2
2
0
2
Annual Report. UP
43%
SaaS Annual
Recurring
Revenue
up 43%
FY18
$70.4M
FY19
$101.7M
FY20
$134.6M
FY21
$192.3M
FY22
$274.2M
SaaS Annual Recurring Revenue
UP
15%
Profit
Before Tax
up 15%
FY18
$50.8M
FY19
$76.4M
FY20
$82.5M
FY21
$97.8M
FY22
$112.3M
Reported Profit Before Tax
UP
22%
FY18
$221M
FY19
$241.8M
FY20
$269.8M
FY21
$293.6M
FY22
$358.7M
Revenue from SaaS & Continuing Business
UP
22%
FY18
$47.7M
FY19
$58.5M
FY20
$62.9M
FY21
$72.7M
FY22
$88.8M
Profit Profit After Tax
These graphs should be read in conjunction with the
Financial highlights table on p.15
Revenue from
SaaS &
Continuing
Business
up 22%
Net Profit
After Tax
up 22%
16 products
strategically
focused over
key industries.
Built on a code
base that is set
up for future
innovation &
highly scalable.
Integrated
GPS, Ai,
Camera &
Machine
Learning
functionality.
Two major
software
releases a year
we focus on
customer
evolution.
Best in class,
global support
providing
customers with
24/7 assistance.
Highest level
security
accreditations
in the industry.
Available
anywhere,
anytime, on
any device.
400+ modules
with over
10,000
capabilities.
Build an app
faster without
having to code.
One simple
intuitive UX
focused
workplace for
everything.
Simplicity, in
the hands of
your customers .
Explore hours
of training to
help you
every day.
We take care
of the upgrade
so you can
focus on the
future.
What’s inside
Our history
At a glance
Financial highlights
Letter to shareholders
Our strategy
Global SaaS ERP solution
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
6
10
15
16
24
30
36
40
54
66
70
72
106
116
118
146
147
148
153
154
155
5
Transforming business, making life simple Our history
1987
Adrian Di Marco founded
TechnologyOne in a
demountable office at
a hide processing plant
in an industrial suburb
of Brisbane. Becoming
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 #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. Delivering 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.
2003
With the emergence of the
internet, TechnologyOne
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.
2017
TechnologyOne launched
the TechnologyOne
Foundation, committing to
raise 500,000 children and
their families out of poverty.
TechnologyOne also
committed to the 1% Pledge
– committing 1% of profit,
staff time and products to its
Foundation.
Adrian Di Marco steps down
as CEO. Retains Executive
Chair position and appoints
Chief Executive Officer,
Edward Chung.
2022
TechnologyOne partnered
with the University of
Lincoln to go live with our
state-of-the-art Student
Management system.
Making the University our
first UK institution using the
internationally trusted system
and joining over 100 higher
education customers utilising
TechnologyOne products in
the UK.
Adrian Di Marco commenced
his retirement. Handing the
reigns of non-executive chair
to Pat O’Sullivan.
Our history
7
Transforming business, making life simple Dear Shareholders,
At our last Annual General Meeting, I announced that I would retire from TechnologyOne after the release of the
company’s half year results.
It has been 35 years since I started TechnologyOne in 1987, with funding from the Mactaggart family, who have
been my business partner ever since. From a small demountable shed, at the front of their hides processing
plant in an industrial suburb of Brisbane, TechnologyOne has grown into one of Australia’s largest and most
successful publicly listed software companies with a market cap approaching $4 billion dollars.
TechnologyOne was one of the first start-ups in Australia 35 years ago, and subsequently one of the first tech
companies to list on the ASX in 1999 before the dotcom boom. It has been an amazing journey as we have
navigated successfully across 4 major technology paradigm shifts, starting first with the advent of Relational
Database technology, then the PC, the internet and more recently the Cloud. At each stage we have rebuilt our
products and adapted our business to a new world.
Today our global ERP SaaS offering is delivering significant benefits to our customers and fuelling our
exceptionally strong growth. Our most recent results clearly show we are on track to achieve our once ambitious
target of $500 million in ARR by FY26, and most probably sooner.
As the founder and a major shareholder, the smooth transition to a new generation has been my top priority over
many years. As such this transition has been very carefully planned, starting with the appointment of our long
serving Chief Operating Officer, Mr. Edward Chung to the role of CEO in 2017, the renewal of our very talented
executive team and the renewal of our Board over the last 5 years; and more recently the recruitment of a very
experienced Deputy Chair, Mr. Pat O’Sullivan, who has now assumed the role of Chair.
Edward Chung has been with TechnologyOne for over 15 years and worked across all areas of the business. He
deeply understands the company, its purpose and its culture. He is without doubt one of the most talented and
visionary executives on the ASX. He has driven the company’s exceptional results over the last 5 years as CEO
and I am confident he will continue to do so going forward. I have been proud to work with Ed, and he has my
total confidence.
Pat brings over 30 years of international and operational experience across a range of industries as a seasoned
executive with Price Waterhouse, Goodman Fielder Ltd, Sing Tel Optus Pty Limited, and Nine Entertainment. He
has extensive ASX board experience as the current Chair of Carsales.com and SiteMinder. Previously Pat has
been a non-executive director of AfterPay, Marley Spoon AG, APN Outdoor Group Limited, iSentia, iiNet Limited
and iSelect Limited. Pat understands the dynamics of an ambitious, fast paced R&D driven tech business. I have
enjoyed working closely with Pat, and once again he has my total confidence.
Looking forward I see our strong growth continuing. Our strategy of providing a total and very deep enterprise
SaaS solution for our target markets, globally, is a unique value proposition that clearly differentiates us from the
plethora of “best of breed” point solutions in the market. It is this strategy that has resonated with our customers,
fuelled our growth and seen a 99+% retention rate in our customer base.
Since we started TechnologyOne over 35 years ago, we have a proud track record of doubling in size every 5
years. I am confident this will continue into the future, as we deliver against our global ERP SaaS strategy, as we
continue to push aggressively into the UK market, and as we deliver our new and exciting initiatives: Solution
as a Service and our new DXP product line. Our Solution as a Service and our DXP product line will once again
redefine the enterprise market and set a new standard.
There have been many challenges over the years at TechnologyOne, and there will be more ahead. I am
confident that our DNA of adapting, changing and never giving in will allow us to continue to be very successful
under the strong leadership of our CEO, Edward Chung and his team.
Let me finish by saying in the end, TechnologyOne’s success comes down to the hard working and passionate
people that work at TechnologyOne. I have been very fortunate to have worked with so many wonderful and
talented people; who I will miss greatly. It has been an honour to lead such an amazing team of people.
And to our investors, whose advice and guidance I have greatly appreciated over the years, I thank you for your
support.
Adrian Di Marco
Founder and Retiring Chairman
9
Transforming business, making life simpleAt a Glance Administration
Arts and Culture
Building and Development
Applications
Customer Service
+2
Call Transfers
At a
glance.
Missed BinWhy was my bin missed?SearchHomeTopicsWaste and RecyclingThere are a number of reasons why your bin may have been missed.Time of day? Our
finances
UP
43%
SaaS ARR $274.2M
UP
22%
$175.9M Cash and cash
equivalents
$92.2M
R&D investment up 19.6%
(25% of revenue)
UP
15%
$112.3M Profit Before Tax
UP
26%
$239.1M
Net assets
13YEARS
Continued record profit
30%
Profit Before
Tax margin
UP
22%
Dividend of 17.02cps
$358.7M revenue from
SaaS & continuing
business
UP
22%
25%
UP
$320.7M
Total ARR
UP
52%
UK profit $2.4M
$15.7M
Consulting
Profit Before Tax.
up $0.1M from PY
$500M
ARR
on track to surpass 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.
Compelling Customer
Experience
We continue to recognise that our
customers are our compass for the
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
Government
Health and Community Services
Asset and Project Intensive
Corporates and Financial Services
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
DXP Local Government
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.
New ideas, new concepts
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 35 years we have completely
redeveloped our software platform four
times.
13
Transforming business, making life simpleAt a Glance Financial
highlights
2022
$’000s
2021
$’000s
Growth on
last year
15-year
compound
growth
2020
$’000s
2019
$’000s
2018**
$’000s
Comparable
2017
$’000s
2016
$’000s
2015
$’000s
2014
$’000s
2013
$’000s
358,668
293,553
22%
-
269,774
241,790
221,046
231,151
192,657
175,279
140,024
128,226
Revenue
from SaaS &
Continuing
Business
Total revenue
369,391
312,012
18%
11%
299,018
286,164
254,491
273,253
249,018
218,724
195,124
180,591
Annual
Recurring
revenue (ARR)1
320,694
257,495
25%
-
221,908
202,480
173,912
153,896
126,996
108,853
-
-
SaaS ARR1
274,186
192,295
43%
-
134,557
101,677
70,372
50,701
24,486
14,265
-
-
92,197
77,005
20%
13%
68,062
60,124
54,042
49,856
46,009
41,038
37,873
35,595
112,320
97,843
15%
12%
86,070
76,389
50,807
58,019
53,240
46,494
40,235
35,097
112,320
97,843
15%
12%
82,470
76,389
50,807
58,019
53,240
46,494
40,235
35,097
88,843
72,691
22%
13%
62,945
58,459
47,681
44,494
41,344
35,785
30,967
26,984
27.51
22.64
22%
12%
19.75
18.43
15.10
14.18
13.26
11.57
10.06
8.78
17.02
13.91
22%
11%
12.88
11.93
11.02
10.20
9.45
8.78
8.16
5.60
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
62%
62%
Return on
Equity
37%
38%
-
-
-
65%
65%
73%
72%
72%
76%
81%
64%
-
44%
55%
46%
28%
31%
30%
30%
31%
Cash and Cash
equivalents
175,865
144,210
22%
13%
125,244
105,046
104,322
93,383
82,588
75,536
80,209
65,397
Net Assets
239,097
190,234
26%
12%
142,168
106,857
103,480
157,520
138,494
117,940
104,499
87,736
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 highlights
15
Transforming business, making life simple Letter to
shareholders.
17
Transforming business, making life simpleLetter to shareholders Letter to shareholders
On behalf of Technology One Limited (TechnologyOne) we are pleased to announce our
thirteenth consecutive year of record profit, record revenues, and record SaaS fees.
Our global SaaS ERP solution is transforming our customers’ business and making life
simple for them.
Highlights for the Year
We are a SaaS company
•
•
•
Completed our fourth generation
ERP, CiA - During the year, we
completed our fourth generation
global SaaS ERP, CiA, having re-
engineered our entire ERP code
base leveraging SaaS technology.
Exceeding ARR targets and
ended legacy licences - We
have successfully completed
our strategy ahead of schedule.
No other ERP company in the
world has successfully made
the transition to SaaS without
impacting its customers and/or its
profit growth.
Record TechnologyOne SaaS
ARR growth up 43% - Adoption of
the TechnologyOne global SaaS
ERP solution (CiA) is exceeding
our expectations, with customer
adoption driving SaaS annual
recurring revenue (ARR) of
$274.2m, up 43%.
•
•
•
•
Record TechnologyOne Total
Growth ARR up 25% - Total
annual recurring revenue (ARR) of
$320.7m, up 25%.
Profit After Tax up 22% - Our Profit
After Tax was up 22%
Surpass $500m+ ARR by FY26 -
With our SaaS business growing
faster than expected, we are on
track to surpass our target of
$500m+ ARR by FY26.
Building the future, enabling us to
continue to double in size every
5 years – With the completion of
our fourth generation ERP, CiA,
we have showcased exciting
new products and solutions
which continue to transform our
customers’ business, enabling us
to continue to double in size every
five years.
These points are discussed later in
more detail.
Results summary
Key results were as follows:
•
•
•
•
•
Profit After Tax of $88.8m, up 22%
Profit Before Tax of $112.3m, up 15%
Revenue from our SaaS and Continuing Business of
$358.7m, up 22%
SaaS Annual Recurring Revenue (ARR)1 of $274.2m,
up 43%
Total Annual Recurring Revenue (ARR)1 of $320.7m,
up 25%
•
•
•
•
•
•
Total Revenue2 of $369.4m, up 18%
Expenses of $257.1m, up 20%3
Cash Flow Generation4 of $77.2m, up 21%
Cash and Cash Equivalents of $175.9m, up 22%
Total Dividend of 17.02cps, including a special
dividend of 2.0 cps, up 22%
R&D investment of $92.2m before capitalisation, up
19.6%, which is 25% of revenue
1 ARR represents future contracted annual revenue at year end. This is a non-IFRS financial measure and is unaudited
2 Includes other income of $1.2m
3 Impacted by Scientia acquisition. Synergies delivered in FY22 will reduce Scientia expenses in FY23
4 Cash Flow Generation is cash flow from operating activities less capitalised development costs, capitalised commission
costs and lease payments. This is a non-IFRS financial measure and is unaudited
19
Transforming business, making life simpleLetter to shareholders Continuing strong performance
TechnologyOne has consistently delivered strong results since listing on the ASX in 1999. Our ability to deliver these results over
20 years is due to our clear vision, strategy, culture, and our significant investment in R&D.
NPAT up 22%
FY12
$23.6m $26.7m $30.3m $35.8m $41.3m $44.5m $51.0m $58.5m
FY16
FY19
FY15
FY18
FY14
FY13
FY17
Repo rt ed Net Profit After ta x
Local Government customer that came
back from Oracle and is extending their
original TechnologyOne footprint and
moving to our latest generation ERP,
CiA.
In the Higher Education sector, we
closed 10 major deals in FY22 worth
$47m in total contract value, cementing
our position as the leading provider
to the APAC Higher Education sector
including large deals with customers
such as Queensland University
of Technology and University of
Technology Sydney.
Exceed ARR targets and
ended legacy licences
In 2018, we detailed our strategy to
transition from an on-premise legacy
licence business to a SaaS business.
We set a plan to reduce on-premise
FY20
FY21
$62.9m $72.7m $88.8m
FY22
legacy licence fees from a high of circa
$70m to zero over five years, whilst
aggressively growing our SaaS recurring
revenue business without impacting
profit growth and without impacting our
customers. We have now delivered this
strategy, exceeding our ARR target in
FY22, and allowing us to bring to an end
our legacy licence fee business. This
transition was extremely complex as we
re-engineered all parts of our business
including our products, our structure,
our policies, processes and disciplines.
No other ERP company in the world has
successfully made this transition without
impacting its customers and / or its profit
growth.
Our philosophy of “transforming
business, making life simple”, made
the transition to our SaaS solution
for our on-premise customers simple
and seamless. They move to SaaS in
UP
43%
TechnologyOne SaaS
ARR grows 43%
organically
Adoption of the TechnologyOne global
SaaS ERP solution is exceeding our
expectations, with customer adoption
driving SaaS annual recurring revenue
(ARR) of $274.2m, up 43%.
We now have over 800 large-scale
enterprise organisations, with millions of
users, leveraging our fourth generation
SaaS ERP, CiA, for mission critical
activities for them and their customers.
This makes TechnologyOne the largest
single instance SaaS ERP offering in
Australia.
Our strategy is to deliver a compelling
customer proposition, providing our
customers with any device, any time
access from anywhere around the
globe, as well as a simple and cost-
effective way to run their enterprise.
Our global SaaS ERP 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 and their customers.
TechnologyOne continues to lead in
the Local Government sector, where
we closed 20 major deals in FY22 with
$63.9 million in total contract value
and we now have more than 320
council customers in APAC. Mornington
Peninsula is an excellent example of a
FY18
FY19
FY20
FY21
FY22
$70.4M
$101.7M
$134.6M
$192.3M
$274.2M
SaaS Annual Recurring Revenue
weeks, not years, like those using our
competitors’ products.
Our SaaS customers unlock significant
benefits including:
•
•
•
•
•
•
•
Two releases 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 SaaS ERP, CiA, and take
advantage of new technologies, such as
Artificial Intelligence and our new Digital
Experience Platform (DXP).
Surpass $500m+ ARR by
FY26
The quality of the revenue from our
latest generation global SaaS ERP
business is exceptionally high, given its
recurring contractual nature, combined
with our industry leading low churn rate
of ~1%.
Today, our Total Annual Recurring
Revenue (ARR) is $320.7m, up 25%. We
are on track to surpass our target of
$500m+ ARR by FY26.
Our ARR stands at 90% of Total
Revenue 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.
Building the future,
enabling us to continue
to double in size every 5
years
Investment in R&D of $92.2m up 19.6%
delivered our fourth generation SaaS
ERP, CiA and underpins our future
platforms for growth.
During the year, we launched our fourth
generation global SaaS ERP, CiA, having
re-engineered our entire ERP code
base using SaaS technology. This is
the fourth time we have successfully
re-engineered our entire code base,
enabling our customers to always be
on the latest technology. No other ERP
provider has been able to achieve this.
This truly is a feat in making the
impossible possible, as our global SaaS
ERP, is extremely broad, deep, complex
and rich in functionality providing
mission critical applications that run
Local Governments, Higher Education
institutions, Governments and large-
scale infrastructure providers.
TechnologyOne invested $92.2 million
in R&D this year, up 19.6%, with the first
full year of ownership of Scientia, locked
in key R&D talent with remuneration
increases and long-term incentives and
took the opportunity to accelerate R&D
into a number of new and exciting areas.
Our R&D is also focused on extending
the functionality and capabilities of our
global SaaS ERP. 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 continue to invest in new, exciting
ideas and innovations, including
Solution as a Service, App Builder and
our Digital Experience Platform (DXP)
for Local Government and Higher
Education. Our 16th product, DXP LG,
was released for general adoption in
June 2022.
Solution as a Service
underpins our future
platforms for growth
It will be a game changer in the ERP
industry and is the next logical evolution
of SaaS where TechnologyOne delivers
the entire outcome faster, with little
risk and in one single annual fee to
our customer. Solution as a Service
will deliver faster time to value as we
continue to dramatically drive down
implementation timeframes, removing
the need for traditional risky and long-
drawn-out implementations. Through
the “Power of One”, TechnologyOne
is the only SaaS ERP provider who will
be able to deliver on this compelling
proposition as we own all parts of the
value chain with deep mission critical
products, industry specific IP and
expertise and our highly skilled in-house
1 Excludes consulting revenue as it flows from business wins
2Not included in our Total ARR.
consulting team which has been built up
over 35 years.
We are excited about the opportunities
these investments will bring to our APAC
and UK customers.
It is these investments in R&D and
Solution as a Service to build our future
platforms for growth which underpins
our ability to continue to double in
size every five years. We manage this
significant investment within our total
cost base, continuing to achieve profit
margin growth from the efficiencies
gained through our single instance
global SaaS ERP.
UK delivers ARR
growth of $17.5m up
95%. Doubling our
investments in sales and
marketing
We have seen our UK business continue
to grow, with ARR of $17.5m up 95%.
We delivered a profit of $2.4 million,
up from a profit of $1.6m last year, and
we see significant opportunities in the
coming years.
The regionalisation of our OneEducation
solution is now complete as we
delivered the first go-lives for our
Student Management and Human
Resources and Payroll products.
Combined with the additional mission
critical product, Timetabling and
Scheduling through the acquisition
of Scientia, we are now doubling our
investments in sales and marketing to
accelerate growth.
Integration of
Timetabling and
Scheduling (Scientia
acquisition)
During the year, we progressed the
integration of Scientia’s mission critical
Timetabling and Scheduling product.
We created the first full SaaS offering of
the product in just six months, with 16
customers now contracted to transition
onto our SaaS platform. Customer
feedback is exceedingly positive. These
customers now have full visibility and
access to TechnologyOne’s entire ERP,
reducing the friction for them to adopt
the rest of the CiA product suite.
21
Transforming business, making life simpleLetter to shareholders Profit Before Tax margin remained
strong at 30%.
We generated organic Profit Before Tax margin of 32%,
compared to 31% pcp. Reported Profit Before Tax margin
remained high at 30% and the temporary decrease was
expected and caused by Scientia’s lower margin. Synergies
delivered in FY22 will reduce Scientia expenses in FY23 and
we expect margin growth to return in FY23. We see group
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.
Investment in 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.
During the year, we set a target Employee Net Promoter Score
(eNPS) of +50 by FY26. Our current eNPS score increased
from +17 to +33 on the back of some new and exciting people
programs and initiatives.
We have been an extremely successful company by any
measure for our first 35 years because of our consistent
strategy, mission, purpose, core beliefs, values, leadership
philosophies and compelling customer experience. During
the year, we refined and simplified our values and relaunched
them to our team through our Culture Book, a collection of
stories which explains to new starters and reminds long timers
what makes TechnologyOne special and how we make the
impossible possible.
We rolled out a career framework to the entire organisation,
to underpin team development and enable us to have
robust succession and promotion plans. During the year, we
promoted 148 team members across all areas of our business.
We continued our focus on diversity and strategies to increase
the number of women in senior roles. During the year we
achieved a gender equality rate of 37.4% across all roles at
TechnologyOne.
During the year, we have put a deliberate focus on wellbeing,
launching a number of wellbeing initiatives for our people. We
have signed Stephanie Gilmore (8 x world surfing champion
and greatest of all time) as our new brand ambassador to
focus on the importance of physical and mental wellbeing. We
have also launched an Employee Share Plan which provides
one free share for every two shares purchased by our
employees. This financial wellbeing initiative enables all team
members to become owners of TechnologyOne and share in
the growth of this great company.
In order to continue to double in size every five years, we
launched our ongoing investment in our leaders through our
Leadership Summit, designed to grow our leaders, teach the
TechnologyOne Way and equip them to lead our teams to
make the impossible possible.
Scientia
Impact1
32%
FY13
19%
FY14
21%
FY15
21%
FY16
21%
FY17
21%
FY18
22%
FY19
27%
FY20
29%
FY21
31%
FY22
30%
Profit Before Tax Margin
Strong balance sheet and cashflows
TechnologyOne continues to have a strong balance sheet with
net assets of $239.1m, up 26%, and cash and cash equivalents
of $175.9 million, up 22%. Cash Flow Generation was once
again strong at $77.2 million for the full year, versus a Net
Profit After Tax of $88.8 million. TechnologyOne continues its
long history of strong cash flow generation which we expect
to progressively grow to match Net Profit After Tax from FY24
onwards.
Dividend
In light of the company’s strong results, our confidence going
forward, and the significant fire power in our balance sheet
to invest in growth and opportunities that may arise, we have
announced a Special Dividend of 2.0 cents per share in
addition to our final dividend of 10.82 cents per share.
The dividends for the full year have increased to 17.02 cents
per share (including the Special Dividend), up 22% on the prior
year, and in line with our Net Profit After Tax growth of 22%.
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, and
also ensures alignment across our Executive KMP.
