Evaluating TechnologyOne as a potential stock to buy Completing this case involved: - Valuing TechOne's intrinsic value of its shares through a DCF analysis - Determining the main catalyst into which this buy will substantiate from - Understanding the business line of TechnologyOne and their occupation in the market - Relevant qualitative analysis on the risk, competitors and external economic drivers for TechOne - Overall rationale as to why TechnologyOne should be bought

1. Technology One – Analysis and Recommendation
Marc Nguyen, Henry Wu, Callum Shaw, Oscar Haman

2. Executive Summary & Table of Contents
We are issuing a buy recommendation for Technology One
Industry Overview
Company Overview
Valuation
Catalyst
Our analysis implies a target 1 year
price of $6.00/share
We believe that the current legal
conflict between BCC and TNE
creates the opportunity to purchase
this stock at a substantial
discount
Disruptive business models, strong
momentum, increased digital
maturity and political support imply
strong growth across the
technology sector
Despite ongoing legal affairs,
Technology One’s fundamental
business model remains
promising.
Risks
A variety of risks persist across ou
strategy
Summary
We believe our strategy offers an
opportunity to produce significant
excess returns
2
Executive Summary2
Investment Thesis3
4 Company Overview
Competitors6
7 Market Overview
8 Price History
10 Valuation
13 Legal Catalyst
15 Quantifying Returns
16 Risk Management
17 Holding Strategy
18 Strategic Summary
20
30
36
40
Division 1 – Company
Research
Division 2 – Market
Research
Division 3 – Legal
Overview & Analysis
Division 4 - Valuation
Table of Contents

3. Why invest in TechnologyOne?The market has overreacted to a potential lawsuit between Brisbane City Council and Technology One
The market has
overreacted to a
potential lawsuit
between Brisbane
City Council and
Technology one by
100-300%.
This creates an
opportunity to
purchase a quality
company a
substantial discount
to it’s implied value
UNDERVALUED
TechnologyOne's
underlying business
model relies on
offering vertically
integrated software
and consulting
packages.
As software becomes
more complex, this
business model will
become more
attractive and
profitable.
HIGH DEMAND
Technology One has
a strong history of
financial performance
– producing profits
every year for the
past 17 years.
The appointment of
10yr TechOne veteran
Edward Chung to
CEO represents a
continuation of a
strong management
team.
PERFORMANCE
Overview
Date:
23-08-17
Closing Price:
$5.03
Recommendation:
BUY
Implied Price
Range:
$5.50-$6.40
Ticker:
ASX:TNE
Target Price:
$6.00
Upside:
8.55-24.92%
Sector: Software &
Services
Investment Thesis
The 16% drop in Technology One’s (TechOne) share price
since the start of 2017 represents a significant overreaction
to the current legal threat facing the company. Financial
performance remains strong and the core business strategy
promises to deliver value into the future. We recommend
purchasing with a target exit price of above $6/share

4. A promising business model…
Current affairs have created an opportunity to purchase Technology One at a substantial discount
Technology One Overview
Company Overview: TechnologyOne is
Enterprise Software vendor that offers
vertically integrated software packages for
business operations.
It aims to deliver value by simplifying the
process of integrating advanced
computational systems in non-tech
businesses.
Technology One distinguishes itself from it’s
competitors by combining service and
software
TechnologyOne’s standout products include
• Cloud Services: These packages allow
clients to access and work from
anywhere in the world
• Connected Intelligence Anywhere: This
system allows clients to use mobile
devices to access enterprise software
• Consulting: TechnologyOne’s consulting
services help clients implement
advanced technology systems
FY17 Mid-Year Results - Growth
93%
Cloud Revenue
13%
Revenue
10%
NPAT
9%
R&D
10%
R&D
Revenue by Service Line
Software Licence
Fees:
Implementation &
Consulting
Services:
Post Sales
Customer
Support:
Project Services:
Cloud Service
Fees:
Other:
Operating Expense Composition
SG&A
Marketing:
Research &
Development
Share-Based
Payments:
Non-Recurring
Costs:

5. 5
Effective products and management
Powerful industry trends create strong prospects for TNE’s business model….
Product LinesManagement & History
Key Points
• Founded by Adrian Di
Marco in 1987
• Listed on the ASX in 1999
• In 2016, Di Marco
announced he planned to
resign within the next two
years
• The appointment of COO
Edward Chung represents
the removal of a substantial
degree of risk
Consulting
• TechOne consults on the
implementation of tech
systems
Software
• TechOne offers dozens of
software products targeted at
improving operations
Cloud Services
• TechOne is a major provider
of cloud services (online data
storage and hosting)
STRONG
PROSPECTS

6. 6
Competitors
Technology One Atlassian Australia MYOB Group Xero Limited
What do
they do?
• Enterprise software company
specialising in a multitude of different
vertical markets - government, local
government, education, health and
community services, financial
services, asset intensive industries,
project intensive industries and
corporates
• Products include HR & Payroll, asset
management, performance planning,
stakeholder management
• Specializes in designing,
developing and licensing
software products to help IT
departments, computer
programmers and other
professionals working together
online
• Has a suite of
subscription-based
products and a browser-
based accounting
product
• Software provider
business that operates in
online accounting and
business services.
• Xero has enhanced its
business model on
integrating third-party
solution providers, which
is oriented to incorporating
services such as customer
relationship management,
job costing and payroll to
its online platforms
Location:
Australia, New Zealand, Asia, the South
Pacific and the UK
Australia, USA, Netherlands,
Philippines and Japan
Australia and New Zealand
Australia, New Zealand, UK
and USA
Financials: Market Share: 9.4%
Revenue FY16: 249m
Market Share: 33.7%
Revenue FY17-18: $1,046m
Market Share: 14.1%
Revenue FY16: 370m
Market Share: 11.7%
Revenue FY16: 286m

7. A strong technology industry…
Powerful industry trends create strong prospects for TNE’s business model….
A disruptive industry model…
• Advanced analytics systems are
beginning to replace and disrupt
businesses traditionally focused on
Human Capital
Sustained industry momentum…
Increasing digital maturity…
• Advanced technologies such as Cloud services are
expected to grow by over USD170B over the next 3
years
• The increasingly technical nature of these products
is driving many business to increase their digital
maturity through consulting services
Bipartisan political support… 3,000.0
4,000.0
5,000.0
6,000.0
7,000.0
8,000.0
9,000.0
IndustryRevenue($M)
Software Suppliers - Revenue Growth
• The Australian Technology sector is growing 62%
faster than the rest of the economy
• The Software Supply sector has grown at a CAGR
of 4.3% over the past 6 years
• There is bipartisan political support for updating outdated
government systems and supporting high-tech job growth
• The rollout of the National Broadband Network (NBN) represents a
substantive upgrades to the technological capacity of Australia 7

8. A history of growth…Up until January 2017, TechnologyOne grew at a CAGR of 19.51% Stock Overview
• TechOne is currently trading at it’s 52
week low
• Up until the lawsuit became public,
TechOne had near continuous
growth at a CAGR of 19.51% over
the past 7 years
• Beta of 0.995 implies lower price
volatility relative to the index.
FY 17 FY 18 FY 19 FY 20 FY 21
Total Current Assets:
176,714 206,335 251,513 295,799 339,789
Total Non-Current
Assets:
88,337 111,494 144,383 185,501 233,057
Total Assets:
265,052 317,828 395,896 481,300 572,845
Total Current
Liabilities:
63,420 77,410 101,725 122,485 143,384
Total Non-Current
Liabilities:
40,760 50,243 63,715 77,199 88,192
Total Liabilities:
104,179 127,653 165,440 199,684 231,577
Total Equity:
160,872 190,176 230,456 281,616 341,268
8

