A. History and Development of the Company Alithya Group inc. (“Alithya” or the “Company”) (formerly 9374-8572 Québec Inc.) was incorporated on March 8, 2018 under the Business Corporations Act (Québec) (the “QBCA”). The Company was created for the purpose of the business combination between Alithya Canada Inc. (formerly Alithya Group Inc.) (“Old Alithya”), incorporated on April 2, 1992 under the Companies Act (Québec), now the QBCA, Alithya USA, Inc. (formerly Edgewater Technology, Inc.) (“Edgewater”), a corporation governed under the laws of Delaware and previously listed on the NASDAQ Global Market, and 9374-8572 Delaware Inc. (“U.S. Merger Sub”), a corporation governed under the laws of Delaware and a wholly-owned subsidiary of the Company. On November 2, 2018, the Company’s Class A subordinate voting shares commenced trading on the Toronto Stock Exchange (“TSX”) and on the NASDAQ Capital Market (“NASDAQ”) under the symbol “ALYA.” On March 15, 2018, the Company, Old Alithya, Edgewater, and U.S. Merger Sub, entered into an arrangement agreement, which was amended on September 10, 2018 and October 17, 2018, (the “Arrangement Agreement”). On November 1, 2018, and pursuant to the terms of the Arrangement Agreement, among other things, (i) the Company acquired Old Alithya, by way of a statutory plan of arrangement under the QBCA (the “Arrangement”), and (ii) U.S. Merger Sub merged with and into Edgewater, with Edgewater being the surviving corporation (the “Merger”). The Arrangement and the Merger are, collectively referred to herein, as the “Edgewater Transaction”. Following completion of the Transaction, shareholders of Old Alithya and Edgewater became shareholders of the Company, and each of Old Alithya and Edgewater became wholly owned subsidiaries of the Company. On October 30, 2018, Old Alithya closed a private placement, where an aggregate 11,736,055 subscription receipts were issued at a price of $4.50 per subscription receipt (the “Offering”). Each subscription receipt was automatically converted into an Old Alithya common share, immediately prior to the close of the Edgewater Transaction, and then exchanged for one subordinated voting share, pursuant to the Arrangement Agreement. The net proceeds of the Offering were used to reduce indebtedness, fund future growth initiatives and for general corporate purposes. On October 1, 2019, the Company acquired all the issued and outstanding shares of Matricis Informatique Inc. (“Matricis”), a Canadian consulting firm specialized in advanced applications and systems using techniques derived from the Internet of Things (IoT), Artificial Intelligence (AI), a combination of the aforementioned (AIoT), as well as operational intelligence in the healthcare, industrial, and financial sectors. The acquisition of Matricis was completed for a total consideration of $7,200,000, payable in cash and subordinate voting shares. On December 13, 2019, the Company acquired, through Alithya Financial Solutions, Inc., an indirect wholly-owned subsidiary, all the issued and outstanding membership interests of Travercent LLC, a US-based cloud-focused Enterprise Resource Planning (ERP) consulting group specialized in the -3- healthcare sector, now known as Alithya Travercent LLC (“Alithya Travercent”), for a total consideration of US$19,500,000, payable in cash and subordinate voting shares. Alithya Travercent's competencies include implementing Oracle's cloud ERP, Human Capital Management (HCM), Enterprise Performance Management (EPM) and Business Intelligence (BI) applications. Alithya Travercent has also developed a cloud solution named Capsure RFTM, an Oracle cloud extension that optimizes material management processes of healthcare providers for supply chain management and point of use. On October 2, 2019, Alithya Zero2Ten, Inc. an indirect wholly-owned subsidiary of the Company, sold all the issued and outstanding shares of its wholly-owned subsidiary Zero2Ten EMEA Limited (“Alithya UK”), for a total cash consideration of GBP£800,000. On February 1, 2020, the Company acquired all the issued and outstanding shares of Groupe Askida Inc., now known as Alithya Askida Solutions Inc., and Askida Consulting Services Inc., now known as Alithya Askida Consulting Services Inc., (collectively “Askida”), a Canadian group with expertise in software quality assurance tools and services, as well as in development and modernization of custom applications, for a total consideration of $16,000,000, payable in cash and subordinate voting shares. The principal executive offices of Alithya are located at 1100 Robert-Bourassa Boulevard, Suite 400, Montréal, Québec, Canada, H3B 3A5. Alithya’s telephone number is +1 (514) 285-5552. Alithya’s website address is www.alithya.com. Information contained on, or that can be accessed through, Alithya’s website is not part of, or incorporated by reference into, this Annual Report. B. Business Overview Alithya is a leader in strategy and digital transformation, with more than 2,000 professionals in Canada, the U.S., and Europe. For over 25 years, Alithya’s experts have advised, guided and assisted clients in their pursuit of innovation and excellence and the achievement of their business objectives through the optimal use of digital technologies. Alithya deploys solutions, services, and expert consultants to design, build and implement innovative and efficient solutions for the complex business challenges of its clients, tailored to their business needs in the financial services, energy, manufacturing, telecommunications, transportation