One Annual Report 2021 | Quarterlytics

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FY2021 Annual Report · One

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Annual
Report

UP
43%

SaaS Annual
Recurring
Revenue
up 43%

FY17
$50.7M

FY18
$70.4M

FY19
$101.7M

FY20
$134.6M

FY21
$192.3M

SaaS Annual Recurring Revenue

UP
19%

Profit
Before Tax
up 19%

FY17
$58M

FY18
$50.8M

FY19
$76.4M

FY20
$82.5M

FY21
$97.8M

Reported Profit Before Tax

UP
9%

FY17
$231.1M

FY18
$221M

FY19
$241.8M

FY20
$269.8M

FY21
$293.6M

Revenue from SaaS & Continuing Business

31%

FY17
21%

FY18
22%

FY19
27%

FY20
28%

FY21
31%

Profit Before Tax margin

These graphs should be read in conjunction with the
Financial highlights table on p.13

Revenue from
SaaS &
Continuing
Business
up 9%

Profit Before
Tax margin
31%

Transforming
business,
making life
simple

What’s inside
Our History

At a glance

Financial highlights

Letter to shareholders

Global SaaS ERP solution

Our strategy

Our growth

Our operations

Our people

TechnologyOne Foundation

Financial statements

Directors’ report

Corporate governance statement

Voluntary Tax Transparency Report

Financial statements

Directors’ declaration

Auditor’s independence declaration

Auditor’s report

Shareholder information

Corporate directory

Corporate calendar

7
8
13
15
23
29
35
39
53
67
73

107

116

118

146

147

148

153

154

155

Transforming business, making life simpleAt a GlanceOur History

1987

Adrian Di Marco founded
TechnologyOne in a
demountable office at a
hide processing plant in
an industrial suburb of
Brisbane. We were one
of the first tech start ups
in Australia. Back then,
there was no venture
capital or private equity,
so one of Adrian’s
previous customers,
the Mactaggart Family,
provided the funding.

The idea was to build
a new generation of
software where the
source code did not
need to be customised
for each customer, which
was then the common
practice. The software
could be configured for
each customer and the
configuration sat outside
the software. Because all
customers used the same
software we could then
ship new releases every
year, with new features
and functionality.

1995

TechnologyOne software
was voted No 1 Software for
Financial Management and
Accounting by a survey of
3000 CFOs by MIS magazine.
TechnologyOne repeated
this win, three years in a row.
TechnologyOne broke away
from the industry “reseller
model” and adopted our
unique Power of One model,
taking responsibility to build,
market, sell, implement and
support its software.

1998

TechnologyOne broke away
from the approach taken
by global ERP vendors like
Oracle and SAP of focusing
on all markets, and focused
on 6 vertical markets:
Education, Local Government,
Government, Health &
Community Services, Asset &
Project Intensive & Corporate
& Financial Services. This
allowed us to build deep
functionality out of the box
for these markets, to create
a significant competitive
advantage.

1991

TechnologyOne released
its first product, called
FinanceOne, using the
Oracle relational database
technology (RDBMS).

1988

Adrian knew that using
technology to get a
competitive advantage
would be the number one
factor in our success, so
he named the company
TechnologyOne.
TechnologyOne was one of
the earliest developers in
the world to use relational
database technology.

1993

TechnologyOne made the
decision to shift away from
Oracle’s RDBMS, to become
database-independent. That
same year, TechnologyOne
pivoted from being Best
of Breed to become one
of the first ERP vendors.
TechnologyOne’s enterprise
vision became a key
differentiator, allowing it to
deliver a single, integrated
enterprise solution, built on
a single modern platform,
with a consistent look and
feel.

1996

With the rise of PCs,
TechnologyOne became
an early adopter of PCs
for enterprise systems,
rebuilding its suite of
products in a new and
emerging technology
called client/server. That
same year, FinanceOne for
Windows was released.

1999

TechnologyOne floated on the
Australian Securities Exchange
(ASX) in 1999. TechnologyOne
was one of the first IT
companies to become publicly
listed and one of the most
successful listings in 1999.

2012

With the emergence of
the cloud, TechnologyOne
became an early adopter
of the cloud for enterprise
software, re-architecting our
ERP system. We deliver a
multi-tenanted global ERP
SaaS system, providing huge
economies of scale enabling
us to take full responsibility
for our customers - building,
implementing and running
our software for them. Our
customers are able to easily
and seamlessly move from on
premise to cloud.

2015

TechnologyOne makes three
acquisitions: ICON Software,
Digital Mapping Solutions
and Jeff Roorda & Associates.
The acquisitions broadened
the breadth and depth of
TechnologyOne’s enterprise
solutions, adding planning,
spatial and strategic asset
management functionality to
our suite of products for Local
Government and Higher
Education markets.

In the same year, Adrian
Di Marco was listed on
SmartCompany’s top 10
most influential people in
the Australian IT industry,
inducted into the Pearcey
Hall of Fame, and named as
2015’s top 10 CEOs by AFR
Boss magazine.

2021

TechnologyOne made its
first international acquisition,
Scientia, as part of our
strategic focus to deliver
the deepest functionality for
higher education becoming
the only ERP provider in the
world to offer this solution to
the higher education market,
as part of a full enterprise
suite.

2002

TechnologyOne acquired
Proclaim Pty Ltd, for
its Property & Rating
product extending
TechnologyOne’s Local
Government enterprise
solution.

2017

TechnologyOne launched
the TechnologyOne
Foundation, committing
to raise 500,000 children
and their families out of
poverty. TechnologyOne
also commited to the 1%
Pledge – committing 1%
of profit, staff time and
products to its Foundation.

2003

With the emergence of the
internet, TechnlogyOne
became an early adopter,
rebuilding our entire ERP
system for the internet.
TechnologyOne Ci
(Connected Intelligence),
was released.

2006

TechnologyOne released
preconfigured solutions
for each of our key vertical
markets dramatically
reducing the time, cost
and risks associated with
implementing its ERP
software.

2014

TechnologyOne SaaS
was released. With the
emergence of mobile
devices, TechnologyOne
rebuilt our ERP systems
to provide any device,
anywhere and any
time access. 100% of
TechnologyOne ERP
functionality is available
across all devices including
mobile phones. The new
product Ci Anywhere was
released in 2014.

In the same year,
TechnologyOne hit $1 billion
market capitalisation and
entered the ASX 200 Index.

In the years since
TechnologyOne
was formed, the IT
industry has changed
dramatically. We have
rebuilt the company
and our products with
each new generation of
technology, taking us
through four generations
of product.

Our success is in making
life simple for our
customers.

Our History

Transforming business, making life simpleAt a
glance

Transforming business, making life simpleAt a GlanceOur
finances

43%

SaaS ARR $192.3M

14%

$142.9M Cash and cash
equivalents

$77M

R&D investment up 13%
(24% of revenue)

19%

$97.8M Profit Before Tax

Dividend of 13.91cps8%

$293.6M revenue from
SaaS & continuing
business

34%

$190.2M
Net assets

12YEARS

Continued record profit

31%

Profit Before
Tax Margin

16%

$257.5M
Total ARR

$1.6MUK profit

14%

Consulting
Profit Before Tax

$500M

ARR

on track by 2026

Our vision

As the only company
offering a true global
Software as a Service
(SaaS) ERP solution across
the entire enterprise, we are
transforming business and
making life simple.

Our difference

We are the only vendor that develops,
sells, implements, supports and runs
a fully integrated suite of enterprise
software solutions. Our global SaaS ERP
solutions span the entire enterprise and
allow our customers to embrace the
digital revolution and an exciting new
world of possibilities in a cloud-first,
mobile-first world.

Our reach

TechnologyOne has a global presence
throughout Australia, New Zealand, Asia
and the United Kingdom.

Our culture

At TechnologyOne, we believe in a
culture of innovation, creativity and
collaboration and have created an
environment that allows our people
to thrive. This culture is built into the
fabric of our business, driving high
performance and underpinning our
success.

Our international team is made up of
more than 1,200 passionate individuals.
We believe in investing in our people,
and we do this with a wide range
of initiatives such as O Week, One
Talks, MARVEL awards and leadership
courses.

decisions we make, the people we
employ and the processes we create.
This is why we continue to invest in our
Compelling Customer Experience (CCE)
program, which provides our people
with ongoing development and support
in delivering outstanding customer
experiences.

To foster a customer-oriented culture,
we developed the Compelling Customer
Experience program. The program
supports and encourages our team
members so that they can deliver
outstanding customer service every day.

Providing a compelling customer
experience is fundamental to the way
TechnologyOne does business and
positions us well to attract customers
away from our competitors.

Our market-leading
solutions and products

As the leading supplier of enterprise
software solutions for more than
1,200 large-scale companies, and with
more than 30 years’ success in the
business, we have developed a deep
understanding of our key markets.

We offer our customers a range
of industry-leading preconfigured
enterprise solutions. Our solutions
streamline implementations, reducing
time, cost and risk for customers. We
also offer a comprehensive suite of
enterprise software products.

Our Markets
•

Local Government

Education

Federal Government

Asset and Project Intensive
industries

Corporates and Financial Services

•

Compelling Customer
experience

We continue to recognise that our
customers are our compass for the

Our preconfigured
solutions
•

OneCouncil

•

OneEducation

•

OneGovernment

OneCare

OneAsset

OneCorporate

Our products
•

Corporate Performance
Management

•

Enterprise Content Management

Human Resources & Payroll

Spatial

Supply Chain Management

Strategic Asset Management

Enterprise Cash Receipting

Enterprise Asset Management

Financials

Property & Rating

Student Management

Business Analytics

Enterprise Budgeting

Performance Planning

Timetabling and Scheduling
(Syllabus Plus)

Our research &
development

We continue to focus our Research
& Development (R&D) efforts on new
and emerging technologies, including
cloud-based technologies, artificial
intelligence, machine learning and other
innovations. Our Australian-owned
commercial R&D centre is the largest
of its kind, with offshoot facilities in
Indonesia and Vietnam.

We are committed to a continuous cycle
of redeveloping our software platform
from the ground up. This process leaves
no line of code untouched and ensures
that we are free to embrace new ideas,
concepts and technologies—rather than
needing to retain legacy systems. Over
the past 30 years we have completely
redeveloped our software platform four
times.

Health and Community Services

New ideas, new concepts

Transforming business, making life simpleAt a GlanceFinancial
highlights

2021
$’000s

2020
$’000s

Growth on
last year

15-year
compound
growth

2019
$’000s

2018**
$’000s

2017
$’000s

2016
$’000s

2015
$’000s

2014
$’000s

2013
$’000s

2012
$’000s

Reported Comparable

Reported

SaaS &
Continuing
Business

293,553

269,774

241,790

221,046

231,151

192,657

175,279

140,024

128,226

117,567

Total revenue

312,012

299,018

10%

286,164

254,491

273,253

249,018

218,724

195,124

180,591

169,070

Annual
Recurring
revenue (ARR)1

257,495

221,908

16%

202,480

173,912

153,896

126,996

108,853

SaaS ARR1

192,295

134,557

43%

101,677

70,372

50,701

24,486

14,265

R&D
Investment

Underlying
Profit Before
Tax2

Net Profit
Before Tax

Net Profit After
Tax

Earnings Per
Share (Cents)

Total Dividends
(cents per
share)

Dividend
Payout ratio

Return on
Equity

Cash and Cash
equivalents

77,005

68,062

13%

60,124

54,042

49,856

46,009

41,038

37,873

35,595

33,524

97,843

86,070

14%

12%

76,389

50,807

58,019

53,240

46,494

40,235

35,097

30,324

97,844

82,470

19%

12%

76,389

50,807

58,019

53,240

46,494

40,235

35,097

30,324

72,691

62,945

15%

12%

58,459

47,681

44,494

41,344

35,785

30,967

26,984

23,559

22.64

19.75

15%

18.43

15.10

14.18

13.26

11.57

10.06

8.78

7.73

13.91

12.88

10%

11.93

11.02

10.20

9.45

8.78

8.16

5.60

5.09

62%

65%

73%

72%

76%

81%

64%

66%

38%

44%

55%

46%

28%

31%

30%

31%

32%

142,853

125,244

14%

12%

105,046

104,322

93,383

82,588

75,536

80,209

65,397

51,133

Net Assets

190,234

142,168

34%

11%

106,857

103,480

157,520

138,494

117,940

104,499

87,736

73,997

The table above shows previously reported results to FY17. Results for those years have not been restated for AASB15.

*Before capitalisation.

**2018 Comparable applies AASB15. It also assumes non-IFRS pro forma capitalisation of R&D costs (50%) for the FY18 year and is unaudited. As a SaaS company, R&D costs are capitalised from FY19 onwards, which is the common

practice of our SaaS peers. We measure our performance using the comparable method because it is a better reflection of the performance of our business, setting a higher bar for the prior comparable period (FY18) than the statutory

reporting. It allows for a ‘like for like’ comparison of the performance of the business, assuming R&D costs (50%) were capitalised in FY18. This is the basis used for all comparable reporting throughout this document.

1ARR is not an IFRS measure and is unaudited, it represents future contracted annual revenue at year end.

2Underlying profit excludes impact of once-off increased provision for a civil employment matter of $3.6m.

Financial Statement

Transforming business, making life simpleLetter to
shareholders

Transforming business, making life simpleLetter to shareholdersLetter to shareholders

On behalf of Technology One Limited (TechnologyOne) we are
pleased to announce our twelfth consecutive year of record profit,
record revenues, and record SaaS fees.

Our global SaaS ERP solution is transforming our customers’
business and makes life simple for them.

Highlights for the Year

•

Profit Before Tax up 19% - Our
Profit Before Tax was up 19%,
which was at the top end of
guidance, underpinned by the
continuing fast growth of the
TechnologyOne global SaaS ERP
solution.

TechnologyOne SaaS ARR
up 43% organically - The
TechnologyOne global SaaS ERP
solution is growing rapidly, with
SaaS annual recurring revenue
(ARR) of $192.3m, up 43%.

End of on-premise business
by October 2024 - During the
year we achieved a watershed
milestone and announced the end
of our on-premise business by
October 2024, which will further
drive our SaaS business.

•

$500m+ ARR by FY26 - With our
fast-growing SaaS business and
the announcement of the end
of our on-premise business, we
are on track to hit our target of
$500m+ ARR by FY26. Given the
current ARR is $257.5m, this is
an additional $242.5m of Annual
Recurring Revenue in the next five
years.

Revenue from SaaS & Continuing
Business was up 9% - This is our
future state business. By FY24 we
expect our total business to be
growing by 15+% per annum.

These points are discussed later in
more detail.

Results summary

Key results were as follows:

•

Profit Before Tax of $97.8m, up 19%1

Revenue from our SaaS and Continuing
Business of $293.6m, up 9%

SaaS Annual Recurring Revenue (ARR)2,5 of
$192.3m, up 43%

Total Annual Recurring Revenue (ARR)2,5 of
$257.5m, up 16%

Total Revenue3 of $312.0m, up 4%

•

Expenses of $214.2m, down 1%

Cash Flow Generation4,5 of $63.9m, up 12%

Cash and Cash Equivalents of $142.9m, up
14%

Total Dividend of 13.91cps, up 8%

R&D investment5 of $77.0m before
capitalisation, up 13%, which is 24% of revenue

1 Profit Before Tax of $97.8m was up 14% on FY20 Underlying Profit Before Tax
2 ARR represents future contracted annual revenue at year end.
3 Includes other income of $0.7m
4 Cash Flow Generation is cash flow from operating activities less capitalised development costs, capitalised commission
costs and lease payments.
5This is a non-IFRS financial measure and is unaudited

Transforming business, making life simpleLetter to shareholdersContinuing strong performance

TechnologyOne has consistently delivered strong results since listing on the ASX in 1999. Our ability to deliver these results for
20+ years is due to our clear vision, strategy, culture and our significant investment in R&D. This is discussed in more detail in
Our Strategy section on page 29.

We see continuing strong growth in the future and expect to double in size again in the next five years.

NPAT up 15%

FY11

FY13
FY12
$20.3m $23.6m $27m

FY14
$31m $35.8m $41.3m $44.5m $51m $58.5m $62.9m $72.7m

FY20

FY16

FY19

FY15

FY18

FY21

FY17

Reported Net Profit After tax

TechnologyOne SaaS
ARR grows 43%
organically

The TechnologyOne global SaaS ERP
solution is growing rapidly, with SaaS
ARR of $192.3m, up 43%. This growth is
all organic and includes no acquisitions.

We added approximately 100 enterprise
customers this year to our global SaaS
ERP solution and we now have 637
large scale enterprise customers, with
hundreds of thousands of users; making
it the largest single instance SaaS ERP
offering in Australia.

Our global SaaS ERP solution
is delivering a compelling value
proposition for our customers providing
them any device, any time access from
anywhere around the globe, as well as
a simple and cost-effective way to run
their enterprise. This is allowing our
customers to innovate and meet the
challenges ahead with greater agility
and speed, without having to worry
about underlying technologies. We take

care of all of this, making life simple for
them. This is discussed in more detail
in the global SaaS ERP section on page
23.

This year we continued to win new,
large enterprise customers from our
competitors. 30+ organisations replaced
our competitors’ systems, including
systems from Oracle, SAP, Microsoft,
Tribal and Workday.

TechnologyOne continued to dominate
in the Local Government sector, where
we closed 20 major deals with $25m+ in
total contract value. We have more than
300 council customers in APAC.

In the Higher Education sector, we
closed 10 major deals with $30m+ in
total contract value, cementing our
position as the dominant provider to the
APAC Higher Education sector.

UP
43%

FY17

FY18

FY19

FY20

FY21

$50.7M

$70.4M

$101.7M

$134.6M

$192.3M

SaaS Annual Recurring Revenue

End of on premise

During the year we announced the end
of our on-premise business by October
2024. This watershed milestone gives
our remaining on-premise customers
ample time to make the transition
to our global SaaS ERP solution.
TechnologyOne has made the transition
to our SaaS solution for our on-premise
customers simple and seamless. They
can move to SaaS in weeks, not years
like those using our competitors’
products. We expect 90%+ of all our
remaining on-premise customers to
move to our SaaS solution, driving the
growth of our SaaS business.

By transitioning to SaaS, our on-premise
customers will unlock the significant
benefits that our SaaS customers
already receive including:

•

Two releases automatically
available each year providing new
functionality

Eight active data centres

Defence in depth security with the
highest levels of cyber security
certification

Always on the latest release

Always on the latest technology

All products and modules
available, so that our customers
can take on additional products
without friction

Save 30%+ on their total cost of
ownership

From here, they can easily move
to our next generation product, Ci
Anywhere (CiA) and take advantage
of new technologies, such as Artificial
Intelligence and our new Digital
Experience Platform (DXP), which we
are in the process of developing.

On track to hit $500m+
ARR by FY26

Our SaaS business continues to grow
quickly. The quality of this revenue
stream is exceptionally high, given its
recurring contractual nature, combined
with our very low churn rate of ~1%.

Combined with our announcement of
the end of our on-premise business, this
is driving our Annual Recurring Revenue
growth.

Our Total ARR is $257.5m, up 16%. We
are on track to hit our target of $500m+
ARR by FY26. Given the current ARR is
$257.5m, this is an additional $242.5m
of annual recurring revenue in the next
Five Years.

Our ARR stands at 90% of Total
Revenue1 which means the majority of
our revenue is locked in at the start of
the financial year. This positions us well
to achieve strong continuing growth in
the new year.

Our future state business
is expected to grow at
15%+ per annum in the
next few years, with the
cessation of our on-
premise business

Total Revenue was up 4%, but this is
not a true indication of our growth, as
it includes our legacy licence business,
which we are aggressively reducing as
we grow our SaaS business.

As planned, our legacy licence business
was down 38% ($10.8m), as we continue
to build our SaaS business and walk
away from traditional on-premise
licences.

If we remove the legacy licence
business from both FY21 and FY20, our
Revenue from SaaS and Continuing
Business, which is a key measure of the
strength of our business, has grown 9%.

We expect by FY24 our Total Revenue
will be growing by 15%+ per annum
with the cessation of our on-premise
business.

UK delivers Profit Before
Tax of $1.6m, versus
breakeven in the prior
year

The UK regionalisation of our
global SaaS ERP solution is nearing
completion, and we have seen our UK
business continue to grow, with SaaS
ARR of $9.0m up 20%. We delivered a
profit of $1.6 million versus a breakeven
result last year and we see significant
opportunities in the coming years.

Consulting Profit Before
Tax of $15.6m, up 14%

Our Consulting division delivered
Profit Before Tax of $15.6 million, up

14% through continued improvement
in culture, systems and processes,
and disciplined use of our Solution
Implementation Methodology. The
turnaround of the UK Consulting
division continued during the year, with
efficiency improving to deliver a profit
of $1m versus a breakeven result last
year. The total Consulting division’s
Profit Before Tax margin has improved
from 7% in 2017 to 24% in 2021. Our
Application Managed Services business
for existing customers is moving to
recurring revenue, with $19.7million now
locked in as recurring revenue2.

Investment in R&D up
13%

TechnologyOne invested $77.0 million
in R&D this year, up 13%. This was
significantly higher than our normal
benchmark of R&D growth of 8%, as we
took the opportunity to accelerate R&D
into a number of new and exciting areas.

We continued to invest in new, exciting
ideas and innovations, including our
new Digital Experience Platform (DXP)
for Local Government and Higher
Education. The first phase of our Local
Government DXP was shipped in 2021.
Customer feedback has been excellent
and our DXP will set the new standard
for ERP.

This year we elevated our Federal
Government customers to a new cyber
security level, as we delivered our
global SaaS ERP solution with IRAP
PROTECTED certification. We continue
to invest millions of dollars and set the
bar higher each year as we deliver
the most trusted SaaS solution to our
customers. It is not feasible for individual
organisations to keep up with increasing
costs and complexity of cyber security
unless they have adopted a SaaS-first
strategy.

Our R&D is also focused on extending
the functionality and capabilities of our
global SaaS ERP solution.

Our R&D program continues to be at
the leading edge of our industry, as
we embrace new technologies, new
concepts and new paradigms.

We expect R&D growth over the
next few years to return back to the
benchmark growth of 8% or less.

1 Excludes consulting revenue as it flows from business wins and is based on opening ARR of $221.9m.
2Not included in our Total ARR.

Transforming business, making life simpleLetter to shareholdersAcquisition of Scientia

In September, we acquired Scientia Resource Management
Limited (Scientia), a United Kingdom company servicing the
higher education sector. The impact on our FY21 profit was
insignificant.

This acquisition forms part of our strategic focus to deliver
the deepest functionality for Higher Education and it will
accelerate our growth and competitive position in the UK,
as well as have significant benefits in the Australian Higher
Education market.

Scientia’s market-leading product, Syllabus Plus, provides
mission critical advanced academic timetabling and resource
scheduling for over 150 leading universities across the United
Kingdom and Australia.

The acquisition further expands our global SaaS ERP solution
for Higher Education. The integration of Scientia’s advanced
academic timetabling and resource scheduling capabilities,
combined with our market-leading Student Management,
HR & Payroll, Enterprise Asset Management and Finance
capabilities, will provide smarter decision-making for
customers, eliminating underutilisation of space and resources
that is paramount for Higher Education across the globe in a
post-COVID world.

This is our first international acquisition and demonstrates
our deep commitment to both Higher Education and the UK
market. The unique IP and market-leading functionality of
Syllabus Plus supports our vision of delivering enterprise
software that is incredibly easy to use and that substantially
enhances our customers’ experience in the Higher Education
sector. We are excited about the opportunities this will bring to
both our UK and Australian customers in the coming years.

Strong balance sheet and cashflows

TechnologyOne continues to have a strong balance sheet
with net assets of $190.2 million, up 34% and cash and cash
equivalents of $142.9 million, up 14% after making the initial
payment for the Scientia acquisition of $11.6 million. Cash
flow generation was once again strong at $63.9 million for
the full year, versus a Net Profit After Tax of $72.7 million.
TechnologyOne continues its long history of strong cash flow
generation, which we expect to progressively grow to match
Net Profit After Tax in FY24.

Profit Before Tax margin increases to
31%

Profit Before Tax margin increased to 31% compared to 28%
for the prior year. We see margins continuing to improve to
35%+ in the coming years, driven by the significant economies
of scale from our single instance, multi-tenanted global SaaS
ERP solution.

We are on track to double the size of our business once again
in the next five years.

FY21
31%

FY12
18%

FY13
19%

FY14
21%

FY15
21%

FY16
21%

FY17
21%

FY18
22%

FY19
27%

FY20
29%

FY21
31%

Profit Before Tax Margin

Dividend

In light of the company’s strong results, and our confidence
going forward, the dividend for the full year has increased to
13.91 cents per share, up 8% on the prior year.

Executive remuneration

TechnologyOne remains focused on delivering strong growth
and our current remuneration structure positions us well to
continue to achieve this both in the short and long-term, as
well as ensuring alignment across our Executive KMP.

At a time when many businesses have struggled during the
pandemic, TechnologyOne has delivered exceptional growth
as follows: organic SaaS ARR growth of 43%, Net Profit Before
Tax growth of 19%, the UK achieving profit of $1.6 million and
Consulting profit growth of 14%.

There is clear alignment between the performance of the
business and executive remuneration. FY21 total executive
KMP remuneration grew by 12%, while the company’s Profit
Before Tax grew by 19%.

Environment, Social, Governance (ESG)

TechnologyOne is committed to its ESG obligations, beyond
just regulatory requirements. Last year, TechnologyOne
became officially Carbon Neutral and this year is our first year
benchmarking and reporting under the recommendations
of the Task Force on Climate-related Financial Disclosures
(TCFD).

While the TechnologyOne operations do not have a material
impact on the environment, we acknowledge that it is the
changing attitude of many that will have a material impact on
reducing climate change.

Please refer to the Company’s website at:
https://www.technologyonecorp.com/company/investors/
corporate-governance for our Sustainability Report and
Corporate Governance Statement.

Corporate Governance - Board renewal

Given TechnologyOne is such a significant R&D and
innovation-led business, coupled with our long track record
of profitable growth, we have taken a cautious and measured
approach to the renewal of our Board, to ensure a smooth
transition. We have made good progress again this year
with the appointment of a new and highly experienced
independent director, Mr Pat O’Sullivan, who holds a number
of directorships for ASX-listed technology companies. Mr Pat
O’Sullivan has been appointed Lead Independent Director
and Deputy Chair. We now have a majority of independent
directors.

TechnologyOne Foundation

The TechnologyOne Foundation defines who we are as a
company and is an important driver of our culture and values.

We are committed to making a difference to underprivileged
and at-risk youths, by empowering them to transform their
lives and create their own pathways of success. We believe
that it is through youth that we can have the greatest impact
on the future. We have an ambitious goal of lifting 500,000
children and their families out of poverty, which we are on
track to achieve.

An important part of the TechnologyOne Foundation is
supporting great Australians doing great work, both locally and
internationally, which includes the Fred Hollows Foundation,
School of St Jude, Opportunity International Australia, Solar
Buddy and St James College.

The Foundation will continue to grow with TechnologyOne
through our commitment to the 1% pledge – which includes
1% profit, 1% product and 1% time. This represents a $2m +
commitment each year. The Foundation will continue to shape
the DNA of our company and staff. This is discussed in more
detail in the TechnologyOne Foundation section on page 67.

Our people and culture

Our people solve incredibly complex business problems for
our customers and have delivered our massively broad and
deep global SaaS ERP. We compete and win against the
world’s largest multinational software companies, who have
R&D teams with tens of thousands of staff.

We continue to invest in our people and culture initiatives,
including our award-winning programs such as O week,
graduate program, Buddy program, Hack Days, Town Halls
and Regional Days, to highlight a few. We also recognise
those team members who live our values and demonstrate
the TechnologyOne Way through our annual MARVEL awards.
During the year we were able to hold a Company Kick Off,
which was a whole-of-company event for team members to
hear from our leaders about the future of our products and
services, and to reconnect with each other after COVID-19
lockdowns.

TechnologyOne conducts a continual eNPS survey to measure
each team and to build our strong and unique culture. All of
these initiatives have resulted in TechnologyOne being once
again independently recognized as an employer of choice.
This is discussed in more detail in the Our People section on
page 53.

Outlook for FY 2022

As we have seen over the last few years, the enterprise
software market continues to remain resilient, with our
products providing our customers the opportunity to reduce
their costs, streamline their business and improve their
efficiencies in a challenging economic time.

The TechnologyOne global SaaS ERP solution is driving
our continuing success. As a result, TechnologyOne’s sales
pipeline of opportunities for 2022 is strong and this positions
us for continuing strong profit growth in FY22.

Our SaaS business will continue to grow strongly and
profitably.

We also expect to see continuing strong growth in the UK
market.

The company will provide further guidance at both the Annual
General Meeting and with the FY22 first half results.

Afterword

To continue to succeed we must continue to innovate and
focus on building beautiful software that is incredibly simple
and easy for our customers to use. Our software must work
on any device, anywhere, at any time if we are to enable our
customers to embrace the exciting future that is possible with
the digital revolution.

Also, we must continue to earn the right to be the enterprise
software partner for our customers. At every touchpoint
we have with our customers, we must strive to make things
simpler for them and give them a great experience.

A few years ago, we set an ambitious goal to transform
business and make life simple for our customers. We are now
making this a reality.

This would not be possible without the talented and
committed people who make up TechnologyOne.

We would also like to thank you, our shareholders, for your
continuing support.

Adrian Di Marco

Edward Chung

Executive Chairman

Chief Executive Officer

Transforming business, making life simpleLetter to shareholders
Global SaaS
ERP solution

Transforming business, making life simpleGlobal SaaS ERP SolutionTechnologyOne’s global SaaS ERP
solution delivers the full functionality of
ERP on any device, without compromise.
Our Software as a Service (SaaS) runs
one global code line, allowing us to
continuously deliver new innovations
to our customers, who benefit from the
scale of our investment as an enterprise
vendor.

Our SaaS ERP solution is a single
instance of software, one single global
code line, run on thousands of servers,
at massive scale, for all customers.
Because of this, we gain enormous
economies of scale, allowing us to
continuously deliver new innovations
to customers. Every customer benefits
from each dollar we invest, amounting
to $77 million investment in R&D in
FY21.

Our solution leads the market
because we own, build and support
our own software. We take complete
responsibility for providing the
processing power, software and
services, including backup, recovery,
upgrade and support services for our
SaaS customers. Other ERP providers
fail to deliver the same economies of
scale and cost efficiencies because they
use cloud hosting but handcraft each
customer’s environment individually.
Our solution delivers the deepest
functionality for the markets we serve,
comprising 14 products and up to 30
modules per product.

Our global SaaS ERP surpasses best-of-
breed cloud products because we offer
one partner, one integrated solution,
one look and feel, one technology
platform and integration out of the box.

Our SaaS ERP solution is a single
instance of software delivered globally,
with a mass production line of servers
running thousands of customers’
organisations. It produces substantial
economies of scale, creating cost
efficiencies that hosting providers
cannot come close to, and a level of
service, security, reliability, scalability
and future proofing that would not be
otherwise possible.

TechnologyOne makes a substantial
investment each year in ongoing R&D,
to continue to improve our software
and to capitalise on new technologies,
concepts and ideas. Our global SaaS
ERP solution provides a compelling
value proposition to our customers,

giving them what is essentially a
very simple, cost effective and highly
scalable model of computing.

Our customers are always on the latest
technology, with access to two releases
of software per year that delivers new
features, functionality and concepts, as
well as access to the TechnologyOne
University for ‘just-in-time’ training. This
is all provided standard as part of our
SaaS solution, and we guarantee it will
be future proof. Our current release,
2021B, unlocks the potential of Ci
Anywhere, providing customers with
greater flexibility to work on any device,
anywhere, at any time.

For existing customers, the migration
from on-premise to SaaS is seamless,
with no loss of functionality or
complicated re-implementations
required. The accelerated transition
allows them to immediately save
up to 30+ per cent on their total
cost, so they can focus on their
business, not on technology. With our
configuration-driven software design,
all our customers’ unique configuration
information is stored in their own
dedicated and secure database. This
is also the case for our customers’
transactional data, allowing us deliver
personalised service at scale.

Our approach to SaaS ERP is a key part
of TechnologyOne’s ongoing success,
with SaaS revenue now representing 48
per cent of our total revenue. In FY21,
we gained approximately 100 new SaaS
customers, joining many of our long-
standing customers on the journey from
on-premise to cloud-based solutions.

Our current release of TechnologyOne
SaaS, 2021B, continues to deliver further
economies of scale and enhanced
security. We are now working on the
next generation of our SaaS solution,
2022A. The pace at which we are
innovating is accelerating, and we are
seeing many opportunities to continue
to improve the features, speed, security,
availability and scalability of our SaaS
solution for our customers.

TechnologyOne is at the very forefront of delivering the benefits
of mass production to the enterprise software industry. As we
have seen in other industries, the economies of scale of mass
production will change the face of the software industry.

Global SaaS
ERP solution

The power of a single integrated ERP solution, built on a single modern
platform with a consistent look and feel and user experience.

Transforming business, making life simpleGlobal SaaS ERP SolutionRealising our vision as a
SaaS-first company

Ten years ago, we started our journey
to SaaS, by committing to building a
software solution that would operate
anywhere, any time, on any device.
We set an aspirational goal to develop
the next generation of ERP software,
to transform our customers through a
digital platform. Today, that solution is Ci
Anywhere, delivered via SaaS.

Over the last five years, our customers
have validated this strategy with the
overwhelming adoption of SaaS. Our
customers report transitioning to SaaS
has allowed them to become more agile
and more importantly, gives them the
ability to focus on their customers and
not on their technology.

We now know that SaaS is the future,
and the only way to provide our
customers with the experience they
need to succeed.

That’s why we’ve transitioned the
majority of our on-premise customers to
our SaaS Platform, providing them with
a digital platform for evolution.

This year marked a significant milestone
in our journey to becoming a full SaaS
company, as we committed to moving
all remaining on-premise customers to
SaaS by 2024.

We will work closely with our on-
premise customers on their pathway
to SaaS over the next three years, to
ensure no customer is left behind.

This shift will not only allow us to realise
our vision as a full SaaS company,
but will enable us to better focus our

637 customers have chosen
TechnologyOne SaaS to
power their organisations.
This is an increase of
more than 18 per cent
in customer numbers
over the past 12 months,
and we expect this rapid
growth to accelerate as we
power towards our 2024
milestone.

resources on developing and delivering
our products, new enhancements and
innovations on a single platform.

The benefits of SaaS are
too big to ignore

To better understand the 30%+ our
customer save by moving to SaaS,
we commissioned IBRS and Insight
Economics to undertake research for
us. The research has validated our
SaaS-first strategy, but more importantly,
provided us with a platform to be a true
industry thought leader in the SaaS
space – with the findings proving too
big to ignore.

The research uncovered a game-
changing $252 billion saving over the
next 10 years, as the direct benefit
potential of our key industries moving to
SaaS. That’s $224 billion in Net Present
Value terms (NPV). The evidence
confirms that SaaS has the potential to
deliver substantial cost savings, which
can be redirected to critical investment
in infrastructure and services for
Australia’s growth.

Across our industries, that translated to:

•

Local Government: $8.4 billion

Higher Education: $8.4 billion

State and Federal Government:
$62.4 billion

Health and Aged Care: $23.7
billion

Corporate and Financial Services:
$59.2 billion

Asset and Project Intensive
Industries: $61.9 billion

By uncovering the significance of
the market opportunities presented
by SaaS, we now have a key role in
the discussion around how digital
technology can power Australia’s future
economic growth.

Any device, anywhere,
at any time

Our award-winning Ci Anywhere
platform delivers a single solution
for our key verticals, that enables
possibilities now and in the future. CiA
is the path forward for our customers
and provides a springboard for future
innovations.

Through Ci Anywhere, customers gain
access to the full functionality of our
enterprise software on any device,
anywhere, at any time.

Organisations can embrace iPad,
iPhone and Android devices as part
of their enterprise solution and our
adaptive screen design guarantees a
great user experience regardless of the
device. Because the experience is tied
to the user, not the device, an employee
can move seamlessly from one device
to another without interrupting their
work. With its incredibly simple design,
CiA has created a new standard
in enterprise software, giving us a
significant competitive advantage.
For customers undertaking digital
transformations, this is the key to future
success.

DXP (Digital Experience
Platform)

The experience your customers
demand

TechnologyOne’s Digital Experience
Platform (DXP) extends the power of
enterprise software for our customers. It
enables organisations to empower their
customers with personalised outcomes,
providing a simplified digital experience
using next generation technologies
such as Artificial Intelligence (AI) and
machine learning (ML).

It is a frictionless experience and
leverages the power of enterprise
software. DXP will digitally enable every
stakeholder throughout an organisation
- be it an employee, customer, supplier,
student or rate payer - substantially
streamlining their business and
improving their experience.

TechnologyOne has released our Local
Government DXP to our pilot customer,
and is continuing to work on the
development of our Student DXP.

Our commitment to
innovation

In FY21, we invested $77 million in R&D
to improve our SaaS offering with new
enhancements and innovations.

Our Software as a Service runs one
global code line, allowing us to
continuously deliver new innovations

to our customers, who benefit from the
scale of our investment as an enterprise
vendor. With each new customer, our
solution is enriched with new IP that
powers the evolution of our software.

and privacy. As part of this program
we develop and maintain our security
framework, which passes the most
stringent external verification, testing and
scrutiny.

The economies of scale offered by
our global SaaS ERP solution mean
that when a customer signs up to our
service, they receive far more than what
they pay for. Each customer benefits
from the hundreds of millions of dollars
that we have invested to date and our
commitment to continued investment.
We take care of patching and upgrades,
and offer two major software releases
per year.

Our SaaS offering is massively scalable,
resilient and fault-tolerant. All our
customers run the same code-line
globally, and all processing resources are
shared. When we make an improvement
to the service we automatically roll out
that improvement to all our customers.

It is a testament to the collective skill
of our people and organisational
structure that we have achieved such
a competitive advantage and level of
differentiation in the SaaS market.

Insights—our SaaS monitoring platform—
gives us unprecedented visibility of the
real-time performance and reliability of
our SaaS environments and software.
This enables us to analyse, detect
and respond to issues faster than
ever before. Insights also strengthens
our support processes by connecting
our development teams directly with
customers.

Most trusted SaaS ERP
provider

We take the privacy and security of
our customers’ data very seriously and
weave this consideration into the fabric
of everything we do. We are committed
to building the world’s most trusted
cloud for enterprise software and will
continue to make significant investments
to that end. That’s why, since 2017, we
have achieved the highest level security
accreditation of any SaaS ERP vendor
operating in Australia.