At a time when many businesses have struggled during the
pandemic, TechnologyOne has delivered exceptional growth
- Record SaaS ARR growth of 43%, Record Net Profit After Tax
growth of 22%, and the UK growing ARR by 95%, achieving
profit of $2.4m. TechnologyOne is on track to surpass our
target of $500m+ ARR by FY26 and has announced new and
existing products and solutions which will underpin our ability
to continue to double in size every five years.
In an extremely competitive market for talent, we moved to
lock in our key leaders with a one-off long term retention
equity incentive plan fully aligned to share price performance
over 4.5 years to November FY26.
There is clear alignment between the performance of the
business and executive remuneration. While the company’s
Profit Before Tax grew by 15%, FY22 total remuneration for
1Profit margin excluding Scientia was 32%, compared to 31% PCP Group Profit margin was impacted by the Scientia acquisition.
Profit margin growth to return in FY23 and beyond.
continuing executive KMP grew by 14% including the one-off
issue of long-term retention options.
Environment, Social, Governance (ESG)
Governance
We now have an independent non-executive Chair of the
Board following our founder, Adrian Di Marco’s retirement
from the Board in June 2022, and we have a majority
of independent non-executive directors with all Board
committees being chaired by independent non-executive
directors.
Environment
TechnologyOne is committed to its ESG obligations, beyond
just regulatory requirements. TechnologyOne continues
its Carbon Neutral status, and this year is our second-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.
Social – 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, The Smith Family,
The Princes Trust, KidsCan, 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 commitment
of more than $2m each year. The Foundation will continue to
shape the DNA of our company and staff.
Please refer to the TechnologyOne website for our full
Sustainability Report and Corporate Governance Statement:
https://www.technologyonecorp.com/company/investors/
corporate-governance
Outlook for FY 2023
COVID, natural disasters and global issues have all interrupted
the supply of goods leading to significant and sustained price
increases. TechnologyOne has seen difficult and challenging
economic environments many times in the past 35 years.
We have continued to grow strongly during these times, and
we will continue to do so. As we have seen over the last few
years, the enterprise software market continues to remain
resilient, with our mission critical products providing our
customers the opportunity to reduce their costs, streamline
their business and improve their efficiencies in a challenging
economic time. Our customers report savings of 30%+ by
utilising our global SaaS ERP.
The TechnologyOne global SaaS ERP solution, CiA, is driving
our continuing success. As a result, TechnologyOne’s sales
pipeline of opportunities for 2023 is strong and this positions
us for continuing strong profit growth in FY23.
The company will provide further guidance at both the Annual
General Meeting and with the FY23 first half results.
Afterword
We would like to recognise the company’s founder, Adrian Di
Marco, who 35 years after founding TechnologyOne retired
from the company on 30 June 2022. Adrian has built an
incredible market leading software business through his vision,
energy and commitment to greatness. He leaves the business
in excellent shape for future growth, and everyone associated
with the business wishes him well in his future endeavours.
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
both like to thank every member of the TechnologyOne team
across the globe for their continued efforts and passion to
deliver world leading software solutions for our customers and
users. FY22 has been another amazing year for the company
and that is thanks to all of you.
We would also like to thank you, our shareholders, for your
continuing support.
Pat O’Sullivan
Edward Chung
Chair
Chief Executive Officer
23
Transforming business, making life simpleLetter to shareholders Our
strategy.
25
Transforming business, making life simpleOur Strategy Our
purpose
and
mission
Our passion is to solve
the complex.
Our mission is to better our
community, from its citizens to
students, by leveraging our team’s
innovation, drive, and determination.
Our vision is to build and deliver
truly great products and services,
transforming business and making life
simple.
Our core beliefs allow us to deliver on
this vision.
Over more than three decades,
TechnologyOne’s clear vision,
purpose, mission, beliefs, people,
and supporting initiatives have
underpinned our growth and 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 35
years ago and continues to define the
way we operate.
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27
Transforming business, making life simpleOur Strategy Our 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 35 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 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.
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 Financial
Services and Corporates. 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 challenges, legislation
and emerging trends. This deep industry engagement ensures
our preconfigured solutions continue to lead the market.
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 35 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, CiA. 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.
29
Transforming business, making life simpleOur Strategy An enterprise solution
31
Transforming business, making life simpleGlobal SaaS ERP SolutionGlobal SaaS ERP solution. TechnologyOne’s global SaaS ERP
solution delivers the full functionality
of an 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 $92.2 million investment in R&D in
FY22.
Our solution leads the market
because we own, build, run 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 16 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,
2022B, brings the simplicity of the
future to your business today, 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 to deliver
personalised service at scale.
Our approach to SaaS ERP is a key part
of TechnologyOne’s ongoing success,
with SaaS revenue now representing 59
per cent of our total revenue. In FY22,
we gained approximately 137 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, 2022B, continues to deliver
further economies of scale and
enhanced security. We are now working
on the next generation of our SaaS
solution, 2023A. 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.
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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.
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ENTERPRISE CASH RECEIPTINGECRTrends over the last year105012453678OtherTransforming business, making life simpleGlobal SaaS ERP Solution Realising 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
CiA, 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 two 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
We now have over 800
large-scale enterprise
organisations, with millions
of users, leveraging our
fourth generation SaaS
ERP, CiA, for mission critical
activities for themselves
and their customers. This
makes TechnologyOne the
largest single instance SaaS
ERP offering in Australia.
resources on developing and delivering
our products, new enhancements and
innovations on a single platform.
Taking SaaS to the next
level
Solution as a Service (SaaS Plus) has
all our customers’ ERP needs in one
place. We are leveraging our unique
domain experience of 35 years and our
unwavering commitment to our industry
by taking complete responsibility to
deliver outcomes with our best-in-class
SaaS ERP.
With SaaS Plus, TechnologyOne takes
full responsibility for the complete
outcome of the solution experience, not
just the software.
This innovation sets a new industry
benchmark and redefines the
relationship between technology
providers and customers, removing
the need for expensive third-party
consulting practices and complex
implementations. SaaS Plus will change
the world of ERP solutions and move us
forward into the future.
CiA Live
Taking customers from one generation
to the next, CiA Live is the simple
solution to upgrade business processes
from our previous Ci platform to our
brand new CiA platform.
When signing up for CiA Live customers
don’t need to worry about the upgrade
process – TechnologyOne has it
covered.
App Builder
A simple no-code toolset that further
extends the TechnologyOne software
and helps solve our customers’ business
problems quickly and easily.
App Builder allows users to create
applications inside our TechnologyOne
ecosystem, with no code and little
training, empowering customers
to further personalise the software
solutions for their business in real-time.
Each one of our customers is different,
while operating in similar markets, no
challenge or opportunity is the same.
App Builder exists as a more intimate
and unique way for TechnologyOne
to solve specific challenges for each
individual customer.
Any device, anywhere, at
any time
Our award-winning CiA 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 CiA, 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. The pandemic has carved out an
increased desire for a hybrid working
model, this ‘new normal’ validates
CiA’s any device, anywhere, anytime
capability and enables the functionality
that hybrid working demands and
employees have come to expect. 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)
TechnologyOne’s Digital Experience
Platform (DXP) extends the power of
enterprise software for our customers.
Enabling organisations to digitally
transform with our simple, intuitive
interface that offers a streamlined
customer-centric experience.
Leveraging next generation
technologies such as Artificial
Intelligence (AI) and machine learning
(ML) DXP allows open, accessible, and
convenient engagements, from anyone,
in any way.
It is a smart, frictionless platform that
provides tailor made experiences for
customer service, content creation, and
communities. Reinvent the customer
journey with a simple interface that
takes the guess work out of customer
service and experience the true power
of an interconnected system with a
centralised location for name records,
content, and more.
TechnologyOne has released our Local
Government DXP, and is continuing
to work on the development of our
Student DXP.
Our commitment to
innovation
In FY22, we invested $92.2 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.
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
Standard
TechnologyOne
Infor
Workday
SAP
IRAP (PROTECTED)
IRAP (OFFICIAL)
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)
faster than ever before. Insights also
strengthens our support processes by
connecting our development teams
directly with customers.
Customers receive the benefit of these
certifications, along with ongoing
security and privacy enhancements, at
no extra charge.
Most trusted SaaS ERP
provider
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.
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
and privacy. As part of this program
we develop and maintain our security
framework, which passes the most
stringent external verification, testing
and scrutiny.
35
Transforming business, making life simpleGlobal SaaS ERP Solution Our
growth.
Global 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 over 800 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.
On track to surpass
$500m+ ARR by FY26
TechnologyOne is focused and we are
clearly on track to surpass 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
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.
We are also leveraging our unique
domain experience and unwavering
commitment to our industries with SaaS
Plus. Taking complete responsibility to
deliver outcomes with our best-in-class
SaaS ERP.
With SaaS Plus, TechnologyOne takes
full responsibility for the complete
outcome of the solution experience, not
just the software.
1. Driving the growth of
our customer base
As an established company with
over 35 years of success, we benefit
from the investment of more than
1,300+ customers. We draw on these
relationships and deep industry
knowledge to power our success and
bring new customers to TechnologyOne.
We focus and specialise on six large
vertical markets, which enables us to
build deep industry knowledge and
develop preconfigured solutions that
quickly meet our customers’ needs.
There is a 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.
Our end of on-premise strategy aims
to end 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.
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
of 16 products 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’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 35 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
CiA, customers can enjoy the same
software functionality across any device,
anywhere, any time.
Through DXP, we are extending the
and delivers all aspects of our
enterprise solution – including
implementation. The single yearly
fee contains all the costs required to
implement, run, support, and upgrade
our solutions.
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.
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.
Our acquisition of Scientia in FY21
has solidified our dominance in the
Higher Education market, with 75% of
institutions in Australia and 50% in the
UK supported by its solution.
The acquisition supports our strategy
to deliver a student-centric, end-to-
end SaaS ERP solution for the Higher
Education sector.
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 FY22, we built on our breakeven
status, with SaaS ARR of $17.5m, up
95%.
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
and go live of our Student Management
product, which opens up significant
opportunities for growth in Higher
Education.
We also integrated 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),
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
customers needs.
Soon we will explore opportunities in
new geographies, including the US.
5. Solution as a Service
(SaaS+)
It’s time to take SaaS to the next level.
All of our customers’ ERP needs are in
one place with Solution as a Service
(SaaS Plus).
We are leveraging our unique
domain experience of 35 years and
our unwavering commitment to
our industries by taking complete
responsibility to deliver outcomes with
our best-in-class SaaS ERP.
With SaaS Plus, we take full
responsibility for the complete outcome
of the solution experience, not just the
software. Through one code-line, one
plan, one price, and one point of call.
It’s an all-inclusive offering specifically
tailored for our customers’ industries
39
Transforming business, making life simpleOur Growth Our
operations.
41
Transforming business, making life simpleOur Operations Stuart
MacDonald
Chief Operating Officer
In the TechnologyOne Way, our team
had ambitious plans and expectations
for FY22 and once again, it’s due to the
Power of One that we delivered.
FY22 saw the culmination of years of
hard work across the business. Each
department not only delivered on its
goal, but most importantly, worked
together to deliver collective success.
To continue to drive a hard-working,
collaborative culture, we launched
our defined purpose and mission - to
solve the complex and to better our
community, from its citizens to students,
by leveraging our team’s innovation,
drive, and determination to our people.
Our purpose and mission are
accompanied by five reinvigorated
values that allow us to grow, nurture,
and preserve a workplace culture that
inspires and motivates our teams.
We once again achieved record ARR of
$320.7 million and our success validates
that our team are living by our mission,
purpose, and values, while executing
our impressive strategy.
SaaS continues to power forward with
the execution of our end of on-premise
strategy, a commitment to move all
remaining on-premise customers to
SaaS by 2024. All team members are
also laser focused on migrating our
customers to our fourth generation ERP,
CiA.
Unstoppable simplicity
SaaS powers our growth with CiA now
consistent with Ci, after five years of
hard work. Our fourth generation ERP,
CiA is an evolution of our Connected
Intelligence (Ci) product that some
of Australia’s largest corporations,
government departments, universities,
and utility providers use every day.
Set up for all future innovation, and
together with SaaS, CiA will enable a
significant growth era, allowing us to
focus our resources on a single platform
and delivery method to drive innovation
forward.
Customers can experience our industry-
leading software, by always being
on the latest release, with the latest
features and functionality.
Simplicity in the hands of
customers
The early adopters stage of our Local
Government Digital Experience Platform
(LG DXP) was completed this financial
year with glowing reviews from City of
Canning, Moreton Bay Regional Council,
and City of South Perth. Moving into
FY23 we are now able to offer all local
government the opportunity to sign onto
experience the benefits of LG DXP.
We are also moving into the research
phase of our Student DXP.
Delivering the Power of
One, globally
FY22 saw another strong year for the
UK as we grow and cement ourselves
in our two industries, Local Government
and Higher Education.
Long-term TechnologyOne customer,
and our first UK customer, University
of Lincoln, went live with our Student
Management product. It’s due to
the power of our SaaS ERP that our
customers continue to invest in our
solutions and grow with us.
Our acquisition of Scientia in late FY21
bolstered the strength of our Higher
Education solution. The acquisition
also saw our UK-based team grow
significantly, culminating in a new office
in Paddington, for our 120 people.
As I sit back and look at over 35 years’
worth of foundational work the team
has completed, TechnologyOne is a
SaaS company through and through,
and our teams have been able to do this
by looking at, and delivering, what the
market expected from us.
Looking into FY23 the work our
people have been undertaking in
the background on Solution as a
Service (SaaS+) sets us up for our next
generation of software – DXP, CiA, App
Builder, and more.
The way our customers will take
advantage of these amazing new tools
and speeds that the market has never
seen before are all underpinned by the
Power of One.
43
Transforming business, making life simpleOur Operations Paul
Jobbins
Chief Financial Officer
Our mission is to drive trust, alignment
and transparency across the business.
We do this through empowering
and supporting our team members,
providing frictionless systems and
processes and encouraging knowledge
sharing.
Now that TechnologyOne has moved
away from a perpetual licence model to
a business model based on recurring
revenue, it’s vital we have the right
systems, people and processes in place
that will allow us to scale.
Supporting our business
and customers
In FY22, we focused on cementing our
structure, setting ourselves up for scale,
and the continuation of new systems
implementation. This allowed us to
support the business for future growth
and scalability. We are well structured
to provide detailed forecasts, planning
and analysis to support logical business
decisions and winning new business.
Aligning with one of TechnologyOne’s
core values, customers are our true
north, in FY22 the corporate services
team established new customer contract
templates to simplify business with our
customers. A new contract database
has also been developed to help with
a unified approach and view for all
customer contracts. This has been
supported by the implementation of our
new revenue processing system.
The corporate services team also
continued to support the UK business,
delivering additional finance and legal
business support to assist with the
integration of the FY21 acquisition of
Scientia.
People
We strongly believe that our people are
our power. To help support the business
through our next critical phase of
growth, the finance team went through a
strategic restructuring to ensure support
for future growth and scalability. This
helped strengthen our alignment with
other parts of the business.
We also worked hard to establish and
roll-out a new Employee Share Plan
(ESP), spawned from a Hack Day idea.
The TechnologyOne ESP is an opt-in
scheme established to help foster a
culture of shared ownership in our great
company and create an opportunity for
team members to purchase shares in a
simple way.
Underpinning innovation
and growth
Moving into FY23 we have appointed
Alison Chalmer as our new Executive
Vice President – People & Culture
and Corporate Services, to help us
reach new heights and hone our
focus. Alison brings with her extensive
experience and expertise in the utilities,
retail, financial services, and transport
industries.
Alison will be leading the Corporate
Services team while they continue
to support the business to deliver
exciting innovations such as Solution
as a Service (SaaS Plus), DXP, CiA, App
Builder, and more. These innovations
will underpin growth with new and
existing customers, while driving
improvements in internal systems and
processes.
We have set big targets to hit in FY23
and beyond. These targets require the
right people, processes and systems to
be embedded across our business. We
look forward to the challenges ahead
and overcoming them with passion and
expertise.
Leo
Hanna
Executive Vice President,
United Kingdom
We are also continuing to support our
on-premise customers transition to
SaaS and have seen momentum build
throughout FY22.
The UK had another strong year,
achieving profit before tax of $2.4m,
with our team continuing to execute our
value proposition and strategies in our
two industries, Local Government and
Higher Education.
FY22 resulted in seven new customers,
including some of the biggest local
authorities within the UK.
Higher Education
strategy and results
Higher Education has remained a focus
for the team throughout the year as
we’ve continued to work with 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.
Consulting with these two non-executive
advisory roles remains a key part of our
UK Higher Education strategy.
FY22 saw the University of Lincoln go
live with our state-of-the-art Student
Management system. This is a milestone
for our internationally trusted system, as
the University of Lincoln is the first UK
institution using Student Management.
Our customers Dundee University and
Fermangh & Omagh District Council also
went live with our Human Resources &
Payroll product.
Now a true SaaS ERP OneEducation
customer, University of Lincoln joins over
100 of our Higher Education customers
benefiting from TechnologyOne
products across the UK.
The integration of our first international
acquisition, Scientia, has also been
a focus throughout FY22. Having
bolstered the strength of OneEducation
and accelerated our growth in the UK,
the Scientia product has undergone a
rebrand to become Timetabling and
Scheduling, to seamlessly integrate with
OneEducation.
Aligning with a TechnologyOne key
value, ‘people are our power’ I’m also
pleased to announce that our team
continues to grow and be welcomed
into our new UK-based office, located
centrally in Paddington, London.
Continuing momentum in
FY23
As we lean into FY23, we continue to
invest in our people with an aim to build
out our management team.
45
Transforming business, making life simpleOur Operations Ben
Malpass
Executive Vice President, Sales
David
Cope
Executive Vice President, Consulting
FY22 saw an outstanding result for
our TechnologyOne sales team and
validated our customer engagement
and partnership strategies across our
key industries. The continued focus
on partnering with our customers,
enabling transitions to our SaaS
platform, expanding product usage to
future proof digital strategies, and new
customer partnerships has enabled the
sales teams to build deeper strategic
alignment within our industries and
regions.
This is demonstrated by the transition of
an additional 137 customers to our SaaS
platform throughout FY22.
Industry research that uncovered a
$252 billion benefit potential and the
investment we have made providing the
world’s most secure and trusted SaaS
ERP platform has resonated strongly
with our customers. This has had, and
will continue to have, a significantly
positive impact on the value we provide
into FY23 and beyond.
The FY21 acquisition of Scientia enabled
the expansion of the value we provide
to higher education customers. We have
successfully integrated Scientia into
our sales business and leverage the
value that it provides customers across
ANZ and the UK. There is a significant
opportunity to continue to leverage
this within the UK and supporting our
education industry ERP expansion
opportunities.
Execution of our strategy
Our sales teams demonstrated an ability
to execute our strategy of enhancing,
retaining, and acquiring customers. This
was underpinned with transparency,
alignment, and trust to enhance our
customers’ experience and interactions.
The focus on new customer partnership
and working with existing customers to
realise the value of our industry aligned
SaaS ERP opportunity, resulted in some
great new customers becoming part
of the TechnologyOne community.
Our SaaS transition initiatives also
highlighted that our teams are able to
work with our customers to identify
additional value for products and
modules which continued to increase
our average product usage.
Our customers are also investing in
the transition from Ci to CiA and are
leveraging the opportunity to enhance
the value of the TechnologyOne
offering, working with our sales team to
build out more strategic and long-term
roadmaps. The success of this strategy
was achieved by working closely with
our Product General Managers and
industry aligned customers success
teams to enhance the value our
customers derive from our solutions,
resulting in strong customer retention.
It was extremely satisfying to see the
way the sales teams leveraged our
‘We’re Stronger as One’ company
value to align with our consulting,
product, SaaS, and broader operations
teams to ensure we unlock the value
of our ‘Power of One’ promise for our
customers.
We welcomed approximately 40 new
customers to TechnologyOne in FY22.
It was encouraging to see that our new
customers ratified and invested in our
CiA industry aligned ERP capabilities,
demonstrating the success of our
industry focused solutions strategy and
dominance in our key markets.
The success we have experienced
this financial year has demonstrated
that we have a strong strategy in place
and a motivated sales team that are
aligned and disciplined with a customer
focus, and the ability to deliver across
APAC and extend this success to
the UK. Our industry focused sales
team, global SaaS ERP offering, CiA
platform adoption, and ability to deliver
value quickly by leveraging SaaS Plus
continues to differentiate us in the
market.
I am extremely proud of what our
entire sales team achieved in FY22.
Our continued investment in sales
development and management via
our career frameworks, operational
effectiveness, and the opportunities we
have created for our teams to progress,
from our sales graduates to senior
management, has seen a significant
number of internal promotions and
favourable results in continued success
and focus.
In FY22 the consulting team continued
to align with all business areas to ensure
a deep market focus and commitment
that differentiates us from competitors.
As a result of this alignment, we have
seen growth in revenue (up 12.6%)
and Employee Net Promotor Score
(eNPS – up 30 points), all key metrics
highlighting the overall success of the
team.
Overall consulting delivered 104
successful go-lives in FY22, and the
number of customers with Application
Managed Services (AMS) programs
has grown to 327, demonstrating the
continued success of the AMS business.
We have also seen significant success
and growth within consulting in the UK.
In FY22 we onboarded seven new UK-
based consultants, integrated a further
seven consultants from the Scientia
acquisition, and had fantastic success
with the first Student Management go-
live at the University of Lincoln.
The consulting success in the UK has
underpinned the UK overall profitability,
and ensured we are set up to support
continued UK expansion and growth.
Investing in our people
Throughout the year we have greatly
increased the number of staff in the
AMS area, which has enabled us to
improve the value we offer customers
and drive further customer intimacy
through our programs business.
The AMS team has seen continued
success with annual contract revenue in
our AMS programs continuing to grow
strongly year-on-year, and demand
for program uplifts (additional hours
requested above and beyond the
base program) remains strong at ~30%
annualised.
In FY22, and moving forward, consulting
has a strong focus on our Compelling
Customer Experience (CCE) and Net
Promoter Score (NPS).
We strive to deliver truly
transformational software and
experiences to our customers, that make
life simple and a key part of achieving
this is seeking genuine customer
feedback through NPS.
NPS is measured through all facets of
the consulting business, at a company
level annually, at an AMS level twice per
year, and at key milestones in each and
every project that is undertaken. Each
piece of feedback customers provide
is reviewed and action plans are put in
place to address all areas.
To address this feedback our CCE
program focuses on providing our
people with ongoing development and
support, ensuring we continue to live
our value that ‘Customers are our True
North’.
