginning on or after 1 January 2022. Early application is permitted if an entity also applies all other updated references (published together with the updated Conceptual Framework) at the same time or earlier.

Amendments to IAS 16 – Property, Plant and Equipment— Proceeds before Intended Use

The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced before that asset is available for use, i.e. proceeds while bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Consequently, an entity recognises such sales proceeds and related costs in profit or loss. The entity measures the cost of those items in accordance with IAS 2 Inventories.

The amendments also clarify the meaning of 'testing whether an asset is functioning properly'. IAS 16 now specifies this as assessing whether the technical and physical performance of the asset is such that it is capable of being used in the production or supply of goods or services, for rental to others, or for administrative purposes.

If not presented separately in the statement of comprehensive income, the financial statements shall disclose the amounts of proceeds and cost included in profit or loss that relate to items produced that are not an output of the entity's ordinary activities, and which line item(s) in the statement of comprehensive income include(s) such proceeds and cost.

The amendments are applied retrospectively, but only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the entity first applies the amendments.

For the year ended 31 December 2020 (continued)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3 NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (CONTINUED)

The entity shall recognise the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of that earliest period presented.

The amendments are effective for annual periods beginning on or after 1 January 2022, with early application permitted.

Amendments to IAS 37 – Onerous Contracts—Cost of Fulfilling a Contract

The amendments specify that the 'cost of fulfilling' a contract comprises the 'costs that relate directly to the contract'. Costs that relate directly to a contract consist of both the incremental costs of fulfilling that contract (examples would be direct labour or materials) and an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).

The amendments apply to contracts for which the entity has not yet fulfilled all its obligations at the beginning of the annual reporting period in which the entity first applies the amendments. Comparatives are not restated. Instead, the entity shall recognise the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings or other component of equity, as appropriate, at the date of initial application.

The amendments are effective for annual periods beginning on or after 1 January 2022, with early application permitted.

Annual Improvements to IFRS Standards 2018–2020

The Annual Improvements include amendments to four Standards.

IFRS 1 First-time Adoption of International Financial Reporting Standards

The amendment provides additional relief to a subsidiary which becomes a first-time adopter later than its parent in respect of accounting for cumulative translation differences. As a result of the amendment, a subsidiary that uses the exemption in IFRS 1:D16(a) can now also elect to measure cumulative translation differences for all foreign operations at the carrying amount that would be included in the parent's consolidated financial statements, based on the parent's date of transition to IFRS Standards, if no adjustments were made for consolidation procedures and for the effects of the business combination in which the parent acquired the subsidiary. A similar election is available to an associate or joint venture that uses the exemption in IFRS 1:D16(a).

The amendment is effective for annual periods beginning on or after 1 January 2022, with early application permitted.

IFRS 9 Financial Instruments

The amendment clarifies that in applying the '10 per cent' test to assess whether to derecognise a financial liability, an entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the other's behalf.

The amendment is applied prospectively to modifications and exchanges that occur on or after the date the entity first applies the amendment.

The amendment is effective for annual periods beginning on or after 1 January 2022, with early application permitted.

IFRS 16 Leases

The amendment removes the illustration of the reimbursement of leasehold improvements.

As the amendment to IFRS 16 only regards an illustrative example, no effective date is stated.

IAS 41 Agriculture

The amendment removes the requirement in IAS 41 for entities to exclude cash flows for taxation when measuring fair value. This aligns the fair value measurement in IAS 41 with the requirements of IFRS 13 Fair Value Measurement to use internally consistent cash flows and discount rates and enables preparers to determine whether to use pretax or post-tax cash flows and discount rates for the most appropriate fair value measurement.

The amendment is applied prospectively, i.e. for fair value measurements on or after the date an entity initially applies the amendment.

The amendment is effective for annual periods beginning on or after 1 January 2022, with early application permitted.

For the year ended 31 December 2020 (continued)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.4 BASIS OF CONSOLIDATION

The Group financial statements consolidate the financial statement of the Company and all of its subsidiary undertakings made up to the relevant year-end. The subsidiary undertakings' financial years are all coterminous with those of the Company.

Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The results of subsidiary undertakings acquired or disposed of during the year are included in the Consolidated Statement of Profit and Loss from the date of their acquisition or up to the date of their disposal. Where necessary, adjustments are made to the financial statements of the subsidiaries to bring their accounting policies into line with those used by the Group.

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated.

2.5 GOING CONCERN

The Group and Parent Company financial statements have been prepared on the going concern basis, which assumes that the Group (including Datalex plc) will be able to continue in operational existence for the foreseeable future. The time period that the Board has considered in evaluating the appropriateness of the going concern basis in preparing the Group and Parent Company financial statements for 2020 is a period of twelve months from the date of approval of these financial statements.

The Group incurred a loss of US\$6.5m in 2020 (2019: US\$12.1m). At 31 December 2020, the Group had net liabilities of US\$23.7m (2019: US\$17.1m) and net current liabilities of US\$23.0m (2019: US\$16.5m). The total decrease in cash was US\$0.03m (2019: decrease of US\$5.3m).

The Group and Parent Company continues to operate in a competitive environment which has been further impacted by the global COVID-19 pandemic. COVID-19 has had a significant adverse impact on the aviation industry to date and there remains uncertainty as to when the industry will recover from it. This leads to the risk that airlines could fail in the near future due to the travel restrictions imposed by governments throughout the world. This gives rise to material uncertainties for the business that may cast significant doubt on the Group and Parent Company's ability to continue as a going concern.

The actions taken by the Group and Parent Company in 2019 and 2020 have assisted the Group and Parent Company in navigating the challenges associated with COVID-19. Over the course of 2020, the Group and Parent Company:

• › Secured the lifting of the suspension of trading of the Company shares on Euronext Dublin. This facilitates greater liquidity in the shares and allows the Group to place additional equity with the market to assist with the funding requirements of the Group. The Board are assessing the current market conditions and waiting for the appropriate time to raise additional capital.
• › Obtained shareholder approval for the extension of the repayment date of the loan facility with Tireragh Limited (a company ultimately beneficially owned by Mr. Dermot Desmond, also a substantial shareholder in the Group via IIU Nominees Limited) to 1 November 2021. As part of this facility, the Group currently has access to an undrawn facility in the amount of €10m. There have been no additional draw downs on the Tireragh loan facility since December 2019. The Company has achieved the relevant financial covenant targets to date. During 2020, Tireragh Limited waived obligations to provide certain financial information within specified time limits, including delivery of the Group's 2019 annual report within 120 days of year end (as permitted by the European Securities and Markets Authority and the Central Bank of Ireland) and the time limits within which budget projections and other periodic reporting obligations were provided during the year. Further, Tireragh Limited provided a waiver extending the time to deliver specified security documents in connection with a subsidiary of the Group and provided a waiver permitting the Group flexibility to negotiate extended payment terms with key suppliers in connection with COVID-19 measures taken by the Group. (Note 14 & Note 31).
• › Took early & decisive action by reducing operating expenses and improving cash flows. These actions include a targeted redundancy programme, re-negotiating business partner arrangements, eliminating discretionary spending, freezing recruitment, implementing voluntary leave options and temporary reduced working hours for all employees.
• › Continued to successfully negotiate extended payment terms with key suppliers.

The significant reduction in costs incurred in the financial year has mitigated some of the impact of the loss of revenues from our customers. In evaluating our cash flow needs for the next twelve months, the Directors have taken into account our commitments to customers in both deployment and ongoing service commitments.

For the year ended 31 December 2020 (continued)

The UK Corporate Governance Code requires the Board to assess and report on the prospects of the Group and whether the business is a going concern. In considering this requirement, the Directors have taken into account the Group's (including Datalex plc) forecast cash flows, liquidity, borrowing facilities and related covenant requirements and the expected operational activities of the Group.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.5 GOING CONCERN (CONTINUED)

To prepare financial forecasts for the business is challenging in this environment, as there are a number of different outcomes, both positive and negative which could arise as a result of COVID-19. The Directors have prepared its 12 month future forecast to take into account the potential impacts that COVID-19 could have on the Group, such as:

• › Slow recovery of transaction volumes as the Group emerges from COVID-19. The Group expects transaction volumes to be 56% of 2019 levels in H1 2021, improving to 68% in H2 2021 and 74% in H1 2022;
• › A material reduction in the assumed cash collected from the HNA Group subsidiaries, whom have been impacted by the HNA Group restructuring process in China;
• › Except for customers whom have indicated their intention to migrate away from the Group over the next 12 months, the Group will retain all customers;
• › The extended delay to a large project implementation;
• › The continued delay to new win opportunities due to the impact of COVID-19 on airlines;
• › Significant reduction across all operating costs of the business; and
• › Continued ability to negotiate extended payment terms with some suppliers.

In their sensitivity analysis, the Directors made further assumptions to reflect COVID-19 having a more adverse impact on the global economy, the aviation industry & Datalex, together with certain actions the Group would take in these circumstances, such as:

• › Slower recovery in transaction volumes and post go-live services versus forecast;
• › The assumed loss of a small number of customers;
• › The removal of further anticipated cash collections from HNA Group subsidiaries; and
• › Additional cost saving measures across the business being implemented, impacting headcount, contractors and operating costs.

Based on the forecasts prepared by management, and the additional sensitivity analysis performed, both of which have been approved by the Board, following drawdown of €10m, no cash shortfalls are anticipated in the 12 month period to 30 April 2022.

The Group is currently required to repay the Tireragh Limited loan facility - which at the year end date consisted of a principal of €11.3m, accrued interest of €1.3m and facility arrangement fees of €2.7m on 1 November 2021. The Group's current forecasts indicate that there will not be sufficient resources to repay the loan facility as it falls due, and additional funding will be required by the Group in order to repay the amount owing. However, subsequent to the year-end, the Board has received from Tireragh Limited, confirmation of its willingness to extend the facility repayment date to 30 September 2022. This extension, should it be required, would be subject to independent shareholder approval as a related party transaction under Euronext Dublin Listing Rules.

During 2021, the Company intends to raise sufficient capital, net of expenses, for the repayment of the loan facility, including related interest charges and arrangement fees, and the funding of the Group's working capital needs. The extension of the repayment date on the loan facility will provide the Group with the capability to choose the most optimal time and structure to raise such capital. Capital fundraising remains the preferred source of funding for the Group. Mr. Desmond, the Groups largest ultimate beneficial shareholder, has informed the Group that he will procure support for the capital raise and the participation of IIU Nominees Limited in its pro rata entitlement.

The Directors recognise that, there are material uncertainties which may cast significant doubt as to the Group and Parent Company's ability to continue as a going concern. Nevertheless, on the basis of Tireragh Limited's intention to continue to support the Group (including Datalex plc), including the availability of the undrawn loan facilities as detailed above, the Directors have a reasonable expectation that the Group and Parent Company will be able to successfully navigate the present uncertainties and as a result, are satisfied that the financial statements be prepared on a going concern basis.

2.6 FOREIGN CURRENCY TRANSLATION

Items included in the financial statements of each of the Group's subsidiaries are measured using the currency of the primary economic environment in which the subsidiary operates ('the functional currency'). The Consolidated financial statements are presented in US Dollar, which is the presentational currency of the Group and the functional currency of the Parent Company.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the Statement of Financial Position date.

For the year ended 31 December 2020 (continued)

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of profit and loss.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.6 FOREIGN CURRENCY TRANSLATION (CONTINUED)

The results and financial position of all the Group's entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• I. assets and liabilities for each statement of financial position presented, are translated at the closing exchange rate at the date of that statement of financial position;
• II. income and expenses for each statement of profit and loss are translated at average exchange rates unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the date of the transaction; and
• III. all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net qualifying investment in foreign operations are taken to shareholders' equity.

2.7 REVENUE RECOGNITION

(A) GENERAL

The Group applies IFRS 15, Revenue from Contracts with Customers ("IFRS 15").

Revenue is recognised by applying the following five step model to the contracts with customers.

• I. Identify the contract with the customer;
• II. Identify the performance obligations in the contract;
• III. Determine the transaction price;
• IV. Allocate the transaction price; and
• V. Recognise revenue when (or as) a performance obligation is satisfied.

IFRS 15 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires extensive disclosures.

(B) CATEGORIES OF REVENUE

The Group considers whether there are various products and services within a contract with a customer that are deemed distinct performance obligations to which the transaction price needs to be allocated. In determining the transaction price for the contractual arrangements, the Group considers the effects of variable consideration, transaction-based license revenue, the existence of significant financing components, upfront payments, and consideration payable to the customer (if any). Accordingly, the Group allocates the transaction price based on the relative stand-alone selling prices of the performance obligations identified within a contract and each portion is recognised separately as each performance obligation is satisfied.

The Group's revenue is divided into three principal categories, with the following significant elements:

1. Platform revenue

(a) License

Customer use of the Datalex software can include (i) air fare bookings, (ii) non-air ancillary bookings such as car, hotel and insurance, (iii) air ancillary items such as seat fees or bag fees, and (iv) hosting fees when the customer's software solution is hosted by Datalex.

Licenses provide customers with a right to access the Datalex platform over time. Software revenue is recognised over time for the contract term determined in accordance with IFRS 15, commencing when the license is usable by the customer following completion of configuration and installation.

(b) Bundled performance obligations

License and services are treated as a bundled product offering where services significantly integrate, customise, or modify the on-premise software or cloud service to which they relate. Where this arises, the license and services are combined into one distinct bundle of products and services and treated as a single performance obligation.

A bundled performance obligation is recognised commencing on completion of implementation services or the go-live date, over the contract term as the license is considered to be the primary or dominant component of such bundled performance obligations. Where bundled performance obligations exist, either upon golive or on completion of implementation services, we commence revenue recognition on the bundled revenues pertaining to the completed implementation period.

For the year ended 31 December 2020 (continued)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.7 REVENUE RECOGNITION

As the measure of progress for revenue recognition we use an output measure, namely project tracking tools that allow both us and our customer to monitor and measure delivery of the various components underpinning the customised software. We consider that the use of such a system provides the most faithful depiction of our progress in satisfying the delivery of the bundled license and implementation services.

(c) Managed services/hosting

Managed services/hosting facilitates customer use of the Datalex product suite. It is offered to those customers that do not manage the solution themselves.

As the customer simultaneously receives and consumes the benefits provided by the entity's performance as the entity performs, revenue from managed services performance obligations is recognised over time, on a rateable basis.

(d) Sale of Code

The Group may sell historic, no longer supported software code to customers where the customers require the software code to maintain their operations but it is no longer economic or feasible for Datalex to continue to support or develop the software code. The sale of the code could occur via granting of a perpetual unsupported licence for the software code or the transfer of the ownership of the Intellectual Property in its entirety to the customer. Revenue is recognised when control of the software is passed to the customer.

(e) Termination fees

Customer contract termination fees are recognised when either of the following conditions are met:

• 1) there are no further performance obligations to transfer goods or services to the customer and all, or substantially all, of the contractual consideration due from the customer has been received and is non-refundable, or;
• 2) the contract has been terminated and the contractual consideration received from the costumer is non-refundable.

Amounts recognised as revenue on terminated contracts include the non-refundable advanced cash payments received less revenue recognised to date and deferred fulfilment costs not yet expensed to the Statement of Profit and Loss. Additionally, certain contracts allow for Datalex to invoice pre-agreed termination fees in the event of early termination of contractual relationships by the customer. Revenue associated with pre-agreed termination fees is only recognised upon formal contract termination and when IFRS 15 is no longer applicable.

2. Professional services revenue

Professional services include implementation services, post go-live services, training and other services. Services such as configuration and installation of software are typically considered a distinct performance obligation except where the services significantly customise, integrate or modify the software to which they relate or the licence and services are highly interdependent or interrelated, in which case it is treated as a bundled performance obligation and reported under Platform Revenue.

Revenues from services are recognised over time as the relevant service days are utilised/drawn down by the customer or upon expiry of their usage period for any unused days. Certain customer contracts may contain provisions preventing the carry forward of unused man days into a subsequent year. Where such provisions exist and are applied, unused man days at a period-end date will be recognised upon expiration. Where carry forward provisions exist, the recognition of revenue will follow the contractual arrangement or as agreed with the customer based on customary practice.

We typically measure progress of our service arrangements using an input method, being labour days akin to percentage completion. Such a method of measuring progress faithfully depicts the transfer of services to the customer.

3. Consultancy revenue

Consultancy revenues derive from the Group's TPF (Transaction Processing Facility) specialist consultancy services concentrated on transaction processing facilities. As the customer simultaneously receives and consumes the benefits provided by the entity's performance as the entity performs, revenue from consultancy services performance obligations is recognised over time, on a rateable basis.

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2.7 REVENUE RECOGNITION (CONTINUED)

(C) SIGNIFICANT REVENUE JUDGEMENTS AND ESTIMATES

All of the judgements and estimates mentioned below can significantly impact the timing and amount of revenue to be recognised.

Identification of contract

We frequently enter into new arrangements with existing customers. Such arrangements can be either a new contract or the modification of prior contracts with the customer. In making this determination, we consider: whether there is a connection between the new arrangement and the pre-existing contracts, whether the products and services under the new arrangement are highly interrelated with the products and services sold under prior contracts, and how the products and services under the new arrangement are priced. In particular, we consider the guidance in IFRS 15 which requires the exercise of judgement and consideration as to whether: the arrangement changes transaction price only, new distinct products or services are added as a result of the arrangement and whether the contract price increases by an amount that represents the standalone selling price for the additional distinct products or services provided.

Where we enter into multiple contracts with the same customer, we treat for accounting purposes those contracts as one contract if the contracts are entered into at or near the same time and are economically interrelated. Judgement is required in evaluating whether various contracts are interrelated, which includes consideration as to whether:

• I. The contracts are negotiated as a package with a single commercial objective;
• II. The amount of consideration to be paid in one contract depends on the price or performance of the other contract; or
• III. The products or services promised in the contracts (or some products or services promised in each of the contracts) are a single performance obligation.

The existence of one or more of the above factors would support the determination that multiple contracts entered into at or near the same time with the same customer are economically interrelated and require treatment for accounting purposes as one contract.

Contract term

For IFRS 15 purposes, the contract term is the period during which the parties to the contract have present and enforceable rights and obligations. The contractual term varies across customers, with many contracts providing for early termination fees and certain contracts containing auto renewal provisions. Renewal options will not generally be considered in determining the contract term, as the renewal is generally not within the control of Datalex and so only the initial contract term will be considered. However, we assess renewal options to determine if any provide a material right as defined in IFRS 15. See below for our policy in respect of material rights. We consider the impact of termination penalties in determining the term of the contract for IFRS 15 purposes and assessing whether that term is equal to the contractual term. Termination provisions and penalties in the case of non-performance ("for cause") or insolvency are disregarded in assessing contractual term. Termination penalties for early termination other than for cause are considered in determining the contract term for revenue recognition purposes.

Where a contract can be terminated early for other than "for cause", we will determine whether there is a termination penalty and whether that termination penalty is substantive. If a contract can be terminated early for no compensation then, for IFRS 15 purposes, the contracting parties are unlikely to have enforceable rights and obligations, regardless of the stated contractual term. Where a contract is terminable early for payment of a penalty and that penalty is substantive, it is likely that the stated/ contractual term is the term for IFRS 15 purposes. Judgement is required in determining whether a termination penalty or provision is substantive, and this requires consideration of the level of any penalty in absolute terms and relative to the contractual value.