The foundation of our global SaaS ERP
solution is a class-leading security and
compliance program designed to give
our customers the strongest protection

Customers receive the benefit of these
certifications, along with ongoing security
and privacy enhancements, at no extra
charge.

Standard

TechnologyOne

Infor

Workday

SAP

IRAP (OFFICIAL)

IRAP (PROTECTED)

NZ IRD SPS 13/01

ISO/IEC 27001:2013

ISO/IEC 27017:2015

ISO/IEC 27018:2014

ISAE 3402 SOC1

AT-C 205 SOC2

AT-C 205 SOC3

SSAE 18

Cyber Essentials Plus (UK)

TechnologyOne University

TechnologyOne University is the learning
and training hub for our software.
Through the power of SaaS, all of our
customers can receive self-paced
learning and comprehensive training on
any device, anywhere, at any time.

An innovative digital learning solution,
TechnologyOne University gives our
customers a dynamic, real-time and
up-to-date self-service support and
education option that empowers users at
all levels.

Transforming business, making life simpleGlobal SaaS ERP SolutionOur
strategy

Transforming business, making life simpleOur StrategyOur vision

Transforming business,
making life simple

Our vision is to build and deliver truly
great products and services that
transform business and make life simple
for our customers. Our core beliefs
allow us to deliver on this vision.

Over more than three
decades, TechnologyOne’s
clear vision, our beliefs,
our people, our supporting
initiatives and our
continuing growth have
underpinned our success.

At TechnologyOne, we know that our
customers’ experiences define our
success. We believe in leadership,
not management. We know that our
survival depends on our ability to
set ambitious goals, and to lead and
inspire our people to achieve great
things. As a large, successful company,
we also believe it is important to give
back to the community. To pay our
success forward, we established the
TechnologyOne Foundation.

Our beliefs, dedication to customer
experience, leadership model and
charitable ethos have formed our vision.
This is the TechnologyOne Way, which
we developed more than 30 years ago
and continues to define the way we
operate.

Transforming business, making life simpleOur StrategyOur core beliefs

We believe in:
Global
SaaS ERP
solution

The
Power
of One

Deepest
functionality
for the
markets
we serve

The
power
of
evolution

Simplicity,
not
complexity

Global SaaS ERP Solution

We believe in the power of a single,
integrated ERP solution built on a
modern platform with a consistent look
and feel and user experience.

A best-in-class enterprise solution

Only through an enterprise solution
can organisations embrace the future
of digital technologies and unlock the
efficiencies they need across their entire
organisation. We have spent more than
30 years and hundreds of millions of
dollars to deliver on this enterprise-wide
vision. Today, we deliver best-in-class
products that come together as a total
enterprise solution from a single vendor.

In the SaaS world we have seen the
proliferation of ‘best-of-breed’ products.
We are confident, just as we have seen
in the past for on-premise customers,
that we will see a move from best-of-
breed products to enterprise software
solutions in the cloud, given the
significant benefits it will provide: one
vendor, one user interface, one common
technology architecture, and integration
across all products. As TechnologyOne
is one of only a few enterprise SaaS
vendors globally, this positions us for
continuing strong growth.

Our leading-edge platform

Our comprehensive suite of fully
integrated software products is
designed to deliver the best possible
experience for users.

Our software solutions are underpinned
by our state-of-the-art CiA platform.
The platform provides the core
functionality, security and a consistent
user interface for each of our products,
and enables our customers to access
their information anywhere, at any
time and from any device. We continue

to evolve our platform, ensuring our
customers can easily adapt to changes
in mobile devices, computing and user
preferences.

challenges, legislation and emerging
trends. This deep industry engagement
ensures our preconfigured solutions
continue to lead the market.

Deepest functionality for
the markets we serve

We have chosen to focus on six key
markets: local government, government,
education, health and community
services, asset- and project-intensive
industries, and corporates and financial
services. With more than 30 years’
experience and over 1,200 large-scale
enterprise customers, we possess
an expansive understanding of these
sectors and provide the deepest
functionality for the markets we serve.
We continue to add more functionality
to our products and preconfigured
solutions for these markets, to
streamline implementation and reduce
customers’ time, cost and risk.

Preconfigured solutions

TechnologyOne’s integrated products
form the building blocks from which
our preconfigured, industry-specific
solutions are developed.

Created in collaboration with hundreds
of customers, the solutions cover 80
per cent of each sector’s requirements.
This accelerates implementation, while
leaving room for the software to be
configured to customers’ specific needs.

This approach is faster, cheaper
and safer than that adopted by our
competitors.

Deep industry engagement

Each of our preconfigured solutions
is developed by a team of specialists
with an in-depth understanding of our
key markets. We work closely with
our sectors to stay abreast of current
requirements, organisational and user

The Power of One

TechnologyOne’s hallmark is being
one vendor with a single vision, code-
line and experience. We do not use
implementation partners or value-
added resellers. We take complete
responsibility for building, marketing,
selling, implementing, supporting and
running our enterprise solutions for
each customer to guarantee long-term
success.

Our unique value proposition

We are 100% accountable to our
customers, whether the focus is on
business needs, underlying technology,
delivering implementations on time and
within budget, or excellence in support
and customer service.

When organisations invest in our
solutions they benefit from a direct
relationship with us every step of the
way. From the start, we take ownership
of a project and provide outstanding
service and support.

Unlike our competitors, we provide a
single, integrated consulting capability
to enable a safer, faster and more
cost-effective time to delivery for our
industry solutions. We partner with our
customers to ensure that they can truly
unlock the value of their TechnologyOne
investment. This is underpinned by the
industry and product experience of our
300 consultants and the power of our
Solutions Implementation Methodology
(SIM) 2.0.

The power of evolution

Substantial investment into R&D each
year allows us to provide our customers

a strong, continuing competitive
advantage through an enterprise
solution that adapts and evolves by
embracing new technologies, concepts
and innovation.

In our 30+ years, being ahead of the
technological curve has been part of
our DNA, because we’ve invested in
technology, processes and people,
for our customers and the verticals we
serve. We’re always innovating, so our
customers can too.

Using technology for competitive
advantage

One of our founding principles in
1987 was to use new and emerging
technologies to provide a competitive
advantage for our customers. It
continues to be a major focus today.

For more than 30 years, we have
successfully delivered a continuous
and smooth technology transition that
has seen TechnologyOne migrate
our customers across a number of
technology paradigms, from mainframe
to client-server computing to the
Internet, to our Connected Intelligence
(Ci) platform and more recently, Ci
Anywhere. Our SaaS solution is built
on beautiful design, and can be used
by any business consumer, anywhere,
on any device and at any time. It is
powerful and simple to use, allowing
our customers to realise the benefits of
our global SaaS ERP solution on their
smart mobile devices.

Simplicity,
not
complexity

As a leader in the ERP market, we have always focused
on transforming business. More importantly, we do this to
remove complexity and make life simple for our customers.

Simplicity is a philosophy we continue to embrace in
everything we do for our customers. We want to be known
for an ERP solution that is easy, simple and intuitive to use,
and that removes needless complexity.

By embracing the simplicity of a SaaS model, we deliver
our software in a high performing and secure manner.
Our highly available infrastructure has redundancy built
in at every level and ensures our customers don’t have to
worry about running or updating their own software and
infrastructure.

By removing the need to manage their computing
environment, customers can focus on business, rather than
the supporting technology.

Transforming business, making life simpleOur StrategyOur
growth

Transforming business, making life simpleOur GrowthGlobal SaaS ERP Solution

Our ongoing success has been
underpinned by the incredible growth
of our SaaS business, which doubles in
size every 18 months. This is powering
the growth of TechnologyOne, which
continues to double in size every five
years.

We now have 637 customers on our
global SaaS ERP solution.

Our solution is a clear market leader
because we are the only enterprise
vendor to offer a true SaaS ERP solution
across the entire enterprise.

Unlike many other software providers
that use cloud hosting, we own,
build and support our software.
Because other providers handcraft
each customer’s environment, they
cannot offer similar shared benefits or
economies of scale.

$500m+ ARR by FY26

TechnologyOne is focused and we are
clearly on track to achieve our strategic
goal of reaching $500 million+ Annual
Recurring Revenue (ARR) by 2026.

To achieve this, we are focused on a
number of platforms for growth:

Driving the growth of our customer

base

Expanding within our vertical

markets

Expanding our product range and

depth

4. Growth in the UK, and beyond

We see the UK as a significant growth
area, demonstrated by the increased
success we have seen in that region
over the last five years.

1. Driving the growth of
our customer base

As an established company with
34 years of success, we benefit
from the investment of more than
1,200+ customers. We draw on these
relationships and deep industry
knowledge to power our success and
bring new customers to TechnologyOne.

quickly meet our customers’ needs.
There is significant runway for us to
expand our customer base across all
markets and grow our solution footprint
as we add value for customers.

This growth is supported by the vertical
alignment of our Marketing, Sales,
Product and Consulting teams, and
is a testament to the deep industry
knowledge and expertise that we have
developed in-house across these fields.

2. Expanding within our
vertical markets

We have experienced continued
success and expansion within each of
our vertical markets. The adoption of
our global SaaS ERP has also enabled
us to further penetrate our key vertical
markets more deeply.

Driving adoption of our global SaaS
ERP

TechnologyOne has made the transition
to our SaaS solution simple and
seamless for our on-premise customers.
They can move to SaaS in weeks, not
years, like those using our competitors’
products.

By transitioning to SaaS, our on-premise
customers will unlock the significant
benefits that our SaaS customers
already receive.

We expect 90%+ of all our remaining
on-premise customers to move to our
SaaS solution, driving the growth of our
SaaS business.

Increasing adoption of our products

Our global SaaS ERP solution comprises
15 products (with the recent acquisition
of Scientia) and up to 30 modules
per product, delivering the deepest
functionality for the markets we serve.
Our solutions are modular by design,
providing customers with the flexibility
to add new products as their needs
increase.

We focus and specialise on six large
vertical markets, which enables us to
build deep industry knowledge and
develop preconfigured solutions that

We’re constantly enhancing the
functionality of our products and
delivering new innovations, for the
benefit of our customers. This has

been key to our 99 per cent customer
retention and our continued growth over
the last 34 years.

Our focus for existing customers is to
increase our product footprint, to ensure
customers are benefiting from the full
depth and breadth of our solution.

3. Expanding our product
range and depth

We work closely with our customers
to ensure we understand their needs,
meet their priorities, drive continuous
improvement and provide an increasing
range of functions within our enterprise
solutions. Our goal is to build proven
practices into our solutions and deliver
the best software and services available
for our customers. The result is that we
continue to extend our product offering
by developing additional features and
functions – further building on what
is already one of the world’s most
comprehensive enterprise software
suites.

By re-engineering all our products for
Ci Anywhere, customers can enjoy the
same software functionality across any
device, anywhere, any time.

Through DXP, we are extending the
reach of our software from the back-
office power users such as accountants,
payroll clerks, student administration
and customer service teams, to the front
office end users such as employees,
ratepayers and students; making the
power of ERP available to everyone.

Our Sales, Marketing and Customer
Success teams keep customers
informed about recent developments
and the experiences of fellow
TechnologyOne customers. This
helps customers further improve
their technology systems, business
processes and models.

Building on this partnership approach,
the TechnologyOne Customer
Community has transformed our support
experience.

As a dynamic group of TechnologyOne
experts and customers, the Customer
Community provides a world-class
support experience to customers. It
also enables them to influence product
direction, keep up-to-date with industry
news and collaborate with other
customers.

4. Growth in the UK, and
beyond

We see the UK as a significant growth
area, demonstrated by the increased
success we have seen in that region
over the last five years.

In FY21, we built on our breakeven
status, with SaaS ARR of $9m, up 20%.

Our team have been working on
the localisation of our global SaaS
ERP solution, to ensure that we are
delivering a solution that fits the
specific needs and requirements of our
industries in the UK.

This year, we achieved a major
milestone, completing the localisation
of our Student Management product,
which opens up significant opportunities
for growth in Higher Education.

We also made our first international
acquisition in leading Higher Education
software provider Scientia, adding
a world-class enterprise scheduling
and timetabling product to our
OneEducation SaaS ERP solution.

This acquisition supports our
strategic focus to deliver the deepest
functionality for Higher Education, and
accelerate our growth and competitive
position in the UK.

We have global locations across
Australia, the United Kingdom (UK) and
New Zealand, the South Pacific and
Asia.

We have adapted our business to meet
the differing needs of customers in
each of these regions. In particular, we
adapt our sales strategies for different
regions as we identify new and ongoing
customer needs.

Soon we will explore opportunities in
new geographies, including the US.

Deepest
functionality
for the
markets
we serve

A deep understanding and engagement with
our key markets means we can deliver to our
customers integrated, preconfigured solutions
that provide proven practice, streamline
implementations and reduce time, cost and risk.

Transforming business, making life simpleOur GrowthOur
operations

Transforming business, making life simpleOur OperationsStuart
MacDonald

Chief Operating Officer

leading software, by always being
on the latest release, with the latest
features and functionality.

Aligning our people
behind our strategy

With the right strategy in place, we know
that the alignment of our people behind
it is the key to our continued success.

With this in mind, we brought all our
people together for our inaugural
Company Kick Off (CKO).

Throughout the three-day tribal event,
we shared our team and product
strategies, immersing our people in
our path forward and ensuring they
were engaged, focused and enabled to
deliver on their role in our future growth.

This was a critical part of the
enablement of our strategy, ensuring
that our people are aligned behind our
common goal.

The UK had a strong year, with our
value proposition now clearly defined
and the team executing on this in our
two industries of Local Government and
Higher Education. The acquisition of
Scientia bolstered the strength of our
Higher Education solution for both the
UK and our wider APAC market.

We see the UK as a significant platform
for future growth over the next few
years, with a total addressable market of
three times our APAC market.

Driving a national agenda

This year we commissioned research
by IBRS and Insight Economics into the
economic potential of SaaS, uncovering
a game-changing $252 billion over
the next 10 years, as the direct benefit
potential of our key industries moving
to SaaS.

Not only has this endorsed our SaaS-
first strategy, but it has given us the
platform to drive the conversation
across all levels of government and
business, and put TechnologyOne in the
vanguard of the digital revolution. This
level of influence and engagement with
key industry players will underpin our
success.

We set out this year with aspirational
plans and expectations. It is a testament
to our Power of One and cohesive
strategies that we delivered on those
aspirations.

FY21 saw the realisation of two years
of hard work focusing on top-down
strategies and organisational alignment
across the business. Each part of the
organisation not only delivered on its
goal, but most importantly, worked
together to deliver collective success.

We achieved record ARR of $257.5m as
SaaS powers our growth, and this can
be best seen in our key industries of
Local Government and Education, which
experienced strong results.

Our success validates that the team is
executing on an impressive strategy.

We continued to drive our strategy
forward by announcing a watershed
moment in our SaaS journey, committing
to moving all remaining on-premise
customers to SaaS by 2024. We are
also laser focused on migrating our
customers to our next generation ERP,
Ci Anywhere.

We know that Ci Anywhere, delivered
via SaaS, is our future, and together they
will enable a significant era of growth,
by allowing us to focus our resources on
a single platform and delivery method to
drive innovation forward. It will mean all
customers can experience our industry

Transforming business, making life simpleOur OperationsPaul
Jobbins

Chief Financial Officer and Executive Vice

President, Corporate Services

Stuart
MacDonald

(Acting) Executive Vice President,

United Kingdom

Underpinning innovation
and growth

In FY22, the Corporate Services team
will continue to support the business to
deliver innovations that will underpin
growth in sales to new and existing
customers, while driving improvements
in internal systems and processes.

By partnering with the business, we will
assist in the transition of customers to
our SaaS platform, the adoption of more
TechnologyOne products, and support
winning new customers in the UK and
APAC.

The Corporate Services team supports
the company through strategic business
partnering and by providing systems
and processes that drive efficiency, and
by managing our capital and cost base
to ensure we optimise return on our
investments.

In FY21, we focused on strengthening
our resources, skills and systems to
ensure we can support the business to
achieve future growth and scalability as
a SaaS company. We are well structured
to provide detailed forecasts, planning
and analysis to support sensible
business decisions and win new
business.

Supporting strategic
success

In FY21 we delivered record Annual
Recurring Revenue (ARR) growth of
$257.5m, and are on track to deliver
our goal of $500 million ARR by
FY26. This has been supported by the
implementation of our new revenue
processing system.

The Corporate Services team also
supported an increased focus on the UK
business, delivering additional finance
and legal business support to assist in
achieving a Profit Before Tax of $1.6m
in FY21.

People

We believe strongly in a culture
of collaboration, and in providing
environments for our team members
to come together and have in-person
‘collisions’ that spark innovation. To
support this, the Corporate Services
team led the negotiation and fit-out of
new leases in Adelaide and Canberra,
and a number of office lease extensions
in other regions.

We also worked hard to ensure we
have the right remuneration framework
in place to support a high performing
culture. This has been validated by
another strong year of growth, record
profits and successful customer
outcomes.

The UK had another strong year,
achieving Profit Before Tax of $1.6m,
with our value proposition now clearly
defined and the team executing on
this in our two industries of Local
Government and Higher Education.

We achieved a huge milestone this year
in the completion of the regionalisation
of our Student Management software for
the UK. This will significantly enhance
our OneEducation global SaaS ERP
offering for the UK, enabling universities
to manage the entire student lifecycle
from a single solution.

With Higher Education firmly in the
spotlight, we appointed two new senior
education advisors: Professor John
Latham CBE, Vice-Chancellor and CEO
of the Coventry University Group and
Dr Katie Bell, Chief Marketing Officer
of UCAS, the UK’s Universities and
Colleges Admissions Service. The

addition of the non-executive advisory
roles are key to our UK higher education
strategy.

Continuing momentum in
FY22

We rounded out the year with our first
international acquisition in leading
higher education software provider
Scientia, adding a world-leading
enterprise scheduling and timetabling
product to our OneEducation solution.

The acquisition supports our strategic
focus to deliver the deepest functionality
for Higher Education by bolstering
the strength of OneEducation, and
accelerates our growth and competitive
positioning in the UK. The integration
of our two global companies will deliver
an enhanced and differentiated digital
experience for our customers, making
us the only ERP provider in the world
to offer this solution to the higher
education market, as part of a full
enterprise suite.

As we lean into FY22, we have
appointed industry heavyweight Leo
Hanna as our new Executive Vice
President, UK, to drive the continued
growth and success of the UK region.

Leo draws on more than 20 years’
experience building and leading sales,
marketing and professional services
organisations in some of the world’s
leading technology and SaaS firms,
including Oracle, Symantec and
Microsoft Corporation.

Leo’s focus for the coming year will
be on continuing our momentum in
Higher Education, while spearheading
expansion in Local Government.

Transforming business, making life simpleOur OperationsBen
Malpass

Executive Vice President, Sales

FY21 was a hugely successful year for
the Sales team, who leveraged their
relationships to drive new opportunities
across our key industries.

This was spearheaded by our
customers’ digital transformations, as
they partnered with us to leverage a
future-proof ERP solution that empowers
them to be agile in adapting to a
changing business landscape. This has
been demonstrated by our ability to
transition an additional 100 customers to
our SaaS Platform this year.

Our announcement to move all
customers to SaaS by 2024, coupled
with our research that uncovered a
$252 billion benefit potential of all
our key industries moving to SaaS has
resonated strongly with customers. We
see these continuing to have a positive
impact on the value we provide into
FY22.

The acquisition of Scientia has also
provided us with an opportunity to
expand on the offerings we can deliver
our customers, and drive significant
growth in the UK.

Aligning behind our
strategy

Our Sales team is aligned behind a
strategy of enhancing, retaining and
acquiring customers, which enables
us to improve engagement across the
business and enhance our customer
experience and interactions.

Our industry sales team focused on
aligning our product capabilities to
the needs of our industries, which
resulted in customers increasing their
investment in our enterprise capabilities.
SaaS transition initiatives also saw
opportunities for our Sales teams to
work with our customers and identify
additional value for products and
modules, which continued to increase
our average product penetration.

We worked closely with our Product
General Managers and Product Success
Directors to provide feedback that has
enhanced the value our customers
derive from our solutions, resulting in
strong customer retention. FY21 also
saw greater alignment with Consulting,
to ensure we unlocked the value of our
Power of One promise for customers.

We welcomed approximately 40 new
customers to the TechnologyOne family
in FY21 and our new customer average
deal size increased by a factor of 2.5x
through the year. This demonstrated
the success of our industry-focused
solutions strategy and dominance in our
key markets of Local Government and
Education. Key wins included:

•

Charles Darwin University

Endeavour College

NSW Ombudsman

Charles Sturt University

Cross River Rail Delivery Authority

•

Parliamentary Services NZ

Cancer Council QLD

Credit Union SA

Hesta, West Yorkshire Combined
Authority

Fareham Borough Council

Allerdale Borough Council

St Giles Society

Advent Care

The success we’ve experienced this
year demonstrates that we have a
strong strategy in place, and the team is
now focused on executing in APAC and
extending that success to the UK. Our
industry-focused Sales teams, our global
SaaS ERP offering and Ci Anywhere
platform, and our ability to deliver value
quickly continues to differentiate us in
the market.

I am extremely proud of what our entire
sales team have achieved in a disruptive
and uncertain FY21. Our continued
investment in career frameworks, sales
development and the opportunity we
have created for our teams to progress
- from our sales graduates to senior
management - has seen a significant
amount of internal promotions and
resulted in continued success.

David
Cope

(Acting) Executive Vice President,

Consulting

In FY21, we completed the first phase of
our Consulting transformation agenda,
which was focused on setting our
foundations and building our platform
for future growth.

We’ve now moved into phase two,
which involves improving alignment
across the business to ensure that we
are tapping into that deep market focus
and commitment that differentiates us
from competitors.

Driving our recurring
revenue

Phase two of our transformation agenda
will also see us focus on improving
the value we offer to customers, and
driving customer intimacy through the
expansion of our Application Managed
Services (AMS) program.

Recurring revenue in our AMS program
grew once again, jumping 42% in FY21
to $19M+. We also maintained our strong
97 per cent customer satisfaction rate,
which spoke to the continued high

engagement of our customer group.

Importantly, we have focused on
ensuring we have the right people
and resourcing in place to provide
customers with a compelling customer
experience. We hired more than 70
new consultants in FY21, and facilitated
the transfer of 16 people to other areas
of the business, furthering the career
growth of our team members and depth
of skills across the company.

Our Career Frameworks are now fully
operational, which has supported an
all-time high of 23 consultants being
identified as promotion ready across
the Consulting group. We once again
delivered a record 3,350 days of
training, and are investing in improving
the speed of onboarding of our people.

Streamlining delivery and
driving growth

The learnings we gained from COVID-19
have strengthened our Consulting
business significantly, and we have

now moved to a completely remote
delivery model. Our Consulting team is
fully equipped to deliver all customer
go lives remotely, with on-site activities
happening by exception.

This has allowed us to improve
the way we resource our customer
engagements, and ensure that we
have the right people on the right
projects. This has also enabled us to
move towards a product and vertical
alignment model, rather than a regional
model – which allows our customers to
benefit from the deep vertical expertise
of our people.

This has driven continued success
across our Consulting business, with
profit and margin increases across the
board, together with exponential growth
in the UK.

The Consulting success in the UK has
underpinned UK overall profitability,
and ensured we are set up to support
continued UK expansion and growth.

Transforming business, making life simpleOur Operations
Richard
Nicol

Executive Vice President, Products

Daniel
Sultana

Executive Vice President, SaaS Platform

Our Products team is committed to
delivering products our customers love,
and our people are proud to create. We
live and breathe this mantra, and it is
critical to delivering on our Transforming
Business, Making Life Simple promise.

To underpin this strategy, we have
been laser focused over the last twelve
months on migrating our customers to
our next generation ERP, Ci Anywhere.

Ci Anywhere will lay the foundation
for the next 10 years of our evolution
and is the basis for some incredible
innovations – innovations that will
show our customers just how powerful
it is working with a vendor who takes
complete responsibility for their
enterprise solution. To us, Ci Anywhere
is more than just software - it is our
platform for the future, the product
our customers will love to use, and the
stepping-stone for our success.

Scientia acquisition
introduces new product

Our acquisition of Scientia has
expanded our product suite and R&D
capability, adding a world-leading
enterprise scheduling and timetabling
product to our OneEducation ERP SaaS
solution.

Our development teams are now
working on integrating Scientia’s
Syllabus Plus product into our single
global code line, which will deliver
a seamless experience across the
entire TechnologyOne enterprise suite
of products. This opens up exciting
new opportunities for the future,
by enhancing the strength of our
OneEducation offering for the Higher
Education market.

Underpinning UK growth

We have been investing in the
requirements of the UK, through the
establishment of a local UK R&D team
that has been tasked with fast-tracking
the localisation of our products for
the region. The team reached a key
milestone this year, with the completion
of the localisation of our Student
Management solution, creating a
significant future revenue stream for the
UK. We see this team expanding as they
continue localisation across our other
products.

The growth of our SaaS business
has continued to soar this year, and
it is underpinned by the strength and
security of our SaaS Platform, which
provides a compelling value proposition
for our customers.

Our strong investment and
determination to be the most trusted
SaaS Platform has again ensured we
are global leaders in compliance, cyber
security, performance and reliability.

To efficiently and easily meet the many
global compliance standards our SaaS
Platform adheres to, we have built
an innovative process and technical
production line that allows us to achieve
and maintain compliance with all our
security accreditations.

In FY21, we sought to register this
innovative process and technical
production line for a patent. We plan to
use this patent to provide our learnings
to customers, and provide them with
compliance automation to assist them in
meeting their reporting obligations.

Enhancing cyber security
standards

Our watershed moment
as a SaaS company

Over the year, we continued to expand
the security and compliance posture of
our platform to reaffirm our position as
the most trusted SaaS provider.

One of the key security accreditations
that sets our solution apart is our
IRAP PROTECTED status, enabling
us to process and store government
information up to PROTECTED. We
offer this for all Australian Federal
Government customers at no additional
cost.

In FY21, we extended the benefits of
IRAP PROTECTED beyond our federal
government customers, to deliver the
enhanced cyber security benefits to our
entire global customer base.

This year we also completed the
relocation of our UK customer’s data
from the European Union to the
United Kingdom to comply with Brexit
initiatives. This also included an uplift in
security, compliance, performance and
reliability at no additional costs to our
customers.

In 2021 we announced a watershed
moment, by committing to moving all
remaining on-premise customers to
our SaaS Platform by 2024. With 637
customers already on our SaaS Platform
- an increase of 18 per cent since last
year – we are now at a tipping point,
with the majority of our customers
already on SaaS.

It’s a credit to the strength of our SaaS
Platform, and the speed and ease of
transitions for on-premise customers
switching to SaaS, that we were able to
make this significant business decision.

We’ve committed additional resources,
focus and support to ensure that we
can help our remaining on-premise
customers make this transition over the
next three years, and enjoy the benefits
of our full global SaaS ERP value
proposition.

Transforming business, making life simpleOur OperationsMaree
Gallagher

Executive Vice President, People & Culture

Brett
Hooker

Executive Vice President, New Engineering

This year, our people and business
recovered from the disruption caused by
COVID-19, and we have put a spotlight
on ensuring that our return to a ‘new
normal’ encompasses flexibility, without
compromising our collaborative culture.

company-led flexible working and in-
person collaboration has allowed us to
maintain productivity, drive creativity and
honour of our Power of One philosophy,
which is contingent on cross-team
engagement.

This included the establishment of a
company-led remote working policy,
which encourages our people to be in
the office three days per week, with the
remaining two days to be worked either
remotely or in-office, at the preference
of our team members.

We also invested in our office spaces
across the board, signing new leases
and extending many across our regions,
to ensure that we provide our people
with an environment that is conducive
to collaboration, learning and in-person
collisions that spark innovation – with
the understanding that many of these
happen in hallway conversations.

We also invested in tribal events that
provided our people with an opportunity
to reconnect and enjoy each other’s
company. One of the key highlights
was our Company Kick Off event, which
provided an opportunity for all team
members to align behind our company
strategy and vision for the future, as
well as celebrate their achievements
together.

We have found this combination of

Investing in our people

Our people are our greatest competitive
advantage, and we continued to
value this through investment in
their engagement, career paths and
capabilities.

In what has been a buoyant candidate
market over the last 12 months, we have
focused on recruiting high performers
that will contribute to the success
of our company strategy and have
a positive impact on our culture. We
also cemented Talent and Succession
Frameworks, helping us to identify our
critical talent and critical roles, develop
our highest potential team members and
invest in our future leaders.

Diversity and inclusion has remained a
key priority across our talent pipeline.
As well as ensuring that we have a
diverse workforce, we have committed
to addressing the shortage of female
technology workers in Australia, through
partnerships with advocacy groups
such as Women in Digital and Women
in Technology. In doing so, we play a
leading role in growing a more diverse

pipeline of future candidates to work in
technical fields and at TechnologyOne.

Finally, we supported a number of
organisational changes across the
business, to ensure we have the right
people and structure in place to drive
forward key strategic milestones –
including our move to a full SaaS
business, the migration of our customers
to our next generation ERP, Ci
Anywhere, and setting up the UK for its
next phase of growth.

Career Framework

After successfully piloting our Career
Framework in Consulting last year, we
rolled this out more broadly across
the business in FY21, engaging team
members at all levels of the business
on their career paths to ensure they are
clear on what’s required to progress, be
it laterally, cross-functionally or through
promotion.

Team member advocacy

Our eNPS survey measures team
member advocacy and loyalty.
Enhancements to the data captured and
action planning post-survey have been
received positively by team members,
and are allowing us to use this data
to drive decisions and improvements
across the business.

Our New Engineering department
focuses on driving new product
innovations, without being inhibited by
the day-to-day operational requirements
of our existing product roadmaps.
This enables the team to explore new
innovations, separate to the delivery and
ongoing enhancement of our existing
product suite.

With a focus on technology innovation
that allows us to reach out to a whole
new class of users, New Engineering
is driving future revenue opportunities
within our key markets.

These innovations are underpinned by
two key innovative practices. Firstly, we
are investing more in design experts,

which allows us to tap into human
computer interface research and
thinking. These experts are focused on
ensuring our software is personalised to
the scenario a user is trying to complete,
and simplify their experience.

To complement this process, we are
also engaging with end users and
those managing the software very
early in the design and innovation
process. This allows us to incorporate
customer feedback ahead of go-live,
increasing the success and quality of
the end products coming out of New
Engineering. It also helps us to ensure
we’re building technology that is fit for
purpose, customer-driven and meets
our customers’ needs.

New product innovations

We continued the development of our
second generation of Digital Experience
Platform (DXP) products in FY21. Our
first customer, City of Canning, went live
with our Local Government DXP, which
provides an engaging digital experience
for council communities.

We also ramped up engineering of
our Student DXP, completing our user
engagement and design phases,
and moving into technical research.
FY22 will see us commence the
manufacturing stage for Student DXP.

Transforming business, making life simpleOur OperationsBrock
Douglas

Executive Vice President, Scientia

On September 15, TechnologyOne
completed our acquisition of Scientia
and its subsidiaries, and have now
commenced operational ownership of
the company.

per cent of institutions in Australia, and
50 per cent in the UK now supported
by our solution. The announcement
was well received by our university
customers.

Scientia marked TechnologyOne’s first
international acquisition, and adds a
world-leading enterprise scheduling
and timetabling product to our
OneEducation ERP SaaS solution. This
acquisition supports our strategic focus
to deliver the deepest functionality for
higher education, and accelerate our
growth and competitive positioning.

As part of the acquisition,
TechnologyOne welcomed over 100
new Scientia team members from
across the globe, and immediately
immersed them into our TechnologyOne
experience and DNA, through a number
of onboarding initiatives, company-
wide events, and direct access to our
TechnologyOne executive team.

It solidifies TechnologyOne’s dominance
in the Higher Education market, with 75

Whilst continuing to enhance the
Scientia products, our development

teams are now also working to integrate
Scientia’s products into our single global
code line.

Once complete, customers will enjoy
a single user interface and experience
across the entire TechnologyOne
enterprise suite of products.

Ultimately, the integration of our two
global companies creates a great
opportunity. It will deliver an enhanced
and differentiated digital experience
for our customers, making us the only
ERP provider in the world to offer this
solution to the higher education market,
as part of a full enterprise suite.

Technology“

Being able to fully integrate a schedule
into the full student experience is
very important, and an exciting step
for those universities - like Swinburne
- that use TechnologyOne’s student
management system.” Michelle
Gillespie, Registrar and Director of
Student Administration and Library
Services at Swinburne University of

“

The power
of one

One vision. One vendor. One code-line. One experience.

We do not use implementation partners or value-added
resellers. We take complete responsibility for building,
marketing, selling, implementation and supporting our
enterprise solution for each customer to guarantee
long-term success.

Transforming business, making life simpleOur OperationsOur
people

Transforming business, making life simpleOur PeopleThe power
of evolution

Substantial investment into R&D each year means we provide
our customers a strong, continuing competitive advantage
through an enterprise solution that adapts and evolves by
embracing new technologies, concepts and innovation.

Culture,
collaboration
and alignment

At TechnologyOne, we believe in a culture of innovation, creativity and collaboration and have created an environment that
allows our people to thrive. This culture is built into the fabric of our business, driving high performance and underpinning our
success.

Over the last two years, we have focused our operating model and business to be a true SaaS business, and pivot away from
an on-premise operating model. In a time when COVID-19 has accelerated this shift to digital, we have had the technology and
organisational structure in place to provide stability for our people and our customers, despite the uncertainty otherwise driven
by the pandemic.

Employer of choice

Our people are a crucial source of
our competitive advantage, and we
purposefully invest in initiatives that
support the recruitment, retention,
development and progression of
individual talent within our workforce.

As a nationally recognised Employer of
Choice, TechnologyOne is committed
to providing an environment in which
our talented people can be innovative,
creative and realise their full potential.

This year, TechnologyOne received
more than 6,500 recruitment
applications.

We also value the voices of our
team members to help shape our
organisation. Our Employee Net
Promoter Score (eNPS) surveys provide
a channel for our people to be heard,
with the results used to influence
ongoing enhancements to our initiatives
and programs.

Extensive onboarding
and training

TechnologyOne hires passionate,
talented and innovative people who are
inspired to think about the future.

Our comprehensive onboarding
program provides the best possible
start for our people in their careers
at TechnologyOne. We continue to
support our commitment to developing
our people and growing their careers
by delivering training in leadership,
technical and professional skills
development.

This year, we also welcomed 110
new team members who joined

TechnologyOne as a result of our
acquisition of Scientia. Our market-
leading orientation and onboarding
experience enabled us to seamlessly
welcome our newest team members to
the TechnologyOne family.

To support this, we have continued to
invest in our physical offices, this year
opening new offices in Adelaide and
Canberra, and signing a number of
lease extensions on our offices in other
regions.

Cultivating a culture of
innovation

The innovation and creativity of our
team is key to our success.

With a team of more than 400
developers, TechnologyOne runs
one of the largest Australian-owned
R&D centres for enterprise software.
In addition to our R&D centres in
Brisbane and Perth, we have offshore
R&D centres in Indonesia and Vietnam,
allowing us to extend our capability
and better support our customers and
existing products.

Our developers are leaders in their field
who challenge conventional thinking
and go beyond the traditional realms of
development methodology. Our state-
of-the-art R&D centre and initiatives
are designed to foster collaboration,
creativity and innovations that provide
the platform for our future growth.

Collaborative facilities and technology

To support new ways of working and
adapt to the impacts of COVID-19,
we have seen an increase in remote
working among our team members
over the last few years. As we begin to
emerge from the pandemic, our focus
has been on ensuring we can maintain
that flexibility, and also provide an
environment conducive to learning,
collaboration and in-person collisions
that spark innovation, which is at the
heart of our culture.

Our spaces are designed to foster
creativity and teamwork, with our Hack
Spaces providing a project area for
aspiring team members, graduates and
employees to innovate and develop
world-class software.

With technology and design being at
the forefront of the concept, the Village
Green social areas provide spaces in
our offices to showcase the ongoing
accomplishments and achievements
of the company in an environment that
reflects our products and values.

This combination of company-led
flexible working and in-person
collaboration has allowed us to maintain
productivity, drive creativity and honour
of our Power of One philosophy,
which is contingent on cross-team
engagement.

People initiatives to drive employee
engagement

In FY21, we invested significantly
in employee initiatives that would
drive reconnection, collaboration and
teamwork, recognising that an extended
period of remote working had resulted
in many team members missing the
dynamic team environment.

Our cornerstone event was our
Company Kick Off, which was a
two-day event that brought all team
members across the globe together
– both virtually and in person, where
possible – to align behind our company

Transforming business, making life simpleOur Peoplestrategy and vision for the future. You can
read more about our Company Kick Off
event on page 59.

To continue the momentum of Company
Kick Off, we introduced One Talks, a
monthly event held on the rooftop of our
HQ building and streamed live. One Talks
featured a different speaker each month,
designed to keep our team up-to-date on
the latest news from across the company,
from the people doing the work on the
ground.

We also introduced Surprise and Delights,
an initiative aimed at ensuring consistent
company and leader-led team activities
that would drive team reconnection and
build excitement around returning to the
office. The Surprise and Delight ‘menu’ of
activities featured team lunches, themed
Friday drinks, random acts of kindness and
hosted events.

In addition to these new initiatives, we
continued our investment in existing
employee engagement and recognition
initiatives, including Hack Days, MARVELs,
Town Halls and Regional Days.

Hack Days provide employees the
opportunity to collaborate across functional
teams and work on projects that fall outside
their normal day-to-day work. These Hack
Days are key to driving our culture of
innovation and creativity.

This year, we extended our Hack Day to be
a two-day event, which allowed us to better
engage with team members across the
globe, given the various time zones.

Meanwhile, our MARVEL awards celebrate
team members who go above and beyond
and showcases ordinary people, doing
extraordinary things. They are designed to
recognise and reward top talent, as part of
our achievement-oriented culture.

MARVEL stands for Merit, Achievement,
Recognition, Values, Excellence and
Leadership. Categories for the MARVEL
awards are centred around our key
initiatives. These include:

•

Leader of the Year

Compelling Customer Experience of
the Year

Hack of the Year

Rookie of the Year

TechnologyOne Superheroes

Winners of the MARVELs receive company-
wide recognition, and are inducted into
TechnologyOne’s League of Extraordinary
People.

Our quarterly Town Hall meetings provided
employees with the chance to hear from
our CEO and other TechnologyOne
executives about company direction and
strategy, as well as ask questions directly
that are answered in real time. These were
complemented by our Regional Days for
Sales and Consulting, where these teams
discuss strategy and goals, allowing
them to strengthen relationships across
regions, teams and projects, and improve
engagement across the whole organisation.

