8COMMON LIMITED - Annual Report 2021

8common

ASX Release

1 September 2021

Updated 2021 Annual Report

Fintech company 8common Limited ( 8common or the Company ) (ASX: 8CO ) advised that further to its 2021 Annual Report released on 31 August 2021 ( Annual Report ), attached is an updated Annual Report which makes minor typographical corrections which we have highlighted in bold below.

Within the Directors Report we corrected the percentage amount in the Operational Review FY21 Highlights dot points, “Total revenue for FY21 of $3.6m, down 14% vs FY20 ...”.

Additionally in the Financial Review first paragraph “In FY21 the company delivered total revenues from continuing operations of $3.6 million representing 14% decrease when compared with FY20 which includes recurring SaaS revenue of $2.5 million representing no growth when compared with FY20.”.

This release has been approved by the Board of 8Common Limited.

-END-

Further information

Corporate Nic Lim [email protected] Executive Chairman	Investors Craig Sainsbury [email protected]

About 8common Limited

8common (ASX:8CO) solutions deliver enterprise grade financial transaction processing for government entities and large enterprise businesses. Its flagship Expense8 platform is a leading pureplay provider of end to end travel expense management software, card application and management. The innovative software solutions improve organisation, productivity, incorporate company organisational policies and expense auditing to reduce fraud. Expense8 by 8common was named a Major Player in the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Travel and Expense Management Applications 2019 Vendor Assessment.

Its new products being PayHero (procurement payment gateway) and CardHero (pre-paid card fund distribution) deliver closed loop solutions to support regulated, large network and high-volume requirements. 8common’s specialises in large enterprise and government segments.

Its growing client base of more than 163,000 platform users include enterprise customers Woolworths, Broadcast Australia, Amcor, and over 158 state and federal government entities. For more information, visit https://www.8common.com/

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For the year ended 30 JUNE 2021 ACN: 168 232 577

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2021 ANNUAL REPORT

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8common Annual Report 2021

2 Chairman and CEO Message

4 Directors’ Report 21 Auditor’s Independence Declaration 22 Consolidated Statements 23 Financial Statements for the Year Ended 56 Directors’ Declaration 57 Independent Audit Report 63 ASX Additional Information Cc

8common Annual Report 2021

Chairman and CEO Message

Dear fellow shareholders,

The 2021 financial year was a transformative period for the company and this has set the tone for periods of multi-year growth and strength. Staying focused and collaborating with our customers has affirmed our position as the leading provider of enterprise grade financial payments and transaction management solutions for government entities and large enterprise businesses. During FY21 the Company:

Launched CardHero, an integrated card payment and expense management solution
Extended the reach of the Expense8 platform with an increase in user numbers to over 166,000
Cemented its position within Federal Government with Expense8 and post year end was selected as the sole solution provider of Travel and Expense Management for the Australian Government GovERP panel
Strengthened our balance sheet to provide the capital to fast track our growth initiatives

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Technology partnerships and ecosystem growth

The Company continues to advance its technology platform to provide the best possible solutions for our customers. We continue to focus on a client driven product development approach and the customer focused nature of our product. During the year, we entered into partnerships with Sypht and Satori to improve the quality of our technology for our customers. The partnership with Sypht, a BPAY Group and BCG Digital Ventures owned document intelligence company, will harness artificial intelligence and machine learning to turn documents into data, insights and action. The integration of Sypht will enable 8common to enhance the quick and accurate extraction of key information from receipts for direct upload to the Expense8 platform.

These partnerships and technology advances are at the core of ensuring that Expense8 remains the travel and expense management solution for our customers.

Cementing our position in Federal Government

The scale of our operational footprint in FY21 is reflected in the over $616m in transactions processed, over 41,000 new users (32% growth y.o.y) onboarded and a record quarterly transaction and recurring revenues. These metrics reflect our consistent level of customer support provided from our integration and onboarding teams through to our support staff. We thank the entire team for the quality of the service they continually provide our corporate and government clients throughout a challenging, but transformational year for our Company.

Expense8 – increasing customer breadth

Whilst COVID-19 impacted activity levels and revenue in the first half of the financial year, our business rebounded strongly in the second half of FY21. The normalisation of business activity levels and the return of travel activity drove improvements in our revenue and new customer engagement. During FY21 the company generated over $3 million TCV in new contract wins. During the year 8CO onboarded nine new entities delivering an additional 41,000 users to our platform. The company’s technology now supports over 166,000 users across 158 different entities.

After the end of the financial year, we announced that Expense8 had been selected as the solution provider of Travel and Expense Management for the Australian Government GovERP Complementary (edge) capabilities panel. Under this agreement, Expense8 will be the sole Travel and Expense Management provider for over 130k employees across 90 Government Entities. 8common currently provides Expense8 to a total of 27 Federal Government entities with approximately 20,000 users with a current Expense8 ARPU from Federal Government of $42 ($53 pre-covid). The addition of Expense8 to the GovERP panel provides the ability for 8common to substantially grow its footprint within Federal Government and significantly increase implementation revenue and transactionbased SaaS recurring revenue over the coming years.

Our appointment is a testament to the quality of the Expense8 platform and our ability to meet the high-level service offering, and security sought as part of the tender process for this whole of government initiative.

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02 8common Annual Report 2021

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CardHero –the next phase of growth

One of the major achievements during the year was the signing of the inaugural CardHero contract with Life Without Barriers, a large not-for-profit organisation supporting 23,000 people living across 400 communities across Australia.

The CardHero platform combines EML Payments (ASX:EML) issued pre-paid Mastercards with 8common’s Expense8 spend reconciliation solution and leverages the Expense8 platform which serves over 150 government entities and large corporates including Woolworths, Amcor and others. We will continue to focus on the rollout of CardHero across non-forprofit, Government and large enterprises as well as continue the rollout of Expense8 within Federal and State Government.

The scale and sophistication of disbursement programs amongst not-for-profits, charities and grant programs has driven the requirement for more advanced solutions like CardHero. The integrated funds disbursement and expense reconciliation capabilities are well supported by our experience and position as a preferred supplier to government and large corporates. CardHero reduces administrative time spent on validating and reconciling expenses and streamlines the distribution of funds.

Importantly we are seeing corporate customers, such as Woolworths, consider the CardHero solution and we believe this will be an avenue of significant revenue growth for the company in coming years.

Financial Strength – well capitalised to accelerate growth

During the year, we accessed capital markets to ensure we have the balance sheet capabilities to execute on our significant growth opportunities. In October 2020, we raised $2.25 million (before costs) to accelerate the roll out of CardHero and expedite the onboarding of recent customer wins. Post the end of the financial year we raised a further $3.78 million before costs. Both placements were strongly supported by a range of existing and new institutional shareholders. The funds raised will help 8CO accelerate its growth from recent contract wins and new product commercialisation.

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Outlook

We would like to thank the 8common team for their efforts during the year. We have a very proud, passionate and talented team that have built an exceptionally strong reputation amongst our clients, both existing and prospective, and are a crucial part of our growth and success.

8common continues to develop a collaborative and consultative engagement with clients generating significant opportunities to expand our business. Our ability to develop and maintain best of breed technology platforms to initiate, transact, manage and report financial transactions for large enterprises will continue to drive our future.

Our CardHero platform continues to gather momentum and we will be rolling it out early in FY22 to our cornerstone customer, not-for-profit, Life Without Barriers. The addition of Expense8 to the GovERP panel provides 8common with the opportunity to substantially grow our footprint within Federal Government, driving significant uplift in medium our SaaS recurring revenue.

We would like to thank all of our shareholders, stakeholder and customers for their support during the year and we look forward to more success in FY22 on beyond.

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Nic Lim Executive Chairman

Andrew Bond Chief Executive Officer

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8common Annual Report 2021 03

Directors’ Report

Your directors present their report on the consolidated entity (referred to herein as the Group or Company) consisting of 8common Limited and its controlled entities for the financial year ended 30 June 2021. The information in the review of operations forms part of this directors’ report for the financial year ended 30 June 2021 and is to be read in conjunction with the following information:

General Information

Directors

The following persons were directors of 8common Limited during or since the end of the financial year up to the date of this report:

Kah Wui “Nic” Lim – Managing Director and Executive Chair man

Adrian Bunter – Non Executive Director

Nyap Liou “Larry” Gan – Non Executive Director John Du Bois – Non Executive Director

Kok Fui Lau – Alternative Non Executive Director to Nyap Liou “Larry” Gan

David Hwang – Company Secretary

Particulars of each director’s experience and qualifications are set out later in this report.

Principal Activities

8common’s (ASX:8CO) solutions deliver enterprise grade financial transaction processing for government entities and large enterprise businesses. Its flagship Expense8 platform is a leading pureplay provider of end to end travel expense management software, card application and management. The innovative software solutions improve organisation, productivity, incorporate company organisational policies and expense auditing to reduce fraud. Expense8 by 8common was named a Major Player in the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Travel and Expense Management Applications 2019 Vendor Assessment.

Its new products being PayHero (procurement payment gateway) and CardHero (pre-paid card payment and fund distribution) deliver closed loop solutions to support regulated, large network and high-volume requirements. 8common specialises in large enterprise and government segments.

Its growing client base of more than 166,000 platform users include enterprise customers Woolworths, Broadcast Australia, Amcor, and over 158 state and federal government entities.

Operating Results and Review of Continuing Operations

Over this year, the Group achieved revenue from continuing operations of $3,507,193 (2020: $3,759,331) and a loss after providing for income tax amounting to $1,335,586 (2020: $804,089 loss). EBITDA for the full year was a loss of $1,093,526 year and the normalised EBITDA loss of $790,720 which excludes the share based payment.

04 8common Annual Report 2021

Operational Review

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Leading cloud-based platform for employee travel and expense management

TARGET USE CASES

FY21 Highlights:

SaaS and transaction-based revenue of $2.5m broadly flat on FY20. Momentum was strong in the second half of the year as normalising business conditions saw improving activity levels
Total revenue for FY21 of $3.6m, down 14% vs FY20 reflecting lower implementation revenue during the year and substantial reduction in transaction-based revenues
Annualised recurring SaaS and transaction-based revenue
- of nearly $3.0m (based on June 2021 SaaS revenue)
State and Federal Government
Large Corporates
$4.1m in operating cash receipts and operating cash outflow
of $154k (outflow of $201k in FY20)
Over $3.16m TCV in total contract wins in FY21 to date

DELIVERING

Streamlined payment reconciliation and travel management software
Total user numbers increased 32% over the period to 166k driven by new contract wins
Cash balance at 30 June 2021 was $3.2m ($1.8m at 30 June
2020).
Post the end of the financial year Expense8 was selected as the solution provider of Travel and Expense management for the Australian Government GovERP panel
Post the end of the financial year, the Company raised $3.78m before costs from a range of high quality institutional and sophisticated investors to provide working capital to support product, customer success and infrastructure enhancements to facilitate onboarding of recent contract wins

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8common Annual Report 2021

Operational Review

FY21 was a transformational year of growth and expansion amid continued challenges with the Australian economy being impacted by COVID-19. Our core Expense8 business grew users by 32% and broke all time monthly recurring and transaction based SaaS revenue records. The expansion into payment cards via CardHero via the mandate from Life Without Barri - ers to deliver NDIS related funds is poised to deliver significant growth.

The company continued to grow its customer relationships over the course for FY21. During the year 8CO onboarded nine new entities delivering an additional 41,000 users to our platform. The company’s technology now supports over 166,000 users across 158 different entities. Key contract wins during the year include;

Five new agencies with the Department of Finance Service Delivery Office:
Safe Work Australia

Whilst COVID-19 is impacting near term business activity, 8CO’s strategy of customer collaboration and consultation have - ensured that we are positioned to deliver highly accurate prod - uct customer fit. We build with clear demand and commercial ise in collaboration with customers.