Identification of performance obligations

Our customer contracts often include various products and services. Typically, the products and services outlined in the Categories of Revenue section above qualify as separate performance obligations and the relevant transaction price is recognised separately as each performance obligation is satisfied. Judgement is required, however, in determining whether a good or service is considered a separate performance obligation. In order for a good or service to be considered distinct, both of the following criteria must be met:

• I. the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e. the good or service is capable of being distinct); and
• II. the entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e. the promise to transfer the good or service is distinct within the context of the contract).

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2.7 REVENUE RECOGNITION (CONTINUED)

(a) Bundled performance obligations

Judgement is required to evaluate whether such services significantly integrate, customise, or modify the on-premises software or cloud service to which they relate. Non distinct products or services are combined into one distinct bundle of products and services and treated as a single performance obligation. This arises in instances where the extent of installation or configuration services significantly modify or customise the underlying software.

Judgment is required in determining if the license is considered to be the primary or dominant component of such bundled performance obligations. Where the licence is considered to be the dominant component, the revenue for the bundle is recognised over the contract term.

(b) Material rights

Where contracts provide customers with an option to acquire additional products or services, typically through a renewal option, we exercise judgement in considering whether such an option provides a material right (as defined by IFRS 15) to the customer that they would not receive without entering into that contract. In evaluating whether such an option is a material right we consider whether the option provides the customer with a discount that is incremental to the range typically given to that or similar customers for those products or services.

Where a material right exists and the products or services are similar to the original products or services in the contract and are provided in accordance with the terms of the original contract rather than separately valuing the option, we avail of a practical alternative in IFRS 15. This practical alternative enables us include within the initial estimate of transaction price the estimate of the expected consideration by reference to the goods or services expected to be provided and the corresponding expected consideration. The expected consideration for any renewal period would then be added to the performance obligation to which it relates (typically the license) and recognised over the expected term of the contract (initial plus expected renewal period).

Determination of transaction price

(a) Variable consideration

We apply judgement in determining the amount to which we expect to be entitled in exchange for transferring promised products or services to a customer. This includes estimates as to whether and to what extent subsequent concessions or payments may be granted to customers and whether the customer is expected to pay the contractual fees. In this judgement, we consider our history both with the respective and comparable customers. Typically for Datalex contracts, variable consideration takes the form of:

• I. Scorecards (bonus or penalties linked to agreed delivery metrics);
• II. Hosting downtime credits;
• III. Hosting increments;
• IV. Contract penalties/ bonuses; and/ or
• V. Transaction or usage-based revenue.

In considering the likelihood of incremental or variable consideration arising, management has considered the range of potential outcomes and associated probabilities, including whether incremental billings will or could arise and whether it is highly probable that any such estimate of variable consideration could be subject to significant reversal when the uncertainties giving rise to the estimate crystallise.

Such features, where present, typically arise in long standing customer relationships where there is significant accumulated past experience in respect of the expected level of downtime or service. Based on this historical experience and current trading patterns with that customer, Datalex is capable of reliably estimating the expected amount of variable consideration and consequently the expected amount(s) to include in the transaction price.

The amount of variable consideration included in the estimated transaction price is subject to a constraint such that the amount included is limited to amounts for which a significant reversal of cumulative revenue recognised when the uncertainty associated with the variable consideration crystallises is not highly probable. In estimating the amount of variable consideration to be included in the transaction price we take account of whether:

• I. There are factors outside of our control that may impact the amount of variable consideration, such as robotic traffic or data mining tools, that may impact the volume of online traffic;
• II. We have a history of providing the customer or similar customers with price concessions; and
• III. Technological developments impacting our platform which may mean that as the platform evolves there is limited available history which may be used to predict or estimate customer behaviours.

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2.7 REVENUE RECOGNITION (CONTINUED)

(b) Transaction-based license revenue

In certain of our license transactions, customers pay variable fees based on products and services transacted through our platform. An exemption from the requirement to estimate variable consideration and include it within the transaction price exists for the recognition of sales or usage-based royalties promised in exchange for a license of intellectual property. This exemption only applies in the case of sales or usagebased revenues arising from a license of intellectual property. Revenues arising from such sales or usage-based royalties are recognised as the sale or usage occurs and are not included within the initial estimate of the transaction price.

In certain of our contracts where variable transaction fees apply, there are also guaranteed annual minimum license fees. Where such guaranteed fees exist, then, for purposes of estimating the transaction price, the contracted minimums only are factored into the transaction price. Revenues for the variable license element are recognised in accordance with the sales-based/ royalty-based exemption as the sale or usage occurs.

(c) Upfront payments

In certain instances, contracts with customers may contain upfront payments. Upfront fees are evaluated to determine whether the activities related to such fees satisfy a performance obligation. Where those activities do not satisfy a performance obligation, the upfront fees are included in the total transaction price that is allocated to the identified distinct performance obligations in the contract.

(d) Significant financing

Only very rarely do our contracts include significant financing components. We do not account for financing components if the period between when we transfer the promised products or services to the customer and when the customer pays for those products or services is one year or less.

Allocation of transaction price

The bases for the standalone selling prices ("SSP"s) that we use to allocate the transaction price of a customer contract to the performance obligations in the contract are outlined below. We review the estimates used for/ of standalone selling prices periodically or whenever facts and circumstances change to ensure the most objective input parameters available are used.

(a) License

The variability of our customers in terms of scale of operation, breadth of their ancillary revenue offering and further complexities such as whether the airline is a member of a global alliance or has code-share arrangements, means that the selling prices for our licenses are highly variable. As such, a representative standalone selling price is not discernible from past transactions. We have therefore used the residual method to establish the SSP for licenses sold, estimated by means of the total transaction price less the sum of the observable standalone selling prices of other products or services promised in the contract.

In instances where there is an inherent discount in a contractual arrangement, prior to allocating the discount to the performance obligations in the contract, we consider whether it relates only to one or more, but not all performance obligations. If so, the discount shall be allocated prior to estimating the residual value of the license.

(b) Managed services/ hosting

Our managed services offering is intended as an enabler of the Datalex product suite. It is offered to those customers that are unable or unwilling to manage the solution themselves. The cost of the service includes any hardware, software, maintenance and uptime management (continuous monitoring). The selling price of our managed services offering is based on the budgeted cost of the estimated activities necessary to provide the offering plus a pre-determined margin. The SSP for our managed services offering is estimated using a "cost plus" basis.

(c) Professional services

For professional services, comprising installation, post-go-live services and ad-hoc consulting, we price such offerings based on standard, daily labour rates. The nature of the professional services in these three work streams is the same. The rates at which such services are charged are based on daily rates, with those rates varying according to a number of factors including seniority of personnel involved, complexity of work and geography. As a result, we believe that use of a price range/ matrix reflecting SSP ranges according to differences in customer geography, skill set of personnel and cost base is an appropriate basis for establishing the SSP for services.

Where contractual prices fall outside of the applicable range for those services this will give rise to a discount/ premium against SSP which will be allocated across the identified performance obligations in that contract.

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2.7 REVENUE RECOGNITION (CONTINUED)

Recognition of revenue

Judgement is required to determine whether revenue is to be recognised at a point in time or over time. For performance obligations satisfied over time, we measure progress using the method that best reflects our performance in satisfying the specific performance obligation and transferring control of the promised products or services to the customer. Our license is treated as a right to access, and license revenues are recognised rateably over time from the point at which the license is usable by the customer. For professional services we measure percentage of completion based on labour hours incurred to date as a proportion of total hours allocated to the contract. If circumstances arise that may change the original estimates of revenues, costs or extent of progress toward completion, estimates are revised. For performance obligations recognised at a point in time, revenues are recognised at the point at which the customer controls the deliverable and the performance obligation has been satisfied.

Disaggregated revenue disclosures

Revenue information is analysed by operating segment, revenue category, geography and by major customer in Note 18.

2.8 SEGMENT REPORTING

The Group has identified two reportable segments, E-Business and TPF Consulting under IFRS 8, Operating Segments. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive management team.

2.9 INTANGIBLE ASSETS

Intangible assets acquired separately are capitalised at cost. Following initial recognition, intangible assets which have a finite life are carried at cost less any applicable accumulated amortisation and any accumulated impairment losses. Where amortisation is charged on assets with finite lives this expense is taken to the Consolidated Statement of Profit & Loss.

The amortisation of intangible assets is calculated to write off the book value over their useful lives on a straight-line basis on the assumption of zero residual value. Please see below for more detail of the amortisation periods applied.

The Group does not have any indefinite-lived intangible assets.

(A) RESEARCH AND DEVELOPMENT EXPENDITURE

Research expenditure is recognised as an expense as incurred. Directly attributable costs incurred on development projects (relating to the design, development and testing of new or improved products) are recognised as intangible assets when the following criteria are fulfilled:

• I. it is technically feasible to complete the intangible asset so that it will be available for use or sale;
• II. management intends to complete the intangible asset and use or sell it;
• III. there is an ability to use or sell the intangible asset;
• IV. it can be demonstrated how the intangible asset will generate probable future economic benefits;
• V. adequate technical, financial and other resources to complete the development and to use or sell the intangible asset are available; and
• VI. the expenditure attributable to the intangible asset during its development can be reliably measured.

Directly attributable costs that are capitalised include the software development employee costs.

Development expenditure that does not meet these criteria is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use on a straight-line basis over its useful life. Where objective evidence is present that the life should be less than 3 to 5 years the amortisation period is reduced accordingly.

(B) COMPUTER SOFTWARE

Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring the specific software to use. These costs are amortised over their estimated useful lives of three to five years. Costs associated with maintaining computer software programmes are recognised as an expense as incurred.

For the year ended 31 December 2020 (continued)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.9 INTANGIBLE ASSETS

(C) IMPAIRMENT

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets that are not yet available for use are tested annually for impairment, or more frequently if events or changes in circumstances indicate a potential impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

2.10 CONTRACT FULFILMENT COSTS

Costs relating directly to the fulfilment of a contract or an anticipated contract, which are expected to be recovered are capitalised and are then amortised on a systematic basis consistent with the pattern of the transfer of the services to which the asset relates, generally the licence term.

2.11 CONTRACT ACQUISITION COSTS

The Group recognises an asset for the incremental costs of obtaining a contract with a customer if it expects the costs to be recoverable and has determined that certain sales incentive programmes meet the requirements to be capitalised. Capitalised contract acquisition costs are amortised consistent with the pattern of transfer to the customer for the goods and services to which the asset relates. The Group applies the practical expedient available under IFRS 15 and does not capitalise incremental costs of obtaining contracts if the amortisation period is one year or less.

2.12 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses. Depreciation is provided on all property, plant and equipment at rates calculated to write off the cost, less estimated residual value, of each asset, on a straight-line basis over its expected useful life as follows:

Fixtures and fittings	5 years
Computer equipment	3 - 5 years

Leasehold improvements are depreciated over the shorter of their estimated useful lives or the related lease term.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date.

An item of property, plant and equipment is derecognised upon disposal (i.e. at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Consolidated Statement of Profit & Loss when the asset is derecognised.

In accordance with IAS 36 Impairment of Assets, the carrying amounts of items of Property, Plant and Equipment are reviewed at each Statement of Financial Position date to determine whether there is any indication of impairment. If an indicator of impairment is identified, an impairment review is carried out as of the reporting date to determine the recoverable amount, which is the higher of the fair value less cost to sell and/or value in use. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount.

If an indicator of impairment is found but there is no impairment charge following review, the depreciation method, the life and residual value are reviewed to ensure they remain appropriate.

If an indicator of impairment is found but there is an impairment charge identified following the review the impairment loss is recognised in the Consolidated Statement of Profit & Loss. Following the recognition of an impairment loss, the depreciation charge applicable to the asset of cash-generating unit is adjusted prospectively in order to systematically allocate the revised carrying amount, net of any residual value, over the remaining useful life.

2.13 TAXATION

The Company is managed and controlled in the Republic of Ireland and, consequently, is tax resident in Ireland.

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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.13 TAXATION (CONTINUED)

Current tax represents the expected tax payable or recoverable on the taxable profit for the year using tax rates enacted or substantively enacted at the Statement of Financial Position date and taking into account any adjustments stemming from prior years. The Group's income tax charge reflects various allowances and reliefs and planning opportunities available in the tax jurisdictions in which the Group operates. The determination of the Group's charge for income tax in the Consolidated Statement of Profit & Loss requires estimates to be made, on the basis of professional advice, in relation to certain matters where the ultimate outcome may not be certain and where an extended period may be required before such matters are determined. The amount shown for current taxation reflects tax uncertainties and is based on the Directors' estimate of:

• (i) the most likely amount; or
• (ii) the expected value of the probable outflow of economic resources that will be required.

The estimates for income tax included in the financial statements are considered appropriate but no assurance can be given that the final determination of these matters will not be materially different to the estimates included in the financial statements. Whilst it is possible, the Group does not currently anticipate that any such differences could have a material impact on the income tax provision and profit for the period in which such a determination is made nor does it expect any significant impact on its financial position in the near term. This is based on the Group's knowledge and experience, as well as the profile of the individual components which have been reflected in the current tax liability, the status of the tax audits, enquiries and negotiations in progress at each yearend, previous claims and any factors specific to the relevant tax environments.

Deferred tax is recognised, using the liability method, on all temporary differences at the Statement of Financial Positionsheet date which is defined as the difference between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets and liabilities are not subject to discounting and are measured using the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantially enacted by the end of the reporting period.

However, if the deferred tax arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit and loss, it is not accounted for.

Deferred tax is recognised in the Consolidated Statement of Other Comprehensive Income or directly in equity, if the tax relates to items that are credited or charged, in the same or a different period, in other comprehensive income or directly in equity.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and unused tax losses and credits can be utilised. The carrying amounts of deferred tax assets are reviewed at each Statement of Financial Position date and are reduced to the extent that it is no longer probable that sufficient taxable profits would be available to allow all or part of the deferred tax asset to be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

2.14 TRADE AND OTHER RECEIVABLES

The Group applies IFRS 9 Financial Instruments. IFRS 9 sets out the classification, subsequent measurement and impairment requirements for all financial assets, including trade receivables.

Recognition and initial measurement

Financial assets, including trade receivables, are recognised on the Consolidated Statement of Financial Position when, and only when, the Group becomes a party to the contractual provisions of the financial instrument.

Trade receivables that do not have a significant financing component (as defined in IFRS 15) are initially recognised at their transaction price. Trade receivables that do have a significant financing component (as defined in IFRS 15) are initially discounted using the discount rate that would be reflected in a separate financing transaction between the Datalex and the customer at contract inception. When all other financial assets are recognised initially, they are measured at fair value and in the case of financial assets not at fair value through profit and loss plus directly attributable transaction costs.

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2.14 TRADE AND OTHER RECEIVABLES (CONTINUED)

Derecognition

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired or has been transferred, and the Group has transferred substantially all risks and rewards of ownership. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that has been recognised directly in equity is recognised in profit or loss. Where this financial asset is not an equity instrument designated at fair value through Other Comprehensive Income.

Subsequent measurement

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, which approximates to fair value given the short-dated nature of these amounts.

For trade receivables which contain and do not contain a significant financing component, the Group applies the simplified approach required by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Group uses judgement in making assumptions around the risk of default and expected loss rates, based on the Group's past history, existing market conditions and comparable information, as well as forward-looking estimates at the end of each reporting period.

Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.

2.15 CONTRACT ASSETS

Trade receivables are recognised for amounts due in respect of performance obligations satisfied in advance of receiving consideration where the receipt of consideration is unconditional other than for the passage of time. Where the receipt of consideration is conditional other than for the passage of time, a contract asset shall be recognised. Judgement is required in determining whether the right to consideration is conditional other than for the passage of time.

Contract assets are classified as current or non-current depending on when it is expected that they will be realised.

Impairment

The Group assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortised cost. For contract assets, the Group applies the simplified approach required by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Group uses judgement in making assumptions around the risk of default and expected loss rates, based on the Group's past history, existing market conditions and comparable information, as well as forward-looking estimates at the end of each reporting period.

Impairment losses on contract assets are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.

2.16 TRADE AND OTHER PAYABLES

Trade and other payables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method, which approximates to fair value given the short-dated nature of these liabilities. These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured. Trade and other payables are presented as current liabilities unless Datalex has an unconditional right to defer payment for at least one year as at the reporting period.

2.17 CONTRACT LIABILITIES

Contract liabilities primarily reflect amounts due or payments received from customers in advance of the performance obligations being satisfied and revenue recognised. Contract liabilities are recognised as revenue when the Group satisfies the contract performance obligations. Contract assets and liabilities are netted if, and only if, they arise under the same customer contractual arrangement.

Contract liabilities are classified as current or non-current on the basis of when the related revenue is anticipated to be recognised.

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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.18 BORROWINGS

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the Statement of Financial Position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit and loss as other income or finance costs.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

2.19 EMPLOYEE BENEFITS

(A) PENSION OBLIGATIONS

The Group operates defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into an independently administrated pension fund.

The Group has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

The contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

(B) SHARE-BASED PAYMENT TRANSACTIONS – SHARE OPTION SCHEMES

The Group and Company operate equity-settled share-based compensation plans. Employees (including Directors) of the Group and Company receive remuneration in the form of share-based payment transactions, whereby employees render service in exchange for shares or rights over shares. The fair value of the employee services received in exchange for the grant of the share options is recognised as an expense in the Consolidated Statement of Profit and Loss. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability). Non-market vesting conditions, including Adjusted EBITDA and cash, are included in assumptions about the number of options that are expected to become exercisable.

At each statement of financial position date, the estimate of the number of options that are expected to vest (become exercisable) is revised. The impact of the revision of original estimates, if any, is recognised in the Consolidated Statement of Profit and Loss, with a corresponding adjustment to equity. The total expense is recognised over the vesting period which is the period over which all the specified vesting conditions are to be satisfied. Modifications of the performance conditions are accounted for as a modification under IFRS 2, Share-based Payment. In particular, where a modification increases the fair value of the equity instruments granted, the Group includes the incremental fair value granted in the measurement of the amount recognised for the services received over the remainder of the vesting period. Where the share-based payments give rise to the issue of new equity share capital, the proceeds received are credited to share capital (nominal value) and share premium when the options are exercised. Transaction costs for the share options are recorded against retained earnings.

Where the share-based payments give rise to the reissue of shares from treasury shares, the proceeds of the issue are credited to shareholder's equity.

The Group does not operate any cash-settled share-based payments schemes or share-based payment transactions with cash alternatives in IFRS 2. Share options exercised are accounted for at date of exercise with values attributed to share capital and share premium, based on the share option exercise price.

Taxes due by the exercisers are accounted for in accordance with employer tax regulations in the relevant jurisdictions.

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2.19 EMPLOYEE BENEFITS (CONTINUED)

(C) SHARE-BASED PAYMENT TRANSACTIONS – DEFERRED SHARE AWARDS

As disclosed in the Remuneration Report, a member of key management was granted a deferred share award. This is an equity-settled scheme. The fair value of the employee services received in exchange for the grant of this award is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the award granted, excluding the impact of any non-market vesting conditions (for example profitability). Non-market vesting conditions, including Adjusted EBITDA and cash, are included in assumptions about the number of awards that are expected to become exercisable. At each statement of financial position date, the estimate of the number of awards that are expected to become exercisable is revised. The impact of the revision of original estimates, if any, is recognised in the Consolidated Statement of Profit & Loss, with a corresponding adjustment to equity. The total expense is recognised over the vesting period which is the period over which all the specified vesting conditions are satisfied. Modifications of the performance conditions are accounted for as a modification under IFRS 2. In particular, where a modification increases the fair value of the equity instruments granted, the Group includes the incremental fair value granted in the measurement of the amount recognised for the services received over the remainder of the vesting period. Given that the Group has used treasury shares to set up this award, any related proceeds, net of any transaction cost, will be credited to the treasury shares reserve.