Graduate
program

Our graduate and intern programs form
the foundation of our talent pipeline
into the future. Our graduate brand and
experience is highly regarded by our peers,
competitors and industry bodies alike. We
received in excess of 1,000 applications,
highlighting the competitive and highly
sought-after nature of our program.

Our award-winning graduate program runs
across our Software, Sales and Consulting
teams. Our newest graduates work across
TechnologyOne with the company’s most
influential and skilled leaders, who provide
them with valuable learning opportunities
and experience.

Transforming business, making life simpleOur PeopleIn 2021, we held a Company Kick Off
(CKO) event for our entire team to
come together and align behind our
strategy for the future.

This two-day event provided a unique
opportunity for team members to
understand the future direction
of our business, explore the huge
possibilities for delivering innovative
solutions for our customers, and
immerse themselves in the path to
TechnologyOne’s future.

Held in May, the tribal event was
also hugely successful in reuniting
all Australian team members after an
extended period of COVID lockdowns
and remote working, and allowing them
to come together as a team, rather than
individual contributors.

For overseas team members unable
to travel to Australia due to COVID
restrictions, we provided a highly
interactive online experience that
enabled them to remain involved and
engaged in the event.

This initiative has driven our team
members to unite behind a common
goal, and ensure they understand
their role in driving the success of our
company strategy moving forward.

Transforming business, making life simpleOur PeopleIndustry
partnerships

We are committed to actively fostering
a diverse and vibrant information and
communications technology (ICT)
industry. We want to create interest
around this exciting time in Australia’s
economy and ensure we are engaging

early with Australia’s youngest and
brightest minds in science, technology,
engineering and maths (STEM) subjects.

With a focus on diversity and building
exceptional female talent pipelines,

TechnologyOne partners with Women
in Technology and Women in Digital to
continue to build our brand recognition
and employee value proposition
to attract rising female stars to
TechnologyOne.

Equal
opportunity

TechnologyOne takes diversity and
inclusion seriously. We advocate for
equal opportunity for all are committed
to addressing the shortage of female
technology professionals in Australia.
To help achieve this, we provide equal
pay opportunities for men and women
and have a zero-tolerance policy for
discrimination and harassment of any
kind.

Recruitment and promotion within
TechnologyOne are based only
on the relevant skills, experience,

qualifications, aspirations, potential and
aptitude of applicants.

to work in technical fields and at
TechnologyOne.

Some key programs TechnologyOne
supported this year included the
Women in Digital and the Queensland
Women in Technology Awards.

Women make up 36.5 per cent of
TechnologyOne’s workforce, which is
high compared to other technology
and software companies globally.
However, we are committed to further
increasing the representation of women
by working with strategic partners to
encourage more women to pursue
STEM-based careers. In doing so, we
play a leading role in growing a more
diverse pipeline of future candidates

Transforming business, making life simpleOur PeopleWellness
programs

TechnologyOne has a wellness program
aimed at encouraging our team
members to look after their wellbeing.
We have evolved this program in
recent years to provide team members
impacted by COVID-19 lockdowns and
restrictions with creative alternative
options, such as a Wellness app, online

yoga and strength building sessions so
they can keep active in the comfort of
their own home.

Our wellness resource hub provides
weekly wellness tips, support, videos
and material aligned to our overall
wellness model – Healthy Minds,

Healthy Bodies, Healthy Spaces and
Healthy Culture.

This year we also did telephone
wellbeing checks in regions affected
by extended lockdown periods, and
delivered wellness giftboxes to our
team members in the UK.

Our Corporate
Sustainability scheme

TechnologyOne is committed to
managing our business operations
in an environmentally responsible
manner. Our headquarters in Brisbane’s
Fortitude Valley has a Six Green Star
environmental rating. The building
includes numerous environmentally-
rated sustainable development
features, including 50 per cent more
fresh air than standard commercial
buildings, carbon dioxide monitoring,
external views to maximise daylight,
energy-efficient lighting, dedicated
exhausts in photocopier areas, a
gas-powered generator and a large

rainwater collection area on the roof to
supply water for the toilets and garden
irrigation.

We have achieved Climate Active
Carbon Neutral certification, and
offset our carbon footprint through the
acquisition of certified carbon credits,
which have been created through a
wind power initiative in India that aims
to develop enough power to replace
existing coal-fired power plants. This
makes TechnologyOne one of only two
companies in the Australian technology
sector to make this investment and
reach this achievement.

Our people are also encouraged to
access and adhere to our Environment
Policy. It outlines our commitment
to providing an environmentally
responsible workplace, and ways to
engage in sound workplace practices
through reducing waste and giving
more consideration to the use of energy
and resources.

For more information see our
Corporate Sustainability Report
overview on page 65.

Transforming business, making life simpleOur PeopleCorporate
Sustainability
overview

TechnologyOne’s
approach to
sustainability

Customer retention99 %

•

Customer satisfaction and retention

Data privacy and security

•

Talent attraction and retention

• Workplace diversity and inclusion

Employee engagement and culture

Employee training and development

Employee health and wellbeing

Ethics, values and transparency

Innovation

Compliance

36.5 %

Participation of women, placing

us among the best globally in the

IT industry

Total number of people who reported

issues concerning Modern Slavery

during FY21

PLEDGE

•

Our customers

Our people

Responsible
business

Our community
& environment

1% ti m

Our people

R&D

b
a
c
k
m
e
c
h
a

nis
m
s

Our community
& environment

Our products
and solutions

Implementation
& Support

Marketing/Sales

ﬁ

Our customers

Proﬁt

Revenue

$2m global impact in FY21

Community investment and education

Environmental footprint

Our growth

For the full Sustainability Report visit our website TechnologyOneCorp.com

Transforming business, making life simpleOur People

Our goal is to lift

500,000

children out of poverty

Transforming business, making life simpleOur PeopleTechnologyOne
Foundation

The TechnologyOne Foundation is dedicated to making a
difference to disadvantaged children and families in our
communities by empowering them to transform their lives
and create their own pathways to success. The Foundation
was established in 2016 to ensure that charitable giving
would become a long-term initiative for the business, and
encourage philanthropy to become part of the company
culture. Our Foundation helps great Australians achieve great
things and we are committed to long term contributions to
our key partners.

The Pledge 1%

The TechnologyOne Foundation is part of the Pledge 1%
corporate philanthropy movement, which is dedicated to
making the community a key stakeholder in every business.
In committing to the Pledge 1% movement, individuals and
companies donate 1% of their profit, product and employee’s
time to their communities.

TechnologyOne donates 1% of annual profit to our charity
partners, supporting our vision of changing the future
by empowering disadvantaged children and families to
transform their lives. This strategic approach to charitable
giving enables us to make a bigger difference to the causes
we support.

Through the 1% product, our commitment is to donate 1%
of new Annual Recurring Revenue each year. This makes it
easier for not-for-profit organisations to access our solutions
and take advantage of the efficiencies they provide, which in
turn extends the impact of their work.

All TechnologyOne team members can also take up to
2.5 days leave each year to volunteer during work hours
for charitable organisations. This supports our 1% of time
commitment. The Pledge 1% equated to a more than $2
million commitment by the company in FY21.

Our contributions have helped children access education
right across the globe - from refugee children right here in
Brisbane to students in Tanzania. We are proud of the impact
we make through our long-term commitments to charitable
organisations, helping families escape the cycle of poverty.

The year in
summary

$640,000
donated to our charity
partners

Welcomed
KidsCan & St James
Bursary Fund
partnerships

$204,000
worth of product
discounts to NFPs

3795 hours
of volunteering,
equating to
474 days

$20,000
supporting
disadvantaged youth
impacted by COVID-19

27
charities supported
worldwide

900
Solar Buddies built in
record time

Transforming business, making life simpleOur PeopleCONTRIBUTIONCOMMUNITYWINNEr 2021Our key
charity
partners

Designs, delivers and scales innovative
financial solutions that help families
living in extreme poverty build
sustainable livelihoods and access
quality education for their children.

Providing a free, high-quality education
to children in poverty and with social
pressures in Tanzania to complete
their schooling.

Treats, trains and equips the local
communities to expand the reach
of eye care services, ensuring the
poorest and most marginalised groups,
including children, can access free or
low-cost care.

Providing a broad range and far-
reaching social services to diverse
people experiencing hardship or
injustice, including youth support,
accommodation services, addiction
recovery, emergency relief and
financial counselling.

Uniting a global community to gift six
million solar lights to children living in
energy poverty by 2030, to help them
to study after dusk and improve their
education outcomes.

Helping disadvantaged Australians to
get the most out of their education to
create better futures for themselves.

Bursary Endowment Fund - Providing
an extensive tertiary education
pathway to an array of cultural, socio-
economic, and academic backgrounds.

How we’re
making a
difference
over time

54,159 children and families
in partnership with
Opportunity International Australia

5,193 lights
in partnership with SolarBuddy

1,960 children through education,
rehabilitation & energy housing
in partnership with The Salvation Army

1800 youth are on pathways out
of poverty
in partnership with The School of St Jude

54,934 children through screening,
glasses & eye surgery
in partnership with The Fred Hollows Foundation

131 young lives are directly
impacted helping them break the
cycle of poverty.
in partnership with The Smith Family

Provided food, clothing
and health products for 25
disadvantaged Kiwi pre-schoolers
in partnership with KidsCan

Our work with Opportunity
International Australia

Through our donations to and partnership
with the microfinance group Opportunity
International Australia, we are transforming
communities and helping families. We aim to
lift 500,000 children and their families over a
15-year period.

As a result of this partnership, families in India
can access small loans to enable them to
build businesses. This will also help them to
earn regular incomes to support themselves,
as well as feed, clothe and educate their
children.

With funds for initiatives such as starting
a shop or buying seeds for a vegetable
farm, families can transform their lives and
their children’s futures. Further, because 98
per cent of the small loans are repaid and
recycled, the impact creates a positive ripple
effect in their communities as more jobs are
created. Those jobs might include delivering
goods or helping with sewing and weaving
orders.

Boosting local communities

With more income and therefore more money
to spend on items such as food and transport,
families who used to live in poverty become
active participants in their local economies.
This benefits the providers of those products
and services, who are themselves often
entrepreneurs.

This virtuous cycle ensures that microfinance
provides a long-term boost to economies and
helps to develop self-sustaining communities
more so than one-time handouts.

Creating change

Micro-entrepreneurs are also able to use
their influence to bring about positive
changes in their communities. With the
confidence that comes with having their own
businesses, people can begin to seek better
infrastructure or educational facilities from
government, or bring local families together
to take on community projects.

Our support to date, with the benefit of
leverage and recycling of funds, has helped
54,159 children and their families to free
themselves from poverty.

Opportunity believes that every person has
the right to reach their potential. Just like
us, people living in poverty have dreams
and hopes. But while talent is universal,
opportunity is not.

Our giving to Opportunity is changing that
equation.

Transforming business, making life simpleOur PeopleFinancial
statements

Transforming business, making life simpleFinancial statementsDirectors’
report

Your Directors present their report on the consolidated entity (referred to hereafter as the Company) consisting of
Technology One Limited and the entities it controlled at the end of, or during, the year ended 30 September 2021.

The following persons were Directors of Technology One Limited during the financial year and up to the date of this report:

Adrian
Di Marco

B Sc, MAICD, FACS | Appointed 8 December 1999

He was inducted into the Pearcey Hall
of Fame in 2015.

He remains a major shareholder

of TechnologyOne.

Special Responsibilities

Board Chair and Chief Strategy and
Innovation Officer.

Interests in shares and options

17,372,500 ordinary shares in Technology
One Limited held beneficially through
Masterbah Pty Ltd. 6,000 ordinary shares in
Technology One Limited held on behalf of
family members. In addition, a relationship
deed exists between Masterbah Pty Ltd and
JL Mactaggart Holdings Pty Ltd (founding
shareholders) – Masterbah Pty Ltd exercises
voting rights only in respect of 26,872,500
securities and an escrow arrangement
applies to 14,000,000 of those securities.
There are no other beneficial rights
incumbent on these shares other than
voting rights.

Experience and expertise

Mr Di Marco founded TechnologyOne
in 1987, to build ERP software based on
new and emerging technologies, that was
configurable and did not require software
customisation. Mr Di Marco has over 40
years’ experience in the software industry.
He was CEO of TechnologyOne up until 2017.

Mr Di Marco has played a major role in
promoting Australian IT, and is a past Director
of the Australian Information Industry
Association, the industry’s peak body. He has
been a director of numerous IT companies.

Mr Di Marco is a supporter of Venture Capital
and has invested in 30+ early stage tech
companies in Australia and overseas.

He has been actively involved in charitable
organisations, and is a past Director of the
Royal Children’s Hospital Foundation Board.
He established TechnologyOne foundation
in 2015.

Mr Di Marco has received recognition for
his contribution to IT including the Pearcey
Award for pioneering achievement, the Tony
Benson award for outstanding contribution
to IT and the Australian Computer Society
award in recognition of distinguished
contribution to ICT.

Pat
O'Sullivan

CA, MAICD
Appointed 2 March 2021

Experience and expertise

Mr O’Sullivan is a Chartered Accountant and
has worked across a wide range of industries
both as an executive and non-executive
director. His last executive role was the Chief
Operating Officer and Finance Director of
Nine Entertainment Co Pty Limited, a position
he held from February 2006 until June 2012
and prior to that he was the Chief Financial
Officer of Optus for five years.

He is currently Chairman of carsales.com
and SiteMinder and Deputy Chair of Calvary
Health. He is chairman of the Audit and Risk
Committees at Calvary Health and he is
also a member of their Remuneration and
Nomination Committees. His previous ASX
non-executive director roles include iiNet,

Richard
Anstey

FAICD, FAIM | Appointed 2 December 2005

Experience and expertise

Mr Anstey's career has spanned over 40
years. His first company, Tangent Group
Pty Ltd, established a strong reputation for
the development of software products and
strategic management consultancy for the
banking and finance sector.

With the sale of Tangent, he then co-founded
lnQbator/iQFunds in 2000, an early stage
investment group focussed upon the
technology, telecommunications and life
sciences sectors.

Through iQFunds and personally, Rick has
co-invested in more than 30 companies with
the support of Commonwealth Government
programs, Venture Capital Funds and
both corporate and personal investors.
While being an active Non-Executive
Director of his investments, Richard has
added value wherever appropriate to
maximise shareholder value and has also
been actively involved in the trade sale of

iSelect, APN Outdoor, iSentia, Marley Spoon
and Afterpay.

Mr O'Sullivan is a member of The Institute
of Chartered Accountants in Ireland and
Australia.

He is a graduate of the Harvard Business
School’s Advanced Management Program.

Special responsibilities

Board Deputy Chair & Lead Independent
Director and member of Audit & Risk
Committee

Interests in shares and options

15,509 ordinary shares held in Technology
One Limited.

seven companies to organisations in the
US, Europe and Australia. Mr Anstey is a
Board member of Queensland University of
Technology-Entrepreneurship (a university-
wide initiative with global collaborations,
turning ideas into reality), a Fellow of the
Australian Institute of Company Directors
and a Fellow of the Australian Institute of
Management. Mr Anstey now continues
his career in venture capital and corporate
advisory roles as a founder of iQ360 Pty Ltd.

Special responsibilities

Chair of the Nomination and Governance
Committee.

Interests in shares and options

30,000 ordinary shares in Technology One
Limited held beneficially through the Anstey
super fund.

Transforming business, making life simpleFinancial statements
Jane
Andrews

GAICD PhD
Appointed 22 February 2016

Experience and expertise

Special responsibilities

Chair of the Remuneration Committee,
member of Audit and Risk Committee and
Nomination and Governance Committee.

Interests in shares and options

30,600 ordinary shares held in
Technology One Limited.

Dr Jane Andrews joined the Board in 2016,
bringing more than 15 years leadership
experience in research and innovation-based
organisations.

As a founder and investor in numerous
innovative companies, Dr Andrews has
extensive experience in corporate strategy,
entrepreneurship, commercialisation,
innovation, research and development.

Dr Andrews is a Graduate of the Australian
Institute of Company Directors, holds a PhD
in Life Sciences, a Bachelor of Science (First
Class Honours) and a Graduate Diploma in
Applied Finance and Investment.

John
Mactaggart

FAICD
Appointed 8 December 1999

Experience and expertise

Interests in shares and options

26,872,500 ordinary shares in Technology
One Limited held beneficially through
JL Mactaggart Holdings Pty Ltd. 30,000
ordinary shares in Technology One Limited
held via the Jontra trust.

Mr Mactaggart’s experience spans industries
such as agriculture, agri-tech, manufacturing
and software. He co-founded the Australian
Association of Angel Investors Limited, is
a co-founder of Brisbane Angels and was
the Australian representative of the World
Business Angels Association. Mr Mactaggart
played an integral role in the creation,
funding, and development of TechnologyOne
and remains a major shareholder. Mr
Mactaggart has been a Fellow of the
Australian Institute of Company Directors
since 1991.

Sharon
Doyle

B Laws (Hons), B IT (Dist), G Dip Bus Admin,
GAICD | Appointed 28 February 2018

Experience and expertise

Ms Doyle is the Executive Chair and
majority owner of corporate advisory firm,
InterFinancial Corporate Finance Limited.
She has successfully navigated technology
companies through the challenges of
steep global growth curves, with a strong
understanding of the dynamics in Software
as a Service (SaaS).

Ms Doyle’s leadership of InterFinancial has
seen her develop a core practice providing
strategic advice for technology and other
IP-rich, high-growth companies. She also has
extensive international experience managing
merger, acquisition and private equity
processes across the technology industry.

Ms Doyle was previously Vice President at

Clifford
Rosenberg

B Bus Sc (Hons), MSc (Hons)
Appointed 27 February 2019

Experience and expertise

Mr Rosenberg has more than 20 years’
experience leading change and innovation
in technology and media companies. As
the former Managing Director of LinkedIn
for Australia, NZ and South-East Asia, Mr.
Rosenberg started the Australian office
in 2009 and oversaw the expansion of
LinkedIn in Australia from 1 million members
in 2009 to more than 8 million members in
2017. Previously, he was Managing Director
at Yahoo! Australia and New Zealand, and
prior to that role he was the founder and
Managing Director of iTouch Australia NZ
where he grew the Australian office to one
of the largest mobile content and application
providers in Australia.

Mr Rosenberg has more than seven years’
experience on the boards of publicly listed
companies. His directorships include
Nearmap (ASX: NEA), A2B Australia Limited

Mincom, one of Australia’s most successful
enterprise software companies. Ms Doyle is
a Non-Executive Director at Auto & General.
She holds a Bachelor of Laws (Hons)
and Bachelor of Information Technology
(Dist.) from the Queensland University of
Technology, as well as a Graduate Diploma of
Business Administration from the University
of Queensland. She is a qualified member of
the Australian Institute of Company Directors.

Special responsibilities

Member of the Audit and Risk Committee
and Nomination and Governance Committee.

Interests in shares and options

18,280 ordinary shares in Technology
One Limited.

(ASX: A2B) and Bidcorp (JSE: BID). Cliff was
also a Non-Executive Director with Dimmi
(online reservations company bought by
Tripadvisor.com in May 2015). He holds a
Bachelor of Business Science (Hons) from
the University of Cape Town and a Masters
of Science (Hons) from the Universitat Ben
Gurion Ba-Negev.

Special responsibilities

Member of Remuneration Committee

Interests in shares and options

27,533 ordinary shares held in Technology
One Limited held beneficially through Clifro
Pty Ltd ATF Cliffro Trust.

Transforming business, making life simpleFinancial statementsCompany
Secretaries

Stephen
Kennedy

B Bus, FGIA, JP (Qual)
Appointed 13 April 2017

Mr Kennedy was appointed Company Secretary on 13 April 2017
and has been employed with TechnologyOne since January 2017.

Paul
Jobbins

B Bus (ACA), CA, GDipAppFin, MAppFin, GAICD
Appointed 16 December 2019

Mr Jobbins is the TechnologyOne Chief Financial Officer and EVP -
Corporate Services and was appointed as Company Secretary on 16
December 2019.

Mr McLean retired from this role at
TechnologyOne on 15 July 2004 and remains
a Non-Executive Director.

Special responsibilities

Member of the Remuneration Committee.

Interests in shares and options

69,737 ordinary shares in Technology One
Limited held beneficially through RONMAC
Investments Pty Ltd.

Ron
McLean

Appointed 8 December 1999

Experience and expertise

Mr McLean has more than 40 years’
experience in the enterprise software
industry including holding Senior Executive
and Managing Director roles in several
international and Australian software
companies.

His involvement in the enterprise software
industry has included leading and managing
software development, consulting and sales
and marketing teams.

Mr McLean joined the Board as a Non-
Executive Director in 1992, was appointed
as the General Manager in 1994, Chief
Operating Officer in 1999 and was promoted
to Chief Executive Officer of Operations in
2003.

Peter
Ball

B Bus, CA
Appointed 2 March 2020

Experience and expertise

Mr Ball is a Chartered Accountant who has
enjoyed a long career in the professional
services sector spanning nearly 40
years, initially in audit both nationally
and internationally, with the last 30 years
in management consulting. Peter was a
Partner with KPMG for some 25 years
providing a range of professional services
and advice to both public and private sector
organisations. He has also held senior
roles with KPMG including the national
leader of KPMG's Strategic Planning and
Economic Development service line and
more recently as national partner responsible
for the finance and operations for KPMG's
Government Advisory Practice.

Most of Peter's work involves providing
strategic, economic, commercial and
business improvement advice to enable
organisations to make fully informed
business decisions.

During his management consulting career
Peter has worked across a number of
industries including tourism and leisure,
gaming and wagering, arts and sports, and
state and local governments.

Peter has an entrepreneurial spirit and has
been involved with a number of start-ups
across a range of sectors including property,
education, gaming and the pharmaceutical
sector. He is also actively involved in the
community/not for profit sector having been
a Director of Alzheimer's Queensland for the
past 10 years.

Special responsibilities

Chair of the Audit & Risk Committee.

Interests in shares and options

21,900 ordinary shares held in Technology
One Limited held beneficially through the
Noosa Hill Super Fund.

Transforming business, making life simpleFinancial statementsMeetings of Directors
The numbers of meetings of the Company's Board of Directors and
of each Board Committee held during the year ended 30 September
2021, and the numbers of meetings attended by each Director were:

Full meetings
of Directors
(Board)

Meetings of committees

Audit

Nomination

Remuneration

A Di Marco

R McLean

J Mactaggart

K Blinco

R Anstey

J Andrews

S Doyle

C Rosenberg

P Ball

P O’Sullivan

10(11)

5(5)

4(4)

10(11)

6(6)

1(1)

Where a Director did not attend all meetings of the Board or relevant
committee, the number of meetings for which the Director was eligible
to attend is shown in brackets. In sections where there is a dash, the
Director was not a member of that committee.

Principal activities
The principal activity of Technology One Limited (the Company)
during the financial year was the development, marketing, sales,
implementation and support of fully integrated enterprise business
software solutions, including:

• TechnologyOne Enterprise Asset Management

• TechnologyOne Financials

• TechnologyOne Human Resource and Payroll

• TechnologyOne Enterprise Budgeting

• TechnologyOne Supply Chain

• TechnologyOne Property and Rating

• TechnologyOne Student Management

• TechnologyOne Business Intelligence

• TechnologyOne Enterprise Content Management

• TechnologyOne Performance Planning

• TechnologyOne Spatial

• TechnologyOne Enterprise Cash Receipting

• TechnologyOne Stakeholder Management

• TechnologyOne Business Process Management

• TechnologyOne Timetabling and Scheduling (Syllabus Plus)

Dividends
Dividends paid to members during the financial year were
as follows:

Ordinary shares

Final dividend for the year ended 30 September 2020 of
9.41 Cents (2019 - 8.78 Cents) per fully paid share paid in
December 2020 (2019 - December 2019)

60% franked (2019 - 75%) based on tax paid at 30%

Interim dividend for the year ended 30 September 2021 of
3.82 Cents (2020 - 3.47 Cents) per fully paid share paid in
June 2021 (2020 - June 2020)

60% franked (2020 - 60%) based on tax paid at 30%

2021
$’000

2020
$’000

30,225

27,930

12,279

11,058

Non-audit services
Non-audit services provided by the Company’s auditor, Ernst & Young,
in the current financial period and prior financial year included taxation
advice and other advisory services. The Directors are satisfied that the
provision of non-audit services is compatible with the general standard
of independence for auditors imposed by the Corporations Act.

During the year, the following fees were paid or payable for non-
audit services provided by the auditor of the Company and its related
practices:

Climate Governance

TechnologyOne’s broader focus on environmental, social
and governance factors (ESG) is overseen by the Nomination
& Governance Committee. The responsibility for implementing ESG
sits with each Business Division, facilitated by our Group Company
Secretary and Head of Compliance and Risk.

TechnologyOne’s Board of Directors will ensure that
climate-related risks are incorporated into the Company’s strategy
and risk management framework.

Ernst and Young:

2021
$

2020
$

Total dividends paid

42,504

38,988

Taxation advice and other advisory services

170,131

148,290

Review of operations
Please refer to Letter to Shareholders on page 15.

Significant changes in the state of
affairs
There were no significant changes in the Company's state of affairs
during the financial year.

Matters subsequent to the end
of the financial year
On 23 November 2021, the Directors of Technology One Limited
declared a final dividend on ordinary shares in respect of the 2021
financial year. The total amount of the dividend is $32,454,363 and is
60% franked.

No other matter or circumstance has occurred subsequent to period
end that has significantly affected, or may significantly affect, the
operations of the Company, the results of those operations or the
state of affairs of the Company or economic entity in subsequent
financial years.

Likely developments
Please refer to Letter to Shareholders on page 15.

Indemnification and Insurance
of Officers
Insurance and indemnity arrangements concerning officers of the
Company were renewed or continued during the year ended 30
September 2021.

An indemnity agreement is in place between TechnologyOne and
each of the Directors of the Company named earlier in this report and
with each full-time Executive officer and secretary of the Company.
Under the agreement, the Company has indemnified those officers
against any claim or for any expenses or costs which may arise as a
result of work performed in their respective capacities.

TechnologyOne paid an insurance premium in respect of a contract
insuring each of the Directors of the Company named earlier in
this report and each full-time Executive officer and secretary of the
Company, against all liabilities and expenses arising as a result of
work performed in their respective capacities, to the extent
permitted by law.

Total remuneration

170,131

148,290

Auditor’s independence declaration
A copy of the auditor's independence declaration as required under
section 307C of the Corporations Act 2001 is set out on page 147.

Rounding of amounts
The Company is of a kind referred to in Instrument 2016/191, issued
by the Australian Securities and Investments Commission, relating
to the 'rounding off' of amounts in the Directors' report and financial
report. Amounts in the Directors' report and financial report have
been rounded off in accordance with that Class Order to the nearest
thousand dollars, or in certain cases, to the nearest dollar.

Environmental regulation
TechnologyOne has assessed the recommendations of the Task Force
on Climate-related Financial Disclosures (TCFD). The outcome of the
assessment is discussed in the section below.

TechnologyOne’s Climate change position

While the TechnologyOne operations do not have a material impact
on the environment, we acknowledge that it is the changing attitude of
many that will have a material impact on reducing climate change.

Climate change is both an environmental and economic issue.
TechnologyOne accept the science of climate change and are
committed to contributing to the decarbonisation of the Australian/
Global economy. Given the growing economic and social importance
of the IT sector and its integral role in the decarbonisation of the
economy, public disclosures on transition and climate-related risks
and opportunities are fundamental. We acknowledge climate change
as a risk that may impact our operational and financial performance.
Therefore, TechnologyOne seeks to fulfil the recommendations of
the TCFD.

To support our first TCFD disclosure, we’ve completed a high-level
review of our practices and the current alignment of disclosures with
the TCFD recommendations. Our approach included benchmarking,
using high level risk assessment and management review and
identification of potential climate-related risks and opportunities.

We understand, as we begin our journey to better assess and
integrate climate-related risk that this is a dynamic process, requiring
evolution and iteration. This initial, high level review has identified a
range of opportunities to further develop and strengthen our approach
to climate change risks in future going forward.

Climate Strategy

To further understand the impact that climate change could have on
our business we performed a high-level qualitative assessment of
the impact of 2°C and 4°C global warming scenarios on our current
business model.

Under the 2°C scenario our key risks include reputational and legal
risks associated with a lack of climate risk disclosure, as well as
financial risks due to energy use and carbon pricing.

Under the 4°C scenario key aspects of the risks relate to physical
damage, network disruptions, missed sales opportunities and health
impacts on our staff.

Climate Risk Management

We aim to ensure that our risk management process is dynamic and
that the top climate change risks and emerging risks, as they evolve,
are identified, managed, and incorporated into our existing risk
management processes.

TechnologyOne aims to develop actions and procedures that seek to
prevent and reduce climate-related risks, notably our strategy aims to
reduce our greenhouse gas emissions (GHG) and decarbonise
our activities.

Our GHG decarbonisation strategy involves three phases:

Phase 1: measure (understand the key emission sources)

Phase 2: manage and minimise (reduce energy consumption and
associated carbon emissions where practicable)

Phase 3: offset (all or a proportion of our carbon emissions)

Climate Metrics and targets

TechnologyOne conducted a greenhouse gas assessment in
accordance with the GHG Protocol: A Corporate Accounting and
Reporting Standard and Corporate Value Chain.

TechnologyOne’s total emissions for FY21 amounted to 5,513.3 tonnes
of carbon dioxide equivalent, with Scope 3 emissions being the key
contributor (87% of net GHG).

Our carbon footprint from combined third-party services and utilities is
a significant contribution to our overall emissions.

We aim to use any arising opportunities to reduce our emissions (e.g.
COVID-19 resulted in a significant advancement in video-conferencing
making it possible to reduce our GHG emissions associate with
air travel). TechnologyOne is proud to say it is carbon neutral for
the second year running and has achieved an 18% reduction in
greenhouse gas emissions. Refer to published Sustainability Report for
further TCFD related information.

Transforming business, making life simpleFinancial statementsShare options

Unissued shares

As at the date of this report, there were 4,303,812 unissued ordinary
shares under options (4,303,812 at the reporting date).
Refer to note 33 for further details of the options outstanding.

Option holders do not have any right, by virtue of the option,
to participate in any share issue of the company.

Shares issued on the exercise of options

During the year, employees and Executives have exercised options
to acquire 2,268,446 fully paid ordinary shares in Technology One
Limited at a weighted average exercise price of $4.67. Refer to note
33 for further details of the options exercised during the year.

Corporate Governance Statement
The most recent Corporate Governance Statement can be located at
the Group’s Website (www.technologyonecorp.com).

This report is made in accordance with a resolution of Directors.

Adrian Di Marco
Executive Chairman

Brisbane
23 November 2021

Remuneration Report (Audited)
Introduction from the Chair of the Remuneration Committee

Dear Shareholders,

On behalf of TechnologyOne’s Remuneration Committee (the
Committee), I am pleased to present our Remuneration Report for the
year ended 30 September 2021.

The intention of this report is to describe the linkage between our
strategic initiatives, remuneration principles and remuneration
framework and how these in turn, drive shareholder returns.

The primary objective of the Committee is to ensure that we align
Key Management Personnel (KMP) financial rewards with shareholder
interests and our business strategy, whilst ensuring that we attract
and retain exceptional Executives, Directors and Employees who are
collectively responsible for delivering long-term profitable growth and
sustainable shareholder returns. This report provides a:

• Summary of incentive outcomes and alignment to

Company performance

• Response to First Strike

Response to First Strike
At the AGM on 22nd of February 2021, whilst the majority of votes
were cast in favour (61.7%) of the adoption of the 2020 Remuneration
Report, there were 38.3% of votes cast against, constituting a ‘first
strike’ under the Corporations Act 2001.

Proxy adviser and shareholder feedback indicated this was as a result
of the Board applying discretion to allow for full vesting of a portion
of KMP LTI that related to FY20 performance. The Board exercised
discretion for options tranches with a FY20 test, given exceptional
performance of the KMP during previously unforeseen circumstances,
(i.e. the global COVID pandemic). It is important to note the LTI
targets were set before COVID, and were both unrealistic and unfair
under these circumstances, and so the Board exercised discretion to
rectify the situation. It should be noted the company delivered record
revenue (up 4%), record profit (up 8%) and record SaaS ARR growth
(up 32%) in FY20. It should also be noted this was the first time, in 33
years, the Company had ever exercised Board discretion.

• Remuneration framework changes during FY21

There has been no Board discretion exercised in FY21.

Summary of incentive outcomes
and alignment to Company
performance
This report demonstrates a clear alignment between executive
remuneration and shareholder value creation.

As COVID-19 continues the company delivered exceptional results
as follows:

• SaaS ARR growth of 43%

• Consulting profit growth of 14%

• The UK achieving profit of $1.6m

• Net profit after tax growth of 15%

In summary:

• Total Executive KMP remuneration, grew by 12% year on year. This
is below the Company’s 19% growth in net profit before tax (NPBT).

• Fixed Remuneration for Executive KMP was not increased in FY21.

In FY21 we have also undertaken a detailed review of our Executive
Remuneration Framework, in collaboration with an independent
executive remuneration advisor, and engaged with shareholders and
proxy advisors to understand and address any ongoing concerns.

Changes in FY21
The review of our remuneration framework and remuneration report
disclosures resulted in the following changes for FY21:

• Improved readability of the Remuneration Report based on

suggestions from proxy advisors and shareholders

• Clarifying that the Malus provision (previously disclosed as ‘claw
back’) for the Deferred STI and LTI involves the Remuneration
Committee considering whether or not the Executive KMP has
upheld expectations (e.g, as per our code of conduct) and if there
are any irregularities or unintended outcomes that would affect
the vesting of an award.

• Short Term Incentive (STI) outcomes across our Executive KMP

• Clarifying that the Retention Bonus is actually an STI deferral

was up 18% in line with growth in reported NPBT of 19%. STIs have
been consistently calculated on Executive NPBT across FY20
and FY21. Executive NPBT has always been the basis for STI
calculation.

component. This is a long-term deferral to ensure alignment with
expectations of shareholders and to encourage staff retention. It
has been renamed to be Deferred STI and is disclosed separately
throughout the Report.

• Deferred STI earned and deferred was up 18% in line with growth

• Disclosing progress against our mandatory shareholding

in reported NPBT of 19%.

requirement for Non-Executive Directors.

• Our Long-Term Incentive (LTI) plan resulted in 99% of ‘at risk’
LTI vesting for our Executive KMP. The Board set challenging
LTI targets, which drive superior performance and long-term
shareholder wealth creation.

• The Board considered whether any discretion on incentive
outcomes was warranted during FY21 and concluded that
there was no reason to adjust remuneration outcomes as they
aligned to shareholder experience and Board expectations of
performance given market conditions.

It is important to note KMP remuneration in FY20 was calculated on
reported NPBT, rather than underlying NPBT, which is the same as
FY21. When comparing growth in STI and Total Remuneration
to growth of the results, reported NPBT should be used not
underlying NPBT.

TechnologyOne remains focused on delivering its growth promises
and we believe that our current remuneration structure positions us
well to continue providing our shareholders with strong returns, both
in the short and long-term, as well as ensuring alignment across our
Executive KMP. We will continue to have ongoing dialogue with proxy
advisors and our shareholders to evolve our framework as well as its
presentation in the remuneration report.

Jane Andrews
Chair, Remuneration Committee

Brisbane
23 November 2021

Transforming business, making life simpleFinancial statements
Remuneration Report (Audited)

The remuneration report contains the following sections.

1. About this report

2. Remuneration governance

3. Executive remuneration at TechnologyOne - strategy,

principles, and target mix

4. How Executive remuneration is structured

5. Key questions

6. Relationship between remuneration and Company performance

7. Detail of current year Executive remuneration and performance

8. Non-executive Director fees

9. Service agreements for the Executive KMP

Non-executive Directors

Status

Sharon Doyle

Independent Director

Audit and Risk Committee

Full year

Nomination and Governance Committee

Clifford Rosenberg

Independent Director

Remuneration Committee

Peter Ball

Independent Director

Audit and Risk Committee Chair

Pat O’ Sullivan

Deputy Chair and Lead Independent Director

Audit & Risk Committee

Kevin Blinco

Independent Director

Audit and Risk Committee

Full year

Appointed 2
March 2021

Resigned 23
February 2021

10. Detail of Executive remuneration for FY21

Executive Director

11. Statutory Remuneration

12. Additional statutory disclosures

1. About this report

1.1

Basis for preparation of FY21
Remuneration Report

The information in this Remuneration Report has been prepared based
on the requirements of the Corporations Act 2001 and applicable
accounting standards.

The Remuneration Report is designed to provide shareholders with a
clear and detailed understanding of TechnologyOne’s remuneration
framework, and the link between our remuneration policies and
Company performance.

The Remuneration Report details the remuneration framework for
TechnologyOne’s Key Management Personnel (KMP). For the purpose
of this report, KMP are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities
of TechnologyOne, directly or indirectly, including any Director
(whether Executive or otherwise).

This report has been audited.

1.2

People covered by the Remuneration Report

The Remuneration Report discloses the remuneration arrangements
and outcomes for those individuals who we have determined to meet
the definition of KMP under AASB 124 Related Party Disclosures. The
below table summarises each KMP, their position and term as KMP.

Non-executive Directors

Ron McLean

Independent Director

Remuneration Committee

John Mactaggart

Non-independent Director

Major shareholder

Richard Anstey

Independent Director

Nomination and Governance Committee Chair

Dr Jane Andrews

Independent Director

Remuneration Committee Chair

Audit and Risk Committee

Nomination and Governance Committee

Status

Full year

Adrian Di Marco

Executive Chair

Chief Strategy and Innovation Officer

Full year

Major shareholder

Executive KMP

Edward Chung

Chief Executive Officer

Stuart MacDonald

Chief Operating Officer

Paul Jobbins

Chief Financial Officer

Full year

2. Remuneration governance
The Remuneration Committee is responsible for developing the
remuneration framework for TechnologyOne Executives and making
recommendations related to remuneration to the Board. The
Committee develops the remuneration philosophy and policies for
Board approval.

The responsibilities of the Committee are outlined in their Charter,
which is reviewed annually by the Board.

The key responsibilities of the Committee include:

• Advising the Board on TechnologyOne’s policy for Executive and

Director remuneration

• Making recommendations to the Board on the remuneration

arrangements for Executives and Directors to ensure they are
aligned with TechnologyOne’s vision and are set competitively to
the market

• Approving KMP terms of employment

In making recommendations to the Board, the Committee reviews
the appropriateness of the nature and amount of remuneration to
Executives and Directors on an annual basis.