The scale of our business continues to grow. Expense8 processed $616 million of transactions in FY21 via 2.3 million dis - crete transactions processed. A record year for the company.

Fair Work Ombudsman
Australia Skills Quality Authority
Australian Public Service Commission
Australia Building and Construction Commission
Australian Radiation Protection and Nuclear Safety Agency • NSW Electoral Commission
Extension of the NSW Department of Planning, Industry and Environment (DPIE) contract
• Extension of the NSW Department of Education contract
Extension of Woolworths (including an option for CardHero) • Extension of University of Canberra
Extension for Edith Cowan University
Extension for Federal Court of Australia
Extension for NSW Department of Customer Service
Extension for Federal Department of the Prime Minister and Cabinet
Extension for Federal Department of Social Services

06 8common Annual Report 2021

Operational Review

CARDHERO REVENUE MODEL

Implementation

Monthly Platform Fee

+ +

Monthly Card Fee

Per Card Issuance Fee and % of load value

EMPLOYEE PURCHASING

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Digital and physical pre-paid expense card
Integrated card and transaction reconciliation platform
Redundancy card in place of Bank issued cards or issuance of Cards to employees who do not have Corporate Cards
Employees will be able to transact on their card with the CardHero smartphone application providing access to information such as available funds, past transactions and recent top-ups. Authorised
decision makers/Client Administrators, though unable to transact, will be able to view this same information.
Employees will be able to transact on an unrestricted basis, though their transactions will be assessed by a ‘fraud detection’ process.
CardHero will provide and support existing Expense8 enterprise clients who in FY21 transacted over $616m.

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FUND DISBURSEMENT

+

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Digital pre-paid fund disbursement card
Integrated fund distribution transaction reconciliation platform
Ensure funding programs can continue where ATM and Bank Branch access is not available
Social service clients will be able to transact on their card with the CardHero smartphone application providing access to information such as available funds, past transactions and recent top-ups. Authorised decision makers/Client
Administrators, though unable to transact, will be able to view this same information.
Clients will be able to transact on an unrestricted basis, though their transactions will be assessed by a ‘fraud detection’ process.
Support and enable regulated and high-volume transaction management specifically targeting the challenges experienced within the not for profit sector. With over $4.8 billion in funds distributed annually, in Australia, this sector alone has the potential to eclipse Expense8 in both total addressable market and rate of adoption.

8common Annual Report 2021 07

Financial Review

In FY21 the company delivered total revenues from continuing operations of $3.6 million representing 14% decrease when compared with FY20 which includes recurring SaaS revenue of $2.5 million representing no growth when compared with FY20.

The Company generated a net operating cash outflow of $154k for FY21 and $146k for Q4 FY2. The company has a strong cash position of $3.2 million as at 30 June 2021.

The company delivered an EBITDA loss of $1,094k for the full year. The net loss for the year of $1,336k was an increase when compared to a $0.804 million loss in FY20. The adjusted EBITDA loss is $790,72 when share based payments are excluded.

As at 30 June 2021, the company maintained a net cash position of $3.2 million a significant improvement versus the $1.8 million as at 30 June 2020. The Company announced two positive quarter of cashflow during the start of FY21 and recorded a full year FY21 operating cash outflow of $154k.

Total Revenue

Recurring SaaS & Transaction Revenue

Operating Cashflow

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08 8common Annual Report 2021

The Company ended FY21 on strong footing due to a combination of a growing customer base and improving business activity in Australia. The Company has a significant pipeline of potential revenue growth via the implementation of our technology across State, Federal, Not-for-profit, and Corporate clients. The CardHero and CardHero+ products are a significant engine of growth and will further expand the client and revenue footprint of the Company. With a dedicated team, robust financials and strong pipeline of Expense8 and CardHero growth opportunities are expected to support a strong platform for continued growth into FY22 and beyond.

Financial Review

CardHero Rollout

CardHero leverages 8common’s significant coverage of Government and Corporate customers via its globally recognised Expense8 product platform which serves over 140 government entities, large corporates including Woolworths, Amcor and others.

The CardHero and CardHero+ platforms have two distinctive use cases and clients in mind:

CardHero is an integrated card payment and ex- pense management solution targeted at govern ment and large enterprise clients.

CardHero+ is an integrated fund disbursement and spend management solution which can be used by not for profits and educational institutions to disburse funding and reconcile transactions.

The CardHero revenue model consists of a combination of a monthly platform fee, and either a per card or percentage of load fee depending on the client requirements and usage model.

During the year the Company announced it had entered in to a 3-year agreement with card solutions provider EML Payments Limited (ASX:EML) to create a CardHero branded reloadable card program. Under the agreement, 8common will be able to issue CardHero branded pre-paid Mastercard’s in partnership with EML.

In December 2020, the Company signed its inaugural CardHero contract with Life Without Barriers, a large not-forprofit organisation supporting 23,000 people living across 400 communities across Australia. The $1.6 million, three year contract incorporates an implementation fee of $150,000 and approximately $500,000 per annum in transaction fees. Life Without Barriers plan to utilise CardHero to disburse funds and manage expenses from this contract to roll out 3,500 cards across 380 disability care homes across Australia.

Life Without Barriers provides a range of services under the National Disability Insurance Scheme (NDIS) in every Australian state and territory. The NDIS gives people choice and control over their support. It’s designed to help people with daily living tasks, achieve their goals and build connection to their community. In 2019, Life Without Barriers supported 6,098 people with disability out of whom 4,043 people are participants of the NDIS.

In addition to Life Without Barriers, a broader opportunity exists to provide the CardHero product to other not-for-profits NDIS service providers, resulting in a significantly larger and wider market opportunity for the CardHero offering.

The CardHero product can is also focussed on the corporate sector. During the year, Woolworths Group signed an option to access 8CO’s integrated card payment and expense management solution. The Company will continue to pursue the rollout of CardHero amongst both the corporate and Government sectors.

Driving technology improvements

The Company continues to advance its technology platform to provide the best possible solutions for its customers. 8common announced a partnership with BPAY Group and BCG Digital Ventures-owned document intelligence company Sypht, to further harness artificial intelligence and machine learning to turn documents into data, insights and action. The integration of Sypht will enable 8common to enhance the quick and accurate extraction of key information from receipts for direct upload to the expense8 platform. The Company implemented Sypht’ s new document intelligence capabilities for the Federal Treasury in Q2 FY2 and will continue to roll out the technology to other customers.

Capital Raise

During the year the Company received binding commitments from a range of high quality institutional and sophisticated investors to subscribed for 17,307,692 shares at an issue price of A$0.13 per share to raise $2.25m before costs.

The funds from the placement were predominantly used to:

Expand the rollout of CardHero, the Company’s integrated payment and expense management solution
Accelerate the onboarding of recent customer wins with the Federal Government sector via the shared services platform
General working capital requirements

The Placement resulted in the issue of 17,307,692 new fully paid ordinary shares at an issue price of $0.13 per share to raise total proceeds of $2.25m. The new shares represent approximately 9.4% of the existing company’s shares on issues and was undertaken within the Company’s existing capacity under ASX Listing Rule 7.1. The issue price of A$0.13 per share represented a 7.1% discount to the last traded price of $0.14 per share.

Post the end of the financial year the Company received binding commitments from a range of high quality institutional and sophisticated investors to subscribe for 21,000,000 shares at an issue price of A$0.18 per share to raise $3.78m before costs. The issue price of A$0.18 per share represents a 5% discount to the last traded price of $0.19 per share.

10 8common Annual Report 2021

Significant Changes in State of Affairs

During the financial year the following significant changes in the state of affairs of the consolidated entity occurred:

Increase in contributed equity of $2.25 million (before costs) through the issue of shares via a placement of shares to institutional and sophisticated investors.

Events after Reporting Year

On the 29 July 2021, Expense8 was selected as the solution provider of Travel and Expense Management for the Australian Government GovERP Complementary (edge) capabilities panel (Edge Panel), part of the Government’s Shared Services Transformation Initiative to provide common resourcing and streamlined provision of services across the Australian Public Sector.

Highlights:

Expense8 is the travel and expense management solution for GovERP. GovERP will provide a common corporate platform for all non-corporate Commonwealth entities (NCCEs) and those corporate Commonwealth entities (CCEs) that have opted in (over 90 agencies)
Over 90 Commonwealth agencies (which includes over 130K employees) participate in the Shared Services Program and could utilise Expense8. With another 79 Commonwealth agencies having the option to opt-in to the Program.
8CO currently generate a Federal Government ARPU of $42 ($53 pre-covid) servicing approximately 20,000 employees across 27 agencies
Over the past 12 months, 8CO has onboarded 10 Federal Government Agencies delivering implementation revenue of $540k
The Agreement will see two new modules, Card Application and Management Module and GovComply Audit and Compliance Module, available to be utilised by the Federal Government which is anticipated to drive an increase in ARPU
The Agreement is for an initial term of three years with an option to extend by a further three years
The GovERP platform is expected to be established in mid-2022 with the first edge capabilities. The first agencies to onboard to GovERP will be the Service Delivery Office (SDO) Provider Hub and its client entities in mid-2023

On the 11 August 2021, 8common increased its contributed equity by $3.78 million (before costs) through the issue of shares via a placement of shares to institutional and sophisticated investors.

Environmental Issues

The company takes a responsible approach in relation to the management of environmental matters. All significant environmental risks have been reviewed and the consolidated entity has no legal obligation to take corrective action in respect of any environmental matter. The consolidated entity’s operations are not subject to significant environmental regulations.

Dividends Paid or Recommended

No dividend has been paid or declared in relation to the financial year ended 30 June 2021.

Indemnifying and insurance of officers

The company has indemnified all current and previous directors of the consolidated entity, the company secretary and certain members of senior management against all liabilities or loss (other than to the company or a related body corporate) that may arise from their position as officers of the company and its controlled entities, except where the liabilities arise out of conduct involving a lack of good faith or indemnification is otherwise not permitted under the Corporations Act. The indemnity stipulates that the company will meet the full amount of any such liabilities, including costs and expenses, and covers a period of seven years after ceasing to be an officer of the company.

8common Annual Report 2021

During the financial year, 8common Limited paid a premium of $42,721 to insure the directors and secretaries of the company and its Australian-based controlled entities, and the general managers of each of the divisions of the group. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.

Indemnifying and insurance of auditor

The company’s insurance contract does not provide cover for the independent auditors of the company or of a related body corporate of the company.

Proceedings on Behalf of Company

No person has applied for leave of court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings. The company was not a party to any such proceedings during the year.

Non-audit Services

The Board of Directors, in accordance with advice from the audit committee, is satisfied that the provision of nonaudit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

The following fees were paid or payable by 8common Limited for non-audit services provided by an entity related to the audit firm during the year ended 30 June 2021:

Taxation services	$ 3,603
	3,603

8common Annual Report 2021

Employee Share Options

At the date of this report, the unissued ordinary shares of 8common Limited under Employee share option plan are as follows:

	Grant Date	Expiry date	Exercise Price	Number of Options
Employee Option Plan	30 June 2021	30 June 2024	$0.16	6,325,000
Employee Option Plan	27 November 2020	27 November 2023	$0.20	450,000
Employee Option Plan	30 June 2020	30 June 2023	$0.091	1,515,054
Employee Option Plan	30 June 2019	30 June 2022	$0.168	7,340,000
Total				15,630,054

Option holders do not have any rights to participate in any issues of shares or other interests of the company or any other entity.

There have been no options granted over unissued shares or interests of any controlled entity within the Group during or since the end of the reporting period.