9. Growth into tomorrow...Global industry tailwinds suggest that TechOne’s key service lines will continue to grow a rapid rate
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21
$inthousands
Historical & Projected Financial Performance
Total Revenue: Total Operating Expenses: Net Income:
Service Line Analysis
Cloud Services
• Cloud services drive increased productivity by improving labor
efficiency & increasing cooperation
• Cloud services are expected to increase by 18% p.a over the next
5-10 years
• Domestic uptake is driven heavily by information-heavy industries
such as Healthcare, Financial Services and the Government
Consulting
• Technology consultation drive value by helping business
implement cutting edge technology which they would not
otherwise have the capacity to utilize
• TechOne has grown it’s consulting revenue at a CAGR of 6%
• Long term pockets of value persist in the implementation of
integrated systems and analytics
Software Services
• High value software packages now persist across multiple platforms
and allow for analytics at the granular level
• The full rollout of the Connected Intelligence (CI) system in
FY18 will represent a significant improvement upon current
domestic technologies and allow for cross-platform, user driven
insights and analysis
9

10. A valuation of TechnologyOne...
Our valuation produced an implied price range of $5.50-$6.40 per share
10
$2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00
EV/Revenue FY16
EV/EBITDA FY16
P/E FY16
2-3% FCF Growth Rate; 8.5-10% DR
25-40% CS; 1-3% SS
Technology One Valuation Range
Min 25th Percentile Median 75th Percentile Max
DCF Analysis
Comparable Companies

11. Revenue Drivers
• Based off historical averages
• Software licence fees expected to grow consistently as
Technology One switches from a perpetual licence model to a
subscription fee model
• 80% of new business has been recurring subscription
licences
• The “Software As A Service Model” has been on demand in
the last 5 years. The subscription based model limits effects of
piracy, increases revenue and improves profit margins over
time
• Moreover, the rollout of the “Ci Anywhere” software will
contribute greatly to the revenue growth (increasing
smartphone usage)
• Cloud services line is still in its early growth stage
experiencing an average annual growth rate of 250% in the
last 5 years
• Significant R&D expense on Ci and Cloud services which
cultivates innovation and hence future revenue growth
• R&D around 21% of revenue which is more than industry
average of 16%
11
Historical Forecasted
Financial Statement Drivers: Units: FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21
Income Statement Drivers:
Revenue Growth: % 7.10% 7.73% 12.31% 13.70% 17.21% 22.15% 26.86% 26.66% 18.27%
Software Licence Fees: % 7.15% 10.30% 17.66% 13.94% 12.26% 10.26% 8.26% 6.26% 4.26%
Implementation & Consulting Services: % 4.81% 4.54% 11.49% 8.25% 7.28% 7.00% 6.00% 5.00% 4.00%
Post Sales Customer Support: % 14.24% 15.80% 13.17% 13.78% 14.25% 13.00% 12.00% 11.00% 10.00%
Project Services: % (2.95%) (14.91%) (25.70%) 8.11% (8.86%) (8.86%) (7.00%) (6.00%) (5.00%)
Cloud Service Fees: % N/A 428.46% 200.15% 145.17% 175.00% 140.00% 105.00% 70.00% 35.00%
Other: % (19.79%) (36.11%) 13.97% (30.32%) (18.06%) (18.06%) (16.00%) (16.00%) (14.00%)

12. 12
Are the valuation multiples justified?
• Australia’s largest enterprise software company, with offices across six countries
• 17 years of revenue growth and 3.5% increase in operating margins in the last 5 years
• Competitive advantage – the only vendor to develop, sell, implement, support and run a fully integrated suite of enterprise software
solutions
• 1000+ leading companies, government departments and statutory authorities powered by their software with a 99% retention rate
Operating Statistics Capitalisation Revenue ($M) EBITDA ($M) EBITDA Margin Net Income ($M)
Company Name Country of Origin Equity Value ($M) Enterprise Value ($M) 30/06/2015 30/06/2016 30/06/2015 30/06/2016 30/06/2015 30/06/2016 30/06/2015 30/06/2016
MYOB Aus 2,302 2,568 328 369 128 171 39.16% 46.48% (38) 59
Xero Limited Aus 1,898 1,862 121 187 (56) (54) (46.15%) (28.94%) (68) (74)
Integrated Research Limited Aus 383 375 70 85 28 31 39.95% 36.18% 14 15
Altium Limited Aus 841 790 104 126 30 37 28.29% 29.35% 120 31
Class Limited Aus 386 370 N/A 22 N/A 9 N/A 42.30% N/A 5
IRESS Limited Aus 1,994 2,149 361 390 111 111 30.69% 28.52% 62 67
Maximum 2,301.66 2,567.52 361.46 389.74 128.36 171.47 39.95% 46.48% 120.31 67.11
75th Percentile 1,970.21 2,077.57 327.78 323.30 110.94 92.61 39.16% 40.77% 62.08 52.01
Median 1,369.36 1,326.15 121.48 156.21 29.55 33.76 30.69% 32.76% 14.25 22.81
25th Percentile 499.43 478.68 104.45 94.87 28.08 14.52 28.29% 28.73% (38.12) 7.56
Minimum 383.47 370.33 70.28 21.68 (56.06) (53.99) (46.15%) (28.94%) (68.20) (74.29)
Technology One Aus 1,618.69 1,535.69 219.00 249.00 51.16 56.92 23.36% 22.86% 36.00 41.00
Valuation Statistics Capitalisation Enterpise Value/Revenue Enterprise Value/EBITDA PE Multiple
Company Name Country of Origin Equity Value ($M) Enterprise Value ($M) 30/06/2015 30/06/2016 30/06/2015 30/06/2016 30/06/2015 30/06/2016
MYOB Aus 2,302 2,568 7.83x 6.96x 20.00x 14.97x N/A 39.00x
Xero Limited Aus 1,898 1,862 15.33x 9.98x N/A N/A N/A N/A
Integrated Research Limited Aus 383 375 5.33x 4.44x 13.35x 12.26x 26.91x 26.23x
Altium Limited Aus 841 790 7.56x 6.28x 26.73x 21.38x 6.99x 27.14x
Class Limited Aus 386 370 N/A 17.08x N/A 40.38x N/A 73.99x
IRESS Limited Aus 1,994 2,149 5.95x 5.51x 19.37x 19.34x 32.13x 29.72x
Maximum 2,301.66 2,567.52 15.33 x 17.08 x 26.73 x 40.38 x 32.13 x 73.99 x
75th Percentile 1,970.21 2,077.57 7.83 x 9.23 x 21.68 x 21.38 x 29.52 x 39.00 x
Median 1,369.36 1,326.15 7.56 x 6.62 x 19.69 x 19.34 x 26.91 x 29.72 x
25th Percentile 499.43 478.68 5.95 x 5.70 x 17.87 x 14.97 x 16.95 x 27.14 x
Minimum 383.47 370.33 5.33 x 4.44 x 13.35 x 12.26 x 6.99 x 26.23 x
Technology One Aus 1,618.69 1,535.69 7.01 x 6.17 x 30.02 x 26.98 x 44.96 x 39.48 x

13. A catalyst for action…
The scope of the current legal situation has been significantly overstated by the market
Legal Summary
Overview: TechnologyOne and Brisbane City
Council (BCC) are in the early stages of exploring
action against each other for breach of contract.
Both parties are claiming AUD50m in damages
Timeline:
05/15 – TechOne and BCC initiates contract for
the integration of BCC’s local government
systems (LGS)
10/16 – BCC updates project scope but refuses
to amend contract
01/17 – Lord Major holds announces TechOne to
be ‘on notice’ due to TechOne falling behind
schedule and $60m over budget
03/17 – Two executive BCC staff directly
responsible for LGS project departs from BCC
04/17 – TechOne Executive offers to meet
personally meet Lord Mayor, offer was rejected
06/17 – TechOne issues statement BCC
deliberately delaying project
07/17 – BCC terminates contract, both parties
seeking +$50m damages
Potential Outcomes
Best Case
Outcome: TechOne awarded
$50m in damages. The
contract revenue is lost, and
legal fees are incurred at
roughly AUD5m
Impact:
• 50m in lost revenue is
offset by damages
• Representative of present
value gain of $5.78m
• This implies a gain of
2c/share
Worst Case
Outcome: Damages worth
50m awarded to BCC. Legal
fees are incurred
Impact:
• Loss of 110m incurred
• Representative of present
value loss of $85.6m
• This implies a loss of
24c/share
Moderate Case
Outcome: Legal action
comes to a standstill. Neither
party gaining any noticeable
edge
Impact:
• No damages awarded
• Representative of present
value loss of $21.7m
• This implies a loss of
6c/share