Prior to the award or vesting of any deferred remuneration including
deferred Short Term Incentives (STI) and Long Term Incentives (LTI),
the Committee will consider whether there are any irregularities or
other factors that would affect the payment or vesting of that award.
This is a formal agenda item for the Remuneration Committee.

During the year the Committee engaged an external advisor to review
the Remuneration Report. No remuneration recommendations as
defined under the Corporations Act (2001) Sect 9B were provided.

Executive Remuneration at
TechnologyOne- strategy,
principles, and target mix

3.1

Our remuneration strategy and principles

At TechnologyOne, our remuneration strategy is aligned with our
vision of “transforming business, making life simple”. The Board
believes that in order to deliver on our vision and build long-term
shareholder growth, TechnologyOne must have a remuneration
framework that allows it to compete for talent both locally and
globally in a highly competitive and fast-moving environment and
against companies such as Oracle, SAP and Workday, as well as other
Australian software companies.

The remuneration principles that underpin our remuneration strategy
and framework are:

• Attract, retain and motivate skilled Directors and Executives in

leadership positions

• Provide remuneration which is appropriate and competitive both

internally and against comparable companies (our peers)

• Align Executives’ financial rewards with shareholder interests and

our business strategy

• Achieve outstanding shareholder wealth creation

• Articulate clearly to Executives the direct link between individual

and group performance, and individual financial reward

• Reward superior performance, while managing risks

• Provide flexibility to meet changing needs and emerging

competitive market practices

• Commitment to diversity, reflecting a fair and equitable

remuneration framework

• Commitment to simplicity

Our Executive remuneration framework aligns with common practices
for ASX200 companies, with adaptations to meet the demands of
the enterprise software market. Relative to our ASX-listed peers, our
Executives receive:

• Relatively low fixed remuneration to enable a greater emphasis

on performance

• Relatively large at-risk STI portion aligning Executives to current

year performance

• Deferred STI component to help further drive long-term
shareholder wealth and ensure that we retain high
performing Executives

• LTI linked to long-term strategy, targets, and shareholder

wealth creation

The winning of new business, driving continued profit growth in
the current year is the key to our long-term success, and it is for
this reason our STI as a percentage of the total remuneration is
significantly higher than our ASX-listed peers. At the same time, the
fixed remuneration for our Executives is comparatively low compared
to our ASX-listed peers. The significant weighting towards the STI
encourages our Executives to drive new business and financial
performance in the current year, which creates Annual Recurring
Revenue (ARR)1 for future years, and therefore long-term success and
shareholder wealth.

TechnologyOne Executives are exposed to the long-term outcomes
of the business through the Deferred STI and a larger LTI component
than our ASX-listed peers.

The talent pool in Australia for Executives with large scale enterprise
software companies is highly competitive. Therefore, it is important to
ensure that our remuneration framework is appropriately structured
for the enterprise software market. We believe that our remuneration
structure offers the necessary flexibility and incentive to ensure that
we attract and retain talented Executives who understand the industry
and, in turn, drive shareholder value.

3.2
The remuneration arrangements of our Executives are made up of both fixed and at-risk remuneration (STI and LTI), as follows:

Overview of remuneration framework

Fixed remuneration

Short-term incentive (STI)

Deferred Short-term incentive (STI)

Long-term incentive (LTI)

Nature

Base salary plus superannuation.

Defined as payments contingent on
a one year performance period.

An amount equal to 25% of the annual
STI earned in the year is deferred
(i.e. 20% of total STI) and paid at the
conclusion of the two-year period
following the end of the financial year.

Defined as payments contingent on
performance over more than one year.

Options and performance rights are
subject to meeting performance targets
tested over three years

Form

Purpose

Cash

Equity

To provide a competitive salary based
on market benchmarking from the
Remuneration Committee

Drives outstanding performance in the
short-term which in turn translates to
long-term shareholder wealth.

Deferral enables risk management
via Malus Provision and encourages
retention.

Creates a focus on long-term
performance, with alignment to
long-term shareholder wealth creation.

Performance
targets

Performance
period

N/A

Percentage of applicable Executive Net
Profit Before Tax (NPBT)

Percentage of STI awarded.

Annual.

Deferred STI is accrued over a three-
year period- comprising the annual
performance period in which it is
determined and a deferral period of
two years of service.

The Deferred STI component is subject
to a Malus Provision in that there must
be no irregularities or other factors that
would affect the payment of that award.

•

Relative TSR (25%)

EPS growth (75%)

Three years.

The LTI component is subject to a Malus
Provision in that there must be no
irregularities or other factors that would
affect the vesting of the award.

1ARR is not an IFRS measure and is unaudited, it represents future contracted annual revenue at year end.

Transforming business, making life simpleFinancial statements

Target remuneration mix
Target remuneration mix at the beginning of the contract for the CEO (Table 1), and other Executive KMP (Table 3) is represented below, based
on target STI achievement and maximum LTI achievement. Over time, the remuneration mix is expected to change due to a larger increase in STI
relative to other remuneration components. The below represents the target contract remuneration mix for the CEO at the beginning of a contract
(Table 1) and demonstrates how remuneration mix changes over time (Table 2).

4. How Executive Remuneration is structured

4.1

Fixed remuneration

Fixed remuneration comprises base salary and superannuation. Fixed remuneration was not increased for FY21.

Table 1. Target CEO remuneration mix
(start of contract target)

Table 2. CEO remuneration mix
FY21

4.2

Short-term incentive

Executives participate in an STI plan which is based on Executive NPBT1. Key features of the STI plan are detailed in the table below:

33%

33%
33%

23%

33%
27%

Feature

Opportunity

27%

41%

Description

The value of the STI is based on a percentage of applicable Executive Net Profit Before Tax1. The percentage is determined at the outset of the
executive’s contract and remains fixed for the contract period for each Executive KMP. Refer to section 7.5 below for each Executive’s agreed
percentage.

STI awarded is uncapped to encourage over-achievement, drive performance in the current year and the creation of long-term shareholder wealth.
Given expected growth in NPBT over time, the longer the executive stays with TechnologyOne, the greater the weighting of the STI component of total
remuneration in comparison to the fixed and LTI components, which typically only increase by CPI on an annual basis. An illustrative example of how
this works over time in practice has been presented following this table. This effect encourages retention of outperformers by increasing their earning
potential the longer they stay with the Company, which aligns them with shareholders

Fixed

STI-current

Deferred STI

LTI

Fixed

STI-current1

Deferred STI

LTI

Award vehicle

Cash

Performance measures

The STI is based on a percentage of applicable Executive Net Profit Before Tax1. This effectively aligns the target incentive with shareholder return since
share price has trended with the increase in earnings.

The below represents the target contracted remuneration mix for other Executive KMP at the beginning of a contract (Table 3) and demonstrates
how remuneration mix changes over time (Table 4).

Table 3. Target Executive KMP remuneration mix
(start of contract target)

Table 4. Executive KMP remuneration mix FY21

33%

23%

30%

STI cap

27%

39%

TechnologyOne’s use of STIs differs from most other organisations in that it utilises only one performance measure in determining STI awards.
This is to create focus and clarity for Executives whilst also providing transparency for shareholders as to how STI awards are determined. The Board
and Remuneration Committee continue to monitor STI performance measures so as to ensure that they best align with the Company’s commitment to
providing shareholder wealth.

As a SaaS company, NPBT is critical to driving long term shareholder wealth. This is because the winning of new business, drives NPBT growth in the
current year. This winning of new business translates to growth in annual recurring revenue (ARR)2 in a SaaS company, which results in contracted
returns for the business in the future. Therefore, although the KMP are rewarded in the short term for increases in profitability, the Company and
shareholders continue to reap the benefits of that increase in profitability for the foreseeable future.

An important element of the success of our STI has been that it is uncapped so the greater the results in the current financial year, the greater the STI.
This not only encourages over performance in the current financial year for the Company it has a dramatic flow on effect in future years through the
greater recurring revenues for the Company. The uncapped STI also helps retain Executives over the long-term because the more they succeed, the
more financial incentive there is to stay with us and continue to work hard to achieve it each year, and the greater benefit to our shareholders through
an ever-increasing recurring revenue base. Market value is contingent on high and sustained annual growth.

Likewise, if the Company under-performs (e.g. loss of customers) or the results in a year are lower (e.g. impairment), there is a significant financial
impact to Executives as their STI forms a significant portion of their total remuneration. Just as the STI is uncapped on the upside, it is also uncapped
on the downside. Given that the Executive’s fixed remuneration is significantly lower than our ASX-listed peers, under-performance has a significant,
negative impact on their total remuneration. This ensures that Executive awards are aligned with shareholder returns.

The STI framework aligns performance with remuneration outcomes encouraging over performance and penalising under performance.

Fixed

STI-current

Deferred STI

LTI

Fixed

STI-current1

Deferred STI

LTI

While the STI is the largest component of remuneration, Deferred STI encourages executives to have a sustainable long term mindset when
approaching profit generation and when this component is summed with the LTI component, the long term elements of variable remuneration
work well in conjunction with the short term elements.

We have reported separately the remuneration mix for our Executive Chair (Table 5). The Executive Chair was offered an LTI of $400,000 which
he declined as he has in previous years. The Remuneration Committee recognises that Mr Di Marco’s total remuneration is substantially below
that of comparable companies. The Remuneration Committee acknowledges that Mr Di Marco’s significant shareholding in TechnologyOne
provides the benefits that the LTI aims to achieve.

Table 5. Target Executive Chairman remuneration mix

Table 6. Executive Chairman remuneration mix FY21

33%

34%

29%

33%

71%

Fixed

STI

LTI

Fixed

STI1

LTI (declined)

1The growth in STI-current as a proportion of overall remuneration seen in the graphs above arises due to the STI award being uncapped on both the upside and the downside. Refer to section 4.2 for more details on the STI-current.

Malus/Clawback

Termination

The ability to apply Malus Provision or clawback to Deferred STI exists in the unlikely event that business outcomes differ materially from expected
or if there are any irregularities or other factors that would or have affect the payment of that award.

On termination, the Executive foregoes any further STI payments which would have otherwise been available for the remainder of the financial year
under their STI plan.

1 Executive Net Profit Before Tax is calculated based on company profit before tax and before the Executive STI is deducted.
For the Executive Chair the Executive Net Profit Before Tax is based on company profit before tax before the Chair’s STI is deducted.

2 ARR is not an IFRS measure and is unaudited, it represents future contracted annual revenue at year end.

Transforming business, making life simpleFinancial statementsTechnologyOne Executives have an STI set at the start of their contract which is typically 33% of their total targeted remuneration. As noted
above, this percentage of their total remuneration will increase with the Executive’s tenure. The best way to consider the mechanics of the
TechnologyOne STI is by way of the following worked example.

Worked example

Consider a candidate who can command a remuneration package of $900,000 in the open market. The TechnologyOne STI opportunity is
determined as follows:

STI target

Commences at 75% to 100% of fixed remuneration (as established during contract negotiations).

$300,000 is used as the initial STI target. If we assume that NPBT of the Group, applies for this employee and the forecast NPBT is $40m,
(a 15% increase on the prior year) then contract STI will be $300,000/$40m (or 0.75% of profit)

Assuming an ambitious profit target increase of 15% per annum and actual profit increases of 12% per annum and CPI of 1% per annum, the
following illustrates the operation of the STI.

Year

Fixed

Profit target ($m)

Actual profit ($m)

300,000

303,000

306,030

40.00

44.80

50.18

38.96

43.64

48.87

STI%

0.75%

STI target
(STI % x profit target ($))

Actual STI (STI% x actual profit ($))

300,000

336,030

376,354

292,200

327,264

366,536

4.4

Long-term incentives (LTI)

LTI remuneration for TechnologyOne Executives is made up of a share-based remuneration element.

4.4.1

Share based remuneration

TechnologyOne Executives are eligible to participate in an LTI plan. The LTI plan is designed to provide participants with the incentive to deliver
substantial consistent growth in shareholder value:

Feature

Opportunity

Award vehicle

Performance period

Description

The value of the total number of LTI options and/or rights issued each year (a grant) to an Executive is typically set at 75% to 100% of fixed
remuneration and is determined during contract negotiation when an Executive is hired.

Each LTI entitles the Executive the right to purchase one TechnologyOne share in the future at an agreed strike price, subject to meeting specified
performance targets. The executive has a choice between options or zero price options (performance rights).

For LTI grants issued during FY20 and onwards, performance is measured at the end of a three-year performance period only (i.e. no annually
tested LTI measures). The test performed will be average annual growth over the three-year performance period. This is consistent with
best practice and further aligns our LTI plan with the creation of long-term shareholder wealth. For LTI grants issued prior to the end of FY19,
performance is measured over a three-year performance period with individual and Company targets tested annually or at the conclusion of the
three-year performance period. The performance period commences at the beginning of the fiscal year of the grant date and extends for three
years to a vesting date.

The number of options and/or rights in the grant are split into tranches based on the weighting of each performance measure. For performance
measures with a three-year target, the relevant tranche vests at the end of the three-year period in accordance with the vesting schedule provided
below.

For performance measures with an annual target, 1/3 of the relevant tranche is tested in accordance with annual performance, however, the LTI will
not vest until the end of the overall three-year performance period.

For accounting purposes, the expense is recognised in accordance with AASB 2 Share Based Payments over the three-year period

4.3

Deferred STI

Feature

Opportunity

Award vehicle

Cap

Description

Performance measures

Performance measures for the most recent LTI grants are

TechnologyOne introduced a Deferred STI in the FY19 year. An amount equal to 25% of the annual STI earned in the year under review is deferred
(i.e. 20% of total STI) and paid at the conclusion of the two-year period following the end of the financial year.

•

25% of the options vest based on Relative Total Shareholder Return (rTSR) against the constituents of the ASX All Technology (XTX) index

75% of the options vest based on EPS Growth

Cash

For the same reasons outlined in section 4.2 for the STI, this Deferred STI is also uncapped on both the upside and the downside.

Vesting schedule

For each performance target there is a mid and stretch target. Mid hurdles have been calculated so that if they are achieved, this will create
substantial shareholder wealth.

Deferral period and service requirements

The award will only be paid at the conclusion of the two-year period following the end of financial year, on the condition that the Executive KMP
remains employed with the Company for the entire deferral period.

Malus/Clawback

The Deferred STI component is subject to a malus/clawback provision in that there must be no irregularities or other factors that would or have
affected the payment of that award.

The following provides a worked example to illustrate the operation of the Deferred STI.
Amounts recognised for Deferred STI:

As can be seen from the table below, the Deferred STI expense is recognised over a three-year period, being the year on award plus the
two years of deferral.

STI
Measure

NPBT

STI
%

0.75%

Financial
result ($m)

STI- received
immediately ($)

Deferred
STI %

Deferred
STI

Year 1

Year 2

Year 3

Year 4

Year 5

Amounts recognised for Deferred STI

38.96

43.64

48.87

292,200

327,264

366,536

25%

73,050

24,350

81,816

91,634

27,272

30,545

The total value of the Deferred STI award is retained and will only be paid at the conclusion of the two-year period following the end of the financial year. The Deferred STI component is subject to a Malus Provision in that there
must be no irregularities or other factors that would affect the payment of that award. For accounting purposes, the expense in relation to this award is recognised over the total three-year deferral period. The Deferred STI was
introduced for the first time in FY19. The value included for FY19 represented one third of the FY19 award value. The value included for FY20 included one third of the FY19 award value plus one third of the FY20 award value.
The value included for FY21 includes one third of the FY19 award value plus one third of the FY20 award value plus one third of the FY21 award value.

24,350

51,622

82,167

57,817

30,545

Performance Metric

Growth <5%

5%<= Growth > 15%

Growth >= 15%

EPS growth

0% vest

50% vest at 5% growth with
linear vesting (50% to 100%) up
to 15% growth

100% vest

Performance Metric

Percentile < 50%

>=50% <75%

Percentile>= 75%

Relative TSR1

0% vest

50% vest at 50% relative TSR
with linear vesting (50% to 100%)
up to 75% relative TSR

100% vest

The number of options that vest at the end of the relevant performance period is determined as follows:

• Number of LTIs earned per three-year performance target = Number of LTIs available for that target x percentage earned x individual

performance factor2

• Number of LTIs earned per yearly performance target = 1/3 x number of LTIs available for that target x percentage earned x individual

performance factor2

1 Relative TSR targets are determined with reference to our peer group. Our peer group is defined as those constituent companies making up the ASX All Technology Index
(XTX). 2 The individual performance factor is typically 100% unless Malus Provision is applied.

The LTI is allocated based on the cost of the option which is calculated with the strike price being the volume weighted average price (VWAP) over
the 10 days prior to the grant date with no discount for the likelihood of performance conditions being met

The fair value of the LTI related to EPS growth is calculated using the binomial method and the fair value of the LTI related to TSR is calculated
using the monte carlo method, in accordance with AASB 2 Share-based payment.

In situations where the Vesting Conditions are affected by factors beyond the control of the employee (e.g. global pandemic, trade restrictions,
war, large-scale natural disasters, profit windfalls or unforeseen tailwinds), the Board has discretion to increase or decrease the number of LTI
options and/or rights vesting.

The Board retains sole discretion to determine the amount and form of any award that may vest (if any) to prevent any unintended outcomes, or in
the event of a corporate restructuring or capital event.

For any single performance metric, the Board also has discretion to apply an Individual Performance Factor (IPF) to adjust the number that vest to
take into consideration exceptional performance or contribution by an employee. The Board has the authority to increase the number of options
vesting for any particular performance metric by up to 200%. The extent of this discretion is capped such that the total number of LTI instruments
that vest will never exceed the maximum LTI opportunity, represented by the total number of LTI options and/or rights offered for all performance
targets for an executive in that year.

Allocation methodology

Fair value methodology

Board discretion

Transforming business, making life simpleFinancial statementsFeature

Description

5. Key questions

Key questions

TechnologyOne approach

The Board has discretion to determine the extent to which LTIs vest based on the period elapsed since the start of the performance period and the
performance at the time of any change of control event.

Why does our remuneration framework have such
a high weighting towards variable remuneration?

Our Executive Remuneration Framework aligns with many common practices for ASX200 companies but has been adapted to meet the
demands of the enterprise software market. Relative to our ASX-listed peers, our Executives receive:

Change of Control

Cessation of employment

Expiry

Re-testing

Malus

Awards lapse unless the Board determines otherwise, in which case it considers performance of the individual over the relevant period up to the
date of cessation of employment.

At the end of the applicable performance period, any LTIs that have vested will expire 5 years after vesting.

We do not revise or re-test our LTIs over the relevant performance period.

The LTI component is subject to a Malus Provision in that there must be no irregularities or other factors that would affect the vesting of the award.
Under the Malus Provision the Board has the ability to vary the LTI as appropriate e.g. reduce, forfeit, defer for longer period.

Margin loans

Directors and Executives are not permitted to use TechnologyOne securities as security for margin loans.

The following provides a worked example to illustrate the operation of the LTI:

Feature

Award vehicle

Vesting period

LTI grant value

Description

Options

3 years

$300,000

LTI metrics and weighting

EPS (75% weighting) and relative TSR (25% weighting)

Fair value of share option at grant date

Share price at grant date

Exercise price

Assumed growth in share price over the
vesting period

$1.50

$7.65

$7.39

30%

Amounts recognised for LTI

LTI metrics

Weighting

Grant number

Fair value

EPS growth %

75%

Relative TSR

25%

150,000

50,000

200,000

225,000

75,000

300,000

Share price at
grant

Exercise price
per share

7.65

7.39

Year 1

52,500

17,500

Year 2

67,500

Year 3

105,000

22,500

35,000

70,000

90,000

140,000

For the Year 1 tranche of LTIs, the fair value is $300,000, recognised over 3 years, as shown above. The proportion recognised increases from
year 1 to year 3 as the likelihood of vesting increases. For the purposes of this worked example, we have assumed that the fair value
of options granted with each metric is the same.

•

Relatively low fixed remuneration to enable a greater emphasis on performance

Relatively large at-risk short-term incentive (STI) portion aligning Executives to current year performance

Deferred STI component to help further drive long-term shareholder wealth and ensure that we retain high performing Executives

Long-term incentives (LTI) linked to long-term strategy, targets, and shareholder wealth creation

The winning of new business, driving continued profit growth in the current year is the key to our long-term success, and it is for this reason
our STI as a percentage of the total remuneration is significantly higher than our ASX-listed peers. At the same time, the fixed remuneration
for our Executives is comparatively low compared to our ASX-listed peers. The significant weighting towards the STI encourages our
Executives to drive new business and financial performance in the current year, which creates Annual Recurring Revenue (ARR)1 for future
years, and therefore long-term success and shareholder wealth.

TechnologyOne Executives are exposed to the long-term outcomes of the business through the Deferred STI and a large long-term
incentive (LTI) component.

The talent pool in Australia for Executives with large scale enterprise software companies is highly competitive. Therefore, it is important to
ensure that our remuneration framework is appropriately structured for the enterprise software market. We believe that our remuneration
structure offers the necessary flexibility and incentive to ensure that we attract and retain talented Executives who understand the industry
and, in turn, drive shareholder value.

Why is the KMP LTI based on EPS growth
and Relative TSR?

In FY19, earnings per share (EPS) growth and relative total shareholder return (TSR) were introduced to replace historical LTI measures,
which included net profit after tax (NPAT) growth. The rationale for the selection of these two measures is as follows:

•

EPS growth: Ensures that our Executives are remunerated in line with growth in shareholder wealth over the long term.

Relative TSR: Ensures that our Executives are remunerated in line with the Company’s creation of shareholder wealth
relative to our peers over the long term.

The introduction of these two new measures ensures we have LTI targets which are more directly aligned with trends in shareholder wealth
over the long term.

There is debate among proxy advisors about the use of TSR as an LTI metric, with some for and some against. Relative TSR may not be
particularly useful as an incentive on its own, as management have little direct influence over outcomes, however, when combined with
the EPS growth metric (which has been given a higher weighting) we feel it results in a very effective LTI for our Executive KMP. The
combination of these metrics ensures that Executives are aligned with shareholder wealth creation (EPS growth) and also ensuring that
performance is better than that of our peers (rTSR).

The winning of new business, driving continued profit growth is the key to our long-term success. Having Executives focus solely on net
profit before tax (NPBT) ensures there is clear line of sight for Executives and transparency for shareholders as to how STI awards are
determined. The setting of NPBT as the measure (rather than components contributing to NPBT) give executives the flexibility to be agile
and choose appropriate strategies based on the market environment and arising opportunities to meet their targets.

NPBT incorporates the outcomes of the key drivers of our business including winning new annual recurring revenue through new
and existing customers, customer retention, expense management and margin expansion.

Is our STI plan sufficiently challenging with only
one performance measure?

What is the rationale for having an uncapped STI?

An important element of the success of our STI has been that it is uncapped on the upside and downside.

The greater the results in the current financial year, the greater the STI. This not only encourages over performance in the current financial
year for the Company, it has a significant flow on effect in future years through the greater annual recurring revenues for the Company. The
uncapped STI also helps retain Executives over the long-term, because the more they succeed, the more financial incentive there is to stay
with us and continue to work hard to achieve each year, and the greater benefit to our shareholders through an ever-increasing recurring
revenue base.

Likewise, if the Company under-performs (e.g. loss of customers) or the results in a year are lower (e.g. impairment), there is a significant
financial impact to Executives as their STI forms a significant portion of their total remuneration. Just as the STI is uncapped on the upside,
it is also uncapped on the downside. Given that the Executive’s fixed remuneration percentage is significantly lower than our ASX-listed
peers, under-performance has a significant, negative impact on their total remuneration.

This performance measure is well-aligned with the interests of shareholders, as NPBT outcomes above target, rewards shareholders as
well as executives. Poor performance also “penalises” executives as well as shareholders.

Why did we introduce a Deferred STI?

A Deferred STI was introduced in FY19 where an amount equal to 25% of the STI earned in the year under review is awarded and deferred
for a period of two years (i.e., 20% of total STI).

The award is only paid out to the Executive if they remain in employment with the Company for the entire deferral period. This deferral:

•

Assists in retaining high performing Executive KMP

Helps further drive long-term shareholder wealth via executive skin in the game, fostering a long term mind set among executives

Provides opportunity to forfeit the award. Prior to its award or vesting, the Remuneration Committee will consider whether there are
any irregularities or other factors that would affect the payment or vesting of that award.

1ARR is not an IFRS measure and is unaudited, it represents future contracted annual revenue at year end

Transforming business, making life simpleFinancial statements6. Relationship between remuneration and Company performance

Average STI vs. NPBT

6.1

TechnologyOne’s five-year performance

The below table sets out information showing the creation of shareholder wealth for the years ended 30 September 2017 to 30 September 2021.
Profits and dividends have grown over the last five years, and growth in the fair value of executives has not exceeded growth in profits over the
period.

Actual profit before tax reported ($’000)

Profit before tax growth

Total dividend including special (cps)

Earnings per share (basic)

EPS growth

Share price at start of period

Share price at end of period

Annual Total Shareholder Return (TSR)

3-year TSR

LTI vesting as a % of maximum

1Accounting for revenue for these periods remains under AASB 118. They were not restated in this table for AASB 15

Profits have grown strongly and sustainably over the last five years,
as have earnings per share and dividends, all while transforming
from perpetual licenses to a SaaS model.

The results indicate substantial growth in shareholder value and, since
TechnologyOne executive remuneration is strongly linked to Company
profit performance, has seen executives rewarded for
their achievements.

As can be seen from the tables above, the Executives’ remuneration
framework has successfully driven performance and the creation
of shareholder wealth over the longer term. In addition, Executives’
remuneration has been in alignment with overall Company
performance.

20171

58,019

10.18

14.20

5.94

5.02

(14%)

78%

100%

20181

66,528

15%

11.02

16.14

14%

5.02

5.58

13%

39%

76%

2019

76,389

15%

11.93

18.43

14%

5.58

7.18

31%

35%

72%

2020

82,470

12.88

19.75

7.18

7.94

12%

58%

98%

2021

97,843

19%

13.91

22.64

15%

7.94

11.36

45%

97%

99%

The graphs on the next page set out information regarding
TechnologyOne’s performance, earnings and movement in
shareholder wealth over the past five financial years up to and
including FY21. Note, figures for 2018 and prior years represent
reported results which have not been restated for changes in
accounting policies or accounting standards.

The first graph below shows our average Executives’ STI has grown by
11% which is below the Company’s Net Profit Before Tax (NPBT) profit
growth of 13% over the last 5 years.

)
s
0
0
0
$

(

T
S

g
v
A

$800

$700

$600

$500

$400

$300

$200

$110

$100

$90

$80

$70

$60

$50

$40

$30

$20

$10

$395k

$445k

$568k

$621k

$736k

FY17

FY18

FY19

FY20

FY21

Financial year

Average STI

NPBT

Average STI has grown by 11% which is at a slower rate than
the 13% growth in reported NPBT over the last 5 years

Our STI structure is working as it drives short-term performance,
which in turn creates a strong long-term recurring revenue base.
In the long-term, this creates continuing financial success and
substantial shareholder wealth for Technology One.

The second graph below shows that the average Executives’
remuneration has been growing at less than the Company’s NPBT.

Average REM vs. NPBT

)
s
0
0
0
$

(

M
E
R

g
v
A

$1,600

$1,400

$1,200

$1,000

$800

$600

$400

$200

$110

$90

$70

$50

$30

$10

$1m

$1.1m

$1.2m

$1.3m

$1.5m

FY17

FY18

FY19

FY20

FY21

Financial Year

Average REM

NPBT

)
s
M
$

(

T
B
P
N

)
s
M
$

(

T
B
P
N

7. Detail of current year
Executive remuneration and
performance
This section describes remuneration outcomes for each executive
based on performance in FY21 using statutory accounting fair value.

7.1

Fixed remuneration

Fixed Remuneration includes base salary and superannuation paid in
line with the remuneration strategy and principles described in section
3.1 above.

7.2

Short term incentive

The short-term incentives for Executives for FY21 were in line with the
remuneration framework described in section 4.2 above.

The following tables in section 7.5 show the amounts achieved in FY21
based on each executive’s agreed percentage of net profit before tax.

Executive Net Profit Before Tax is calculated based on Company
profit before tax and before the Executive STIs are deducted. For
the Executive Chair the Executive Net Profit Before Tax is based on
Company profit before tax before Chair’s STI is deducted.

7.3

Deferred short term incentive

The Deferred STI achieved by Executives for FY21 were in line
with the remuneration framework described in section 4.3 above.

The following tables in section 7.5 show the statutory accounting
fair value of the amounts recognised in FY21.

7.4

Long-term incentive

The long-term incentives granted to Executives for FY21 were in line
with the remuneration framework described in section 4.4.1 above.
Refer to section 7.7 below for specific details of the grants for FY21.

The following tables in section 7.5 show the statutory accounting fair
value of the amounts recognised and instruments forfeited in FY21.

Refer section 7.6 for details of the share options and Executive
Performance Rights (EPRs) vested in FY21. 99% of instruments
vested during the year.

Average Executive Remuneration has grown by 11% which is at
a slower rate than the 13% growth in reported NPBT over the last
5 years.

NPBT has grown faster than our average Executive remuneration
which demonstrates how effective our remuneration structure is at
driving long-term shareholder wealth.

Transforming business, making life simpleFinancial statements

7.5

Detail of Executive remuneration and performance

Adrian Di Marco

Edward Chung

Position

Executive Chair and Chief Strategy and Innovation Officer

Position

Chief Executive Officer

Fixed remuneration

Base salary

2021
$

2020
$

Variance

% Notes

339,056

341,556

The base salary represents the amount earned for the role of Chief
Strategy and Innovation Officer.

Chairman's fees

141,000

The Chair's fees are benchmarked every 3 years in line with the
Group's peers.

Fixed remuneration

Base salary

Directors’ fees

Superannuation

2021
$

2020
$

Variance

% Notes

505,568

508,068

27,500

25,000

Superannuation

27,500

25,000

Total fixed remuneration

533,068

0.0%

Total fixed remuneration

507,556

0.0%

99,092,373

83,523,578

18.6%

STI

STI - profit¹

STI %

Total STI

Total Deferred STI

LTI

Fair value of options recognised

Fair value of options forfeited

Fair value of EPRs recognised

Fair value of EPRs forfeited

Total LTI

1.26%

1,248,564

1,052,397

STI

STI - profit¹

STI %

Total STI

102,318,557

86,515,918

18.3%

0.78%

798,085

674,824

18.3% Growth in STI is consistent with growth in NPBT, the primary measure

of STI.

18.6% The STI relates to the role of Chief Strategy and Innovation Officer. Growth
in STI is consistent with growth in NPBT, the primary measure of STI.

0.0% The Executive Chair has a substantial shareholding so a Deferred STI

is not required.

Total Deferred STI

174,678

108,171

LTI

Fair value of options recognised

382,895

339,328

The Executive Chair has a substantial shareholding so has declined an LTI.

Fair value of EPRs recognised

Fair value of options forfeited

61.5% Deferred STI (refer to section 4.3) was introduced in FY19 for the first time.
FY21 amount includes one third of the FY19 award plus one third of
the FY20 award plus one third of the FY21 award. The growth shown
is primarily due to the timing of accounting recognition and does not
represent growth in remuneration awarded or realised.

The value included for FY21 includes one third of the FY19 LTI fair value
plus one third of the FY20 LTI fair value plus one third of the FY21 LTI fair
value.

The fair value for the forfeitures noted in 12.1 was adjusted for in FY19
when the annual test was performed.

Total remuneration

1,756,120

1,559,953

12.6% Total remuneration has grown by 12.6%, less than reported net profit

Fair value of EPRs forfeited

before tax growth of 19%.

1 Refer to section 7.2 above for the description of the net profit before tax used to calculate the STI.

Fair value of options recognised
(old scheme)

58,471

116,057

The final tranche of share options vested and were exercised during the
year.

Total LTI

441,366

455,385

(3.1%)

Total remuneration

1,947,197

1,771,448

9.9% Total remuneration has grown by 9.9%, less than reported net profit

before tax growth of 19%.

1 Refer to section 7.2 above for the description of the net profit before tax used to calculate the STI.

Transforming business, making life simpleFinancial statements

Stuart MacDonald

Position

Chief Operating Officer

Fixed remuneration

Base salary

Directors' fees

Superannuation

2021
$

2020
$

Variance

% Notes

421,117

421,944

25,827

25,000

Paul Jobbins

Position

Chief Financial Officer

Fixed remuneration

Base salary

Directors' fees

Superannuation

2021
$

2020
$

Variance

% Notes

221,764

222,250

25,486

25,000

Total fixed remuneration

446,944

0.0%

Total fixed remuneration

247,250

0.0%

STI

STI - profit1

STI %

Total STI

102,318,557

86,515,918

18.3%

0.533%

545,358

0.533%

461,130

Total Deferred STI

119,164

73,717

LTI

Fair value of options recognised

139,132

235,508

Fair value of options forfeited

Fair value of EPRs recognised

110,862

69,404

Fair value of EPRs forfeited

18.3% Growth in STI is consistent with growth in NPBT, the primary measure

of STI.

61.7% Deferred STI (refer to section 4.3) was introduced in FY19 for the first time.
FY21 amount includes one third of the FY19 award plus one third of
the FY20 award plus one third of the FY21 award. The growth shown
is primarily due to the timing of accounting recognition and does not
represent growth in remuneration awarded or realised.

The fair value for the forfeitures noted in 12.1 was adjusted for in FY19
when the annual test was performed.

Total LTI

249,994

304,912

(18.0%)

Total remuneration

1,361,460

1,286,703

5.8% Total remuneration has grown by 5.8%, less than reported net profit

before tax growth of 19%.

1 Refer to section 7.2 above for the description of the net profit before tax used to calculate the STI.

STI

STI - profit¹

STI %

Total STI

102,318,557

86,515,918

18.3%

0.343%

350,953

296,750

18.3% Growth in STI is consistent with growth in NPBT, the primary measure

of STI.

Total Deferred STI

74,944

45,698

64.0% Deferred STI (refer to section 4.3) was introduced in FY19

LTI

Fair value of options recognised

283,269

174,487

Fair value of options forfeited

Fair value of EPRs recognised

Fair value of EPRs forfeited

Total LTI

Total remuneration

283,269

956,416

174,487

764,185

for the first time.
FY21 amount includes one third of the FY19 award plus one third of
the FY20 award plus one third of the FY21 award. The growth shown
is primarily due to the timing of accounting recognition and does not
represent growth in remuneration awarded or realised.

The value included for FY21 includes one third of the FY19 LTI fair value
plus one third of the FY20 LTI fair value plus one third of the FY21 LTI
fair value. As Mr Jobbins commenced employment during FY19 the
value included in the table for FY20 represents one third of the FY19 fair
value plus one third of the FY20 LTI fair value only. The growth shown
is primarily due to the timing of accounting recognition and does not
represent growth in remuneration awarded or realised.

The fair value for the forfeitures noted in 12.1 was adjusted for in FY19
when the annual test was performed.

62.3%

25.2% Total remuneration has grown by 25.2%. As Mr Jobbins commenced

employment during FY19, the growth shown is primarily due to the timing
of accounting recognition for LTI fair value (increasing over the three-year
performance period) and does not represent growth in remuneration
awarded or realised.

1 Refer to section 7.2 above for the description of the net profit before tax used to calculate the STI.

Transforming business, making life simpleFinancial statements

7.6

Options and EPRs that became eligible to vest during FY21

7.7

Options/EPRs that have been granted in FY20 and FY21 and not yet vested

During the year, Edward Chung, Stuart MacDonald and Paul Jobbins completed a three-year performance period relating to the LTI instruments
granted to them in FY19 and vesting in FY21. 100% of the Relative TSR options became eligible to vest and 99% of the EPS options, resulting in
99% of total LTI vesting.

A summary of the targets set and performance against each target and options which have vested and are available to be exercised has been
set out below:

Edward Chung

Grant year

Performance
measure

Option or EPR

FY19

Relative TSR

EPS Growth

Option

Number of LTIs
available for
target

43,766

175,064

Testing

Testing year

Target

Performance
measure
achieved

Number due
to forfeit

LTIs vested % LTI vested

3 year

Annual

FY21

75% percentile

76%

43,766

FY19

FY20

FY21

>15%

14%

2,188

41,578

8%¹

15%

43,766

172,876

100%

95%

100%

99%

Stuart MacDonald

Grant year

Performance
measure

Option or EPR

Number of LTIs
available for
target

Relative TSR

EPR

11,722

FY19

EPS Growth

EPR

11,721

EPR

11,721

EPR

11,721

46,885

Paul Jobbins

Testing

Testing year

Target

Performance
measure
achieved

Number due
to forfeit

LTIs vested % LTI vested

3 year

Annual

FY21

75% percentile

76%

11,722

FY19

FY20

FY21

>15%

14%

586

11,135

8%¹

15%

11,721

46,299

100%

95%

100%

99%

Grant year

Performance
measure

Option or EPR

Number of LTIs
available for
target

Testing

Testing year

Target

Performance
measure
achieved

Number due
to forfeit

LTIs vested % LTI vested

Relative TSR

EPS Growth

FY19

Option

53,864

3 year

Annual

215,456

FY21

75% percentile

76%

53,864

FY19

FY20

FY21

>15%

14%

2,693

51,171

8%¹

15%

53,864

212,763

100%

95%

100%

99%

1As disclosed in sections 3.2 and 3.4 of the FY20 Remuneration Report, the Board exercised discretion for option tranches with a FY20 test for EPS Growth, given exceptional performance of the KMP during previously unforeseen
circumstances, (i.e. the global COVID pandemic). It is important to note the LTI targets were set before COVID, and were both unrealistic and unfair under these circumstances, and so the board exercised discretion to rectify the
situation. It should be noted the company delivered record revenue (up 4%), record profit (up 8%) and record SaaS ARR growth (up 32%) in FY20. It should also be noted this was the first time, in 33 years, the company had ever
exercised Board discretion. This was an historical decision made for FY20 testing, and was not repeated for the testing of FY21 tranches.