To deliver on this we must ensure we
have the right people and resources in
place, and to this end we hired over 50
new consultants in FY22. Another key
TechnologyOne value is ‘People are
our Power’ and along with recruitment,
we continue to invest in our people
through the Career Framework program,
employee benefits, and other internal
initiatives.
Looking forward with CiA
and SaaS+
FY22 was the culmination of five years
of work for many in the business with
the launch of CiA Live and Solution as a
Service (SaaS Plus).
With SaaS Plus TechnologyOne takes
responsibility for the outcome of
the solution experience, not just the
software. In FY22 consulting played
a pivotal role in defining the future
implementation methodology with SaaS
Plus and moving into FY23 the team
will continue to refine and enhance the
methodology to drive down the time to
value, reduce risk, and solidify outcomes
for our customers.
CiA Live enables our customers to easily
transition business processes from our
previous Ci platform to our brand new
CiA platform. We have entered the
execution phase for CiA Live, leveraging
our Migration Central tool to ensure we
are able to transition our customers as
effectively and efficiently as possible.
47
Transforming business, making life simpleOur Operations Richard
Nicol
Executive Vice President, Products
Daniel
Sultana
Executive Vice President, SaaS Platform
and Enterprise Asset Management
products into the UK market.
Looking forward to FY23, the products
team are shifting focus from CiA
completion to providing more customer
requested enhancements and
functionality, with the aim of improving
the use of our software and creating a
maximum loveable product.
Our products team is committed to
delivering products our customers love
and that 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.
Over the past twelve months our team
have been innovating and investing
in products that help our customers
manage through generational changes,
using simplicity as our compass.
CiA innovations
We’ve been working on completing
and migrating our customers to CiA,
the next generation of SaaS ERP. Built
on a code base which is set up for
future innovation, CiA is highly scalable,
flexible, and will be our technology
platform for the next 10 years. It is also
the foundation for incredible innovations
including CiA Live, AppBuilder, and DXP.
To assist with the migration to CiA, one
of the key innovations delivered in
FY22 is the launch of Migration Central
– developed specifically to guide and
automate the migration of customers
from Ci to CiA as simply as possible.
Since our acquisition of Scientia in FY21
we have now integrated the Scientia
products into our OneEducation solution
and delivered our customers a seamless
experience across the solution by
making the now rebranded, Timetabling
and Scheduling, available on SaaS.
These innovations show our customers
just how powerful it is working
with a vendor who takes complete
responsibility for their enterprise
solution.
Celebrating success and
the future
FY22 saw our first customer go-live with
Student Mangement in the UK with the
University of Lincoln. The team also
had major achievements with the go-
live of our Human Resources & Payroll
product for customers such as Dundee
University and Fermangh & Omagh
District Council, with many more to
come. And we will continue to see more
success out of the UK with the launch
of our Enterprise Content Management
of our on-premise customers enjoy the
benefits of our full global SaaS ERP
value proposition.
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
achieve these numbers.
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.
Enhancing cyber security
standards
Over the year, we continued to
enhance our cyber security posture and
compliance standards of our platform to
reaffirm our position as the most trusted
SaaS provider.
TechnologyOne views cyber security
as a shared responsibility between
ourselves and our customers. Internally,
we’ve taken a whole of business
approach to enhancing and educating
all business units about the importance
of cyber security through various cyber
security week initiatives.
We have also released a number of
artifacts to help our customers in their
cyber security obligations, particularly
focusing on ransomware and cyber
threats.
The pathway to SaaS
In FY22, we continued to drive our
SaaS-first strategy forward by executing
our end of on-premise strategy, a
commitment to move all remaining on-
premise customers to SaaS by 2024.
We’ve seen an impressive uptake
from our customers this year, with 810
customers now on our SaaS platform –
an increase of 27% per cent since last
year. We are now in the final stages of
our end of on-premise strategy with
our focus moving to help the final 25%
49
Transforming business, making life simpleOur Operations Maree
Gallagher
Executive Vice President, People & Culture
Stuart
MacDonald
(Acting) Executive Vice President,
New Engineering
Our mantra at TechnologyOne has
always been to transform business
and make life simple. At our recent
35th birthday celebration our people
came together, and it was the perfect
opportunity to evolve our mantra to
clearly refresh and refine our mission,
purpose, vision, and values.
The refreshed and reinvigorated values
were unveiled to our people with a
digital culture book, this book also
included our purpose - to solve the
complex, and our mission - to better our
community, from its citizens to students,
by leveraging our team’s innovation,
drive, and determination to continue
our collaborative culture, FY22 also saw
our first ever Leadership Summit. The
Summit saw leaders across the business
come together to build trust, alignment,
and transparency. The growth of
our business must be backed by our
leaders, and their growth as leaders is
crucial to our success. The Leadership
Summit is an initiative that will be
continued into FY23.
Over in the UK we invested in our
new UK-based office space with a
new purpose-built fit out, ensuring we
provide our people with an environment
that is conducive to collaboration,
learning, and in-person collisions that
spark innovation. It was also a focus
to bring our new Timetabling and
Scheduling (Scientia) team members
together in one location.
Our people are our power
Our people are our greatest competitive
advantage, and we continue to amplify
and value this through investment in
their engagement, career paths, and
capabilities.
Despite the war on talent, great
resignation and the unprecedented
times of COVID-19, we continue to
attract talent in a competitive market.
That will continue to contribute to the
success of our company strategy and
have a positive impact on our culture,
with 296 new high performing team
members joining TechnologyOne in
FY22. We also continued to invest in
our Career Frameworks, engaging team
members at all levels of the business
on their career paths to ensure they’re
clear on what’s required to progress, be
it laterally, cross-functionally, or through
promotion.
Diversity and inclusion have 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 setting our business up for the
next phase of growth with SaaS Plus,
App Builder, DXP, and more.
Looking forward to FY23
For the seventh consecutive year
TechnologyOne was also recognised in
the Australian Business Awards as an
Employer of Choice for 2022.
I feel very privileged to have led the
People & Culture team as we have
continued to drive positive change
throughout TechnologyOne.
Looking forward into FY23, Alison
Chalmer has been appointed as the
new Executive Vice President – People
& Culture and Corporate Services, to
help us reach new heights and hone our
focus. Alison brings with her extensive
experience and expertise in the utilities,
retail, financial services, and transport
industries.
Alison will be leading the People &
Culture and Corporate Services team
while they enable and support the
business to achieve our strategic
objectives, continue to grow our people,
and retain our great culture.
Evolving DXP
FY22 saw stage one of our Local
Government Digital Experience Platform
(DXP) become generally available
for our three early adopters, City of
Canning, City of South Perth, and
Morton Bay Regional Council.
Following the success stories that
have come from our early adopters’
five customers have embraced our
Local Government DXP, proving council
communities desire to deliver an
engaging digital experience.
Development of stages two and three
of Local Government DXP has also
moved into the early adoption stage
which completes the first iteration of the
product. These stages will be available
for customers in FY23.
We also ramped up the engineering
of our Student DXP, completing the
technical research phase and now have
a good foundation of knowledge.
Looking forward, FY23 will see us
complete stage one of design and
manufacturing for Student DXP with
completion scheduled for the beginning
of FY24.
The last 12 months have been very
productive for our New Engineering
department, which 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.
51
Transforming business, making life simpleOur Operations Brock
Douglas
Executive Vice President, Scientia
and easily and being able to deliver
Timetabling and Scheduling modules
leveraging App Builder further validates
the App Builder strategy.
Looking forward to FY23 we will
continue delivering our native SaaS
solution for Timetabling and Scheduling
along with introducing customers to
the other TechnologyOne products that
make up our OneEducation solution.
FY22 marked a year since our
acquisition of Scientia and its
subsidiaries, and it’s exciting to see that
we’ve achieved our two-year integration
goal within the first year. The successful
integration saw the team achieve our
sales ambition and exceed profit and
synergy goals.
As part of the acquisition, we welcomed
over 100 new Scientia team members
from across the globe. These team
members have now been completely
integrated into their respective
departments within TechnologyOne.
We continue to immerse our heritage
Scientia team members in the
TechnologyOne values and culture
and have seen a pleasing lift in our
Employee Net Promoter Score (NPS) as
a result.
Another key part of the Scientia
integration throughout the year was
the product rebrand to Timetabling and
Scheduling. This rebrand allowed for a
closer alignment with TechnologyOne’s
OneEducation solution, further
supporting our strategic focus to deliver
the deepest functionality for higher
education and accelerate our growth
and competitive positioning.
The team delivered the Timetabling and
Scheduling solution on SaaS throughout
FY22 and have sold 16 SaaS based
solutions to our customers. University
College London – one of the top ten
universities in the world is one of our
customers now enjoying the benefits of
our SaaS ERP solution.
In our latest software release 2022B –
Simplicity Unleashed, we delivered our
first three native CiA modules, validating
how fast we’re able to get our SaaS
product into market through the use of
our latest App Builder functionality.
App Builder is a simple no-code toolset
to help solve business problems quickly
The
power
of one.
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.
53
Transforming business, making life simpleOur Operations Our
people.
The 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 three 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,
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 7,796 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 296
new team members who joined
TechnologyOne. Our market-leading
orientation and onboarding experience
enabled us to seamlessly welcome
our newest team members to the
TechnologyOne family.
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 emerge from
the pandemic, our focus has been on
ensuring we can maintain that flexibility,
and provide an environment conducive
to learning, collaboration and in-person
collisions that spark innovation, which is
at the heart of our culture.
To support this, we have continued to
invest in our physical offices, this year
opening a new offices in Paddington,
London and signing a number of lease
extensions on our offices in other
regions.
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 FY22, we refined and simplified our
values and relaunched them to all our
staff in our culture book with stores to
explain to new starters and to remind
long timers what makes TechnologyOne
special and how we make the
impossible possible.
We also rolled out a Career Framework
to the entire organisation, which
underpins our staff’s growth and
enables us to have robust succession
and promotions.
57
Transforming business, making life simpleOur People In order to continue to double in size every
five years we also launched our continuing
investment in our leaders through our
Leadership Summit which will grow our
leaders, teach the TechnologyOne Way,
and equip them to continue to lead our
teams.
During the year we also undertook
numerous wellbeing initiatives for our
people. We signed Stephanie Gilmore as
brand ambassador focused on physical and
mental wellbeing, and we have launched an
Employee Share Plan which provides one
free share for every two shares purchased
by our employees.
We kicked off our One Talks again, 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 continued 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.
Our Hack Day has been extended to be
a two-day event, which allow 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.
59
Transforming business, making life simpleOur People O U R V A L U ES
O U R V A L U ES
We’re
stronger
as one.
Customers
are our
true north.
O U R V A L U ES
People
are our
power.
O U R V A L U ES
Make the
impossible
possible.
O U R V A L U ES
Simplicity
is our
compass.
61
Transforming business, making life simpleOur People Industry
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 and 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 37.4 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
63
Transforming business, making life simpleOur People Wellness
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 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.
Sustainability
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 are proud to continue our Climate
Active carbon neutral certification
through offsetting our carbon footprint
with certified carbon credits generated
through an energy wind farm in India
which re-invests the funds back into the
community including training for local
youth and developing local healthcare
systems, clean water and sanitation.
TechnologyOne also retires credits
generated by the Oakvale Native
Forest Protection Project in NSW which
protects native forest from deforestation
and in turn protects the native fauna
(including the crucifix toad, planigale,
kultarr, native bees and wedge-tailed
eagles which make their home on the
property).
For more information see our
Sustainability Report on our website.
65
Transforming business, making life simpleOur People More than $2m global pledge in FY22
Our goal is to lift
500,000
children and their families out of poverty
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 total Pledge 1% equated to a more than $2 million
commitment by the company in FY22..
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
$726,910
profit contributed to
the TechnologyOne
Foundation to
give back to our
communities
$322,390
worth of product
discounts to NFPs
3,811 hours
of volunteering,
equating to
476 days
Delivered in house
work education
programs for The
Smith Family and St
James students
Over $71,000
raised by team
members
30
charities supported
worldwide
500
Solar Buddies
built
67
Transforming business, making life simpleOur PeopleCONTRIBUTIONCOMMUNITYWINNEr 2022 Our 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 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
72,000 children and families
in partnership with
Opportunity International Australia
500 lights
in partnership with SolarBuddy
30 students provided TAFE and
higher education scholarships
in partnership with The Salvation Army
Enrolled 181 new students for
a free quality education and
supported 60% of graduating
students on STEM pathways
in partnership with The School of St Jude
246,957 school children and community
members educated in eye health
in partnership with The Fred Hollows Foundation
Supporting 34 First Nations
students and working together to
help close the gap in educational
outcomes
in partnership with The Smith Family
7,500 hot meals prepared for
disadvantaged Kiwi children
in partnership with KidsCan
270 students have been
equipped to ensure they have an
equal chance at school
in partnership with St James Bursary Fund
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
72,000 children and their families to free
themselves from poverty.
Opportunity International 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.
69
Transforming business, making life simpleOur People Financial
statements.
71
Transforming business, making life simpleFinancial statements Directors’
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 2022.
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
Retired 30 June 2022.
Experience and expertise
causes.
Mr Di Marco has received extensive
recognition for his contribution and
pioneering work for the IT industry.
He retired as executive Chairman on
the 30 June 2022 and remains a major
shareholder of TechnologyOne.
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.
Mr Di Marco founded TechnologyOne in
1987, to undertake deep research to build
configurable ERP software based on new
and emerging technologies, that did not
require customisation at the code level. Mr
Di Marco has over 35 years’ experience
in the software industry. He has been
responsible for all operational aspects of
TechnologyOne, as well as the strategic
direction of the company.
Mr Di Marco has played a major role in
promoting the Australian IT industry 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 an active investor and
supporter of Venture Capital and start-ups
both here in Australia and overseas.
He has also been actively involved in
charitable organisations and is a past
Director of the Royal Children’s Hospital
Foundation Board. Having established
the TechnologyOne foundation, he has in
recent years also established the DiMarco
Family foundation to support children
Pat
O'Sullivan
CA, MAICD
Appointed 2 March 2021
Experience and expertise
Mr O’Sullivan is a Chartered Accountant and
has 40 years’ experience working 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 for six years
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. His previous ASX non-
executive director roles include Afterpay,
iiNet, iSelect, APN Outdoor, iSentia and
Marley Spoon.
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 seven
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 Chair.
Interests in shares and options
39,779 ordinary shares held in Technology
One Limited.
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.
Interests in shares and options
30,000 ordinary shares in Technology One
Limited held beneficially through the Anstey
Super Fund.
73
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
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 Fellow 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.
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 (ASX: A2B) and Bidcorp (JSE: BID).
Mr Rosenberg 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
Chair of Nomination & Governance
Committee and 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.
75
Transforming business, making life simpleFinancial statements Company
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 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.
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. Mr Ball 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 Mr Ball'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
Mr Ball has worked across a number of
industries including tourism and leisure,
gaming and wagering, arts and sports, and
state and local governments.
Mr Ball 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 and
member of Remuneration Committee.
Interests in shares and options
21,900 ordinary shares held in Technology
One Limited held beneficially through the
Noosa Hill Super Fund.
77
Transforming business, making life simpleFinancial statements Meetings 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 2022, and the numbers of meetings attended by each
Director were:
Dividends
Dividends paid to members during the financial year were
as follows:
Ordinary shares
2022
$’000
2021
$’000
Full meetings
of Directors
(Board)
Meetings of committees
Audit &
Risk
Nomination &
Governance
Remuneration
Final dividend for the year ended 30 September 2021 of
10.09 Cents (2020 - 9.41 Cents) per fully paid share paid in
December 2021 (2020 - December 2020)
A Di Marco*
R McLean
J Mactaggart
R Anstey
J Andrews
S Doyle
C Rosenberg
P Ball
P O’Sullivan
8(8)
10
9(10)
9(10)
10
10
9(10)
10
9(10)
-
-
-
-
4
4
-
4
4
-
-
-
1(1)
3
3
2(2)
-
-
-
1(1)
-
-
3
-
3
-
2(2)
*Mr Di Marco retired on 30 June 2022.
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:
• Technology One Business Analytics
• Technology One Corporate Performance Management
• Technology One DXP Local Government
• Technology One Enterprise Asset Management
• Technology One Enterprise Budgeting
• Technology One Enterprise Cash Receipting
• Technology One Enterprise Content Management
• Technology One Financials
• Technology One Human Resources and Payroll
• Technology One Performance Planning
• Technology One Property and Rating
• Technology One Spatial
• Technology One Strategic Asset Management
• Technology One Student Management
• Technology One Supply Chain Management
• Technology One Timetabling and Scheduling
60% franked (2020 - 60%) based on tax paid at 30%
32,454
30,225
Interim dividend for the year ended 30 September 2022 of
4.20 Cents (2021 - 3.82 Cents) per fully paid share paid in
June 2022 (2021 - June 2021)
60% franked (2021 - 60%) based on tax paid at 30%
13,673
12,279
Total dividends paid
46,127
42,504
Review of operations
Please refer to Letter to Shareholders on page 16.
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 22 November 2022, the Directors of Technology One Limited
declared a final and special dividend on ordinary shares in respect
of the 2022 financial year. The total amount of the dividend is
$41,455,316 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 16.
Indemnification and Insurance
of Officers
Insurance and indemnity arrangements concerning officers of the
Company were renewed or continued during the year ended 30
September 2022.
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.
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:
Ernst and Young:
Taxation advice and other
advisory services
2022
$
2021
$
197,241
170,131
Total remuneration
197,241
170,131
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 climate change
mitigation will require deep and permanent
greenhouse gas reductions as part of a
universal transformation from business,
government, and individuals collectively.
Climate change is both an environmental
and economic issue. We accept the science
of climate change and the Paris Agreement
which aims to limit global temperatures
well below 2°C above pre-industrial
temperatures, and are committed to reducing
our carbon emissions to the lowest amount
possible and offsetting remaining scope 1
to 3 greenhouse gas emission amounts to
maintain carbon neutrality. Given the growing
importance of the IT sector in achieving
global emission reductions, we see industry
public disclosures on climate-related risks
and opportunities as fundamental. We
acknowledge climate-related risks and
opportunities have the potential to impact
our operational and financial performance.
Therefore, TechnologyOne seeks to fulfil the
recommendations of the TCFD.
As part of our progress to date,
TechnologyOne has adopted an iterative
approach to implementing the TCFD
recommendations; to identify, measure,
manage, assure and report on climate-
related risks and opportunities.
Moving forward, we will continue to
assess how we quantify climate-related
risks and opportunities, how the Board
integrates climate-related considerations
into decision-making and strategy, and how
we engage with shareholders, customers,
team members, suppliers and other key
stakeholders.
Climate Governance
The TechnologyOne Board maintains
oversight of sustainability matters, translating
these into our strategy for long-term
value. 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.
Through our Risk Management Framework,
the Audit & Risk Committee oversees
TechnologyOne’s material enterprise-wide
risks and the integrity of our statutory
statements, including reviewing compliance
with applicable laws, regulations and
reporting standards. The Remuneration
Committee considers executive performance
on ESG issues when considering whether
malus should be applied to vesting
outcomes.
Climate Strategy
To further understand the strategic
implications of climate-related risks and
opportunities, we matured our assessment
of potential future scenarios to maximise the
positive impacts and minimise the negative
impacts on our business under three global
warming scenarios.
Under the 2°C scenario characterised by
strong ambitious action which is orderly
and gradual to meet climate goals, our
key risks include reputational and legal
risks associated with a lack of climate risk
disclosure and action, as well as financial
risks.
Under the 2°C scenario characterized by
late, disruptive, sudden and/or unanticipated
action which is disorderly but sufficient to
meet climate goals, our key risks also include
reputational and legal risks associated with a
lack of climate risk disclosure and action, as
well as financial risks.
Under the 4°C scenario characterised by
limited action to meet climate goals beyond
what has already been committed and
there is continued increase in emissions,
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 are
identified, managed, and incorporated into
our existing risk management processes.
TechnologyOne takes actions and
procedures that seek to prevent and reduce
climate-related risks, notably our goal is to
reduce our greenhouse gas (GHG) emissions
to the lowest amount possible and to offset
remaining amounts to maintain carbon
neutrality.
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
During the reporting period, TechnologyOne
conducted a GHG assessment in accordance
with the GHG Protocol: A Corporate
Accounting and Reporting Standard and
Corporate Value Chain.
TechnologyOne’s total global emissions for
FY22 amounted to 5,870 tonnes of carbon
dioxide equivalent, where the total emissions
79
Transforming business, making life simpleFinancial statements linked to our Australian operations amounted
to 4,989 tonnes. Scope 3 emissions for third-
party goods and services continue to be the
key contributor, followed by utilities outside
of purchased electricity.
We aim to use any arising opportunities
to reduce our emissions. TechnologyOne
is proud to say that our global operations
are now carbon neutral, and our Australian
operations have been carbon neutral for the
past three consecutive years.
Refer to our 2022 Sustainability Report for
further TCFD related information.
SHARE OPTIONS
Unissued shares
As at the date of this report, there were
5,485,153 unissued ordinary shares under
options (5,485,153 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 1,392,572
fully paid ordinary shares in Technology One
Limited at a weighted average exercise price
of $4.25. Refer to note 34 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.
Pat O’Sullivan
Chair
Brisbane
22 November 2022
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 (the
Report) for the year ended 30 September
2022.
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 Executive Key
Management Personnel (KMP) financial
rewards with shareholder interests and
achievement of 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
letter provides:
• A summary of incentive outcomes and
alignment to Company performance
• Executive and Director Remuneration
changes
• Enhancement of disclosures.
Summary of incentive outcomes and
alignment to Company performance
The Company delivered exceptional results
in the year:
•
•
•
•
SaaS ARR growth of 43%.
UK achieving profit of $2.4m, up 100%,
including Scientia.
Net profit after tax growth of 22%.
Successful integration of the operations
of Scientia which we acquired in late
2021.
We are on track to surpass $500m Annual
Recurring Revenue (ARR) by FY26.
Executive remuneration continues to be
clearly aligned with shareholder value
creation:
•
Total Continuing Executive KMP
remuneration, grew by 8% year on year
(excluding Retention LTIs, see below).
•
•
•
•
•
Total Continuing Executive KMP
remuneration, grew by 14% year on year
(including Retention LTIs).
This compares to the Company’s 15%
growth in statutory net profit before tax
(NPBT).
Short Term Incentive (STI) outcomes
across our Continuing Executive
KMP was up 14% in line with growth
in Executive NPBT of 14%. Executive
NPBT has always been the basis for STI
calculation.
Deferred STI earned was up 14% in line
with growth in statutory NPBT of 15%.
Our Long-Term Incentive (LTI) plan,
based on earnings per share (EPS)
growth and total shareholder return
(TSR) relative to technology companies,
resulted in 97% 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.