Share options exercised are accounted for at date of exercise with values attributed to share capital and share premium, based on the share option exercise price.

Taxes due by the exercisers are accounted for in accordance with employer tax regulations in the relevant jurisdictions.

(D) COMPANY FINANCIAL STATEMENTS

In relation to the Company financial statements, the annual cost corresponding to share-based awards, JSOP awards and deferred share awards is recorded as part of the cost of investment in subsidiaries in the Company Statement on Financial Position.

(E) LONG TERM INCENTIVE PLAN ("LTIP")

As explained in Note 15, the Group has implemented a longterm incentive plan which operates in a similar way to a longterm cash bonus (the "Long Term Incentive Plan" or "LTIP"). At each statement of financial position date, the related provision is calculated based on the estimated fair value of the obligation resulting from applying a straight-line charge approach to the estimated final cash obligation over the term of the award (three years). Remeasurements are recognised immediately through profit or loss.

2.20 LEASES

The Group recognises a right-of-use asset and a lease liability at the date that the lease commences. The right-of-use asset is initially measured at cost and subsequently at cost less any accumulated depreciation and impairment losses, and adjusted for certain remeasurements of the lease liability. Right-of-use assets are depreciated over the shorter of the lease term and useful life of the underlying asset.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. The Group typically uses its incremental borrowing rate as the discount rate. Due to the limited financing options available to the Group, the incremental borrowing rates for the Group's leases have been set referencing the interest rate on the Tireragh Limited loan facility.

The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. The lease liability is remeasured when there is a change in future lease payments arising from a change in an index or a rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.

The Group has applied judgement to determine the lease term for some lease contracts that include termination or renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which affects the amount of lease liabilities and right-of-use assets recognised.

The weighted average Incremental Borrowing rate applied during 2020 was 10.55%.

2.21 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

For the year ended 31 December 2020 (continued)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.22 EQUITY

SHARE CAPITAL

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax from the proceeds.

TREASURY SHARES

Where the Company issues or purchases equity share capital under its Joint Share Ownership Plan or Deferred Share Scheme, which are held in trust by an Employee Benefit Trust, these shares are classified as treasury shares on consolidation until such time as the interests vest and the participants acquire the shares from the Trust or the interests lapse and the shares are forfeited, disposed of by the Trust or otherwise cancelled by the Company. Where such shares are subsequently sold or re-issued, any consideration is included in Total Equity. Treasury shares have been excluded in the calculation of basic and diluted earnings per share (see Note 25).

DIVIDENDS

Dividend distributions to the Company's shareholders are recognised as a liability in the Group's and Company's financial statements in the period in which the dividends are approved by the Company's shareholders. Proposed dividends that are approved after the Statement of Financial Position date are not recognised as a liability at the Statement of Financial Position date but are disclosed in the dividends note (Note 27).

2.23 INVESTMENT IN SUBSIDIARIES

Investments in equity shares in subsidiaries included in the Company Statement of Financial Position are stated at cost less allowance for impairment. Such investments are tested for impairment at each statement of financial position date or earlier if events or circumstances indicate that the carrying amount exceeds its recoverable amount. An impairment loss is recognised in profit or loss as the amount by which the asset's carrying amount exceeds its recoverable amount.

2.24 CASH ADVANCES FROM CUSTOMERS

Cash advances from customers consist of payments received from customers in advance of revenue recognition and are initially measured at fair value and released to the statement of profit and loss at the time the related revenue is earned under the applicable revenue recognition policy as stated in Note 2.7 above.

2.25 FINANCE INCOME AND COSTS

Interest income is recognised in the Consolidated Statement of Profit and Loss as it accrues using the effective interest method. Finance costs comprise interest payable on borrowings calculated using the effective interest rate method, facility fees and the unwinding of discounts on provisions. The interest expense component of lease arrangements is recognised in the Consolidated Statement of Profit and Loss using the effective interest rate method.

2.26 EXCEPTIONAL ITEMS

The Group has adopted a format which seeks to highlight significant items within the Group results for the year. Exceptional items are material non-recurring items that derive from events or transactions that fall within the ordinary activities of the Group and which individually or, if of a similar type, in aggregate, are separately disclosed by virtue of their size or incidence. Such items may include litigation costs and payments or receipts arising from court case judgements, or once off costs or income where separate identification is important to gain an understanding of the financial statements. Judgement is used by the Group in assessing the particular items, which by virtue of their scale and nature should be disclosed in the Statement of Profit and Loss and related notes as exceptional items. Exceptional items recorded in the year ended 31 December 2020 are presented in Note 23. Exceptional items are included within the statement of profit and loss captions to which they relate and are disclosed either on the face of the consolidated statement of profit and loss or in the notes thereto.

2.27 EARNINGS PER SHARE

The Group presents basic and diluted earnings per share ("EPS") information for its ordinary shares. Basic EPS is determined by dividing the consolidated profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is calculated by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, including share options granted to employees and awards under employee share award schemes.

For the year ended 31 December 2020 (continued)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.28 ONEROUS CONTRACTS

If the Group has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision. However, before a separate provision for an onerous contract is established, the Group recognises any impairment loss that has occurred on assets dedicated to that contract.

An onerous contract is a contract under which the unavoidable costs (i.e., the costs that the Group cannot avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it.

2.29 PROVISIONS

A Provision is recognised in the Consolidated Statement of Financial Position when the Group has a present obligation (either legal or constructive) as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are measured at the Director's best estimate of the expenditure required to settle the obligation at the Statement of Financial Position date and are discounted to present value where the effect is material.

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan and after it announced its main provisions which has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan.

A contingent liability is not recognised but is disclosed where the existence of the obligation will only be confirmed by future events or where it is not probable that an outflow of resources will be required to settle the obligation or where the amount of the obligation cannot be measured with reasonable reliability. Contingent assets are not recognised but are disclosed where an inflow of economic benefits is probable.

2.30 GOVERNMENT GRANTS

Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable. Amounts are recognised as income over the periods necessary to match them with the related costs and are deducted in reporting the related expense.

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the Consolidated and Company financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions concerning the future that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these judgements and estimates.

Estimates and judgements are evaluated, reviewed and revised on an ongoing basis based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities at 31 December 2020 within the next financial year are discussed below.

Information about critical judgements and significant estimates in applying accounting policies that have the most significant impact on the amounts recognised in the financial statements are set out below:

JUDGEMENTS

(A) REVENUE RECOGNITION

Our accounting policy for revenue, including significant judgements is set out in Note 2.7. Significant judgement is exercised in determining individual performance obligations, determining appropriate Standalone Selling Prices, whether certain performance obligations should be bundled and the identification of material rights.

It was determined that new commercial arrangements entered into with HNA group airlines did not meet the requirements of Step 1 of IFRS 15 revenue recognition on the basis that the collection of the contract consideration was not deemed probable. As a result, no revenue has been recognised on these arrangements despite ongoing services being provided during 2020. A materially different outcome would be recorded in the 2020 Consolidated Statement of Profit and Loss had the commercial arrangements with the HNA group airlines met the Step 1 requirements of IFRS 15. The application of this judgement has a significant impact on the presentation of the financial results of the Group. The accounting standards require that revenue recognition be deferred until cash has been received from the HNA subsidiary contracts.

For the year ended 31 December 2020 (continued)

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)

In the prior year, it was determined that the performance obligations were not distinct for a single large customer implementation project. The judgment has been made as a result of the significant investment required by the Group in the development and enhancement of the Platform capabilities in order for the customer to extract value from the licence to utilise the Platform. The impact of this judgement resulted in the Company "Bundling" the associated revenues for the Implementation and Services into a new revenue classification, which when recognised will be referred to as "bundled" in the Consolidated Statement of Profit and Loss. No revenue was recognised in the 2020 Consolidated Statement of Profit & Loss for the Bundled performance obligation as the software had not gone live during the financial year.

It was expected that commencement of revenue recognition on the Bundled performance obligation would occur during 2021, however as a result of COVID-19 the go-live of the implementation has been delayed. It is anticipated that this revenue recognition will commence in 2022. A materially different outcome would be recorded in the 2020 Consolidated Statement of Profit and Loss had the previous conclusion been reached that the Bundled performance obligations were in fact separate and distinct. The application of this judgement has a significant impact on the presentation of the financial results of the Group. The accounting standards require all revenues and direct costs associated with this Bundled contract to be deferred until such time as the contract deliverables "Go-Live".

(B) CAPITALISATION OF DEVELOPMENT COSTS

Costs incurred on development projects are recognised as intangible assets when all criteria required under IAS 38 are met. Judgement is necessary to determine commercial and technical feasibility. These calculations also require the use of estimates, primarily around the level of directly attributable management and supervisory time, bug fixing (i.e. rebasing and republishing). Capitalisation ceases and amortisation commences once a product is available for deployment.

During 2019 the Group completed a review of the approach to market and product development activities. As a result of this review, "Strategic Product Roadmap" was developed that aligned the product development activities with the wider strategies of the Group. This product roadmap outlined the Group's focus on technology enhancements and developments which represent distinct new capabilities, with more targeted investment in activities. The items included within the roadmap were determined as a result of customer feedback and developments in the marketplace. The identified capabilities facilitated an increase in the offerings to existing customers and improved the go-to-market options with potential customers. During 2019, management put in place appropriate governance structures on the resource time and effort spent on the roadmap items. This was to ensure that management could measure reliably the cost of the capabilities during the period.

During 2020, the Group commenced work on a number of distinct technology capabilities and platform changes to facilitate our customers response to the COVID-19 crisis. These capabilities included Vouchers as a form of payment, our Merchandiser product and our Dynamic offering product. The Group has capitalised \$1.1m (2019: US\$0.1m) in respect of these capabilities. Work on US\$0.7m of these capabilities remains on going at the year end.

(C) ACCOUNTING FOR EXCEPTIONAL ITEMS

Exceptional items are material non-recurring items that derive from events or transactions that fall within the ordinary activities of the Group and which individually or, if of a similar type, in aggregate, are separately disclosed by virtue of their size or incidence. Such items may include litigation costs and payments or receipts arising from court case judgements, or once off costs or income where separate identification is important to gain an understanding of the financial statements. Judgement is used by the Group in assessing the particular items, which by virtue of their scale and nature should be disclosed in the Statement of Profit and Loss and related notes as exceptional items.

(D) GOING CONCERN

The Directors have a reasonable expectation that the Group has adequate resources to continue operating as a going concern for the foreseeable future. Judgement and estimate is required in forecasting cashflow projections incorporating the impact of COVID-19. The details of the going concern scenarios, key assumptions and mitigating actions are outlined in the going concern statement within note 2.5.

(E) IMPAIRMENT OF INVESTMENTS IN SUBSIDIARIES (COMPANY)

Investments in subsidiaries are tested for impairment at each statement of financial position date or earlier if events or circumstances indicate that the carrying amount exceeds its recoverable amount. Such an assessment involves judgement regarding the future financial performance of the subsidiaries.

Directors previously assessed the recoverable amount of the investment having taken into consideration a range of assumptions as well as events post the statement of financial position date. Following this assessment, a full impairment provision was retained against the carrying value of the investment arising from the uncertainties as to the future profitability of the subsidiary. In the current year, the Directors have deemed it appropriate to maintain the full impairment provision recorded in the prior years. The events that gave rise to the provision remain applicable to the 2020 financial statements.

For the year ended 31 December 2020 (continued)

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)

ESTIMATES

(A) PROVISIONS

Legal and Compliance Costs

In 2019 the Group recognised a provision which related to legal and compliance costs of ongoing regulatory investigations and the necessary requirements to obtain an end to the suspension order on the trading of the Group's shares on the Euronext Dublin exchange. The regulatory investigation and suspension of trading of the Group's share arose following the significant breakdown in internal financial controls as disclosed in the 2018 Annual Report.

Management has exercised judgement in arriving at the potential provision in respect of these issues. There is significant estimation uncertainty involved in determining this provision, and in particular including the extent of economic resources that will need to be deployed by the Group in order to bring the issues to a resolution and therefore the amount of any associated liabilities. These could result in material adjustments to the provision in the future. At this point, information usually required by IAS 37 Provisions, Contingent Liabilities and Contingent Assets, is not disclosed on the grounds that such disclosure would seriously prejudice the position of the Group in resolving the legal and compliance matters to which provision relates.

Management notes that it may take a number of years for the Group to conclude on the associated legal issues arising from the past events. As a result, the balance included in the financial statements has been discounted to reflect the time value of money. The actual future economic outflows may be materially higher than those provided for.

Uncertain Tax Positions

The Group has recognised a provision which relates to certain uncertain tax positions as at the reporting date. These

Management has exercised judgement in arriving at the potential provision in respect of these issues. There is significant estimation uncertainty involved in determining this provision, and in particular including the extent of economic resources that will need to be deployed by the Group in order to bring the issues to a resolution and therefore the amount of any associated liabilities (including interest and penalties etc).

Management and its tax advisors are in discussions with relevant tax authorities in order to seek resolution of these uncertain tax positions. Whilst management is endeavouring to resolve these issues, it is unclear as to whether these matters will be fully resolved during 2021.

(B) EXPECTED CREDIT LOSSES

Financial assets, including trade receivables are subject to IFRS 9, Financial Instruments, which requires management to estimate the probability of default on an asset at the year end date. This requires significant estimation and judgement.

Management has used a common methodology to calculate the expected credit loss under IFRS, whereby: Expected credit loss (ECL) = PD*LGD*EAD

• › PD is the probability of default, i.e. the likelihood of a default happening over a prescribed period;
• › LGD, or loss given default, is the percentage that could be lost in the event of a default. Datalex assume an LGD of 100%, i.e. an assumption that for the amount that would be calculated as a result of the probability of default, Datalex will lose 100% of this amount;
• › EAD is the Exposure at Default. This consists of the asset amount at the period end date for each customer.

Management has utilised a third party consultant to assist in the obtaining and calculation of yield spreads. These yield spreads form part of the inputs to assess the probability of default by the Group's customers.

(C) EXPECTED CREDIT LOSSES (COMPANY)

Datalex PLC is also applying IFRS in the stand-alone financial statements and is therefore required to calculate expected credit losses on all financial assets, including intercompany loans within the scope of IFRS 9, 'Financial Instruments'. Certain simplifications from IFRS 9's general 3-stage impairment model are available for trade receivables (including intercompany trade receivables), contract assets or lease receivables, but these do not apply to intercompany balances. The amounts owed to the PLC Company by Group undertakings are interest free, unsecured and are repayable on demand. Having had due consideration of the ECL model set out in section (B) above, the directors deemed it appropriate, as in the prior year, to record an ECL provision at 100% of the net intercompany receivable balance at the year end.

For the year ended 31 December 2020 (continued)

4 PROPERTY, PLANT AND EQUIPMENT

This note details the tangible assets utilised by the Group to generate revenues and contribution to profits. The cost of these assets primarily represents the amounts originally paid for them. All assets are depreciated over their estimated useful economic lives.

		Group
	Fixtures &	Computer	Leasehold
	fittings	equipment	improvements	Total
	US\$'000	US\$'000	US\$'000	US\$'000
At 1 January 2019
Cost	796	8,704	1,301	10,801
Accumulated depreciation	(528)	(7,205)	(532)	(8,265)
Closing net book value	268	1,499	769	2,536
Year ended 31 December 2019
Opening net book value	268	1,499	769	2,536
Derecognition of finance lease assets - IFRS 16 Adoption	-	(1,141)	-	(1,141)
Opening net book amount (revised)	268	358	769	1,395
Cost
Opening Cost	796	8,704	1,301	10,801
Derecognition of finance lease assets - IFRS 16 Adoption	-	(5,425)	-	(5,425)
Additions	-	303	-	303
Disposals	-	(4)	-	(4)
Write-downs	(32)	(1,333)	-	(1,365)
Closing Cost	764	2,245	1,301	4,310
Accumulated Depreciation
Opening Accumulated Depreciation	(528)	(7,205)	(532)	(8,265)
Derecognition of finance lease assets - IFRS 16 Adoption	-	4,284	-	4,284
Depreciation charge	(98)	(300)	(223)	(621)
Disposals	-	4	-	4
Write-downs	32	1,333	-	1,365
Closing Accumulated Depreciation	(594)	(1,884)	(755)	(3,233)
Closing net book value	170	361	546	1,077

For the year ended 31 December 2020 (continued)

4 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

		Group
	Fixtures &	Computer	Leasehold
	fittings	equipment	improvements	Total
	US\$'000	US\$'000	US\$'000	US\$'000
At 31 December 2019
Cost	764	2,245	1,301	4,310
Accumulated depreciation	(594)	(1,884)	(755)	(3,233)
Closing net book value	170	361	546	1,077
Year ended 31 December 2020
Cost
Opening Cost	764	2,245	1,301	4,310
Additions	4	47	16	67
Transfer of Assets	-	(123)	-	(123)
Disposals	(260)	(996)	-	(1,256)
Closing Cost	508	1,173	1,317	2,998
Accumulated Depreciation
Opening Accumulated Depreciation	(594)	(1,884)	(755)	(3,233)
Depreciation charge	(105)	(177)	(225)	(507)
Disposals	260	991	-	1,251
Closing Accumulated Depreciation	(439)	(1,070)	(980)	(2,489)
Closing net book value	69	103	337	509
At 31 December 2020
Cost	508	1,173	1,317	2,998
Accumulated depreciation	(439)	(1,070)	(980)	(2,489)
Closing net book value	69	103	337	509

Depreciation of US\$0.5m (2019: US\$0.6m) has been charged in administration expenses in the statement of profit or loss.

Disposal of US\$Nil (2019: US\$4k) has been charged in administration expense.

The basis by which depreciation is calculated is stated in Note 2.12.

Details of security provided in respect of Property, Plant and Equipment are disclosed in Note 14 and Note 31.

The gross carrying amount of fully depreciated property, plant and equipment that is still in use as at 31 December 2020 was US\$1.9m (2019: US\$1.9m).

For the year ended 31 December 2020 (continued)

5 INTANGIBLE ASSETS

This note details the intangible assets utilised by the Group to generate revenues and contribution to recorded results. The cost of software primarily represents the amounts originally paid to bring the software into use. The cost of product development primarily represents the direct labour costs incurred. All intangible assets are amortised over their estimated useful economic lives. Amortisation commences once the asset is available for use.

Software development US\$'000 US\$'000 US\$'000 At 1 January 2019 Cost 2,299 72,900 75,199 Accumulated amortisation and impairment (2,159) (72,900) (75,059) Closing net book value 140 - Year ended 31 December 2019 Opening net book value 140 - Additions 48 - Work in Progress - 107 Amortisation charge (67) - Closing net book value 121 107 At 31 December 2019 Cost 188 107 Accumulated amortisation and impairment (67) -	Total 140 140
	48
	107
	(67)
	228
	295
	(67)
Closing net book value 121 107	228
Year ended 31 December 2020
Opening net book value 121 107	228
Additions 578 394	972
Work in Progress - 732	732
Disposals (35) -	(35)
Amortisation charge (72) (27)	(99)
Closing net book value 592 1,206	1,798
At 31 December 2020
Cost 731 1,233	1,964
Accumulated amortisation (139) (27)
Closing net book value 592 1,206 1,798	(166)

WORK IN PROGRESS

During the latter part of 2019 the Group completed the review of its approach to market and its product development activities. As a result of the review, the management team developed a "Strategic Product Roadmap" that aligned with the strategic object of Product first and Future proofed platform. This roadmap outlines the Group's focus on technology enhancements and developments which represent distinct new capabilities. Work on these capabilities remains active at the year end date. Once the platform enhancements are made available to the business and are available for use it will be moved out of Work in Progress into Additions.