Edward Chung

Grant year

FY20

FY21

Stuart MacDonald

Grant year

FY20

FY21

Paul Jobbins

Grant year

FY20

FY21

Performance
measure

Number of LTIs
available for target

Relative TSR

66,160

EPS Growth

198,479

Relative TSR

63,730

EPS Growth

191,189

Testing

Testing year

Target

Performance
measure achieved

LTIs due to vest

3 year

FY22

FY23

75% percentile

To be tested at the end of FY22

>15%

To be tested at the end of FY22

75% percentile

To be tested at the end of FY23

>15%

To be tested at the end of FY23

Performance
measure

Number of LTIs
available for target

Relative TSR

41,849

EPS Growth

125,547

Relative TSR

38,113

EPS Growth

114,339

Testing

Testing year

Target

Performance
measure achieved

LTIs due to vest

3 year

FY22

FY23

75% percentile

To be tested at the end of FY22

>15%

To be tested at the end of FY22

75% percentile

To be tested at the end of FY23

>15%

To be tested at the end of FY23

Performance
measure

Number of LTIs
available for target

Relative TSR

36,629

EPS Growth

109,887

Relative TSR

33,359

EPS Growth

100,077

Testing

Testing year

Target

Performance
measure achieved

LTIs due to vest

3 year

FY22

FY23

75% percentile

To be tested at the end of FY22

>15%

To be tested at the end of FY22

75% percentile

To be tested at the end of FY23

>15%

To be tested at the end of FY23

Transforming business, making life simpleFinancial statementsService agreements for the
Executive KMP

Remuneration and other terms and conditions of employment for
Executive KMP are formalised in service agreements which are
reviewed each year. All Executive KMP service agreements are
rolling contracts which cease following notice of termination by either
employee or employer.

The following table presents some of the key contractual
arrangements for the Executive KMP:

KMP

Contract term

Termination notice
by either party

Post-employment
restraint

Executive Chair

CEO

Other Executive KMP

Ongoing

3 months

6 months

12 weeks

12 months

If a service agreement is terminated, payment in lieu of notice that is
not worked may be provided, in addition to any statutory entitlements.
No other additional termination or post-employment benefits are
provided on termination of employment. Refer to sections 4.3 and
4.4 respectively for treatment of STIs and LTIs on cessation of
employment.

The Executive Chair’s fixed remuneration package is established to
compensate him for executing the role of Chair and also for that of
Chief Strategy and Innovation Officer (as tabled below).

In FY21, the Chairman’s fixed remuneration consists of:

Role

Chairman

Chief Strategy and Innovation Officer

Total fixed remuneration

Fixed remuneration

141,000

366,556

507,556

The Executive Chair also receives an STI component for his role as
Chief Strategy and Innovation Officer.

As the Chair is also an Executive, the remuneration for performing
the Chair role (exclusive of Directors’ fees) is not included in the
Non-Executive Director Fee Pool.

10. Detail of Executive

remuneration for FY21
The remuneration package for Executives, including the Executive
Chair, for FY21 comprises the amounts outlined in the following tables.

There is no maximum or minimum STI for Executives as the Company
wants to ensure a strong focus on performance in the current year.

8. Non-executive Director fees

Determination of Non-executive Director fees

In FY21, Board fees remain at $141,000 per Director, including statutory
superannuation contributions. This was not increased for FY21. No
additional fees are paid in respect of committee attendance.

Directors’ Fees are normally reviewed every three years by an
independent consultant and the setting of fees is to be consistent
with comparable companies by market capitalisation. Fee increases

between independent reviews are capped at CPI.

Aggregate fee pool

The total amount of Directors’ fees is capped at a maximum pool
that is approved by shareholders. The current fee pool is capped
at $1,500,000, which was approved by shareholders at the Annual
General Meeting on 26 February 2019. Non-executive Directors
receive aggregate fees to recognise both their contribution to the
work of the Board and the associated committees that they serve.
Non-executive Directors do not receive any performance-related
remuneration.

FY22 aggregate fee pool and Non-Executive Director fees

It is proposed that the current fee pool remain unchanged for FY22,
capped at $1,500,000. Non-executive Director fees are set to increase
in line with CPI, as per Board policy.

Director shareholdings

Directors are required to hold a minimum shareholding of one
year’s Directors’ fees (pre-tax) in TechnologyOne shares. Directors
are required to rectify any short fall within a 12-month period. New
Directors are allowed 36 months to meet this requirement.

2021

Directors of TechnologyOne Limited

Balance at
the end of the
year

% of Mandatory
Shareholding Requirement

A Di Marco

R McLean

J Mactaggart

R Anstey

Dr J Andrews

S Doyle

C Rosenberg

P Ball

P O’Sullivan

17,378,500

69,737

26,902,500

30,000

30,600

18,280

27,533

21,900

15,509

100%

87%

The Board in total holds 44,494,559 shares representing 14% of the
total shareholding of the Company. Individual holdings are as shown
above. All Directors are compliant with the mandatory shareholding
requirement except for Pat O’Sullivan, who has until 2024 to meet the
requirement.

11. Statutory Remuneration
The information in the table below is based on the statutory accounting fair value of remuneration earned for each KMP and does not represent
the value offered or realised.

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Name

Non-executive Directors

R McLean
(Non-executive Director)

J Mactaggart
(Non-executive Director)

K Blinco
(Non-executive Director)¹

R Anstey
(Non-executive Director)

Dr J Andrews
(Non-executive Director

S Doyle
(Non-Executive Director)

C Rosenberg
(Non-Executive Director)

P Ball
(Non-Executive Director)

Pat O' Sullivan²

Executives

A Di Marco
(Executive Chairman)³

E Chung
(Chief Executive Officer)⁴

S MacDonald
(Chief Operating Officer)⁵

P Jobbins
(Chief Financial Officer)⁶

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

128,767

12,233

141,000

128,767

12,233

141,000

128,767

12,233

141,000

128,767

12,233

141,000

53,653

5,097

58,750

128,767

12,233

141,000

128,767

12,233

141,000

128,767

12,233

141,000

128,767

12,233

141,000

128,767

12,233

141,000

128,767

12,233

141,000

128,767

12,233

141,000

128,767

12,233

141,000

128,767

12,233

141,000

128,767

12,233

141,000

75,114

7,136

82,250

2021

339,056

141,000

27,500

507,556

1,248,564

2020

341,556

141,000

25,000

507,556

1,052,397

2021

505,568

2020

508,068

2021

421,117

2020

421,944

2021

221,764

2020

222,250

27,500

533,068

798,085

25,000

533,068

674,824

25,827

446,944

545,358

25,000

446,944

461,130

25,486

247,250

350,953

25,000

247,250

296,750

Total Executive KMP

2021

1,487,505

141,000

106,313

1,734,818

2,942,960

2020

1,493,818

141,000

100,000

1,734,818

2,485,101

Total (Non-Executive
Directors and Executive
KMP)

2021

1,487,505

1,096,023

197,040

2,780,568

2,942,960

2020

1,493,818

1,117,484

192,766

2,804,068

2,485,101

174,678

441,366

108,171

455,385

141,000

58,750

-58%

141,000

71%

82,250

N/A

1,756,120

13%

1,559,953

1,947,197

14%

10%

1,771,448

119,164

139,132

110,862

1,361,460

13%

73,717

235,508

69,404

1,286,703

74,944

283,269

45,698

174,487

956,416

14%

25%

764,185

368,786

863,767

110,862

6,021,193

13%

12%

227,586

865,380

69,404

5,382,289

368,786

863,767

110,862

7,066,943

10%

227,586

865,380

69,404

6,451,539

1Mr Kevin Blinco resigned 23 February 2021. 2Mr Pat O’ Sullivan was appointed on 2 March 2021. 3Mr Di Marco was again offered an LTI of $400K which he declined in the 2020/2021 year, as he has in previous years. The
Remuneration Committee acknowledges that Mr Di Marco’s existing significant shareholding in TechnologyOne provides the benefits that the LTI aims to achieve. Mr Di Marco’s STI is calculated as 1.26% of Group NPBT. Mr Di Marco’s
remuneration grew by 13% on the prior year, due to his STI being up 19% in line with company profit. 4Mr Chung’s remuneration grew by 10% on the prior year. Growth in remuneration other than LTI was 14%. Mr Chung’s STI is
calculated as 0.78% of Executive NPBT, his STI is up 18%, in line with the increase in Executive NPBT. 5Mr MacDonald’s remuneration grew by 6% on the prior year, Growth in remuneration other than LTI was 13%. Mr Macdonald’s STI
is calculated as 0.533% of Executive NPBT, his STI is up 18%, in line with the increase in Executive NPBT. 5Mr Jobbins’s remuneration grew by 25% on the prior year. Growth in remuneration other than LTI was 14%. Mr Jobbins’s STI is
calculated as 0.343% of Executive NPBT, his STI is up 18%, in line with the increase in Executive NPBT.

101

Transforming business, making life simpleFinancial statements

12. Additional statutory disclosures

12.1

Long-term incentive scheme

In 2016, TechnologyOne replaced its previous Executive Option Plan (EOP) with an LTI plan aligned to market, shareholder and Executive
requirements. Options and EPRs issued under the new plan are outlined in the tables below.

Options

2021

Name

Edward Chung

Stuart MacDonald

Paul Jobbins

Opening balance of
share options

Number of options
granted during the
period

Number of options
exercised during the
period

Number of options
forfeited during the
vesting period*

Closing balance of
share options

Vested and
exercisable

842,461

539,229

361,972

254,917

152,450

133,434

(402,758)

(371,833)

(2,188)

(2,693)

692,432

319,846

492,713

172,876

212,763

Unvested

519,556

319,846

279,950

Executive Performance Rights

2021

Name

Edward Chung

Stuart MacDonald

Paul Jobbins

Opening balance of
EPRs

Number of EPRs
granted during the
period

Number of EPRs
exercised during the
period

Number of EPRs
forfeited during the
vesting period*

Closing balance
of EPRs

Vested and
exercisable

Unvested

46,885

(586)

46,299

*Options and EPRs forfeited during the vesting period, are due to non-achievement of performance targets set by the Board. The Board is focused on ensuring that management remuneration and shareholder value are aligned by
setting performance targets that create long-term shareholder wealth.

For details of grants under the previous EOP plan, please refer to section 12.3.

The model inputs for options granted to Executives are as follows:

(a) Options are granted for no consideration. Each tranche vests at the end of the three-year period,

subject to meeting performance hurdles.

(b) Dividend yield – 1.6%

(d) Risk-free interest rate – 0.1%

(e) Price of shares on grant date – $8.07

(f)

Fair value of options – $1.77

The performance measures for LTI grants made in FY21 are presented below. The performance targets, set out below, are such that they are all
considered to be challenging targets that, if met, will drive significant shareholder wealth creation.

Performance Metrics

Performance period

Testing

Weighting (all KMP)

EPS growth

Relative TSR1

3 years

75%

25%

The performance targets to be achieved by the Executives are set out below:

Performance Metric

Growth <5%

5%<= Growth < 15%

Growth >= 15%

EPS growth

0% vest

50% vest at 5% growth with
linear vesting (50% to 100%)
up to 15% growth

100% vest

Performance Metric

Percentile < 50% >=50% <75%

Percentile>= 75%

Relative TSR1

0% vest

50% vest at 50th percentile for
relative TSR with linear vesting
(50% to 100%) up to 75th
percentile for relative TSR

100% vest

12.2

Fair value of options granted in FY21

1Relative TSR targets are determined with reference to our peer group. Our peer group is defined as those constituent companies making up the ASX All Technology Index (XTX).

Number of options
granted during the
period¹

Weighted average
fair value per options
issued during the
period²

Name

Grant date

Exercise price

Vesting date

Expiry Date

Fair value of grant

Edward Chung

254,917

1.77

22/01/2021

Stuart MacDonald

152,450

1.77

22/01/2021

Paul Jobbins

133,434

1.77

22/01/2021

7.85

22/01/2024

22/01/2026

22/01/2024

22/01/2026

22/01/2024

22/01/2026

451,505

270,017

236,336

1 LTIs are offered to Executive KMP as either options (with an exercise price) or EPRs (executive performance rights issued at market price).

2 The assessed fair value at grant date of options granted to the individuals is recognised over the period from grant date to vesting date. The amount is included in the remuneration tables above.

12.3

Quarantined Executive Option Plan (EOP) (now
superseded)

Share options were granted to Executives by the Board based on the
option plan approved by the Board.

Previously, TechnologyOne had contracts with executives which
needed to be honoured. These pre-existing contracts were
quarantined and as existing Executive Contracts come to an end, they
will be renegotiated so that the LTI is based on the 2016 LTI plan going
forward. All new appointments of Executives to the Company will be
under the 2016 LTI plan. For the sake of disclosure, details of the now
obsolete and quarantined EOP are provided below.

Under the EOP, options were issued with a strike price set typically
at a 0% to 25% discount on the volume weighted average price for
the 10 days prior to the grant date. The discount could be forfeited
prior to vesting at the Board's discretion based on the performance
of the Executive. The option could also be withheld by the Executive
Chairman for unsatisfactory performance.

The options vest if and when the Executive satisfies the period of
service contained in each option grant.

The contractual life of each option varies between two and five years.
There are no cash settlement alternatives.

Options granted under this plan carry no dividend or voting rights.

When exercisable, each option is convertible into one ordinary
TechnologyOne share. Further information is set out in note 31 to the
financial statements.

Edward Chung is the only current Executive KMP with LTIs issued
under this plan. The final tranche of share options issued under this
quarantined plan vested and were exercised during the year.

2021

Name

Balance at start of
the year

Granted as
compensation

Exercised

Forfeited

Balance at the end
of the year

Vested and
exercisable

Edward Chung

167,000

(167,000)

Unvested

103

Transforming business, making life simpleFinancial statements

12.4

Equity instruments held by Key Management Personnel

The number of shares in the Group held during the financial year by each Director and Senior Executive of Technology One Limited,
including their personally related parties, are set out below. There were no shares granted during the reporting period as compensation.

2021

Name

Directors of TechnologyOne Limited

Balance at start of the year

Purchased during the year

Sale during the year

Balance at the end of the year

A Di Marco

R McLean

J Mactaggart

K Blinco

R Anstey

Dr J Andrews

S Doyle

C Rosenberg

P Ball

P O' Sullivan

2021

Name

20,378,500

69,737

30,902,500

200,000

25,500

30,600

18,280

27,533

18,000

4,500

3,900

15,509

(3,000,000)

(4,000,000)

(200,000)

17,378,500

69,737

26,902,500

30,000

30,600

18,280

27,533

21,900

15,509

Balance at start of the year

Received during
the year

Sale during the year

Balance at the end of the year

Senior Executives of the Group

E Chung

S MacDonald

P Jobbins

733,000

569,826

371,901

(402,758)

(316,833)

900,068

55,068

2020

Name

Directors of TechnologyOne Limited

Balance at start of the year

Purchased during the year

Sale during the year

Balance at the end of the year

A Di Marco

R McLean

J Mactaggart

K Blinco

R Anstey

Dr J Andrews

S Doyle

C Rosenberg

P Ball

2020

Name

27,378,500

111,000

38,902,500

200,000

25,500

30,600

12,375

27,533

9,000

5,905

9,000

(7,000,000)

(41,263)

(8,000,000)

20,378,500

69,737

30,902,500

200,000

25,500

30,600

18,280

27,533

18,000

Balance at start of the year

Received during
the year on the
exercise of options

Sale during the year

Balance at the end of the year

Senior Executives of the Group

E Chung

S MacDonald

P Jobbins

566,000

167,000

271,137

(271,137)

733,000

12.5

Loans to Key Management Personnel

There have been no loans to Directors or Executives during the financial year (2020 - nil).

12.6

Other transactions with Key Management Personnel

During the year there were no transactions with the Key Management Personnel. This report is made in accordance with a resolution of Directors.

105

Transforming business, making life simpleFinancial statements
Corporate Governance Statement

The Board of Directors of the Company is responsible for its corporate
governance. The Board guides and monitors the business and affairs
of the Company on behalf of the shareholders by whom they are
elected and to whom they are accountable.

The Directors have established guidelines for the operation of the
Board and its Committees. Set out below are the Company’s main
corporate governance practices.

The TechnologyOne Board routinely considers industry governance
initiatives of benefit to the Company and its many stakeholders. The
Board has adopted the 4th Edition of the ASX Corporate Governance
Principles and Recommendations.

The Corporate Governance Statement, as well as supporting
documents are available on the Company’s internet site: www.
technologyonecorp.com/company/investors/corporate-governance

Managing Director and Chief Executive Officer.

• Setting the highest business standards and code of ethical

behaviour.

• Overseeing the establishment and implementation of the risk
management system, and annually reviewing its effectiveness.

• Decisions relating to the appointment or removal of the Company

Secretary.

• To review and evaluate the performance of the Board as a whole,
each Committee, key Executives and each Director on an annual
basis.

The Board has the authority to delegate any of their powers to
committees consisting of such Directors and external consultants, as
the Board think fit. The Board has established a number of committees
as follows:

Board of Directors
The Board of the Company currently comprises nine Directors and
includes:

Name

Position

Adrian Di Marco

Executive Chair - Major shareholder

Pat O’Sullivan

Non-Executive Director - Deputy Chair / Lead
Independent Director

John Mactaggart

Non-Executive Director - Major shareholder

Ronald McLean

Non-Executive Director - Independent

Richard Anstey

Non-Executive Director - Independent

Appointed

08/12/1999

02/03/2021

08/12/1999

02/12/2005

• Nomination & Governance Committee

• Audit & Risk Committee

• Remuneration Committee

Board papers are prepared for the Directors, containing detailed
operational reports from each region and department in the Company,
highlighting:

• Operational performance.

• Initiatives undertaken/completed.

• Identified problems/risks and proposed solutions.

The Managing Director and Chief Executive Officer also prepare a
summary report that highlights:

• Input into and subsequent approval of the budget including
Operating Expenditure and Capital Expenditure, and any
significant variations.

• Oversight of the Company, including its control and accountability

systems.

• Input into and subsequent approval of changes to internal systems

and controls.

• Review, and accept/reject recommendations from sub-

committees such as Audit & Risk, Remuneration and Nomination &
Governance committees.

• Input into and ratifying any acquisitions and divestitures.

• Oversee the establishment and implementation of a risk

management system, and review regularly the effectiveness of the
Company’s implementation of that system.

• Oversee the ongoing development by management of an

enterprise-wide risk management framework for management of
material risks.

Director Principles
The Directors operate in accordance with the following broad
principles:

• The Board should comprise of at least three members, but

no more than 10. The current Board membership is nine. The
Board may increase the number of Directors where it is felt that
additional expertise in specific areas is required. The Company
believes that its current size enables the Company to be more
effective and to react quickly to opportunities and mitigate threats.

• The Board should be comprised of Directors with an appropriate
mix of skills, qualifications, expertise, experience and diversity.
The skills, experience and expertise which the Board considers
to be particularly relevant include those listed above. In respect
of diversity, the Board recognises that diversity relates to, but is
not limited to gender, age, ethnicity and cultural background. The
Board values diversity and recognises the individual contribution
that people can make and the opportunity for innovation that
diversity brings.

• Periodically review the adequacy and effectiveness of the

Company’s policies and procedures relating to risk management
and compliance.

• The Board shall meet on both a planned basis and an unplanned
basis when required, and have available all necessary information
to participate in an informed discussion of agenda items.

All other matters are referred to management.

• The Directors are entitled to be paid expenses incurred in

BOARD SKILLS
As a collective, the Board has extensive commercial skills and
experience which provide a solid base for the governance of the
Company. The Board has a combination of experience in the following
core areas:

Jane Andrews

Non-Executive Director - Independent

22/02/2016

• Financial performance year to date and forecast for the full year.

• Strategic and Commercial Acumen

Sharon Doyle

Non-Executive Director - Independent

28/02/2018

• Significant issues.

Cliff Rosenberg

Non-Executive Director - Independent

27/02/2019

• Significant changes proposed.

Peter Ball

Non-Executive Director - Independent

02/03/2020

• Proposed strategic initiatives.

1 Ron McLean held the position of Deputy Chair until Pat O’Sullivan’s appointment on 2 March 2021.

The following information is provided in the Corporate Governance
section of the Company’s Annual Report:

• Details of names, qualifications, skills, experience and dates of

appointment of each Board member.

• The number of meetings of the Board and the names of

attendees.

• Explanation of any departures from the ASX Corporate

Governance Principles and Recommendations.

On a regular basis, members of the Senior Leadership Team are
invited to present to the Board directly and to answer questions the
Board may have.

The strategy of the Company, as well as matters reserved to the
Board, are reviewed annually by the Board.

Matters reserved to the Board
Matters that are reserved to the Board are as follows:

• Communications with shareholders and the market in general,
including ASX announcements, through the Chair of the Board.

• Input into and subsequent approval of corporate strategy and

The role of the Board is as follows:

performance objectives.

• Setting objectives, goals and strategic direction for management,

• Reviewing and ratifying systems of risk management, internal

with a view to maximising shareholder value.

• Input into and ratifying any significant changes to the Company.

• Adopting an annual budget and monitoring financial performance.

• Ensuring adequate internal controls exist and are appropriately

monitored for compliance.

• Ensuring significant business risks are identified and appropriately

managed.

compliance and control, codes of conduct and legal compliance
(ASX, ASIC, and ATO).

• Input into and subsequent approval of significant organisational

structure/restructure.

• Review of the Managing Director, Chief Executive Officer and

Company Secretary to the relevant Code of Conduct established
by the Board.

• Appointing and removing the Managing Director and Chief

• Selecting, appointing and reviewing the performance of the

Executive Officer and monitoring their performance respectively.

• Finance and Taxation

• Risk and Compliance

• IT and Communications Industry

• Software and Product Development

• Start-ups and Early Stage Investments

• Corporate Governance

• Sales and Marketing

• People, Culture and Conduct

• Executive Management and Leadership

• Listed Entities

• International Business

The Board as a whole benefits from the combination of the Director’s
individual skills, experience and expertise in particular areas, as well
as the varying perspectives that arise from the Board’s interactions
through their diverse backgrounds.

The Board believes that its current membership provides a
suitable level of skills to properly guide the Company and deliver
the Company’s strategic objectives and provide a solid base for
governance.

The Board assesses its level of skills annually and will address any
requirements for additional skills that it feels would be in the best
interest of the Company in response to wider market factors and the
growth of the Company. The Board has determined the core skills for
its governance of the Company.

connection with the execution of their duties as Directors. Each
Director is therefore able to seek independent professional advice
at the Company’s expense, where it is in connection with their
duties and responsibilities as Director. The Company policy is
that a Director wishing to seek independent professional advice
should advise the Chair at least 48 hours before doing so.

• The Directors and Officers will not engage in short term trading

of the Company’s shares. Furthermore, the Directors and Officers
will not buy or sell shares at a time when they possess information
which, if disclosed publicly, would be likely to materially affect
the market price of the Company’s shares. Information is not
considered to be generally available until a reasonable time has
elapsed to allow the market to absorb these announcements. A
detailed policy exists on this matter – refer below, section: Trading
in Company Securities.

• Directors have a clear understanding of the corporate and

regulatory expectations of them. To this end, formal letters of
appointment are made for each Director setting out the key terms
and conditions, any special duties or arrangements, remuneration
and expenses, their rights and entitlements, confidentiality and
rights of access to corporate information, as well as Indemnity and
Insurance cover provided.

• Newly appointed Directors undertake an induction course

covering the Company’s strategy, products and operations. They
are also provided a copy of the Company’s constitution, charters
and key policies.

• Directors are required to disclose Directors’ interests and any

matters that may affect the Director’s independence. This includes
disclosure of conflicts of interest, which may include transactions
with family members or related entities.

• If there is a potential conflict of interest, conflicted Directors must
immediately inform the Board and abstain from deliberations
on such matters. Such Directors are not permitted to exercise
any influence over other Board members. If the Board believes
the conflict of interest is material or significant, the Directors
concerned will not be allowed to attend the meeting or receive
the relevant Board papers.

107

Transforming business, making life simpleFinancial statementsDirector independence
The Board comprises a majority of independent Non-Executive
Directors who have broad commercial experience and bring
independence, accountability and judgement in discharging the
Board’s responsibilities to ensure optimal returns to shareholders and
the ongoing provision of benefits to the Company’s employees.

The Board is required to disclose any new information that could,
or would be reasonably perceived to influence, or reasonably be
perceived to influence, in a material respect their capacity to bring an
independent judgement to bear on the issues before the Board and to
act in the best interests of the Company and its shareholders.

The independence of the Directors is assessed annually in
accordance with the ASX Corporate Governance Principles and
Recommendations.

TechnologyOne does not have casual, ad-hoc informal relationships
between the Directors and Senior Executives and provides only formal
interaction between the Directors and Senior Executives in order
to maintain the independence of each Director. All interactions are
formal in nature and documented. TechnologyOne believes that by
doing this, it maintains the independence of the Directors and nullifies
the impact of tenure on independence. These formal interactions
include presentations to the Board throughout the year on their
business unit strategies and outcomes. Any other interaction by a
Board Member and a Senior Executive is only under prior approval by
the Chair.

TechnologyOne will only enter into an agreement for the provision of
consultancy or similar services by a Director or

Senior Executive or by a related party of theirs if TechnologyOne has
independent advice that the services being provided are outside the
ordinary scope of their duties as a Director or Senior Executive; the
agreement is on arm’s length terms; and the remuneration payable
under it is reasonable and with full disclosure of the material terms to
securityholders.

The Board acknowledges tenure as a factor potentially impacting
independence so assesses each director annually to ensure their
independence is maintained.

The ASX guidelines states that it “recognises that the interests of a
listed entity and its security holders are likely to be well served by
having a mix of directors, some with a longer tenure with a deep
understanding of the entity and its business and some with a shorter
tenure with fresh ideas and perspective.”

The Company has set the objective to increase the Board size,
with the aim of adding additional independent directors, with Jane
Andrews’ appointment in the 2016 financial year, Sharon Doyle’s
appointment in the 2018 financial year, Cliff Rosenberg’s appointment
in the 2019 financial year, Peter Ball appointed in the 2020 financial
year and Pat O’Sullivan appointed in the 2021 financial year resulting
in an indisputable majority of independent directors.

TechnologyOne has aligned its Committee composition strategy
to comply with the ASX Corporate Governance Principle
recommendations, ensuring that newly appointed Directors are made
members of the appropriate Committees once they have had sufficient
time to develop a comprehensive understanding of TechnologyOne’s
operations.

Lead Independent Director
The Company has appointed Pat O’Sullivan as the Deputy Chair
and Lead Independent Director. The Lead Independent Director
represents the interests of shareholders where the Executive Chair is
unable to do so due to a conflict of interest.

Audit & risk committee

The Board has established an Audit & Risk Committee. The Committee
is comprised of:

Name

Position

Principles of the Audit & Risk
Committee
The Committee operates in accordance with the following broad
principles:

The role of Lead Independent Director includes:

Peter Ball (Chair)

Independent Non-Executive Director

• Representing the independent Directors as the most senior

independent Director;

• Acting as principle liaison between the independent Directors and

the Chair; and

• Advising the Board with reference to the other independent
Directors on the matters where there is a conflict of interest.

Director Appointments
All Directors, both Executive and Non-Executive, receive written
notifications of their appointment and a new Director induction
pack which details the terms and conditions of their appointment,
remuneration (including superannuation contributions), continuous
disclosure requirements (including interests in the Company), ongoing
confidentiality obligations, Company policies on when to seek
independent professional advice, and the Company’s indemnity and
insurance measures.

Prior to appointment, appropriate checks are undertaken on the
candidates and relevant information provided to shareholders to
consider when voting on the election of the Director. Relevant
information is also provided for shareholders to consider when voting
to re-elect existing Directors upon rotation. Executive Directors
and Senior Executives of the Company will also have formal written
employment agreements which set out the terms of their employment,
roles and responsibilities, reporting lines, remuneration, confidentiality
and termination provisions.

All Directors and Senior Executives are required to comply with key
corporate policies which include, but are not limited to, Code of
Business Conduct, Share Trading Policy, Insider Trading Policy, Privacy
Policy and Diversity Policy.

All new Directors and Senior Executives participate in the Company’s
formal on-boarding program which includes an induction program
which incorporates meetings with key Senior Executives.

Company Secretary
The Company has a Company Secretary that is appointed by the
Board by resolution.

The Company Secretary is accountable directly to the Board, through
the Chair.

The role of the Company Secretary is as follows:

• Advising the Board and Committees on governance matters:

• Monitoring adherence of Board and Committees to policies and

procedures.

• Coordinating timely completion and despatch of Board and

Committee papers.

Jane Andrews

Sharon Doyle

Pat O’Sullivan

Independent Non-Executive Director

The role of the Committee is to:

• Ensure the integrity in financial reporting (refer section below –

Safeguard Integrity in Financial Reporting).

• Review for accuracy financial statements for each reporting period

prior to approval by the Board, and publishing.

• Ensure required declarations from the Company’s Chief Executive
Officer and Chief Financial Officer are received for each reporting
period.

• Ensure that the financial statements for each reporting period

comply with appropriate accounting standards.

• Regularly review Accounting Standards and Company Policies in
conjunction with the Auditors and recommend adoption/changes
to the Board.

• Directly follow-up action where considered necessary.

• Relay any matters of concern to the Board.

• Oversight of the Company’s group taxation matters and ongoing

development.

• Review of taxation governance processes, policies, control

framework and reporting.

• Ensure that systems of internal control are functioning effectively

and economically and that these systems and practices contribute
to the achievement of the Company’s corporate objectives.

• Ensure the Internal Audit Function maintains a high standard of

performance

• Receive and review reports from the external Auditor.

• Oversight of the process to ensure the independence and

competence of the Company’s external auditors.

• Review the performance of the external auditor on an annual

basis.

• Recommend the selection and the appointment of the external

Auditors, based on specified criteria.

• Monitor compliance with the requirements of the Corporations
Act, Listing Rules, Australian and Foreign Taxation Offices and
other related legal obligations.

• Make recommendations to the Board on specific risk management

matters that may relate to industry and regulatory changes.

• Ensuring business at Board and Committee meeting is accurately

captured in the minutes.

The number of meetings held during the years and the attendance of
the members is provided in the Annual Report.

• Helping to organise and facilitate induction and professional

development of Directors.

The Audit & Risk Committee Charter is available on the Company’s
website.

• Advise and assist the Board in fulfilling its responsibilities relating
to financial management, risk oversight and reporting functions
and in safeguarding the Company's assets;

• Provide a means of easy access to the Board for the external
auditors in order to assist them in performing their functions;

• Assign the Secretary of the Committee such duties and

responsibilities as the Committee may deem appropriate.

• Do other things and take other actions as are necessary or

prudent to fulfil the responsibilities of the Committee, provided
that no action will be taken without prior approval of the Board.

• TechnologyOne requires the rotation of the external audit partner
every five years. The Audit & Risk Committee includes members
who are financially literate; and at least one member who has
financial expertise, preferably a qualified accountant.

Remuneration committee
The Board has established a Remuneration Committee. The
Committee is comprised of:

Name

Position

Jane Andrews (Chair)

Independent Non-Executive Director

Cliff Rosenberg

Ron McLean

Independent Non-Executive Director

The Board has established a Remuneration Committee. The
Committee is comprised of:

• To advise the Board with regard to the Company’s broad policy for

Senior Executive and Director remuneration.

• To determine, on behalf of the Board, the individual remuneration

packages for Senior Executives and Directors.

• To give the Company’s Senior Executives encouragement to

enhance the Company’s performance and to ensure that they are
fairly, but responsibly, rewarded for their individual contribution.

The number of meetings held during the years and the attendance of
the members is provided in the Annual Report.

The Remuneration Committee Charter is available on the Company’s
website.

Non-Executive Directors’ remuneration is determined by the Board
within the aggregate amount per annum which may be paid in
Directors’ fees.

109

Transforming business, making life simpleFinancial statementsPrinciples of the remuneration
committee
The committee operates in accordance with the following broad
principles:

• The committee should provide the packages needed to attract,

retain and motivate Senior Executives, but avoid paying more than
is necessary.

The Nomination & Governance Committee Charter is available on the
Company’s website

Principles of the Nomination &
Governance Committee
The committee operates in accordance with the following broad
principles:

• The Nomination & Governance Committee is entitled to seek the

• The committee should judge where to position the Company

advice of an external consultant.

relative to other companies. Be aware of comparable companies’
pay, but exercise caution.

• The committee should be sensitive to the wider scene, especially

with regard to salary increases.

• Performance related elements should form a significant proportion
of the package; should align interests with those of shareholders;
and should provide keen incentives.

Nomination & Governance
Committee
The Board has established a Nomination & Governance Committee.
The Committee is comprised of:

Name

Position

Richard Anstey (Chair)

Independent Non-Executive Director

Sharon Doyle

Jane Andrews

Independent Non-Executive Director

The role of the Committee is as follows:

• Assessment of the necessary and desirable competencies and

experience for Board membership.

• Evaluation of the membership of the Board, Audit & Risk and

Remuneration committees, and their membership.

• Evaluation initially and on an on-going basis of Non-Executive
Director’s professional development, commitments, and their
ability to commit the necessary time required to fulfil their duties
to a high standard.

• Adherence by Directors to the Director’s Code of Conduct and to

• The Nomination & Governance Committee will make

recommendations to the Board. The Board is responsible
to appoint the most suitable candidate, after receiving
recommendations from the Nomination & Governance Committee.
The nominated appointee upon acceptance will hold office until
the next Annual General Meeting, where the appointee will stand
for election.

• The Board is responsible to either recommend/not recommend

the endorsement of a Director at the next Annual General
Meeting.

• The name of all candidates submitted for election as Director

is accompanied with necessary information required by
shareholders to make an informed decision including biographical
details, competencies, qualifications, details of relationships
between the Company, the candidate and Directors; other
directorships held, particulars of other positions held which
involve significant time commitments, and any other particulars
required by law or good corporate governance. For existing
Directors standing for re-election, the number of years as a
Director of TechnologyOne will also be provided in the Annual
Report.

• Directors (with the exception of the Managing Director who is

appointed by the Board) must stand for re-election every three
years in accordance with the Company’s Constitution. One third
of the Directors retire from office at each Annual General Meeting
and are eligible to nominate for re-election.

• A structured process has been established to review and evaluate
the performance of the Board and its Committees. This process
also identifies ways to improve their performance, interaction with
management, and quality of information provided.

good corporate governance.

The following information is provided in the Annual Report:

• Review of Board succession plans.

• The skills, experience and expertise relevant to the position of

• Recommendation for changes to committees.

• Recommendation of, and undertaking the appropriate checks,

before for the appointment of new Directors.

• Recommendation of, and undertaking the appropriate checks, for

Director.

• The names of Directors considered by the Board to constitute

independent Directors and the Company’s materiality thresholds.

• The term of office held by each Director.

the endorsement or non-endorsement of existing Directors.

• The number of meetings held by the Nomination & Governance

• Ensuring that an effective induction process is in place for new

Board members.

• Review and oversight of the Company’s Corporate Governance

Statement and governance related policies.

• Review and oversight of the Company’s Environmental, Social &

Governance (ESG) strategy and Sustainability Reporting

• Oversee compliance with Modern Slavery Regulations

Committee and the names of attendees.

• Explanation of any departures from the ASX Corporate

Governance Principles and Recommendations.

Assessment of Director
Independence
The Board has determined that an independent Director will meet all
of the following criteria:

The number of meetings held during the years and the attendance of
the members is provided in the Annual Report.

• Is not an Executive Director (i.e. not a member of the management

team)

• Is not a substantial shareholder of the Company, as defined by

• Responsibilities to the individual.

Section 9 of the Corporations Act, or an officer of a company that
is a substantial shareholder.

• Compliance with the codes.

• Is not directly associated with a substantial shareholder of the

Company.

• Within the last three years, has not been employed in an Executive

capacity by the Company or another group member, or been
appointed a Director within three years after ceasing to hold such
employment, insofar as the Director was not appointed prior to the
introduction of the ASX Principles of Good Corporate Governance
in March 2003.

• Within the last three years, has not been a principal of a material
professional adviser or a material consultant to the Company or
another group member, or an employee materially associated with
the service provider.

• Is not a material supplier or customer of the Company or other
group member, or an officer of or otherwise associated, either
directly or indirectly, with a material supplier or customer. This
includes family members being in these categories.

• Has no material contractual relationship with the Company or

another group member other than as a Director of the Company.

• Is free from any interest and any business or other relationship
which could, or could reasonably be perceived to, materially
interfere with the Director’s ability to act in the best interest of the
Company.

Corporate Governance Principles &
Recommendations

Ethical Standards and Code of Business Conduct

All Directors, Executives and employees are expected to act with
the utmost integrity and objectivity, observe the highest standards of
behaviour and business ethics, and strive at all times to enhance the
reputation and performance of the Company.

A Code of Business Conduct has been established which is applicable
to each of the following:

• Directors

• Chief Executive Officer

• Chief Financial Officer

• Executives

• Employees

The Codes of Business Conduct has been approved by the Board,
and given their full support.

The Code addresses:

• Responsibilities to shareholders, and clients.

• “The TechnologyOne Way”, which refers to the success of the
Company coming from our shared values, our entrepreneurial
spirit and innovation.

• Employment practices (anti-discrimination, occupational health

and safety, etc.).

• Responsibilities to the community.

In addition, the Executive Chair, Chief Executive Officer, Chief Financial
Officer, Executives and all employees have employment agreements,
which include job descriptions. These job descriptions describe their
duties, rights and responsibilities.

In conjunction with the Code of Business Conduct, TechnologyOne
has developed a Whistleblower Policy and Bribery & Corruption Policy.
The Whistleblower Policy encourages employees to come forward
with concerns that the entity is not acting lawfully, ethically or in a
socially responsible manner and provides suitable protections if they
do. The Board will be informed of any material concerns raised that
call into question the culture of TechnologyOne or have been raised
under the Bribery & Corruption Policy.

The Board is informed of any material breaches of the Code of
Business Conduct by a Director or Senior Executive and of any other
material breaches of the code that call into question the culture of the
organisation.

Diversity Policy
TechnologyOne has an inclusive diversity policy which covers the
broader dimension of diversity covering aspects of gender, age,
disability, ethnicity, marital or family status, religious or cultural
background, sexual orientation and gender orientation within the
total organisation, including the Board, and senior management. In
conjunction with this policy, the Company has measurable objectives
which are assessed and reported in the annual report.

The diversity of TechnologyOne remains fundamental to our ongoing
success. TechnologyOne has established a Diversity Policy which
reflects the Company’s commitment to providing an inclusive
workplace.

A summary of the Diversity Policy is following:

• Diversity is one of TechnologyOne’s strengths. TechnologyOne

values this diversity and recognises the individual contribution our
people can make and the opportunity for innovation such diversity
brings.

• TechnologyOne believes that we will achieve greater success
by providing our people with an environment that respects the
dignity of every individual, fosters trust, and allows every person
the opportunity to realise their full potential.

• TechnologyOne is committed to providing an inclusive workplace
and our commitment to diversity extends to our interactions with
customer and suppliers.

The Board has developed and has oversight of the following diversity
objectives:

• Ensuring compliance with the published diversity policy.

• Not less than 30% of the Board to be of each gender by 2025 (to

allow for the Board transition)

• 70% of all vacant roles are to have at least one female candidate

shortlisted.

• Maintain reporting measures that are in compliance with both the

ASX guidelines and Workplace Gender Equality Agency.