and logistics, professional services, healthcare and government sectors. Business Offerings Business offerings include a comprehensive range of digital technology services to address client needs: •Business Strategy. Alithya leads clients through essential decision-making processes regarding strategic planning, change management, systems evolution, operational processes, and more. Applying the most recurrent methodologies, we help our clients optimize efficiency and successfully navigate the digital transformation age. We achieve results by leveraging an array of Business Strategy services, including strategic consulting, digital transformation, organizational performance and enterprise architecture. •Application Services. Alithya’s experts guide clients through all facets of Application Services, from migration of legacy systems into future-ready digital solutions, to the development of completely new solutions using state-of-the-art technologies. Our experts assist our clients in the choice between cloud, on-premise, and hybrid hosting strategies and solutions. Alithya’s Application Solutions services include digital applications DevOps, legacy -4- systems modernization, control and software engineering, cloud infrastructure, quality assurance and automated testing. •Enterprise Solutions. Working with key industry partners, including some of the world’s largest vendors of Enterprise Solutions, Alithya’s experts help clients deploy company-wide systems to improve the efficiency of their finance, human capital, operations, and marketing functions. Alithya’s Enterprise Solutions services include Enterprise Resource Planning (ERP), Corporate Performance Management (CPM/EPM), Customer Relationship Management (CRM/CXM) and Human Capital Management (HCM). •Data and Analytics. Data analysis plays a critical role in the optimization of business processes. Leveraging specialized IT systems and software, Alithya’s data scientists help clients gain business insight and drive better decision-making through enhanced data collection, big data analytics, machine learning automation and reporting. Alithya’s Data and Analytics services include business intelligence, data management, artificial intelligence and machine learning, as well as Internet of Things (IoT). Geographically, Alithya’s operations span Canada, the United States and Europe, providing a full spectrum of strategy and digital technology services with deep expertise in a range of technologies and business domains. Industry Dynamics and Opportunity Today, for many companies, digital systems and infrastructures are among their most important and strategic assets. Not only do these assets require significant investments, but they increasingly serve as key differentiators and drivers of growth for customers. Accordingly, businesses are seeking solutions that allow them to maintain their ability to differentiate themselves from competitors with proprietary business processes, combined with product customization. That is where digital transformation comes into play, inviting companies to make a shift in their approach and to evolve from traditional information technologies to flexible digital technologies. As businesses’ technology spending continues to increase, digital technology firms are striving to deliver innovative thinking and in-depth vertical industry expertise, while facilitating business process transformation through the use of the most optimal technologies. Alithya believes it is well positioned to respond to these trends in clients’ investments in digital technology. Alithya’s business model is built on a philosophy of offering flexible and creative solutions, enabling clients to realize maximum benefits from their digital technology investments. Alithya positions itself as an agile trusted advisor and consulting partner capable of delivering rapid results for its clients. Clients Alithya’s clients are mainly concentrated in the financial services, energy, manufacturing, telecommunications, transportation and logistics, professional services, healthcare and government sectors. The majority are large to mid-size companies. Alithya seeks to cultivate collaborative and flexible service engagements that are designed to adapt to clients’ evolving priorities and challenges. -5- Business Strategic Plan Alithya has adopted a three to five year strategic plan which sets as a goal to become a North American digital transformation leader. Under this plan, Alithya will take advantage of its consolidated scale and scope to leverage its geographies, expertise, integrated offerings, and position on the value chain to target growing IT services segments. Alithya believes its specialization in digital technologies and the flexibility of its approach resonates directly with clients and enables it to exceed their expectations. Alithya has established a three-pronged plan focusing on: •Increasing scale through organic growth and strategic acquisitions by: ◦Sustaining steady organic growth through innovation, higher-value offerings and client-relationships based on trust; ◦Completing value enhancing acquisitions by way of a North America geographic expansion to complement current market presence, while progressively adding major integrated enterprise solutions offerings and selected specialized expertise; •Achieving best-in-class employee engagement by: ◦Fostering a culture of collaboration and ownership; ◦Cultivating employee well-being and personal growth; ◦Investing in the development of our leaders