For the year ended 31 December 2020 (continued)

5 INTANGIBLE ASSETS (CONTINUED)

ADDITIONS

The Group completed a number of new capabilities and enhancements during 2020. These are now available for deployment to our existing customers and any potential new customers. Amortisation of these costs has commenced from the date that they are complete and ready for deployment.

AMORTISATION

All intangible assets are amortised over their estimated useful economic lives and commences once the asset is available for use as stated in Note 2.9. Amortisation is recognised as an expense in the Consolidated Statement of Profit and Loss.

IMPAIRMENT

During 2020, management considered the external and internal sources of information that may indicate that the impairment loss recognised in previous years may no longer exist or may have decreased. The external indicators considered included whether there had been a significant favourable change in the asset's value and market conditions. The internal indicators considered included whether there had been any significant favourable change in the asset's use and performance. As a result of the review of the external and internal indicators, no impairment charge is recorded in 2020 and it was deemed appropriate not to reverse any of the previously recorded impairment charge on Product Development.

WRITE-OFF OF DEVELOPMENT EXPENDITURE INCURRED

An amount of US\$1.4m (2019: US\$1.8m) was incurred by the Group during the year ended 31 December 2020 in respect of development expenditure, of which US\$1.1m (2019:US\$0.1m) has been capitalised. An amount of US\$0.9m (2019: US\$0.2m) has been accrued for an R&D tax credit claim in respect of this expenditure at 31 December 2020.

No Intangible Assets are held under lease. Details of security provided in respect of Intangible Assets are disclosed in Note 14 and Note 31.

For the year ended 31 December 2020 (continued)

6 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

This note details the lease disclosures for the Group.

RIGHT-OF-USE ASSETS

Right-of-use assets related to leased properties are presented below:

		Group
	Office	Computer	Motor
	Buildings	Equip	Vehicles	Total
	US\$'000	US\$'000	US\$'000	US\$'000
At 31 December 2019
Cost	5,889	1,141	54	7,084
Accumulated depreciation	(804)	(489)	(2)	(1,295)
Net carrying amount	5,085	652	52	5,789
Year ended 31 December 2019
Opening net book value
Effect of adopting IFRS 16	5,942	1,141	90	7,173
Translation adjustment	(53)	-	(36)	(89)
Depreciation charge for year	(804)	(489)	(2)	(1,295)
Closing net book value	5,085	652	52	5,789
Year ended 31 December 2020
Opening Cost	5,889	1,141	54	7,084
Additions	266	103	4	373
Disposals	-	(361)	(3)	(364)
Transfer of Assets	-	123	-	123
Impairment	(260)	-	-	(260)
Closing Cost	5,895	1,006	55	6,956
Opening Accumulated Depreciation	(804)	(489)	(2)	(1,295)
Depreciation charge	(815)	(566)	(27)	(1,408)
Disposals	-	361	-	361
Closing Accumulated Depreciation	(1,619)	(694)	(29)	(2,342)
Closing net book value	4,276	312	26	4,614
At 31 December 2020
Cost	5,895	1,006	55	6,956
Accumulated depreciation	(1,619)	(694)	(29)	(2,342)
Closing net book value	4,276	312	26	4,614

For the year ended 31 December 2020 (continued)

6 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (CONTINUED)

LEASE LIABILITIES

	Group
	Office	Computer	Motor
	Buildings	Equip	Vehicles	Total
	US\$'000	US\$'000	US\$'000	US\$'000
At 1 January 2019	(6,400)	(1,261)	(90)	(7,751)
Translation adjustment	49	3	1	53
Payments	1,161	746	46	1,953
Discount unwinding	(638)	(44)	(15)	(697)
Closing Cost	(5,828)	(556)	(58)	(6,442)
At 1 January 2020	(5,828)	(556)	(58)	(6,442)
Translation adjustment	(228)	(62)	(2)	(292)
Additions	(171)	(64)	(3)	(238)
Disposals	54	-	4	58
Payments	1,177	238	35	1,450
Discount unwinding	(605)	(17)	(8)	(630)
Closing Cost	(5,601)	(461)	(32)	(6,094)

The table below shows a maturity analysis of the discounted and undiscounted lease liability arising from the Group's leasing activities. The projections are based on the foreign exchange rates applying at the end of the relevant financial year and on interest rates (discounted projections only) applicable to the lease portfolio.

		As at 31 December 2020		As at 31 December 2019
	US\$'000	Discounted Undiscounted US\$'000	US\$'000	Discounted Undiscounted US\$'000
Within one year	1,276	1,660	250	251
Between one and two years	1,009	1,363	14	17
Between two and three years	769	1,100	385	380
Between three and four years	613	916	484	621
Between four and five years	472	746	1,100	1,412
After five years	1,955	3,349	4,209	7,267
Total	6,094	9,134	6,442	9,948

The Group avails of the exemption from capitalising lease costs for short-term leases and low-value assets where the relevant criteria are met. Variable lease payments directly linked to sales or usage are also expensed as incurred. The following lease costs have been charged to the Consolidated Statement of Profit and Loss as incurred:

2020 US\$'000	2019 US\$'000
Short-term leases 84	19
Leases of low-value assets -	4
Total 84	23

For the year ended 31 December 2020 (continued)

6 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (CONTINUED)

Lease commitments for short-term leases are similar to the portfolio of short-term leases for which the costs, as above, were expensed to the Consolidated Statement of Profit and Loss. The effect of excluding future cash outflows arising from variable lease payments, termination options, residual value guarantees and leases not yet commenced from lease liabilities was not material for the Group. The potential undiscounted future cash outflows arising from the exercise of renewal options that are not expected to be exercised (and are therefore not included in the lease term) are as follows:

As at 31	As at 31
December 2020	December 2020
Undiscounted	Undiscounted
US\$'000	US\$'000
Within one year 48	48
Between one and two years	- -
Between two and three years	- -
Between three and four years	- -
Between four and five years	- -
After five years	- -
Total 48	48

7 DEFERRED CONTRACT FULFILMENT COSTS

This note details the deferred contract fulfilment costs that arise from customer service contracts and comprise of staff and contractor / outsource partner costs incurred. These costs are being deferred under IFRS 15 and will be recognised as the related performance obligations are fulfilled.

The movements in the contract fulfilment cost asset in the year were as follows:

Group		Group
	2020	2019
	US\$'000	US\$'000
At 1 January	2,161	11,524
Costs incurred to fulfil terminated customer contract in the year	-	2,040
Costs incurred to fulfil the ongoing customer contracts in the year	702	2,161
Costs offset with Contract Liabilities on termination of customer contract (i)	-	(10,802)
Costs invoiced on termination of customer contract (i)	-	(2,339)
Costs written off on termination of customer contract (i)	-	(154)
Costs released upon fulfilment of customer performance obligations	-	(269)
At 31 December	2,863	2,161

For the year ended 31 December 2020 (continued)

7 DEFERRED CONTRACT FULFILMENT COSTS (CONTINUED)

	Group	Group
	2020	2019
	US\$'000	US\$'000
Current
Costs incurred to fulfil customer contract	-	-
Non-current

Costs incurred to fulfil customer contract 2,863 2,161 Total 2,863 2,161

Deferred contract fulfilment costs arise from customer service contracts and comprise of staff and contractor / outsource partner costs incurred up to 31 December 2020. These costs are being deferred under IFRS 15 and will be recognised as the related performance obligations are fulfilled.

At 31 December 2020, the Directors are of the opinion that the contract fulfilment costs of US\$2.8m (2019: US\$2.2m) will be recovered through related future revenues and that deferral of such costs continues to be appropriate. The deferred costs relate to an on-going implementation that was due to go-live in H1 2020. As a result of COVID-19, the airline customer paused the implementation prior to the scheduled go-live date. At the time the project was on track to meet the go-live requirements. It is expected the implementation will recommence in 2022. The deferred costs will be amortised on a systematic basis consistent with the pattern of the transfer of the services to which the asset relates, generally the licence term.

(i) In 2019 following the cessation of the implementation project and confirmation that the customer no longer intended to utilise a Datalex platform solution, Deferred Contract Fulfilment Costs incurred were offset against the related Contract Liabilities (advance payment receipts received from the customer). Additionally, the Group invoiced the customer under the terms of the contract, certain costs incurred for which no advanced payment had been received. The amount invoiced in 2019 remains in Trade Receivables, Note 10, at the year end.

8 CONTRACT ACQUISITION COSTS

This note details the contract acquisition costs incurred by the Group. The balance primarily relates to commission payable to customer relationship managers on obtaining new commercial arrangements with customers. The balance is amortised over the life of the contractual relationship.

At 31 December	62
Amortisation charge	(128)
Additions	-
At 1 January	190
Net book value
	Group 2020 US\$'000

At 31 December

Cost	977
Accumulated amortisation	(915)
Closing net book value	62

For the year ended 31 December 2020 (continued)

8 CONTRACT ACQUISITION COSTS

The closing net book value is estimated to be amortised over the following period:

	Group 2020 US\$'000	Group 2019 US\$'000
Current
Less than one year	62	114
Non-current
Greater than one year	-	76
Total	62	190

9 INCOME TAX

(A) INCOME TAX

	Group Total 2020 US\$'000	Group Total 2019 US\$'000
Current tax
Corporation tax for the year	-	-
Foreign tax for the year	(59)	66
Foreign withholding tax	-	-
Total current tax	(59)	66

The tax on the Group's loss before income tax differs from the theoretical amount that would arise using the Irish domestic tax rate applicable to profits and losses of the consolidated companies as follows:

	Group	Group
	Total	Total
	2020	2019
	US\$'000	US\$'000
Loss before income tax	(6,536)	(11,995)
Loss before tax multiplied by the standard rate of tax in the Republic of Ireland of 12.5%	(817)	(1,499)
Expenses not deductible and income not taxable	4	232
Utilisation of previously unrecognised tax losses	(127)	(105)
Difference in effective tax rates on overseas earnings	131	77
Tax losses for which no deferred tax asset was recognised	852	1,409
Other	(102)	(48)
Income tax (credit)/charge	(59)	66

For the year ended 31 December 2020 (continued)

9 INCOME TAX (CONTINUED)

(B) DEFERRED TAX

Deferred tax assets have not been recognised in respect of the following:

	Group 2020 US\$'000	Group 2019 US\$'000
Unused tax losses	21,310	21,624
R&D credits available	1,756	1,497
Temporary differences	129	314
Total	23,195	23,435

The unrecognised deferred income tax assets in respect of losses relate to unused tax losses in Datalex Solutions (UK) Limited, Datalex Ireland Limited and Datalex USA, Inc. The Directors will continue to evaluate their expectation on realisation of the tax benefit through future taxable profits.

10 TRADE AND OTHER RECEIVABLES

Trade and other receivables mainly consist of amounts owed to the Group by customers & contract assets, net of an allowance for expected credit losses, together with prepayments, VAT Receivables and R&D tax credits receivable.

	Group	Group	Company	Company
	2020	2019	2020	2019
	US\$'000	US\$'000	US\$'000	US\$'000
Current trade and other receivables
Trade receivables	8,662	10,084	-	-
Less: allowance for expected credit losses on trade receivables	(4,100)	(5,506)	-	-
Trade receivables – net	4,562	4,578	-	-
Contract assets	931	2,757	-	-
Less: allowance for expected credit losses on contract assets	(78)	(196)	-	-
Contract assets – net	853	2,561	-	-
Amounts owed by Group undertakings	n/a	n/a	26,377	18,542
Less: allowance for expected credit losses on amounts owed by
Group undertakings	n/a	n/a	(26,377)	(18,542)
Amounts owed by Group undertakings – net	n/a	n/a	-	-
Prepayments	269	531	-	-
Research and development tax credit	249	499	-	-
VAT receivable	933	1,588	-	-
Receivable from related parties	36	46	36	25
Other receivables	378	5	25	-
Total other receivables	1,865	2,669	61	25
Total current trade and other receivables and contract assets - net	7,280	9,808	61	25
Non-current trade and other receivables
Research and development tax credit	665	255	-	-
Total non-current trade and other receivables	665	255	-	-
Total trade and other receivables and contract assets	7,945	10,063	61	25

For the year ended 31 December 2020 (continued)

10 TRADE AND OTHER RECEIVABLES (CONTINUED)

The fair value of trade receivables and contract assets approximate to the values shown above. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold collateral as security.

CREDIT RISK AND ALLOWANCE FOR EXPECTED CREDIT LOSSES

The Group has applied IFRS 9, Financial Instruments, during the year, which includes the requirements for calculating allowance for expected credit losses on financial assets.

Datalex PLC (Company Only) is also applying IFRS in the stand-alone financial statements and is therefore required to calculate expected credit losses on all financial assets, including intercompany loans within the scope of IFRS 9, 'Financial Instruments'. Certain simplifications from IFRS 9's general 3-stage impairment model are available for trade receivables (including intercompany trade receivables), contract assets or lease receivables, but these do not apply to intercompany balances. The amounts owed to the PLC Company by Group undertakings are interest free, unsecured and are repayable on demand. Having had due consideration of the ECL model set out Note 3, the directors deemed it appropriate, as in the prior year, to record an ECL provision at 100% of the net intercompany receivable balance at the year end.

TRADE RECEIVABLES & CONTRACT ASSETS

The Group applies the simplified approach to providing for expected credit losses on trade receivables and contract assets as required by IFRS 9, which permits the use of the lifetime expected loss provision for such receivables. The Group uses judgement at the end of each reporting period in making assumptions around the risk of default and expected loss rates. These are based on the Group's past history, comparable information, existing market conditions (including the use of market observable credit data either for specific customers or for comparable entities, based on industry, size and geographical location), as well as forward looking estimates (which primarily consisted of information specific at the customer level, with the expected loss rate adjusted where appropriate as a result).

As per Notes 7 & 17, included within the Trade Receivables amount is a balance of \$2.3m invoiced to a customer upon termination of contract (2019: \$2.3m). Following the cessation of the implementation project and confirmation that the customer no longer intends to utilise a Datalex platform solution, Deferred Contract Fulfilment Costs incurred were offset against the related Contract Liabilities (advance payment receipts received from the customer). The Company invoiced the customer under the terms of the contract certain costs incurred for which no advanced payment had been received. Whilst the Directors expect to recover in full the outstanding contractual amounts from the customer, due to the on-going litigation a specific provision has been recorded against this trade receivable as the recovery is dependant on the successful outcome of the litigation proceedings.

The allowance for expected credit losses as at 31 December 2020 is determined as presented below. The expected credit losses also incorporate forward looking information for both trade receivables and contract assets:

31-Dec-20			Trade receivables
		Days past due
	Contract		Within 30	Between 31-60	Between 61-90	More than	Trade
	assets	Current	days	days	days	90 days	receivables	Total
	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000
Expected loss rate *	8.4%	11.0%	11.6%	18.2%	3.1%	79.9%	47.3%	43.6%
Gross carrying amount	931	1,118	2,350	680	32	4,482	8,662	9,593
Total balance subject to
impairment review	931	1,118	2,350	680	32	4,482	8,662	9,593
Allowance for expected credit losses	78	123	272	124	1	3,580	4,100	4,178

* The expected loss rates have been calculated using the formula described in Note 3(b). Judgment has been applied in determining the appropriate expected loss rates.

For the year ended 31 December 2020 (continued)

10 TRADE AND OTHER RECEIVABLES (CONTINUED)

31-Dec-19			Trade receivables
			Days past due
				Between
	Contract		Within 30	Between	days 61-	More than	Trade
	assets	Current	days	31-60)	90 days	90 days	receivables	Total
	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000
Expected loss rate	7.12%	16.14%	8.53%	93.29%	71.50%	83.09%	54.60%	44.40%
Gross carrying amount	2,757	3,506	959	2,664	714	2,241	10,084	12,841
Total balance subject to
impairment review	2,757	3,506	959	2,664	714	2,241	10,084	12,841
Allowance for
expected credit losses	196	566	82	2,485	511	1,862	5,506	5,702

The closing allowance for expected credit losses for trade receivables and contract assets as at 31 December 2020 reconciles to the opening allowance for expected credit losses as follows:

	Contract assets		Trade receivables		Total
	2020	2019	2020	2019	2020	2019
	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000
At 1 January	196	115	5,506	778	5,702	893
(Decrease)/Increase in allowance for expected credit
losses recognised in profit or loss during the year	(118)	81	(1,406)	4,728	(1,524)	4,809
At 31 December	78	196	4,100	5,506	4,178	5,702

The Group defines a default as when a financial asset becomes more than 90 days past due, which is based on past experience for similar assets. The Group's policy is to write off a financial asset once it becomes more than 360 days past due, which is also based on past experience.

AMOUNTS RECOGNISED IN PROFIT AND LOSS FOR TRADE RECEIVABLES

During the year ended 31 December 2020, the following gains/ (losses) were recognised in profit or loss and presented as net impairment losses in relation to impaired receivables.

	2020	2019
	US\$'000	US\$'000
Movement in allowance for expected credit losses	(1,524)	4,728
Amounts written off	-	26
Net impairment losses on financial and contract assets	(1,524)	4,754

Movements on the Group allowance for expected credit losses on trade receivables and contract assets are as follows:

	Group	Group
	2020	2019
	US\$'000	US\$'000
At 1 January	5,702	893
Opening allowance for expected credit losses as at 1 January	-	-
Movement in allowance for expected credit losses	(1,524)	4,809
Receivables written off during the year as uncollectible	-	-
At 31 December	4,178	5,702

For the year ended 31 December 2020 (continued)

10 TRADE AND OTHER RECEIVABLES (CONTINUED)

The decrease in the loss allowance in 2020 is due to a decrease in the year end Trade Debtor's balance and cash reciepts from customers during 2020.

The creation and release of the allowance for expected credit losses has been included in net impairment losses on trade receivables and contract assets on the statement of profit or loss.

OTHER RECEIVABLES

As at the end of the current and prior year, the allowance for expected credit losses on other receivables was not deemed to be material to the financial statements, with the carrying amount in the statement of financial position reflecting the maximum exposure to credit risk.

The other classes within trade and other receivables do not contain impaired assets.

The majority of the Group's customers, primarily representing major corporations, operate within the airline and travel industry. As at 31 December 2020 and 2019, a significant portion of the trade receivables and contract assets of the Group related to a limited number of customers as follows:

Group	Group
2020 (1)	2019 (1)
Customer A 26%	21%
Customer B 26%	21%
Customer C 15%	21%
Customer D	7% -
Customer E	6% 6%
Customer F	5% 6%
Customer G	- 6%

(1) Customers whose trade receivable and contract assets balances represent 5% or more of the total trade receivable and contract assets balance at 31 December 2020 or 31 December 2019 are disclosed in the note above.