14. Identifying market overreaction…
Powerful industry trends effectively mitigates legal dispute downside
Legal implication offset by
growth principles…
1. The appointment of CEO Edward Chung CEO
represents the removal of a significant source of
price volaitlity
2. The release of the ConnectedIntelligence (CI)
product suite in 2018 promises to create a new
source of ongoing revenue
3. Strong and sustained financial performance
indicates a strong underlying business model and
operations process
4. Productivity growth associated with the
implementaton of Cloud Services creates a strong
driver of long term profitiability
5. Increasingly complex technology systems creates
demand for vertically integrated software packages
Building in risk: Producing a risk-adjusted price
• Worst-case scenario would create a PV loss of 24c/share
• Working from earlier 2017 prices (before the conflict became public), the
implied lowest price would be $5.45/share
• This still implies the stock is undervalued at $5.03/share
0
500000
1000000
1500000
2000000
2500000
$4.00
$4.20
$4.40
$4.60
$4.80
$5.00
$5.20
$5.40
$5.60
$5.80
$6.00
1/2/17 2/2/17 3/2/17 4/2/17 5/2/17 6/2/17 7/2/17 8/2/17
Price - Volume Chart 2017
Volume Adj Close

15. Quantifying expected returns…
Steady growth in industry trend lays stable foundation for TNE’s expanding business model….
Upside Predictions
• Our implied price of $6/share suggests
an upside of 19.28%
• Sensitivity analysis indicates an upside
of 8.55-24.92%
Assumptions
• Revenue and Net Income driven by 3
statement projections (see appendix)
• Payout Ratio based on the 5 year
historical average (55%)
25.00%
27.00%
29.00%
31.00%
33.00%
35.00%
37.00%
39.00%
41.00%
43.00%
FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21
Projected Return on Equity
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
FY 17 FY 18 FY 19 FY 20 FY 21
Projected Dividend Payments - FY17-FY21

16. Managing risk and reward…
There are a variety of risks that may persist across our investment strategy
Overview: It could be stated that the current
legal conflict is indicative of an underlying
vulnerability in TechOne’s operation. We
believe that this is unlikely for three reasons
1. BCC has refused to release the
independent review
2. TechOne has dozens of customers,
and this is the first major conflict
3. TechOne has experienced strong
financial growth over the past 17
years
Overview: It appears that TechOne has little-
no immediate default risk. This is because
1. TechOne has a Altman-Z score of 14.5.
A score over 3 implies a <1% chance of
default over the next 2 years
2. TechOne has a Debt-Equity ratio of
0.56.
3. TechOne’s underlying business model
does not rely on leverage
Overview: A surface analysis implies that
TechOne is likely win any legal conflict.
More importantly, any potential losses can
be contained and absorbed by insurance & a
strong business model respectively.
The pressure placed on BCC by the QLD
state government implies that there is a
political need to resolve this issue quickly
and cleanly.
Overview: The breadth and integrated
nature of TechOne’s packaged systems
provides barriers to entry in the immediate
term.
However, there is an ongoing, longer term,
threat of international technology players
and disruptive start-ups undermining the
stability of TechOne’s market.
Operations Failure
Default Risk
Legal Risk
Competitive Risk
Increasing Likelihood
IncreasingImpact
Operations
Failure
Competitive
Risk (LT)
Competitive
Risk (ST)
Default
Risk
Legal
Risk
Risk Matrix
16

17. Measuring ongoing performance…
Powerful industry trends create strong prospects for TNE’s business model….
Prices Continue to Fall…
• If prices fall due to the
lawsuit, BUY
• If prices fall for another
reasons, RECONSIDER
Prices flat line…
• If there are more effective
oppurtunites available, SELL
• If not, HOLD
Prices rise…
• If prices significantly exceed
valuation, SELL
• If not, HOLD
1 2 3
Next Steps
Buy at
$5.03/Share
Hold until price
appreciates to $6
Consider
divestment
17

18. Summarising our strategy…
Powerful industry trends create strong prospects for TNE’s business model….
Investment Thesis
The 16% drop in Technology One’s (TechOne) share price since the start of 2017 represents a significant overreaction to the current
legal threat facing the company. Financial performance remains strong and the core business strategy promises to deliver value into
the future. We recommend purchasing with a target 1 year price of $6/share
Value Driver #1 – Overreaction
• Price falls associated with
the conflict between BCC
and significantly outweigh
the present value of a worst
case scenario loss
Value Driver #2 – Demand for
Products
• TechnologyOne’s vertically
integrated service &
software offerings will
become more attractive as
technical complexity
increases
Value Driver #3 – Strong
Historical Performance
• TechnologyOne has
produced profits for the last
17 years, and has
significantly outpaced
benchmarks
18

19. Appendix
Marc Nguyen, Henry Wu, Callum Shaw, Oscar Haman

20. Division 1 – Company Research
Marc Nguyen, Henry Wu, Callum Shaw, Oscar Haman

21. Company Overview
Principal Activity Development marketing sales implementation and support of fully integrated enterprise
business software solutions
Business areas  Software provider and consultant
 Servicing government
 Local government
 Financial services
 Health & community services
 Education
 Utilities
 Managed services markets
 Custom software development services
 Purpose build applications
Product and
services
 Financials
 HR & Payroll
 Supply chain
 Business intelligence
 Corporate performance management
 Property & Rating
 Student management
 Works & Assets
 Enterprise Content Management
 Customer Relationship Management
 Mobile solutions
 Customer software
 Scoping research
 Training
 Data conversion
 Account management
 Project management
Listing Date: 08/12/1999
GICS Sector: Information Technology
GICS Industry Group: Software & Services
GICS Industry: Software
Industry: 0.92
Company Beta: 0.87
P/E: 46.23
EPS:12.85
21

22. Product Overview
Connected
Intelligence (Ci)
Platform for enterprise business software solutions that allows the clients to access TechnologyOne
solution across their organisations. The solution has functionality that involves integration with other
desktop applications such as spreadsheets and email, an instant response to, and validation, of
information, and rich tools such as graphing and grid manipulation. TNE develops Ci Enterprise Suite,
called Ci², which is a native browser based enterprise application that also supports smart mobile devices
such as the iPhone, iPad and Android platforms.
TechnologyOne
Cloud
Deliver the TechnologyOne Ci Enterprise Suite through the cloud to customers
22

23. Products Cont.
23

24. Products - Consulting
Consulting:
- Business and strategic consulting
o Develop business case, manage and realise
benefits, mitigate risks and delivering
transformation agenda
- Application services
o Ensure security and integration of applications
o Assist with implementation of TechOne
solutions supporting integration and data
migration
- Technical services
o Design and build high performance IT
systems
o Provide technical training to keep systems in
peak operational performance
o Ensure security of systems
- Solution implementation services
o Uses a ‘Systems Implementation
Methodology’ (SIM)
o Able to minimise business risk using
accelerators, tools and preconfigured
solutions database
$0.00
$10,000.00
$20,000.00
$30,000.00
$40,000.00
$50,000.00
$60,000.00
$70,000.00
$80,000.00
$90,000.00
FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21
$inthousands
Consulting & Implementation Revenue
24