For details of options issued to directors and executives as remuneration, refer to the remuneration report.

During the year ended 30 June 2021, there were 284,946 ordinary shares issued on the exercise of employee share options granted.

No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of any other body corporate

Auditor’s Independence Declaration

The lead auditor’s independence declaration for the year ended 30 June 2021 has been received and can be found on page 21 of the financial report.

Auditor

Walker Wayland NSW Chartered Accountants continues in office in accordance with section 327 of the Corporations Act 2001.

Options

At the date of this report, there were no options on issue listed on the Australian Securities Exchange.

Information Relating to Directors

Kah Wui “Nic” Lim – Managing Director and Executive Chairman Qualifications – Bachelor of Commerce (Western Sydney University) and Bachelor of Law (University of Technology, Sydney) Experience – Founder of 8common, investor and Board member of various technology companies over the last 20 years. Co-Founded Catcha.com in 1999, Nic left an operational role in 2003 and remained on the Board member of various subsidiaries until 2010. Nic established a career in finance and advisory until 2012 and was most recently attached to the Fixed Income Sales team within the Investment Bank of Morgan Stanley in Singapore. He was also previously with UBS and Credit Suisse in Hong Kong. Interest in Shares and Options – 26,608,340 ordinary shares in 8common Limited. 125,000 options Special Responsibilities – None Directorships held in other listed – None entities during the last three years

8common Annual Report 2021

Nyap Liou “Larry’ Gan

Qualifications

Experience

Non-Independent, Non-Executive Director
Fellow of Association of Certified Chartered Accountants and Certified Management Consultant
During his 26 years at Accenture he held many global leadership roles. He was the Accenture Managing Partner of ASEAN from 1993 to 1996 and Managing Partner of Asia from 1997 to 1999. He was a member of the Accenture Global Management Council from 1997 to 2004 and sat on many global management committees, governing partner admission, rewards and compensation. He was also the Managing Partner of Corporate Development, Asia Pacific from 1999 to 2002 and managed the company’s multi-billion dollar Venture Fund for the Asia Pacific region.
Interest in Shares and Options – 14,430,576 ordinary shares in 8common Limited. 125,000 options

Special Responsibilities

Directorships held in other listed entities during the last three years

Member of the Remuneration Committee and member of the Audit Committee
He is a current Board member of Fatfish Internet Group Limited, Catcha Digital Berhad and Cloudaron Group Berhad. Previously a member of Cuscapi Bhd and Tropicana Corporation Bhd.

Adrian Bunter

Qualifications

Experience

Independent, Non-Executive Director
Bachelor of Business (University of Technology, Sydney) and a Graduate Diploma in Applied Finance. Member of Chartered Accountants Australia and New Zealand, Senior Associate of Financial Services Institute of Australia
Adrian has 26 years experience in accounting, finance and a broad range of corporate advisory roles including mergers and acquisitions, divestments of business, debt/equity raisings and strategy development and execution. He is an executive director of Venture Advisory, one of Australia’s leading specialist technology, media and telecommunications financial advisory firms and is an executive committee member of Australia’s leading angel investing group, Sydney Angels.
Interest in Shares and Options – 150,000 ordinary shares in 8common Limited. 125,000 options

Special Responsibilities

Directorships held in other listed entities during the last three years

Member of the Remuneration Committee and member of the Audit Committee – Non-Executive Chairman of Carly Holdings Limited (ASX: CL8)

John Du Bois

Qualifications

Experience

Independent, Non-Executive Director
IAC (Institute of Administration & Commerce Zimbabwe) Law Economics and Accounts. Macquarie University Graduate School of Business - Banking and Finance. INSEAD Executive Leadership. Australian Graduate School of Management Leadersip and Management Monash University NLP Advanced Techniques Chisholm Institute/Monash University Data Processing Programming Analysis Structure and Information
John has over 35 years experience in executive leadership leading transforming and building early stage and established businesses, including mergers, acquisitions and divestments. He is Chairman of Avigna, Global Mentor for Everwise, Council Member for GLG (Garson Lehrman Group) and does Advisory and Executive interim management.
Interest in Shares and Options – 378,698 ordinary shares in 8common Limited 75,000 options

Special Responsibilities

Member of the Remuneration Committee and member of the Audit Committee

8common Annual Report 2021

Directorships held in other listed – N/A entities during the last three years

Kok Fui Lau

– Independent, Non-Executive Director (Alternate to Nyap Liou “Larry” Gan)

Qualifications – Master in Business Administration from Henley Management College United Kingdom Advance Management Program Training at GE Crotonville Aircraft Maintenance Engineer Licences.

Experience – Lau has 40 years of experience working in Aviation, media and IT industries covering a broad range of roles including business formation, mergers and acquisitions, divestments of business, and strategy development and execution.

He was a Managing Director of the General Electric Company as well as Regional Director of Business Development covering the Asia Pacific Region. He was recognised for many successful operational and business achievements.

Interest in Shares and Options – 17,223,886 ordinary shares in 8common Limited Special Responsibilities – NA Directorships held in other listed –[MSCM Berhad Malaysia. (Formerly Panpages Berhad Malaysia) ] entities during the last three years

Meetings of Directors

During the financial year, 13 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows:

			Audit
	Directors’	Meetings	Committee		Remuneration Committee
	Number eligible	Number	Number eligible	Number	Number eligible	Number
	to attend	attended	to attend	attended	to attend	attended
Kah Wui “Nic” Lim	10	10	-	-	-	-
John Du Bois	10	10	2	2	1	1
Nyap Liou “Larry” Gan	10	9	2	2	1	1
Adrian Bunter	10	10	2	2	1	1
Kok Fui Lau	-	-	-	-	-	-

REMUNERATION REPORT - AUDITED

This report outlines the remuneration arrangements in place for Directors and key management personnel of the Group for FY21. The remuneration report is set out under the following main headings:

A. Principles used to determine the nature and amount of remuneration
B. Details of remuneration
C. Service agreements
D. Share-based compensation

These disclosures have been audited, as required by section 308(3c) of the Corporations Act 2001.

Role of the remuneration committee

The remuneration committee is a committee of the Board. It is primarily responsible for making recommendations to the Board to ensure 8common’s remuneration structures are equitable and aligned with the long- term interests of 8common and its Shareholders. The remuneration committee will have regard to relevant company policies in attracting and retaining skilled executives, and structuring short and long-term incentives that are challenging and linked to the creation of sustainable Shareholder returns.

In relation to remuneration matters, the committee’s responsibilities are to ensure that 8common:

8common Annual Report 2021

has coherent remuneration policies and practices which enable 8common to attract and retain executives and Directors who will create value for Shareholders;
fairly and responsibly remunerates Directors and executives, having regard to the performance of 8common, the performance of the executives and the general remuneration environment; and
has effective policies and procedures to attract, motivate and retain appropriately skilled and diverse persons to meet 8common’s needs.

The Corporate Governance Statement provides further information on the role of this committee. The Chief Executive Officer and the Chief Financial Officer attend meetings by invitation to assist the Committee in its deliberations except on matters associated with their own remuneration.

A. Principles used to determine the nature and amount of remuneration

The performance of the Group depends on the quality of its Directors and executives. To prosper, the Group must attract, motivate and retain highly skilled Directors and executives. To this end, the Group embodies the following principles in its remuneration framework:

provide competitive rewards to attract high calibre executives;
link executive rewards to shareholder value;
ensure that a significant portion of executive remuneration is ‘at risk’, and therefore dependent on meeting pre-determined performance benchmarks; and
establish appropriate performance hurdles in relation to variable executive remuneration.

The Board of Directors assesses the appropriateness of the nature and amount of remuneration of Directors and senior managers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team.

Remuneration structure

In accordance with the corporate governance principles and recommendation, the structure of Non-Executive Director and senior manager remuneration is separate and distinct.

Non-executive director remuneration

Objective

The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract and retain Directors of the highest calibre, while incurring costs that are acceptable to shareholders.

Structure

Each Non-Executive Director will receive a fixed fee for being a Director of the Group. The current fee is $36,000 per annum.

The constitution and the ASX Listing Rules specify that the maximum aggregate remuneration of Non-Executive Directors shall be determined from time to time by a general meeting of shareholders.

The amount of aggregate remuneration sought to be approved by shareholders and the fixed fees paid to Directors are reviewed annually. The Board considers fees paid to Non-Executive Directors of comparable companies when undertaking the annual review process. The current aggregate amount as approved by the shareholders is $300,000.

Executive remuneration

Objective

The Company aims to reward key management personnel with a level and mix of remuneration commensurate with their position and responsibilities within the Company and:

Reward key management personnel for achievement of pre-determined key performance indicators;
Link reward with the strategic goals and performance of the Company; and
Ensure total remuneration is competitive by market standards.

The Remuneration for key management personnel and staff will include an annual review using a formal performance appraisal process. The Remuneration Committee recommends to the Board the level of fixed remuneration each year based on the performance of individuals.

8common Annual Report 2021

Structure

A policy of the Board is to establish employment or consulting contracts with the Chairman, Chief Executive Officer and other senior executives. At the time of this report there are employment agreements are in place for the members of the Board and senior management.

Current remuneration agreements only consist of fixed remuneration. The Board and senior management are reviewing the remuneration agreements with the view of incorporating long-term equity-based incentives that are subject to satisfaction of performance conditions. There have been one off grants of long term equity incentives in 2020 and 2021 which are intended to retain key executives and reward performance.

Fixed remuneration

The level of fixed remuneration is set as to provide a base level of remuneration that is both appropriate to the position and is competitive in the market. Fixed remuneration comprises of payroll salary, superannuation and other benefits. Individuals, however, may choose to sacrifice part of their salary to increase payments towards superannuation or other benefits.

Remuneration Policy and Performance

The Company is currently reviewing the remuneration policies applicable to the CEO and CTO as well as the general manager and other senior personnel of the Company in relation to KPI’s and extent of remuneration, which is ‘at risk’. The review will assist the Company to better structure remuneration policies in accordance with current trends and practices in corporate remuneration.

Relationship between remuneration policy and company performance

The Company is currently reviewing its remuneration policies as indicated above.

Details of the remuneration of the Directors and other key management personnel (as defined in AASB 124 Related Party Disclosures) of 8common Limited are set out in the following tables.

B. Details of remuneration (audited)

		Post-Employment Benefits	Post-Employment Benefits
			Share
	Cash salary	Superannuation	based	Total	Performance
Name	and fees		payments		related
2021	$	$	$	$	%
Non-executive
directors
John Du Bois	36,000	-	5,047	41,047	-
Nyap Liou “Larry” Gan	36,000	-	5,047	41,047	-
Adrian Bunter	36,000	-	5,047	41,047	-
Total non-executive directors	108,000	-	15,141	123,141	-
Executive directors and	key management	personnel
Kah Wui “Nic” Lim (i)	189,584	-	5,047	194,631		-
Zoran Grujic (Chief Financial Officer)	66,926	-	15,639	82,565		-
Andrew Bond (Chief Executive Officer)	191,806	18,221	40,214	250,241		-
Rory Koehler (Chief Technology Officer) (ii)	143,590	-	26,810	170,400		-
Ben Brockhoff (Chief Operating Officer)	170,996	16,245	40,214	227,455		-
Total executive
directors & key	762,902	34,466	127,924	925,292		-
management
Total	870,902	34,466	143,065	1,048,433		-

8common Annual Report 2021

(i) Mr Lim is not based in Australia and hence no local superannuation is payable on his remuneration. (ii) Mr Koehler is not based in Australia and hence no local superannuation is payable on his remuneration.