The carrying amounts of the Group's trade receivables and contract assets are denominated in the following currencies:

	Group	Group
	2020	2019
	US\$'000	US\$'000
US dollar	4,670	7,384
Euro	4,923	4,394
Swedish krona	-	70
Pound sterling	-	898
Chinese renminbi	-	95
Total	9,593	12,841

AMOUNTS OWED BY GROUP UNDERTAKINGS

Amounts owed by Group undertakings and related parties are interest free, unsecured and are repayable on demand.

For the year ended 31 December 2020 (continued)

11 CASH AND CASH EQUIVALENTS

This note details the liquid cash resources available to the Group. The majority of the Group's cash is held in current /on demand accounts.

	Group	Group	Company	Company
	2020	2019	2020	2019
	US\$'000	US\$'000	US\$'000	US\$'000
Cash at bank and in hand	2,905	2,960	92	86
Short-term bank deposits less than 90 days	120	91	-	-
Cash and cash equivalents	3,025	3,051	92	86

The effective interest rate on bank deposits is based on the relevant Euribor rate applicable to the term of the deposit.

The short-term bank deposits which are included in cash and cash equivalents have an average maturity of 30 days (2019: 30 days).

The fair values of the deposits less than 90 days which are part of cash and cash equivalents approximate to the values shown above.

FOREIGN CURRENCY EXPOSURE

The Group's currency exposure in respect of cash and cash equivalents relates to balances in currencies other than the US dollar. The balances as at 31 December 2020 and 2019 are set out below.

Non-US\$ denominated cash and cash equivalents	Group	Group	Company	Company
	2020	2019	2020	2019
	US\$'000	US\$'000	US\$'000	US\$'000
Euro	1,178	1,132	90	85
Pound sterling	124	89	2	1
Chinese renminbi	36	153	-	-
Total	1,338	1,374	92	86

The Group does not have any bank overdrafts at the year end date (2019:US\$nil).

12 SHARE CAPITAL

The ordinary shareholders of Datalex plc own the Company. This note details how the total number of ordinary shares in issue has changed during the year.

AUTHORISED SHARE CAPITAL - GROUP AND COMPANY

	2020	2019
	US\$'000	US\$'000
Equity share capital
100,000,000 ordinary shares of US\$0.10 each	10,000	10,000
Other equity share capital
3,000,000 "A" convertible redeemable shares of US\$0.10 each	300	300
1,500,000 "B" convertible redeemable shares of US\$0.10 each	150	150
30,000 deferred shares of €1.269738 each	44	44
	494	494
Total	10,494	10,494

For the year ended 31 December 2020 (continued)

12 SHARE CAPITAL (CONTINUED)

ISSUED SHARE CAPITAL – GROUP AND COMPANY

	Ordinary shares No. of shares No. of shares	Ordinary ("A" and "B") shares	Convertible redeemable shares No. of shares	Convertible redeemable shares	Deferred shares No. of shares	Deferred shares
	'000	US\$'000	'000	US\$'000	'000	US\$'000
At 1 January 2019	78,100	7,810	2,542	254	30	8
Issued during the year	3,859	386	-	-	-	-
Employee share option scheme - proceeds from share issues	25	2	-	-	-	-
At 31 December 2019	81,984	8,198	2,542	254	30	8
At 1 January 2020	81,984	8,198	2,542	254	30	8
Issued during the year	-	-	-	-	-	-
Employee share option scheme - proceeds from share issues	170	17	-	-	-	-
At 31 December 2020	82,154	8,215	2,542	254	30	8

ORDINARY SHARES

The holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at meetings of the Company. In 2019, the Company announced that it had raised proceeds of c. €3.86 million by way of the Placing of 3.859 million new Ordinary Shares with IIU Nominees Limited ("IIU"), at a price of €1.00 per share, Mr Desmond is the ultimate beneficial owner of this shareholding. The issued shares are presented as share capital.

"A" AND "B" CONVERTIBLE REDEEMABLE SHARES

On 1 October 2001, the conversion rights attaching to "A" convertible redeemable shares expired. On 30 March 2007, the conversion rights attaching to the "B" convertible redeemable shares expired. The convertible redeemable shares have no participation rights in relation to profits and surplus in a winding up, no contractual obligations to deliver funds in a winding up and the holders are not entitled to attend or vote at any general meeting of the Company. Following the tenth anniversary of their issue, the Company may, at its discretion, redeem Convertible Shares at their par value.

DEFERRED SHARES

All deferred shares issued have no participation rights in relation to profits and surplus in a winding up, and the holders are not entitled to attend or vote at any general meeting of the Company.

TREASURY SHARES

As set out in Note 13, The Datalex Employee Benefit Trust has an interest over 590,000 ordinary shares (2019: 590,000). For accounting purposes these shares are treated as treasury shares. These shares do not have an entitlement to receive dividends.

For the year ended 31 December 2020 (continued)

12 SHARE CAPITAL (CONTINUED)

EMPLOYEE SHARE OPTIONS SCHEME – 2000 SHARE OPTION SCHEMES

The Group had operated two employee share option schemes up to their date of expiration in August 2010, together referred to as the "2000 Share Option Schemes". After this date no new options were granted under these schemes. The two schemes are described below.

Group Share Option Scheme

The terms of The Datalex plc Share Option Plan ("Group Share Option Scheme") allow for vesting over a three-year period, in equal thirds commencing on the first anniversary of the date of grant. Accelerated vesting can take place subject to Board approval. The majority of options issued under this scheme expire ten years after issuance. Employees who leave the Group have 90 days to exercise any vested options after which period the options lapse and become void. Unvested options expire upon leaving the Group. The exercise price of all options granted is equal to the market price of the shares on the date of grant.

UK Share Option Scheme

The terms of this scheme allow for vesting over a three-year period, in equal thirds commencing on the first anniversary of the date of grant. Accelerated vesting can take place subject to Board approval. All options issued under this scheme expire ten years after issuance. Employees who leave the Group have 90 days to exercise any vested options, after which period, the options lapse and become void. Unvested options expire upon leaving the Group. The exercise price of all options granted is equal to the market price of the shares on the date of grant.

SUMMARY OF EMPLOYEE SHARE OPTIONS ACTIVITY (NUMBER OF OPTIONS) IN RESPECT OF THE 2000 SHARE OPTION SCHEMES

The activity in the Group's 2000 Share Option Schemes is summarised in the following table:

	2020	2020	2019	2019
		Weighted		Weighted
		average		average
		exercise price		exercise price
	No. of shares	(US\$)	No. of shares	(US\$)
Outstanding at beginning of year	450,000	0.15	525,000	0.15
Issued during the year	-	-	-	-
Exercised during the year (1)	(150,000)	0.14	(25,000)	0.16
Expired during the year (2)	(300,000)	0.14	(50,000)	0.15
Outstanding at end of year	-	-	450,000	0.15
Exercisable at end of year	-	-	450,000	0.15

(1) No weighted average market share price existed for the dates of exercise during 2020 (2019: US\$1.12). (2) Expired on departure from the Group or on expiration of the share option scheme.

No options were granted during the year (2019: nil) as the scheme had previously expired.

For the year ended 31 December 2020 (continued)

12 SHARE CAPITAL (CONTINUED)

EMPLOYEE SHARE OPTIONS SCHEME – 2012 SCHEME

On 6 February 2012, a share option plan, The Datalex plc Share Option Plan 2012 (the "2012 Group Share Option Scheme" or "2012 Scheme") was implemented, replacing the original "2000 Share Option Schemes" which expired on their tenth anniversary in August 2010. Under the 2012 Scheme, share options can only vest after the third anniversary of award, and vesting is subject to the achievement of challenging annual performance conditions. At grant date, performance conditions relate to Adjusted EBITDA, cash targets established by the Remuneration Committee and other measures of shareholder value that the Remuneration Committee may consider appropriate.

No options may be granted under the 2012 Scheme which would cause the number of shares issued or issuable in the preceding ten years to exceed 10% of the ordinary share capital of the Company in issue at that time. As a further restriction, no options will ordinarily be granted under the 2012 Scheme which would cause the number of shares issued or issuable in the preceding ten years to exceed 7.5% of the ordinary share capital of the Company in issue at that time, but on the basis that the Remuneration Committee may resolve to grant additional options up to the overall 10% limit if it determines either that the Group's underlying financial performance and/ or growth in shareholder value would merit such further dilution or that vesting of any additional such options would be subject to exceptional performance. The basis for any such determination by the Remuneration Committee would be described in the Annual Report and financial statements.

The activity in the 2012 Group Share Option Scheme is summarised in the following table:

	2020	2020 Weighted average	2019	2019 Weighted average
	No. of shares	exercise price (US\$)	No. of shares	exercise price (US\$)
Outstanding at beginning of year	1,667,783	1.35	3,079,450	2.00
Issued during the year	-	-	-	-
Exercised during the year (1)	(20,000)	0.42	-	-
Forfeited during the year	(156,333)	1.63	(1,411,667)	2.55
Outstanding at end of year	1,491,450	1.48	1,667,783	1.35

(1) The weighted average market share price on the date of exercise in 2020 was US\$0.48.

Share options outstanding at the end of the year have the following exercise price ranges and expiry dates:

Exercise price range remaining	Number of options	Weighted average contractual life (in months)
US\$0.30 to US\$0.50	45,000	13
US\$0.51 to US\$0.70	25,000	8
US\$0.71 to US\$0.90	55,000	21
Over US\$0.90	1,366,450	35
Total	1,491,450	77

For the year ended 31 December 2020 (continued)

12 SHARE CAPITAL (CONTINUED)

EMPLOYEE SHARE OPTIONS SCHEME – 2020 SCHEME

On 2 December 2020, a new share option plan 'Datalex Long Term Incentive Plan 2020 (the "2020 Plan")' was approved by shareholders. Under the 2020 plan, share options can only vest when the Performance Period has been completed and the Final Calculated Award has been determined. Challenging performance conditions were set when initial grants were made under this plan. The Committee may change these Performance Conditions for future Awards provided that the conditions remain no less challenging and are aligned with the interests of the Company's shareholders.

An Award may not be granted if the result would be that the aggregate number of Shares issued or issuable pursuant to Awards granted under the Plan or under any other employees' share scheme adopted by the Company (other than any Shares issued or which may be issued by the Company to holders of awards under any share-based incentive plan if such awards were granted prior to the approval of the Plan) would exceed 10% of the Company's issued ordinary share capital at the Award Date. The Committee shall ensure that appropriate policies regarding flow rates exist in order to ensure that the limit is not exceeded.

The activity in the 2020 Group Share Option Scheme is summarised in the following table:

	2020	2020
	No. of shares	Weighted average exercise price (US\$)
Outstanding at beginning of year	-	-
Issued during the year	2,975,000	0.66
Exercised during the year	-	-
Forfeited during the year	-	-
Outstanding at end of year	2,975,000	0.66

There were 2.975m options granted during 2020. The fair value of the options granted during 2020 was determined using the Black Scholes model amounted to US\$1,518,478. The weighted average fair value per option granted in 2020 was US\$0.51. The significant inputs into the 2020 model were share prices of: €0.55 at the grant date (being the market price of shares at the date of grant), exercise price (which is the same as the share price at the grant date), dividend yield of 0%, risk-free interest rates of 0.22%, expected option life of three years and the share price volatility of 138%. The volatility measured at the standard deviation of expected share price returns is based on statistical analysis.

Share options outstanding at the end of the year have the following exercise price ranges and expiry dates:

Exercise price range remaining	Number of options	Weighted average contractual life (in months)
US\$0.30 to US\$0.50	-	-
US\$0.51 to US\$0.70	2,975,000	119
US\$0.71 to US\$0.90	-	-
Over US\$0.90	-	-
Total	2,975,000	119

The charge for the year ended 31 December 2020 in relation to share options was US\$66,653. (2019: US\$82,540).

For the year ended 31 December 2020 (continued)

12 SHARE CAPITAL (CONTINUED)

JOINT SHARE OWNERSHIP PLAN

In January 2012, the Board of Directors approved the establishment of a Joint Share Ownership Plan ("JSOP"). The scheme was intended to incentivise senior management in the Group (excluding Executive Directors) towards the achievement of challenging performance targets for Adjusted EBITDA and cash generation during the years ending 31 December 2013 and 31 December 2014. Under the plan, the participants and an Employee Benefit Trust established by Datalex (Ireland) Limited jointly acquired 1.56m awards of existing stock at the open market price (€0.39 per award). Subject to meeting the performance conditions for Adjusted EBITDA and cash and short-term investments, the awards vested in two equal tranches on 31 December 2013 and 2014, respectively.

	2020	2020	2019	2019
		Weighted		Weighted
		average		average
		exercise price		exercise price
	No. of shares	(US\$)	No. of shares	(US\$)
Outstanding at beginning of year	300,000	0.44	460,000	0.42
Issued during the year	-	-	-	-
Exercised during the year	-	-	-	-
Forfeited during the year	-	-	(160,000)	0.44
Outstanding at end of year	300,000	0.48	300,000	0.44
Exercisable at end of year	300,000	0.48	300,000	0.44

There was no charge in the years ended 31 December 2020 or 2019 in relation to the JSOP scheme.

No awards were made in 2020 or 2019. All awards have vested due to the related performance and service conditions being achieved at 31 December 2014.

The weighted average contractual life at 31 December 2020 was 0 months (2019: 1 months).

DEFERRED SHARE SCHEME

The 130,000 JSOP awards forfeited in 2014, which were returned back to the Employee Benefit Trust, were re-issued in 2015 to a new senior management team member under the Deferred Share Scheme. According to the rules of the scheme, the shares vested in 2018 but the employee left in 2019 and the awards were forfeited and returned to the trust again.

Deferred Share Scheme	2020	2020	2019	2019
		Weighted		Weighted
		average		average
		exercise price		exercise price
	No. of shares	(US\$)	No. of shares	(US\$)
Outstanding at beginning of year	-	-	130,000	1.83
Issued during the year	-	-	-	-
Exercised during the year	-	-	-	-
Forfeited during the year	-	-	(130,000)	1.73
Outstanding at end of year	-	-	-	-
Exercisable at end of year	-	-	-	-

No awards were made in 2020 and 2019. The average contractual life at 31 December 2020 was 0 months (2019: 0 months).

The 2020 charge in relation to the Deferred Share Scheme was US\$Nil (2019: US\$Nil).

For the year ended 31 December 2020 (continued)

13 OTHER RESERVES

This note details the movement in the Group's other reserves which are treated as different categories of equity as required by accounting standards.

		Other	Treasury	Share-based		Foreign
	Share	capital	shares	payments	Other	currency
Group	premium	reserves	reserve	reserve	reserves	translation	Total
	US\$'000	US\$'000			US\$'000 (1) US\$'000 (2) US\$'000 (3) US\$'000 (4)		US\$'000
Balance at 1 January 2019	2,562	134	(274)	4,144	1,011	206	7,783
Share-based payments cost	-	-	-	83	-	-	83
Premium on shares issued	4,019	-	-	-	-	-	4,019
Currency translation differences	-	-	-	-	-	7	7
Balance at 31 December 2019	6,581	134	(274)	4,227	1,011	213	11,892
Balance at 1 January 2020	6,581	134	(274)	4,227	1,011	213	11,892
Share-based payments cost	-	-	-	67	-	-	67
Premium on shares issued	13	-	-	-	-	-	13
Currency translation differences	-	-	25	-	-	(220)	(195)
Balance at 31 December 2020	6,594	134	(249)	4,294	1,011	(7)	11,777

(1) Treasury shares reserves represent the balance of Datalex plc Ordinary Shares held by The Datalex Employee Benefit Trust. At 31 December 2020, treasury shares of 590,000 shares (2019: 590,000 shares) comprised 300,000 shares (2019: 300,000) held in respect of JSOP awards and 290,000 which reverted to The Datalex Employee Trust on forfeiture of entitlements . These shares are treated as treasury shares and consequently have been deducted from equity.

(2) The share-based payments reserve comprises amounts expensed in the Consolidated Statement of Profit and Loss in connection with awards made under the equity-settled share-based plans, being the share option schemes, the JSOP and deferred share awards (see Note 12).

(3) Other reserves relate mainly to the proceeds from exercise of collateral on 1.85m Datalex plc shares. In 2002, three former Datalex executives in the USA established a new business called Conducive Technology Corp ("CTC"). Datalex provided this Company with a US\$800,000 working capital loan, secured against any future proceeds of sale of 1.85m shares in Datalex held by the founders of CTC. On 25 January 2012, CTC disposed of 1.56m shares, which were acquired at the open market price by The Datalex Employee Benefit Trust, as part of the implementation of the Joint Share Ownership Plan. In October 2012, CTC completed the sale of the remaining 290,000 shares, remitting these proceeds to Datalex plc. Given that the loan had previously been written off through reserves on transition to IFRS, the proceeds recovered were recognised through reserves directly under IAS 32, Financial Instruments: Presentation.

(4) The foreign currency translation reserve comprises the cumulative currency translation adjustment in respect of subsidiaries whose functional currencies are not the US dollar. The translation adjustments arise from the retranslation of the profits of such operations from the average exchange rate for the year to the exchange rate at the statement of financial position date as well as the retranslation of those subsidiaries' applicable assets and liabilities.

For the year ended 31 December 2020 (continued)

13 OTHER RESERVES (CONTINUED)

	Share	Share-based payments
Company	premium	reserve	Total
	US\$'000	US\$'000	US\$'000
Balance at 1 January 2019	42,491	4,144	46,635
Share-based payments (Note 12)	-	83	83
Premium on shares issued	4,019	-	4,019
Balance at 31 December 2019	46,510	4,227	50,737
Balance at 1 January 2020	46,510	4,227	50,737
Share-based payments (Note 12)	-	67	67
Premium on shares issued	13	-	13
Balance at 31 December 2020	46,523	4,294	50,817

14 BORROWINGS

Group borrowings are made up of lease liabilities and debt funding. The Group obtained debt funding from a related party to support it's working capital needs.

	Group	Group
	2020	2019
	US\$'000	US\$'000
Lease liabilities	6,094	6,442
Secured loan	15,733	12,421
Total borrowings	21,827	18,863
Disclosed as
Current	17,009	13,376
Non-current	4,818	5,487
Total borrowings	21,827	18,863

For the year ended 31 December 2020 (continued)

14 BORROWINGS (CONTINUED)

IFRS 16 LEASE LIABILITIES

Included in lease liabilities at 31 December 2020 above are the following amounts:

	Group	Group
	2020	2019
	US\$'000	US\$'000
Current	1,276	955
Non-current	4,818	5,487
Total lease liabilities arising from IFRS 16	6,094	6,442

The carrying amounts of the Group's lease liabilities are denominated in the following currencies:

	Group	Group
	2020	2019
	US\$'000	US\$'000
US dollar	870	1,218
Euro	4,166	4,282
Pound sterling	853	913
Chinese renminbi	205	29
Total	6,094	6,442
Secured loan
	Group &	Group &
	Company	Company
	2020	2019
	US\$'000	US\$'000
Current	15,733	12,421
Non-current	-	-
Total loan liability	15,733	12,421

For the year ended 31 December 2020 (continued)

14 BORROWINGS (CONTINUED)

RELATED PARTY SECURED LOAN

The Company entered into a €6.141m secured loan facility agreement on 14 March 2019 with Tireragh Limited, a company ultimately beneficially owned by Mr. Desmond ('Tireragh'), conditional on shareholder approval (the "First Facility"). Shareholder approval for the First Facility was subsequently given at an EGM held on 26 April 2019. Under the terms of the First Facility, Tireragh made available a term loan facility of up to a maximum aggregate amount of €6.141m to be drawn down by the Company by way of one or more advances (but no more than six). The First Facility was secured by a debenture entered into by the Company, creating fixed and floating charges over all of the Company's assets, undertaking and goodwill as security for the Company's obligations to Tireragh with respect to the First Facility. The First Facility was guaranteed by Datalex (Ireland) Limited, the Company's subsidiary, which, by debenture, also created a fixed and floating charge over all of its assets, undertaking and goodwill as security for its and the Company's obligations to Tireragh with respect to the First Facility. The First Facility was non-amortising, had a term of 18 months from 1 May 2019 and incurred interest on drawn down balances at the rate of 10% per annum, compounding monthly and rolled up until maturity.