Retention LTI were granted in FY22 to ensure
the retention of high performing technology
industry executives during a critical phase of
growth and to ensure smooth transition from a
founder-led company.
In response to feedback, calculations for the
EPS growth performance hurdle for long-term
incentives are now calculated to two decimal
places.
Executive and Director Remuneration
changes
As announced on 23 February 2022, Mr
Adrian Di Marco stepped down as Executive
Chair on 30 June 2022. Mr Pat O’Sullivan
was appointed as independent non-executive
Chair from 30 June 2022.
Executive KMP remuneration – Change
in Leadership and Global Skills
Shortage
Through FY22 there has been a convergence
of a number of factors impacting
TechnologyOne which has resulted in us
granting retention LTIs in the form of options
for Executive KMP.
The founder and long-time leader of
TechnologyOne, most recently as Executive
Chair but for many years as CEO, Adrian Di
Marco, retired from the Company in June
2022. Adrian had been the driving force
behind the Company’s successful strategy
and growth for many years. He has built
a strong board of directors and executive
leadership team over the last thirty-five years,
including appointing Edward Chung as CEO
in 2017.
attract and retain executives with enterprise
SaaS experience and skills which left us
exposed to the risk of losing key executives.
As has been widely reported in the financial
press, there is a huge skills shortage in
Australia as the technology industry is facing
unprecedent demand for staff. We had
Executive KMP head-hunted aggressively
around the time of Adrian’s notification of his
planned retirement.
We compete on a global level for executive
talent and it is very difficult to attract
executives with Enterprise SaaS experience
and skills, with the ability to be hands on and
deliver against our ambitious goals, and who
align to and drive our unique culture.
In order to put us in the best possible position
to retain the key senior talent in the Company,
the Board took the decision to approve a
single grant of long-dated Retention LTIs
to Executive KMP in FY22, to ensure the
retention of our high performing executives
during this critical phase of growth, and to
ensure smooth transition from a founder-led
company. This is not an annual grant.
Prior to approving the Retention LTI’s, the
Board conducted independent benchmarking
to ensure overall Executive KMP remuneration
packages are appropriate when compared
to our peers. The review confirmed that
TechnologyOne Executives’ remuneration is
far more sensitive to performance, having the
greatest percentage of their remuneration at
risk and aligned with company performance.
and, after including the retention LTIs, is
appropriate and reasonable when compared
to our peers.
After considering alternatives such as
changing fixed remuneration or short-
term incentives, the grant of long-term
retention options was the most aligned with
shareholders and the most appropriate
mechanism for this situation. It has a
temporary expense impact, is non-cash, only
rewards executives if shareholders benefit as
well, and the retention and exercise periods
are aligned with the Company’s SaaS strategy
and target period. In addition, retention
options are common within the technology
industry and widely accepted market practice.
The options will vest in November 2026
subject to continuous employment and
malus provisions. They lapse and there is no
prorating if executives leave before November
2026. They have an implicit performance
hurdle, with share price appreciation required
for the instruments to have realisable value.
The higher the share price, the higher the
value of the options – aligning executives with
shareholder returns. No dividends will be paid
on options unless they are exercised. Further
details are described in section 4.5.
Adrian’s departure was at a time when
domestically and globally it is very hard to
There has been no other change to the
Executive KMP remuneration framework.
Fixed base salary increases were limited
to 1.5%, including statuary increase for
superannuation. Short-term incentive and
deferred STIs increased in line with Executive
net profit before tax.
Directors fees
In accordance with our policy of independent
benchmarking every three years, the Board
intends to increase Director fees for 2023,
subject to shareholders resolving to increase
the fee pool to $2.0m at the 2022 AGM.
The increases reflect the need for a market
aligned independent non-executive chair
fee, additional NED workloads arising from
growth, ability to attract and retain high
calibre directors, and the continuous need to
ensure market aligned fees for board renewal.
Further details are described in section 9.
Enhancement of Disclosures - controls
to mitigate inappropriate actions that
could increase STIs
We have included disclosure of our long-
standing effective controls that mitigate
inappropriate actions that could increase
STIs (refer section 4.2). The Company has
internal controls, external audit, internal audit
and practice management reviews. Specific
internal controls include strict pricing and
discounting policies and processes, selling
only solutions into 6 specific markets, robust
approval processes for contractual terms
that are non-standard or considered high
risk, active management of outstanding
debtors, malus provisions for deferred STIs
and clawback provisions for amounts retained
from STI payments.
Afterword
TechnologyOne remains focused on
delivering sustainable long-term growth and
we believe that our remuneration policies
position us well to continue providing our
shareholders with strong returns via effective
executive attraction, retention and focus on
performance, with NED fees aligned to market
for effective company governance.
We welcome the ongoing engagement with
our shareholders and their proxy advisors
as we continue to evolve our remuneration
framework to support sustainable long-term
growth and returns.
Jane Andrews
Chair, Remuneration Committee
Brisbane
22 November 2022
8181
Financial statementsTransforming business, making life simpleTransforming business, making life simple
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
Non-executive Directors
Sharon Doyle
Independent Director
Audit and Risk Committee
Nomination and Governance Committee
Clifford Rosenberg
Independent Director
Status
Full year
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. Service agreements for the Executive KMP
9. Non-executive Director fees
10. Statutory Remuneration
11. Additional statutory disclosures
About this report
1.1
Basis for preparation of FY22
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).
Nomination and Governance Committee Chair
from 14 February 2022
Full year
Part year
Remuneration Committee
Independent Director
Audit and Risk Committee Chair
Remuneration Committee (from 15 August
2022)
Full year
Part year
Peter Ball
Executive Director
Adrian Di Marco
Executive Chair (Retired 30 June 2022)
Chief Strategy and Innovation Officer (Retired
30 June 2022)
Part year
Major shareholder
Executive KMP
Edward Chung
Chief Executive Officer
Stuart MacDonald
Chief Operating Officer
Paul Jobbins
Chief Financial Officer
Full year
Full year
Full year
Remuneration governance
The Remuneration Committee (the Committee) is responsible for
developing the remuneration framework for TechnologyOne KMPs
and making recommendations related to KMP’s 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.
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
sustainable 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 and global 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 Company 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
LTIs linked to long-term strategy, targets, and shareholder wealth
creation
Retention LTI grants to ensure the retention of high performing
technology industry executives during a critical phase of growth
and to ensure smooth transition from a founder-led company.
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 secures long-term
success and shareholder wealth.
TechnologyOne Executives are exposed to the long-term outcomes of
the business through the Deferred STI, Retention LTIs 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
This report has been audited.
The key responsibilities of the Committee include:
Fixed remuneration Short-term incentive (STI)
Deferred Short-term incentive (STI)
Long-term incentive (LTI)
Retention Long-Term Incentive
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 identifies each KMP, their position and term as KMP.
•
•
Advising the Board on TechnologyOne’s policy for KMP’s
remuneration
Making recommendations to the Board on the remuneration
arrangements for KMP to ensure they are aligned with
TechnologyOne’s vision and are set competitively to the market
Nature
Base salary plus
superannuation.
Defined as payments
contingent on
a one year performance
period.
An additional 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.
Non-executive Directors
Pat O’ Sullivan
Ron McLean
Independent Non-Executive Chair (from 30
June 2022)
Deputy Chair and Lead Independent Director
(to 30 June 2022)
Audit & Risk Committee (to 15 August 2022)
Remuneration Committee (from 14 February
2022 to 15 August 2022
Independent Director
Remuneration Committee (to 14 February
2022)
John Mactaggart
Non-independent Director
Richard Anstey
Major shareholder
Independent Director
Status
Part year
Full year
Part year
Full year
Full year
Nomination and Governance Committee Chair
to 14 February 2022
Part year
Dr Jane Andrews
Independent Director
Remuneration Committee Chair
Audit and Risk Committee
Nomination and Governance Committee
Full year
•
Approving KMP terms of employment
In making recommendations to the Board, the Committee reviews the
appropriateness of the nature and amount of remuneration to KMP 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 considers whether there are any irregularities or
other factors (including ESG matters) that would affect the payment
or vesting of that award. This is a formal agenda item for the
Remuneration Committee and it is conducted without the executives
present.
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 by
the external advisor.
Executive Remuneration at
TechnologyOne- strategy,
principles, and target mix
3.1
Our remuneration strategy and principles
Defined as payments contingent on
service over more than one year.
Options subject to meeting
continuous service condition until
November 2026. They have an
implicit performance hurdle, with
share price appreciation required
for the instruments to have
realisable value.
Ensures retention of key executives
during critical growth phase
through to November 2026 and
the transition from a founder led
company.
N/A
Options vest if Executive remains in
service until November 2026. No
prorating if Executives leave before
November 2026.
Subject to a Malus Provision that
there must be no irregularities or
other factors that would affect the
vesting of the award.
Form
Purpose
Cash
Cash
Cash
Equity
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
N/A
Performance
and service
period
Salary and
superannuation
prorated with
service.
Percentage of applicable
Executive Net Profit Before Tax
(NPBT).
Annual.
The STI is subject to a Malus
Provision and claw back.
•
•
Relative TSR (25%)
EPS growth (75%)
Refer to section 4.4 below
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.
Percentage of STI awarded.
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
On termination, any accrued and
deferred STI is forfeited..
1ARR is not an IFRS measure and is unaudited, it represents future contracted annual revenue at year end.
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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).
Table 1. Target CEO remuneration mix
(start of contract target)
Table 2. CEO remuneration mix
FY22
33%
33%
33%
7%
27%
7%
33%24%
21%
9%
40%
4. How Executive Remuneration is structured
4.1
Fixed remuneration
Fixed remuneration comprises base salary plus superannuation.
Fixed base salaries increased by 1.5% for FY22. Increase includes statutory increase for superannuation.
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 below:
Feature
Opportunity
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
Retention LTI
Award vehicle
Cash
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).
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.
Table 3. Target Executive KMP remuneration mix
(start of contract target)
Table 4. Executive KMP remuneration mix
FY22
33%
33%
7%
4%
20%
33%27%
9%
27%
40%
Fixed
STI-current
Deferred STI
LTI
Fixed
STI-current1
Deferred STI
LTI
Retention 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 and retention LTI component, the long-term elements of variable
remuneration work well in conjunction with the short term elements.
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.
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 also has a dramatic flow on effect in future years through
the greater recurring revenues for the Company. Combined with the regular LTI and the retention LTI, 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 results 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.
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.
To mitigate inappropriate actions that could increase short term incentives, the Company has long-standing effective controls in place, internal and
external audits, and practice management reviews.
In addition, the Company has specific internal controls in place including strict pricing and discounting policies and processes, sells only solutions into
6 specific markets, has robust approval processes for contractual terms that are non-standard or considered high risk, performs active management of
outstanding debtors, malus provisions for deferred STIs and clawback provisions for amounts retained from STI payments.
STI cap
Malus/Clawback
Controls
Termination
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.
TechnologyOne 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.
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.
85
Transforming business, making life simpleFinancial statements 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
STI rate set 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 Company, applies for this employee and the forecast NPBT is $40m, (a 15%
increase on the prior year) then contract STI will be $300,000/$40m (or 0.75% of profit).
Assuming an ambitious profit target increase of 15% per annum and actual profit increases of 12% per annum and CPI of 1% per annum, the
following illustrates the operation of the STI.
Year
1
2
3
Fixed
Profit target ($m)
Actual profit ($m)
300,000
303,000
306,030
40.00
44.80
50.18
38.96
43.64
48.87
STI%
0.75%
0.75%
0.75%
STI target
(STI % x profit target ($))
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 KMP is typically set at 75% to 100% of fixed remuneration
(excluding the Retention LTI grant) and is determined during contract negotiation when an KMP is hired.
Each LTI entitles the KMP the right to purchase one TechnologyOne share in the future at an agreed strike price, subject to meeting specified
performance targets. The KMP has a choice between options or 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 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
TechnologyOne introduced a Deferred STI in the FY19 year. An additional 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.
Performance measures
Performance measures for the most recent LTI grants are
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.
•
•
75% of the options / rights vest based on EPS Growth. See Vesting Conditions below.
25% of the options / rights vest based on Relative Total Shareholder Return (rTSR) compared against the constituents of the ASX All
Technology (XTX) index. See Vesting Conditions below.
Deferral period and service requirements
The award will only be paid at the conclusion of the two-year period following the end of the financial year, on the condition that the Executive KMP
remains employed with the Company for the entire deferral period.
Vesting conditions
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.
Malus/Clawback
Controls
Termination
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.
Refer section 4.2
On termination, the Executive forgoes any accrued and deferred STI.
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.
FY
1
2
3
STI
Measure
NPBT
NPBT
NPBT
STI
%
0.75%
0.75%
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%
25%
25%
73,050
24,350
24,350
24,350
-
81,816
91,634
-
-
27,272
27,272
27,272
-
30,545
30,545
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 recognised for FY22 includes one third of the FY20 award value plus one third of the FY21 award value plus one third of the FY22 award value.
24,350
51,622
82,167
57,817
30,545
Allocation methodology
Fair value methodology
Board discretion
Performance Metric
Growth <5%
Growth > 5%, < 15%
Growth >= 15%
EPS growth1
0% vest
50% vest at 5% growth with
linear vesting (50% to 100%) up
to 15% growth
100% vest
Performance Metric
Percentile < 50%
Percentile >50, <75
Percentile>= 75%
Relative TSR2
0% vest
50% vest at 50th percentile
relative TSR with linear vesting
(50% to 100%) up to 75th
percentile
100% vest
The number of options/rights 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 factor3
1 EPS growth is calculated to 2 decimals places.
2 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). Calculations for the vesting outcomes for relative TSR vesting conditions are prepared by an independent external company.3 The individual performance factor is
typically 100% unless Malus Provision is applied.
3 The individual performance factor is typically 100% unless Malus Provision is applied.
The LTI is allocated based on the cost of the option / right 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 Black-Scholes 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
metrics for an executive in that year.
87
Transforming business, making life simpleFinancial statements Feature
Description
Change of Control
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.
Termination
Expiry
Revision
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 termination of employment.
Any LTIs that have vested will expire 5 years after vesting.
We do not revise 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
$7.39
30%
Amounts recognised for LTI
FY
1
2
LTI metrics
Weighting
Grant number
EPS growth %
Relative TSR
75%
25%
150,000
50,000
200,000
Fair value
($)
225,000
75,000
300,000
Share price at grant
($)
Exercise price per share
($)
7.65
7.65
7.39
7.39
For the Year 1 tranche of LTIs, the fair value is $300,000, recognised over 3 years. For the purposes of this worked example, we have assumed
that the fair value of options granted with each metric is the same.
4.5 Retention LTI (option grant)
founder-led company. This is not an annual grant.
Through FY22, there has been a convergence of a number of factors
impacting TechnologyOne which has resulted in the Board granting
Retention LTIs in the form of options for Executive KMP.
The founder and long-time leader of TechnologyOne, most recently as
Executive Chair but for many years as CEO, Adrian Di Marco, retired
from the Company in June 2022. Adrian had been the driving force
behind the Company’s successful strategy and growth for many years.
He has built a strong board of directors and executive leadership team
over the last thirty-five years, including appointing Edward Chung as
CEO in 2017.
Adrian’s departure was at a time when domestically and globally
it is very hard to attract and retain executives with enterprise SaaS
experience and skills left us exposed to the risk of losing key
executives. As has been widely reported in the financial press, there is
a huge skills shortage in Australia as the technology industry is facing
unprecedent demand for staff. We had Executive KMP head-hunted
aggressively around the time of Adrian’s notification of his planned
retirement.
We compete on a global level for executive talent, and it is very difficult
to attract executives with Enterprise SaaS experience and skills, with
the ability to be hands on and deliver against our ambitious goals, and
who align to and drive our unique culture.
In order to put the Company in the best possible position to retain
the key senior talent in the Company, the Board took the decision to
approve a single grant of long-dated Retention LTIs to Executive KMP
in FY22, to ensure the retention of high performing executives during
this critical phase of growth, and to ensure smooth transition from a
Prior to approving the Retention LTI’s, the Board conducted
independent benchmarking to ensure overall Executive KMP
remuneration packages are appropriate when compared to our peers.
The review confirmed that TechnologyOne Executives’ remuneration is
far more sensitive to performance, having the greatest percentage of
their remuneration at risk and aligned with company performance, and,
after including the retention LTIs, is appropriate and reasonable when
compared to our peers.
After considering alternatives such as changing fixed remuneration or
short-term incentives, the grant of long-term retention options was the
most aligned with shareholders and the most appropriate mechanism
for this situation. It has a temporary expense impact, is non-cash, only
rewards executives if shareholders benefit as well, and the retention
and exercise periods are aligned with the Company’s SaaS strategy
and target period. In addition, retention options are common within the
technology industry and widely accepted market practice.
The options will vest in November 2026 subject to continuous
employment and malus provisions. They lapse and there is no
prorating if executives leave before November 2026. They have an
implicit performance hurdle, with share price appreciation required
for the instruments to have realisable value. The higher the share
price, the higher the value of the options – aligning executives with
shareholder returns. No dividends will be paid on options unless they
are exercised.
The details of the Retention LTI option grants are set out below.
Feature
Opportunity
Description
The value of the options issued and recognised over the vesting period to November 2026 is:
Position
Total grant value
CEO
COO
CFO
$2,038,066
$1,154,250
$582,305
Award vehicle
Allocation methodology
Vesting period
Fair value methodology
Board discretion
Change of control
Each option entitles the Executive the right to purchase one TechnologyOne share in the future, at a purchase price based on the market value at
the grant date of the award, subject to being employed on 30 November 2026 and malus provisions.
The options were allocated based on the fair value of the option which was calculated with the exercise price being the market price at the time of
award.
The Executive must be employed on 30 November 2026 for options to vest and become exercisable. There is no prorating if Executives leave
before 30 November 2026.
The fair value of options is calculated using the Black-Scholes method, in accordance with AASB 2 Share-based payment.
For accounting purposes, the expense is recognised in accordance with AASB 2 Share Based Payments over the service period.
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.
The Board has discretion to determine the extent to which options vest based on the period elapsed since the start of the service period to the
time of any change of control event.
Cessation of employment
Awards lapse. There is no prorating if Executives leave before 30 November 2026.
Expiry
Malus
Margin loans
Hedging
Any options that have vested will expire 5 years after vesting.
The options are 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 options as appropriate e.g. reduce, forfeit, defer for longer period.
Directors and Executives are not permitted to use TechnologyOne securities as security for margin loans.
Hedging is not permitted.
89
Transforming business, making life simpleFinancial statements Amounts recognised for Retention LTIs (option grant)
The Retention LTI (option grant) expense is recognised over the service period up to 30 November 2026. The grant will only vest on 30
November 2026 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 service period.
5. Key questions
Key questions
TechnologyOne approach
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:
a. Relatively low fixed remuneration to enable a greater emphasis on performance.
b. Relatively large at-risk short-term incentive (STI) portion aligning Executives to current year performance.
c. Deferred STI component to help further drive long-term shareholder wealth and ensure that we retain high performing Executives.
d. Long-term incentives (LTI) linked to long-term strategy, targets, and shareholder wealth creation.
e. Retention LTI grants to ensure the retention of high performing technology industry executives during a critical phase of growth and to ensure smooth
transition from a founder-led company.
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 aligned to the long-term outcomes of the business through the Deferred STI and a large long-term incentive (LTI and retention 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?
Earnings per share (EPS) growth and relative total shareholder return (rTSR) have been selected as appropriate performance measures. 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.
These two measures ensure we have LTI targets which are directly aligned with trends in shareholder wealth over the long term.
There is debate among proxy advisors and investors about the use of rTSR 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 of 75%) 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).
Why does the Relative TSR
performance hurdle not
have a gate for positive
TSR?
Relative TSR considers the relative performance of the Company’s share price, relative to the share price of its market peers. For instruments to vest, the Company’s
performance needs to be better than that of our peers.
If relative TSR is better than market peers, but represents a negative return, it is unlikely that there will be any intrinsic value in the equity instrument, so the
Executive is unlikely to realise any increased value at the time of vesting. Further, the value of the instrument is aligned with shareholder experience, either positive
or negative.
We feel that this framework is consistent with our remuneration principle of commitment to simplicity.
Is our STI plan sufficiently
challenging with only one
performance measure?
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
leveraging 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.
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.
Key questions
TechnologyOne approach
Why did we introduce a
Deferred STI?
A Deferred STI component was introduced in FY19 where an additional 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 considers whether there are any irregularities or other
factors that would affect the payment or vesting of that award (Malus Provision).
What is the rationale
for deferring 20% of the
total STI award, and not a
higher amount?
Our Executives receive:
•
•
•
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
Given the low fixed remuneration, and emphasis on performance related at-risk remuneration, it is not considered appropriate to defer greater than 20% of the total
STI.
Why grant Retention LTIs?
Through FY22, there has been a convergence of a number of factors impacting TechnologyOne which has resulted in the Board granting Retention LTIs in the form
of options for Executive KMP.
The founder and long-time leader of TechnologyOne, most recently as Executive Chair but for many years as CEO, Adrian Di Marco, retired from the Company in
June 2022. Adrian had been the driving force behind the Company’s successful strategy and growth for many years. He has built a strong board of directors and
executive leadership team over the last thirty-five years, including appointing Edward Chung as CEO in 2017.
Adrian’s departure at a time when domestically and globally it is very hard to attract and retain executives with enterprise SaaS experience and skills left us exposed
to the risk of losing key executives. As has been widely reported in the financial press, there is a huge skills shortage in Australia as the technology industry is facing
unprecedent demand for staff. We had Executive KMP head-hunted aggressively around the time of Adrian’s notification of his planned retirement.
We compete on a global level for executive talent and it is very difficult to attract executives with Enterprise SaaS experience and skills, with the ability to be hands
on and deliver against our ambitious goals, and who align to and drive our unique culture.
In order to put the Company in the best possible position to retain the key senior talent in the Company, the Board took the decision to approve a single grant of
long-dated Retention LTIs to Executive KMP in FY22, to ensure the retention of high performing executives during this critical phase of growth, and to ensure smooth
transition from a founder-led company. This is not an annual grant.
Prior to approving the Retention LTI’s, the Board conducted independent benchmarking to ensure overall Executive KMP remuneration packages are appropriate
when compared to our peers. The review confirmed that TechnologyOne Executives’ remuneration is far more sensitive to performance, having the greatest
percentage of their remuneration at risk and aligned with company performance, and, after including the retention LTIs, is appropriate and reasonable when
compared to our peers.