and employees; •Providing our investors, partners and stakeholders with long-term growing return on investment by: ◦Strengthening our existing relationships with clients, as a key trusted advisor, by generating long-term value; ◦Investing in innovation and higher value service offerings; ◦Acting responsibly, with a sustainable and respectful vision for our stakeholders. Management Philosophy With a client-centric and flexible service delivery philosophy, Alithya focuses on diligently supporting its clients in identifying and achieving their evolving objectives through exceptional communications and by developing tailor-made solutions that take into account their specific business realities. Alithya strives to sustain high levels of client satisfaction and exceed client expectations which is key to renewal of existing contracts and entry into new ones. Alithya’s agile approach ensures optimal alignment with clients, enabling them to overcome their challenges and attain their goals with seamless technology integration. Alithya’s goal is to become its clients’ trusted advisor by developing long-term relationships that extend beyond just project delivery. Alithya also seeks to be an active participant in the ongoing consolidation of the digital technology industry and to leverage its expertise and solutions to offer clients an alternative to larger traditional digital technology solution providers. Alithya is continually looking to expand its capacity and broaden the scope of its service offerings through targeted acquisitions. Growth through acquisitions can offer Alithya opportunities to better serve existing clients with additional talent, technology and complementary services. Through such acquisitions, Alithya aims at expanding its existing client relationships by adding capacity in new geographic locations, while opening doors for existing capabilities into new client relationships. -6- Alithya believes that its growth strategy through acquisitions also helps to provide an opportunity to achieve the scale that is increasingly required for mandates awarded by government and private organizations, and to attract potential acquisition candidates which are poised to benefit from Alithya’s established relationships, better access to market and preferred supplier status. Sales, Marketing and Strategic Partners Alithya markets and sells its services directly through its professional staff, senior management and direct sales personnel operating out of its offices, which are strategically located in Canada, the U.S. and France. In order to provide its clients with the solutions best suited to their needs, Alithya has established strategic partnerships with a number of companies, including Microsoft, Oracle and Amazon Web Services (AWS). These partnerships entail joint marketing efforts, making joint client presentations, and negotiating discounts on license fees, among other benefits. Where such partnership are formalized in written agreements, those agreements are either terminable at will by either party or are for terms of one year or less. Alithya believes it has been successful in establishing strategic partnerships with a strong group of companies who are either industry leaders or well-regarded new entrants. Competition Alithya’s competitors include: •systems integration firms; •contract programming companies; •application software companies; •cloud computing service providers; •large or traditional consulting firms; •professional services groups of computer equipment companies; •infrastructure management and outsourcing companies; and •boutique digital companies. In addition, Alithya competes with numerous smaller local companies in the various geographic markets in which it operates. Alithya competes based on the following principal differentiating factors: •vision and strategic advisory ability; •digital services capabilities; •performance and reliability; •quality of technical support, training and services; •responsiveness to client needs; •reputation and experience; •financial stability and strong corporate governance; and •competitive pricing of services. Alithya also relies on the following measures to compete effectively: •investments to scale its services practice areas; •a well-developed recruiting, training and retention model; •a successful service delivery model; -7- •intrapreneurial culture and approach; •a broad referral base; •continual investment in process improvement and knowledge capture; •investment in infrastructure and research and development; •continued focus on responsiveness to client needs, quality of services and competitive prices; and •project management capabilities and technical expertise. Intellectual Property Alithya leverages its proprietary innovations, methodologies and other intellectual property when servicing its clients. Alithya actively protects its intellectual property and has registered, or applied for registration of, Canadian, U.S. and international trademarks, service marks, domain names and copyrights. Alithya also owns licenses in a number of trademarks, copyrights, and other intellectual property rights relating to its solutions and services. Alithya’s intellectual property portfolio includes the following solutions: •AI-FITM solutions. These solutions leverage Alithya’s range of proprietary applications using artificial intelligence, machine learning, and deep learning techniques. A play on the term hi-fi, short for high fidelity, the AI-FITM brand integrates the concepts of artificial intelligence (and its