The First Facility was re-financed in advance of maturing with the remaining interest payable on the First Facility being capitalised at the refinancing date. Under the terms of the secured loan facility with Tireragh which was approved by shareholders on 15 November 2019 (the "Second Facility"), a further €5m in secured debt funding was made available to the Company. The Second Facility was repayable in November 2020. Under the Second Facility there are additional obligations to which the Company needs to comply with in addition to those set out in the First Facility.

The Second Facility required cross guarantees to be provided by the Company and Datalex (Ireland) Limited. Additionally Datalex USA, Inc. and Datalex Solutions (UK) Limited were required to act as additional guarantors of the Second Facility. The obligations of the Company and each of the guarantors to Tireragh, include:

• (i) A debenture entered into by the Company creating fixed and floating charges over all of its assets, undertaking and goodwill as security for its and the other guarantors' obligations to Tireragh with respect to the Second Facility;
• (ii) A debenture creating fixed and floating charges over all of Datalex Ireland Limited's assets, undertaking and goodwill as security for its and the other guarantors' obligations to Tireragh with respect to the Second Facility;
• (iii) Security provided over the shares of Datalex USA Inc. and Datalex Solutions (UK) Limited granted by Datalex (Ireland) Limited;
• (iv) US law security over such assets, undertaking and goodwill of Datalex USA Inc. as may be permissible as a matter of US law as security for its and the other guarantors' obligations to Tireragh with respect to the Second Facility; and
• (v) A debenture entered into by Datalex Solutions (UK) Limited granting fixed and floating charges over all of its assets, undertaking and goodwill as security for its and the other guarantors' obligations to Tireragh with respect to the Second Facility; and
• (vi) Requirements to adhere to certain financial covenants, as outlined below:

The key financial covenants pertaining to the loan facility with Tireragh Limited are:

• › Achievement of Revenue and EBITDA targets, subject to agreed performance criteria, on a six month rolling basis.
• › Achievement of Cash & Bank balances and Working Capital targets on a monthly basis, subject to agreed performance criteria and testing over two consecutive months.

The Company has achieved the relevant financial covenant targets to date. During 2020, Tireragh Limited waived obligations to provide certain financial information within specified time limits, including delivery of the Group's 2019 annual report within 120 days of year end (as permitted by the European Securities and Markets Authority and the Central Bank of Ireland) and the time limits within which budget projections and other periodic reporting obligations were provided during the year. Further, Tireragh Limited provided a waiver extending the time to deliver specified security documents in connection with a subsidiary of the Group and provided a waiver permitting the Group flexibility to negotiate extended payment terms with key suppliers in connection with COVID-19 measures taken by the Group.

On the 31st October 2020, the maturity of the Second Facility was extended to 1 November 2021 following Shareholder approval at an EGM on the 24 September 2020. As part of this facility, the Group currently has access to an undrawn facility in the amount of €10m. There have been no additional draw downs on the Tireragh loan facility since December 2019. On 1 April 2021, the Group received written confirmation from Tireragh Limited that it is willing to extend the repayment date of the loan facility to 30 September 2022. The extension of the Tireragh Limited loan facility would be on the same terms as the existing facility arrangement. Please see Note 2.5, Going Concern for addtional information.

For the year ended 31 December 2020 (continued)

14 BORROWINGS (CONTINUED)

At the year end date, the loan balance payable under the loan Facility (which is denominated in euro) was comprised of:

	Group &	Group &
	Company	Company
	2020 US\$'000	2019 US\$'000
Drawdown*	12,405	12,405
Debt issuance costs	(3,465)	(469)
Debt issuance costs - amortisation	887	166
Interest charges	1,388	148
Loan Facility Fees	3,362	-
Foreign exchange	1,156	171
	15,733	12,421

* Included in the Drawdown amount is capitalised interest on the First Facility of US\$185k which was rolled up into the drawdown on the Second Facility agreement.

15 PROVISIONS

Group	Group
2020	2019
US\$'000	US\$'000
Current
Long term incentive Plan -	23
Regulatory Costs Compliance 555	436
Uncertain Tax Positions 359	482
Total Current 914	941
Non-Current
Regulatory Costs Compliance 468	598
Uncertain Tax Positions 58	638
Total Non-Current 526	1,236
Total Provisions 1,440	2,177

For the year ended 31 December 2020 (continued)

15 PROVISIONS (CONTINUED)

A. LONG TERM INCENTIVE PLAN

A Long-Term Incentive Plan ("LTIP") for key employees was approved by shareholders at the 2015 AGM. The LTIP was intended to retain and reward certain key employees who are central to the achievement of the Group's growth strategy. The implementation of the scheme commenced in 2016. Grant awards have the characteristics of a long-term cash bonus with a maximum fixed amount.

This long-term cash bonus operates under similar terms to the Group's Share Option Scheme, with vesting of cash bonuses based on the achievement of non-market performance conditions (Adjusted EBITDA and cash targets) plus a service condition over a three-year period.

Movements on the LTIP during the year were as follows:

	Group 2020 US\$'000	Group 2019 US\$'000
At 1 January	23	651
Credited/paid in the year	(23)	(401)
Additional provision recognised	-	84
Unused amounts reversed	-	(311)
At 31 December	-	23

The credit has been reflected in the Consolidated Statement of Profit and Loss within payroll costs in line with the Group accounting policy. There was only a single member of the LTIP programme remaining with the Company as at the 31 December 2019 and this balance was paid in 2020.

B. REGULATORY COSTS COMPLIANCE

As a result of the events that occured in 2018, the Group is subject to a number of regulatory investigations that are likely to continue into the future.

The Group has estimated the costs associated with responding to and addressing the requirements of the Regulators, including the Director of Corporate Enforcement, the Central Bank of Ireland and the Gardai.

	Group & Company 2020	Group & Company 2019
	US\$'000	US\$'000
At 1 January	1,049	-
Charged to the statement of profit or loss	-	1,049
Used in the year	(83)	-
Unwind of discount rate on Provision	57	-
At 31 December	1,023	1,049

The unwind of the discount rate on the provision balance has been reflected in exceptional items within the Consolidated Statement of Profit and Loss in line with the original accounting treatment for the provision in the prior year.

For the year ended 31 December 2020 (continued)

15 PROVISIONS (CONTINUED)

C. UNCERTAIN TAX POSITIONS

As a result of a review of tax compliance across the Group, which was performed in consultation with external professional advisors, the Group has provided for its best estimate of taxes, interest and penalties due to various tax authorities. The amount to be settled is subject to on-going discussion and agreement with the related tax authorities.

Group	Group
2020	2019
US\$'000	US\$'000
At 1 January 1,120	1,264
Charged to the statement of profit or loss 333	247
Paid during the year (130)	(352)
Reclassified to accruals during the year (387)	-
Unused amounts reversed (519)	(39)
At 31 December 417	1,120

The accrued interest & penalties are recorded in the Consolidated Statement of Profit and Loss alongside the underlying tax charges.

16 TRADE AND OTHER PAYABLES

The Group's current trade and other payables mainly consist of amounts owed to our suppliers that have been either invoiced or accrued and are due to be settled within twelve months.

	Group 2020 US\$'000	Group 2019 US\$'000	Company 2020 US\$'000	Company 2019 US\$'000
Current trade and other payables
Trade payables	4,220	7,216	414	-
Accruals	3,109	2,796	2,302	1,234
Pension contributions	118	128	-	-
Social security and other taxes	3,374	574	-	-
VAT payable	35	21	-	-
Other payables	6	228	-	-
Total current trade and other payables	10,862	10,963	2,716	1,234
Total non-current trade and other payables	-	-	-	-
Total trade and other payables	10,862	10,963	2,716	1,234

The fair values of trade and other payables approximate to the values shown above.

For the year ended 31 December 2020 (continued)

16 TRADE AND OTHER PAYABLES (CONTINUED)

The carrying amounts of the Group's trade payables are denominated in the following currencies:

	Group	Group
	2020	2019
	US\$'000	US\$'000
US dollar	3,009	4,321
Euro	1,106	2,649
Pound sterling	90	246
Other	15	-
Total	4,220	7,216

The carrying amounts of the Company's trade payables are denominated in the following currencies:

	Company 2020 US\$'000	Company 2019 US\$'000
US dollar	42	-
Euro	316	-
Other	15	-
Total	373	-

17 CONTRACT LIABILITIES

Contract liabilities represent amounts received from customers in advance of delivery of the contractual performance obligations.

Group	Group
2020	2019
US\$'000	US\$'000
Advances for bundled performance obligations 4,419	3,818
Advances for services performance obligations 101	624
Advances for platform performance obligations 5,665	2,977
Total 10,185	7,419
Current 4,419	3,561
Non-current 5,766	3,858

The amount disclosed in "Advances for bundled performance obligations" in the current year relates to an ongoing delivery contract where the customer is estimated to go live in 2022 . The balance will be unwound over the remaining life of the commercial contract.

The details of revenue recognised in 2020 arising from balances included in Contract Liabilities on 1 January 2020 are included in Note 18.

For the year ended 31 December 2020 (continued)

18 SEGMENTAL INFORMATION

The Group is organised into two operating segments. This section provides information on the financial performance for the year on a segmental basis.

The Group's reportable operating segments based on the reports reviewed by the chief operating decision marker ("executive management team") that are used to make strategic decisions. The executive management team assesses the performance of the operating segments based on the Adjusted EBITDA measure.

The executive management team reviews business performance from a product and service perspective. In 2020 and 2019, TPF Consulting (Transaction Processing Facility) did not meet the quantitative thresholds for mandatory disclosure under IFRS 8 Operating Segments (IFRS 8 para 3). However, the executive management team have opted to continue to disclose this segment separately on the basis that TPF Consulting is managed independently and that the executive management team review the performance of the segment separately. The TPF Consulting business has different characteristics and business challenges compared to the E-Business reporting segment. Throughout the year, management considers the performance of E-Business and TPF Consulting on a separate basis.

The reportable operating segments derive their revenue primarily from the sale of products and services associated with the Group's suite of travel related technology and TPF Consulting revenue. Segment profit is measured using Adjusted EBITDA, which is defined as earnings before interest, tax, depreciation, amortisation (with the exception of deferred commission costs), exceptional costs and the costs of share options and interests granted to Executive Directors and employees. Sales between segments are carried out at arm's length. The revenue from external parties reported to the executive management team is measured in a manner consistent with that in the statement of profit and loss.

The E-Business segment consists of the development and sale of a variety of direct distribution software products and solutions to the Airline and Travel travel industry. The TPF consulting segment provides IT consultancy services to a number of major airlines. The segment information provided to the executive management team for the reportable segments for the year ended 31 December 2020 is as follows:

Group	2020	2020	2020	2019	2019	2019
		TPF			TPF
	E-Business	Consulting	Total	E-Business	Consulting	Total
	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000
Revenue from contracts with customers	26,860	1,961	28,821	43,470	2,526	45,996
Inter-segment revenue	-	(751)	(751)	-	(848)	(848)
External revenue	26,860	1,210	28,070	43,470	1,678	45,148
Adjusted EBITDA	1,159	183	1,342	561	(66)	495
Share-based payments cost	(67)	-	(67)	(83)	-	(83)
EBITDA	1,092	183	1,275	478	(66)	412
Depreciation	(1,871)	(44)	(1,915)	(1,053)	(52)	(1,105)
Amortisation	(227)	-	(227)	(1,510)	-	(1,510)
Operating (loss)/ profit before exceptional items	(1,006)	139	(867)	(2,085)	(118)	(2,203)
Exceptional items (Note 23)	(2,711)	(61)	(2,772)	(8,293)	-	(8,293)
Operating (loss)/ profit after exceptional items	(3,717)	78	(3,639)	(10,378)	(118)	(10,496)
Finance costs	(2,926)	29	(2,897)	(1,424)	(79)	(1,503)
Finance income	-	-	-	4	-	4
(Loss)/ profit before income tax	(6,643)	107	(6,536)	(11,798)	(197)	(11,995)
Income tax credit/(expense)	59	-	59	(66)	-	(66)
(Loss)/ profit for the year	(6,584)	107	(6,477)	(11,864)	(197)	(12,061)

For the year ended 31 December 2020 (continued)

18 SEGMENTAL INFORMATION (CONTINUED)

A reconciliation of adjusted EBITDA and foreign currency adjusted EBITDA to loss before income tax is provided as follows:

	Group	Group
	2020	2019
	US\$'000	US\$'000
Adjusted EBITDA	1,342	495
Depreciation	(1,915)	(1,105)
Amortisation - development costs	(27)	(841)
Amortisation – software	(72)	(67)
Amortisation - contract acquisition costs	(128)	(602)
Finance income	-	4
Finance costs	(2,897)	(1,503)
Share-based payments cost	(67)	(83)
Exceptional items (Note 23)	(2,772)	(8,293)
Loss before income tax	(6,536)	(11,995)
	Group	Group
	2020	2019
	US\$'000	US\$'000

Adjusted EBITDA	1,342	495
Foreign exchange	2,013	198
Foreign Currency Adjusted EBITDA	3,355	693

Foreign Currency Adjusted EBITDA is a new KPI introduced in 2020. Our functional currency is US\$. As explained in our debt financing note (Note 14), in 2019 the Company received €11.3m debt financing from Tireragh Limited. This loan funding was denominated in Euro.

We present this measure because we believe that the measure provides useful and necessary information to investors and other interested parties for the following reasons:

• › It ensures that the underlying business performance is presented clearly in the accounts and is not adversely or favourably affected by changes in the relative exchange rates which would be outside the control of the business.
• › It is the metric that is used for internal performance analysis.

The foreign exchange input is arrived at by combining the foreign exchange movements per Note 22 (both realised and unrealised Foreign exchange) and the additional foreign exchange movements on those Euro denominated Trade Debtor balances fully provided at the end of 2019 and reported as an exceptional item per Note 23.

For the year ended 31 December 2020 (continued)

18 SEGMENTAL INFORMATION (CONTINUED)

Group	2020	2020	2020	2019	2019	2019
	E-Business US\$'000	TPF Consulting US\$'000	Total US\$'000	E-Business US\$'000	TPF Consulting US\$'000	Total US\$'000
Reportable segment assets:
Intangible assets
- Product development	1,206	-	1,206	107	-	107
- Software	592	-	592	120	-	120
Contract acquisition costs	62	-	62	190	-	190
Other assets	16,249	2,626	18,875	21,454	689	22,143
Total reportable segment assets	18,109	2,626	20,735	21,871	689	22,560
Group	2020	2020	2020	2019	2019	2019
		TPF			TPF
	E-Business	Consulting	Total	E-Business	Consulting	Total
	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000
Reportable segment liabilities:
Current	(32,028)	(360)	(32,388)	(28,645)	(751)	(29,396)
Non-current	(12,126)	-	(12,126)	(10,161)	(125)	(10,286)
Total reportable segment Liabilities	(44,154)	(360)	(44,514)	(38,806)	(876)	(39,682)

Revenue from external customers is derived from the sales of E-Business products and services associated with the Group's suite of Airline and travel related technology and TPF Consulting services.

Analysis of revenue by category	2020	2020	2020	2019	2019	2019
		TPF			TPF
	E-Business	Consulting	Total	E-Business	Consulting	Total
	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000
Platform revenue (1)	16,571	-	16,571	26,822	-	26,822
Professional services (2)	10,135	-	10,135	16,397	-	16,397
Consultancy	-	1,210	1,210	-	1,677	1,677
Other revenue	154	-	154	252	-	252
Total revenue from contracts
with customers	26,860	1,210	28,070	43,471	1,677	45,148

(1) In 2019 US\$1.7m was recognised as platform revenue following sale of a legacy historic and no longer supported code base to a customer.

(2) In 2019 US\$4m was recognised as service revenue following the termination of a contract whereby the customer had made contractual nonrefundable payments that were previously carried on the Statement of Financial Position as a Contract Liability.

For the year ended 31 December 2020 (continued)

18 SEGMENTAL INFORMATION (CONTINUED)

	Group	Group
	2020	2019
	US\$'000	US\$'000
Americas	13,927	20,866
Asia – Pacific	6,229	11,795
Other European	4,833	6,825
Ireland	2,512	4,492
UK	569	1,170
Total revenue from contracts with customers	28,070	45,148

The entity is domiciled in the Republic of Ireland. Revenue from external customers in the Republic of Ireland is US\$2.5m (2019: US\$4.5m) and the total revenue from external customers from other countries is US\$25.6m (2019: US\$40.6m).

The total property, plant and equipment, intangible assets and capitalised contract acquisition costs located in the Republic of Ireland is US\$5.4m (2019: US\$2.1m), and the total of non-current assets located in other countries is US\$1.5m (2019: US\$0.7m).

A significant portion of the revenue of the Group was derived from the external customers as below, all of whom relate to the E-business segment:

	Group 2020 (1)	Group 2019 (1)
Customer A	40%	24%
Customer B	15%	10%
Customer C	10%	8%
Customer D	8%	10%
Customer E	8%	12%
Customer F	5%	7%
Customer G2	5%	7%

(1) Customers whose revenue balance represents 5% or more of the total revenue balance at 31 December 2020 or 31 December 2019 are disclosed in the note above.

(2) Following the receipt of the notice of termination Customer G revenue will be US\$nil in 2021.

CONTRACT BALANCES	Group	Group
	2020	2019
	US\$'000	US\$'000
Trade receivables (Note 10)	4,562	4,578
Contract assets (Note 10)	853	2,561
Contract liabilities (Note 17)	10,185	7,419

For the year ended 31 December 2020 (continued)

18 SEGMENTAL INFORMATION (CONTINUED)

TRADE RECEIVABLES

Trade receivables are non-interest bearing and are generally on terms of 30 days.

E-Business

In 2020, US\$4.1m (2019: US\$5.5m) was recognised as provision for expected credit losses on trade receivables.

TPF

In 2020, US\$Nil (2019: US\$Nil) was recognised as provision for expected credit losses on trade receivables

CONTRACT ASSETS

Contract assets are initially recognised for amounts due in respect of performance obligations satisfied, in advance of receiving consideration where the receipt of consideration is conditional other than for the passage of time. Contract assets are reclassified to trade receivables once invoiced in accordance with the customer contractual terms. Contract assets increased in the year as there were higher unbilled amounts due to the Company finalising new contractual arrangements at the year end with a customer.

E-Business

In 2020, US\$\$0.1m (2019: US\$0.2m) was recognised as a provision for expected credit losses on contract assets.

TPF

In 2020, US\$Nil (2019: US\$Nil) was recognised as a provision for expected credit losses on contract assets.

CONTRACT LIABILITIES

Contract liabilities include advances received to deliver licence and implementation services as a result.

E-Business

US\$3m revenue from contracts with customers was recognised in 2020 (2019: US\$6.1m) in respect of amounts included in contract liabilities at the beginning of the year.