25. Products – CI & Cloud
TechnologyOne Cloud:
Philosophy: “Instead of your business investing and
maintaining a large, complex IT infrastructure, you
can access your computing power from the grid – the
cloud.”
TOC is an online platform purchasable by businesses
that provide technologically relevant business
software. It promotes a platform to enterprise
software that can be accessible through any device.
It boasts benefits including scalability (effective for
developers that require systems that accommodate
business growth), risk mitigation and cost-
effectiveness
Connected Intelligence (Ci):
Platform for enterprise business software solutions that allows the clients to access
TechnologyOne solution across their organisations. The solution has functionality
that involves integration with other desktop applications such as spreadsheets and
email, an instant response to, and validation, of information, and rich tools such as
graphing and grid manipulation. Ci expands the Cloud’s reach to also include smart
device such as ipads and iphones.
TNE develops Ci Enterprise Suite, called Ci², which is a native browser based
enterprise application that also supports smart mobile devices such as the iPhone,
iPad and Android platforms.
Allows organisations to use their smart, mobile devices including iPad, iPhone and
Android devices, as part of the TechnologyOne solution.
Deliver the entire suite of enterprise software and functionality on these mobile
devices
Allows the possibility for customers to access data from any device, anywhere in
the world, at any time.
Forecasted to complete the Ci Anywhere Suite by late 2018
Driver for Cloud and Ci:
A major driver is the rise of the tech sector in Australia (refer to Real Estate
appendix data). With the prominence of start-ups that experience rapid growth and
expansion, Cloud and Ci offered by TechOne provides perfect technological
support to cater towards their development at a low price.
‘A developer with 50 sites may have 500 users across those sites – and while they
won’t all be using the software all day every day, most will be at month end. A
cloud-based service will automatically provide more power to manage demand –
and you won’t take a performance hit when everyone is using the software at the
same time to close off the month’
‘Cloud is a more cost-effective solution. One TechnologyOne cloud customer
invested $1.2 million in licensing and services, and an additional $1 million each
year after that. Comparatively, a KPMG cost analysis put the capital expenditure of
a similar non-cloud based solution’
The quality and effectiveness of Cloud and Ci is expected to also to inflate as
TechOne increases R&D into the program 25

26. Country Segmentation Data
Segment Revenue by Operational Countries
Australia New Zealand International
Segment Asset by Operational Countries
Australia New Zealand International
Segment Revenue
2016
$'000
2015
$'000 Growth
Australia 220,448 193,440 14%
New Zealand 20,845 19956 4%
International 7,725 5,328 45%
Segment Revenues from
Sales
to external customers 249,018 218,725
Segment Assets
2016
$'000
2015
$'000
Australia 207,116 172,450 20%
New Zealand 5,603 6,312 -11%
International 5,803 3,885 49%
Total Segment Assets 218,522 182,647
26

27. 2017 Mid-Year Report
Highlights
 Revenue up 13%
 Net Profit Before Tax up 10%
 Total Expenses up 13%
 Expenses excluding R&D up 15%
 R&D expenses up 9%
Revenue
streams
 Initial License fees up 30%
 Annual License fees up 10%
 Total Consulting Services line ball
 Cloud Service fees up 93%+
Ci Anywhere
(Catalyst)
Allows organisations to use their smart, mobile devices including iPad, iPhone
and Android devices, as part of the TechnologyOne solution. Ci Anywhere
software apdapts to the screen size of the mobile device, PC or laptop, yet it
remains immediately familiar to the user
 Deliver the entire suite of enterprise software and functionality on these
mobile devices
 Allows the possibility for customers to access data from any device,
anywhere in the world, at any time.
 Transforms the way organisations interact with their customer and
community, now and into the future
Forecasted to complete the Ci Anywhere Suite by late 2018
Fast track
subscription
licenses
 Move away from perpetual licenses to subscription licenses to create a
strong, long term annuity business.
 This half achieved over 80% of all new business being recurring
subscription licences
Appointment of
new CEO
 Appointment of its long serving and highly successful Chief Operating
Officer, Mr Edward Chung, to the new role of Chief Executive Officer,
effective May 23
27

28. 2016 Annual Report
R&D  Investment in R&D makes TechnologyOne Australia’s largest software R&D
companies.
 Compound annual growth rate of 7% in R&D has led to a substantial improvement
in profit margins from 17% to 21%
 Committed five-year period until 2021, in which time will continue to grow R&D
at an annual compound rate not exceeding 8%  result in cost savings of
approximately $29m in 2021 year.
Expanding
within vertical
markets
 We operate within 8 specific vertical markets which provide room to expand our
customer base and grow our solution footprint, adding value to customers.
o Government, local government, education, health and community services,
financial services, asset intensive industries, project intensive industries
and corporates
 Currently offer 24 preconfigured solutions
o Solutions cover 80% of the sector’s requirements out of the box, leaving
room to tailor to customer specific needs.
Adding value to
existing
customers
 Enterprise solution comprises a suite of 14 products
o Investment in strategic events including regional showcases and biennial
Evolve user conference, ensures customers benefit from being able to
collaborate with experts and executives from all areas of the business
Expanding
product range
and depth
 Acquired Jeff Roorda & Associate (JRA), Australia’s leading Strategic Asset
Management provider  to deepen and broaden enterprise solutions.
o Particularly for customers who have invested in their Asset Management
software
Enhancing our
products and
solutions
 Invested considerably in R&D in order to develop the Ci Anywhere platform and
enterprise software as a service (SaaS) offering
 Developing SaaS will provide further processing power, software and services for
the cloud customers. This delivers customers a very simple, cost effecrtive and
highly scalable model of computing
Our Products  TechnologyOne has invested substantial funds in –
o Human Resoiurce & Payroll (HRP)
o Asset Management (AM)
o Enterprise Content Management (ECM)
o Stakeholder Management (MHM)
o Others
 Products have been a drag on the company’s earnings, but as they are now
approaching ‘best in class’ status, we are seeing them move to profitability
Expansion into the
UK
 Adding 13 new customers  total of 40 enterprise customers in the region
 Executing next part of the UK expansion  next 2 years movements from the highly competitive
‘red ocean’ to the ‘blue ocean’
 Introduction of Human Resource & Payroll (HRP) solution into the UK market in mid 2017
 Introduce Student Management solution into the UK market in mid/late 2018
 More product offerings allow TechnologyOne to move into the less crowded ‘blue ocean’ space, as
we will be one of only a few enterprise vendors in the UK market
Acquisition  Prefer organic growth because of significant costs, time, effort and management distraction
 Acquisition is driven by the need to acquire intellectual property (IP) that allows them to extend their
enterprise presence into new areas.
 Last 18 months TechnologyOne undertook three acquisitions
o ICDN Software – Provides Online Planning and Approval software for local government
that streamlines the process for development approvals, reducing time and cost for its
customers.
o DMS - provides Digital Mapping Solutions allowing for the management and viewing of
spatial data, and for the integration of spatial data into business processes. DMS has a
strong presence in local government and government
o RA, which provides Strategic Asset Management for our local government and the asset
intensive customers.
Segments  Sales and Marketing - sales of licence fees and customer support to our customers
 Consulting - implementation, consulting services and custom software development services for
large scale, purpose built applications
 Research & Development (R&D) - the research development and support of our products
 Cloud - the delivery of cloud hosting services to our customers
 Corporate - the aggregation of the corporate services functions’ costs and revenue, and corporately-
funded
 projects
28

29. Long Term Outlook
LONG TERM OUTLOOK
 Continuation and improvement of the Ci Enterprise suite  in
conjunction with the preconfigured solutions, which reduce the time,
effort, cost and risk associated with enterprise implementations.
 Growth of the 8 vertical markets in Australia and New Zealand
 UK operations having now moved into profitability, in the coming
years will be a significant contributor to profits
 New product development, such as Enterprise Content Management,
Stakeholder Management and Human Resource & Payroll to
become mature and increase substantially in profitability
 Substantial growth from existing customer base in the coming years,
as they embrace the TechnologyOne Cloud
 Next generation of enterprise suite, Ci Anywhere, creating a platform
of usage by leveraging smart mobile devices as well as new and
exciting technologies and concepts
 Maintaining expenditure in R&D will allow significant synergies and
scale, whilst also ensuring that the R&D growth rates will move
substantially slower down than in previous years.  supports the
substantial improvements in margins over the next 10 years
 Offshore R&D centre will allow the reduction of R&D expenditure as
a percentage of revenue, without impacting any strategic initiatives
and at the same time improve customer experience.
29