After considering alternatives such as changing fixed remuneration or short-term incentives, the grant of long-term retention options was the most aligned with
shareholders and the most appropriate mechanism for this situation. It has a temporary expense impact, is non-cash, only rewards executives if shareholders
benefit as well, and the retention and exercise periods are aligned with the Company’s SaaS strategy and target period. In addition, retention options are common
within the technology industry and widely accepted market practice.
The options will vest in November 2026 subject to continuous employment and malus provisions. They lapse and there is no prorating if executives leave before
November 2026. They have an implicit performance hurdle, with share price appreciation required for the instruments to have realisable value. The higher the share
price, the higher the value of the options – aligning executives with shareholder returns. No dividends will be paid on options unless they are exercised.
Does our remuneration
framework align
our executives with
shareholders?
TechnologyOne Executive remuneration continues to be clearly aligned with shareholder value creation. Our Executives have the greatest percentage of their
remuneration at risk and aligned with Company performance when compared to our peers.
Refer section 3.1 for our remuneration strategy and principles, and section 6.1 showing the creation of shareholder wealth for the years ended 30 September 2022
compared to executive remuneration growth.
The Executive Remuneration Framework has successfully driven performance and the creation of shareholder wealth over the longer term.
1ARR is not an IFRS measure and is unaudited, it represents future contracted annual revenue at year end
91
Transforming business, making life simpleFinancial statements 6. Relationship between remuneration and Company performance
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 2018 to 30 September 2022.
Profits and dividends have grown over the last five years, and growth in the fair value of Executive KMP’s remuneration 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) (cps)
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
Continuing Executive KMP remuneration growth
1 Accounting for revenue for these periods remains under AASB 118. They were not restated in this table for AASB 15
2 Excluding retention LTI granted in FY22
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 our 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.
20181
66,528
15%
11.02
16.14
14%
5.02
5.58
13%
39%
76%
21%
2019
76,389
15%
11.93
18.43
14%
5.58
7.18
31%
35%
72%
12%
2020
82,470
8%
12.88
19.75
8%
7.18
7.94
12%
58%
98%
12%
2021
97,843
19%
13.91
22.64
15%
7.94
11.36
45%
97%
99%
12%
2022
112,320
15%
17.02
27.51
22%
11.36
10.60
(5%)
61%
97%
8%2
The graphs on the following page set out information regarding
TechnologyOne’s performance, earnings and movement in
shareholder wealth over the past five financial years up to and
including FY22. Note, figures for 2018 and prior years represent
reported results which have not been restated for changes in
accounting policies or accounting standards.
Graph one below shows how our Executives’ STI has grown by 12.1%
which is below the Company’s Net Profit Before Tax (NPBT) profit
growth of 14.1% over the last 5 years.
120,000
100,000
80,000
60,000
40,000
20,000
'
)
s
0
0
0
$
(
I
T
S
.
g
v
A
0
NBPT
($000's)
FY18
FY19
FY20
FY21
FY22
Financial year
NBPT
STI
2,500
2,000
1,500
1,000
500
0
STI
($000's)
STI has grown by 12.1% which is at a slower rate than the
14.1% 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 TechnologyOne.
REM vs. NPBT
120,000
100,000
80,000
60,000
40,000
20,000
'
)
s
0
0
0
$
(
I
T
S
.
g
v
A
0
NBPT
($000's)
FY18
FY19
FY20
FY21
FY22
Financial year
NBPT
STI
5,000
4,500
4,000
3,500
3,000
2,500
2,000
REM
($000's)
'
)
s
M
$
(
T
B
P
N
Graph two below shows that the Executive’s remuneration has been
growing at less than the Company’s NPBT
Executive remuneration has grown by 13.0% which is at a slower
rate than the 14.1% growth in reported NPBT over the last 5 years.
Our remuneration structure is working as profit has grown faster than
our executive remuneration.
Remuneration excludes retention LTI.
7. Detail of current year
Executive KPM remuneration and
performance
This section describes remuneration outcomes for each Executive
KMP based on performance in FY22 using statutory accounting fair
value.
7.1
Fixed remuneration
'
)
s
M
$
(
T
B
P
N
Fixed Remuneration includes base salary and, superannuation, paid in
line with the remuneration strategy and principles described in section
4.1 above.
7.2
Short term incentive
The short-term incentives for Executives for FY22 were in line with the
Executive Remuneration Framework described in section 4.2 above.
The following tables in section 7.5 show the amounts achieved in
FY22 based on each Executive KMP’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 incentiv
The Deferred STI achieved by Executives for FY22 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 FY22.
7.4
Long-term incentive
The long-term incentives granted to Executives for FY22 were in line
with the remuneration framework described in section 4.4 above.
Refer to section 7.7 below for specific details of the grants for FY22.
The following tables in section 7.5 show the statutory accounting fair
value of the amounts recognised and instruments forfeited in FY22.
Refer section 7.6 for details of the share options and Executive
Performance Rights (EPRs) vested in FY22. 97% of instruments vested
during the year.
93
Transforming business, making life simpleFinancial statements
Fixed remuneration
Base salary
Chairman's fees
Superannuation
Total fixed remuneration (excl
Chairman's Fees)
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
7.5
Detail of Executive remuneration and performance
The remuneration for Executives, including the former Executive Chair, comprises the amounts outlined in the following tables.
Refer to section 8 below for details of service agreements with Executive KMP.
Name
Adrian Di Marco
Position
Executive Chair and Chief Strategy and Innovation Officer (retired 30 June 2022)
Position
Executive Chair and Chief Strategy and Innovation Officer
2022
$
2021
$
Variance
% Notes
245,573
339,056
107,773
25,780
141,000
27,500
The base salary represents the amount earned for the role of Chief
Strategy and Innovation Officer.
379,126
507,556
(25.3%) The Executive Chair retired part way through the year on 30 June 2022.
Name
Edward Chung
Position
Chief Executive Officer
Position
Chief Executive Officer
Fixed remuneration
Base salary
Directors’ fees
Superannuation
2022
$
2021
$
Variance
% Notes
513,358
505,568
-
-
27,500
27,500
Total fixed remuneration
540,858
533,068
1.5% Increase includes statuary increase for superannuation.
STI
STI - profit¹
STI %
Total STI
117,090,048
102,318,557
14.4%
0.78%
0.78%
913,302
798,085
14.4% Growth in STI is consistent with growth in NPBT, the primary measure of
STI.
65,764,503
99,092,373
(33.6%) The STI relates to the role of Chief Strategy and Innovation Officer.
Total Deferred STI
198,851
174,678
1.26%
1.26%
828,633
1,248,564
(33.6%) The Executive Chair retired part way through the year on 30 June 2022.
13.8% Deferred STI (refer to section 4.3) was introduced in FY19 for the first time.
FY22 amount includes one third of the FY20 award plus one third of
the FY21 award plus one third of the FY22 award. The growth shown
is primarily due to the timing of accounting recognition and does not
represent growth in remuneration awarded or realised.
-
-
-
-
-
-
-
-
-
-
-
-
-% The Executive Chair has a substantial shareholding, so a Deferred STI is
not required.
LTI
The Executive Chair has a substantial shareholding so has declined an LTI.
Fair value of options recognised
508,468
382,895
The value included for FY22 includes one third of the FY20 LTI fair value
plus one third of the FY21 LTI fair value plus one third of the FY22 LTI fair
value.
Fair value of options forfeited
(18,684)
Fair value of EPRs recognised
Fair value of EPRs forfeited
Fair value of options recognised
(old scheme)
-
-
-
-
-
-
58,471
The final tranche of share options vested and were exercised in FY21.
Total remuneration
1,207,759
1,756,120
(31.2%) The Executive Chair retired part way through the year on 30 June 2022.
Total LTI
489,784
441,366
11.0%
Fair value of Retention LTI recognised
in FY22
152,855
-
Total remuneration
2,295,650
1,947,197
N/A Grant in FY22 to ensure retention of key executive during critical growth
phase through to November 2026 and the transition from a founder led
company. This is not an annual grant. (Refer to section 4.5)
17.9% Total remuneration has grown by 17.9%. When excluding Retention LTI,
remuneration growth of 10% is less than reported net profit before tax
growth of 15%.
1Refer to section 7.2 above for the description of the net profit before tax used to calculate the STI.
2022 represents period from 1 October 2021 to time of retirement 30 June 2022
1 Refer to section 7.2 above for the description of the net profit before tax used to calculate the STI.
95
Transforming business, making life simpleFinancial statements
Name
Stuart MacDonald
Position
Chief Operating Officer
Position
Chief Operating Officer
Fixed remuneration
Base salary
Directors’ fees
Superannuation
2022
$
2021
$
Variance
% Notes
425,976
421,117
-
-
27,500
25,827
Name
Paul Jobbins
Position
Chief Financial Officer
Position
Chief Financial Officer
Fixed remuneration
Base salary
Directors’ fees
Superannuation
2022
$
2021
$
Variance
% Notes
223,363
221,764
-
-
27,500
25,486
Total fixed remuneration
453,476
446,944
1.5% Increase includes statuary increase for superannuation.
Total fixed remuneration
250,863
247,250
1.5% Increase includes statuary increase for superannuation.
STI
STI - profit¹
STI %
Total STI
117,090,048
102,318,557
14.4%
0.533%
0.533%
624,090
545,358
14.4% Growth in STI is consistent with growth in NPBT, the primary measure of
STI.
Total Deferred STI
135,882
119,164
LTI
Fair value of options recognised
272,215
139,132
14.0% Deferred STI (refer to section 4.3) was introduced in FY19 for the first time.
FY22 amount includes one third of the FY20 award plus one third of
the FY21 award plus one third of the FY22 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 FY22 includes one third of the FY20 LTI fair value
plus one third of the FY21 LTI fair value plus one third of the FY22 LTI fair
value
Fair value of options forfeited
(9,258)
-
Fair value of EPRs recognised
Fair value of EPRs forfeited
-
-
110,862
-
Total LTI
262,957
249,994
5.2%
Fair value of Retention LTI recognised
in FY22
76,181
-
N/A Grant in FY22 to ensure retention of key executive during critical growth
phase through to November 2026 and the transition from a founder led
company. This is not an annual grant. (Refer to section 4.5)
Total remuneration
1,552,585
1,361,460
14.0% Total remuneration has grown by 14.0%, less than reported net profit
before tax growth of 15%.
STI
STI - profit¹
STI %
Total STI
117,090,048
102,318,557
14.4%
0.343%
0.343%
401,619
350,953
14.4% Growth in STI is consistent with growth in NPBT, the primary measure of
STI.
Total Deferred STI
87,444
74,944
LTI
Fair value of options recognised
262,304
283,269
16.7% Deferred STI (refer to section 4.3) was introduced in FY19 for the first time.
FY22 amount includes one third of the FY20 award plus one third of
the FY21 award plus one third of the FY22 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 FY22 includes one third of the FY20 LTI fair value
plus one third of the FY21 LTI fair value plus one third of the FY22 LTI fair
value. The reduction shown is primarily due to the timing of accounting
recognition and does not represent reduction in remuneration awarded
or realised.
Fair value of options forfeited
(9,557)
Fair value of EPRs recognised
Fair value of EPRs forfeited
-
-
-
-
-
Total LTI
252,747
283,269
(10.8%)
Fair value of Retention LTI recognised
in FY22
29,115
-
N/A Grant in FY22 to ensure retention of key executive during critical growth
phase through to November 2026 and the transition from a founder led
company. This is not an annual grant. (Refer to section 4.5).
Total remuneration
1,021,788
956,416
6.8% Total remuneration has grown by 6.8%, less than reported net profit
before tax growth of 15%.
1 Refer to section 7.2 above for the description of the net profit before tax used to calculate the STI.
1 Refer to section 7.2 above for the description of the net profit before tax used to calculate the STI.
97
Transforming business, making life simpleFinancial statements
7.6
Options and EPRs that became eligible to vest during FY22
7.7
Options/EPRs that have been granted in FY21 and FY22 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 FY20 and vesting in FY22. 100% of the Relative TSR options became eligible to vest and 96% of the EPS options, resulting in
97% 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
Number of LTIs
available for
target
Testing
Testing year
Range
Performance
measure
achieved
Number
forfeited
LTIs vested % LTI vested
Relative TSR
Option
66,160
3 year
FY22
50th to 75th
percentile
85.6%
-
66,160
100%
FY20
EPS Growth
Option
198,479
3 year
FY22
5% to 15%
14.28%
(7,104)
191,375
264,639
(7,104)
257,535
96%
97%
Stuart MacDonald
Grant year
Performance
measure
Option or EPR
Number of LTIs
available for
target
Testing
Testing year
Range
Performance
measure
achieved
Number
forfeited
LTIs vested % LTI vested
Relative TSR
Option
41,849
3 year
FY22
50th to 75th
percentile
85.6%
-
41,849
100%
Edward Chung
Grant year
Performance
measure
Number of LTIs
available
Testing
Testing year
Range
LTIs due to vest
Relative TSR
63,730
EPS Growth
191,189
Relative TSR
48,104
EPS Growth
144,312
3 year
3 year
3 year
3 year
FY23
FY23
FY24
FY24
50th to 75th
percentile
5% to 15%
50th to 75th
percentile
5% to 15%
Nov 2023
Nov 2023
Nov 2024
Nov 2024
FY21
FY22
Stuart MacDonald
Grant year
Performance
measure
Number of LTIs
available
Testing
Testing year
Range
LTIs due to vest
FY21
FY22
Relative TSR
38,113
EPS Growth
114,339
Relative TSR
28,768
EPS Growth
86,304
3 year
3 year
3 year
3 year
FY23
FY23
FY24
FY24
50th to 75th
percentile
5% to 15%
50th to 75th
percentile
5% to 15%
Nov 2023
Nov 2023
Nov 2024
Nov 2024
FY20
Paul Jobbins
EPS Growth
Option
125,547
3 year
FY22
5% to 15%
14.28%
(4,494)
121,053
167,396
(4,494)
162,902
96%
97%
Paul Jobbins
Grant year
Performance
measure
Option or EPR
Number of LTIs
available for
target
Testing
Testing year
Range
Performance
measure
achieved
Number
forfeited
LTIs vested % LTI vested
Relative TSR
Option
36,629
3 year
FY22
50th to 75th
percentile
85.6%
-
36,629
100%
FY20
EPS Growth
Option
109,887
3 year
FY22
5% to 15%
14.28%
(3,933)
105,954
146,516
(3,933)
142,583
96%
97%
Grant year
Performance
measure
Number of LTIs
available
Testing
Testing year
Range
LTIs due to vest
FY21
FY22
Relative TSR
33,359
EPS Growth
100,077
Relative TSR
25,180
EPS Growth
75,539
3 year
3 year
3 year
3 year
FY23
FY23
FY24
FY24
50th to 75th
percentile
5% to 15%
50th to 75th
percentile
5% to 15%
Nov 2023
Nov 2023
Nov 2024
Nov 2024
7.8
LTI Retention options granted during the year that will vest on 30 November 2026
Edward Chung
Grant year
Performance measure
Number of options
available for vesting
Vesting
Vesting year
Total grant value
LTIs due to vest
FY22
Service
720,165
Nov 2026
FY27
$2,038,066
Nov 2023
Stuart MacDonald
Grant year
Performance measure
Number of options
available for vesting
Vesting
Vesting year
Total grant value
LTIs due to vest
FY22
Service
475,000
Nov 2026
FY27
$1,154,250
Nov 2023
Paul Jobbins
Grant year
Performance measure
Number of options
available for vesting
Vesting
Vesting year
Total grant value
LTIs due to vest
FY22
Service
205,761
Nov 2026
FY27
$582,305
Nov 2023
99
Transforming business, making life simpleFinancial statements 8.
Service 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
CEO
Other Executive KMP
Contract term
Ongoing
Ongoing
Termination notice
by either party
Post-employment
restraint
6 months
12 weeks
12 months
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, 4.4 and 4.5 for treatment of STIs and LTIs on cessation
of employment.
The Executive Chair’s fixed remuneration package was established
to compensate him for executing the role of Chair and also for that
of Chief Strategy and Innovation Officer (as tabled below).
In FY22, the Chair’s fixed remuneration, for the period to 30 June
2022, consisted of:
Role
Executive Chair
Chief Strategy and Innovation Officer
Total fixed remuneration
Fixed remuneration
107,773
271,353
379,126
The Executive Chair also received an STI component for his role as
Chief Strategy and Innovation Officer.
As the Chair was also an Executive, remuneration for performing the
Chair role (exclusive of Directors’ fees) was not included in the Non-
Executive Director Fee Pool.
9. Non-executive Director fees
Determination of Non-executive Director fees
Director fees are set to enable TechnologyOne to attract and retain
high calibre Directors and in recognition of the workload for Directors.
Director fee levels and fee pool are reviewed every three years by
an independent consultant to remain competitive with comparable
companies based on market capitalisation, operational scope and key
geographical areas. Fee increases between independent reviews are
capped at CPI.
In FY21, Board fees were $141,000 per Director, including statutory
superannuation contributions. This was increased by CPI (3%)
to $145,230 in FY22. No additional fees were paid in respect of
committee membership or attendance.
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.
FY23 aggregate fee pool and Non-Executive Director fees
An independent market review of Non-Executive Director (NED) fees
was conducted in the year.
The Board determined that an increase in the Board and Committee
fees was appropriate given:
•
•
•
The need to appropriately compensate an Independent Non-
Executive Chairman in recognition of the additional workload of
Pat O’Sullivan who was appointed to the position on 30 June
2022.
Increased workload of Directors due to significant growth in size
over the last 3 years, additional responsibilities transitioning from
a founder-led company, and international expansion in the UK.
NED fees were below market and inconsistent with market
practice where additional fees are paid to recognise the
additional workload in chairing a committee.
Shareholder approval will be sought at the FY22 AGM to increase
the fee pool to $2,000,000, from $1,500,000. The proposed fee pool
would allow the Board to attract and retain high calibre directors
(including overseas directors) in a competitive technology market,
provide flexibility for Board succession planning and appointment of
new directors.
The table below sets out the Non-Executive Director Fees paid during
FY22 and proposed fees for FY23. In line with the fee review policy
above, any fee increases over the next two years will capped at CPI.
Board and Committee Fees
(inclusive of superannuation)
Directors of TechnologyOne Limited
FY22 Fees
Proposed FY23 Fees
Board Chair – all-inclusive fee
$145,230*
Non-Executive Director – base board fee
$145,230
Audit Committee Chair
Audit Committee Member
Remuneration Committee Chair
Remuneration Committee Member
Nomination Committee Chair
Nomination Committee Member
-
-
-
-
-
-
$300,000
$175,000
$27,500
-
$27,500
-
$27,500
-
Non-Executive Director shareholdings and requirements
NEDs are required to hold a minimum shareholding of one year’s NED
fees (pre-tax) in TechnologyOne shares. NEDs are required to rectify
any short fall within a 12-month period. New NEDs are allowed 36
months to meet this requirement.
2022
Balance at the end of
the year
% of Mandatory Shareholding
Requirement
Non-Executive Directors of Technology One Limited
P O’Sullivan
R McLean
J Mactaggart
R Anstey
Dr J Andrews
S Doyle
C Rosenberg
P Ball
39,779
69,737
26,902,500
30,000
30,600
18,280
27,533
21,900
100%
100%
100%
100%
100%
100%
100%
100%
The Board in total holds 27,140,329 shares representing 8% of the total
shareholding of the Company. Individual holdings are as shown above.
* Payable to the Executive Chair until his retirement on 30 June 2022. The new independent Non-Executive Chair appointed on 30 June 2022 received $145,230 for FY22.
The Board Chair does not receive any additional committee fees.
10. 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.
Short-term employee benefits
n
o
i
t
a
r
e
n
u
m
e
r
d
e
x
i
F
’
s
r
o
t
c
e
r
i
$ D
s
e
e
f
$
n
o
i
t
a
u
n
n
a
r
e
p
u
S
$
n
o
i
t
a
r
e
n
u
m
e
r
d
e
x
fi
l
a
t
o
T
$
t
n
e
m
y
o
p
m
e
l
t
s
o
P
s
t
fi
e
n
e
b
e
v
i
t
n
e
c
n
I
m
r
e
t
-
t
r
o
h
S
s
t
fi
e
n
e
b
n
o
i
t
a
n
m
r
e
$ T
i
$
I
T
S
d
e
r
r
e
f
e
D
I
T
S
d
e
r
r
e
f
e
D
m
r
e
t
g
n
o
L
s
e
v
i
t
n
e
c
n
i
e
r
a
h
s
f
o
e
u
a
$ V
l
s
n
o
i
t
p
o
f
o
e
u
a
$ V
l
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
$
r
o
i
r
p
n
o
h
t
w
o
r
g
$ %
r
o
i
r
p
n
o
h
t
w
o
r
g
$ %
I
T
L
l
c
x
e
r
a
e
y
I
T
L
l
c
n
i
r
a
e
y
l
a
t
o
T
$
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
Executive KMP
A Di Marco
(Executive Chairman)³
E Chung
(Chief Executive Officer)⁴
S MacDonald
(Chief Operating Officer)⁵
P Jobbins
(Chief Financial Officer)⁶
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
132,027
13,203
145,230
128,767
12,233
141,000
132,027
13,203
145,230
128,767
12,233
141,000
-
-
-
53,653
5,097
58,750
132,027
13,203
145,230
128,767
12,233
141,000
132,027
13,203
145,230
128,767
12,233
141,000
132,027
13,203
145,230
128,767
12,233
141,000
132,027
13,203
145,230
128,767
12,233
141,000
132,027
13,203
145,230
128,767
12,233
141,000
132,027
13,203
145,230
75,114
7,136
82,250
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2022
245,573
107,773
25,780
379,126
828,633
2021
339,056
141,000
27,500
507,556
1,248,564
2022
513,358
2021
505,568
2022
425,976
2021
421,117
2022
223,363
2021
221,764
-
-
-
-
-
-
27,500
540,858
913,302
27,500
533,068
798,085
27,500
453,476
624,090
25,827
446,944
545,358
27,500
250,863
401,619
25,486
247,250
350,953
Total Executive KMP
2022
1,408,270
107,773
108,280
1,624,323
2,767,644
2021
1,487,505
141,000
106,313
1,734,818
2,942,960
Total
(Non-Executive Directors
and Executive KMP)
2022
1,408,270 1,031,964
200,699
2,640,933
2,767,644
2021
1,487,505
1,096,023
197,040
2,780,568
2,942,960
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
198,851
642,639
174,678
441,366
135,882
339,137
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
145,230
3%
3%
141,000
145,230
3%
3%
141,000
-
-100%
-100%
58,750
145,230
3%
3%
141,000
145,230
3%
3%
141,000
145,230
3%
3%
141,000
145,230
3%
3%
141,000
145,230
3%
3%
141,000
145,230
77%
77%
82,250
1,207,759
-31%
-31%
1,756,120
2,295,650
10%
18%
1,947,197
1,552,585
10%
14%
119,164
139,132
110,862
1,361,460
87,444
281,862
74,944
283,269
422,177 1,263,638
-
-
-
1,021,788
10%
7%
956,416
6,077,782
-5%
1%
368,786
863,767
110,862
6,021,193
422,177 1,263,638
-
7,094,392
-4%
0%
368,786
863,767
110,862
7,066,943
1Mr Kevin Blinco resigned 23 February 2021. 2Mr Pat O’ Sullivan was appointed on 2 March 2021. 3Mr Di Marco retired on 30 June 2022. He was again offered an LTI of $400K which he declined in FY22 year, as he has in previous
years. The Remuneration Committee acknowledged that Mr Di Marco’s significant shareholding in TechnologyOne provided the benefits that the LTI aimed to achieve. Mr Di Marco’s STI is calculated as 1.26% of Group NPBT. 4Mr
Chung’s remuneration grew by 10% on the prior year (excluding Retention LTI). Growth in remuneration other than LTI was 10%. Mr Chung’s STI is calculated as 0.78% of Executive NPBT, his STI is up 14%, in line with the increase in
Executive NPBT. 5Mr MacDonald’s remuneration grew by 8% on the prior year (excluding Retention LTI). Growth in remuneration other than LTI was 9%. Mr MacDonald’s STI is calculated as 0.533% of Executive NPBT, his STI is up 14%,
in line with the increase in Executive NPBT. 6Mr Jobbins’s remuneration grew by 4% on the prior year (excluding Retention LTI). Growth in remuneration other than LTI was 10%. Mr Jobbins’s STI is calculated as 0.343% of Executive
NPBT, his STI is up 14%, in line with the increase in Executive NPBT.