TPF

US\$Nil revenue from contracts with customers was recognised in 2020 (2019: US\$Nil) in respect of amounts included in contract liabilities at the beginning of the year.

REMAINING PERFORMANCE OBLIGATIONS

E-Business

Amounts of our customers' transaction prices that are allocated to remaining (unsatisfied or partially unsatisfied) performance obligations represent contracted revenues that have not yet been recognised. The total transaction price that has been allocated to performance obligations not satisfied in full at 31 December 2020 was US\$30m (2019: US\$43m). This total largely comprises obligations to provide professional services to customers and deliver customised or bundled license and service arrangements under contracts that have remaining durations in excess of one year and typically have multiple remaining years.

The decrease year on year is the result of ongoing service delivery.

The estimate of both the amount of transaction price allocated to unsatisfied performance obligations and the expected pattern of recognition is subject to changes arising from, among other things:

• › Potential contract modifications;
• › Changes to the remaining contracted terms;
• › Customers availing of contract renewal options;
• › Currency fluctuations, particularly with respect to changes in the Euro and US dollar exchange rates; and
• › Actual future transaction fees.

TPF

As the customer simultaneously receives and consumes the benefits provided by TPF's performance revenue is recognised over time. As at 31 December 2020, there are no remaining performance obligations.

For the year ended 31 December 2020 (continued)

19 EXPENSES BY NATURE

This note provides additional detail on the nature of the expenses incurred and recorded by the Group.

	2020 before	2020	2020 after	2019 before	2019	2019 after
	exceptional	exceptional	exceptional	exceptional	exceptional	exceptional
	items	items	items	items	items	items
		(Note 23)			(Note 23)
	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000
Employee benefit expense (Note 20) -
net of capitalisation	14,169	467	14,636	18,894	2,596	21,490
Consultants and contractors - net of
capitalisation	6,058	-	6,058	14,840	-	14,840
Amortisation - development costs (Note 5)	27	-	27	-	-	-
Amortisation - software (Note 5)	72	-	72	67	-	67
Deferred commission amortisation (Note 8)	128	-	128	602	-	602
Establishment costs	672	-	672	836	-	836
Hosting	1,568	-	1,568	1,130	-	1,130
Professional fees	1,831	1,840	3,671	1,732	281	2,013
Travel	183	-	183	695	-	695
Depreciation - PP&E (Note 4)	507	-	507	1,105	-	1,105
Depreciation - Right of Use Assets (Note 6)	1,408	-	1,408	841	-	841
Net impairment losses on financial and contract assets (Note 10)	(1,729)	205	(1,524)	1,933	2,876	4,809
Third party services	429	-	429	512	-	512
Impairment	-	260	260	-	-	-
Communication	178	-	178	238	-	238
Software maintenance and other online charges	630	-	630	771	-	771
Other	1,591	-	1,591	3,366	2,540	5,906
Total cost of sales, selling and marketing costs, impairment losses on contract and trade receivables, administrative and exceptional expenses	27,723	2,772	30,495	47,562	8,293	55,855
Other losses	1,615	-	1,615	199	-	199
Total operating costs	29,338	2,772	32,110	47,761	8,293	56,054
Disclosed as:
Cost of sales	19,234	-	19,234	30,583	2,596	33,179
Selling and marketing costs	1,116	-	1,116	1,654	-	1,654
Administrative expenses	9,102	2,567	11,669	13,392	2,821	16,213
Net impairment losses on financial and contract assets	(1,729)	205	(1,524)	1,933	2,876	4,809
Other losses	1,615	-	1,615	199	-	199
Total operating costs	29,338	2,772	32,110	47,761	8,293	56,054

For the year ended 31 December 2020 (continued)

19 EXPENSES BY NATURE (CONTINUED)

REMUNERATION TO GROUP EXTERNAL AUDITOR

During the year the Group obtained the following services from the Group's auditors:

Company	2020	2019
	US\$'000	US\$'000
Fees payable to the entity's statutory auditors in respect of:
(a) the audit of entity financial statements	12	12
(b) other assurance services	675	509
(c) tax advisory services	-	-
(d) other non-audit services	-	-
Total	687	521
Group	2020	2019
	US\$'000	US\$'000
Fees payable to the Groups' statutory auditors in respect of:
(a) the audit of Group financial statements	675	509
(b) other assurance services	12	12
(c) tax advisory services	-	-
(d) other non-audit services	-	-
Total	687	521

20 EMPLOYEE BENEFIT EXPENSE

	Group	Company	Group	Company
	2020	2020	2019	2019
	US\$'000	US\$'000	US\$'000	US\$'000
Wages and salaries	13,505	-	18,901	-
Social security costs	1,340	-	2,123	-
Pension costs – defined contribution schemes	557	-	859	-
Employee benefit expense before capitalisation	15,402	-	21,883	-
Capitalised labour	(699)	-	(42)	-
Employee benefit expense after capitalisation	14,703	-	21,841	-
Share-based payments credit (Note 13)	(67)	-	(83)	-
Long term incentive plan granted to Executive Directors and other employees (Note 15)	-	-	(310)	-
Total	14,636	-	21,448	-
Total before capitalisation	15,335	-	21,490	-
Capitalisation	(699)	-	(42)	-
Amount charged to Profit or Loss	14,636	-	21,448	-

For the year ended 31 December 2020 (continued)

20 EMPLOYEE BENEFIT EXPENSE (CONTINUED)

The average number of persons employed by the Group (including Executive Directors) during the year analysed by category was as follows:

	Group 2020	Company 2020	Group 2019	Company 2019
Product development and delivery	118	-	170	-
Sales and marketing	5	-	8	-
Administration	25	-	25	-
Total	148	-	203	-

The total number of persons employed by the Group (including Executive Directors) at 31 December 2020 was 140 (2019: 164).

No staff were employed by the PLC Company at 31 December 2020 and 2019.

The Group operates a number of defined contribution pension schemes in which the majority of Group employees participate. The assets of these schemes are held separately from those of the Group in independently administrated funds. The pension charge represents contributions payable by the Group to the schemes and amounted to US\$557,000 in respect of 2020 (2019: US\$859,000), of which US\$118,000 was accrued at the year-end (2019: US\$112,000).

Details of Directors' remuneration can be found in the Remuneration Report (see pages 74 to 91).

21 OTHER INCOME

Group	Group
2020	2019
US\$'000	US\$'000
Sundry Income 401	410
Total 401	410

Sundry income primarily consists of customer recharges for content provider costs incurred of US\$59k (2019:US\$410k) and COVID related government wage subsidy schemes of US\$324k (2019:US\$Nil).

22 OTHER LOSSES

	Group	Group	Group	Group	Group	Group
	2020	2020	2020	2019	2019	2019
	Before	Exceptional	After	Before	Exceptional	After
	exceptional	items (Note	exceptional	exceptional	items (Note	exceptional
	items	23)	items	items	23)	items
	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000
Net foreign exchange losses	(1,615)	-	(1,615)	(199)	-	(199)
Total	(1,615)	-	(1,615)	(199)	-	(199)

For the year ended 31 December 2020 (continued)

23 EXCEPTIONAL ITEMS

The following costs and expenses have been treated as exceptional items in the consolidated statement of profit or loss:

	Group 2020 US\$'000	Group 2019 US\$'000
Professional fees in relation to investigations, business transformation programme and litigation procedures	1,783	1,555
Severance pay costs	467	2,596
Provision for costs associated with complying with regulatory investigations	57	1,035
Provision for non recovery of customer receivable balances, which are subject to litigation	205	2,876
Impairment of contract assets	-	231
Impairment Atlanta office	260	-
Total	2,772	8,293

EXCEPTIONAL ITEMS:

Professional fees in relation to investigations, business transformation programme and litigation procedures

During 2019, the Group undertook a cost restructuring programme as part of a wider Transformational Change Programme, termed "RESET". These programmes were designed to reduce costs and address the operational and financial control issues identified from the reviews carried out. Professional fees included legal, accounting and other consultancy services related to: improving internal control procedures to support a relisting of the Company's shares on Euronext, customer litigation, review of tax compliance, severance programmes, business reorganisation and further costs associated with the financial irregularities identified in respect of 2018.

Severance pay costs

Charges in relation to a voluntary severance programme carried out in 2019 as part of the cost reduction program. The Group identified 57 roles across the Group which were included in the severance programme. During 2019, 55 employees had departed with US\$2.6m being paid out in 2019, with a remaining immaterial balance paid in 2020. A further 14 roles were identified as part the redundancy program in 2020 rising from the need to respond to the COVID-19 impact on the business. This additional severance programme was completed in 2020.

Provision for costs associated with complying with regulatory investigations

The Group has recognised a provision which relates to legal and compliance costs of ongoing regulatory investigations and the necessary requirements to obtain an end to the suspension order on the trading of the Group's shares on the Euronext Dublin exchange. The regulatory investigation and suspension of trading of the Group's shares arose following the significant breakdown in internal financial controls as disclosed in the 2018 Annual Report.

For the year ended 31 December 2020 (continued)

23 EXCEPTIONAL ITEMS (CONTINUED)

EXCEPTIONAL ITEMS: (CONTINUED)

Provision for non recovery of customer receivable balances, which are subject to litigation

On 4 September 2019, the Group received a termination notice from Lufthansa AG ("Lufthansa"). The Group strongly disputes the legality of this notice and has commenced proceedings against Lufthansa in Landgericht Frankfurt (Regional Court of Frankfurt) in order to achieve resolution of the matter and to recover amounts due and general business damages. On 5 March 2020, the Group issued a notice of dispute and invocation of a contractual arbitration clause to recover amounts owed to the Group by Deutsche Lufthansa AG in connection with services provided to its subsidiary, Swiss International Airlines Limited. At 31 December 2020, the invoiced balances due by Lufthansa and its subsidiary company, Swiss International Airlines Limited, amounted to US\$4.3m (2019:US\$2.9m). The directors strongly believe that the Group is entitled to recover amounts outstanding, but have recorded a 100% expected credit loss amount in these financial statements against the full value of invoiced amounts, in accordance with IFRS 9. The additional balance in 2020 relates to contractual amounts due from Swiss Airlines invoiced during the year.

Impairment of contract assets

During the prior year, following the termination of certain customer contracts due to events outside the Group's control, the Group assessed the recoverability of the associated contract assets. As a result of the review undertaken, it was deemed appropriate to impair the contract assets.

Impairment of Atlanta office

During the year a review of the US real estate was undertaken which concluded that the Atlanta office was no longer required by the Group. The Group subsequently entered into a sub-lease arrangements for this building. The sub-lease rental income is less than the head lease costs, as such the Atlanta Right-of-Use asset was deemed to be impaired. Additional costs were incurred by the Group in exiting the office in preparation or sub-leasing the space.

24 FINANCE INCOME AND FINANCE COSTS

This note details the interest income generated by our financial assets and the expense incurred on our financial liabilities.

Group	Group
2020	2019
US\$'000	US\$'000
Interest income on bank deposits with less than 90 days maturity -	4
Early settlement discount -	(242)
Shareholder's loan interest & amortisation (2,275)	(499)
Interest on Lease Liabilities (639)	(706)
Other interest net 17	(56)
Net finance cost (2,897)	(1,499)

For the year ended 31 December 2020 (continued)

25 EARNINGS PER SHARE

Earnings per share (EPS) is the amount of post tax results attributable to each ordinary share. Basic EPS is the amount of result for the year divided by the weighted average number of shares in issue during the year. Diluted EPS shows what the impact would be if all outstanding and exercisable options were exercised and treated as ordinary shares at year end.

Basic	Group	Group
	2020	2019
Loss attributable to ordinary shareholders (US\$'000)	(6,477)	(12,061)
Weighted average number of ordinary shares outstanding	80,014,342	79,923,849
Basic loss per share (in US cents)	(8.09)	(15.1)

Basic earnings per share is calculated by dividing the loss attributable to the ordinary shareholders by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased/ issued by the Company and held as treasury shares.

Diluted Group 2020	Group 2019
Loss attributable to ordinary shareholders (US\$'000) (6,477)	(12,061)
Weighted average number of ordinary shares outstanding 80,014,342	79,923,849
Adjustment for share options and share awards
Weighted average number of ordinary shares outstanding 80,014,342	79,923,849
Diluted loss per share (in US cents) (8.09)	(15.1)

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The categories of dilutive potential ordinary shares of the Group are employee share options, JSOP awards and Deferred Share Scheme awards under the schemes as described in Note 12. A calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of subscription rights attached to outstanding share options.

No share options have been included in the calculation of diluted earnings per share because they are anti-dilutive for the year ended 31 December 2020 due to the loss recorded by the Group. The share options could potentially dilute basic earnings per share in the future. The weighted average potential dilutive impact of share options at 31 December 2020 amounted to 4,466,449 shares. As the trading in the shares on the Euronext Dublin market was suspended at the 2019 year end date the directors were unable to determine with reasonable certainty the average share price for the reporting period. The average share price for the 2019 reporting period was used to assess which share options are "in the money" and potentially dilutive. The weighted average potential dilutive impact of share options at 31 December 2019 varied based on the average share price for the reporting period, as per Note 12 the potentially dilutive shares could have fallen within the following range based on a share price upon relisting:

Average share price below US\$50c: 88,000 potentially dilutive shares Average share price below US\$70c: 128,000 potentially dilutive shares Average share price below US\$90c: 198,000 potentially dilutive shares Average share price over US\$90c: 1,667,783 potentially dilutive shares

No JSOP or Deferred Share Scheme share awards have been included in the calculation of diluted earnings per share for the year ended 31 December 2020 as these are anti-dilutive due to the loss recorded by the Group. The share awards could potentially dilute basic earnings per share in the future. The weighted average potential dilutive impact of share awards at 31 December 2020 amounted to 609,905 shares (2019: 609,905 treated as dilutive).

For the year ended 31 December 2020 (continued)

26 CASH GENERATED BY/(USED IN) OPERATIONS

This note reconciles how the Group's loss for the year translates into cash flows generated by/(used in) operating activities.

	Group		Company
	2020	2019	2020	2019
	US\$'000	US\$'000	US\$'000	US\$'000
Loss before income tax	(6,536)	(11,995)	(4,848)	(18,081)
Adjustments for:
Finance costs – net	2,897	603	2,275	500
Interest on lease liabilities	-	652	-	-
Depreciation	507	1,105	-	-
Depreciation right-of-use assets	1,408	841	-	-
Amortisation	99	67	-	-
Deferred commission amortisation	128	602	-	-
Impairment	260	231	5,222	18,625
Share-based payments cost	67	83	-	-
Exchange translation adjustment	-	8	1,372	171
Loss on disposal of fixed assets	-	4	-	-
Non cash management charges	-	-	(5,758)	(2,249)
Provision movement	-	627	-	1,034
Changes in working capital:
Trade and other receivables	410	469	(77)	198
Contract assets	1,708	(774)	-	-
Contract fulfilment costs	(1)	2,762	-	-
Trade and other payables	538	(4,834)	1,737	89
Contract liabilities	2,766	(6,346)	-	-
Provisions	(737)	892	-	-
Net cash inflow / (outflow) from operations	3,514	(15,003)	(77)	287

For the year ended 31 December 2020 (continued)

27 DIVIDENDS PAID

Dividends represent one type of shareholder return and are paid as an amount per ordinary shares held. There was no dividend paid in 2020 (2019: Nil).

The Board of Directors of the Company are not proposing that a final dividend be paid to shareholders in respect of the year ended 31 December 2020 (2019:nil).

UNLAWFUL DISTRIBUTION AND DIVIDEND RECEIVED FROM DATALEX (IRELAND) LIMITED

As reported in our 2018 Annual Report, Datalex plc paid a dividend to shareholders of US\$3.8m on 5 September 2018. To enable the dividend to be paid, Datalex plc received a dividend of US\$4.0m from its subsidiary, Datalex (Ireland) Limited ("Datalex Ireland") on 30 May 2018. This dividend was US\$0.24 per share on the issued ordinary share capital of 16,607,262 shares. The dividend payment by Datalex plc had been approved by shareholders at the AGM on 18 June 2018 and interim financial statements to 31 May 2018 were filed at the Companies Registration Office to support this payment.

Subsequent to the dividend payments, management identified that Datalex Ireland would not have had sufficient retained earnings to support the dividend payment to Datalex plc had there been appropriate recording of revenue, which had been subsequently amended. As such, the 2018 dividend payment by Datalex Ireland to Datalex plc of US\$4.0m was an unlawful distribution in contravention of the provisions of Section 117 of the Companies Act 2014.

In accordance with applicable legislation, the dividend of US\$4.0m paid by Datalex Ireland to Datalex plc is repayable by Datalex plc. Accordingly, an intercompany payable to Datalex Ireland has been recognised for US\$4.0m in the financial statements of Datalex plc and the dividend received had been derecognised in the statement of profit or loss of the Company for 2018. The intercompany receivable balance which has been presented net of the provision in the Statement of Financial Position remains outstanding at the 31 December 2020.

28 INVESTMENTS IN SUBSIDARIES

This note details of the Company's principle subsidiary undertakings as well as the carrying value of these subsidiary undertakings.

Company	2020 US\$'000	2019 US\$'000
At beginning of year	-	-
Share-based payments cost	67	83
Impairment provision	(67)	(83)
At end of year	-	-

During 2020, management considered the external and internal sources of information that may indicate that the previously recognised impairment losses may no longer exist or may have decreased. The external indicators considered include whether there has been a significant favourable changes in the asset's value and market conditions. The internal indicators considered include whether there has been any significant favourable changes in the asset's use and performance. As a result of the review of the external and internal indicators, it was deemed appropriate not to reverse any of the previously recorded impairment on investments in subsidiary undertakings.

For the year ended 31 December 2020 (continued)

28 INVESTMENTS IN SUBSIDARIES (CONTINUED)

The Company has investments in the following subsidiary undertakings:

COMPANY NAME	ORDINARY SHAREHOLDING	NATURE OF ACTIVITY	REGISTERED OFFICE
Datalex (Ireland) Limited	100%	Development and sale of computer software	Block U, Eastpoint, Clontarf, Dublin D03 H704, Ireland
Datalex USA, Inc.	100%	Delivery of professional services and hosting	1 Concourse Parkway, Suite 650, Atlanta, GA 30328, USA
Datalex Netherlands B.V.	100%	TPF consulting	Parlevinker 13, 1186 ZA Amstelveen, The Netherlands
Datalex Solutions (UK) Limited	100%	Delivery of professional services	8th Floor, 55 Spring Gardens, Manchester, M2 2BY, UK
Datalex Tokenization, Inc.	100%	Provision of online payment processing connectivity in line with PCI compliance	1 Concourse Parkway, Suite 650, Atlanta, GA 30328, USA
Datalex Employee Benefit Trust	100%	Employee benefit trust	12 Castle Street, St Helier, Jersey JE2 BR2, UK
Datalex Holdings Limited	100%	Holding company	Block U, Eastpoint, Clontarf, Dublin D03 H704, Ireland
Datalex (China) Limited	100%	Development and sale of computer software	Room 332 , 3F Hyundai Motor Tower 38 Xiaoyun Road, Chaoyang District, Beijing 100027, P.R. China
Datalex Australasia Pty. Limited	100%	In liquidation	58 Gipps Street, Collingwood, Victoria 3066, Australia

29 RELATED PARTY TRANSACTIONS

The Group's principal related parties are the Group's subsidiaries and key management personnel of the Group.