30. Division 2 – Market Research
Marc Nguyen, Henry Wu, Callum Shaw, Oscar Haman 30

31. External Market Drivers
Wireless innovation
• Movements of cloud systems and NBN in the economy causes businesses to
become decentralised through the hub of a one-way system. Hence, greater
demand of cloud services
• Technology information and communication (ICT) sector is the leading growth
sector in Australia with 5.2% p.a. growth rate, whilst the average is 3.2% p.a.
Just under a third of businesses reported the use of paid cloud computing
services (31%). Of those businesses, software as the most common paid
cloud computing service used (85%), followed by storage capacity (60%)
• Excluding the common need for mobile internet and access to high speed
broadband, many Australian businesses seem to value the importance of
Cloud technology over other digital technologies, such as social media, data
analytics and E-commerce capability.
• Approximately 35% moderately/majorly feel the importance of cloud systems.
• Businesses are relying more on the use of smart-phone devices to interact
with their customers due to the benefits of flexibility and as a gateway
opportunity to deliver services. More than half of all businesses with internet
access (53%) reported that mobile internet was of a major importance to their
business
• In 2016, 84% of people in Australia own smartphone device. 94% aged
between 18-24 years old
• Apps, in comparison to browsers, lead the way when it comes to processing
task which are completed regularly. For example, the rapid growing use of
personal health and fitness mobile apps
31

32. External Market Drivers
Globalization of ICT services
 With the rise of ICT activity in Australia, trade flows for of ICT services are becoming
significantly prominent in both the domestic and foreign markets.
o Trade flows in ICT services totalled ~$5 billion in 2014-15, with the sharp rise in
ICT services exports over the past year
 $ 2.6 billion imports/$2.3 billion exports
 Imports have increased by almost 40% between 2012-13 and 2014-15,
and exports of ICT services rose by around 45% over the same period
Data centres
 Demand for effective systems to condense terabytes of data that needs to be searched,
analysed and used to enhance their ability to create products and services for customers
o Currently, 85% of cloud users in businesses have received benefits, such as
increased productivity, greater flexibility and reduced costs
o 20% of businesses use cloud services, but there is a significant potential for other
Australians to take up cloud computing services, due to improvement in
operations and product offerings
Healthcare
 The digitization of health information will open new markets for health-related devices,
from fitness trackers for consumers to hospital-grade tech. At every level of the
healthcare system, digital technology will become more important for making diagnoses,
managing patient records, preventing disease and so on.
o Health care and social assistance have been growing above the average of
Australia’s industries. Currently growing by 4.2% p.a., whilst average is 3.2% p.a.
o Health sector in Australia is on average 27% more productive than its global
competitors
32

33. External Drivers
Business confidence
• All time low cash-rates will drive up capital expenditure in the
economy, thereby increase business opportunities and confidence.
• Through the increase of business confidence, it leads to more job
opportunities and gross income in the economy, as a result increase
demand for the outsourcing of operations and business functions.
• For example, human resources and recruitment services (36.6%),
computer software design and consultancy services (35.9%) and
finance and administration services (11.7%)
• Financial and insurance services one of the leading growth sectors in
Australia with a growth of 4.9% p.a., whilst average is 3.2% p.a.
Australian productivity in mining and agriculture is 42% and 46%
higher than global competitors
• Higher business confidence also leads to ICT firms to invest more in
R&D as a way to further improve their enterprise cloud systems
• Australia’s expenditure of R&D is ranked in the top 10 among OECD
member nations. One of the highest growing country for R&D
expenditure
• Compound annual growth rate from 2000-14 of 8.5%
33

34. External Drivers
34

35. External Drivers
this year. However, we expect this to plateau
over the coming 12 months after the
remaining feature phone owners are forced
to convert to smartphone following the 2G
shutdown by each of Australia’s major mobile
network operators.
the rou
and wit
smartp
the sma
remain
Which, if any, of the following devices do you own or have
ready access to?
Smartphone ownership
2014 2015 2016
76%
79%
84%
Source: Australia edition, Deloitte Global Mobile Consumer Survey, Jun – Jul 2016
Base: All survey respondents 2006
35

36. Division 3 - Legal Overview and Analysis
Marc Nguyen, Henry Wu, Callum Shaw, Oscar Haman 36

37. Conflict Timeline
Law Suit Overview:
Dispute between TechOne and Brisbane City regarding the contracted LGS project of converting 13 local government service systems to one platform. TechOne’s contract
with council was for $50 mil, and another additional $72 mil for council staff and contractors
2015:
June
BCC awards TechOne contract for the LGS project, with value of approximately $50m over 10 years.
2016:
October:
BCC updates business process requirements that expands the scope of project but refused to issue contractual amendment
TechOne obligated to configure a system for BCC that does not reflect BCC’s current business processes. This costs TechOne $2 million over 6 months
2017:
Jan:
BCC issues press release announcing TechOne to be ‘on notice’ due to the project being 18 months behind schedule and $60 mil over budget
Feburary:
TechOne issues Notice of Delay due to BCC not addressing the variation for $3.6m.
Further increase in contracted scope by BCC with lack of clarity
March:
Original project ‘go live date’
April:
TechOne executive chairman offers to meet Lord Mayor personally, offer was refused
37

38. Conflict Timeline
May:
Council issues first notice to show cause for the project.
TechOne rebut with claim stating it was owed $750,000 in unpaid invoices for reaching project
milestones
June
Council issues second notice to show cause, covering same issues as first notice.
TechOne remains confident of its legal and commercial position. Also informs public it has total
and comprehensive insurance cover for all of its projects.
July:
TechOne issues statement BCC intentionally endangering the completion of the LSG project
TechOne says that if the contract is wrongfully terminated, it will immediately commence
proceedings against BCC for $50+ million in damages.
Contract terminated by BCC, both TO and BCC seeking damages more than $50 million.
TechOne believe it would go to arbitration and settlement.
38

39. Valuing the Loss
-40
-20
0
20
40
60
80
1 2 3 4 5 6 8 9 10
Year
Loss Timeline
Best Moderate Worst
Year Best Moderate Worst
1 -25 25 75
2 3 3 3
3 3 3 3
4 3 3 3
5 3 3 3
6 3 3 3
8 3 3 3
9 3 3 3
10 3 3 3
PV ($M) ($7.81) $37.97 $83.75
PV/Share ($0.02) $0.11 $0.24
Legal Cost: 5M
Maximum Damages (Either Side): 50M
Lost Revenue: 50M
39

40. Division 3 - Valuation
Marc Nguyen, Henry Wu, Callum Shaw, Oscar Haman 40

41. Assumptions
41
General Assumptions:
Company Name: Technology One
Ticker: TNE
Current Share Price: 5.03$
Last Historical Year: 30-September-2016
Current Valuation Date: 23-August-2017
Effective Tax Rate: 30.00%
Historical Forecasted
Financial Statement Drivers: Units: FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21
Income Statement Drivers:
Revenue Growth: % 7.10% 7.73% 12.31% 13.70% 17.21% 22.15% 26.86% 26.66% 18.27%
Software Licence Fees: % 7.15% 10.30% 17.66% 13.94% 12.26% 10.26% 8.26% 6.26% 4.26%
Implementation & Consulting Services: % 4.81% 4.54% 11.49% 8.25% 7.28% 7.00% 6.00% 5.00% 4.00%
Post Sales Customer Support: % 14.24% 15.80% 13.17% 13.78% 14.25% 13.00% 12.00% 11.00% 10.00%
Project Services: % (2.95%) (14.91%) (25.70%) 8.11% (8.86%) (8.86%) (7.00%) (6.00%) (5.00%)
Cloud Service Fees: % N/A 428.46% 200.15% 145.17% 175.00% 140.00% 105.00% 70.00% 35.00%
Other: % (19.79%) (36.11%) 13.97% (30.32%) (18.06%) (18.06%) (16.00%) (16.00%) (14.00%)
SGA&A % Revenue: % 58.64% 58.39% 57.87% 58.33% 58.31% 58.31% 58.31% 58.31% 58.31%
Marketing % Revenue: % 1.25% 1.68% 1.48% 1.10% 1.38% 1.38% 1.38% 1.38% 1.38%
Research & Development % Revenue: % 19.67% 19.42% 18.74% 18.48%
Share-Based Payments % Revenue: % 0.55% 0.00% 0.46% 0.80% 0.43% 0.43% 0.43% 0.43% 0.43%
Amortisation of Intangible Assets % Revenue: % 1.25% 0.90% 0.62% 0.30%
Depreciation % Revenue: % 2.14% 1.41% 1.28% 1.28% 1.28% 1.28% 1.28% 1.28% 1.28%