		Post-Employment Benefits	Post-Employment Benefits
			Share
	Cash salary	Superannuation	based	Total	Performance
Name	and fees		payments		related
2020	$	$	$	$	%
Non-executive
directors
John Du Bois	35,083	-	-	35,083	-
Nyap Liou “Larry” Gan	35,083	-	-	35,083	-
Adrian Bunter	35,083	-	-	35,083	-
Total non-executive directors	105,249	-	-	105,249	-
Executive directors and	key management	personnel
Kah Wui “Nic” Lim (i)	186,084	-	-	186,084	-
Zoran Grujic (Chief Financial Officer)	55,850	-	6,310	62,160	-
Andrew Bond (Chief Executive Officer)	175,000	16,625	86,247	277,872	-
Rory Koehler (Chief Technology Officer) (ii)	135,000	-	40,770	175,770	-
Ben Brockhoff (Chief Operating Officer)	148,333	14,092	65,233	227,658	-
Total executive
directors & key	700,267	30,717	198,560	929,544	-
management
Total	805,516	30,717	198,560	1,034,793	-

(i) Mr Lim is not based in Australia and hence no local superannuation is payable on his remuneration.

(ii) Mr Koehler is not based in Australia and hence no local superannuation is payable on his remuneration.

C. Service agreements

Mr Kah Wui “Nic” Lim was appointed as the Executive Chairman and is based in Singapore, and reports to the Board by way of an executive service agreement. The appointment of Nic is for an unspecified term. Either 8common or Mr Lim may terminate the appointment with 6 months’ notice or alternatively in 8common’s case, payment in lieu of notice. Upon the termination of Mr Lim’s employment contract, he will be subject to a restraint of trade period of up to 12 months. The enforceability of the restraint clause is subject to all usual legal requirements. The fixed remuneration payable to Mr Lim comprises a remuneration of $187,385 inclusive of all entitlements.

Mr Andrew Bond was appointed as the Chief Executive Officer and is based in Sydney Australia, and reports to the Board by way of an executive service agreement. Either 8common or Mr Bond may terminate the appointment with 3 months’ notice or alternatively in 8common’s case, payment in lieu of notice. Upon the termination of Mr Bond’s employment contract, he will be subject to a restraint of trade period of up to 12 months. The enforceability of the restraint clause is subject to all usual legal requirements. The fixed remuneration payable to Mr Bond was reviewed during the financial year and comprises a remuneration of $189,000 per annum plus superannuation.

D. Share-based compensation (audited)

Loans to directors and executives

There were no loans to Directors or executives during or since the end of the year.

8common Annual Report 2021

Share holdings of key management personnel.

Directors and key	Balance at the	Other changes	Balance at the
management personnel of	start of the year	during the year	end
8common Limited			of the year
ordinary shares
2021
John Du Bois	328,698	50,000	378,698
Nyap Liou “Larry” Gan	14,430,576	-	14,430,576
Adrian Bunter	66,000	84,000	150,000
Kah Wui “Nic” Lim	26,579,340	29,000	26,608,340
Kok Fui Lau	17,223,886	-	17,223,886
Zoran Grujic	4,345,987	-	4,345,987
Andrew Bond	30,000	70,000	100,000
Ben Brockhoff	18,000	54,946	72,946
Rory Koehler	30,000	60,000	90,000
Total	63,052,487	347,946	63,400,433

Directors and key	Balance at the	Other changes	Balance at the
management personnel of	start of the year	during the year	end
8common Limited			of the year
ordinary shares
2020
John Du Bois	232,560	96,138	328,698
Nyap Liou “Larry” Gan	14,430,576	-	14,430,576
Adrian Bunter	66,000	-	66,000
Kah Wui “Nic” Lim	24,479,850	2,099,490	26,579,340
Kok Fui Lau	-	17,223,886	17,223,886
Zoran Grujic	2,728,000	1,617,987	4,345,987
Andrew Bond	30,000	-	30,000
Ben Brockhoff	-	18,000	18,000
Rory Koehler	30,000	-	30,000
Total	41,996,986	21,055,501	63,052,487

Options holdings of key management personnel.

Directors and key	Balance at the	Options acquired	Options	Balance at the
management personnel of	start of the year	or disposed of	exercised during	end
8common Limited options		during the year	the year	of the year
2021
Adrian Bunter	-	125,000	-	125,000
John Du Bois	-	125,000	(50,000)	75,000
Nyap Liou “Larry” Gan	-	125,000	-	125,000
Kah Wui “Nic” Lim	-	125,000	-	125,000
Andrew Bond	2,650,000	900,000	(70,000)	3,480,000
Rory Koehler	1,250,000	600,000	(60,000)	1,790,000

8common Annual Report 2021

Directors and key	Balance at the	Options acquired	Options	Balance at the
management personnel of	start of the year	or disposed of	exercised during	end
8common Limited options		during the year	the year	of the year
Ben Brockhoff	2,000,000	900,000	(54,946)	2,845,054
Zoran Grujic	250,000	350,000	-	600,000
Total	6,150,000	3,250,000	(234,946)	9,165,054

Directors and key	Balance at the	Options acquired	Options	Balance at the
management personnel of	start of the year	or disposed of	exercised during	end
8common Limited options		during the year	the year	of the year
2020
Kah Wui “Nic” Lim	2,004,001	-	(2,004,001)	-
Andrew Bond	2,100,000	550,000	-	2,650,000
Rory Koehler	1,000,000	250,000	-	1,250,000
Ben Brockhoff	1,600,000	400,000	-	2,000,000
Zoran Grujic	-	250,000	-	250,000
Total	6,704,001	1,450,000	(2,004,001)	6,150,000

Description of options/rights issued and remuneration

500,000 options were issued under the employee share options plan to the Directors during the year with an exercise price of $0.20 per option and an expiry date of 27 November 2023.

6,325,000 options were issued under the employee share options plan to key management personnel and other employees during the year with an exercise price of $0.16 per option and an expiry date of 30 June 2024.

There have been no unissued shares or interests under option of any controlled entity within the Group during or since reporting date.

END OF REMUNERATION REPORT

This Director’s report, incorporating the Remuneration report, is signed in accordance with a resolution of the Board of Directors.

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Nic Lim Executive Chairman

31 August 2021 Singapore

8common Annual Report 2021

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31 August 2021

The Directors 8common Limited Level 7, 120 Pitt Street SYNDEY NSW 2000

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF 8COMMON LIMITED AND CONTROLLED ENTITIES

We declare that, to the best of our knowledge and belief, during the year ended 30 June 2021 there have been no contraventions of:

i. the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
ii. any applicable code of professional conduct in relation to the audit.

Walker Wayland NSW Chartered Accountants

Wali Aziz Partner

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021

Note Revenue from continuing operations 3a Other income 3b TOTAL REVENUE EXPENSES FROM CONTINUING OPERATIONS Cost of sales 4 Employee and contractor costs Occupancy expenses 4 Administration expenses Computer software/ maintenance Accounting and legal costs Marketing costs Borrowing costs 4 Depreciation and amortisation 4 Impairment 15 (ii) Share based payments 29 TOTAL EXPENSES NET LOSS BEFORE INCOME TAX Income tax benefit / (expense) 5 NET LOSS FOR THE YEAR FROM CONTINUING OPERATIONS NET LOSS FOR THE YEAR Other comprehensive loss Reserve adjustment – (loss) on revaluation of financial asset TOTAL COMPREHENSIVE LOSS FOR THE YEAR Earnings per share Basic loss per share – cents per share Diluted loss per share – cents per share	2021 2020 $ $ 3,507,193 3,759,331 55,385 409,018
	3,562,578 4,168,349
	(730,917) (561,426) (2,543,395) (2,369,446) (80,430) (78,963) (335,618) (353,605) (366,980) (383,245) (214,576) (136,411) (80,772) (68,995) - (342) (296,251) (293,273) - (388,000) (302,806) (309,060)
	(4,951,745) (4,942,766)
	(1,389,167) (774,417)
	53,581 (29,672)
	(1,335,586) (804,089)
	(1,335,586) (804,089)
	(338,623) (2,241,972)
	(1,674,209) (3,046,061)
	(0.69) (0.48) (0.69) (0.48)

The accompanying notes form part of these consolidated financial statements

8common Annual Report 2021

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021

	Note	30 June 2021	30 June 2020
		$	$
Current assets
Cash and cash equivalents	9	3,223,185	1,842,492
Trade and other receivables	10	139,550	244,431
Other assets	14	108,402	95,854
Total current assets		3,471,137	2,182,777
Non current assets
Financial assets	15	984,960	1,318,807
Property, plant and equipment	12	23,794	12,897
Deferred tax assets	18	197,333	143,752
Intangible assets	13	2,289,490	1,765,720
Total non-current assets		3,495,577	3,241,176
Total assets		6,966,714	5,423,953
Current liabilities
Trade and other payables	16	1,083,856	556,611
Contract liabilities	17	461,263	319,620
Provisions	19	202,340	170,461
Total current liabilities		1,747,459	1,046,692
Non current liabilities
Provisions	19	95,137	50,620
Total non current liabilities		95,137	50,620
Total liabilities		1,842,596	1,097,312
Net assets		5,124,118	4,326,641
Shareholders’ equity
Contributed equity	20	13,148,139	10,979,259
Accumulated Losses		(6,749,009)	(5,419,353)
Asset revaluation reserve	25	(2,101,845)	(1,763,222)
Share based payment reserve	29	826,833	529,957
Total shareholders’ equity		5,124,118	4,326,641

The accompanying notes form part of these financial statements

8common Annual Report 2021

CONSOLIDATED STATEMENT OF CASH FLOW FOR THE YEAR ENDED 30 JUNE 2021

Note CASH FLOW FROM OPERATING ACTIVITIES Receipts from customers Government grants and tax incentives Interest received Interest paid Payments to suppliers and employees Net cash (used in) operating activities 24a CASH FLOW FROM INVESTING ACTIVITIES Purchase of non current assets Payment for Software development costs Net cash (used in) provided by investing activities CASH FLOW FROM FINANCING ACTIVITIES Net Proceeds from conversion of options to ordinary shares Net cash provided by financing activities NET INCREASE IN CASH HELD Cash and cash equivalent at beginning of financial year CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 9	2021 2020 $ $ 4,099,146 4,151,803 50,000 344,937 752 750 - (342) (4,304,242) (4,698,083)
	(154,344) (200,935)
	(21,656) (10,150) (600,937) -
	(622,593) (10,150)
	2,157,630 1,020,194
	2,157,630 1,020,194
	1,380,693 809,109 1,842,492 1,033,383
	3,223,185 1,842,492

The accompanying notes form part of these consolidated financial statements

8common Annual Report 2021

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021

Opening Balance Comprehensive income Loss for the year Other comprehensive loss Total comprehensive loss Issue of shares Share based payment Transfer to Accumulated losses BALANCE AT 30 JUNE 2020 Comprehensive income Loss for the year Other comprehensive loss Total comprehensive loss Issue of shares Share issue costs Share based payment Transfer to Accumulated losses BALANCE AT 30 JUNE 2021	Contributed Equity Accumulated Losses Asset Revaluation Reserves Share based payment reserve Total $ $ $ $ $ 9,959,064 (4,657,996) 478,750 263,629 6,043,847 - (804,089) - - (804,089) - - (2,241,972) - (2,241,972)
	- (804,089) (2,241,972) - (3,046,061) 1,020,195 - - - 1,020,195 - - - 309,060 309,060 - 42,732 (42,732) -
	10,979,259 (5,419,353) (1,763,222) 529,957 4,326,641
	- (1,335,586) - - (1,335,586) - - (338,623) - (338,623)
	- (1,335,586) (338,623) - (1,674,209) 2,281,380 - - - 2,281,380 (112,500) - - - (112,500) - - - 302,806 302,806 - 5,930 (5,930) -
	13,148,139 (6,749,009) (2,101,845) 826,833 5,124,118

The accompanying notes form part of these financial statement

8common Annual Report 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements and notes represent those of 8common Limited and its Controlled Entities (the “consolidated group” or “group”).