• Continue to identify employee feedback mechanisms through

the review of existing forums and information provided as well as
the identification of appropriate new mechanisms for employee
consultation.

111

Transforming business, making life simpleFinancial statements • Maintain existing educational programs that support diversity

including but not limited to induction, on boarding and leadership
programs.

The Company’s 2021 Workplace Gender Equality Agency report can
be found on the ‘Investor Relations’ section of the Company’s website.

TechnologyOne has a history of supporting initiatives aimed at
promoting the technology sector as a career choice for women. We
have continued our support of the Tech Girls Movement, Women in
Technology and Women in Digital to promote diversity and to be seen
as an employer of choice for women in the technology industry. We
also partner with the Computer Society Foundation to sponsor the
national Big Day In series, which is designed to inspire high school
and university students to pursue careers in the IT industry.

We have policies in place in relation to anti-discrimination and
workplace gender equality, diversity, sexual harassment, flexible
working arrangements and paid parental leave.

Safeguard Integrity In Financial
Reporting
The Company has established a structure of reviews and
authorisations designed to ensure the truthful and factual presentation
of the Company’s financial position. This includes:

• The establishment of an Audit & Risk Committee, and the review
and consideration of the accounts by the Audit & Risk Committee.

• Process to ensure the independence and competence of the

Company’s external auditors.

• Requirement that the CEO and CFO state in writing to the Board
that the Company’s financial reports present a true and fair view
in all material respects of the Company’s financial condition;
operational results are in accordance with the relevant accounting
standards and the Company’s Risk Management and Internal
Compliance and Control System is operating efficiently and
effectively in all material respects.

• Ensuring that the Company’s external Auditor attends the

Company’s Annual General Meeting each year

• Verification of statements and data supplied in the annual

Directors’ report and other corporate reports to ensure that the
releases to the market are accurate, balanced and understandable
and provide investors with appropriate information to make
informed investment decisions.

• Disclosure of the annual tax transparency statement.

The Company put the external audit services to tender in 2020 which
is another example of how the Company expresses its dedication to
ensuring integrity of the financial reporting is maintained.

Continuous disclosure
The Company Secretary working closely with the Executive Chair,
have been delegated responsibility for the continuous disclosure of
information to the market, to ensure:

• All investors have equal and timely access to material information

concerning the Company, including its financial position,
performance, ownership and governance.

• Company announcements are factual and presented in a clear
and balanced way, requiring the disclosure of both positive and
negative information.

• When analysts are briefed on aspects of the Company’s

operations, the market is forewarned, and the materials used in

such presentations are also released to the ASX and posted on
the Company’s website.

• Any information that a reasonable person would expect to have a
material effect on the price or value of the Company’s share price
(as per Listing Rule 3.1) is immediately notified to the ASX.

The Company has established a documented procedure to handle
continuous disclosure requirements. Directors are provided with
copies of all announcements made under listing rule 3.1 promptly once
made

Risk Assessment Management
The Company has adopted an active approach to risk management
and the Board recognises that the Company’s participation in
commercial and operational activities require a certain level of risk.
As such, the Board has delegated the risk management function to
the management of the Company with oversight by the Board. A
standing Item has been included in the Board agenda to consider the
Enterprise Risk Register.

The Board has received assurance from the Chief Executive Officer
and Chief Financial Officer that the declaration provided in accordance
with section 295A of the Corporations Act is founded on a sound
system of risk management and internal control and that the system is
operating effectively in all material aspects in relation to the financial
reporting risks.

The risk appetite of the Company takes into account the level of risk
and risk combinations that the Board is prepared to take to achieve
strategic objectives together with the level of risk shock that the
Company is able to withstand.

The Company has performed an annual risk review and have
identified a number of key risk categories for the business.

Human Risk

The Company has identified that it has a material risk in relation to the
human element of the business. The Company manages human risk
by undertaking half yearly performance assessments and reviews,
performance management (where necessary), succession planning,
key talent retention strategies, having human resources business
partners assigned to each operating steam of the Company to work
with the business on any concerns raised, and by conducting half
yearly surveys of managers to identify any known issues. The Board is
provided with a summary of these issues as part of the Group Director
– People & Culture’s report tabled at each board meeting.

Key Risks

The Company’s focus on risk management is primarily conducted
through the Board, with a number of identified areas of specific risks
as follows:

Contract Risk

The Company has established a Contract Approval Process that
reviews all proposed new contracts with non-standard terms prior to
signing to ensure the contracts can be fulfilled, the risks are known
and can be managed, and that the contract can be completed
profitably without exposing the Company to ongoing liabilities.

Financial Risk

The Company has an Executive Committee that reviews the
Company’s financial exposure with a particular focus in the area of
Outstanding Debtors.

Data Security & Privacy Risks

TechnologyOne has successfully completed the Information Security
Registered Assessors Program (IRAP) assessment for PROTECTED
classified data. This provides our SaaS customers with an increased
cyber security posture and greater certainty in a constantly evolving
cyber security landscape. This was achieved by leveraging the strong
compliance and security foundations established over recent years
and is a testament to TechnologyOne’s mature security practices,
accountability mechanisms and belief in continuous assessment and
improvement.

The Company has a robust data security and privacy program
developed to meet the requirements set out in Australia’s Privacy
Amendments (Notifiable Data Breaches) Act 2017, UK Data Protection
Act 2018 (DPA Act) and the EU General Data Protection Regulation.
This program ensures security is considered throughout the day to
day operations of the Company and is backed by an independently
verified process for dealing promptly with matters should they arise.
The Company also is certified to the standards required in ISO27000,
ISO9001, SOC1, SOC2 and SOC3 (Service Organisation Controls).

Software Risk

The Company has an executive R&D Committee that reviews Software
Release management, including resourcing and development issues.

Insurance Risk

The Board of TechnologyOne, on an annual basis, reviews the
Company’s insurance requirements and compares this to the level of
cover provided to ensure it is adequately covered.

Project Risk

The Board requires the Chief Executive Officer to report on any
customer implementation project that may be at significant risk of
either incurring substantial penalties or incurring substantial over-
runs. In addition, the Company has established a Consulting Practice
Management Team that reviews current projects and consulting
activities to provide an early detection mechanism to ensure that any
activities that pose a significant risk to the Company are identified and
resolved before exposing the Company to potential liabilities.

Sustainability Risk

The Company believes that it does not have material exposure
to specific economic, environmental, or social sustainability risks
due to controls implemented. However, the company recognises
the importance of these to its stakeholders and has developed a
Sustainability Report to outline the Company’s position and initiatives
across a number of sustainability risks.

The Sustainability Report provides the Company’s initiatives and
targets on items including:

• Diversity,

• Customer satisfaction

• Employee satisfaction

• Corporate culture

• Ethical business practices

• Community support

• Environmental sustainability practices

The Company has engaged external subject matter experts to
assist in the preparation of environmental risk reporting aligned

with the Task Force on Climate-related Financial Disclosure (TCFD)
recommendations. The Board acknowledges that climate change
is both an environmental and economic issue. TCFD disclosures
are now provided in the Financial Statements and in the annually
published Sustainability Report.

The Sustainability Report is available on the Company’s website.

Accounting Standards And
Company Policies
Adhering to Accounting Standards and Company Policies, and the
appropriate interpretation of such policies/standards, is seen as
critical to managing the financial risk of Technology One. Accounting
Standards and Company policies are reviewed on a regular basis by
the Audit & Risk Committee working in conjunction with the Auditors,
and recommendations for adoption/change are made to the Board.
Compliance with Accounting Standards and Company policies are
included as part of the Auditors annual review.

Internal Controls and Compliance

The Company has an internal control framework that consists of:

• Written policies and procedures.

• Division of responsibilities to ensure appropriate segregation of

duties.

• Careful selection of high calibre well qualified staff.

TechnologyOne undertakes Internal Audits in accordance with the
Internal Audit schedule as approved by the Audit & Risk Committee.
These audits are undertaken by the Governance, Risk & Compliance
Team and reported directly through to the Audit & Risk Committee.
Independent auditors are engaged to review the Company’s internal
controls and compliance and to provide a report to the Audit & Risk
Committee. The Audit & Risk Committee oversees the Company’s
compliance program with relevant international standards (including
ISO 9001, 27000 series, SOC 1, 2 & 3).

The Company has established Practice Management teams in each
business area to undertake reviews of compliance with certain
operational policies and procedures. Each Practice Management
Team provides quarterly reporting of their findings to the Audit &
Risk Committee. An independent audit of the Practice Management
reviews is undertaken by the Internal Audit team annually.

Remuneration Principles
TechnologyOne believes in the full disclosure of remuneration of its
Directors and Executives to the market, on at least an annual basis.
Disclosure will include all monetary and non-monetary remuneration
including salary, fees, non-cash benefits, bonuses or profit share
accruing each year irrespective of payment, superannuation
contributions, entitlements at termination or retirement, value of
shares or options issued and sign-on payments.

As a matter of principle, TechnologyOne has adopted the following
guidelines to motivate Directors and Executives to pursue long-term
growth, and ensure their interests and those of the shareholders are
closely aligned:

• Remuneration packages should be set in the context of what is

reasonable and fair, taking into account the Company’s legal and
industrial obligations, labour market conditions, the scale of the
business and competitive forces.

• Non-Executive Directors should be remunerated solely on the
basis of a cash payment, plus superannuation contributions as
required by law. Non-Executive Directors should not be provided

113

Transforming business, making life simpleFinancial statementswith bonuses, options, shares, loans or any other non-cash
component. They should not participate in schemes designed for
the remuneration of Executives. The Company does not provide a
Director’s Retirement Plan.

• Non-Executive Directors will not be provided termination or
retirement payments other than statutory superannuation.

• Company Executives (including Executive Directors) should be
provided with a significant component of their expected salary
on “an at-risk basis”, tied to the Company’s profit target. Shares,
Options or Performance Rights may also be provided as part of
the “at risk component”, but these must be tied to performance
hurdles. The performance hurdles are to be reasonable, objective
and measurable. Vesting of securities is also subject to malus and
clawback provisions.

• Termination payments should be agreed in writing and in advance

if any are to be provided.

Performance Evaluation Board
The Board meets annually for the purpose of reviewing and
evaluating the performance of the Board as a whole, each Committee,
key Executives and each Director individually in meeting key
responsibilities and achieving its objectives.

The following areas were considered by the Board in its 2021 annual
review:

• Performance evaluation of Directors and Senior Executives.

• Review of skills and experience of the Board for current

operations of the Company and identification of any shortfalls.

• Director succession planning.

• Review of current legislation in relation to any age restrictions.

• Review of independence of each Director.

• Review of skills matrix to ensure relevance of required skills.

To assist the Board in maximising its effectiveness, the Board and
Nomination & Governance Committee have a skills matrix to provide
objective information about each Director and the Board as a whole
during the past year.

Each Director is encouraged to discuss any issue concerning Board
performance with the Chair at any time.

Directors are encouraged to maintain and improve their knowledge,
skills and expertise through briefings, seminars and going professional
development programs.

Remuneration of the Board is assessed every three (3) years against
comparative data for Australian publicly listed companies supplied
by an independent consultant and reported to the Remuneration
Committee. The relative risk, time, effort, complexity of the
underlying business, competency of the management team, financial
performance and track record, clarity of strategy as well as the number
of Board meeting required to oversee the business are used as
benchmarks to determine the appropriate level of Director’s fees. For
years where a formal assessment of remuneration is not conducted,
the Director’s fees are increased by the Australian Consumer Price
Index (CPI).

Senior Executives

The performance of Senior Executives is reviewed and evaluated
annually by a combination of the Company’s internal performance

management program managed by the Company’s human resources
department and as part of the formal remuneration review that is
conducted annually by the Remuneration Committee.

Trading in Company Securities
The Directors have resolved to adopt the following policy in relation to
trading by Directors and Officers in the Company’s shares.

• The Directors and Senior Executives will not engage in short term

trading of the Company’s shares.

• The Directors and Senior Executives will not buy or sell shares
at a time when they possess information which, if disclosed
publicly, would be likely to materially affect the market price of the
Company’s shares. Information is not considered to be generally
available until a reasonable time has elapsed to allow the market
to absorb these announcements.

The Directors and Senior Executives are not permitted to use the
Company’s shares as security for margin loans. To assist Directors
and Senior Executives in abiding by these principles the following
rules have been established, relating to when Directors and Senior
Executives can buy and sell the Company’s shares:

For 50 days from the day following the release of the following
information to the market:

• the half yearly financial statement

• the annual financial statement

• other reports relating to the financial performance or financial

status of the Company.

At all times, the Director or Senior Executive must notify the Board
(as a minimum the Chair) in advance of any intended transactions
involving the Company’s shares. It is recognised that there may be
circumstances where it may not be appropriate for Directors and
Senior Executives to buy and sell within the above 50-day window
in the event the Company is involved in strategic initiatives (such as
acquisitions), which could materially affect the market price of the
Company’s shares.

The Directors and Senior Executives must advise the Company
Secretary of any completed trades immediately once each transaction
is done. This will allow the Company Secretary sufficient time to notify
the ASX of the change in shareholding within the required period.

A register of Director’s holdings is made available for inspection at
every Board meeting

This policy applies to Directors and Senior Executives (including their
nominee companies) and the entities which they control.

For the purpose of this Policy, Senior Executive is deemed to include
the following parties:

a) persons named by the Executive Chair from time to time who may

be involved in strategic issues

b) persons named by the Executive Chair from time to time who are

involved in financial reporting

c) Senior Executives of the Company as defined as Officers in

section 9 of the Corporations Act being: ‘any person by whatever
name called who is concerned or takes part in the management of
the Company’.

In addition to the policy for Directors and Senior Executives, all
employees are reminded of the Insider Trading provisions of the
Corporations Act. Staff are reminded of their obligations during the
Trading Windows.

Shareholders’ Rights And
Communication
The Board of Directors aim to ensure that shareholders are informed
of all major developments affecting the Company’s state of affairs. The
information is communicated to shareholders, and forms part of the
Company’s two-way investor relations program:

• By ensuring that all shareholders can elect to receive information
and communications from the Company’s share registry either
physically or electronically and can update their preferences
through the share registry.

• By the Annual Report being distributed to all shareholders. The

Board ensures the Annual Report contains all relevant information
about the operations of the Company during the financial year,
together with details of future developments and other disclosures
required under the Corporations Act 2001.

• By publishing its Notice of Meetings and Explanatory

Memorandum for each Annual General Meeting or other
such meetings as required from time to time; By encouraging
shareholders to attend and participate in the Company’s Annual
General Meeting;

• By encouraging shareholder to attend and participate in the

Company’s Annual General Meeting.

• By encouraging shareholders to participate in proxy voting should
they be unable to attend the Company’s Annual General Meeting.

• By enabling shareholders to pose questions to the Company in

the lead up to the Annual General Meeting for responding during
the meeting;

• By the Half Year results released to the market;

• By disclosures forwarded to the ASX under the Company’s

continuous disclosure obligations;

• Through the Company’s website, under a special area called

Investor Relations;

• By the Company’s participation in scheduled briefings with

institutional shareholders and security analysts;

• By the participation of the Company’s Auditors and Solicitors at

the Annual General Meeting.

All information communicated by the Company is in accordance with
its continuous disclosure requirements under ASX Listing Rule 3.1.

Non-Compliance with ASX
Corporate Governance Principles &
Recommendations 4th Edition

The Board of Technology One believes in working to the highest
standards of Corporate Governance. Notwithstanding this, the Board
believes it is important to recognise there is not a ‘one size fits all’ to
good corporate governance, and that it is important to consider the
size of the Company, the industry it operates within, the corporate
history and the Company’s inherent strengths.

The ASX Corporate Governance Council has recognised this fact and
has allowed companies to explain where they do not comply with the
Corporate Governance Principles and Recommendations 4th Edition.

The Company has complied with the majority of recommendations,
with the exception of the following. The Board believes the area of
non-conformance shown below will not impact the Company’s ability
to meet the highest standards of Corporate Governance and will at the
same time allow the Company to capitalize on its inherent strengths.

This section highlights the area of non-compliance and explains why it
is appropriate.

Independent Chair (Refer
ASX Corporate Guidelines –
Recommendation 2.5)
The Board is of the opinion it should maximise the vision, skills and
deep industry knowledge of the Company’s founder and major
shareholder, Mr Di Marco, to continue to lead the Company forward.
He has a long and proven track record of creating significant
shareholder wealth for the Company as its Chair, since listing on the
ASX in 1999.

The Board believes Mr Di Marco continues to be the best candidate
to clearly communicate the Company’s vision, strategy and to set
market expectations. To this end it is seen as appropriate that Mr Di
Marco should remain as Executive Chair of the Company. There is no
empirical evidence to support the preference of an Independent Chair.

The ASX Corporate Governance Principles and Recommendations
propose that “if the Chair is not an independent Director, a listed entity
should consider the appointment of an independent director as the
Deputy Chair”. Mr Pat O’Sullivan was appointed Deputy Chair and
Lead Independent Director from his appointment to the Board on 2
March 2021.

On 23 May 2017, Mr Edward Chung was appointed as Chief Executive
Officer.

Mr Di Marco is not deemed an independent under the ASX guidelines
due to him being a substantial shareholder. This, however, aligns Mr Di
Marco with the interests of the Company’s shareholders.

115

Transforming business, making life simpleFinancial statementsVoluntary Tax Transparency Report

TechnologyOne has a strong commitment to transparency and
compliance. TechnologyOne supports the objectives of the
Government and the Board of Taxation to provide stakeholders with
additional information and confidence that a company is compliant
with their statutory obligations.

Our Approach to Tax
TechnologyOne has a tax governance framework which has been
approved by the Board. Tax falls under the oversight of the Audit
and Risk Committee.

The information provided complies with the standard of disclosure
expected of ‘large businesses’ under the Voluntary Tax Transparency
Code.

The requirements of the Code are broken into Part A, which forms part
of the tax notes as referenced below and Part B as disclosed below.
The make-up of the respective parts is as follows:

(i) Part A:

• Effective company tax rates for our Australian and global

operations (Note 7). The effective tax rate of the Australian
Group for FY21 is 25.7%

• A reconciliation of accounting profit to tax expense and to income

tax payable (Note 7)

• Identification of material temporary and non-temporary differences

(Note 7)

(ii) Part B

• Tax policy, tax strategy and governance

• Information about international related party dealings

• A tax contribution summary of income tax paid.

Information in relation to the year ended 30 September 2021 is set out
below.

Tax is one of a broad range of commercial factors taken into account
when assessing and undertaking investment activities.

TechnologyOne is conservative in its approach to tax risk.
TechnologyOne aims to achieve full compliance with tax obligations
in each tax jurisdiction in which it operates. In accordance with its
commitment to best practice corporate governance and a culture of
excellence, TechnologyOne will not enter into any arrangements that
may be regarded as tax evasion.

The Tax Risk Governance Policy includes a framework for the internal
escalation process for referring matters to the CFO. The CFO must
report any material tax issues to the Board. TechnologyOne will not
pursue aggressive tax positions or strategies or adopt positions that
are not able to be supported or defended in a court of law. Where the
tax law is unclear or subject to interpretation, advice is obtained and
when necessary the Australian Taxation Office (ATO) (or other relevant
tax authority) is consulted to ensure certainty.

TechnologyOne has a strong history of compliance and an open
engagement with relevant tax authorities. We seek to be co-operative
and transparent and to maintain collaborative relationships.

Year ended 30 September 2021

Corporate income taxes

Fringe benefits taxes

Payroll taxes

Net GST/VAT tax

Employee taxes remitted

TOTAL

Consolidated Global
Group AUD

7,188,927.18

425,130.46

7,397,936.67

29,969,082.36

49,862,713.88

94,843,790.55

International related party dealings
TechnologyOne seeks to ensure all intercompany transactions are
undertaken in accordance with the arm’s length principle.

TechnologyOne has entered an Advanced Pricing Arrangements
(APA) with the Australian Taxation Office.

As an Australian headquartered company, we have created and
maintained significant intellectual property in Australia which has
been successfully utilised in our overseas operations. Our
engagement with the ATO through the APA process, seeks to
ensure Australia receives a commercial return for the use of
intellectual property by our overseas businesses. These returns
are taxable in Australia.

In addition, loans are made to and received from foreign controlled
entities for short term, medium term and long-term funding
requirements. As a large global group, these transactions assist with
managing cash flow and funding requirements.

Tax Contribution Summary
Below is a summary of the taxes paid, collected and remitted by
TechnologyOne to the relevant revenue authorities during the
financial year ended 30 September 2021.

117

Transforming business, making life simpleFinancial statementsFinancial Statements
Consolidated income statement

For the year ended 30 September 2021

Revenue - SaaS and continuing business

Revenue - Legacy licence business

Revenue from contracts with customers

Variable costs

Variable customer SaaS costs

Total variable costs

Occupancy costs

Corporate costs

Depreciation and amortisation

Computer and communication costs

Marketing costs

Employee costs

Share-based payments

Finance expense

Total operating costs

Other income

Profit before income tax

Income tax expense

Profit for the year

Basic earnings per share

Diluted earnings per share

Notes

5(a)

The above consolidated income statement should be read in conjunction with the accompanying notes.

Consolidated statement of comprehensive income

For the year ended 30 September 2021

Profit for the year (from above)

Other comprehensive income

Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations

Other comprehensive income for the year, net of tax

Total comprehensive income for the year

2021
$’000

293,553

17,742

311,295

(19,444)

(21,934)

(41,378)

(1,942)

(13,190)

(25,832)

(8,850)

(7,890)

(110,381)

(3,213)

(1,493)

2020
$’000

269,774

28,493

298,267

(19,130)

(19,479)

(38,609)

(3,259)

(18,312)

(18,638)

(8,019)

(5,296)

(119,615)

(3,305)

(1,495)

(172,791)

(177,939)

717

97,843

(25,152)

72,691

751

82,470

(19,525)

62,945

Cents

22.64

19.75

22.52

19.61

2021
$’000

72,691

(178)

72,513

2020
$’000

62,945

286

63,231

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

Consolidated statement of financial position
as at 30 September 2021

Notes

ASSETS

Current assets

Cash and cash equivalents

Prepayments

Trade and other receivables

Contract assets

Other current assets

Current tax assets

Contract acquisition costs

Total current assets

Non-current assets

Property, plant and equipment

Right-of-use assets

Intangible assets

Capitalised development

Deferred tax assets

Contract assets

Contract acquisition costs

Total non-current assets

Total assets

LIABILITIES

Current liabilities

Trade and other payables

Provisions

Contingent consideration

Deferred revenue

Current tax liabilities

Lease liability

Total current liabilities

Non-current liabilities

Provisions

Contingent consideration

Other non-current liabilities

Lease liability

Total non-current liabilities

Total liabilities

Net assets

EQUITY

Contributed equity

Other reserves

Retained Earnings

Total equity

2020
$’000

142,853

13,429

50,580

22,709

238

5,001

234,810

7,279

20,971

61,696

90,985

26,349

2,962

9,676

219,918

454,728

36,567

21,219

3,842

160,015

2,677

3,342

227,662

2,067

7,576

120

27,069

36,832

264,494

190,234

51,645

72,717

65,872

190,234

2019
$’000

125,244

10,851

37,396

22,051

397

8,077

2,956

206,972

8,969

23,786

37,986

62,556

28,605

7,035

168,937

375,909

37,123

20,548

144,148

2,148

203,967

2,430

147

27,197

29,774

233,741

142,168

40,551

63,524

38,093

142,168

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

119

Transforming business, making life simpleFinancial statements

Consolidated statement of changes in equity

For the year ended 30 September 2021

Consolidated statement of cash flows

For the year ended 30 September 2021

Balance at 1 October 2020

Profit for the period

Exchange differences on translation of reserves

Total comprehensive income for the period

Dividends Paid

Transfer to dividends reserve

Exercise of share options

Share based payments

Tax impact of share trust

Balance at 30 September 2021

Balance at 1 October 2019

AASB 16 opening adjustment

Adjusted opening balance

Profit for the period

Exchange differences on translation of reserves

Total comprehensive income for the period

Dividends paid

Transfer to dividends reserve

Exercise of share options

Share-based payments

Tax impact of share trust

Balance at 30 September 2020

Notes

Contributed
equity
$’000

40,551

11,094

51,645

35,302

5,249

40,551

Retained
earnings
$’000

38,093

72,691

Dividend reserve
$’000

30,046

(42,504)

(44,912)

44,912

(44,912)

65,872

16,078

199

16,277

62,945

2,408

32,454

27,905

(38,988)

(41,129)

41,129

(41,129)

38,093

2,141

30,046

FOREX
reserve
$’000

Share option
reserve
$’000

Total
equity
$’000

2,136

(178)

31,342

142,168

3,213

3,750

6,963

72,691

(178)

72,513

(42,504)

11,094

3,213

3,750

(24,447)

1,958

38,305

190,234

25,722

106,857

199

25,722

107,056

1,850

286

3,305

2,315

5,620

62,945

286

63,231

(38,988)

5,249

3,305

2,315

(28,119)

142,168

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

2,136

31,342

Cash flows from operating activities

Receipts from customers (inclusive of GST)

Payments to suppliers and employees (inclusive of GST)

Interest received

Net Income taxes paid

Interest paid

Net cash inflow / (outflow) from operating activities

Cash flows from investing activities

Payment for business acquisition

Payments for property, plant and equipment

Payments for development expenditures and intangibles

Net cash inflow / (outflow) from investing activities

Cash flows from financing activities

Proceeds from exercise of share options

Principal repayments of lease liabilities

Dividends paid to shareholders

Net cash inflow / (outflow) from financing activities

Net increase / (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the financial year

Cash and cash equivalents at end of year

Notes

2021
$’000

341,812

(217,795)

225

(7,762)

(1,493)

114,987

(11,585)

(1,658)

(51,269)

(64,512)

10,595

(957)

(42,504)

(32,866)

17,609

125,244

142,853

2020
$’000

340,405

(222,036)

353

(13,716)

(1,495)

103,511

(223)

(1,979)

(42,859)

(45,061)

5,248

(4,512)

(38,988)

(38,252)

20,198

105,046

125,244

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

121

Transforming business, making life simpleFinancial statements

Notes to the consolidated financial statements

Summary of significant
accounting policies

The financial report of Technology One Limited (the Company) for
the year ended 30 September 2021 was authorised for issue in
accordance with a resolution of Directors on 23 November 2021.

Technology One Limited (the Company) is a company limited by
shares incorporated in Australia whose shares are publicly traded on
the Australian Securities Exchange.

The principal accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been
consistently applied to all the periods presented, unless otherwise
stated. The financial statements are for the consolidated entity
consisting of Technology One Limited and its subsidiaries. The nature
of the operations and principal activities of the Group are described in
the Directors' report.

(a) Basis of preparation

The financial report is a general-purpose financial report prepared by
a for profit entity, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting
Standards and other authoritative pronouncements of the Australian
Accounting Standards Board.

The financial report is presented in Australian dollars and all values
are rounded to the nearest thousand dollars ($000) unless otherwise
stated.

The accounting policies adopted are consistent with those of the
previous financial year except where a change has been required due
to the implementation of a new accounting standard.

Certain comparative items have been reclassified in the financial
statements to align with the 30 September 2021 year end disclosures.

(i) Compliance with IFRS

This financial report also complies with International Financial
Reporting Standards (IFRS) as issued by the International Accounting
Standards Board.

(ii) New accounting standards and interpretations

The accounting policies adopted are consistent with those of the
previous financial year. Any new or amended standards that became
applicable for the first time for the 30 September 2021 year end did
not result in a change to the Group’s accounting policies or require
retrospective adjustments.

(i) Issued but not yet effective

No new standards that will have a material impact to the Group
have been issued that are not in effect for the Group.

(ii) Critical accounting estimates

The preparation of financial statements requires the use
of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of
applying the Group's accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial
statements, are disclosed in note 3.

(b) Principles of consolidation

(i) Subsidiaries

The consolidated financial statements incorporate the assets and
liabilities of all subsidiaries of Technology One Limited ('Company'
or 'parent entity') as at 30 September 2021 and the results of all
subsidiaries for the year then ended. Technology One Limited and
its subsidiaries together are referred to in this financial report as the
'Group' or the 'Consolidated entity'.

Intercompany transactions, balances and unrealised gains on
transactions between companies are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence
of the impairment of the asset transferred. Accounting policies
of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.

(ii) Employee Share Trust

The Group has formed a trust to administer the Group's employee
share scheme. This trust is consolidated, as the substance of
the relationship is that the trust is controlled by the Group. At 30
September 2021, the Group had 66,897 treasury shares (2020: 61,173).

Treasury shares are shares in the Group that are held by the
Employee Share Trust for the purpose of issuing shares under the
TechnologyOne employee share scheme.

(iii) Business combination and goodwill

Business combinations are accounted for using the acquisition
method under AASB 3 Business Combinations. The cost of an
acquisition is measured as the aggregate of the consideration
transferred, which is measured at acquisition date fair value, and the
amount of any non-controlling interests in the acquiree.

For each business combination, the Group elects whether to
measure the non-controlling interests in the acquiree at fair value or
at the proportionate share of the acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred and included in
administrative expenses.

When the Group acquires a business, it assesses the financial assets
and liabilities assumed for appropriate classification and designation
in accordance with the contractual terms, economic circumstances
and pertinent conditions as at the acquisition date. This includes the
separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer
will be recognised at fair value at the acquisition date. Contingent
consideration classified as equity is not remeasured and its
subsequent settlement is accounted for within equity. Contingent
consideration classified as an asset or liability that is a financial
instrument and within the scope of AASB 9 Financial Instruments,
is measured at fair value with the changes in fair value recognised
in the statement of profit or loss in accordance with AASB 9. Other
contingent consideration that is not within the scope of AASB 9 is
measured at fair value at each reporting date with changes in fair
value recognised in profit or loss.

Goodwill is initially measured at cost (being the excess of the
aggregate of the consideration transferred and the amount
recognised for non-controlling interests and any previous interest held
over the net identifiable assets acquired and liabilities assumed).

If the fair value of the net assets acquired is in excess of the aggregate
consideration transferred, the Group re-assesses whether it has
correctly identified all of the assets acquired and all of the liabilities
assumed and reviews the procedures used to measure the amounts
to be recognised at the acquisition date. If the reassessment still
results in an excess of the fair value of net assets acquired over the
aggregate consideration transferred, then the gain is recognised in
profit or loss. After initial recognition, goodwill is measured at cost less
any accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each of the
Group’s cash-generating units that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of
the acquiree are assigned to those units. Where goodwill has been
allocated to a cash-generating unit (CGU) and part of the operation
within that unit is disposed of, the goodwill associated with the
disposed operation is included in the carrying amount of the operation
when determining the gain or loss on disposal. Goodwill disposed
in these circumstances is measured based on the relative values of
the disposed operation and the portion of the cash-generating unit
retained.

(i) Functional and presentation currency

Items included in the financial statements of each of the Group's
operations are measured using the currency of the primary economic
environment in which the entity operates ('the functional currency').
The consolidated financial statements are presented in Australian
dollars, which is Technology One Limited's functional and presentation
currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. 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 income statement.

(iii) Group companies

The results and financial position of foreign operations (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:

• Assets and liabilities for each statement of financial position

presented are translated at the closing rate at the date of that
statement of financial position

• Income and expenses for each income statement and statement
of comprehensive income are translated at average exchange
rates (unless this 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 dates
of the transactions)

• All resulting exchange differences are recognised in other

comprehensive income.

(d)

Revenue recognition

The Group has the following key revenue categories:

1. SaaS Fees

2. Annual Licence Fees

3. Consulting Services

4. Initial Licence Fees

The accounting policies for each of these categories has been set
out below:

Revenue categories

SaaS Fees

Revenue from term SaaS contracts are recognised on a daily basis
over the term of the contract. Included within this category is revenue
from contracts for annual SaaS licences as well as Platform services
associated with initial licence fees. The Group considers that SaaS
licence contracts represent a right to access the Group’s licenced
intellectual property and as such the performance obligation is fulfilled
over the contract term.

Payment terms in respect of SaaS Fees are typically annual within 14
to 30 days of invoice. Invoiced amounts are reflected in trade and
other receivables until paid.

Unsatisfied performance obligations in respect of SaaS Fees received
or receivable are recognised as deferred revenue in the consolidated
statement of financial position. Refer to note 16 for details of deferred
revenue.

Costs incurred in obtaining the customer contract are expensed,
unless they are incremental to obtaining the contract and the
Group expects to recover those costs. Costs that meet the criteria
for capitalisation will be amortised over the life of the contract that
they relate to. The Group has identified certain commission costs as
meeting the criteria of directly related contract costs. These costs are
capitalised in the month in which they are incurred and amortised
over an average contract term of 5 years. The movement in the year
and the closing balance of this asset is disclosed within note 13 as
‘contract acquisition costs’. This balance is presented as ‘contract
acquisition costs’ in the statement of financial position.

2. Annual Licence Fees

Revenue from Annual Licence Fees are recognised on a daily
basis over the term of the contract. The Group considers that the
performance obligation in respect of these services is satisfied over
time.

Payment terms in respect of Annual Licence Fees are typically annual
within 14 to 30 days of invoice. Invoiced amounts are reflected in trade
and other receivables until paid.

Unsatisfied performance obligations in respect of Annual Licence
Fees are disclosed as deferred revenue in the consolidated statement
of financial position. Refer to note 16 for details of deferred revenue.

3. Consulting Services

Consulting services includes services for licenced software and
project services revenue.

Revenue from these services is recognised as services are rendered,
typically in accordance with the achievement of contract milestones
and/or hours expended.

123

Transforming business, making life simpleFinancial statements

Initial licence fees

Initial Licence Fees includes both perpetual licence fees and
subscription term licences and are recognised on provision of the
software. The Group considers that such contracts represent a right
to use the Group’s licenced intellectual property and as such the
performance obligation is fulfilled at the point in time at which the
customer receives the licence key.

Payment terms in respect of Initial Licence Fees are typically within
14 to 30 days of invoice. Invoiced amounts are reflected in trade and
other receivables.

Perpetual licence fees are typically invoiced upfront on signing the
contract but subscription term licences are billed annually throughout
the subscription period.

As the performance obligation is satisfied at a point in time (i.e. at
contract delivery), there are no unsatisfied performance obligations
in respect of Initial Licence Fees.

The Group considers the effects of variable consideration, reviews
the contracts to identify if a significant financing component exists
and considers the standalone pricing of the initial licence fees when
allocating the transaction price of the contract to the performance
obligation.

Associated contract balances

Under AASB 15, the timing of revenue recognition, customer invoicing
and cash collections results in the recognition of trade and other
receivables, contract asset and deferred revenue (contract liability)
on the Group’s Consolidated statement of financial position. At 30
September 2021, the statement of financial position shows a current
liability balance of $228m (30 September 2020: $204m) which
is largely attributable to the deferred revenue balance in current
liabilities. As deferred revenue represents payments received or
receivable in advance from customers for SaaS Fees and Annual
Licence Fees which will be recognised in future periods, and not a
future cash outflow, this balance does not impact the Group’s ability
to meet its short-term obligations as and when they fall due.

Revenue Groups disclosed in the consolidated income statement

The Group has the following revenue groups:

Revenue – SaaS and continuing business

The Group defines continuing business as those revenue streams
that form part of the growth strategy. Namely this includes SaaS,
Annual Licence Fees and consulting services.

2. Revenue – Legacy licence business

The legacy licence fee business encompasses the sale of initial
licences which will continue to decline as our customers transition
to SaaS, growing the SaaS and continuing business revenue.
Included within this revenue group is Annual Licence Fees
recognised from the date the associated initial licence is delivered
until the end of the first financial year post signing.

(e)

Income tax

The income tax expense or benefit for the period is the tax payable
on the current period's taxable income based on the applicable
income tax rate for each jurisdiction adjusted by changes in deferred
tax assets and liabilities attributable to temporary differences and to
unused tax losses.

The current income tax charge is calculated on the basis of the tax
laws enacted or substantively enacted at the end of the reporting

period in the countries where the Group's subsidiaries operate
and generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be
paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial
statements. However, the deferred income tax is not accounted for if
it 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 or loss. Deferred income
tax is determined using tax rates (and laws) that have been enacted
or substantially enacted by the end of the reporting period and are
expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary
differences and losses.

Deferred tax liabilities and assets are not recognised for temporary
differences between the carrying amount and tax bases of
investments in foreign operations where the Group is able to control
the timing of the reversal of the temporary differences and it is
probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and liabilities and when
the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a
legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.

The carrying amount of deferred income tax assets is reviewed at
each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or
part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax
rates that are expected to apply to the year when the asset is realised
or the liability is settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted at the reporting date.

Technology One Limited and its wholly-owned Australian controlled
entities have implemented the tax consolidation legislation. As a
consequence, these entities are taxed as a single entity and the
deferred tax assets and liabilities of these entities are set off in the
consolidated financial statements.

The head entity, Technology One Limited, and the controlled entities in
the tax consolidated group account for their own current and deferred
tax amounts. These tax amounts are measured as if each entity in the
tax consolidated group continues to be a stand-alone taxpayer in its
own right.

The Group has applied the Group allocation approach in determining
the appropriate amount of current taxes and deferred taxes to allocate
to members of the tax consolidated group. The current and deferred
tax amounts are measured in a systematic manner that is consistent
with the broad principles in AASB 112.

The Group created an Employee Share Trust during 2009 which
allows an employee on the exercise of an option to hold the share
in the Trust. As per AASB 112, on granting the option, the Group now
records a deferred tax asset on the expected value of the share.

If the amount of the tax deduction (or estimated future tax deduction)
exceeds the amount of the related cumulative remuneration expense,
the difference is recognised directly in equity. When the employee
exercises the option, the tax effect difference between the actual
market value and what was recorded as a deferred tax asset is
recognised in equity.

AASB Interpretation 23 Uncertainty over Income Tax Treatments
clarifies how to recognise and measure deferred and current income
tax assets and liabilities where there is uncertainty over a tax
treatment. This does not have a material impact on the Group.

(f)

Segment reporting

An operating segment is a component of an entity that engages
in business activities from which it may earn revenues and incur
expenses (including revenues and expenses relating to transactions
with other components of the same entity), whose operating results
are regularly reviewed by the entity's chief operating decision maker
to make decisions about resources to be allocated to the segment and
assess its performance and for which discrete financial information is
available.

Operating segments have been identified based on the information
provided to the chief operating decision maker - being the Chief
Executive Officer.

Operating segments that meet the quantitative criteria as prescribed
by AASB 8 are reported separately. However, an operating segment
that does not meet the quantitative criteria is still reported separately
where information about the segment would be useful to users of the
financial statements.

(g)

Leases

AASB 16 Leases sets out the principles for the recognition,
measurement, presentation and disclosure of leases and requires
lessees to recognise most leases on the balance sheet.