42. Balance Sheet Drivers:
Days Sales Outstanding: # Days 61.52 57.73 63.79 61.04 61.02 61.02 61.02 61.02 61.02
Days Payable Outstanding: # Days 39.67 33.37 36.71 36.04 36.45 36.45 36.45 36.45 36.45
Prepayments % SG&A: % 0.00% 0.00% 1.42% 4.01% 4.01% 4.01% 4.01% 4.01% 4.01%
Other Current Assets % Revenue: % 5.24% 4.70% 4.53% 6.64% 5.28% 5.28% 5.28% 5.28% 5.28%
Other Non-Current Assets % Revenue: % 0.29% 0.00% 1.11% 1.90% 0.82% 0.82% 0.82% 0.82% 0.82%
Deferred Tax Asset % Taxes: % 61.53% 71.57% 66.49% 62.60% 65.55% 65.55% 65.55% 65.55% 65.55%
Current Provisions % Revenue: % 4.17% 4.06% 4.17% 4.50% 4.22% 4.22% 4.22% 4.22% 4.22%
Non-Current Provisions % Revenue: % 1.71% 2.09% 2.19% 1.83% 1.95% 1.95% 1.95% 1.95% 1.95%
Unearned Revenue % Revenue: % 4.18% 4.17% 5.79% 8.39% 8.39% 8.39% 9.39% 9.39% 10.00%
Other Current Liabilities % SG&A: % 3.26% 2.48% 3.00% 0.90% 2.41% 2.41% 2.41% 2.41% 2.41%
Other Long-Term Liabilities % SG&A: % 3.10% 2.30% 8.03% 12.01% 12.01% 12.01% 12.01% 12.01% 12.01%
Cash Flow Statement Drivers:
Capital Expenditures % Revenue: % 0.00% 0.00% 1.80% 1.95% 2.00% 2.50% 3.00% 3.50% 4.00%
Depreciation % Revenue: % 2.14% 1.41% 1.28% 1.28% 1.53% 1.53% 1.53% 1.53% 1.53%
Other Investing Activities % Revenue: % 1.11% 0.77% 10.47% 4.65% 4.25% 4.25% 4.25% 4.25% 4.25%
Dividends % Net Income: % 25.00% 58.06% 72.22% 68.29% 55.88% 55.88% 55.88% 55.88% 55.88%
42

43. Income Statement Projection
43
Historical Forecasted
Income Statement: Units: FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21
Revenue By Segment:
Software Licence Fees: $'000 35,448 37,983 41,896 49,294 56,165 63,052 69,523 75,267 79,981 83,390
Implementation & Consulting Services: $'000 45,388 47,573 49,735 55,449 60,026 64,393 68,901 73,035 76,686 79,754
Post Sales Customer Support: $'000 63,685 72,753 84,248 95,346 108,480 123,935 140,046 156,852 174,106 191,516
Project Services: $'000 16,601 16,112 13,710 10,186 11,012 10,036 9,147 8,506 7,996 7,596
Cloud Service Fees: $'000 0 260 1,374 4,124 10,111 27,805 66,733 136,802 232,563 313,960
Other: $'000 7,878 6,319 4,037 4,601 3,206 2,627 2,152 1,808 1,519 1,306
Total Revenue: $'000 169,000 181,000 195,000 219,000 249,000 291,849 356,502 452,270 572,851 677,523
Operating Expenses:
SG&A $'000 102,680 106,143 113,856 126,725 145,240 170,164 207,860 263,698 334,004 395,033
Marketing: $'000 2,320 2,262 3,271 3,237 2,751 4,020 4,911 6,230 7,891 9,333
Research & Development $'000 33,500 35,595 37,873 41,038 46,009 49,690 53,665 57,958 62,595 67,602
Share-Based Payments: $'000 500 1000 0 1,000 2,000 1,269 1,551 1,967 2,492 2,947
Non-Recurring Costs: $'000 0 0 0 0 0
Total Operating Expenses: $'000 139,000 145,000 155,000 172,000 196,000 225,143 267,986 329,854 406,981 474,915
Operating Income (EBIT): 30,000 36,000 40,000 47,000 53,000 66,706 88,515 122,417 165,870 202,608
EBIT Margin % 17.75% 19.89% 20.51% 21.46% 21.29% 22.86% 24.83% 27.07% 28.96% 29.90%
Income Tax $'000 6,800 8,000 9,000 11,000 12,000 20,012 26,555 36,725 49,761 60,782
Net Income: $'000 23,200 28,000 31,000 36,000 41,000 46,694 61,961 85,692 116,109 141,825

44. Balance Sheet Projections
44
Historical Forecasted
Balance Sheet Units: FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21
Assets:
Current Assets:
Cash & Cash Equivalents: $'000 49,030 65,000 80,000 76,000 83,000 105,693 118,514 139,894 162,475 190,883
Prepayments: $'000 0 0 0 1,802 5,817 6,824 8,335 10,574 13,394 15,841
Receivables: $'000 30,285 30,509 30,844 38,273 41,642 48,792 59,601 75,612 95,771 113,270
Other: $'000 3,350 9,491 9,156 9,925 16,541 15,405 18,818 23,873 30,238 35,763
Total Current Assets: $'000 82,665 105,000 120,000 126,000 147,000 176,714 205,269 249,953 301,877 355,757
Non-Current Assets:
Net PP&E: $'000 15,490 11,617 8,875 10,012 11,681 13,064 16,536 23,202 34,510 51,271
Intangible Assets: $'000 16,191 15,938 15,684 37,245 48,088 59,753 74,166 92,648 116,254 144,308
Deferred Tax Asset: $'000 5,496 4,922 6,441 7,314 7,512 13,117 17,405 24,072 32,616 39,840
Other: $'000 94 523 0 2,429 4,719 2,403 2,935 3,724 4,716 5,578
Total Non-Current Assets: $'000 37,271 33,000 31,000 57,000 72,000 88,337 111,043 143,646 188,097 240,998
Total Assets: $'000 119,936 138,000 151,000 183,000 219,000 265,052 316,311 393,599 489,974 596,755
Liabilities & Equity:
Current Liabilities:
Accounts Payable: $'000 16,110 19,673 17,826 22,026 24,587 22,482 26,760 32,938 40,640 47,423
Provisions: $'000 7,089 7,544 7,922 9,137 11,194 12,329 15,061 19,106 24,200 28,622
Unearned Revenue: $'000 6,525 7,566 8,123 12,672 20,885 24,479 29,902 42,468 53,791 67,752
Borrowings: $'000 1,969 1,760 1,302 2,363 29 29 29 29 29 29
Other: $'000 1,948 3,457 2,827 3,802 1,305 4,100 5,009 6,354 8,048 9,519
Total Current Liabilities: $'000 33,641 40,000 38,000 50,000 58,000 63,420 76,760 100,896 126,708 153,346
Non-Current Liabilities:
Provisions: $'000 2906 3098 4076 4,793 4,555 5,705 6,969 8,842 11,199 13,245
Borrowings: $'000 5375 3607 2304 29 0 0 0 0 0 0
Other: $'000 4,014 3,295 2,620 10,178 17,445 35,054 42,820 54,323 68,806 81,378
Total Non-Current Liabilities: $'000 12,295 10,000 9,000 15,000 22,000 40,760 49,789 63,165 80,005 94,624
Total Liabilities: $'000 45,936 50,000 47,000 65,000 80,000 104,179 126,550 164,060 206,713 247,969
Equity:
Common Stock: $'000 26,000 27,000 27,000 28,000 30,000 31,269 32,820 34,787 37,279 40,226
Reserves: $'000 13,000 5,000 8,000 11,000 17,000 17,000 17,000 17,000 17,000 17,000
Retained Earnings: $'000 35,000 56,000 69,000 79,000 92,000 112,603 139,942 177,751 228,982 291,560
Total Equity: $'000 74,000 88,000 104,000 118,000 139,000 160,872 189,762 229,539 283,261 348,786
Total Liabilities & Equity: $'000 119,936 138,000 151,000 183,000 219,000 265,052 316,311 393,599 489,974 596,755