The financial statements were authorised for issue on 31 August 2021 by the directors of the company.

Basis of Preparation

These general purpose financial statements have been prepared in accordance with the Corporations Act 2001 , Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and International Financial Reporting Standards as issued by the International Accounting Standards Board. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise.

Except for cash flow information, the consolidated financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

a)[Going Concern basis of accounting ]

The Group has incurred a net loss after tax for the year ended 30 June 2021 of $1,335,586 (2020: loss of $804,089), with the cash outflow used in operating activities of $154,344 (2020: cash outflows of $200,935). As at 30 June 2021, the Group has a net current asset position of $1,723,678 (2020: $1,136,085) which includes Contract Liabilities of $461,263 (30 June 2020: $319,620). Contract liabilities are unearned revenue which will be recognised over the coming period, which has no associated cash outflow.

The Directors believe there are reasonable grounds that the Group will be able to continue as a going concern after consideration of the following factors:

Despite the impacts of COVID-19, the current business development prospects have improved, with new clients onboarded to the platform and the announcement as the solution provider of Travel and Expense Management for the Australian Government GovERP Complementary (edge) capabilities panel (Edge Panel), part of the Government’s Shared Services Transformation Initiative to provide common resourcing and streamlined provision of services across the Australian Public Sector;
Sale proceeds in the form of Cloudaron shares provides another avenue of liquidity should the business require it;
The Directors remain committed to the long-term business plan that is contributing to improved results as the business progresses;
The budgets and forecasts reviewed by the Directors for the next twelve months anticipate the business will continue to produce improved results;
The successful completion of a $3.78m (before costs) capital raise in August 2021 to fund growth; and
Furthermore, the Directors have the option of seeking further funding to support working capital and the business development activities of the Group by way of equity or convertible note debt finance.

The Directors are of the opinion that these factors will allow the Group to focus on growth areas and on improving profitability. The Directors continue to monitor the situation closely and are focused on taking all measures necessary to optimise the Group’s performance.

The Directors believe that the above indicators demonstrate that the Group will be able to pay its debts as and when they become due and payable, and to continue as a going concern, and be in a position to realise its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial report. Accordingly, the Directors believe that it is appropriate to adopt the going concern basis in the preparation of the financial statements.

In the event that the Group does not achieve the conditions stated by the Directors, the ability of the Company and therefore the Group to continue as a Going Concern may be impacted, and therefore the Group may not be able to realise its assets and extinguish its liabilities in the ordinary course of operations and at the amounts stated in the financial report. No adjustments have been made to the recoverability and classification of recorded asset values and the amount and classification of liabilities that might be necessary should the Group and company not continue as going concerns.

8common Annual Report 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

b) Significant accounting judgments, estimates and assumptions

Management has identified the following critical accounting policies for which significant judgments, estimates and assumptions are made. Actual results may differ from these estimates under different assumption and conditions and may materially affect the financial results or the financial position reported in future years.

Critical accounting judgements, estimates and assumptions

i. Impairment – Intangibles

The Group assesses impairment at the end of each reporting year by evaluating conditions and events specific to the Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations, which incorporate various key assumptions.

The impairment models for intangible asset balances incorporate growth rates in Australian (Expense8 and Perform8) revenues and expenses have been factored into valuation models for the next five years on the basis of management’s expectations regarding the Group’s continued ability to capture market share from competitors. The rates used incorporate an allowance for inflation. Pre-tax discount rates have been used in all models. These assets are considered to be sensitive to these assumptions and are carried in the statement of financial position at a writtendown value of $2,289,490 (2020: $1,765,720). A blended average revenue growth rate of 33.36% has been used for the periods 2022 to 2026. A terminal growth rate of 2.0% has been used.

No impairment has been recognised in relation to the intangible assets for the year ended 30 June 2021. Goodwill impairment is considered sensitive to the 2022 to 2026 revenue growth rate assumptions. Management have sensitised the value in use (discounted cash flow model) and note that any potential impairment is highly dependent on the revenue growth rate applied in the model over the 5 year forecast period. Downward sensitivities assuming no new business (and not factoring in contracts already won including CardHero and GovERP) and using a 5 year revenue growth rate of 14-15% per annum would result in an impairment write-down of intangibles, assuming the terminal growth rate of 2% and the equivalent WACC of 11.45%.

ii. Provision for impairment of receivables

The directors have considered the recoverability of all trade receivable balances and they are of the opinion that no impairment provision is necessary. This estimate is based on their judgment.

iii. Intellectual Property – Software useful lives

Expense8 and Perform8 Software is recognised at the cost of acquisition. These assets are deemed to have an infinite useful life, however the directors based on their estimates and judgments have assessed a useful life of 5 years and are carried at cost less accumulated amortisation and any impairment losses.

iv. Capitalised Development Costs

Judgment is required in distinguishing the research and development phases of a new software development project. It is also required in determining whether the recognition requirements for the capitalisation of development costs are met. After capitalisation, management monitors whether the recognition requirements continue to be met and whether there are any indicators that capitalised costs may be impaired.

v. Going concern basis on accounting

Refer to note 1(a).

vi. Share Based payments

The Group measures the cost of equity-settled transactions with by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Black-Scholes model taking into account the terms and conditions upon which the instruments were granted.

The valuations have been carried out at the grant date. The main areas of judgement and estimates include volatility, risk free rate and revenue growth assumption in the Black Scholes option pricing model.

vi. Recovery of deferred tax assets

Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES b) Significant accounting judgments estimates and assumptions (cont)

Capitalised developments costs –- as disclosed in Note 13 ‘Intangible Assets’ of $1,049,582 (2020: $525,812) have been capitalised on the basis that management expects future economic benefits to be derived by the Group. Capitalised development costs are being amortised over a period of 5 years, which is commensurate with managements’ expectations as to the period of expected future economic from the product development.

c) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits available on demand with banks, other short-term highly liquid investments with original maturities of 3 months or less, and bank overdrafts. Bank overdrafts are reported within short-term borrowings in current liabilities in the statement of financial position.

d) Trade and Other Receivables

Trade and other receivables include amounts due from customers for goods sold and services performed in the ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting year are classified as current assets. All other receivables are classified as non-current assets.

Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment.

e) Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation.

The carrying amount of property, plant and equipment is reviewed annually by officers of the 8common Group to ensure it is not in excess of the recoverable amount is assessed on the basis of the expected net cash flows which will be received from the assets employed and subsequent disposal. The expected net cash flows have not been discounted to present values in determining recoverable amounts.

The depreciable amounts of all fixed assets are depreciated on a straight-line basis over their estimated useful lives commencing from the time the asset is held ready for use.

f) Financial assets at fair value through other comprehensive income

Initial recognition and measurement

Financial assets are classified, at initial recognition, are subsequently measured at amortised cost, fair value through other comprehensive income (OCI), or fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them.

The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

Financial assets at amortised cost
financial assets at fair value through other comprehensive income
Financial assets at fair value through profit or loss

8common Annual Report 2021

Financial assets at fair value through Other Comprehensive Income (OCI)

On initial recognition, the Group may make an irrevocable election (on an instrument-by-instrument basis) to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognised by an acquirer in a business combination. A financial asset is held for trading if:

• it has been acquired principally for the purpose of selling it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has evidence of a recent actual pattern of short-term profit-taking; or

• it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the asset revaluation reserve. The cumulative gain or loss is not reclassified to profit or loss on disposal of the equity investments, instead, it is transferred to retained earnings. Dividends on these investments in equity instruments are recognised in profit or loss in accordance with IFRS 9, unless the dividends clearly represent a recovery of part of the cost of the investment. No dividends have been received during the year. The Group designated all financial assets in equity instruments that are not held for trading as at FVTOCI on initial recognition (see note 15).

g) Principles of Consolidation and intangible assets

The consolidated financial statements incorporate all of the assets, liabilities and results of 8common Limited and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group.

Business combinations

Business combinations occur where an acquirer obtains control over one or more businesses.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions).

When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. After initial recognition, 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 is remeasured in each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial instrument, are recognised as expenses in profit or loss when incurred.

The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

Foreign Currency Transactions and Balances

Functional and presentation currency

The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars, which is the parent entity’s functional currency.

Transactions and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Nonmonetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES g) Principles of Consolidation and Intangible Assets (cont)

Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise the exchange difference is recognised in profit or loss.

Group companies

The financial results and position of foreign operations, whose functional currency is different from the Group’s presentation currency, are translated as follows:

assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
income and expenses are translated at average exchange rates for the period; and
retained Loss are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position. The cumulative amount of these differences is reclassified into profit or loss in the period in which the operation is disposed.

Goodwill

Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:

the consideration transferred;
any non-controlling interest (determined under either the full goodwill or proportionate interest method); and
the acquisition date fair value of any previously held equity interest;

over the acquisition date fair value of net identifiable assets acquired.

The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements.

Fair value re-measurements in any pre-existing equity holdings are recognised in profit or loss in the year in which they arise. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss.

Goodwill on acquisition of subsidiaries is included in intangible assets.

Goodwill is tested for impairment annually and is allocated to the Group's cash-generating units or groups of cashgenerating units, representing the lowest level at which goodwill is monitored being not larger than an operating segment. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity disposed.

Changes in the ownership interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions and do not affect the carrying amounts of goodwill.

The accounting for the business combinations is considered provisional.

Intangibles Other than Goodwill

Intellectual Property – Software

Software is recognised at cost of acquisition. These assets are deemed to have an infinite life, however the directors have assessed a useful life of five (5) years and are carried at cost less accumulated amortisation and any impairment losses. These assets will be assessed for impairment on an annual basis.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

g) Principles of Consolidation and Intangible Assets (cont)

Development costs

Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the group can demonstrate:

The technical feasibility of completing the intangible asset so that the asset will be available for use or sale;
Its intention to complete and its ability to use or sell the asset;
How the asset will generate future economic benefits;
The availability of resources to complete the asset;
The ability to measure reliably the expenditure during development; and
The ability to use the intangible asset generated.

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. Travel and Expense Management product development costs are amortised over the period of expected future benefit being 5 years. Amortisation is recorded in expenses. During the period of development, the assets are tested annually for impairment.

h) Trade and Other Creditors

These amounts represent liabilities for goods and services provided to the 8common Group prior to the end of the year and which are unpaid. The amounts are unsecured and are paid in accordance with supplier terms.

i) Contract liabilities

Contract liabilities represent services billed by the Group in advance of meeting its performance obligations to the customer. These obligations typically exist of 12 months and as such are classified as a current liability.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

j) Employee Entitlements

Short-term employee benefits

Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled.

The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as a part of current trade and other payables in the statement of financial position. The Group’s obligations for employees’ annual leave and long service leave entitlements are recognised as provisions in the statement of financial position.

Other long-term employee benefits

Provision is made for employees’ long service leave and annual leave entitlements not expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service. Other long-term employee benefits are measured at the present value of the expected future payments to be made to employees. Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures and are discounted at rates determined by reference to market yields at the end of the reporting period on corporate bond rates that have maturity dates that approximate the terms of the obligations. Any remeasurements for changes in assumptions of obligations for other long-term employee benefits are recognised in profit or loss in the periods in which the changes occur.

The Group’s obligations for long-term employee benefits are presented as non-current provisions in its statement of financial position, except where the Group does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which case the obligations are presented as current provisions.