The Group’s lease portfolio primarily consists of property leases.
Lease terms are negotiated on an individual basis and contain a range
of different terms and conditions.

Lease contracts may contain both lease and non-lease components.
The Group allocates the consideration in the contract to the lease and
non-lease components based on their relative stand-alone prices.

Lease liability

The lease liability is initially measured at the present value of
outstanding lease payments (including those to be made under
reasonably certain extension options). The payments used in this
calculation include the following:

The lease payments above are discounted using the interest rate
implicit in the lease if that rate is readily determinable. This is not the
case for the Group’s current leases. When the interest rate implicit in
the lease is not readily determinable AASB 16 requires the use of the
incremental borrowing rate to calculate the present value of the lease
payments. This rate is the rate of interest that a lessee would have to
pay to borrow the funds necessary to purchase the right of use asset,
over a similar term and with a similar security, in similar economic
environment.

The most appropriate rate to use as a starting point in determining
the incremental borrowing rate would be the interest rate incurred on
existing borrowings. However, the Group does not have any existing
borrowings. In the absence of this the Group uses the swap curve
with a corresponding rating as the starting point in determining the
incremental borrowing rate. In line with the accounting standard the
Group adjusts the swap curve rate for the term of the leases, the value
of the leases and the creditworthiness of the Group.

Once the lease liability has been recognised on the balance sheet
the periodic lease repayments are allocated between an interest and
a principal element. The interest is charged to profit or loss over the
lease period so as to produce a constant periodic rate of interest on
the remaining balance of the liability. Variable lease payments that
do not depend on an index or a rate are recognised as expenses in
the period in which the event or condition that triggers the payment
occurs.

Right-of-use asset

The right-of-use asset is initially calculated as being equal to the lease
liability and then adjusted for the following:

• Lease payments made on or before the commencement date less

any incentives received

• Any initial direct costs, and

• An estimate of restoration costs.

This right-of-use asset is then depreciated on a straight-line basis over
the calculated lease term.

Right-of-use assets are also subject to impairment testing under AASB
136 Impairment of assets.

Short term and low value assets

The Group applies the short-term lease recognition exemption to
its short-term leases (i.e., those leases that have a lease term of 12
months or less from the commencement date and do not contain a
purchase option). Payments associated with short-term leases and all
leases of low-value assets are recognised on a straight-line basis as
an expense in profit or loss.

• fixed payments (including in-substance fixed payments), less any

lease incentives receivable

(h)

Variable costs

• variable lease payment that are based on an index or a rate,

initially measured using the index or rate as at the
commencement date

• amounts expected to be payable by the group under residual

value guarantees

• the exercise price of a purchase option if the group is reasonably

certain to exercise that option, and

• payments of penalties for terminating the lease, if the lease term

reflects the group exercising that option.

The components to variable costs are made up of:

•

Costs incurred in obtaining an initial licence fee contract as well
as incentives on achievement of KPIs. These are expensed as
incurred.

Costs incurred in fulfilling the contract with a customer are
capitalised if the requirements in AASB 15 are fulfilled and
are then amortised in line with the satisfaction of the related
performance obligation. The expense is recognised within
the Depreciation and Amortisation line of the Consolidated
Statement of Profit or Loss.

125

Transforming business, making life simpleFinancial statements(i)

Variable customer SaaS costs

Variable customer SaaS costs relate to costs incurred in providing
our customers with access to our SaaS Platform. These costs are
expensed as incurred.

(j)

Impairment of assets

Goodwill and intangible assets that have an indefinite useful life are
not subject to amortisation and are tested annually for impairment,
or more frequently if events or changes in circumstances indicate
that they might be impaired. Other assets are tested for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. 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 purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from other assets
or groups of assets (cash-generating units). Non-financial assets other
than goodwill that suffered an impairment are reviewed for possible
reversal of the impairment at the end of each reporting period.

(k)

Financial assets and liabilities

Financial instruments recognised in the statement of financial position
include; cash and cash equivalents, trade and other receivables,
contract assets, trade payables and contingent consideration.

(i) Classification

The Group classifies its financial assets and financial liabilities
into the following measurement categories;

• those to be measured at amortised cost
(using the effective interest method) and;

• those to be measured at fair value with changes

through the profit or loss (FVPL).

Classification into these categories is based on an assessment of the
Groups’ business model for managing its financial instruments and the
contractual terms of the cash flows.

(ii) Measurement

Amortised cost
Under this method the financial instrument is measured at the amount
recognised at initial recognition minus principal repayments. Further
adjustments to the carrying value of the financial instrument will
arise if there is a modification to the contractual cash flows creating
a gain/loss in the measurement or if there is no longer a reasonable
expectation of recovery of a financial asset resulting in a write off.

FVPL
The financial instrument is measured at fair value. Changes in fair
value are recognised in profit and loss as they arise.

(iii) Impairment

The Group recognises impairment losses on its financial assets carried
at amortised cost using an expected credit losses (ECL) model in line
with AASB 9 Financial Instruments. The ECL model essentially aims to
calculate the Assets’ credit risk. It involves consideration of scenarios
that would lead to default, calculating the shortfall between what is
contractually due and what would be received under each scenario
and then multiplying the shortfall/loss by the probability of the default
situation occurring.

The Group has elected to apply the AASB 9 simplified approach to
measuring expected credit losses which uses a lifetime expected
credit loss allowance for all trade receivables and contract assets.
The Group has also made use of the practical expedient available
for calculating expected credit losses for short term receivables. This
practical expedient involves using a “provision matrix” to calculate the
loss allowance. This matrix is based on historical default rates over the
expected life of the trade receivables and it is adjusted for forward-
looking estimates.

A 6-month historical default rate is applied to the trade receivables
balance to calculate the expected credit loss. This appears as a
provision against the trade receivables balance. Movements in this
provision are recognised as an expense in the consolidated income
statement to the extent that the related revenue has been recognised
in the consolidated income statement. If a receivable balance is
identified as being unrecoverable it is written off against the allowance
for expected credit losses.

(l)

Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash
and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short-term, highly liquid investments with
original maturities of three months or less that are readily convertible
to known amounts of cash and which are subject to an insignificant
risk of changes in value, and bank overdrafts. Cash and cash
equivalents are presented in the consolidated statement of cash flows,
net of outstanding bank overdrafts.

(m)

Trade and other receivables

Trade and other receivables are recognised initially at transaction
price which is deemed to be fair value and subsequently measured at
amortised cost using the effective interest method. Trade receivables
are typically due for settlement within 14 to 30 days.

The Group uses the simplified approach to measuring expected credit
losses. The movement in the expected credit loss is recognised in the
income statement within corporate expenses.

(o)

Intangible assets

(i) Goodwill

Goodwill represents the excess of the cost of an acquisition over the
fair value of the Group's share of the net identifiable assets of the
acquired subsidiary/associate at the date of acquisition. Goodwill on
acquisitions of subsidiaries is included in intangible assets. Goodwill is
not amortised. Instead, goodwill is tested for impairment annually, or
more frequently if events or changes in circumstances indicate that it
might be impaired and is carried at cost less accumulated impairment
losses. Gains and losses on the disposal of an entity include the
carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of
impairment testing. The allocation is made to those cash-generating
units or groups of cash-generating units that are expected to benefit
from the business combination in which the goodwill arose (note 4).

(ii) Intellectual property/source code

Intangible assets acquired separately are capitalised at cost, and
if acquired as a result of a business combination, capitalised at fair
value as at the date of acquisition. Following initial recognition, the
cost model is applied to all classes of intangible assets. The useful
lives of the intangible assets are assessed to be either finite or
indefinite. Where amortisation is charged on intangible assets with
finite lives, this expense is taken to the Income Statement through
the 'depreciation and amortisation expense' line item. Intangible
assets with finite lives are tested for impairment where an indicator of
impairment exists. Useful lives are examined on an annual basis and
adjustments, where applicable, are made on a prospective basis.

Intellectual Property/Source Code is amortised on a straight line basis
over 3-8 years.

Gains or losses arising from the de-recognition of an intangible asset
are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognised in the
statement of comprehensive income when the intangible asset is
derecognised.

(n)

Property, plant and equipment

(iii) Software development

Property, plant and equipment are measured at cost less accumulated
depreciation and any impairment in value. Depreciation is calculated
on a straight-line basis over the estimated useful economic lives of the
assets as follows:

Office furniture and equipment

3-11 years

Computer software

Motor vehicles

3-4 years

4-5 years

The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than its
estimated recoverable amount (note 1(j)).

Gains and losses on disposals are determined by comparing proceeds
with carrying amount. These are included in the Statement of
Comprehensive Income.

Research expenditure is recognised as an expense as incurred.
Research costs are largely made up of employee labour which is
included in employee costs in the consolidated income statement.
Development expenditure is only capitalised if the recognition
requirements within AASB 138 have been fulfilled and an economic
benefit of more than 12 months is expected.

Costs that are directly associated with the development of this
software (largely CiAnywhere products) are recognised as an
intangible asset where the following criteria are met:

(a) The technical feasibility of completing the intangible asset

so that it will be available for use or sale;

(b) Intention to complete the intangible asset and use
or sell it;

(d) How the intangible asset will generate probable
economic benefits. Among other things, the entity can
demonstrate the existence of a market for the output of

the intangible asset or the intangible asset itself or, if it is
to be used internally, the usefulness of the intangible asset;

(e) The availability of adequate technical, financial and other

resources to complete the development and to use or sell
the intangible asset and

(f) Ability to measure reliably the expenditure attributable to

the intangible asset during its development.

As a SaaS company, access is provided to our products via a SaaS
platform over a prolonged term. The technical feasibility of our
products can be established through pre-defined project roadmaps.

TechnologyOne follows a robust process to ensure the accuracy of the
amounts capitalised on the balance sheet. The costs included in the
balance are costs of personnel and other directly attributable costs
incurred in the development of software. The process for determining
what constitutes capitalisable spend under AASB 138 involves
detailed analysis of all timesheet data available in regard to projects
that employees have worked on during the year and other directly
attributable costs in respect of software development spend.

Capitalised software development costs are recognised as an
intangible asset and amortised over their estimated useful lives, which
is considered to be from three to seven years. Software development
costs are capitalised as “under development” until the products to
which the costs relate become available for use. At the point in which
the products become available for use, the costs are transferred from
“under development” to “in use” and amortised from that point (refer
to categorisation in note 13). Development costs previously recognised
as expenses are not recognised as assets in a subsequent period.

(p)

Trade and other payables

These amounts represent liabilities for goods and services provided
to the Group prior to the end of financial year which are unpaid.
The amounts are unsecured and are usually paid within 30 days
of recognition.

(q)

Provisions

Provisions are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is probable that an
outflow of resources will be required to settle the obligation and the
amount has been reliably estimated. Provisions are not recognised for
future operating losses.

Provisions are measured at the present value of management's best
estimate of the expenditure required to settle the present obligation at
the end of the reporting period. The discount rate used to determine
the present value is a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the
liability. The increase in the provision due to the passage of time is
recognised as interest expense.

127

Transforming business, making life simpleFinancial statements

(r)

Employee benefit

(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits
and annual leave expected to be settled within 12 months after the
end of the period in which the employees render the related service
are recognised in respect of employees' services up to the end of the
reporting period and are measured at the amounts expected to be
paid when the liabilities are settled. Liabilities for sick leave, which are
non-vesting, are recognised when the leave is taken and measured at
the rates paid or payable.

(ii) Deferred STI

An amount equal to 25% of the annual STI earned by Executive KMP in
the year is deferred and paid at the conclusion of the two-year period
following the end of the financial year. It is accrued over a three-
year period- throughout the annual performance period in which it is
determined and a deferral period of two years of service.

(iii) Long service leave

The liability for long service leave is recognised in the provision for
employee benefits and is measured as the present value of expected
future payments to be made in respect of services provided by
employees up to the reporting period. Consideration is given to
expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are
discounted using market yields at the end of the reporting period on
national corporate bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.

(iv) Share-based payments

The Group provides benefits to certain employees in the form of
share-based payment transactions, whereby employees render
services in exchange for rights over shares. The costs of share-based
payment transactions with employees are measured by reference to
the fair value of the equity instruments at the date at which they are
granted. Refer to note 33.

The cost of share-based payments is recognised, together
with a corresponding increase in equity, over the period in which the
performance and/or service conditions are fulfilled, ending on the
date on which the relevant employees become fully entitled to the
award (the vesting period). If options or rights do not vest at the end
of the performance period due to the service condition or non-market
condition not being met, the corresponding expense will be reversed.

(s)

Contributed equity

Ordinary shares are classified as equity.
Issued and paid up capital is recognised at the fair value of the
consideration received. Any transaction costs arising on the issue of
ordinary shares are recognised directly in equity as a reduction of the
share proceeds received.

(t)

Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

• The profit attributable to owners of the Group, excluding any costs

of servicing equity other than ordinary shares

• By the weighted average number of ordinary shares outstanding
during the year, adjusted for bonus elements in ordinary shares
issued during the year and excluding treasury shares

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account:

• The after income tax effect of interest and other financing costs

associated with dilutive potential ordinary shares

• The weighted average number of additional ordinary shares that
would have been outstanding assuming the conversion of all
dilutive potential ordinary shares.

(u)

Dividends

Provision is made for the amount of any dividend declared, being
appropriately authorised and no longer at the discretion of the entity,
on or before the end of the reporting period but not distributed at the
end of the reporting period.

(v)

Goods and services tax (GST) and equivalent
overseas value added taxes

Revenues, expenses and assets are recognised net of the amount of
associated GST, unless the GST incurred is not recoverable from the
taxation authority. In this case it is recognised as part of the cost of
acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST
receivable or payable. The net amount of GST recoverable from, or
payable to, the taxation authority is included with other receivables or
payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components
of cash flows arising from investing or financing activities which are
recoverable from, or payable to the taxation authority, are presented
as operating cash flows.

Financial Risk Management

2.
Financial instruments recognised in the statement of financial position
include; cash and cash equivalents, trade and other receivables, lease
liabilities and trade payables.

It is, and has been throughout the period under review, the Group’s
policy that no trading in financial instruments shall be undertaken.
The main risks arising from the Group’s financial assets and liabilities
are interest rate risk, foreign currency risk and credit risk. The Board
reviews and agrees policies for managing each of these risks and they
are summarised below.

Details of the significant accounting policies and methods adopted,
including the criteria for recognition, the basis of measurement and
the basis on which income and expenses are recognised, in respect
of each class of financial asset, financial liability and equity instrument
are disclosed in Note 1 to the Financial Statements.

The Group holds the following financial instruments:

(a)

Interest rate risk

The Group’s cash and investment assets are exposed to movements
in deposit and variable interest rates. The Group does not hedge this
exposure. Interest rate risk on cash is not considered to be material.

2021
$’000

2020
$’000

142,853

125,244

50,580

37,396

193,433

162,640

(d)

Liquidity risk

Liquidity risk arises from the financial liabilities of the Group and the
Group’s subsequent ability to meet their obligations to repay their
financial liabilities as and when they fall due.

The below table represents the financial assets under note 2(c)
and the liquidity risk of financial liabilities referred to in note 2(d).

Less than
12 months
$’000

Between
1 and 5
years
$’000

Over 5
years
$’000

Total
contractual
cash
flows
$’000

25,149

11,418

30,411

37,123

At 30 September 2021

Financial assets

29,345

Cash and cash equivalents

66,978

66,468

Trade and other receivables

142,853

50,580

193,433

Total

Financial liabilities

Trade and other payables

25,149

Contingent consideration

3,842

7,576

Lease liabilities

4,800

29,297

Total

33,791

36,873

173

142,853

50,580

193,433

25,149

11,418

34,270

70,837

Net inflow / (outflow)

159,642

(36,873)

(173)

122,596

Financial assets

Cash and cash equivalents

Trade and other receivables

Financial liabilities

Trade and other payables

Contingent consideration

Lease liability

(b)

Foreign currency risk

As a result of operations in New Zealand, Malaysia, Papua New
Guinea and the United Kingdom and sales contracts denominated in
United States dollars, the Group's statement of financial position can
be affected by movements in the exchange rates applicable to these
geographical locations and currencies.

The Group does not hedge this risk. The Group’s exposure to foreign
currency changes is not significant.

At balance date, the Group had the following exposures in Australian
dollar equivalents of amounts to foreign currencies which are not
effectively hedged:

2021
USD
$’000

2021
PGK
$’000

2020
USD
$’000

2020
PGK
$’000

Trade Receivables

1,650

(c)

Credit risk

The Group is exposed to credit risk from its operating activities
(primarily trade and other receivables and contract assets) and from
its financing activities, including deposits with banks and financial
institutions.

To manage this risk the Group trades only with recognised,
creditworthy third parties. It is the Group's policy that all customers
who wish to trade on credit terms are subject to credit verification
procedures. In addition, receivable balances are monitored on an
ongoing basis with the result that the Group's expected credit loss is
not significant. Information on credit risk exposures is contained in
Note 9.

Less than
12 months
$’000

Between
1 and 5
years
$’000

Over 5
years
$’000

Total
contractual
cash
flows
$’000

At 30 September 2020

Financial assets

Cash and cash equivalents

Trade and other receivables

Total

Financial liabilities

125,244

37,396

162,640

Trade and other payables

37,123

Lease liabilities

2,341

28,508

3,566

Total

39,464

28,508

3,566

Net inflow / (outflow)

123,176

(28,508)

(3,566)

125,244

37,396

162,640

37,123

34,415

71,538

91,102

129

Transforming business, making life simpleFinancial statements

(e)

Fair value measurements

Contingent consideration is classified as Level 3. The balance of
contingent consideration is recognised as contingent consideration
in the Consolidated Statement of Financial Position, and it is split
between a current and non-current portion. The release of the
contingent consideration that does not represent payment is
recognised within the other income line of the consolidated
income statement.

Contingent Consideration

Opening balance at 1 October 2020

Amounts added for Scientia (note 25)

Payments made

Closing balance at 30 September 2021

Contingent Consideration

Opening balance at 1 October 2019

Payments (DMS and JRA)

Reduction in contingent consideration (JRA)

Closing balance at 30 September 2020

2021
$’000

11,418

2020
$’000

223

(223)

The carrying value of trade and other receivables, contract assets
and trade payables are assumed to approximate their fair value due
to their short-term nature or the effect of discounting on non-current
financial assets not being significant.

All other assets are reviewed for indicators or object evidence of
impairment. If indicators or objective evidence exists, the recoverable
amount is reviewed.

(ii) Share-based payments

The cost of share-based payments is recognised, together with
a corresponding increase in equity, over the period in which the
performance and/or service conditions are fulfilled, ending on the date
on which the relevant employees become fully entitled to the award
(the vesting period). In the event that the rights over shares do not
vest at the end of the performance period, the expense relating to the
unvested rights is reversed. No expense is recognised for awards that
do not ultimately vest due to not meeting the non-market conditions or
service conditions.

(iii) Revenue contracts

Initial licence fee contracts entered into by the Group require
judgement in the identification and separation of the contract
components related to software licence fees, Annual Licence Fees
and platform services. The Group assesses each customer contract
individually and revenue is assigned to each component based upon
the stand alone fair value of the component relevant to the total
contract value.

(iv) Capitalisation of development costs

(f)

Capital risk management

The Group manages its capital to ensure that entities in the Group will
be able to continue as a going concern while maximising the return to
stakeholders through the optimisation of the debt and equity balance.

The Group capitalises costs related to software development.
Software development costs are recognised upon meeting the criteria
set out in note 1(o)(iii). The carrying value of these costs are regularly
reviewed for impairment. Software development costs are amortised
over a period of three to seven years.

The current risk management structure of the Group is to use all
equity funding.

(v) COVID-19

The equity funded position of the Group is managed by the Board
through dividends, new shares and share buy backs as well as the
issue of new equity where considered appropriate to fund business
acquisitions.

3. Critical accounting estimates

and judgements

Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations of
future events that may have a financial impact on the entity and that
are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom equal
the related actual results. The estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are
discussed below.

(i) Impairment of goodwill and other assets

The Group tests annually whether goodwill has suffered any
impairment, in accordance with the accounting policy stated in note
1(o)(i). The recoverable amounts of cash-generating units have been
determined based on value-in-use calculations. These calculations
require the use of assumptions. Refer to note 13 for details of these
assumptions and the potential impact of changes to the assumptions.

Management have considered the potential impact of COVID-19 in
performing the Group’s impairment assessments and in establishing
the expected credit loss on financial assets. No adjustments
were made to the Group’s assets as a result of these additional
assessments. At a time when many businesses have struggled
during the pandemic, TechnologyOne has continued to perform
strongly. There has been no impact to the Group’s balance sheet.
TechnologyOne has not received any JobKeeper government support.

(vi) Legal Provision

Provisions are recognised when the Group has a present obligation
(legal or constructive) as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the
amount of the obligation. The group recognises legal provisions based
on the probability and management’s best estimate of the outcome of
the claim.

(vii) Contingent consideration

Contingent consideration has been recognised at the present value
of anticipated costs for future contingent earn out considerations
resulting from the acquisitions made by the Group. In estimating the
liability, it was assumed that the maximum earn out amount will be
payable based on current operating projections. Further details are
available at note 25.

(a)

Segment information

Description of segments

The Group’s chief operating decision maker, being the Chief Executive
Officer, makes financial decisions and allocates resources based
on the information received from the Group’s internal management
system. Sales are attributed to an operating segment based on the
type of product or service provided to the customer.

Segment information is prepared in conformity with the accounting
policies of the Group as discussed in note 1 and the Accounting
Standard AASB 8 Operating Segments.

2020

Revenue from contracts
with customers

SaaS fees*

Annual licence fees*

Consulting services*

Initial licence fees **

Other income

• Software – consists of Sales and Marketing, R&D,

SaaS platform.

• Consulting – responsible for services in relation to

our software.

Net royalty

Total revenue

Expenses

Software
$'000

Consulting
$’000

Corporate
$’000

Total
$’000

106,171

102,272

62,482

27,342

384

367

(170)

106,171

102,272

62,482

27,342

751

(53,819)

(6,642)

60,461

180,312

58,048

60,658

299,018

The Group’s reportable segments are:

Intersegment revenue

(2,038)

2,208

• Corporate – includes all corporate functions.

Total external expenses

(127,681)

(44,393)

(44,474)

(216,548)

Intersegment revenues/expenses are where one operating segment
has been charged for the use of another's expertise.

Royalties are a mechanism whereby each segment pays or
receives funding for their contribution to the ongoing success of
TechnologyOne. For example, Software pays Corporate for the use of
corporate services.

The chief operating decision maker views each segment’s
performance based on revenue post royalties and profit before tax. No
reporting or reviews are made of segment assets, liabilities and cash
flows and as such this is not measured or reported by segment.

(b)

2021

Segment information provided to the
Chief Operating Decision Maker (CODM)

Software
$'000

Consulting
$’000

Corporate
$’000

Total
$’000

Revenue from contracts
with customers

SaaS fees*

Annual licence fees*

Consulting services*

Initial licence fees **

Other income

Intersegment revenue

Net royalty

Total revenue

Expenses

151,052

78,965

64,508

16,770

462

(281)

304

255

(23)

(56,893)

(6,547)

63,440

151,052

78,965

64,508

16,770

717

190,075

58,265

63,672

312,012

Total external expenses

(126,666)

(42,657)

(44,846)

(214,169)

Profit before tax

63,409

15,608

18,826

97,843

Income tax expense

Profit for the year

Total assets

Total liabilities

Total depreciation and amortisation

*Recognised over time / as services are rendered

**Recognised at a point in time

(25,152)

72,691

454,728

264,494

(25,832)

Profit before tax

52,631

13,655

16,184

82,470

Income tax expense

Profit for the year

Total assets

Total liabilities

Total depreciation and amortisation

*Recognised over time / as services are rendered

**Recognised at a point in time

(i) Segment revenue

Australia

New Zealand & Asia Pacific*

APAC total

United Kingdom

(19,525)

62,945

375,909

233,741

(18,638)

2021
$'000

2020
$'000

260,564

250,586

38,609

36,533

299,173

287,119

12,839

11,899

Total segment revenues from sales to external customers

312,012

299,018

(ii) Segment assets

Australia

New Zealand and Asia Pacific*

APAC total

United Kingdom

Total segment assets

2021
$'000

2020
$'000

380,116

319,750

14,754

19,834

394,870

339,584

33,509

7,720

428,379

347,304

All significant non-current assets are located in Australia.
Segment assets are presented net of deferred tax.

*Asia Pacific includes Malaysia and South Pacific

131

Transforming business, making life simpleFinancial statements

(iii) Major customers

The Group has a number of customers to which it provides both
products and services, none of which contribute greater than 10% of
external revenue.

5.(a) Other income

Other income

Foreign exchange gains / (losses)

Interest received

Other

Total other income

2021
$’000

2020
$’000

(9)

225

501

717

(3)

353

401

751

Income tax expenses

Income tax expense

(a)

Current tax

2021
$’000

2020
$’000

17,760

12,045

Relating to origination and reversal of temporary differences

7,315

8,680

Adjustments for tax expense of prior periods

(1,200)

Money market accounts at call are made for varying periods of
between one day and three months, depending on immediate cash
requirements of the Group, and earn interest at the respective money
market deposit rates. Given the short-term nature of these accounts
the fair value of cash assets at 30 September are their carrying values.

9. Current assets - Trade and

other receivables

Total revenue

312,012

299,018

Deferred income tax expense / (revenue) included in income
tax expense comprises:

25,152

19,525

Trade and other receivables

Allowance for expected credit losses

(Increase) / decrease in deferred tax assets

(4,492)

(6,575)

Sundry receivables

Expenses

Profit before income tax includes the
following specific expenses:

2021
$’000

2020
$’000

Increase / (decrease) in deferred tax liabilities

10,500

10,960

Adjustments for deferred taxes of prior periods

1,307

4,295

7,315

8,680

2021
$’000

2020
$’000

51,410

40,320

(1,337)

(2,885)

507

(39)

50,580

37,396

5. Revenue

Revenue from contracts with customers

SaaS fees*

Annual licence fees*

Consulting services*

2021
$’000

2020
$’000

151,052

106,171

77,993

101,121

64,508

62,482

Revenue - SaaS and continuing business

293,553

269,774

Initial licence fees**

16,770

27,342

Annual licence fees associated with initial licence fees*1

972

1,151

Revenue - Legacy licence business

17,742

28,493

Total revenue from contracts with customers

311,295

298,267

*Recognised over time / as services are rendered

**Recognised at a point in time

1 This represents revenue on Annual Licence Fees recognised from the date the associated initial licence is
delivered until the end of the first financial year post delivery.

Depreciation

Plant and equipment

Total depreciation

Amortisation

Other intangible amortisation

Contract acquisition costs amortisation

Capitalised development amortisation

Amortisation of right-of-use assets

Total amortisation

Total depreciation and amortisation

Wages and salaries

Defined contribution plan expense

Payroll tax

Provision for employee benefits

Other

Total employee costs

Share-based payments

Occupancy costs

Finance expense

Profit and loss movement in expected credit loss

Foreign exchange (gain) / loss

(Gain) / Loss on sale of property, plant and equipment

3,331

3,905

3,331

3,905

443

346

3,639

2,493

13,429

4,990

6,103

5,791

22,501

14,733

25,832

18,638

83,722

91,622

9,480

7,593

1,045

9,919

6,366

1,701

8,541

10,007

110,381

119,615

3,213

3,305

1,942

3,259

1,493

1,495

267

(21)

(13)

509

(38)

In addition to the employee benefits expense disclosed above,
‘Variable costs’ in the consolidated income statement includes $17.3m
(2020: $18.6m) relating to employee costs, ‘Contract acquisition costs’
in the consolidated statement of financial position includes $8.3m
in current year employee benefits (2020: $4.9m) and ‘Capitalised
development’ includes $36.1m in current year employee benefits
(2020: $32.3m).

(b)

Numerical reconciliation of income tax
expense to prima facie tax payable

2021
$’000

2020
$’000

Profit from continuing operations before income tax expense

97,843

82,470

Tax at the Australian tax rate of 30% (2020 - 30%)

29,353

24,741

Adjustments for current tax of prior periods

(1,200)

(i) Trade and other receivables are non-interest bearing and are
on 14 to 30 day terms. No interest is charged on trade and other
receivables.

Included in the trade and other receivable balance are debtors with
a carrying amount of $4.3m (2020 - $7.6m) which are past due at the
reporting date for which the consolidated entity has not specifically
provided as there has not been a significant change in credit quality
and the consolidated entity believes that the amounts are still
considered recoverable. The consolidated entity does not hold any
collateral over these balances, however is able to withdraw future
support and software licence use rights if concerns arise relating to
the recoverability of an outstanding customer balance.

Research and development tax concession

(4,235)

(4,131)

(a) Allowance for expected credit losses

Expenditure not allowable for income tax purposes

(43)

115

Income tax expense

25,152

19,525

Movements in the provision for impairment of receivables are
as follows:

(c)

Amounts recognised directly in equity

Opening balance - 1 October

2021
$’000

2020
$’000

2,885

1,135

2021
$’000

2020
$’000

Aggregate current and deferred tax arising in the reporting
period and not recognised in net profit or loss or other
comprehensive income but directly debited or credited to
equity:

Net deferred tax - debited (credited) directly to equity

(3,750)

(2,315)

8. Current assets - Cash

and cash equivalents

Increase/(decrease) in expected credit loss allowance

780

2,885

Amounts reversed/written off

Closing balance - 30 September

(2,328)

(1,135)

1,337

2,885

In determining the recoverability of a trade and other receivable
the Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the reporting
date. The concentration of credit risk is limited due to the customer
base being large and unrelated.

2021
$’000

2020
$’000

Age

Trade
Debtors

Expected
credit loss

Trade
Debtors

Expected
credit loss

Cash and cash equivalents

142,853

125,244

The Group has a secured $2 million interchangeable facility which
is transferable between an Overdraft, Fixed Rate Commercial Bill
and Variable Rate Commercial Bill to assist with working capital
requirements. The facility is unused at 30 September 2021.

Cash at bank earns interest at floating rates based on daily bank
deposit rates.

2021
$’000

43,602

4,354

759

2,695

2021
$’000

(480)

(48)

(8)

(801)

2020
$’000

30,051

5,915

715

3,369

2020
$’000

(456)

(90)

(11)

(2,328)

51,410

(1,337)

40,050

(2,885)

0 – 30 days

31 – 60 days

61 – 90 days

91+ days

Total

133

Transforming business, making life simpleFinancial statements

10. Contract asset

Contract assets

2021
$’000

2020
$’000

22,918

22,283

12. Non-current assets - property,

plant and equipment

Contract assets - non current

2,962

Year ended 30 September 2021

Allowance for expected credit losses

(209)

(232)

Opening net book amount

25,671

22,051

Additions

The above contract asset balance represents revenue recognised for
contracts with customers which has not been invoiced at the end of
the financial year, in line with customer contracts.

Expected credit loss for contract assets

Movements in the provision for impairment of contract assets are as

follows:

Opening balance - 1 October

Increase/(decrease) in expected credit loss allowance
recognised in profit and loss during the year

Unused amounts reversed

2021
$’000

2020
$’000

232

(23)

115

117

Closing balance - 30 September

209

232

11. Current assets - Other current

assets

Deposits receivable

2021
$’000

238

2020
$’000

397

Office furniture
& equipment
$’000

Other
$’000

8,823

1,525

(17)

(3,239)

7,106

146

(92)

119

173

Total
$’000

8,969

1,525

(17)

(3,331)

119

7,279

42,898

(35,673)

7,225

4,770

(4,716)

47,668

(40,389)

7,279

Disposals

Depreciation charge

Make good movement

Exchange difference

Closing net book amount

At 30 September 2021

Cost

Accumulated depreciation

Net book amount

Year ended 30 September 2020

Opening net book amount

Additions

Disposals

Depreciation charge

Make good movement

Exchange difference

10,659

2,008

(51)

(3,788)

Closing net book amount

8,837

241

(117)

(14)

132

At 30 September 2020

Cost

41,510

4,769

Accumulated depreciation

(32,687)

(4,623)

Net book amount

8,823

146

10,900

2,030

(51)

(3,905)

(14)

8,969

46,279

(37,310)

8,969

13. Non-current assets - Intangible assets

Year ended 30 September 2021

Opening net book amount

Additions

Transfers to software - in use

Amortisation charge

Impairment

Exchange difference

Intellectual
property/
source code
$’000

Customer
contracts
$’000

Contract
acquisition
costs1
$’000

Software under
development
$’000

Software in use
$’000

Total
$’000

4,023

1,141

(388)

713

9,991

8,370

26,983

41,858

(38,546)

(55)

(3,639)

(45)

35,573

38,546

(13,429)

110,533

74,365

(17,511)

(29)

Goodwill
$’000

33,250

22,996

Closing net book amount

56,246

4,792

658

14,677

30,295

60,690

167,358

At 30 September 2021

Cost

Accumulated amortisation

Accumulated impairment

Net book amount

Year ended 30 September 2020

62,999

(6,753)

56,246

12,331

(4,862)

(2,677)

4,792

Opening net book amount

33,250

3,503

Additions

Transfers to software - in use

Amortisation charge

Impairment

Exchange difference

819

(291)

(8)

1,100

(442)

658

768

23,808

(9,131)

30,295

80,777

211,310

(20,087)

(34,522)

(9,430)

14,677

30,295

60,690

167,358

7,519

4,972

(55)

(2,493)

(7)

23,825

37,069

(33,911)

7,765

33,911

(6,103)

76,630

42,860

(8,942)

(15)

Closing net book amount

33,250

4,023

713

9,991

26,983

35,573

110,533

At 30 September 2020

Cost

Accumulated amortisation

Accumulated impairment

Net book amount

40,003

(6,753)

33,250

11,174

(4,474)

(2,677)

4,023

1,100

(387)

713

15,483

(5,492)

26,983

42,231

(6,658)

136,974

(17,011)

(9,430)

9,991

26,983

35,573

110,533

1 Balance of contract acquisition costs is split between current portion of $5.0m and non-current portion of $9.7m (2020: current $2.9m; non-current $7.0m).

(a) Impairment tests for goodwill

Goodwill and indefinite life intangibles are allocated to the Group's
Software and Consulting cash generating units (CGUs) which are also
operating and reportable segments for impairment testing purposes.

A segment-level summary of the goodwill and indefinite life intangible
assets allocation is presented to the right.

Software
$’000

Consulting
$’000

Corporate
$’000

Total
$’000

46,638

9,608

2021

Goodwill

2020

Goodwill

Indefinite life intangibles

1,362

660

48,000

10,268

Software
$’000

Consulting
$’000

Corporate
$’000

23,643

9,608

Indefinite life intangibles

1,362

660

25,005

10,268

56,246

2,022

58,268

Total
$’000

33,251

2,022

35,273

135

Transforming business, making life simpleFinancial statements

15. Current liabilities - Trade and

other payables

19. Non-current liabilities -

Provisions

Lease liability

The recoverable amounts have been determined based on a value in
use calculation using cash flow projections based on financial budgets
approved by senior management covering a five year period, as there
is no active market against which to compare the fair value of the unit.

In the current year, there is a new CGU as a result of the acquisition.
This increased Goodwill by $22.9m. This CGU has not been tested
for impairment as at 30 September 2021 due to being acquired
near balance sheet date and the allocation of goodwill remaining
provisional. Refer to note 25 for further details.

The key assumptions used for all CGUs in value in use calculations
for 30 September 2021 and 2020 are:

• Budgeted profit

• Growth rates - based on long-term historical trends

for each segment

• The discount rate applied to cash flow projections

is 15% pre-tax (2020 - 15%)

• Terminal growth rates - these have been set at 2% (2020 - 2%)

14. Non-current assets - Deferred

tax assets

Trade payables

Sundry creditors

Directors fees

2021
$’000

2020
$’000

29,445

29,315

7,021

7,249

101

559

36,567

37,123

Trade payables and sundry creditors are non-interest bearing and
are normally settled on 30 day terms. No interest is payable on
outstanding balances. The Group has financial risk management
policies in place to ensure that all payables are paid within the
credit timeframe.

16. Current liabilities -

Deferred revenue

2021
$’000

2020
$’000

Carrying amount at 1 October

Carrying amount at 30 September

2021
$’000

2020
$’000

144,148

147,558

160,015

144,148

The balance comprises temporary differences attributable to:

Employee benefits

Provisions-other

Accrued expenses

Intangibles

Lease liability (net)

Employee share trust

Deferred revenue

Other

Set-off of deferred tax liabilities pursuant to set-off provisions
(note 21)

Net deferred tax assets

Net deferred tax assets expected to be recovered within 12
months

Net deferred tax assets expected to be recovered after more
than 12 months

5,179

2,131

524

558

4,958

1,089

2,204

753

245

2,864

1,718

4,927

3,536

45,877

40,762

1,642

232

63,741

55,497

(37,392)

(26,892)

26,349

28,605

44,059

13,779

(17,710)

14,826

26,349

28,605

Movements:

Opening balance at 1 October

55,497

48,085

Credited / (charged) to the consolidated income statement

4,492

6,575

Revenue recognised from the opening balance

142,411

145,359

Deferred Revenue represents payments received or receivable in
advance from customers for SaaS Fees and Annual Licence Fees
which will be recognised as revenue in future periods, generally
over the next 12 months. These amounts are a contract liability under
AASB15. These amounts do not result in a future cash outflow.
The operating costs to deliver the services are not significant.

17. Current liabilities - Provisions

Make good provision

Other provisions¹

Annual leave

Long service leave

2021
$’000

2020
$’000

148

569

5,444

5,416

8,305

8,030

7,322

6,533

21,219

20,548

1 On 2 October 2020, the Federal Court issued a judgement against TechnologyOne in a civil employment case.
As a result of the judgement, the Group’s provision was increased to $5.2m as at 30 September 2020. The
company lodged an appeal to the Full Federal Court on 27 October 2020. The company won its appeal, with
the original judgement being overturned in August 2021, and a retrial being ordered. The Group has retained
the full value of the provision at 30 September 2021 ($5.2m) based on management’s best estimate pending
the results of the retrial.

18. Contingent Consideration

2021
$’000

2020
$’000

Credited / (charged) to equity

3,750

837

Contingent consideration

3,842

Offset from deferred tax liabilities

(37,392)

(26,892)

Contingent consideration- non-current

7,576

Closing balance at 30 September

26,349

28,605

Total

11,418

Refer to note 25- Business Combinations for details of the acquisition.