The following transactions were entered with related parties during the year:

KEY MANAGEMENT PERSONNEL

Key management personnel include the two Executive Directors who held office during the year (2019: four Executive Directors), the five Non-Executive Directors (2019: eight Non-Executive Directors) and 12 members of the executive leadership team (2019: 15 members).

The remuneration of and transactions with all Directors under the Companies Act 2014 have been disclosed in the Remuneration Report.

For the year ended 31 December 2020 (continued)

29 RELATED PARTY TRANSACTIONS (CONTINUED)

KEY MANAGEMENT COMPENSATION

	2020 US\$'000	2019 US\$'000
Short term employee benefits (1)	3,185	3,013
Share-based payment charge (2)	81	-
Termination benefits	-	581
Retirement benefits expense (3)	139	128
Charged to operating profit	3,405	3,722

(1) Balance is made up of salaries, Directors' fees, and other short-term employee benefits.

(2) The benefits included in this category relate to share option awards, JSOP awards, Long Term Incentive Plans and deferred share awards under the schemes described in Note 2.19. This relates to the Long-Term Incentive Plan described in Notes 12 and 15.

(3) Retirement benefits are accruing to two Executive Directors and 12 senior management team members (2019: four Executive Directors and 13 members of the senior management team) under a defined contribution scheme.

Peter Lennon, a Non-Executive Director, is employed by Ronan Daly Jermyn, a law firm. US\$14k in expenses were incurred by the Group with Ronan Daly Jermyn during 2020. US\$2k was payable to Ronan Daly Jermyn at 31 December 2020 (2019: US\$78k).

Non-Executive Directors' fees of US\$39,000 (2019: US\$36,000) were accrued at the year end.

The remuneration of and transactions with all Non-Executive Directors is as follows:

2020	2019
US\$'000	US\$'000
Fees 349	324

COMPANY

At 31 December 2020, the Company had a balance net of provision of US\$nil (2019: US\$nil) due to it from other Group companies.

Amounts owed by Group undertakings are interest free, unsecured and are repayable on demand. In the previous years the Board reviewed these amounts for impairment. Following these reviews, a full provision for impairment was deemed necessary on the balances due from other Group companies as at 31 December 2019, given uncertainties as to future recoverability of these amounts and in light of the significant losses and cash outflows in these other Group companies.

During 2020, the Directors considered the external and internal sources of information that may indicate that the impairment loss recognised in the prior year may no longer exist or may have decreased. The external indicators considered include whether there has been a significant favourable changes in the asset's value and market conditions. The internal indicators considered include whether there has been any significant favourable changes in the asset's use and performance. As a result of the review of the external and internal indicators, it was deemed appropriate not to reverse any of the previously recorded impairment.

At 31 December 2020, the Company had a balance of US\$34k (2019: US\$34k) due from Mr. David Kennedy, a previous related party, in relation to share option exercise costs. At the date of the Annual Report the amount unpaid is US\$34k and which is being actively pursued. Mr. Kennedy, a former Executive Director, held the position of Finance Director until 5 December 2018.

As disclosed in Note 27, the 2018 dividend of US\$4.0m paid by Datalex Ireland to Datalex plc is repayable by Datalex plc. Accordingly, an intercompany payable to Datalex Ireland has been recognised for US\$4.0m in the financial statements of Datalex plc. The amount remains outstanding at the 31 December 2020.

For the year ended 31 December 2020 (continued)

29 RELATED PARTY TRANSACTIONS (CONTINUED)

GROUP AND COMPANY

TRANSACTIONS WITH TIRERAGH LIMITED AND IIU NOMINEES LIMITED:

In March 2019, IIU Nominees Limited subscribed for 3.859 million new ordinary shares in Datalex plc at a price of €1.00 per share (see also Note 12), Mr Desmond is the ultimate beneficial owner of this shareholding.

As more fully explained in Notes 14 & 31, the Group entered into a secured loan facility agreement with Tireragh Limited, a related party ultimately beneficially owned by Mr. Dermot Desmond, during the year ended 31 December 2020.

On 1 April 2021, Tireragh Limited notified the Board of Directors, by way of letter, confirming that it would be willing to extend the Termination date of the loan facility to 30 September 2022 on the basis that all other provisions of the loan facility agreement remain in place.

At 31 December 2020, the total balance payable to Tireragh Limited under this arrangement was US\$15.7m including US\$3.2m for unpaid debt facility fees). The break down of the principle amount, interest charges, debt issuance costs & foreign exchange charges are included in Note 14.

30 LITIGATION AND DISPUTES

This note provides an update on the significant lligitation and disputes which the Group is involved in.

On 4 September 2019, the Group received a termination notice from Lufthansa AG ("Lufthansa"). The Group strongly disputes the legality of this notice and has commenced proceedings against Lufthansa in Landgericht Frankfurt (Regional Court of Frankfurt) in order to achieve resolution of the matter and to recover amounts due and general business damages. In addition the Group has commenced arbitration proceedings against a subsidiary company of Lufthansa, Swiss International Airlines Limited ("Swiss Airlines") to recover amounts due and owing as a result of the early termination of a contract by Swiss Airlines which have not been paid. The outcome of these processes is currently uncertain and the Group may incur additional legal costs in pursing these claims which may not be recoverable. At 31 December 2020, the invoiced balances due by Lufthansa and its subsidiary company, Swiss International Airlines Limited, amounted to \$4.3 million. While the directors believe strongly that the Group is entitled to recovery, this is not guaranteed and a provision has been made in these financial statements against the full value of invoiced amounts, in accordance with IFRS 9.

31 FINANCIAL RISK MANAGEMENT

This note details the Group's treasury management and financial risk management objectives and policies. Information is also provided regarding the Group's exposure and sensitivity to market rate risk, foreign exchange risk, interest rate risk, price risk, credit risk, liquidity risk, capital risk, cash flow risk and the policies in place to monitor and manage these risks.

FINANCIAL RISK MANAGEMENT

The Group and Company's operations expose it to a variety of financial risks including interest rate, foreign exchange, credit and liquidity risk. The Group has in place a risk management programme that seeks to manage the financial exposure of the Group. The Group may and has used derivative financial instruments to manage certain risk exposures but has not done so in either 2020 or 2019. Given the size of the Group, the Directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the Board. The policies are set by the Board of Directors and are implemented by the Group's finance department.

MARKET RATE RISK

Market rate risk refers to the exposure of the Group's financial position to movements in interest rates, currency rates and general price risk. The principal aim of managing currency risk is to limit the adverse impact of movement in currency rates on shareholders' equity. The Group has limited exposure to interest rate and price risk.

For the year ended 31 December 2020 (continued)

31 FINANCIAL RISK MANAGEMENT (CONTINUED)

MARKET RATE RISK (CONTINUED)

(I) FOREIGN EXCHANGE RISK

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures in the normal course of business and primarily with respect to the euro, pound sterling, Swedish Krona and Chinese renminbi. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. The main exposure at 31 December 2020 relates to euro monetary assets totalling US\$6.3m (2019: US\$5.5m), pound sterling monetary assets totalling US\$0.1m (2019: US\$0.1m) and Swedish Krona monetary assets totalling US\$nil (2019: US\$0.9m). The Group's main current strategy to manage the foreign exchange risk is, where possible, to match customer contracts with related contractor and employee costs in the same currency. The Group also has bank accounts denominated in its various operating currencies which allow it to maintain available funds in different currencies as a means of minimising the impact of foreign exchange volatility on its operations.

To manage the foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, the Group may avail of forward contracts and has facilities available with its bank. Forward contracts are generally used when it is deemed that there is a potential volatility risk which may negatively impact the certainty in respect of euro-based operating costs. Given the profile of the overseas operations and the customer base, foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the US dollar. There were no forward foreign exchange contracts in place as at 31 December 2020 or 2019.

At 31 December 2020, the movement of the Euro against the US dollar with all other variables held constant, the impact on posttax loss for the year would have been:

2019 Impact on results	288	216	144	72
2020 Impact on results	520	390	260	130
	'000's	'000's	'000's	'000's
	USD	USD	USD	USD
Euro movement against US Dollar	10%	7.50%	5%	2.50%

A strengthening in the Euro would have result in a reduced loss being recorded, whereas a weakening would have resulted in an increase in the loss recorded .The movement is mainly as a result of foreign exchange gains on translation of euro-denominated trade receivables, trade payables and cash. The 2020 year end Euro to US Dollar rate was US\$1.2271 (2019: US\$1.1234). The average Euro to US Dollar exchange rate for 2020 was US\$1.145 (2019: US\$1.119).

(II) INTEREST RATE RISK

The principal aim of managing interest rate risk is to limit the adverse impact on cash flows and shareholders' equity of movements in interest rates. Cash and cash equivalents at variable rates expose the Group to cash flow interest rate risk. Cash and cash equivalents at a fixed rate expose the Group to fair value interest rate risk. The Group's treasury policy is designed to monitor the funding requirements of the business. Cash requirements are managed centrally and reviewed daily. Excess funds are placed on deposits which typically have a maturity of less than three months. The term of deposit is based on the interest rate offered and cash forecasts as the Group ensures that sufficient cash is available on demand to meet expected operational requirements. The interest rate on floating rate deposits (with maturities less than 90 days) of US\$0.1m at 31 December 2020 (2019: US\$0.09m) is generally based on the appropriate Euribor or Libor rate.

The Directors will revisit the appropriateness of this policy should the Group's operations change in size or nature.

Interest rate sensitivity analysis

At 31 December 2020, based on the value of interest-bearing cash balances held at that date, if interest rates had been 100 basis points higher/ lower and all other variables were held constant, the Group loss after tax for the year would not have been materially impacted (2019: Group loss after tax for the year would not have been materially impacted).

For the year ended 31 December 2020 (continued)

31 FINANCIAL RISK MANAGEMENT (CONTINUED)

MARKET RATE RISK (CONTINUED)

(III) PRICE RISK

The Group is not exposed to material price risk.

CREDIT RISK

Credit is managed on a Group basis. Credit risk arises from cash and cash equivalents, short-term investments and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding trade receivables, contract assets committed transactions. The Group treasury policy is designed to limit exposure with any one institution and to invest its excess cash in low risk investment accounts with authorised banking counterparties. The Group has not experienced any losses on such accounts.

The Group has implemented policies that require appropriate credit checks on potential customers before sales are made and monitors the exposure to potential credit loss on a regular basis. The utilisation of credit limits is regularly monitored. During the year ended 31 December 2020 a significant portion of the Group's revenue was derived from a limited number of customers (see Note 18).

The credit quality of cash and cash equivalents can be assessed by reference to long term S&P credit ratings of the counterparties in the following tables:

Cash and cash equivalents	Group	Group
	2020	2019
	US\$'000	US\$'000
A	230	633
A-	503	2,337
BBB+	28	48
BBB-	2,254	-
Not rated	-	-
	3,015	3,018

Cash and cash equivalents are held at amortised cost. The expected credit loses on these balances are immaterial.

LIQUIDITY RISK

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities on hand, having additional funding available through an adequate amount of committed credit facilities and maintaining the ability to close out market positions.

It is Group policy to maintain at all times access to sufficient resources to meet all short-term financial obligations.

The analysis below summarises the Group's financial liabilities (based on contractual undiscounted cash flows) into relevant maturity group-based on the remaining period as at the reporting date:

TRADE PAYABLES AND BORROWINGS (INCLUDING INTEREST)

Group	Less than 1 Yr	Between 1-2 Yrs	Between 2-5 Yrs	Over 5 Yrs	Total
	US\$'000	US\$'000	US\$'000	US\$'000	US\$'000
At 31 December 2020	32,053	1,779	1,804	1,956	36,871
At 31 December 2019	24,346	824	2,030	2,634	29,833

For the year ended 31 December 2020 (continued)

31 FINANCIAL RISK MANAGEMENT (CONTINUED)

SHAREHOLDER LOAN FACILITY AGREEMENT

As discussed in Note 14, the Company entered into a €6.141m secured loan facility agreement on 14 March 2019 with Tireragh Limited, a company ultimately beneficially owned by Mr. Desmond ('Tireragh'), conditional on shareholder approval (the "First Facility"). Shareholder approval for the First Facility was subsequently given at an EGM held on 26 April 2019. Under the terms of the First Facility, Tireragh made available a term loan facility of up to a maximum aggregate amount of €6.141m to be drawn down by the Company by way of one or more advances (but no more than six). The First Facility was secured by a debenture entered into by the Company, creating fixed and floating charges over all of the Company's assets, undertaking and goodwill as security for the Company's obligations to Tireragh with respect to the First Facility. The First Facility was guaranteed by Datalex (Ireland) Limited, the Company's subsidiary, which, by debenture, also created a fixed and floating charge over all of its assets, undertaking and goodwill as security for its and the Company's obligations to Tireragh with respect to the First Facility. The First Facility was non-amortising, had a term of 18 months from 1 May 2019 and incurred interest on drawn down balances at the rate of 10% per annum, compounding monthly and rolled up until maturity.

The First Facility was re-financed in advance of maturing with the remaining interest payable on the First Facility being capitalised at the refinancing date. Under the terms of the secured loan facility with Tireragh which was approved by shareholders on 15 November 2019 (the "Second Facility"), a further €5m in secured debt funding was made available to the Company. The Second Facility is repayable in November 2020. Under the Second Facility there are additional obligations to which the Company needs to comply with in addition to those set out in the First Facility.

The Second Facility required cross guarantees to be provided by the Company and Datalex (Ireland) Limited. Additionally Datalex USA, Inc. and Datalex Solutions (UK) Limited were required to act as additional guarantors of the Second Facility. The obligations of the Company and each of the guarantors to Tireragh, include:

• (i) A debenture entered into by the Company creating fixed and floating charges over all of its assets, undertaking and goodwill as security for its and the other guarantors' obligations to Tireragh with respect to the Second Facility;
• (ii) A debenture creating fixed and floating charges over all of Datalex Ireland Limited's assets, undertaking and goodwill as security for its and the other guarantors' obligations to Tireragh with respect to the Second Facility;
• (iii) Security provided over the shares of Datalex USA Inc. and Datalex Solutions (UK) Limited granted by Datalex (Ireland) Limited;
• (iv) US law security over such assets, undertaking and goodwill of Datalex USA Inc. as may be permissible as a matter of US law as security for its and the other guarantors' obligations to Tireragh with respect to the Second Facility; and
• (v) A debenture entered into by Datalex Solutions (UK) Limited granting fixed and floating charges over all of its assets, undertaking and goodwill as security for its and the other guarantors' obligations to Tireragh with respect to the Second Facility; and
• (vi) Requirements to adhere to certain financial covenants, as outlined below:

The Company has achieved the relevant financial covenant targets to date. During 2020, Tireragh Limited waived obligations to provide certain financial information within specified time limits, including delivery of the Group's 2019 annual report within 120 days of year end (as permitted by the European Securities and Markets Authority and the Central Bank of Ireland) and the time limits within which budget projections and other periodic reporting obligations were provided during the year. Further, Tireragh Limited provided a waiver extending the time to deliver specified security documents in connection with a subsidiary of the Group and provided a waiver permitting the Group flexibility to negotiate extended payment terms with key suppliers in connection with COVID-19 measures taken by the Group.

The key financial covenants pertaining to the loan facility with Tireragh Limited are:

• › Achievement of Revenue and EBITDA targets, subject to agreed performance criteria, on a six month rolling basis.
• › Achievement of Cash & Bank balances and Working Capital targets on a monthly basis, subject to agreed performance criteria and testing over two consecutive months.

On the 31st October 2020, the maturity of the Second Facility was extended 1 November 2021 following Shareholder approval at an EGM on the 24 September 2020. On 1 April 2021, the Group received written confirmation from Tireragh Limited that it is willing to extend the repayment date of the loan facility to 30 September 2022. The extension of the Tireragh Limited loan facility would on the same terms as the existing facility arrangement. Please see Note 2.5, Going Concern for addtional information.

For the year ended 31 December 2020 (continued)

31 FINANCIAL RISK MANAGEMENT (CONTINUED)

CAPITAL MANAGEMENT

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders. The capital comprises mainly of issued capital, reserves and retained earnings as set out in the Consolidated Statement of Changes in Equity on page 114.

CASH FLOW RISK

The Group's income and operating cash flows are substantially independent of changes in market interest rates.

32 SUBSEQUENT EVENTS

This note provides details of material events which have occurred between the year end date of 31 December 2020 and the date of approval of the financial statements.

The Directors do not propose a final dividend in respect of the year ended 31 December 2020 (2019: \$nil).

Right-of-Use Assets - Buildings

On 31 March 2021, Datalex Ireland gave notice of termination to the landlord on the lease on our global headquarters in Block U, Eastpoint, Dublin, D03 H704, Ireland.

This notice issued to the landlord is part of the Group's intention to review the existing office requirements to support the continued operations of the Group going forward.

Shareholder Loan Arrangements

On 1 April 2021, Tireragh Limited notified the Board of Directors, by way of letter, confirming that it would be willing to extend the Termination date of the loan facility to 30 September 2022 on the basis that all other provisions of the loan facility agreement remain in place.

The Directors deem the above subsequent events to be non-adjusting events. There have been no other subsequent events that impact on the 2020 consolidated financial statements up to the date of this report.

33 CONTINGENCIES

The Group is subject to a number of regulatory investigations including the facts and circumstances of the historic events that gave rise to a illegal intercompany dividend, retracted market guidance and refiling of the 2018 half year financial statements amongst other items. Whilst the Group has provided for the estimate of the direct costs that will be incurred to support these regulatory investigations, no provision has been recorded for any fines that may be levied on the Group. Any fines that may arise are uncertain and are dependent on uncertain future events, i.e. the outcome and conclusions reached by the regulatory authorities. The Directors are therefore unable to determine with reasonable certainty an amount of potential fines. Additionally, the Directors are not certain as to when the regulatory bodies will likely conclude their reviews.

34 GUARANTEES

The Group had no guarantees as at 31 December 2020.

Supplementary Information

Contacts & Other Information

Directors

David Hargaden (Non-Executive Chairman)

Sean Corkery (Chief Executive Officer)

John Bateson (Non-Executive Director)

Christine Ourmières-Widener (Independent Non-Executive Director)

Peter Lennon (Non-Executive Director)

Mike McGearty (Lead Independent Non-Executive Director)

Niall O'Sullivan (Chief Financial Officer)

Company Secretary

Neil McLoughlin

Registered Number

329175

Registered Office

Block U EastPoint Clontarf Dublin 3 D03 H704 Ireland

Bankers

Bank of Ireland Sutton Cross Dublin 13 D13 K253 Ireland

Solicitors

McCann FitzGerald Riverside One Sir John Rogerson's Quay Dublin 2 D02 X576 Ireland

Independent Auditor

Deloitte Ireland LLP 29 Earlsfort Terrace Dublin 2 D02 AY28 Ireland

Shareholder's Enquiries

All administrative enquiries relating to shareholdings (for example, notification of change of address, loss of share certificates, dividend payments) should be addressed to the Company's registrars:

Computershare Investor Services (Ireland) Ltd 3100 Lake Drive Citywest Business Campus Dublin 24 D24 AK82 Ireland

Broker:

Goodbody 2 Ballsbridge Park Ballsbridge Dublin 4 D04 YW83 Ireland

Datalex plc Global Headquarters Block U EastPoint Dublin D03 H704 Ireland

Call: +353 1 806 3500 Fax: +353 1 806 3501

Email: info@datalex.com www.datalex.com