Defined contribution superannuation benefits

All Australian employees of the Group receive defined contribution superannuation entitlements, for which the Group pays the fixed superannuation guarantee contribution (currently 9.5% of the employee’s average ordinary salary) to the employee’s superannuation fund of choice. All contributions in respect of employees’ defined contribution entitlements are recognised as an expense when they become payable. The Group’s obligation with respect to employees’ defined contribution entitlements is limited to its obligation for any unpaid superannuation guarantee contributions at the end of the reporting period. All obligations for unpaid superannuation guarantee contributions are measured at the (undiscounted) amounts expected to be paid when the obligation is settled and are presented as current liabilities in the Group’s statement of financial position.

k) Taxation

The income tax expense/(income) for the year comprises current income tax expense/(income) and deferred tax expense/(income).

Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities/(assets) are measured at the amounts expected to be paid to/(recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.

Current and deferred income tax expense/(income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss.

Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. With respect to non-depreciable items of property, plant and equipment measured at fair value and items of investment property measured at fair value, the related deferred tax liability or deferred tax asset is measured on the basis that the carrying amount of the asset will be recovered entirely through sale.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES k) Taxation (con’t)

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

Tax Consolidation

8common Limited and its wholly owned Australian subsidiary (Expense8 Pty Limited) have formed an income tax consolidated group under tax consolidation legislation as of 3 March 2014. Each entity in the 8common Group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to the head entity. The 8common Group notified the Australian Taxation Office that it had elected to form an income tax consolidated group as of 3 March 2014.

l) Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or Options are shown in equity as a deduction, net of tax, from the proceeds.

m) Share based payments

The Group operates an employee option plan. Share-based payments to employees are measured at the fair value of the instruments issued and amortised over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the option reserve. The fair value of options is determined using the Black-Scholes pricing model. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for services received as consideration for the equity instruments granted is based on the number of equity instruments that eventually vest.

n) Revenue

The core principle of AASB 15 is that revenue is recognised on a basis that reflects the transfer of promised goods or services to customers at an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. Revenue is recognised by applying a five-step process outlined in AASB 15 which is as follows:

Step 1: Identify the contract with a customer; Step 2: Identify the performance obligations in the contract and determine at what point they are satisfied; Step 3: Determine the transaction price; Step 4: Allocate the transaction price to the performance obligations; Step 5: Recognise revenue as the performance obligations are satisfied.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

n) Revenue (cont)

Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed.

Annual Licence Fees are invoiced for 12 months in advance but allocated to Unearned revenue in the Statement of Financial Position until they can be taken to the Profit & Loss in the relevant month over the term of the licence.

Monthly SaaS revenue is monthly revenue taken to the Profit and Loss as per the contract with the customer which is billed monthly in arrears. This includes platform fees, transaction fees, usage fees, card fees and travel fees to name a few inclusions.

Change Requests refer to changes that a client request be made to their system that is specific to them (ie. Change of name, change of authorisation level etc). These are typically invoiced on agreed milestones per the change request. Revenue is recognised upon the completion of work.

Consulting fees relate to revenues earned on non technical 3rd party contractors utilised for projects. These are billed monthly in arrears, which coincides with the service being provided.

Implementation revenue is invoiced and allocated to the Profit and Loss when agreed milestones are achieved during the course of an implementation. Revenue is recognised upon the completion of work.

Other associated services relate to client reimbursements and other miscellaneous revenue.

Interest revenue is recognised using the effective interest method. Any R&D income received is recognised on receipt. All revenue is stated net of the amount of goods and services tax.

o) Consumption Taxes

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

p) Accounting Standards Issued but not yet effective

[A number of new standards, amendments to standards and interpretations have been published but are not yet ] mandatory and have not been applied in preparing these financial statements. Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Group for the year ended 30 June 2021.

The Group has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 2: PARENT INFORMATION

NOTE 2: PARENT INFORMATION The following information has been extracted from the books and records of the parent and has been prepared in accordance with Australian Accounting Standards. Statement of Financial Position ASSETS Current assets Non-current assets TOTAL ASSETS LIABILITIES Current liabilities Non current liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Accumulated losses Reserves TOTAL EQUITY Statement of Profit or Loss and Other Comprehensive Income Total loss Total comprehensive loss	PARENT ENTITY 2021 $ 2020 $ 2,816,057 1,009,149 4,728,210 4,897,389
	7,544,267 5,906,538
	241,668 140,278 2,153,756 1,963,846
	2,395,424 2,104,124
	5,148,843 3,802,414
	13,148,139 10,979,259 (6,724,284) (5,943,579) (1,275,012) (1,233,266)
	5,148,843 3,802,414
	(801,244) (807,983)
	(801,244) (807,983)

Guarantees

No cross guarantees existed during the year ended 30 June 2021.

Contingent liabilities

At 30 June 2021, 8common Limited is not responsible for any contingent liabilities of subsidiaries.

Contractual commitments

At 30 June 2021, 8common Limited was not responsible for any contractual commitments of any of its subsidiaries.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 3: REVENUE a. Revenue Consulting fees, Change requests and implementations Annual Licence fees & SaaS revenue Other revenue Total revenue b. Other Income Interest received Research & development incentive income Other revenue – cashflow boost and paid maternity leave Profit on disposal of shares Total Other revenue Total Revenue NOTE 4: EXPENSES FOR THE YEAR Loss before income tax from continuing operations includes the following specific expenses: Expenses Cost of sales Borrowing costs on financial liabilities: – unrelated parties Depreciation Amortisation Employee benefits expense: – defined contribution superannuation expense Occupancy expenses include Rental expense on short term operating leases		Consolidated Group 2021 $ 2020 $ 929,706 1,189,299 2,492,279 2,490,484 85,208 79,548 3,507,193 3,759,331 610 750 - 344,937 50,000 63,331 4,775 - 55,385 409,018 3,562,578 4,168,349 730,917 561,426 - 342 - 342 10,759 7,786 285,492 285,487 296,251 293,273 158,630 129,982
		80,430 78,785

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 5: TAX (BENEFIT) / EXPENSE

a.
The components of tax (expense)/income comprise:
Current tax
Deferred tax
Income tax (expense)/income attributable to entity
b.
The prima facie tax on profit from ordinary activities before
income tax is reconciled to income tax as follows:
Prima facie tax payable 26% (2020: 27.5%) on profit from
ordinary activities before income tax
Tax effect of:
Impairment
Provisions and accruals
Share based payments expense
Amortisation
Income tax (benefit) / expense attributable to entity
c.
Unrecognised deferred tax balances:
The following deferred tax assets have not been brought to
account:
Losses available for offset against future taxable income

Consolidated Group
2021
$
2020
$
74,590
(34,737)
(21,009)
5,065
53,581
(29,672)
(361,183)
(212,965)
-
106,700
151,848
(29,705)
78,729
84,992
77,025
80,650
(53,581)
29,672
2,861,953
2,240,594

Deferred tax assets arising from tax losses are, to the extent noted above, not recognised at reporting date as realisation of the benefit definite. This deferred income tax benefit will only be obtained if:

future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;
the conditions for deductibility imposed by tax legislation is complied with, including Continuity of Ownership and/or Same Business Tests; and
no changes in tax legislation adversely affect the Group in realising the benefit.
the Group is in the process of preparing its 30 June 2021 consolidated income tax return

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 6: KEY MANAGEMENT PERSONNEL COMPENSATION

Refer to the remuneration report contained in the directors’ report for details of the remuneration paid or payable to each member of the Group’s key management personnel (KMP) for the year ended 30 June 2021.

The totals of remuneration paid to KMP of the company and the Group during the year are as follows:

Short-term employee benefits Post-employment benefits Share based payments Total KMP compensation	Consolidated Group 2021 $ 2020 $ 870,902 805,516 34,466 30,717 143,065 198,560 1,048,433 1,034,793

Short-term employee benefits

These amounts include fees and benefits paid to the executive Chair and non-executive directors as well as all salary, paid leave benefits, fringe benefits and cash bonuses awarded to executive directors and other KMP.

Post-employment benefits

These amounts are the current-year’s estimated cost of providing for the Group’s superannuation contributions made during the year.

NOTE 7: AUDITORS’ REMUNERATION Remuneration of the auditor, Walker Wayland NSW Chartered Accountants for: – auditing or reviewing financial statements – taxation services – Other services	Consolidated Group 2021 $ 2020 $ 43,000 43,000 3,603 8,106 - 3,000 46,603 54,106

		Consolidated	Group
Note	8: LOSS PER SHARE	2021	2020
		$	$
a.	Loss used to calculate basic and diluted loss per share	(1,335,586)	(804,089)
		No.	No.
b.	Weighted average number of ordinary shares outstanding during the
	year used in calculating basic loss per share	194,635,668	167,049,722
	Weighted average number of ordinary shares outstanding during the
	year used in calculating dilutive loss per share	194,635,668	167,049,722

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 9: CASH AND CASH EQUIVALENTS

Cash at bank Reconciliation of cash Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents NOTE 10: TRADE RECEIVABLES CURRENT Trade receivables	3,223,185 1,842,492
	3,223,185 1,842,492
	3,223,185 1,842,492
	139,550 244,431
	139,550 244,431

a. Provision for Impairment of Receivables

The directors have considered the recoverability of all trade receivable balances and they of the opinion that no impairment provision is necessary. The Group did not suffer any affects related to the recoverability of trade receivables during the COVID-19 pandemic.

b. Credit Risk

The Group has no significant concentration of credit risk with respect to any single counterparty or group of counterparties. The class of assets described as “trade and other receivables” is considered to be the main source of credit risk related to the Group.

The Group has no significant credit risk exposure in any country in which the Group trades.

The balances of receivables that are within initial trade terms (as detailed in the table) are considered to be of high credit quality.

2021 Trade and other receivables Total 2020 Trade and other receivables Total	Gross Amount $ Past Due and Impaired $ Past Due but Not Impaired (Days Overdue) Within Initial Trade Terms $ < 30 $ 31–60 $ 61–90 $ > 90 $ 139,550 - 132,010 660 7,144 (264) 121,029
	139,550 - 132,010 660 7,144 (264) 121,029
	Gross Amount $ Past Due and Impaired $ Past Due but Not Impaired (Days Overdue) Within Initial Trade Terms $ < 30 $ 31–60 $ 61–90 $ > 90 $ 244,431 - 100,129 27,440 20,247 7,446 89,169
	244,431 - 100,129 27,440 20,247 7,446 89,169

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 10: TRADE AND OTHER RECEIVABLES (CONTINUED)

c. Financial Assets Classified as Trade and Other Receivables

Trade and other receivables: – total current Financial assets	Consolidated Group 2021 $ 2020 $ 139,550 244,431
	139,550 244,431

NOTE 11: INTERESTS IN SUBSIDIARIES & ACQUISITIONS

a. Information about Principal Subsidiaries

The subsidiaries listed below have share capital consisting solely of ordinary shares or which are held directly by the Group. The proportion of ownership interests held equals the voting rights held by the Group. Each subsidiary’s principal place of business is also its country of incorporation.

	Principal Place of	Ownership	Interest Held by the
Name of Subsidiary	Business		Group
		2021	2020
		%	%
Expense8 Pty Ltd	Australia	100	100
Payhero Holdings Pty Ltd	Australia	100	100
CardHero Pty Ltd	Australia	100	-

Subsidiary financial statements used in the preparation of these consolidated financial statements have also been prepared as at the same reporting date as the Group’s financial statements.