101
Transforming business, making life simpleFinancial statements
11. Additional statutory disclosures
11.1
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
2022
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
692,432
319,846
492,713
912,581
590,073
306,480
(172,876)
-
(212,763)
(7,104)
(4,494)
(3,933)
1,425,033
905,425
582,497
257,535
162,902
142,583
Unvested
1,167,498
742,523
439,914
Executive Performance Rights
2022
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
-
46,299
-
-
-
-
-
(46,299)
-
-
-
-
-
-
-
-
-
-
-
-
-
11.2
Fair value of options granted in FY22
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
192,416
2.31
26/11/2021
720,165
2.83
18/05/2022
Stuart MacDonald
115,073
2.31
26/11/2021
475,000
2.43
23/02/2022
Paul Jobbins
100,719
2.31
26/11/2021
205,761
2.83
18/05/2022
12.31
10.37
12.31
10.37
12.31
10.37
30/11/2024
30/11/2029
444,481
30/11/2024
30/11/2029
30/11/2026
30/11/2031
30/11/2024
30/11/2029
30/11/2026
30/11/2031
265,819
1,154,250
232,661
582,305
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.
*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.
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
For details of grants under the previous EOP plan, please refer to section 11.3.
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).
30/11/2026
30/11/2031
2,038,066
Share options were granted to Executives by the Board based on the option plan approved by the Board.
The model inputs for options granted to Executives are as follows:
(a) Options are granted for no consideration. Each tranche vests subject to meeting performance hurdles
(b) Dividend yield – 1.2% to 1.4%
(c) Expected volatility – 30.98% to 33.15%
(d) Risk-free interest rate – 1.20% to 1.59%
(e) Price of shares on grant date – $9.23 to $11.56
(f)
Fair value of options – $2.13 to $2.83
The performance measures for LTI grants made in FY22 are presented below while the Retention LTIs vest based on service conditions. 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
EPS growth
Relative TSR1
3 years
3 years
Testing
3 years
3 years
The performance targets to be achieved by the Executives are set out below:
Weighting (all KMP)
75%
25%
Performance Metric
Growth <5%
Growth > 5%, < 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%
Percentile >50, <75
Percentile>= 75%
11.3
Quarantined Executive Option Plan (EOP) (now superseded)
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 33 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 prior year.
2022
Name
Balance at start of
the year
Granted as
compensation
Exercised
Forfeited
Balance at the end
of the year
Vested and
exercisable
Edward Chung
-
-
-
-
-
-
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
-
Unvested
-
103
Transforming business, making life simpleFinancial statements
11.4
Equity instruments held by Key Management Personnel
The number of shares in the Group held during the financial year by each Director and Executive KMP 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
Balance at the start of year
Purchased during the year
Sale during the year
Other movements
Balance at the end of the year
Senior Executives of the Group
E Chung
S MacDonald
P Jobbins
733,000
-
-
569,758
371,833
-
(402,758)
(316,833)
-
68
68
68
900,068
55,068
68
11.5 Loans to Key Management Personnel
There have been no loans to Directors or Executives during the financial year (2021 - nil).
11.6 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.
2022
Name
A Di Marco
R McLean
J Mactaggart
Dr J Andrews
S Doyle
C Rosenberg
P Ball
P O' Sullivan
Balance at the start of year
Purchased during the year
Sale during the year
Other movements
Balance at the end of the year
17,378,500
69,737
26,902,500
30,600
18,280
27,533
21,900
15,509
-
-
-
-
-
-
-
24,270
-
-
-
-
-
-
-
-
(17,378,500)*
-
-
-
-
-
-
-
-
69,737
26,902,500
30,600
18,280
27,533
21,900
39,779
* Represents balance held at date of retirement
2022
Name
Balance at the start of year
Purchased during the year
Sale during the year
Other movements
Balance at the end of the year
Senior Executives of the Group
E Chung
S MacDonald
P Jobbins
2021
Name
900,068
55,068
68
172,876
46,299
212,763
(172,876)
(55,000)
(212,763)
-
-
-
900,068
46,367
68
Balance at the start of year
Purchased during the year
Sale during the year
Other movements
Balance at the end of the year
Directors of TechnologyOne Limited
A Di Marco
R McLean
J Mactaggart
K Blinco
R Anstey
Dr J Andrews
S Doyle
C Rosenberg
P Ball
P O' Sullivan
*Represents balance held at date of resignation.
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)
-
-
-
(100,000)
(190,000)*
-
-
-
-
-
-
-
-
-
-
-
-
17,378,500
69,737
26,902,500
-
30,000
30,600
18,280
27,533
21,900
15,509
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
Board of Directors
The Board of the Company currently comprises eight Directors and
includes:
Name
Position
Appointed
Pat O’Sullivan
Non-Executive Director - Independent Board Chair
02/03/2021
Ronald McLean
Non-Executive Director – Independent
John Mactaggart
Non-Executive Director - Major shareholder
Richard Anstey
Non-Executive Director – Independent
Jane Andrews
Non-Executive Director – Independent
Sharon Doyle
Non-Executive Director - Independent
Cliff Rosenberg
Non-Executive Director - Independent
08/12/1999
08/12/1999
02/12/2005
22/02/2016
28/02/2018
27/02/2019
Peter Ball
Non-Executive Director – Independent
02/03/2020
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
The role of the Board is as follows:
•
•
•
•
•
•
•
Setting objectives, goals and strategic direction for management,
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.
Selecting, appointing and reviewing the performance of the 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:
•
•
•
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 Chief Executive Officer also prepares a summary report that
highlights:
•
•
•
•
Financial performance year to date, and forecast for the full year.
Significant issues.
Significant changes proposed.
Proposed strategic initiatives.
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 at least 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 Board Chair.
Input into and subsequent approval of corporate strategy and
performance objectives.
Reviewing and ratifying systems of risk management, internal
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 Chief Executive Officer and Company Secretary to
the relevant Code of Conduct established by the Board.
Appointing and removing the Managing Director and / or Chief
Executive Officer and monitoring their performance respectively.
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.
All other matters are referred to management.
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:
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.
• 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.
• The Directors are entitled to be paid expenses incurred in
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 Board Chair at least 48 hours before doing so.
Strategic and Commercial Acumen
• The Directors and Officers will not engage in short term trading
•
•
•
•
•
•
•
•
•
•
•
•
Finance and Taxation
Risk and Compliance
IT and Communications Industry
Software and Product Development
Start-ups and Early Stage Investments
Corporate Governance and ESG
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.
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 eight.
• 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
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
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.
Director 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 material information that
could influence, or would be reasonably 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.
107
Transforming business, making life simpleFinancial statements • Coordinating timely completion and despatch of Board and
Company’s implementation of that system.
Committee papers.
• Ensuring business at Board and Committee meetings is accurately
captured in the minutes.
• Oversee the ongoing development by management of an
enterprise-wide risk management framework for management of
material risks.
• Helping to organise and facilitate induction and professional
• Periodically review the adequacy and effectiveness of the
or other factors that would affect the payment or vesting of that
award (that is, consider whether to apply malus provision or utilise
discretion).
The number of meetings held during the year and the attendance of
the members is provided in the Annual Report.
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, and therefore assesses each director annually to
ensure their independence is maintained.
The ASX guidelines state 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.” TechnologyOne has a strong
and effective Board transition process to promote this.
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. All Committees are comprised of independent non-
executive directors.
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
Company Secretaries are appointed by the Board by resolution.
Company Secretaries are accountable directly to the Board, through
the Board Chair.
The role of the Company Secretary is as follows:
• Advising the Board and Committees on governance matters.
development of Directors.
Audit & Risk Committee
The Board has established an Audit & Risk Committee. The Committee
is comprised of:
Name
Position
Peter Ball (Chair)
Independent Non-Executive Director
Jane Andrews
Sharon Doyle
Independent Non-Executive Director
Independent Non-Executive Director
The role of the Committee is to:
• Ensure the integrity in financial reporting (refer section –
Safeguard Integrity in Financial Reporting).
• Review the accuracy of the 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.
• Monitoring adherence of the Board and Committees to policies
and procedures.
• Oversee the establishment and implementation of a risk
management system, and review regularly the effectiveness of the
Company’s policies and procedures relating to risk management
and compliance.
The Remuneration Committee Charter is available on the Company’s
website.
• Make recommendations to the Board on specific risk management
matters that may relate to industry and regulatory changes.
• Oversight of the insurance portfolio with consideration of material
risks, including cyber risk and information security.
The number of meetings held during the year and the attendance of
the members is provided in the Annual Report.
The Audit & Risk Committee Charter is available on the Company’s
website.
Principles of the Audit & Risk
Committee
The committee operates in accordance with the following broad
principles:
• 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.
• Take actions as 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
Non-Executive Directors’ remuneration is determined by the Board
within the aggregate amount per annum which may be paid in
Directors’ fees.
Executives are not present for committee discussions on executive
remuneration.
Principles 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 committee should judge where to position the Company
relative to other companies. Be aware of comparable companies’
pay, but exercise caution.
• The committee should be sensitive to the wider scene, especially
regarding 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.
• Remuneration should be fair and equitable.
Nomination & Governance
Committee
The Board has established a Nomination & Governance Committee.
The Committee is comprised of:
Name
Position
Cliff Rosenberg (Chair)
Independent Non-Executive Director
Sharon Doyle
Jane Andrews
Independent Non-Executive Director
Independent Non-Executive Director
Jane Andrews (Chair)
Independent Non-Executive Director
The role of the Committee is as follows:
Cliff Rosenberg
Peter Ball
Independent Non-Executive Director
Independent Non-Executive Director
The role of the committee is:
• 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.
• To consider the vesting of any deferred remuneration including
deferred STI & LTI to assess whether there are any irregularities
• 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
good corporate governance.
• Review of Board succession plans.
• Recommendation for changes to committees.
109
Transforming business, making life simpleFinancial statements • Recommendation of, and undertaking the appropriate checks,
The following information is provided in the Annual Report:
before the appointment of new Directors.
• The skills, experience and expertise relevant to the position of
• Recommendation of, and undertaking the appropriate checks, for
Director.
the endorsement or non-endorsement of existing Directors.
• The names of Directors considered by the Board to constitute
• Ensuring that an effective induction process is in place for new
independent Directors and the Company’s materiality thresholds.
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.
The number of meetings held during the year and the attendance of
the members is provided in the Annual Report.
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 term of office held by each Director.
• The number of meetings held by the Nomination & Governance
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
the following criteria:
• 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
Section 9 of the Corporations Act, or an officer of a company that
is a substantial shareholder.
• The Nomination & Governance Committee is entitled to seek the
• Is not directly associated with a substantial shareholder of the
advice of an external consultant.
Company.
• The Nomination & Governance Committee will make
• 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.
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 the 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 a Managing Director if 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.
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 always strive 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:
A Code of Business Conduct has been established which is applicable
to each of the following:
• Directors
• Chief Executive Officer
• Chief Financial Officer
• Chief Operating 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, workplace health and
safety, etc.).
• Responsibilities to the community.
• Responsibilities to the individual.
• Compliance with the codes.
In addition, all employees have employment agreements, which
include job descriptions that 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 Whistleblower Hotline is
facilitated by an external, independent third party and they provide
translation services for those where English is not their primary
language.
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 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.
• Maintain existing educational programs that support diversity
including but not limited to induction, on-boarding and leadership
programs.
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
customers and suppliers.
The Company’s 2022 Workplace Gender Equality Agency report can
be found on the ‘Corporate Governance’ 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. Further
details on the initiatives undertaken by TechnologyOne to promote
diversity are outlined in the company’s Sustainability Report.
We have policies in place in relation to anti-discrimination, workplace
gender equality, diversity, sexual harassment, flexible working
arrangements and paid parental leave.
111
Transforming business, making life simpleFinancial statements 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 the integrity of the financial reporting is maintained.
Continuous disclosure
The Company Secretary working closely with the Board Chair, CEO
and CFO 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 Audit & Risk
Committee. A standing Item has been included in the Audit & Risk
Committee 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 considers 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 performs risk reviews at least semi-annually and has
identified several key risk categories for the business.
Material Risks
Cyber Risk
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).
People Risk
The Company needs to ensure we attract, retain, develop and foster
the talent, skills and knowledge needed to deliver ambitious goals.
The Company manages people risk through:
• Education of the Company’s mission, values and purpose
• Career progression and succession, remuneration and
achievement and reward initiatives
• Wellbeing initiatives - physical, mental, and financial
• Leadership training and coaching
• eNPS surveys and retention / turnover reporting and analysis
• Promotion of the success of the Company internally and externally
• Alignment of education of the Company’s and departmental
strategies, and empowerment to deliver
• Graduate, intern and global mobility program
The Board is provided with a summary of these initiatives at each
board meeting.
Building the Future Risk
The Company sets ambitious goals for its future growth which are
delivered on through:
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 several sustainability risks.
The Sustainability Report provides the Company’s initiatives and
targets on items including:
• Diversity
• Alignment and education of the Company’s and department
• Customer satisfaction
strategies and empowerment to deliver
• Product success, Practice Management, Customer Success
Teams, and tribes and ‘Brains Trust’ groups established
• Ongoing and frequent engagement with customers and user
groups and early adopter programs
• Employee satisfaction
• Corporate culture
• Ethical business practices
• Supply chain
• Continuous investment in R&D and ‘tribal days’ including Hack
• Community support
Day
• Ongoing monitoring of operating environment and competitors.
Other Risks
The Company’s focus on risk management is primarily conducted
through the Audit & Risk Committee, 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.
Software Risk
The Company has an executive committee that reviews Software
Release management, including resourcing and development issues.
Insurance Risk
The Audit & Risk Committee reviews the Company’s insurance
requirements on an annual basis and compares this to the level of
cover provided to ensure it is adequately covered. A recommendation
is then provided to the Board for the placement of the Company’s
insurance policies.
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
• Environmental sustainability practices
The Company has engaged external subject matter experts to
assist in the preparation of environmental risk reporting aligned
with the Taskforce for 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.
Suppliers to TechnologyOne are expected to comply with all
applicable local, national and international laws and regulations,
including in relation to bribery and corruption, modern slavery and
ethical conduct. TechnologyOne undertakes due diligence of all new
suppliers and has initiated an annual supplier attestation process to
ensure our suppliers continue to comply.
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 Auditor's 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.
The scope of the Internal Audits includes evidencing the responses to
the semi-annual Management Attestations, ensuring the controls listed
in the Enterprise Risk Register are operational, confirming findings
from the previous audit are complete and to ensure that company-
wide processes are being complied with.
113
Transforming business, making life simpleFinancial statements •
By the participation of the Company’s Auditors and Solicitors at
the AGM.
All information communicated by the Company is in accordance with
its continuous disclosure requirements under ASX Listing Rule 3.1.
Legislative changes to the Corporations Act 2001 (Cth) effective from
1 April 2022, means that companies are no longer required to send
shareholder communications by mail unless specifically requested.
TechnologyOne aims to continually reduce our carbon emissions and
to maintain carbon-neutrality, while continuing to provide effective
communications to shareholders. By no longer sending shareholder
communications by mail as the default position, we save time and
cost, and it helps reduce our carbon footprint. Shareholders can still
elect to receive some, or all, communications by mail if they choose.
Shareholders are encouraged to review or update their
communication preferences through the Company’s share registry
provider. Contact details are available on the Company’s website
through the Investor Relations area.
ASX Corporate Governance
Principles and Recommendations
4th Edition Compliance
The Company has complied with all of the recommendations outlined
in the Corporate Governance Principles and Recommendations 4th
Edition.
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 the remuneration of
its Directors and Executives to the market, on at least an annual basis.
Disclosure includes 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, considering 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
with bonuses, options, performance rights or loans. 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 2022 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.
•
•
•
•
Board Chair, Director and CEO 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 during the
past year.
Each Director is encouraged to discuss any issue concerning Board
performance with the Board Chair at any time.
Directors are encouraged to maintain and improve their knowledge,
skills and expertise through briefings, seminars and attending
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 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 Trading Windows
have been established, relating to when Directors and Senior
Executives can buy and sell the Company’s shares. These Trading
Windows are open for 50 days following the full and half year result
releases.
At all times, the Director or Senior Executive must notify the Board (as
a minimum the Board 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 Trading 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:
•
•
•
persons named by the Chief Executive Officer from time to time
who may be involved in strategic issues
persons named by the Chief Executive Officer from time to time
who are involved in financial reporting
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 Meeting and Explanatory
Memorandum for each Annual General Meeting (AGM) 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 shareholders to participate in proxy voting
should they be unable to attend the Company’s AGM.
By enabling shareholders to pose questions to the Company in
the lead up to the AGM for responding during the meeting.
By facilitating polls for each resolution voted during an AGM.
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.
115
Transforming business, making life simpleFinancial statements Voluntary 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 FY22 is 20.9%
• 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 2022 is
following.
Tax is one of a broad range of commercial factors that is 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.
International related party dealings
TechnologyOne seeks to ensure all intercompany transactions are
undertaken in accordance with the arm’s length principle.
Year ended 30 September 2022
Corporate income taxes
Fringe benefit taxes
Payroll taxes
Net GST/VAT taxes
Employee taxes remitted
TOTAL
TechnologyOne has 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 2022.
Consolidated Global
Group AUD
18,059,860
678,246
9,831,918
32,039,809
52,276,226
112,886,059
117
Transforming business, making life simpleFinancial statements
Financial Statements
Consolidated income statement
For the year ended 30 September 2022
Revenue - SaaS and continuing business
Revenue - Legacy licence business
Revenue from contracts with customers
Other income
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
Profit before income tax
Income tax expense
Profit for the year
Basic earnings per share
Diluted earnings per share
Notes
5
5(a)
6
6
6
6
6
7
32
32
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 2022
Profit for the period (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 period, net of tax
Total comprehensive income for the period
30-Sep-22
$'000
30-Sep-21
$'000
358,668
9,566
368,234
1,157
(20,701)
(26,350)
(47,051)
(2,539)
(20,370)
(38,110)
(10,458)
(8,685)
(124,661)
(3,353)
(1,844)
(210,020)
112,320
(23,477)
88,843
Cents
293,553
17,742
311,295
717
(19,444)
(21,934)
(41,378)
(1,942)
(13,190)
(25,832)
(8,850)
(7,890)
(110,381)
(3,213)
(1,493)
(172,791)
97,843
(25,152)
72,691
Cents
27.51
22.64
27.38
22.52
30-Sep-22
$'000
88,843
(3,196)
(3,196)
85,647
30-Sep-21
$'000
72,691
(178)
(178)
72,513
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 2022
Notes
30-Sep-22
$'000
30-Sep-21
$'000
ASSETS
Current assets
Cash and cash equivalents
Prepayments
Trade and other receivables
Contract assets
Other current 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
8
9
10
11
13
12
20
13
13
14
10
13
15
17
18, 25
16
20
19
18, 25
20
22
23
175,865
20,379
57,266
21,540
600
6,505
282,155
8,505
23,110
59,452
126,909
21,060
4,881
13,873
257,790
539,945
48,559
20,902
6,997
184,008
2,784
7,897
271,147
2,200
-
94
27,407
29,701
300,848
239,097
57,635
81,875
99,587
239,097
144,210
13,811
51,108
22,846
283
5,001
237,259
7,377
22,442
60,774
101,008
25,790
2,962
9,676
230,029
467,288
40,425
21,521
-
169,322
2,632
3,342
237,242
2,069
7,576
120
30,047
39,812
277,054
190,234
51,645
72,717
65,872
190,234
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 2022
Consolidated statement of cash flows
For the year ended 30 September 2022
Balance at 1 October 2021
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
Note
Contributed
equity
Retained earnings
Dividend reserve
FOREX reserve
$'000
51,645
-
-
-
-
-
5,990
-
-
$'000
65,872
88,843
-
88,843
-
(55,128)
-
-
-
$'000
32,454
-
-
-
(46,127)
55,128
-
-
-
5,990
(55,128)
9,001
$'000
1,958
-
(3,196)
(3,196)
-
-
-
-
-
-
24
22
33
Share option
reserve
Total equity
$'000
$'000
38,305
190,234
-
-
-
-
-
-
3,353
-
3,353
88,843
(3,196)
85,647
(46,127)
-
5,990
3,353
-
(36,784)
Balance at 30 September 2022
57,635
99,587
41,455
(1,238)
41,658
239,097
Balance at 1 October 2020
40,551
38,093
30,046
2,136
31,342
142,168
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
-
-
-
-
-
11,094
-
-
72,691
-
72,691
-
-
-
-
(42,504)
(44,912)
44,912
-
-
-
-
-
-
11,094
(44,912)
2,408
-
(178)
(178)
-
-
-
-
-
-
-
-
-
-
-
-
3,213
3,750
6,963
72,691
(178)
-
72,513
(42,504)
-
11,094
3,213
3,750
(24,447)
24
22
33
Balance at 30 September 2021
51,645
65,872
32,454
1,958
38,305
190,234
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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 net of cash acquired
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 period
Cash and cash equivalents at the end of the period
Notes
6
31
12
13
20
24
8
30-Sep-22
$'000
413,885
(251,329)
423
(18,339)
(1,844)
142,796
-
(3,767)
(63,515)
(67,282)
5,920
(3,652)
(46,127)
(43,859)
31,655
144,210
175,865
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
30-Sep-21
$'000
341,812
(217,795)
225
(7,762)
(1,493)
114,987
(10,228)
(1,658)
(51,269)
(63,155)
10,595
(957)
(42,504)
(32,866)
18,966
125,244
144,210
121
Transforming business, making life simpleFinancial statements
Notes to the consolidated financial statements
1.