45. Cash Flow Statement Projection
45
Historical Forecasted
Cash Flow Statement: Units: FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21
Cash Flow From Operating Activities:
Net Income: $'000 28,000 31,000 36,000 41,000 46,694 61,961 85,692 116,109 141,825
Adjustments for Non-Cash Charges:
Depreciation: $'000 3,873 2,742 2,799 3,188 4,454 5,441 6,902 8,742 10,340
Amortisation: $'000 2,258 1,763 1,358 736 736 736 736 736 736
Share Based Payments: $'000 1,000 0 1,000 2,000 1,269 1,551 1,967 2,492 2,947
Changes In Operating Assets & Liabilities:
Prepayments: $'000 0 0 (1,802) (4,015) (1,007) (1,512) (2,239) (2,819) (2,447)
Receivables: $'000 (224) (335) (7,429) (3,369) (7,150) (10,809) (16,011) (20,159) (17,499)
Other Current Assets: $'000 (6,570) 858 (3,198) (8,906) 3,452 (3,945) (5,844) (7,358) (6,387)
Deferred Tax Asset: $'000 574 (1,519) (873) (198) (5,605) (4,289) (6,666) (8,545) (7,224)
Payables: $'000 3,563 (1,847) 4,200 2,561 (2,105) 4,278 6,178 7,702 6,784
Provisions: $'000 647 1,356 1,932 1,819 2,286 3,995 5,918 7,451 6,468
Unearned Revenues: $'000 1,041 557 4,549 8,213 3,594 5,423 12,566 11,323 13,962
Other Current Liabilities: $'000 790 (1,305) 8,533 4,770 20,405 8,674 12,848 16,177 14,043
Net Change In Operating Assets & Liabilities: $'000 (179) (2,235) 5,912 875 13,870 1,816 6,751 3,772 7,699
Net Cash Provided By Operating Activities: $'000 34,952 33,270 47,069 47,799 67,023 71,504 102,048 131,851 163,547
Cash Flow Investing Activities:
Capital Expenditures: $'000 0 0 (3,936) (4,857) (5,837) (8,913) (13,568) (20,050) (27,101)
Other Investing Activities: $'000 (2,005) (1,509) (22,919) (11,579) (12,401) (15,149) (19,218) (24,342) (28,790)
Net Cash Provided By Investing Activities: $'000 (2,005) (1,509) (26,855) (16,436) (18,238) (24,061) (32,786) (44,392) (55,891)
Cash Flow Financing Activities:
Dividends Paid: $'000 (7,000) (18,000) (26,000) (28,000) (26,091) (34,622) (47,882) (64,878) (79,248)
Reserves: $'000 (8,000) 3,000 3,000 6,000 0 0 0 0 0
Short-term Debt Issuances/Repayments: $'000 (209) (458) 1,061 (2,334) 0 0 0 0 0
Debt Issuances/Repayments: $'000 (1,768) (1,303) (2,275) (29) 0 0 0 0 0
Net Cash Provided By Financing Activities: $'000 (16,977) (16,761) (24,214) (24,363) (26,091) (34,622) (47,882) (64,878) (79,248)
Change in Cash & Cash Equivalents: $'000 15,970 15,000 (4,000) 7,000 22,693 12,821 21,380 22,581 28,408
Beginning Cash: $'000 49,030 65,000 80,000 76,000 83,000 105,693 118,514 139,894 162,475
Ending Cash: $'000 65,000 80,000 76,000 83,000 105,693 118,514 139,894 162,475 190,883

46. Discounted Cash Flow Analysis
46
Assumptions:
Share Price: 5.03$
Diluted Shares Outstanding: 321,806,949
Discount Rate: 9.22%
Multiple Method:
Baseline Terminal EBITDA Multiple: 10.42 x
Baseline Terminal Value ('000): 2,226,581
Implied Terminal FCF Growth Rate: 3.29%
Perpetuity Method:
Baseline Terminal FCF Growth Rate: 3.00%
Baseline Terminal Value ('000): 2,259,474
Implied Terminal EBTDA Multiple: 10.57 x
Multiple Method: Perpetuity Method:
NPV of Terminal Value: 1,432,609 NPV of Terminal Value: 1,453,772
NPV of FCF: 342,759 NPV of FCF: 342,759
Implied Enterprise Value: 1,775,368 Implied Enterprise Value: 1,796,531
% of Implied EV from TV: 80.69% % of Implied EV from TV: 80.92%
Plus: Cash & Cash Equivalents: 83,000 Plus: Cash & Cash Equivalents: 83,000
Less: Total Debt: (29) Less: Total Debt: (29)
Less: Minority Interest: Less: Minority Interest:
Implied Equity Value: 1,858,339 Implied Equity Value: 1,879,502
Implied Share Price: 5.77$ Implied Share Price: 5.84$
Premium/Discount: 14.81% Premium/Discount: 16.11%
Discount Rate Calculation Assumtions:
Risk Free Rate: 4.00%
Equity Risk Premium: 6.00%
Beta 1.00
Cost of Equity: 9.97%
Cost of Debt: 4.82%
Cost of Preferred Stock:
Current Capital Structure:
Equity Value: 30,000,000
Debt Value: 29,000
Total 30,029,000
Weighted Average Cost of Capital 9.97%
Multiple Method: Perpetuity Method:
NPV of Terminal Value: 1,432,609 NPV of Terminal Value: 1,453,77
NPV of FCF: 342,759 NPV of FCF: 342,759
Implied Enterprise Value: 1,775,368 Implied Enterprise Value: 1,796,53
% of Implied EV from TV: 80.69% % of Implied EV from TV: 80.92%
Plus: Cash & Cash Equivalents: 83,000 Plus: Cash & Cash Equivalents: 83,000
Less: Total Debt: (29) Less: Total Debt: (29)
Less: Minority Interest: Less: Minority Interest:
Implied Equity Value: 1,858,339 Implied Equity Value: 1,879,50
Implied Share Price: 5.77$ Implied Share Price: 5$
Premium/Discount: 14.81% Premium/Discount: 16.