NOTE 12: PROPERTY, PLANT AND EQUIPMENT

Plant and Equipment Plant and equipment: At cost Accumulated depreciation	Consolidated Group 2021 $ 2020 $ 57,427 35,771 (33,633) (22,874)
	23,794 12,897

a. Movements in Carrying Amounts

Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year:

Balance at beginning of year Additions/disposals Depreciation expense Balance at end of year	2021 2020 $ $ 12,897 10,533 21,656 10,150 (10,759) (7,786)
	23,794 12,897

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 13: INTANGIBLE ASSETS

Goodwill arising on acquisition of Expense8 Pty Ltd Total Goodwill Trademark for Expense8 & 8common Total Trademarks Intellectual property – Expense8 Less: accumulated amortisation Development Costs – Expense8 Additions Less: accumulated amortisation (i) Development Costs – CardHero (ii) Intellectual property – Payhero Intellectual property – Perform8 Less: accumulated amortisation Total Intellectual Property & Development Costs Total Intangibles	30 June 2021 30 June 2020 $ $ 1,225,108 1,225,108
	1,225,108 1,225,108
	4,800 4,800
	4,800 4,800
	833,000 833,000 (833,000) (833,000)
	- -
	1,427,413 1,427,413 60,641 (1,187,093) (901,601)
	300,961 525,812
	748,621 -
	748,621 -
	10,000 10,000
	10,000 10,000
	900,000 900,000 (900,000) (900,000)
	- -

	1,064,382 535,812

	2,289,490 1,765,720

(i) Travel and Expense Management product development costs are amortised over the period of expected future benefits being 5 years. Amortisation is recorded in expenses. During the period of development, the assets are tested annually for impairment.

(ii)

CardHero product development costs are still in progress and accordingly are yet to be amortised.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 13: INTANGIBLE ASSETS (continued)

Consolidated Group: Year ended 30 June 2021 Balance at the beginning of the year Additions Amortisation charge Consolidated Group: Year ended 30 June 2020 Balance at the beginning of the year Amortisation charge	Goodwill Acquired Intellectual property & Trademarks Software Development Costs – Expense8 Software Development Costs - CardHero Total $ $ $ $ $ 1,225,108 14,800 525,812 - 1,765,720 - - 60,641 748,621 809,262 - - (285,492) - (285,492)
	1,225,108 14,800 300,961 748,621 2,289,490
	1,225,108 14,800 811,299 - 2,051,207 - - (285,487) - (285,487)
	1,225,108 14,800 525,812 - 1,765,720

Intangible assets, other than goodwill, have finite useful lives. The current amortisation charges for intangible assets are included under depreciation and amortisation expense per the statement of profit or loss. Goodwill has an indefinite useful life and is tested for impairment at least annually. Development costs for the Expense8 product have been amortised since 1 January 2017.

Impairment disclosures

Goodwill is allocated to cash-generating units (CGU) which are based on the Group’s reporting segments:

	2021	2020
	$	$
Australian CGU – Expense8	1,225,108	1,225,108

The recoverable amount of the Australian CGU above is determined based on value-in-use calculations. Value-inuse is calculated based on the present value of cash flow projections over a 5-year period with the period extending beyond 5 years extrapolated using an estimated growth rate. The cash flows are discounted using the company’s weighted average cost of capital.

The following key assumptions were used in the value-in-use calculations:

5 year Terminal Growth Growth Rate Discount Rate Australian CGU 2.0% 33.36% pa 11.45%

Management has based the value-in-use calculations on budgets for each reporting segment. These budgets use historical weighted average growth rates to project revenue. Costs are calculated considering historical gross margins as well as estimated weighted average inflation rates over the year, which are consistent with inflation rates applicable to the locations in which the segments operate. Discount rates are pre-tax and are adjusted to incorporate risks associated with a particular segment.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

Note 13: Intangible Assets (continued)

The blended average revenue growth rate of 33.36% has been used for the periods 2022 to 2026. A terminal rate of 2.0% has been used. Goodwill impairment is considered to be sensitive to the 2022 to 2026 growth rate assumptions. Management have sensitised the value in use (discounted cash flow model) and note that any potential impairment is highly dependent on the revenue growth rate applied in the model over the 5 year forecast period. Downward sensitives assuming no new business (and not factoring in already won contracts including CardHero and GovERP) and using a 5 year revenue growth rate of 14-15% per annum would result in an impairment write-down of intangibles, assuming the terminal growth rate of 2% and the equivalent WACC of 11.45%.

NOTE 14: OTHER ASSETS

CURRENT Prepayments & Contract assets NOTE 15: FINANCIAL ASSETS Note Financial assets at fair value through other comprehensive income (i)	Consolidated Group 2021 $ 2020 $ 108,402 95,854 108,402 95,854 2021 2020 $ $ 984,960 1,318,807 984,960 1,318,807

Note:

As part of the sale and purchase agreement dated 15 February 2018 of the remaining 90% of Realtors8 Pte Ltd sale to Cloudaron Group Berhad (listed on Bursa Malaysia CLOUD:MK), a total consideration of SGD$4,230,000 was agreed to be paid in 2 tranches as follows:

(i) This amount relates to the fair value of the shares held in Cloudaron Group Berhad and based on the market price on the Bursa Stock Exchange as at 30 June 2021.
(ii) As advised to the ASX on 8 May 2020 the minimum EBITDA for the issue of the Tranche 2 payment was not met by Realtor8 Pte Ltd and accordingly the full deferred consideration component of $388,000 was impaired and written off to the Statement of Profit or Loss and Other Comprehensive Income during the year ended 30 June 2020.

a) Valuation techniques

The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques selected by the Group are consistent with one or more of the following valuation approaches:

Market approach: valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.

Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data (such as publicly available information on actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for which market data is not available and therefore are developed using the best information available about such assumptions are considered unobservable.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 15: FINANCIAL ASSETS (cont)

The following notes (b) and (c) provide the fair values of the Group’s assets and liabilities measured and recognised on a recurring basis after initial recognition and their categorisation within the fair value hierarchy:

There were no transfers between Level 1 and Level 2 fair value measurements during the period, and no transfers into or out of Level 3 fair value measurements during the year ended 30 June 2021.

Fair value hierarchy

All financial instruments for which fair value is recognised or disclose are categorised within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole, as follows: Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement in unobservable

For assets and liabilities that are recognised at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisations (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

There were no changes in the Group’s valuation processes, valuation techniques, and types of inputs in the fair value measurements during the period.

Consolidated Group: Deferred consideration Financial assets at fair value through other comprehensive income Total	30 June 2021 30 June 2020 Carrying amount Fair value Carrying amount Fair value $ $ $ $ - - - - 984,960 984,960 1,318,807 1,318,807
	984,960 984,960 1,318,807 1,318,807

The following table provides the fair value measurement hierarchy of the Group’s financial assets as at 30 June 2021:

		Fair value measurement using	Fair value measurement using
	Total	Quoted prices in active markets (Level 1)	Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	$	$	$		$
As at 30 June 2021:
Financial assets measured at fair value:
Financial assets at fair value
through other comprehensive	984,960	984,960		-	-
income

8common Annual Report 2021

Fair value measurement using

	Total	Quoted prices in active markets (Level 1)	Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	$	$	$		$
As at 30 June 2020:
Financial assets measured at fair value:
Financial assets at fair value
through other comprehensive	1,318,807	1,318,807		-	-
income

NOTE 16: TRADE & OTHER PAYABLES

Unsecured liabilities: Trade payables Sundry payables and accrued expenses Australian Tax Office - GST & PAYG payable	Consolidated Group 2021 2020 $ $ 449,939 37,519 495,195 398,602 138,722 120,490
	1,083,856 556,611

a. Financial liabilities at amortised cost classified as trade and other payables Trade and other payables: – total current Financial liabilities as trade and other payables OTE 17: CONTRACT LIABILITIES Contract liabilities: Total	1,083,856 556,611
	1,083,856 556,611
	461,263 319,620
	461,263 319,620

NOTE 17: CONTRACT LIABILITIES

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 18: TAX

NOTE 18: TAX CURRENT Income tax payable NON CURRENT Deferred tax asset Deferred tax asset NON-CURRENT Deferred tax assets Provisions & accruals Balance at 30 June 2021 NON-CURRENT Deferred tax assets Provisions & accruals Balance at 30 June 2020	Consolidated Group 2021 $ 2020 $ - - 197,333 143,752 Opening Balance Charged to Income Charged Directly to Equity Changes in Tax Rate Exchange Differences Closing Balance $ $ $ $ $ $ 143,752 53,581 - - - 197,333 143,752 53,581 - - - 197,333 138,687 5,065 - - - 143,752 138,687 5,065 - - - 143,752

The Group has reviewed its deferred tax assets with reference to the potential impact of COVID-19 on forecast taxable profits.

NOTE 19: PROVISIONS

Analysis of total provisions

Current – leave Non-current – leave Balance at beginning of year Additions in the year/(amounts used) Balance at end of year	Consolidated Group 2021 $ 2020 $ 202,340 170,461 95,137 50,620 297,477 221,081 221,081 157,169 76,396 63,912 297,477 221,081

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 19: PROVISIONS (continued)

Provision for Employee Benefits

Provision for employee benefits represents amounts accrued for annual leave and long service leave.

The current portion for this provision includes the total amount accrued for annual leave entitlements that have vested due to employees having completed the required period of service. Based on past experience, the Group does not expect the full amount of the annual leave balance classified as current liabilities to be settled within the next 12 months. However, these amounts must be classified as current liabilities since the Group does not have an unconditional right to defer the settlement of these amounts in the event employees wish to use their leave entitlement.

The non-current portion for this provision includes amounts accrued for long service leave entitlements that have not yet vested in relation to those employees who have not yet completed the required period of service.

In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based on historical data. The measurement and recognition criteria relating to employee benefits have been discussed in Note 1(j).

NOTE 20: ISSUED CAPITAL

Date Price Balance as at 30 June 2020 Shares issued via placement 29 October 2020 $0.13 Shares issued on conversion of options 31 December 2020 $0.091 Shares issued on conversion of options 1 April 2021 $0.091 Shares issued on conversion of options 1 April 2021 $0.20 Less share issue costs Total Balance as at 30 June 2021	No. $ 182,917,118 10,979,259 17,307,692 2,250,000 184,946 16,830 50,000 4,550 50,000 10,000 (112,500)
	17,592,638 2,168,880
	200,509,756 13,148,139

Ordinary shares participate in dividends and the proceeds on winding-up of the parent entity in proportion to the number of shares held.

At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 20: ISSUED CAPITAL (continued)

a. Capital Management

Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long-term shareholder value and ensure that the Group can fund its operations and continue as a going concern.

The Group’s debt and capital include ordinary share capital and financial liabilities, supported by financial assets.

The Group is not subject to any externally imposed capital requirements.

Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

Total borrowings Less cash and cash equivalents Net Debt Total equity Total capital Gearing ratio	Consolidated Group 2021 $ 2020 $ - - (3,223,185) (1,842,492)
	(3,223,185) (1,842,492)
	5,124,118 4,326,641
	13,148,139 10,979,259
	0% 0%

NOTE 21: CAPITAL AND LEASING COMMITMENTS

The company does not have any capital or operating leases and accordingly has no commitments to report.

NOTE 22: CONTINGENT LIABILITIES AND CONTINGENT ASSETS There are no contingent liabilities or contingent assets as at the date of this annual report.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 23: OPERATING SEGMENTS

The Group has currently only one reportable segment (FY20 it had one reportable segment), as described below, which is the groups strategic business unit. The Group has identified its business unit based on internal reports that are reviewed on a monthly basis and used by the executive management team (the chief operating decision makers) in assessing performance and in determining the allocation of resources.

The following summary describes the operations in each of the Group’s reportable geographic segments:

Productivity & Performance (including Expense8 and Perform8): Expense8 is a Travel & Expense management software solution that manages and streamlines the end-to-end processing of employeegenerated expenses. By using Expense8, clients’ administration of expenses charged to corporate credit cards is made easier. Perform8 is an advanced survey and action planning solution that diagnoses and prioritises areas for improvement across your business. Its unique methodology drives continuous improvement throughout an organisation, maximising employee engagement and boosting productivity levels.