acronym AI) and fidelity (FI). Alithya’s AI-FITM solutions include: ◦AI-FITM Connect : a plugin-based data connector that enables integration between various data sources, designed to receive data from a source, structure it, replicate the structure to a destination, and automatically send new data to the destination as it becomes available. ◦AI-FITM Ultrasonic : detects wear-induced flaws in a nuclear plant’s fuel channels, a critical aspect of the operation and regulation of these plants. ◦AI-FITM Suitability Assessment : offers companies looking to leverage machine learning an in-depth review of their data and business processes to determine an AI strategy that’s right for them. ◦AI-FITM Enablement : allows organizations to adapt a swift deployment and integration of AI analytics. •Askida CTTM. Askida CTTM is a solution that allows clients to test the functionality of applications on all platforms and in any programming language, by running a series of systematic and repeatable tests, and which presents the results and status through sophisticated dashboards. •Capsure RFTM. Capsure RFTM is a cloud-based platform that was purpose built for healthcare providers to maximize inventory management processes. Capsure RFTM is a modern and open technology that has real time integration into Oracle Cloud ERP applications and can be integrated into other systems if necessary. Capsure RFTM’s four main functions are Mobile Supply Chain automation, PAR Inventory, RFID for Inventory / Medical Equipment and Patient Charge Capture or Point of Use. •CASSITM Analytics and KPIs. These solutions help nuclear plants reduce the work needed to generate and distribute maintenance performance reports and provide insight into opportunities to streamline maintenance. CASSITM software drives accountability and tracks progress against -8- corporate and site-based performance goals for work week leaders, planners, schedulers, operations and maintenance staff. CASSITM Analytics and KPIs include: ◦CASSITM Analytics for Online Weekly Maintenance : supports the continuous improvement of Nuclear Online Preparation, Execution, Backlog, and Reliability-centered activities. ◦CASSITM Analytics for Outage Management : automates the generation of KPIs and objectively tracks and trends corporate targets. ◦CASSITM Analytics for PetroChem Turnarounds : delivers key performance indicators in support of continuous improvement, essential to a successful turnaround. ◦CASSITM Analytics for Maintenance and Reliability : supports the continuous improvement of Preparation, Execution, Backlog, and Reliability-centered activities for value-based maintenance organizations. •//SIDERTM. //SIDERTM is a secure solution that facilitates distribution of medical results to healthcare facilities and to centralized electronic health records. It acts as an integrated system for the electronic distribution of results, facilitating the work of all the health professionals, health clinics and laboratory managers involved in monitoring medical results. While its proprietary intellectual property is important to its success, Alithya believes its business as a whole is not currently materially dependent on any particular intellectual property right. C. Organizational Structure Below, and as Exhibit 8.1 to this Annual Report, is the list of our principal subsidiaries as at March 31, 2020, each of which is directly or indirectly wholly-owned by Alithya. Certain subsidiaries whose total assets did not represent more than 10% of Alithya’s consolidated assets or whose revenues did not represent more than 10% of Alithya’s consolidated revenues as at March 31, 2020, based on our Annual Financial Statements, included as Exhibit 15.3 to this Annual Report, have been omitted. These omitted subsidiaries, however, represented, as a group, less than 20% of the consolidated assets and revenues of Alithya as at March 31, 2020. Entity Jurisdiction Percentage Ownership Alithya Canada Inc. Québec, Canada 100% Alithya Consulting Inc. Québec, Canada 100% Alithya Consulting SAS France 100% Alithya Digital Technology Corporation Ontario, Canada 100% Alithya Financial Solutions, Inc. Delaware, USA 100% Alithya Fullscope Solutions, Inc. Delaware, USA 100% Alithya Ranzal LLC Delaware, USA 100% Alithya Travercent LLC Texas, USA 100% Alithya USA, Inc. Delaware, USA 100% -9- D. Property, Plants and Equipment Alithya is headquartered in Montréal, Canada. It does not own any real property, but has a global presence in Canada, the U.S. and France through leased facilities. As of March 31, 2020, Alithya leased approximately 163,108 square feet related to its 12 principal locations. Alithya believes that its current facilities are adequate to meet its ongoing needs. The following table outlines the facilities that Alithya leased as at the date of this Annual Report: Location Square Feet Date Lease Ends Purpose Canada Montréal, Québec 19,309 June 30, 2020 Office space Montréal, Québec 78,573 March 31, 2030 Office space Montréal, Québec 10,173 April 30, 2022 Office space Québec, Québec 10,482 November 29, 2030 Office space Toronto, Ontario 16,200 April 30, 2030 Office space Pickering, Ontario 9,130 November 30, 2020 Office space Gatineau, Québec 1,228 April 30, 2021 Office space United States Alpharetta, GA 10,970 June 30, 2025 Office space White Plains, NY 1,443 January 31, 2021 Office space Athens, AL 3,842 December 31, 2023 Office space Europe Aix-en-Provence, France 1,206 December 31, 2024 Office space Sophia-Antipolis, France 552 August 31, 2027 Office space