47. 47
Historical Forecasted
Unlevered FCF Projection: Units: FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21
Revenue: 169,000 181,000 195,000 219,000 249,000 291,849 356,502 452,270 572,851 677,523
Annual Revenue Growth Rate: 7.10% 7.73% 12.31% 13.70% 17.21% 22.15% 26.86% 26.66% 18.27%
Operating Income (EBIT): 30,000 36,000 40,000 47,000 53,000 66,706 88,515 122,417 165,870 202,608
Annual Operating Margin: 17.75% 19.89% 20.51% 21.46% 21.29% 22.86% 24.83% 27.07% 28.96% 29.90%
Less Taxes: (9,000) (10,800) (12,000) (14,100) (15,900) (20,012) (26,555) (36,725) (49,761) (60,782)
Net Operating Profit After Tax (NOPAT): 21,000 25,200 28,000 32,900 37,100 46,694 61,961 85,692 116,109 141,825
Adjustment For Non-Cash Charges:
Depreciation: 3,873 2,742 2,799 3,188 4,454 5,441 6,902 8,742 10,340
Amortisation: 2,258 1,763 1,358 736 736 736 736 736 736
Share Based Payments: 1,000 0 1,000 2,000 1,269 1,551 1,967 2,492 2,947
Total Adjustments For Non-Cash Charges: 7,131 4,505 5,157 5,924 6,459 7,727 9,605 11,970 14,023
Changes In Operating Assets & Liabilities:
Prepayments: 0 0 (1,802) (4,015) (1,007) (1,512) (2,239) (2,819) (2,447)
Receivables: (224) (335) (7,429) (3,369) (7,150) (10,809) (16,011) (20,159) (17,499)
Other Current Assets: (6,570) 858 (3,198) (8,906) 3,452 (3,945) (5,844) (7,358) (6,387)
Deferred Tax Asset: 574 (1,519) (873) (198) (5,605) (4,289) (6,666) (8,545) (7,224)
Payables: 3,563 (1,847) 4,200 2,561 (2,105) 4,278 6,178 7,702 6,784
Provisions: 647 1,356 1,932 1,819 2,286 3,995 5,918 7,451 6,468
Unearned Revenues: 1,041 557 4,549 8,213 3,594 5,423 12,566 11,323 13,962
Other Current Liabilities: 790 (1,305) 8,533 4,770 20,405 8,674 12,848 16,177 14,043
Total Changes In Operating Assets & Liabilities: (179) (2,235) 5,912 875 13,870 1,816 6,751 3,772 7,699
Capital Expenditure: 0 0 (3,936) (4,857) (5,837) (8,913) (13,568) (20,050) (27,101)
Annual Unlevered FCF: 32,152 30,270 40,033 39,042 61,186 62,591 88,480 111,801 136,446
Annual FCF Growth Rate: (5.85%) 32.25% (2.48%) 56.72% 2.30% 41.36% 26.36% 22.04%
PV of FCF: 56,021 52,470 67,910 78,567 87,791
Annual EBITDA: 42,131 44,505 51,157 56,924 71,895 94,692 130,055 175,348 213,683
Annual EBITDA Growth Rate: 5.63% 14.95% 11.27% 26.30% 31.71% 37.35% 34.83% 21.86%

48. 48
Decline In Cloud Growth Rate
5.84$ 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% 55.00% 60.00%
0.00% 13.71 11.64 9.87 8.35 7.08 6.01 5.14 4.44 3.89 3.46 3.16
0.50% 13.66 11.60 9.82 8.31 7.03 5.97 5.09 4.39 3.84 3.42 3.11
1.00% 13.62 11.56 9.78 8.27 6.99 5.92 5.05 4.35 3.80 3.38 3.07
Decline in Software 1.50% 13.58 11.51 9.74 8.22 6.95 5.88 5.01 4.31 3.76 3.34 3.03
Licence Fee Rates 2.00% 13.54 11.47 9.70 8.18 6.90 5.84 4.97 4.27 3.71 3.29 2.99
2.50% 13.50 11.44 9.66 8.14 6.87 5.80 4.93 4.23 3.68 3.26 2.95
3.00% 13.46 11.40 9.62 8.11 6.83 5.76 4.89 4.19 3.64 3.22 2.91
3.50% 13.42 11.36 9.58 8.07 6.79 5.73 4.85 4.15 3.60 3.18 2.87
4.00% 13.39 11.32 9.55 8.03 6.75 5.69 4.82 4.12 3.56 3.14 2.84
Discount Rate
5.84$ 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00% 8.50% 9.00% 9.50% 10.00%
0.00% 8.12 7.35 6.71 6.18 5.72 5.32 4.97 4.66 4.39 4.15 3.93
0.50% 8.89 7.97 7.22 6.60 6.07 5.62 5.23 4.89 4.59 4.32 4.08
1.00% 9.86 8.73 7.83 7.10 6.49 5.97 5.53 5.14 4.81 4.51 4.25
FCF Growth Rate 1.50% 11.11 9.68 8.58 7.70 6.98 6.38 5.87 5.43 5.06 4.73 4.44
2.00% 12.77 10.91 9.51 8.43 7.56 6.86 6.27 5.77 5.35 4.98 4.66
2.50% 15.09 12.54 10.71 9.35 8.28 7.43 6.74 6.16 5.68 5.26 4.90
3.00% 18.58 14.82 12.31 10.52 9.18 8.14 7.31 6.63 6.06 5.58 5.17
3.50% 24.39 18.24 14.55 12.09 10.34 9.02 8.00 7.18 6.52 5.96 5.49
4.00% 36.02 23.94 17.91 14.29 11.88 10.16 8.87 7.86 7.06 6.41 5.86
Sensitivity Analysis

49. Comparable Company Analysis
49
Operating Statistics Capitalisation Revenue ($M) EBITDA ($M) EBITDA Margin Net Income ($M)
Company Name Country of Origin Equity Value ($M) Enterprise Value ($M) 30/06/2015 30/06/2016 30/06/2015 30/06/2016 30/06/2015 30/06/2016 30/06/2015 30/06/2016
MYOB Aus 2,302 2,568 328 369 128 171 39.16% 46.48% (38) 59
Xero Limited Aus 1,898 1,862 121 187 (56) (54) (46.15%) (28.94%) (68) (74)
Integrated Research Limited Aus 383 375 70 85 28 31 39.95% 36.18% 14 15
Altium Limited Aus 841 790 104 126 30 37 28.29% 29.35% 120 31
Class Limited Aus 386 370 N/A 22 N/A 9 N/A 42.30% N/A 5
IRESS Limited Aus 1,994 2,149 361 390 111 111 30.69% 28.52% 62 67
Maximum 2,301.66 2,567.52 361.46 389.74 128.36 171.47 39.95% 46.48% 120.31 67.11
75th Percentile 1,970.21 2,077.57 327.78 323.30 110.94 92.61 39.16% 40.77% 62.08 52.01
Median 1,369.36 1,326.15 121.48 156.21 29.55 33.76 30.69% 32.76% 14.25 22.81
25th Percentile 499.43 478.68 104.45 94.87 28.08 14.52 28.29% 28.73% (38.12) 7.56
Minimum 383.47 370.33 70.28 21.68 (56.06) (53.99) (46.15%) (28.94%) (68.20) (74.29)
Technology One Aus 1,618.69 1,535.69 219.00 249.00 51.16 56.92 23.36% 22.86% 36.00 41.00
Valuation Statistics Capitalisation Enterpise Value/Revenue Enterprise Value/EBITDA PE Multiple
Company Name Country of Origin Equity Value ($M) Enterprise Value ($M) 30/06/2015 30/06/2016 30/06/2015 30/06/2016 30/06/2015 30/06/2016
MYOB Aus 2,302 2,568 7.83x 6.96x 20.00x 14.97x N/A 39.00x
Xero Limited Aus 1,898 1,862 15.33x 9.98x N/A N/A N/A N/A
Integrated Research Limited Aus 383 375 5.33x 4.44x 13.35x 12.26x 26.91x 26.23x
Altium Limited Aus 841 790 7.56x 6.28x 26.73x 21.38x 6.99x 27.14x
Class Limited Aus 386 370 N/A 17.08x N/A 40.38x N/A 73.99x
IRESS Limited Aus 1,994 2,149 5.95x 5.51x 19.37x 19.34x 32.13x 29.72x
Maximum 2,301.66 2,567.52 15.33 x 17.08 x 26.73 x 40.38 x 32.13 x 73.99 x
75th Percentile 1,970.21 2,077.57 7.83 x 9.23 x 21.68 x 21.38 x 29.52 x 39.00 x
Median 1,369.36 1,326.15 7.56 x 6.62 x 19.69 x 19.34 x 26.91 x 29.72 x
25th Percentile 499.43 478.68 5.95 x 5.70 x 17.87 x 14.97 x 16.95 x 27.14 x
Minimum 383.47 370.33 5.33 x 4.44 x 13.35 x 12.26 x 6.99 x 26.23 x
Technology One Aus 1,618.69 1,535.69 7.01 x 6.17 x 30.02 x 26.98 x 44.96 x 39.48 x