Long service leave

Make good provision

2021
$’000

2020
$’000

1,924

2,285

143

145

2,067

2,430

Year ended 30 September 2021

Opening liability

New leases entered into during the year

Modifications during the year

(a) Movements in provisions

Movements in each class of provision during the financial year, other
than employee benefits, are set out below:

The non-current provisions have been discounted using a pre-tax rate
that reflects current market assessments of the time value of money
and the risks specific to the liability.

Payments

Interest expense

Exchange difference

Property
$'000

Equipment
$'000

29,284

2,041

(111)

Total
$’000

29,345

2,092

(111)

(2,347)

(49)

(2,396)

1,438

1,439

Closing liability

30,347

30,411

The following are amounts recognised in profit or loss under
AASB 16:

e
v
a
e

e
c
i
v
r
e
s
g
n
o
L

0
0
0
’
$

e
v
a
e
L
l

a
u
n
n
A

0
0
0
’
$

d
o
o
G
e
k
a
M

0
0
0
’
$

t
n
e
m

t
i

m
m
o
C

e
v
e
L
e
c
i
v
r
e
S

0
0
0
’
$

n
o
i
t
a
r
e
d
i
s
n
o
C
t
n
e
g
n
i
t
n
o
C

n
o
i
s
i
v
o
r
p

a
g
e
L

0
0
0
$

a
t
o
T

0
0
0
’
$

8,030

8,817

714

217

5,200

22,978

Amortisation on right-of-use assets

Interest expense on lease liabilities

Expense related to short-term leases
(included in occupancy costs)

2021
$’000

2020
$’000

4,990

5,791

1,439

1,454

25 599

Total amount recognised in profit or loss

6,454

7,844

3,110

1,919

142

11,418

16,649

Cashflow for leases

(2,835)

(1,488)

(566)

(34)

(4,923)

8,305

9,248

290

222

5,221

11,418

34,704

Total cash outflow as a lessee1

2021
$’000

2020
$’000

2,421

6,564

2,421

6,564

2021

Carrying amount
at 1 October 2020

Additional
provisions
recognised

Amount released
during the year

Carrying amount
at 30 September
2021

1Reduction in lease payments year on year is largely due to a rental rebate on the Group’s HQ lease.
This rebate significantly reduces base rent payable between 1 July 2020 and 1 April 2022. The rent rebate
applied in FY21 was $4.8m (FY20 $867k).

Right-of-use assets

Year ended 30 September 2020

Property
$'000

Equipment
$'000

Total
$’000

Opening net book amount

28,578

108

28,686

20. Leases

Right-of-use-assets

Year ended 30 September 2021

Opening net book amount

Additions

Modifications during the year

Disposals

Depreciation charge

Exchange difference

Closing net book amount

At 30 September 2021

Cost

Accumulated depreciation

Net book amount

Property
$'000

Equipment
$'000

23,723

2,041

(4,933)

20,914

31,593

(10,679)

20,914

(57)

159

(102)

Total
$’000

23,786

2,092

Additions

Modifications during the year

Disposals

(4,990)

Depreciation charge

Exchange difference

20,971

Closing net book amount

At 30 September 2020

31,752

Cost

(10,781)

20,971

Accumulated depreciation

Net book amount

1,206

(324)

(5,746)

23,723

29,469

(5,746)

23,723

(45)

108

(45)

1,206

(324)

(5,791)

23,786

29,577

(5,791)

23,786

137

Transforming business, making life simpleFinancial statements

Lease liability

Year ended 30 September 2020

Property
$'000

Equipment
$'000

Opening liability

32,709

108

New leases entered into during the year

Modifications during the year

1,351

(324)

Total
$’000

32,817

1,351

(324)

Payments

Interest expense

Exchange difference

Closing liability

(5,916)

(49)

(5,965)

1,452

1,454

29,284

29,345

21. Non-current liabilities –

Deferred tax liabilities

The balance comprises temporary
differences attributable to:

Contract assets

Accelerated depreciation for tax purposes

Prepayments

Capitalised development

Contract acquisition costs

Total deferred tax liabilities

Set-off of deferred tax liabilities pursuant to set-off provisions
(note 14)

Net deferred tax liabilities

Movements:

2021
$’000

2020
$’000

(5,222)

(4,269)

(851)

(1,323)

(24)

(28)

(27,271)

(18,767)

(4,024)

(2,505)

(37,392)

(26,892)

37,392

26,892

Opening balance at 1 October

(26,892)

(15,932)

Date

Details

Number of shares

$’000

30 Sep 2021

Closing balance

321,648,793

51,645

1 Oct 2019

Opening balance

317,827,581

35,302

Exercise of options

1,467,877

5,249

30 Sep 2020

Closing balance

319,295,458

40,551

Information relating to the TechnologyOne Employee Share Option
Plan, including details of options issued, exercised and lapsed during
the financial year and options outstanding at the end of the financial
year, is set out in note 33.

23. Reserves

(a) Other reserves

Share-based payments

Foreign currency translation

Dividend reserve

2021
$’000

2020
$’000

38,305

31,342

1,958

2,136

32,454

30,046

72,717

63,524

(b) Nature and purpose of other reserves

(i) Share-based payments

The reserve is used to record the value of equity benefits provided
to employees, through share-based payment transactions and
associated tax benefits.

(ii) Foreign currency translation

Exchange differences arising on translation of the foreign controlled
entity are recognised in other comprehensive income as described
in note 1(c) and accumulated in a separate reserve within equity. The
cumulative amount is reclassified to the income statement when the
net investment is disposed of.

Charged/(credited) to the Consolidated income statement

(10,500)

(10,960)

(iii) Dividend reserve

Offset to deferred tax assets

Closing balance at 30 September

37,392

26,892

The reserve records retained earnings set aside for the payment
of future dividends.

22. Contributed Equity

24. Dividends

Share capital

Ordinary shares

Fully paid

2021
Shares

2020
Shares

2021
$’000

2020
$’000

321,648,793

319,295,458

51,645

40,551

Movements in ordinary share capital

Final dividend for the year ended 30 September 2020 of 9.41
Cents (2019 - 8.78 Cents) per fully paid share paid in December
2020 (2019 - December 2019)

60% franked (2019 - 75%) based on tax paid at 30%

Interim dividend for the year ended 30 September 2021 of 3.82
Cents (2020 - 3.47 Cents) per fully paid share paid in June 2021
(2020 - June 2020)

60% franked (2020 - 60%) based on tax paid at 30%

2021
$’000

2020
$’000

30,225

27,930

12,279

11,058

(a) Employee Share Option Plan

Total dividends paid

42,504

38,988

Date

Details

Number of shares

1 Oct 2020

Opening balance

Exercise of options

Share grant to employees

319,295,458

2,282,537

70,798

$’000

40,551

10,595

499

(a) Dividends policy

TechnologyOne’s goal is, to the extent possible, to increase dividends
paid by 8% to 10% per annum.

(b) Dividends not recognised at the end of the reporting
period

The initial accounting of the assets and liabilities acquired is
incomplete and provisional as the information is not available in part
due to the business being in administration prior to it being acquired.
The fair value of the acquisition was determined to be $22.9m (12.2m
GBP) and has been initially recorded to goodwill as there is limited
information for the purchase price allocation prior to the financial
statements being issued.

2021
$’000

2020
$’000

The initial cash payment of $11.5m (6.1m GBP) on 25 August 2021
included payments to extinguish the list of liabilities of Scientia at the
time of acquisition as well as payments to shareholders.

Final

In addition to the above dividends, since year end the directors
have recommended the payment of a final dividend of 10.09
cents per fully paid ordinary share (2020 - 9.41 cents) 60%
franked (2020 - 60%) based on tax paid at 30% (2020 - 30%).

The aggregate amount of proposed dividend expected to be
paid out of retained earnings, but not recognised as a liability
at year end

32,454

30,046

32,454

30,046

The franked portions of the final dividends recommended after 30
September 2020 will be franked out of existing franking credits or out
of franking credits arising from the payment of income tax in the year
ended 30 September 2021.

Franking account balance as at the end of the financial year at
30% (2020: 30%)

Franking credits that will arise from the payments of income tax
payable as at the end of the financial year

2021
$’000

2020
$’000

(1,391)

3,044

3,324

519

1,933

3,563

The above amounts represent the balance of the franking account as
at the end of the reporting period, adjusted for:

(a) franking credits that will arise from the payment of the
amount of the provision for income tax

(b) franking debits that will arise from the payment of dividends

recognised as a liability at the reporting date

The impact on the franking account of the dividend recommended by
the Directors since the end of the reporting date, but not recognised
as a liability at the reporting date, will be a reduction in the franking
account of $8,345,408 (2020 - $7,730,209).

25. Business Combinations
On 15 September 2021, Technology One UK Limited acquired 100% of
the issued shares and voting rights in Scientia Resource Management
Limited (Scientia). The Scientia acquisition forms part of the strategic
focus to deliver further functionality for Higher Education software
solution and it will accelerate the growth and competitive position
in the UK as well as have significant benefits in the Australian
Higher Education market. Scientia’s product, Syllabus Plus, provides
advanced academic timetabling and resource scheduling for over 150
leading universities across the United Kingdom and Australia.

The sales and purchase agreement outlined earn out clauses
including:

• The first earn out clause of $3.8m (2.1m GBP) is consideration for
the acquisition and is earned through future performance hurdles
on net profit before tax (NPBT) and annual recurring revenue (ARR)
as of 31 December 2021. The company has considered the future
contingent payment to be a level 3 financial liability. The fair value
of the earn out considering the time value discount is $3.8m.

• The second earn out clause of $7.6m (4.1m GBP) is consideration
for the acquisition and is earned through future performance
hurdles on NPBT and ARR as of 31 December 2022. The company
has considered the future contingent payment to be a level 3
financial liability. The fair value of the earn out considering the
time value discount is $7.4m.

Further payments to the major shareholder may be due subject to
the achievement of certain future NPBT and ARR targets between 31
December 2022 and 31 December 2024. These payments would be
accrued if deemed to be earned and probable. As of 30 September
2021, there has been no provision recorded.

There were $0.5m of acquisition costs incurred during the year ended
30 September 2021. The revenue and profit and loss for Scientia was
insignificant for the 15 days of consolidation. Given the business was in
administration prior to the acquisition it is impracticable to determine
what the revenue or profit and loss would be for the full year based on
historical results as they are not reflective the business performance.

26. Key management personnel

disclosures

(a) Key management personnel disclosures

Short-term employee benefits

5,733,291

5,289,169

2021
$

2020
$

Deferred STI

Share-based payments

368,786

227,586

974,629

934,784

7,076,706

6,451,539

(b) Equity instrument disclosures relating to key
management personnel

Details of options provided as remuneration to KMP and shares issued
on the exercise of such, together with terms and conditions can be
found in the remuneration report.

139

Transforming business, making life simpleFinancial statements

31. Reconciliation of profit after

income tax to net cash inflow
from operating activities

32. Earnings per share

(a) Basic earnings per share

Profit for the year

Depreciation and amortisation

Non-cash employee benefits expense - share-based payments

Finance costs

Net (gain) / loss on sale of non-current assets

Movement in ECL through profit or loss

2021
$’000

2020
$’000

72,691

62,945

25,832

18,638

3,213

1,493

(21)

267

3,305

1,495

(38)

(increase)/decrease in trade and other receivables and contract
assets

(16,804)

14,192

(increase)/decrease in prepayments and other current assets

(2,578)

1,959

Basic earnings per share (cents per share)

Diluted earnings per share (cents per share)

Profit used for calculating basic and diluted earnings
per share ($'000)

2021
Cents

2020
Cents

22.64

19.75

22.52

19.61

72,691

62,945

(b) Weighted average number of shares used
as denominator

Weighted average number of ordinary shares used as
the denominator in calculating basic earnings per share

321,074,997

318,659,285

2021
Number

2020
Number

(increase)/decrease in tax assets and liabilities

13,010

3,548

Adjustments for calculation of diluted earnings per share:

Increase / (decrease) in trade creditors

(556)

(3,967)

Options

1,667,676

2,295,131

Country of
Incorporation

Class of shares

2021%

2020%

Equity holding

Increase / (decrease) in provisions

Increase / (decrease) in lease liabilities

308

2,265

1,983

2,827

Weighted average number of ordinary and potential
ordinary shares used as the denominator in
calculating diluted earnings per share

322,742,673

320,954,416

Malaysia

Ordinary

100

Increase / (decrease) in deferred revenue

15,867

(3,410)

Net cash inflow / (outflow) from operating activities

114,987

103,511

New Zealand

Ordinary

100

27. Remuneration of auditors
During the year, the following fees were paid or payable for services
provided by the auditor of the consolidated entity:

(a) Ernst & Young (Australia)

(b) Transactions with related parties

The parent entity entered into the following transactions during the
year with related parties in the wholly owned group:

• Loans were advanced and repayments received on short-term

intercompany accounts.

2021
$

2020
$

• Marketing support and management fees were charged to wholly

owned controlled entities.

Fees to Ernst and Young (Australia)

Fees for auditing the statutory financial report of the parent
covering the group and auditing the statutory financial reports
of any controlled entities

728,603

801,795

Fees for assurance services that are required by legislation

• Dividends were paid from Technology One New Zealand Limited

to the parent entity during the year

These transactions were undertaken on commercial terms and
conditions. No allowance for expected credit loss has been
recognised for amounts due to and receivable from related parties.

Fees for other assurance and agreed-upon-procedure services

212,816

174,440

Fees for other services

170,131

148,290

The ownership interest in related parties in the wholly owned group is
set out in note 30.

Total remuneration of Ernst & Young Australia

1,111,550

1,124,525

The relative ratio of other services to audit and assurance services
was 15% (2020: 13%).

28. Contingencies
TechnologyOne is a global business and from time to time in the
ordinary course of business it receives enquiries from various
regulators and government bodies. TechnologyOne cooperates fully
with all enquiries and these enquiries do not require disclosure in their
initial state, however should the Group become aware that an enquiry
is developing further or if any regulator or government action is taken
against the group, appropriate disclosure is made in accordance with
the relevant accounting standards.

As a global business, from time to time TechnologyOne is also subject
to various claims and litigation from third parties during the ordinary
course of its business. The Directors of TechnologyOne have given
consideration to such matters which are or may be subject to claims or
litigation at year end and, unless specific provisions have been made,
are of the opinion that no material contingent liability for such claims
of litigation exists. The group had no material contingent assets or
liabilities.

Guarantees

At 30 September 2021, the Group had $3,694,124 (2020: $3,397,831)
in outstanding bank performance guarantees. The total available
guarantee facility is $7,000,000 (2020: $6,650,000). The Group also
had unused foreign currency dealing limits of $1,199,814
(2020: $1,606,393).

The parent entity, Technology One Limited, continues to support its
subsidiaries in their operations, by way of financial support.

29. Related party transactions

(a) Ultimate controlling entity

The ultimate controlling entity of the consolidated entity is Technology
One Limited, a company incorporated in Australia.

30. Controlled entities
The consolidated financial statements incorporate the assets, liabilities
and results of the following subsidiaries in accordance with the
accounting policy described in note 1(b):

Name of entity

Technology One
Corporation Sdn Bhd

Technology One New
Zealand Ltd

Technology One UK
Limited

Icon Solution Unit Trust
(ICON)

Icon Strategic Solutions
Pty Ltd

Jeff Roorda and
Associates Pty Ltd (JRA)

Scientia Resource
Management Limited
(UK)

England

Ordinary

Avand Pty Ltd

Australia

Ordinary

Desktop Mapping
Systems Pty Ltd (DMS)

Digital Mapping Solutions
NZ Limited (DMS)

Australia

Ordinary

New Zealand

Ordinary

Boldridge Pty Ltd

Australia

Ordinary

Australia

Ordinary

100

Australia

Ordinary

100

Australia

Ordinary

100

England

Ordinary

100

The parent entity is Technology One Limited, a public company,
limited by shares and is domiciled in Brisbane, Australia and whose
shares are traded on the Australian Securities Exchange. All entities
operate in the software industry in their geographical locations.

The Registered office is located at:

Technology One HQ
Level 11,
540 Wickham Street,
Fortitude Valley, Qld, 4006

There are no potentially dilutive share instruments not included in the
calculation of diluted earnings per share.

There have been no transactions involving ordinary shares or potential
ordinary shares that would significantly change the number of ordinary
shares or potential ordinary shares outstanding between the reporting
date and the date of completion of these financial statements.

33. Share-based payments

(a) Employee option plan

Options are granted to employees at the discretion of the Board
based on the option plan approved by the Board.

TechnologyOne issues options with up to 25% discount on the volume
weighted average price for the 10 days prior to the grant date.

The period available between vesting date and expiry date of each
option is five years. There are no cash settlement alternatives.

Each option entitles the holder to purchase one share. Options
granted as part of remuneration are based on values determined
using the Black-Scholes option pricing model.

141

Transforming business, making life simpleFinancial statements

33. Share-based payments (continued)
Set out below are summaries of options granted under the plan:

Balance at start
of the period
Number

Issued during the
year
Number

Exercised during
the period
Number

Forfeited during
the period
Number

Balance at the end
of the period
Number

Vested and
exercisable at end
of the period
Number

Balance at start of the
period
Number

Issued during the
year
Number

Exercised during
the period
Number

Forfeited during
the period
Number

Balance at the end
of the period
Number

Vested and
exercisable at end
of the period
Number

Issue date

Expiry date

Exercise price

2021

30/03/2021

30/11/2028

5.8850

22/01/2021

30/11/2028

5.8850

22/01/2021

30/11/2028

7.8467

22/01/2021

30/11/2027

5.8850

1/07/2020

1/10/2027

1.8914

1/10/2019

1/10/2027

1/10/2019

1/10/2027

7.3854

1/10/2019

1/10/2027

5.5391

1/10/2018

1/10/2026

4.1122

1/10/2018

1/10/2026

5.4829

1/10/2018

1/07/2026

1.5862

1/10/2018

1/10/2025

4.1166

30/04/2018

1/10/2025

4.9952

1/10/2018

1/07/2025

0.8633

1/10/2018

1/07/2025

1.5862

1/10/2018

1/07/2025

1.8914

50,000

1,691

578,551

913,938

988,325

390,520

12,500

313,582

100,101

29,250

12,500

50,000

1/10/2017

1/10/2025

5.1456

1,565,170

1/10/2017

1/10/2024

5.1456

1/10/2017

1/10/2025

5.7474

1/07/2018

1/07/2026

1.3388

1/07/2018

1/10/2026

4.1122

1/07/2017

1/07/2024

0.8633

23/05/2017

1/10/2024

5.6046

10/03/2017

1/10/2024

5.6027

1/10/2016

1/10/2024

5.7474

1/07/2016

1/07/2023

0.8633

1/07/2015

1/07/2022

0.8633

25/08/2010

25/08/2023

0.3450

25/08/2011

25/08/2024

0.3450

50,000

11,177

167,000

22,853

16,650

155,482

22,516

17,000

16,650

30,000

11,064

644,990

540,801

116,938

(12,500)

(290,783)

(100,101)

(12,500)

(32,788)

(7,654)

(1,691)

(109,170)

(89,246)

(1,410,064)

(63,092)

(50,000)

(167,000)

(155,482)

(22,516)

(17,000)

(1,350)

(16,650)

11,064

612,202

540,801

109,284

50,000

578,551

804,768

899,079

390,520

Issue date

Expiry date

Exercise price

2020

1/10/2019

1/10/2027

1/10/2019

1/10/2027

7.3854

1/10/2019

1/10/2027

5.5391

1/10/2018

1/10/2026

4.1122

1/10/2018

1/10/2026

5.4829

1/10/2018

1/07/2026

1.5862

1/10/2018

1/07/2026

1.8914

1/10/2018

1/10/2025

4.1166

1/10/2018

1/07/2025

1.0313

1/10/2018

1/10/2025

4.9952

1/10/2018

1/07/2025

0.8633

22,799

1/10/2018

1/07/2025

1.5862

16,750

50,000

92,014

11,177

22,853

16,650

16,750

50,000

92,014

11,177

16,650

1/10/2018

1/07/2025

1.8914

1/10/2017

1/10/2025

5.1456

1/10/2017

1/10/2024

5.1456

1/10/2017

1/10/2025

5.7474

1/07/2018

1/07/2026

1.3388

1/07/2018

1/07/2025

1.3388

1/07/2018

1/10/2026

4.1122

1/07/2017

1/07/2024

0.8633

23/05/2017

1/10/2024

5.6046

7/04/2017

30/09/2024

10/03/2017

1/10/2024

5.6027

14/02/2017

1/10/2024

5.0688

7/02/2017

1/10/2024

5.2334

15,300

1/10/2016

1/10/2024

5.7474

30,000

1/10/2016

1/10/2024

1/07/2016

1/07/2023

0.8633

1/07/2015

1/07/2022

0.8633

Total

5,562,106

1,313,793

(2,268,446)

(303,641)

4,303,812

284,690

25/08/2009

25/08/2022

0.3450

Weighted average exercise price

$4.93

$6.69

$4.67

$5.05

$5.60

$2.77

25/08/2010

25/08/2023

0.3450

25/08/2011

25/08/2024

0.3450

1,003,568

390,520

12,500

50,000

313,582

176,667

100,101

250,250

12,500

50,000

1,593,113

50,000

11,177

167,000

22,853

29,150

247,373

978

22,516

50,000

762,737

10,000

29,150

16,650

30,000

29,250

12,500

50,000

16,650

155,482

1,691

578,551

913,938

(50,000)

(15,243)

(151,667)

(25,000)

1,691

578,551

913,938

988,325

390,520

12,500

313,582

100,101

29,250

12,500

50,000

(27,943)

1,565,170

50,000

11,177

167,000

22,853

16,650

(46,375)

155,482

(221,000)

(167,000)

(12,500)

(45,516)

(978)

(50,000)

10,000

(657,788)

(97,949)

(10,000)

(12,500)

(30,000)

22,516

17,000

16,650

30,000

17,000

16,650

30,000

Weighted average exercise price

$4.27

$6.10

$3.60

$4.97

$4.93

$3.27

5,679,385

1,554,180

(1,458,949)

(212,510)

5,562,106

396,698

143

Transforming business, making life simpleFinancial statements

33. Share-based payments

(continued)

34. Parent entity financial

information

At September 2021 a total of 4,303,812 options (2020: 5,562,106)
were offered to employees.

(a) Summary financial information

The individual financial statements for the parent entity show the
following aggregate amounts:

35. Events after the reporting

period

On 23 November 2021, the Directors of Technology One Limited
declared a final dividend on ordinary shares in respect of the 2021
financial year. The total amount of the dividend is $32,454,363 and is
60% franked.

No other matter or circumstance has occurred subsequent to period
end that has significantly affected, or may significantly affect, the
operations of the Group, the results of those operations or the state of
affairs of the Group or economic entity in subsequent financial years.

The weighted average share price at the date of exercise of options
exercised during the year ended 30 September 2021 was $4.67
(2020: $3.60).

The weighted average remaining contractual life of share options
outstanding at the end of the period was 6 years (2020: 6.0 years).

Fair value of options granted

The fair value of the equity-settled options is measured at the
reporting date taking into account the terms and conditions upon
which the instruments were granted.

The fair value of options granted during the year was between $1.77
and $2.66 (2020: $1.93 - $3.39).

The model inputs for options granted during the year ended 30
September 2021 included:

(I) Dividend yield of 1.6% (2020: 1.6%)

(II) Expected volatility 33.54% (2020: 29.5%)

(III) Risk-free interest rate 0.01% (2020: 0.62 –1.89%)

(IV) Expected life of option 3.3 years (2020: 3.3 years)

(V) Option exercise price between $7.85 and $5.88

(2020: $7.39 - $5.54)

(VI) Weighted average share price at grant date was $7.85

(2020: $7.39)

Balance sheet

Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Shareholders' equity

Contributed equity

Dividend reserve

Share option reserve

Retaining earnings

The expected volatility reflects the assumption that the historical
volatility of the Group’s share price over a period similar to the life of
the options is indicative of future trends, which may not necessarily be
the actual outcome.

Profit or loss before tax for the year

Total comprehensive income

2021
$’000

2020
$’000

212,771

181,777

225,836

197,068

438,607

378,845

198,267

178,175

32,602

37,086

230,869

215,261

51,645

40,551

32,454

30,046

38,305

31,342

85,283

62,278

207,687

164,217

92,260

75,787

92,260

75,787

(b) Executive performance rights

After further market consultation, the Group made the decision to
return to issuing options or EPRs. Please refer to section 3 of the
remuneration report for further information.

Total expenses arising from share-based payment transactions
recognised during the year as part of employee benefit expense
were as follows:

Options issued under employee option plan:

Vested

Forfeited

Total share-based payment expense

2021
$’000

2020
$’000

3,404

3,355

(192)

(50)

3,212

3,305

At 30 September 2021, the statement of financial position shows a
current liability balance of $198m (30 September 2020: $178m) which
is largely attributable to the Deferred Revenue balance in current
liabilities. As Deferred Revenue represents payments received or
receivable in advance from customers for SaaS Fees and Annual
Licence Fees which will be recognised in future periods, and not a
future cash outflow, this balance does not impact the Group’s ability to
meet its short-term obligations as and when they fall due.

(b) Guarantees entered into by the parent entity

At 30 September 2021, the Group had $3,694,124 (2020: $3,397,831)
in outstanding bank performance guarantees. The total available
guarantee facility is $7,000,000 (2020: $6,650,000). The Group
also had unused foreign currency dealing limits of $1,199,814 (2020:
$1,606,393).

The parent entity, Technology One Limited, continues to support its
subsidiaries in their operations, by way of financial support.

At 30 September 2021 and 30 September 2020, the parent entity had
no contingent liabilities.

145

Transforming business, making life simpleFinancial statements

Directors' declaration

In accordance with a resolution of the Directors of Technology One Limited, I state that:

In the opinion of the Directors:

(a)

the financial statements and notes set out on pages 118 to 121 are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the consolidated entity's financial position as at 30 September 2021 and of its performance for the
year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001;

(b)

the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 1(a); and

(c)

(d)

there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable;
and

this declaration has been made after receiving the declarations required to be made to the Directors in accordance with section
295A of the Corporations Act 2001 for the reporting year ended 30 September 2021.

On behalf of the Board of Directors

Adrian Di Marco
Director
Brisbane
23 November 2021

Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001

Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au

Auditor’s Independence Declaration to the Directors of Technology
One Limited

As lead auditor for the audit of the ﬁnancial report of Technology One Limited for the ﬁnancial year
ended 30 September 2021, I declare to the best of my knowledge and belief, there have been:

a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in

relation to the audit;

b. No contraventions of any applicable code of professional conduct in relation to the audit; and

c. No non-audit services provided that contravene any applicable code of professional conduct in

relation to the audit.

This declaration is in respect of Technology One Limited and the entities it controlled during the
ﬁnancial year

Ernst & Young

Alison de Groot
Partner
23 November 2021

A member ﬁrm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

147

Transforming business, making life simpleFinancial statements

Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001

Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au

Independent auditor’s report to the members of Technology One Limited

Report on the audit of the ﬁnancial report

Opinion
We have audited the ﬁnancial report of Technology One Limited (the Company)and its subsidiaries
(collectively the Group), which comprises the consolidated statement of ﬁnancial position as at 30
September 2021, the consolidated income statement, the consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash ﬂows for the
year then ended, notes to the ﬁnancial statements, including a summary of signiﬁcant accounting
policies, and the directors’ declaration.

In our opinion, the accompanying ﬁnancial report of the Group is in accordance with the Corporations
Act 2001, including:

a. Giving a true and fair view of the consolidated ﬁnancial position of the Group as at 30 September

2021 and of its consolidated ﬁnancial performance for the year ended on that date; and

b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the ﬁnancial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
ﬁnancial report in Australia. We have also fulﬁlled our other ethical responsibilities in accordance with
the Code.

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

Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most signiﬁcance in
our audit of the ﬁnancial report of the current year. These matters were addressed in the context of
our audit of the ﬁnancial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.

We have fulﬁlled the responsibilities described in the Auditor’s responsibilities for the audit of the
ﬁnancial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the ﬁnancial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying ﬁnancial report.

Measurement and recognition of revenue and associated assets and liabilities

Why significant

How our audit addressed the key audit matter

The Group has the following key revenue streams:

Our audit procedures included the following:

► SaaS fees;
► Annual licence fees;
► Initial licence fees; and
► Consulting services

The Group contracts with its customers using written
contracts which often include a number of products
and services (separately identiﬁable components).
Revenue recognition for these contracts was
considered to be a key audit matter due to the
complexity of contracts and the judgement required
to allocate revenue amongst the respective
performance obligations.

Note 1(d) to the ﬁnancial statements details the
Group’s revenue streams and the associated
accounting policies. Revenue is disclosed in Note 5,
associated assets in Note 9 and Note 10 and
associated liabilities in Note 16.

► For a sample of signed customer contracts, we

obtained the supporting documentation and
assessed management’s judgement on whether
the revenue has been recorded appropriately.
The assessment included whether there were
contract modiﬁcations and the impact of any
delayed payment terms.

► The testing of the signed customer contracts

(including contract modiﬁcations and
conversion of initial licences to SaaS
arrangements) considered:

 The determination of stand-alone price for

separately identiﬁable components;

 The allocation of the transaction price to
identiﬁed performance obligations,
separated into the different revenue
streams, and;

 The timing of revenue recognition based

on the satisfaction of performance
obligations.

► For a sample of consulting service contracts,
(time and materials) we assessed the Group’s
controls associated with the recording of
consulting days delivered and the application of
contracted fee rates to these days.

► For deferred revenue (contract liabilities) and

contract assets, we tested a sample of balances
at year end that included:

 Agreeing the amounts recorded to invoice

and payment (where received);

 Reperforming the recognition of revenue
based on the satisfaction of performance
obligations; and

 Recalculating the amount of the contract
asset or contract liability balance at year
end.

► Assessed the adequacy of the ﬁnancial report

disclosures included in the ﬁnancial statements.

A member ﬁrm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

149

Transforming business, making life simpleFinancial statementsCapitalisation of software development costs

Why significant

How our audit addressed the key audit matter

As set out in Note 13 to the ﬁnancial statements the
Group capitalises costs related to the development of
software products. Software development is core to
the Company’s operations and requires judgement as
to whether it meets the capitalisation criteria of AASB
138 Intangible Assets. The carrying value of the
capitalised assets (Software under development and
software-in use) totalled $90.99m as disclosed in
Note 13.

The capitalisation of software development costs was
a key audit matter due to the signiﬁcant management
judgements, including:

► Whether the costs incurred relate to research

costs, which are required to be expensed or
development costs that are eligible for
capitalisation;

► The assessment of the useful life of the asset

and the timing of amortisation;

► The assessment of future economic beneﬁts

and indications of impairment of the capitalised
software development costs.

We performed the following procedures in respect of
the development costs capitalised:

► Assessed the Group’s policy of capitalisation of
software development costs for compliance
with Australian Accounting Standards.

► Held inquiries with Project Directors and other

project team members, to understand
development activities undertaken and the
feasibility of completion.

► For a sample of capitalised software

development costs, we tested whether
additions were appropriately supported to
payroll records or third party documentation
and attributed to development activities.

► Considered the appropriateness of the

amortisation period for the capitalised software
development costs and the timing of
amortisation.

► Assessed the completeness of the Group’s

indicators of impairment of capitalised software
development costs.

► Assessed the adequacy of the ﬁnancial report

disclosures included in the ﬁnancial statements.

Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2021 annual report other than the ﬁnancial report and our
auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report,
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual
report after the date of this auditor’s report.

Our opinion on the ﬁnancial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.

In connection with our audit of the ﬁnancial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the ﬁnancial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the ﬁnancial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
ﬁnancial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.

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

Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the ﬁnancial report as a whole is
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 the Australian Auditing Standards 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 this ﬁnancial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:

► Identify and assess the risks of material misstatement of the ﬁnancial report, 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’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’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 report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.

► Evaluate the overall presentation, structure and content of the ﬁnancial report, including the

disclosures, and whether the ﬁnancial report represents the underlying transactions and events
in a manner that achieves fair presentation.

► Obtain sufﬁcient appropriate audit evidence regarding the ﬁnancial information of the entities or

business activities within the Group to express an opinion on the ﬁnancial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.

A member ﬁrm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

151

Transforming business, making life simpleFinancial statementsWe communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and signiﬁcant audit ﬁndings, including any signiﬁcant deﬁciencies in internal control that we
identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.

From the matters communicated to the directors, we determine those matters that were of most
signiﬁcance in the audit of the ﬁnancial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest beneﬁts of such communication.

Report on the audit of the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included within the Directors’ Report for the year ended 30
September 2021.

In our opinion, the Remuneration Report of Technology One Limited for the year ended 30 September
2021, complies with section 300A of the Corporations Act 2001 .

Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.

Ernst & Young

Alison de Groot
Partner
Brisbane
23 November 2021

Jennifer Barker
Partner
Brisbane
23 November 2021

A member ﬁrm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

Shareholder information

The shareholder information set out below was applicable as at 06 December 2021.

(a) Distribution of equity securities

Number of shares

1-1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 and over

Number of shareholders

4,917

4,885

1,269

1,199

There were 164 holders of less than a marketable parcel of ordinary shares.

(b) Equity security holders

Twenty largest quoted equity security holders

Name

JL Mactaggart Holdings Pty Ltd 1

Fundsmith (London) 2

Masterbah Pty Ltd 1

Vinva Investment Management (Sydney)

Selector Funds Mgt (Sydney)

Hyperion Investor Mgt (Brisbane)

Wasatch Global Investors (Salt Lake City)

State Street Global Advisors (Sydney)

First Sentier Investors (Sydney)

Argo Investments (Adelaide)

Dimensional Fund Advisors (Sydney)

BlackRock Investment Management (Sydney)

BlackRock Investment Management (San Francisco)

Vanguard Group (Philadelphia)

Macquarie Asset Management (Sydney)

Acadian Asset Mgt (Boston)

Pendal Group (Sydney)

Mondrian Investment Partners (London)

Lennox Capital Partners (Sydney)

Walter Scott & Partners (Edinburgh)

Number held

%IC

26,902,500

8.34%

18,841,086

5.84%

17,378,500

5.39%

13,767,228

4.27%

12,157,993

10,143,104

3.77%

3.14%

9,085,974

2.82%

8,952,639

2.77%

8,396,859

2.60%

6,784,564

6,306,246

5,597,121

5,490,376

5,429,294

5,176,058

5,017,279

4,901,587

4,864,792

4,796,723

4,500,000

2.10%

1.95%

1.73%

1.70%

1.68%

1.60%

1.55%

1.52%

1.51%

1.49%

1.39%

184,489,923

57.18%

1 Substantial holder (including associate holdings) in Technology One Limited.

2In their capacity as an investment manager, the following have lodged Form 604 notices as a Substantial Shareholder under section 608 of the Corporations Act: Fundsmith Group (5.00% as at
01/03/21)

All ordinary shares issued by Technology One Limited carry one vote per share without restriction. Options and Performance
Rights have no voting rights.

153

Transforming business, making life simpleFinancial statementsCorporate directory - Technology One Limited

Corporate calendar

Board of Directors

Adrian Di Marco

Pat O'Sullivan

Ron McLean

John Mactaggart

Richard Anstey

Jane Andrews

Sharon Doyle

Cliff Rosenberg

Peter Ball

Company Secretary

Stephen Kennedy

Paul Jobbins

Australian Business Number

84 010 487 180

Registered Office

Technology One Limited

Level 11, TechnologyOne HQ

540 Wickham Street

Fortitude Valley QLD 4006

Australia

www.TechnologyOneCorp.com

P. 1800 671 978

International: +617 3167 7300

Branch Locations

Lawyer

The following calendar shows the planned dates for significant shareholder events for the 2022 Year.
These dates are subject to change. The declaration of dividends is subject to board approval.

Brisbane

Sydney

Melbourne

Canberra

Adelaide

Perth

Hobart

Auckland

Wellington

Kuala Lumpur

Maidenhead

Auditor

Ernst & Young

Level 51, 111 Eagle Street

Brisbane QLD 4000

www.ey.com/au

McCullough Robertson

Level 11, 66 Eagle Street

Brisbane QLD 4000

www.mccullough.com.au

Share Registry

Link Market Services Limited

Locked Bag A14

Sydney NSW 1235

Phone: 02 8280 7454

Fax: 02 9287 0303

www.linkmarketservices.com.au

Stock Exchange Listing

Australian Securities Exchange

(ASX: TNE)

2022 (Year Ending 30 September 2022)

Annual General Meeting

Announcement of Half Year Results for 2022

Media Interviews

Presentations to Institutions – Sydney (tentative)

Presentations to Institutions – Melbourne (tentative)

Ex-Dividend for 2022 Interim Dividend

Record Date for 2022 Interim Dividend

Payment Date for 2022 Interim Dividend

Announcement of Full Year Results for 2022

Media Interviews

Presentations to Institutions – Sydney (tentative)

Presentations to Institutions – Melbourne (tentative)

Distribute 2022 Sustainability Report

Ex-Dividend for 2022 Final Dividend

Record Date for 2022 Final Dividend

Payment Date for 2022 Final Dividend

Distribute 2022 Annual Report

Annual General Meeting (2022 tentative)

Notes:

23 February 2022

24 May 2022

25 & 26 May 2022

27 May 2022

2 June 2022

3 June 2022

17 June 2022

22 November 2022

23 & 24 November 2022

25 November 2022

30 November 2022

1 December 2022

2 December 2022

16 December 2022

16 January 2023

22 February 2023

Closing date for receipt of director nominations is 4 January 2022 in accordance with ASX Listing Rule 14.3 (35 days prior to AGM)

The Ex-Dividend date occurs one day before the Record Date

The Record Date is 5.00pm on the date TechnologyOne closes its share register to determine which shareholders are entitled to receive the current dividend

The Payment Date is the date on which TechnologyOne’s dividend is paid to shareholders. The payment date is approximately 10 business days after the Record Date.

Closing date for receipt of director nominations is 3 January 2023 in accordance with ASX Listing Rule 14.3 (35 days prior to AGM)

155

Transforming business, making life simpleFinancial statementsTechnologyOne (ASX: TNE) is Australia’s largest enterprise
software company and one of Australia’s top 150 ASX-listed
companies, with locations across six countries. We provide
a global SaaS ERP solution that transforms business and
makes life simple for our customers. Our deeply integrated
enterprise SaaS solution is available on any device, anywhere
and any time and is incredibly easy to use. Over 1,200
leading corporations, government agencies, local councils
and universities are powered by our software. For more than
34 years, we have been providing our customers enterprise
software that evolves and adapts to new and emerging
technologies, allowing them to focus on their business and
not technology.

ABN: 84 010 487 180

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TechnologyOneCorp.com

Australia | New Zealand | South Pacific | Asia | United Kingdom

Freecall 1800 671 978 (within Australia) | +617 3167 7300 (outside Australia)

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