Summary of significant
accounting policies
The financial report of Technology One Limited (the Company) for
the year ended 30 September 2022 was authorised for issue in
accordance with a resolution of Directors on 22 November 2022.
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 as no new or amended Standards or
Interpretations were applicable in the current year.
Certain comparative items have been reclassified in the financial
statements to align with the 30 September 2022 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.
(i) Issued but not yet effective
No new standards or amendment to an existing Standard have
been issued that will have a material impact to 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 2022 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 2022, the Group had 260,813 treasury shares (2021:
66,897).
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.
(c)
Foreign currency translation
(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
1.
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 received or receivable 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 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.
4.
Initial licence fees
Initial (legacy) 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
123
Transforming business, making life simpleFinancial statements
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 2022, the statement of financial position shows a
current liability balance of $271m (30 September 2021: $237m) 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:
1.
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
fees, Annual Licence Fees and Consulting Services.
2. Revenue – Legacy licence business
The legacy licence fee business encompasses the sale of initial
(legacy) 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 except for
transactions that, on initial recognition give rise to equal taxable and
deductible temporary differences such as recognition of an ROU Asset
and a lease liability. 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
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:
• fixed payments (including in-substance fixed payments), less any
lease incentives receivable
• variable lease payment that are based on an index or a rate,
initially measured using the index or rate as at the commencement
date
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 ensures the swap curve rate reflects 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.
• amounts expected to be payable by the group under residual
(h)
Variable costs
value guarantees
The components of variable costs are made up of:
• 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.
•
•
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.
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.
(k)
Financial assets and liabilities
(l)
Cash and cash equivalents
Financial instruments recognised in the statement of financial position
include; cash and cash equivalents, trade and other receivables,
contract assets, lease liabilities, trade payables and contingent
consideration.
(i) Classification
The Group classifies its financial assets and financial liabilities into the
following measurement categories
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.
• those to be measured at amortised cost (using the effective
(m)
Trade and other receivables
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
Financial assets are initially measured at fair value. Trade receivables
that do not contain a significant financing component or for which
the Group has applied the practical expedient are measured at the
transaction price. Financial assets and liabilities at amortised cost are
subsequently measured using the effective interest method. 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 - Fair value through profit and loss
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
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.
(n)
Property, plant and equipment
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
3-4 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.
(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
3 - 8 years
Customer contracts
Trade name
8 - 12 years
8 - 12 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.
(iii) Software development
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 are recognised as an intangible asset where the following
criteria are met:
(a)
(b)
(c)
The technical feasibility of completing the intangible asset so
that it will be available for use or sale;
Intention to complete the intangible asset and use or sell it;
Ability to use or sell the intangible asset;
(d)
(e)
(f)
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;
The availability of adequate technical, financial and other
resources to complete the development and to use or sell
the intangible asset and
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 eight 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 an additional 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 deferred for a two-year period
following the end of the financial year.
(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, trade payables and contingent consideration.
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.
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, the United Kingdom and Europe, and sales contracts
denominated in different currencies, 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:
2022
2022
2022
2021
2021
USD
PGK
EUR
USD
PGK
$'000
$'000
$'000
$'000
$'000
Trade receivables
11
104
106
-
-
(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.
2022
$'000
2021
$'000
175,865
144,210
57,266
51,108
233,131
195,318
(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
48,559
40,425
At 30 September 2022
6,997
35,304
90,860
7,576
Financial assets
33,389
Cash and cash equivalents
81,390
Trade and other receivables
Total
Financial liabilities
Trade and other payables
Contingent consideration
175,865
57,266
233,131
41,562
6,997
-
-
-
-
-
-
-
-
-
-
Lease liabilities
9,715
27,276
2,635
Total
58,274
27,276
2,635
Net inflow / (outflow)
174,857
(27,276)
(2,635)
144,946
175,865
57,266
233,131
41,562
6,997
39,626
88,185
144,210
51,108
195,318
40,425
7,576
40,192
Less than
12 months
$’000
Between
1 and 5
years
$’000
Over 5
years
$’000
Total
contractual
cash
flows
$’000
At 30 September 2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Total
Financial liabilities
144,210
51,108
195,318
-
-
-
-
-
-
-
-
-
Trade and other payables
40,425
Contingent consideration
-
7,576
Lease liabilities
5,497
32,084
2,611
Total
45,922
39,660
2,611
88,193
Net inflow / (outflow)
241,240
39,660
2,611
283,511
129
Transforming business, making life simpleFinancial statements
(e)
Fair value measurements
(ii)
Share-based payments
Contingent consideration is classified as Level 3. The balance of
contingent consideration is recognised as contingent consideration
in the Consolidated Statement of Financial Position. The release of
the contingent consideration that does not represent payment is
recognised within the other income line of the consolidated income
statement while payment would be applied against this provision. For
further details please refer to note 25.
Contingent consideration
Opening balance
Amounts added for Scientia acquisition (note
25)
FX movement
Closing balance
2022
$'000
7,576
-
(579)
6,997
2021
$'000
-
7,576
-
7,576
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.
(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 current risk management structure of the Group is to use all
equity funding.
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.
All other assets are reviewed for indicators or object evidence of
impairment. If indicators or objective evidence exists, the recoverable
amount is reviewed.
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). 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
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.
(v)
COVID-19
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 did not receive 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
fair value of anticipated costs for future contingent earn out
considerations resulting from the acquisitions made by the Group.
Further details are available at note 25.
4.
(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.
The Group’s reportable segments are:
• Software – consists of Sales and Marketing, R&D,
SaaS platform.
• Consulting – responsible for services in relation to
our software.
2021
Revenue from contracts
with customers
SaaS fees*
Annual licence fees*
Consulting services*
Initial licence fees **
Other income
Intersegment revenue
Net royalty
Total revenue
Expenses
Software
$'000
Consulting
$’000
Corporate
$’000
Total
$’000
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
• Corporate – includes all corporate functions.
Total external expenses
(126,666)
(42,657)
(44,846)
(214,169)
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)
2022
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
216,812
70,221
-
-
-
72,670
-
-
8,531
583
(443)
-
-
-
-
216,812
70,221
72,670
8,531
574
1,157
602
(159)
(66,320)
(7,300)
73,620
(ii) Segment assets
-
-
229,384
65,972
74,035
369,391
Australia
Total external expenses
(151,902)
(49,121)
(56,048)
(257,071)
Profit before tax
77,482
16,851
17,987
112,320
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
(23,477)
88,843
539,945
300,848
(38,110)
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
(c) Other segment information
(i) Segment revenue
Australia
New Zealand and Asia Pacific*
APAC total
United Kingdom
(25,152)
72,691
467,288
277,054
(25,832)
2022
$'000
2021
$'000
303,643
260,564
40,482
38,609
344,125
299,173
25,266
12,839
Total segment revenue from sales to external customers
369,391
312,012
2022
$'000
2021
$'000
442,497
380,179
New Zealand and Asia Pacific*
37,901
14,692
APAC total
United Kingdom
Total segment assets
480,398
394,871
38,487
46,627
518,885
441,498
Majority of 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. .
6.
Expenses
Profit before income tax includes the
following specific expenses:
2022
$’000
2021
$’000
5. Revenue
Revenue from contracts with customers
SaaS fees*
Annual licence fees*
Consulting services*
2022
$’000
2021
$’000
Depreciation
Plant and equipment
Total depreciation
Amortisation
216,812
151,052
Other intangible amortisation
69,186
77,993
72,670
64,508
Contract acquisition costs amortisation
Capitalised development amortisation
Revenue - SaaS and continuing business
358,668
293,553
Amortisation of right-of-use assets
Initial licence fees **
8,531
16,770
Total amortisation
Annual licence fees associated with initial licence fees*¹
1,035
972
Total depreciation and amortisation
Revenue - Legacy licence business
9,566
17,742
Wages and salaries
Total revenue from contracts with customers
368,234
311,295
Defined contribution plan expense
1This 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.
*Recognised over time / as services are rendered.
**Recognised at a point in time.
5.(a) Other income
Foreign exchange gains / (losses)
Interest received
Other
Total other income
2022
$’000
2021
$’000
34
423
700
1,157
(9)
225
501
717
Payroll tax
Provision for employee benefits1
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
2,627
3,331
2,627
3,331
1,185
443
5,839
3,639
23,383
13,429
5,076
4,990
35,483
22,501
38,110
25,832
94,048
83,722
10,680
9,480
8,588
415
10,930
7,593
1,045
8,541
124,661
110,381
3,353
3,213
2,539
1,942
1,844
1,493
639
(68)
(6)
267
(21)
(13)
Total revenue
369,391
312,012
1In addition to the employee benefits expense disclosed above, ‘Variable costs’ in the consolidated income
statement includes $17.7m (2021: $17.3m) relating to employee costs, ‘Contract acquisition costs’ in the
consolidated statement of financial position includes $11.9m in current year employee benefits (2021: $8.3m)
and ‘Capitalised development’ includes $41.6m in current year employee benefits (2021: $36.1m).
(c)
Amounts recognised directly in equity
2022
$’000
2021
$’000
Increase/(decrease) in expected credit loss allowance
Amounts reversed/written off
Closing balance - 30 September
23,477
25,152
Opening balance - 1 October
Income tax expenses
Income tax expense
7.
(a)
Current tax
Group, and earn interest at the respective term 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
2022
$’000
2021
$’000
19,374
17,760
Relating to origination and reversal of temporary differences
5,717
7,315
Adjustments for tax expense of prior periods
(1,614)
77
23,477
25,152
Trade and other receivables
Deferred income tax expense / (revenue) included in income
tax expense comprises:
(Increase) / decrease in deferred tax assets
(1,786)
(4,492)
Increase / (decrease) in deferred tax liabilities
6,447
10,500
Allowance for expected credit losses
Sundry receivables
2022
$’000
2021
$’000
59,917
54,761
(3,172)
(4,158)
521
505
57,266
51,108
Adjustments for deferred taxes of prior periods
1,057
5,717
1,307
7,315
(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.
(b)
Numerical reconciliation of income tax
expense to prima facie tax payable
2022
$’000
2021
$’000
Profit from continuing operations before income tax expense
112,320
97,843
Tax at the Australian tax rate of 30% (2021 - 30%)
33,696
29,353
Adjustments for current tax of prior periods
(1,614)
77
Research and development tax concession
(8,453)
(4,235)
Expenditure not allowable for income tax purposes
Current year tax losses not recognised
Tax rate variance in subsidiaries
Income tax expense
279
(35)
(396)
(43)
-
-
Included in the trade and other receivable balance are debtors with
a carrying amount of $4.2m (2021 - $4.3m) 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.
(a) Allowance for expected credit losses
Movements in the provision for impairment of receivables are
as follows:
2022
$’000
4,158
(387)
2021
$’000
2,885
3,601
(599)
(2,328)
3,172
4,158
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)
8. Current assets - Cash
and cash equivalents
Note prior year has been re-stated to include Scientia.
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.
Age
Trade
Debtors
Expected
credit loss
Trade
Debtors
Expected
credit loss
2022
$’000
2021
$’000
Cash and cash equivalents
175,865
144,210
0 – 30 days
The Group has a secured $2 million overdraft facility to assist with
working capital requirements. The facility is unused at 30 September
2022.
Cash at bank earns interest at floating rates based on daily bank
deposit rates.
31 – 60 days
61 – 90 days
91+ days
Total
2022
$’000
47,234
4,742
1,135
6,806
59,917
2022
$’000
(433)
(44)
(262)
(2,433)
(3,172)
2021
$’000
44,633
4,572
1,044
4,512
54,761
2021
$’000
(480)
(48)
(8)
(3,622)
(4,158)
Term deposits are made for varying periods of between one day and
three months, depending on immediate cash requirements of the
Expected credit loss includes $1.5m (FY21: $2.8m) acquired with
Scientia.
133
Transforming business, making life simpleFinancial statements
10. Contract asset
Contract assets
2022
$’000
2021
$’000
21,781
23,055
Contract assets - non current
4,881
2,962
Year ended 30 September 2022
Allowance for expected credit losses
(241)
(209)
Opening net book amount
26,421
25,808
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
2022
$’000
209
32
-
2021
$’000
232
(23)
-
Closing balance - 30 September
241
209
11. Current assets - Other current
assets
Deposits receivable
2022
$’000
600
600
2021
$’000
283
283
12. Non-current assets - property,
plant and equipment
Office furniture
& equipment
$’000
7,323
3,767
(13)
Other
$’000
54
-
-
Total
$’000
7,377
3,767
(13)
Disposals
Depreciation charge
(2,577)
(50)
(2,627)
Make good movement
Exchange difference
Closing net book amount
At 30 September 2022
Cost
Accumulated depreciation
Net book amount
Year ended 30 September 2021
Opening net book amount
Additions
Disposals
(54)
55
8,501
46,311
(37,810)
8,501
8,823
1,636
(17)
-
-
4
4,770
(4,766)
4
146
-
-
Depreciation charge
(3,239)
(92)
Make good movement
Exchange difference
Closing net book amount
At 30 September 2021
Cost
Accumulated depreciation
Net book amount
119
1
7,323
43,009
(35,686)
7,323
-
54
4,770
(4,716)
54
(54)
55
8,505
51,081
(42,576)
8,505
8,969
1,636
(17)
(3,331)
119
1
7,377
47,779
(40,402)
7,377
13. Non-current assets - Intangible assets
Year ended 30 September 2022
Opening net book amount
Additions
Transfers to software - in use
Amortisation charge
Impairment
Exchange difference
Closing net book amount
At 30 September 2022
Cost
Accumulated amortisation
Accumulated impairment
Net book amount
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
5,900
1,547
-
(569)
-
(86)
6,792
14,900
(5,431)
(2,677)
6,792
4,023
2,255
-
(388)
-
10
7,180
-
-
(616)
-
(484)
6,080
7,139
(1,059)
-
14,677
11,908
30,295
50,060
70,713
176,459
-
63,515
-
(46,369)
46,369
-
(5,839)
-
(368)
-
-
(39)
(23,383)
(30,407)
-
(737)
-
(2,828)
20,378
33,947
92,962
206,739
35,348
(14,970)
-
33,947
136,432
281,099
-
-
(43,470)
(64,930)
-
(9,430)
6,080
20,378
33,947
92,962
206,739
713
6,563
-
(55)
-
(41)
9,991
8,370
26,983
41,858
-
(38,546)
(3,639)
-
(45)
-
-
-
35,573
9,971
38,546
110,533
83,552
-
(13,429)
(17,511)
-
52
-
(115)
Goodwill
$’000
47,694
-
-
-
-
(1,114)
46,580
53,333
-
(6,753)
46,580
33,250
14,535
.
-
(91)
Closing net book amount
47,694
5,900
7,180
14,677
30,295
70,713
176,459
At 30 September 2021
Cost
Accumulated amortisation
Accumulated impairment
Net book amount
54,447
-
(6,753)
47,694
13,439
(4,862)
(2,677)
5,900
7,622
(442)
-
7,180
23,808
(9,131)
-
30,295
90,800
220,411
-
-
(20,087)
(34,522)
-
(9,430)
14,677
30,295
70,713
176,459
1 Balance of contract acquisition costs is split between current portion of $6.5m and non-current portion of $13.9m (2021: current $5.0m; non-current $9.7m).
Assets with indefinite life other than goodwill are within Intellectual property/source code above.
(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 as follows.
Software
$’000
Consulting
$’000
Corporate
$’000
Total
$’000
36,972
9,608
2022
Goodwill
2021
Goodwill
Indefinite life intangibles
1,362
660
38,334
10,268
Software
$’000
Consulting
$’000
Corporate
$’000
38,086
9,608
Indefinite life intangibles
1,362
660
39,448
10,268
-
-
-
-
-
-
46,580
2,022
48,602
Total
$’000
47,694
2,022
49,716
135
Transforming business, making life simpleFinancial statements
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 prior year, there was a new CGU as a result of the acquisition.
This has been tested for impairment for the year ended 30 September
2022. Refer to note 25 for further details of the acquisition.
The key assumptions used for all CGUs in value in use calculations for
30 September 2022 and 2021 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
(2021 - 15%)
• Terminal growth rates - these have been set at 3% (2021 - 2%)
15. Current liabilities - Trade and
other payables
19. Non-current liabilities -
Provisions
Trade payables
Sundry creditors
Directors fees
2022
$’000
2021
$’000
40,331
31,120
8,163
9,204
65
101
48,559
40,425
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.
Long service leave
Make good provision
2022
$’000
2021
$’000
2,066
1,926
134
143
2,200
2,069
(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.
14. Non-current assets - Deferred
tax assets
16. Current liabilities -
Deferred revenue
The balance comprises temporary differences attributable to:
Employee benefits
Provisions-other
Accrued expenses
Intangibles
Copyright - software
Lease liability (net)
Employee share trust
Deferred revenue
Other
2022
$’000
2021
$’000
5,097
2,450
1,384
830
37
5,179
2,131
524
558
39
3,066
2,864
2,952
4,927
50,621
45,877
2,924
5,545
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
Movements:
Opening balance at 1 October
Opening balance adjustment
(48,301)
(41,854)
21,060
25,790
48,688
43,500
(27,628)
(17,710)
21,060
25,790
67,643
55,497
-
3,903
Credited / (charged) to the consolidated income statement
1,718
4,494
Carrying amount at 1 October
Carrying amount at 30 September
2022
$’000
2021
$’000
169,322
160,015
184,008
169,322
Revenue recognised from the opening balance
168,003
158,278
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
69,361
67,644
Make good provision
Other provisions¹
Annual leave
Long service leave
2022
$’000
2021
$’000
76
148
5,524
5,444
8,032
7,270
8,461
7,468
20,902
21,521
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 and 2022 ($5.2m) based on management’s best estimate
pending the results of the retrial.
18. Contingent Consideration
2022
$’000
2021
$’000
Credited / (charged) to equity
Offset from deferred tax liabilities
Closing balance at 30 September
-
3,750
(48,301)
(41,854)
Contingent consideration - current
6,997
-
Contingent consideration- non-current
-
7,576
21,060
25,790
Total
6,997
7,576
Refer to note 25- Business Combinations for details of the acquisition.
Net book amount
Lease liability
Year ended 30 September 2022
Opening liability
New leases entered into during the year
Modifications during the year
Payments
Interest expense
Exchange difference
Closing liability
Property
$'000
Equipment
$'000
33,325
4,543
1,280
64
40
-
Total
$’000
33,389
4,583
1,280
(5,322)
(54)
(5,376)
1,723
(296)
1
-
1,724
(296)
35,253
51
35,304
The following are amounts recognised in profit or loss under
AASB 16:
Amortisation on right-of-use assets
Interest expense on lease liabilities
Expense related to short-term leases
(included in occupancy costs)
2022
$’000
2021
$’000
5,076
4,990
1,724
1,439
-
25
Total amount recognised in profit or loss
6,800
6,454
e
v
a
e
l
e
c
i
v
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0
0
0
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a
e
L
l
a
u
n
n
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0
0
0
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$
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o
o
G
e
k
a
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0
0
0
’
$
t
n
e
m
t
i
m
m
o
C
l
e
v
e
L
e
c
i
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e
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0
0
0
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$
n
o
i
t
a
r
e
d
i
s
n
o
C
t
n
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g
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i
t
n
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C
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i
s
i
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l
a
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0
0
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’
$
8,461
9,396
290
222
5,221
7,576
31,166
Cashflow for leases
3,593
1,456
(15)
162
(4,022)
(1,516)
(65)
(81)
-
-
-
5,196
(579)
(6,263)
Total cash outflow as a lessee1
2022
$’000
2021
$’000
5,376
2,421
5,376
2,421
8,032
9,336
210
303
5,221
6,997 30,099
1Increase in lease payments year on year is largely due to a rental rebate on the Group’s HQ lease. This rebate
significantly reduced base rent payable between 1 July 2020 and 1 April 2022. The rent rebate applied in FY22
was $3.1m (FY21 $4.8m).
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
25,193
2,041
41
-
(4,933)
43
22,385
33,064
(10,679)
22,385
63
51
-
-
(57)
-
57
159
(102)
57
Total
$’000
25,256
2,092
41
-
(4,990)
43
22,442
33,223
(10,781)
22,442
Property
$'000
Equipment
$'000
22,385
4,558
1,292
-
(5,018)
(146)
23,071
38,164
(15,093)
23,071
57
40
-
-
(58)
-
39
199
(160)
39
Total
$’000
22,442
4,598
1,292
-
(5,076)
(146)
23,110
38,363
(15,253)
23,110
137
2022
Carrying amount
at 1 October 2021
Additional
provisions
recognised
Amount used
during the year or
FX movement
Carrying amount
at 30 September
2022
20. Leases
Right-of-use-assets
Year ended 30 September 2022
Opening net book amount
Additions
Modifications during the year
Disposals
Depreciation charge
Exchange difference
Closing net book amount
At 30 September 2022
Cost
Accumulated depreciation
Transforming business, making life simpleFinancial statements
Lease liability
Year ended 30 September 2021
Opening liability
New leases entered into during the year
Modifications during the year
Payments
Interest expense
Exchange difference
Property
$'000
Equipment
$'000
Total
$’000
Date
Details
Number of shares
$’000
Share grant to employees
4,607
70
30-Sep-22
Closing balance
323,365,816
57,635
32,262
2,041
(111)
61
51
-
32,323
1-Oct-20
Opening balance
2,092
(111)
Exercise of options
Share grant to employees
319,295,458
2,282,537
70,798
40,551
10,595
499
(2,347)
(49)
(2,396)
30-Sep-21
Closing balance
321,648,793
51,645
1,438
42
1
-
1,439
42
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
Closing liability
33,325
64
33,389
1 Increase in lease payments year on year is largely due to a rental rebate on the Group’s HQ lease. This rebate
significantly reduced base rent payable between 1 July 2020 and 1 April 2022. The rent rebate applied in FY22
was $3.1m (FY21 $4.8m).
23. Reserves
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:
(a) Other reserves
Share option reserve
Foreign currency translation
Dividend reserve
2022
$’000
2021
$’000
41,658
38,305
(1,238)
1,958
41,455
32,454
81,875
72,717
2022
$’000
2021
$’000
(5,461)
(5,222)
(914)
(25)
(851)
(25)
(36,176)
(31,732)
(b) Nature and purpose of other reserves
(5,725)
(4,024)
(i) Share-based payments
(48,301)
(41,854)
48,301
41,854
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
Opening balance at 1 October
(41,854)
(26,892)
Charged/(credited) to the Consolidated income statement
(6,447)
(10,500)
Closing balance adjustment
Offset to deferred tax assets
-
(4,462)
48,301
41,854
(iii) Dividend reserve
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.
Closing balance at 30 September
-
-
The reserve records retained earnings set aside for the payment of
future dividends.
22. Contributed Equity
24. Dividends
Share capital
Ordinary shares
Fully paid
2022
Shares
2021
Shares
2020
$’000
2019
$’000
323,365,816
321,648,793
57,635
51,645
Movements in ordinary share capital
(a) Employee Share Option Plan
Date
Details
Number of shares
1-Oct-21
Opening balance
Exercise of options
321,648,793
1,712,416
$’000
51,645
5,920
Final dividend for the year ended 30 September 2021 of 10.09
Cents (2020 - 9.41 Cents) per fully paid share paid in December
2021 (2020 - December 2020)
60% franked (2020 - 60%) based on tax paid at 30%
Interim dividend for the year ended 30 September 2022 of
4.20 Cents (2021 - 3.82 Cents) per fully paid share paid in June
2022 (2021 - June 2021)
60% franked (2021 - 60%) based on tax paid at 30%
2022
$’000
2021
$’000
32,454
30,225
13,673
12,279
Total dividends paid
46,127
42,504
(a) Dividends not recognised at the end of the reporting
period
2022
$’000
2021
$’000
Final
In addition to the above dividends, since year end the directors
have recommended the payment of a final dividend of 10.82
cents per fully paid ordinary share (2021 - 10.09 cents) 60%
franked (2021 - 60%) based on tax paid at 30% (2021 - 30%).
The aggregate amount of proposed dividend expected to be
paid out of retained earnings, but not recognised as a liability
at year end
The directors have also recommended the payment of a special
dividend of 2 cents per share, 60% franked.
6,467
-
41,455
32,454
(b) Franked Dividends
The franked portions of the final dividends recommended after 30
September 2021 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 2022.
Franking account balance as at the end of the financial year at
30% (2021: 30%)
Franking credits that will arise from the payments of income tax
payable as at the end of the financial year
2022
$’000
2021
$’000
171
(1,391)
1,197
3,324
1,368
1,933
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 $10,659,985 (2021 - $8,345,408).
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 the 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 (now Timetabling
and Scheduling), provides advanced academic timetabling and
resource scheduling for over 150 leading universities across the
United Kingdom and Australia.
At 30 September 2021, the business combination was provisional as
the Company continued to receive information required to assess
the fair values of the assets and liabilities acquired. The fair value of
the acquisition was determined to be $22.9m (£12.2m GBP) and was
initially recorded to goodwill as there was limited information available
for the purchase price accounting (PPA) allocation prior to the financial
statements being issued.
In accordance with the accounting standards, changes to
measurement during the provisional accounting period have been
adjusted in the comparative balance sheet as at 30 September 2021.
The provisional assessment is now complete, and the Company has
completed its diligence and valuation work. Changes made to the
provisional accounting to date have been noted in below.
Purchase consideration
34,988
32,454
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.
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 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 as at 15 September 2021 of the
earn out considering the time value discount is $7.4m as at 15
September 2021. The fair value as at 30 September 2022 is
$6.9m.
At acquisition, the Scientia Group had not begun the preparation of
the 2020 or 2021 financial statements, nor completion of the related
audits. In the period between October 2021 and March 2022, the audit
of 2020 financial statements was completed. The 2021 audit was also
significantly progressed by then. This work, combined with external
due diligence and valuation work and Technology One’s internal
efforts, uncovered facts already present at the date of acquisition
and circumstances that would have strongly impacted the probability
of Scientia achieving the first earn out. For this reason, the purchase
consideration was retrospectively reduced to the initial cash payment
of $11.5m (£6.1m) plus the value of the second earn out, $7.6m (£4.1m)
within the half year accounts.
Further payments to the major selling 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 probable. As of 30 September 2022,
there has been no provision recorded.
There were $0.5m of acquisition costs incurred during the comparison
year ended 30 September 2021. The revenue and profit and loss
for Scientia was insignificant for the 15 days of consolidation to 30
September 2021.
The inclusion of the Scientia Group in the Consolidated Statement of
Comprehensive Income at 30 September 2022 resulted in additional
profit of $0.8m for the Technology One Group.
139
Transforming business, making life simpleFinancial statements
Assets acquired and liabilities assumed – PPA outcomes
during provisional accounting period
Purchase consideration
Cash paid
2021
$'000
2021
$'000
Finalised
Provisional
11,535
11,535
Contingent consideration at FV on acquisition date
7,623
11,461
Total purchase consideration
19,158
22,996
Assets acquired
Software
Tradename
Customer relationships
Right-of-use assets (ROU)
Cash
Trade debtors
Prepayments and accrued income
Tangible assets
Liabilities assumed
Deferred tax liabilities(net)
Creditors and accruals
Deferred revenue
Lease liability
9,971
1,114
6,563
1,479
2,123
1,857
694
110
(555)
(6,178)
(9,596)
(2,959)
-
-
-
-
-
-
-
-
-
-
-
-
Fees for assurance services that are required by legislation
2022
$
-
2021
$
-
Fees for other assurance and agreed-upon-procedure services
214,987
212,816
Fees for other services
197,241
170,131
Total remuneration of Ernst & Young Australia
1,290,678
1,111,550
The relative ratio of other services to audit and assurance services
was 15% (2021: 15%).
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.
Goodwill arising on acquisition
14,535
22,996
Guarantees
26. Key management personnel
disclosures
At 30 September 2022, the Group had $3,745,483 (2021 - $3,694,124)
in outstanding bank guarantees issued by Technology One. The total
available guarantee facility is $8,300,000 (2021- $7,000,000).
(a) Key management personnel disclosures
Short-term employee benefits
Deferred STI
Share-based payments
2022
$
2021
$
5,408,577
5,733,291
422,177
368,786
1,263,638
974,629
7,094,392
7,076,706
Short-term employee benefits have decreased due to Adrian Di Marco
(executive Chairman) retiring on 30 June 2022.
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.
(b) Transactions with related parties
The parent entity entered into the following transactions during the
year with related parties in the wholly owned group:
(b) Equity instrument disclosures relating to key
management personnel
• Loans were advanced and repayments received on short-term
intercompany accounts.
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.
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)
2022
$
2021
$
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
878,450
728,603
• Marketing support and management fees were charged to wholly
owned controlled entities.
• The IP held in Scientia Ltd was transferred to Technology One
Limited.
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.
The ownership interest in related parties in the wholly owned group is
set out in note 30.
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):
32. Earnings per share
(a) Basic earnings per share
Country of
Incorporation
Class of shares
2022%
2021%
Equity holding
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
2022
Cents
2021
Cents
27.51
22.64
27.38
22.52
Name of entity
Technology One
Corporation Sdn Bhd
Technology One New
Zealand Ltd
Technology One UK
Limited
Malaysia
Ordinary
New Zealand
Ordinary
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
Australia
Ordinary
Australia
Ordinary
Icon Solution Unit Trust
(ICON)
Icon Strategic Solutions
Pty Ltd
Jeff Roorda and
Associates Pty Ltd (JRA)
Scientia Resource
Management Limited
(UK)
Cyon Knowledge
Computing Pty Ltd
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
`100
100
England
Ordinary
100
100
Scientia Limited
England
Ordinary
Australia
Ordinary
100
100
100
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
31. Reconciliation of profit after
income tax to net cash inflow from
operating activities
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
2022
$'000
2021
$'000
88,843
72,691
38,110
3,353
1,844
(6)
639
25,832
3,213
1,493
(21)
267
(increase)/decrease in trade and other receivables and contract
assets
(6,771)
(16,804)
(increase)/decrease in prepayments and other current assets
(6,568)
(2,578)
(increase)/decrease in tax assets and liabilities
(3,466)
13,010
Increase / (decrease) in trade creditors
Increase / (decrease) in provisions
Increase / (decrease) in lease liabilities
Increase / (decrease) in deferred revenue
11,284
(1,067)
1,915
14,686
(556)
308
2,265
15,867
Net cash inflow / (outflow) from operating activities
142,796
114,987
Profit used for calculating basic and diluted earnings per share
($'000)
88,843
72,691
(b) Weighted average number of shares used
as denominator
2022
Number
2021
Number
Weighted average number of ordinary shares used as
the denominator in calculating basic earnings per share
322,953,789
321,074,997
Adjustments for calculation of diluted earnings per share:
Options
1,526,148
1,667,676
Weighted average number of ordinary and potential
ordinary shares used as the denominator in
calculating diluted earnings per share
324,479,937
322,742,673
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:
33. Share-based payments (continued)
Set out below are summaries of options granted under the plan:
Issue date
Expiry date
Exercise price
2022
8/07/2022
30/11/2031
7.7800
23/02/2022
30/11/2031
10.3700
26/11/2021
30/11/2028
5.8850
26/11/2021
30/11/2027
9.2300
26/11/2021
30/11/2029
9.2300
26/11/2021
30/11/2029
12.3100
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
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
1/10/2025
4.1166
1/10/2018
1/07/2025
0.8633
1/10/2018
1/07/2025
1.8914
1/10/2017
1/10/2025
5.1456
1/10/2017
1/10/2025
5.7474
1/07/2018
1/10/2026
4.1122
1/07/2017
1/07/2024
0.8633
1/07/2016
1/07/2023
0.8633
25/08/2010
25/08/2023
0.3450
25/08/2011
25/08/2024
0.3450
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
-
-
-
-
-
-
11,064
612,202
540,801
109,284
50,000
578,551
804,768
899,079
390,520
22,799
16,750
50,000
92,014
11,177
22,853
16,650
15,300
30,000
30,000
468,022
1,400,926
37,593
34,740
547,113
408,208
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(847,166)
(385,639)
(2,799)
(16,750)
-
-
-
-
-
(36,712)
-
-
(131,959)
-
-
-
(15,531)
(105,849)
-
(4,881)
-
-
-
(48,268)
(27,757)
-
-
(16,650)
(15,300)
(30,000)
(30,000)
-
-
-
-
-
-
468,022
1,400,926
37,593
34,740
510,401
408,208
11,064
480,243
540,801
109,284
50,000
563,020
698,919
51,913
-
20,000
-
50,000
15,989
11,177
22,853
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
51,913
-
20,000
-
50,000
15,989
11,177
22,853
-
-
-
-
Total
4,303,812
2,896,602
(1,392,572)
(322,689)
5,485,153
171,932
1/07/2016
1/07/2023
0.8633
Weighted average exercise price
$5.60
$9.94
$4.25
$6.15
$8.20
$3.67
1/07/2015
1/07/2022
0.8633
25/08/2010
25/08/2023
0.3450
25/08/2011
25/08/2024
0.3450
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
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
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
-
-
-
-
-
50,000
1,691
578,551
913,938
988,325
390,520
12,500
313,582
100,101
29,250
12,500
50,000
50,000
11,177
167,000
22,853
16,650
155,482
22,516
17,000
16,650
16,650
30,000
30,000
-
11,064
644,990
540,801
116,938
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(12,500)
(290,783)
(100,101)
(12,500)
(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
-
-
-
-
-
-
-
-
-
-
-
-
-
22,799
22,799
-
16,750
-
50,000
92,014
-
11,177
-
22,853
16,650
-
-
-
-
16,750
-
50,000
92,014
-
11,177
-
-
16,650
-
-
-
15,300
15,300
-
30,000
30,000
-
30,000
30,000
1/10/2017
1/10/2025
5.1456
1,565,170
Total
5,562,106
1,313,793
(2,268,446)
(303,641)
4,303,812
284,690
Weighted average exercise price
$4.93
$6.69
$4.67
$5.05
$5.60
$2.77
143
Transforming business, making life simpleFinancial statements
(b) Guarantees entered into by the parent entity
At 30 September 2022, the Group had $3,745,483 (2021 - $3,694,124)
in outstanding bank performance guarantees. The total available
guarantee facility is $8,300,000 (2021- $7,000,000).
The parent entity, Technology One Limited, continues to support its
subsidiaries in their operations, by way of financial support.
(c) Contingent liabilities of the parent entity
At 30 September 2022 and 30 September 2021, the Parent had
no contingent liabilities but did have a provision for contingent
consideration as disclosed in note 25.
35. Events after the reporting
period
On 22 November 2022, the Directors of Technology One Limited
declared a final and special dividend on ordinary shares in respect
of the 2022 financial year. The total amount of the dividend is
$41,455,498 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
33. Share-based payments
(continued)
At September 2022, a total of 5,485,153 options (2021 – 4,303,812)
were offered to employees.
The weighted average share price at the date of exercise of options
exercised during the year ended 30 September 2022 was $4.25 (2021
- $4.67).
The weighted average remaining contractual life of share options
outstanding at the end of the period was 7.0 years (2021 - 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 $2.13
and $3.65 (2021 - $1.77 and $2.66).
The model inputs for options granted during the year ended 30
September 2022 included:
(I)
Dividend yield of 1.2% (2021: 1.6%)
(II)
Expected volatility 33.15% (2021: 33.54%)
(III) Risk-free interest rate 1.24% (2021: 0.01%)
(IV) Expected life of option 3.3 years (2021: 3.3 years)
(V) Option exercise price between $12.31 and $9.23 (2021: $7.85
and $5.88)
(VI) Weighted average share price at grant date was $11.56 (2021:
$7.85)
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.
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.
Retention long-term incentives options
The Group made the decision to issue retention LTI’s during the
year to ensure the retention of key executives during the critical
growth phase through to November 2026 and the transition from a
founder led company. Option vest if the employee remains in service
until November 2026 and malus provisions. Please refer to the
remuneration report for more information.
A total of 1,400,926 retention LTI’s were granted during the year
(2021:nil).
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 $2.43 -$2.83.
The model inputs for options granted during the year ended 30
September 2022 included:
(I)
Dividend yield of 1.4%
(II) Expected volatility 30.98%
(III) Risk-free interest rate 1.59%
(IV) Expected life of option 5.07 years
(V) Option exercise price $10.37
(VI) Weighted average share price at grant date was $9.96
(d)
Expenses arising from share-based payment transactions
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
2022
$’000
2021
$’000
3,589
3,405
(236)
(192)
3,353
3,213
34. Parent entity financial
information
(a) Summary financial information
The individual financial statements for the parent entity show the
following aggregate amounts:
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
Profit or loss before tax for the year
Total comprehensive income
2022
$’000
2021
$’000
222,751
212,771
260,224
225,836
487,975
438,607
219,344
198,267
14,207
32,602
233,551
230,869
57,635
51,645
41,455
32,454
41,658
38,305
113,624
85,283
254,372
207,687
103,583
92,260
103,583
92,260
At 30 September 2022, the statement of financial position shows a
current liability balance of $217m (30 September 2021: $198m) 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.
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 70 to 155 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 2022 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
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable;
(c)
and
this declaration has been made after receiving the declarations required to be made to the Directors in accordance with section
(d)
295A of the Corporations Act 2001 for the reporting year ended 30 September 2022.
On behalf of the Board of Directors
Pat O’Sullivan
Chair
Brisbane
22 November 2022
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 2022, 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
John Robinson
Partner
22 November 2022
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 2022, 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
2022 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:
(cid:377) SaaS fees;
(cid:377) Annual licence fees;
(cid:377)
(cid:377) Consulting services
Initial licence fees; and
Customer contracts often include a number of
products and services (separately identifiable
components). Revenue recognition is considered 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.
(cid:377)
For a sample of customer contracts, we
obtained supporting documentation and
assessed management’s judgement on whether
the revenue has been recorded appropriately.
Testing considered:
(cid:131)
(cid:131)
(cid:131)
The timing of revenue recognition
based on the satisfaction of
performance obligations;
The allocation of transaction price to
identified performance obligations;
and
The determination of stand-alone
selling price for separately identifiable
components.
(cid:377)
(cid:377)
For a sample of consulting service contracts,
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, including:
(cid:131)
(cid:131)
(cid:131)
Agreeing the amounts recorded to
contract, invoice and payment, where
appropriate;
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.
(cid:377) 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
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
149
Transforming business, making life simpleFinancial statements
Capitalisation 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 capitalisation of software development costs was
a key audit matter due to the significant management
judgements, including:
(cid:377) Whether the costs incurred relate to
research costs, which are required to be
expensed, or development costs that are
required for capitalisation;
(cid:377) The assessment of the useful life of the asset
and the timing of amortisation; and
(cid:377) 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:
(cid:377) Assessed the Group’s policy of capitalisation of
software development costs for compliance
with Australian Accounting Standards.
(cid:377) Held inquiries with Project Directors and other
project team members, to understand
development activities undertaken and the
feasibility of completion.
(cid:377)
For capitalised salaries, we tested whether
additions were appropriately supported to
payroll records, including:
(cid:131)
(cid:131)
Testing a sample of payroll
transactions capitalised to payslips and
employee contracts;
Performing independent data analysis
to identify and investigate
significant changes in salaries
capitalised (including changes in
employees) and the capitalisation rate
applied to time recorded on employee
timesheet.
(cid:377)
For a sample of third-party costs capitalised,
agreed the amount capitalised to invoice or
other supporting documentation and assessed
whether the service or good received was
attributed to development activities.
(cid:377) Considered the appropriateness of the
amortisation period for the capitalised software
development costs and the timing of
amortisation.
(cid:377) Assessed the completeness of the Group’s
indicators of impairment of capitalised software
development costs.
(cid:377) Assessed the adequacy of the financial report
disclosures included in the financial statements.
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:
(cid:377)
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.
(cid:377) 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.
(cid:377) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
(cid:377) 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.
(cid:377) 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
151
Transforming business, making life simpleFinancial statements
(cid:377) 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.
We 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 2022.
In our opinion, the Remuneration Report of Technology One Limited for the year ended 30 September
2022, 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
John Robinson
Partner
Sydney
22 November 2022
Jennifer Barker
Partner
Brisbane
22 November 2022
Shareholder information
The shareholder information set out below was applicable as at 05 December 2022.
(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
Percentage of
shareholders
6,443
4,989
1,249
1,175
64
There were 180 holders of less than a marketable parcel of ordinary shares (1.29% of shareholders).
(b) Equity security holders
Twenty largest quoted equity security holders
Name
JL Mactaggart Holdings Pty Ltd 1
Masterbah Pty Ltd 1
Selector Funds Mgt (Sydney)
Fundsmith (London)
First Sentier Investors (Sydney)
State Street Global Advisors (Sydney)
Vanguard Group (Philadelphia)
Vinva Investment Management (Sydney)
Hyperion Investor Mgt (Brisbane)
Macquarie Asset Management (Sydney)
BlackRock Investment Management (San Francisco)
Argo Investments (Sydney)
Dimensional Fund Advisors (Sydney)
Wasatch Global Investors (Salt Lake City)
Pendal Group (Sydney)
Acadian Asset Mgt (Boston)
Vanguard Investments (Melbourne)
Walter Scott & Partners (Edinburgh)
Lennox Capital Partners (Sydney)
Mondrian Investment Partners (London)
Number held
26,902,500
17,378,500
14,263,369
11,985,359
11,612,362
9,919,191
9,823,466
9,501,181
8,905,855
8,807099
8,017,882
6,784,564
6,475,186
6,380,783
5,251,394
4,862,652
4,453,718
4,417,231
4,320,745
4,039,282
1 Substantial holder (including associate holdings) in Technology One Limited.
184,096,319
56.72%
(c) Unquoted securities
Details
TNEAI (Options)
TNEAJ (Performance Rights)
(d) Voting rights
Number on Issue
Number of Holders
4,997,926
101,714
89
29
46.29%
35.84%
8.97%
8.44%
0.46%
%IC
8.29%
5.35%
4.39%
3.69%
3.58%
3.06%
3.03%
2.93%
2.74%
2.71%
2.47%
2.09%
2.00%
1.97%
1.62%
1.50%
1.37%
1.36%
1.33%
1.24%
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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 statements
Corporate directory - Technology One Limited
Corporate calendar
Board of Directors
Branch Locations
Lawyer
The following calendar shows the planned dates for significant shareholder events for the 2023 Year.
These dates are subject to change. The declaration of dividends is subject to board approval.
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)
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
Brisbane
Sydney
Melbourne
Canberra
Adelaide
Perth
Hobart
Auckland
Wellington
Kuala Lumpur
London
Auditor
Ernst & Young
Registered Office
Technology One Limited
Level 51, 111 Eagle Street
Brisbane QLD 4000
Level 11, TechnologyOne HQ
www.ey.com/au
540 Wickham Street
Fortitude Valley QLD 4006
Australia
www.TechnologyOneCorp.com
P. 1800 671 978
International: +617 3167 7300
2023 (Year Ending 30 September 2023)
Distribute 2022 Annual Report
Annual General Meeting 2023
Announcement of Half Year Results for 2023
Media Interviews
Presentations to Institutions – Sydney (tentative)
Presentations to Institutions – Melbourne (tentative)
Ex-Div for 2023 Interim Dividend
Record date for interim dividend
Payment date for interim dividend
Announcement of Full Year Results for 2023
Media Interviews
Presentations to Institutions – Sydney (tentative)
Presentations to Institutions – Melbourne (tentative)
Ex-Div for 2023 Final Dividend
Record date for 2023 dividend
Payment date for 2023 final dividend
Distribute 2023 Annual Report (placeholder only)
Annual General Meeting 2024 (tentative)
Notes:
16 Jan 2023
22 Feb 2023
23 May 2023
23 May 2023
24 May 2023
26 May 2023
01 Jun 2023
02 Jun 2023
16 Jun 2023
21 Nov 2023
21 Nov 2023
22 Nov 2023
24 Nov 2023
30 Nov 2023
01 Dec 2023
15 Dec 2023
17 Jan 2024
21 Feb 2024
Closing date for receipt of director nominations is 4 January 2023 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 2024 in accordance with ASX Listing Rule 14.3 (35 days prior to AGM)
155
Transforming business, making life simpleFinancial statements TechnologyOne (ASX: TNE) is Australia’s largest enterprise
software company and one of Australia’s top 150 ASX-listed
companies, with locations globally. 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 1,300 leading corporations,
government agencies, local councils and universities are
powered by our software.
For more than 35 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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