The revenue and net profit figures below are based on the full financial year.

Year ended June 2021	Performance & Productivity	Head Office	Unallocated	Total
	$	$		$
Total segment revenue	3,507,803	54,775	-	3,562,578
Net Profit / (Loss) after tax
for the Period	(534,342)	(801,244)		(1,335,586)
			-
EBITDA	(292,282)	(801,244)	-	(1,093,526)
Total segment assets
30 June 2021	3,976,628	7,544,267	(4,554,181)	6,966,714
Total segment liabilities
30 June 2021	2,115,694	2,395,424	(2,668,522)	1,842,596
Year ended June 2020	Performance & Productivity	Head Office	Unallocated	Total
	$	$		$
Total segment revenue	3,823,201	345,148	-	4,168,349
Net profit / (loss) after tax			-
for the period	3,894	(807,983)		(804,089)
EBITDA	(379,692)	(101,859)	-	(481,551)
Total segment assets
30 June 2020	1,801,781	5,906,538	(2,284,366)	5,423,953
Total segment liabilities
30 June 2020	860,088	2,104,124	(1,866,900)	1,097,312

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 24: CASH FLOW INFORMATION

a.
Reconciliation of Cash Flow from Operations with
Loss after Income Tax
Non-cash flows in profit:
-
Amortisation
-
Depreciation
-
Non-cash share based payment
-
impairment
Changes in assets and liabilities, net of the effects of purchase
and disposal of subsidiaries
-
Decrease in trade and other receivables
-
(Increase) in other assets
-
Increase / (Decrease) in trade payables, accruals and
contract liabilities
-
(Increase) in deferred tax assets
-
Increase in provisions
Cash flow from Operating activities
b.
Acquisition of Entities
Refer to Note 11: Interests in subsidiaries

Consolidated Group
2021
$
2020
$
(1,335,586)
(804,089)
285,492
285,488
10,759
7,786
302,806
309,060
-
388,000
104,881
91,324
(12,548)
(65,465)
467,036
(471,885)
(53,581)
(5,065)
76,397
63,911
(154,344)
(200,935)

c. There were no non cash investing and financing activities during the year.

NOTE 25: ASSET REVALUATION RESERVE

Asset revaluation reserve relates to unrealised gain or loss on the revaluation of financial assets held at fair value through other comprehensive income.

NOTE 26: EVENTS AFTER THE REPORTING YEAR

Highlights:

Expense8 is the travel and expense management solution for GovERP. GovERP will provide a common corporate platform for all non-corporate Commonwealth entities (NCCEs) and those corporate Commonwealth entities (CCEs) that have opted in (over 90 agencies)
Over 90 Commonwealth agencies (which includes over 130K employees) participate in the Shared Services Program and could utilise Expense8. With another 79 Commonwealth agencies having the option to opt-in to the Program.
The Agreement will see two new modules, Card Application and Management Module and GovComply Audit and Compliance Module, available to be utilised by the Federal Government which is anticipated to drive an increase in ARPU
The Agreement is for an initial term of three years with an option to extend by a further three years
The GovERP platform is expected to be established in mid-2022 with the first edge capabilities. The first agencies to onboard will be the Service Delivery Office (SDO) Provider Hub.

On the 11 August 2021, 8common increased its contributed equity by $3.78 million (before costs) through the issue of shares via a placement of shares to institutional and sophisticated investors.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 27: RELATED PARTY TRANSACTIONS

Related Parties

a. The Group’s main related parties are as follows:
(i) Entities exercising control over the Group:
- The ultimate parent entity that exercises control over the Group is 8common Limited, which is incorporated in Australia.
(ii) Key management personnel:

Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity, are considered key management personnel.

(iii) Other related parties:

Other related parties include entities controlled by the ultimate parent entity and entities over which key management personnel have joint control.

b. Transactions with related parties:

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

The following transactions occurred with related parties:

A company that Mr Lim is an owner of 8capita Sdn Bhd, provided outsourced labour hire to the group during the year. The total value of the services provided for the current year was $154,116 (2020: $160,991).

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 28: FINANCIAL RISK MANAGEMENT

The Group’s financial instruments consist mainly of deposits with banks, local money market instruments, shortterm investments, account receivable and payable, loans to and from subsidiaries, bills and leases.

The totals for each category of financial instruments, measured in accordance with AASB 139: Financial Instruments: Recognition and Measurement as detailed in the accounting policies to these financial statement, are as follows:

as follows:
	Note	Consolidated	Group
		2021	2020
		$	$
Financial assets
Cash and cash equivalents	9	3,223,185	1,842,492
		3,223,185	1,842,492
Trade and other receivables	10	139,550	244,431
Financial assets at fair value through other comprehensive income 15		984,960	1,318,807
		1,124,510	1,563,238
Total financial assets		4,347,695	3,405,730
Financial Liabilities
Financial liabilities at amortised cost:
- trade and other payables	16	1,083,856	556,611
Total financial liabilities		1,083,856	556,611

Financial Risk Management Policies

The Audit Committee has the responsibility of managing the financial risk exposures of the consolidated group. The consolidated entity’s activities expose it to a variety of financial risks: market risks (including foreign currency risk and interest rate risk), credit risk and liquidity risk. The consolidated entity does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The Committee’s overall risk management strategy seeks to assist the consolidated group in meeting its financial targets, while minimising potential adverse effects on financial performance.

Specific Financial Risk Exposures and Management

The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk, foreign currency risk. There have been no substantive changes in the types of risks the Group is exposed to, how these risks arise, or the Board’s objectives, policies and processes for managing or measuring the risks from the previous year.

a. Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in a financial loss to the consolidated group. The consolidated groups has adopted a policy of generally dealing with reputable counterparties as a means of mitigating the risk of financial loss from defaults

Trade receivables consist of a large number of customers and ongoing credit evaluation is performed on the accounts regularly. The consolidated entity does not have any significant credit risk exposure to any single counterparty or any group of counterparties. The carrying amounts of financial assets recorded in the financial statements, net of any allowance for losses, represent the consolidated entity’s maximum exposure to credit risk.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 28: FINANCIAL RISK MANAGEMENT (CONTINUED)

b. Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who has built an appropriate liquidity risk management framework for the management of the consolidated entity’s short, medium and long-term funding and liquidity management requirements. The consolidated entity manages liquidity by maintaining adequate reserves and by continually monitoring forecast and actual cash flows and matching the maturity profiles of financial assets with financial liabilities.

Consolidated Group Financial liabilities due for payment Trade payables Total contractual outflows Consolidated Group Financial liabilities due for payment Trade payables Total contractual outflows	Within 1 Year 1 to 5 Years Over 5 Years Total 2021 2021 2021 2021 $ $ $ $ 1,083,856 - - 1,083,856 1,083,856 - - 1,083,856 Within 1 Year 1 to 5 Years Over 5 Years Total 2020 2020 2020 2020 $ $ $ $ 556,611 - - 556,611 556,611 - - 556,611

d. Fair values

The fair values of financial assets and financial liabilities at balance date equate to their carrying values.

Market risk

(i) Interest rate risk:

Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting year whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. Interest rate risks on interest earning cash balances are not considered material.

(ii) Foreign currency risk

Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity's functional currency. Other than the financial assets held in Cloudaron Group Berhad (listed on Bursa Malaysia CLOUD:MK) as per note 15, the Group did not have any material transactions denominated in foreign currency and was not significantly exposed to foreign currency risk through foreign exchange rate fluctuations.

(iii) Fair Market Value

The fair value of the groups Cloudaron Group Berhad investment is subject to movements in the share price of Cloudaron on the Bursa Malaysia Stock Exchange. Every movement of 1 MYR in the share price will have an approximate $122k positive or negative impact on the carrying value of the investment.

8common Annual Report 2021

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 29: SHARE BASED PAYMENTS

Employee Share Option Plan

The Group established the 8common Employee Share Option Scheme (ESOS) on 27 November 2020 as a longterm incentive scheme to recognise talent and motivate employees to strive for group performance. All employees are entitled to participate in the share option scheme. Employees are granted options which vest over two years. The options are issued for no consideration and carry no entitlements to voting rights or dividends of the Group. The number available to be granted is determined by the Board and is based on performance measures including growth in shareholder return, return on equity, cash earnings and Group earnings per share growth.

On 30 June 2020, 1,800,000 share options were granted to employees in the 8common Limited employee share option plan to take up ordinary shares at an exercise price of $0.091 each. The options are exercisable on or before 30 June 2023. The options hold no voting or dividend rights and are not transferable.

On 27 November 2020, 500,000 share options were granted to the Directors (as approved during the AGM) in the 8common Limited employee share option plan to take up ordinary shares at an exercise price of $0.20 each. The options are exercisable on or before 27 November 2023. The options hold no voting or dividend rights and are not transferable.

On 30 June 2021, 6,325,000 share options were granted to KMP & other employees in the 8common Limited employee share option plan to take up ordinary shares at an exercise price of $0.16 each. The options are exercisable on or before 30 June 2024. The options hold no voting or dividend rights and are not transferable. The Company notes that all Options granted to employees via the ESOS have all vested as at 30 June 2021.

Further details of these options are provided in the directors’ report. The options hold no voting or dividend rights and are unlisted. The options lapse within 30 days when a key management personnel ceases their employment with the Group should they not exercise their option.

Balance as at beginning of the year Options converted/lapsed during the year Options granted during the year Options granted during the year Balance as at 30 June 2021	Number Weighted Average exercise price $ 9,140,000 0.153 (324,946) 0.11 500,000 0.20 6,325,000 0.16
	15,630,054 0.156

The weighted average remaining life of options outstanding at year-end is 2.2 years. The average exercise price of outstanding options at the end of the reporting period is $0.156.

The fair value of the options granted to employees is considered to represent the value of the employee services received over the vesting period.

The weighted average fair value of options vested during the year was $302,806 (2020: $309,060). These values were calculated using the Black-Scholes option pricing model applying the following inputs:

Grant Date	30 June 2021	27 November 2020	30 June 2020	30 June 2019
Number options issued	6,325,000	500,000	1,800,000	7,650,000
Weighted average exercise price:	$0.16	$0.20	$0.091	$0.168
Weighted average life of the option:	3 years	3 years	3 years	3 years
Expected share price volatility:	60.0%	60.0%	65.0%	74.5%
Risk-free interest rate:	0.99%	0.99%	0.99%	0.99%
Fair value per option	$0.04	$0.04	$0.025	$0.068

8common Annual Report 2021

Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future movements.

The life of the options is based on the historical exercise patterns, which may not eventuate in the future. The remaining Share based payment reserve of $826,833 as at 30 June 2021 relates to employee share option reserve recognised as expenses on valuation of the employee share options.

NOTE 30: COMPANY DETAILS

The registered office of the company is:

8common Limited Level 11, Suite 11.01 60 Castlereagh Street SYDNEY NSW 2000

The principal places of business are:

8common Limited Expense8 Pty Limited Level 7 320 Pitt Street SYDNEY NSW 2000

8common Annual Report 2021

DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of 8common Limited, the directors of the company declare that:

the financial statements and notes, as set out on pages 22 to 55 are in accordance with the Corporations Act 2001 and:
a. comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the financial statements, constitutes compliance with International Financial Reporting Standards (IFRS); and
b. give a true and fair view of the financial position as at 30 June 2021 and of the performance for the year ended on that date of the consolidated group;
in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and
the directors have been given the declarations required by s 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer.

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…………………………………………………………………………………………………………………….

Kah Wui “Nic” Lim

Director

Dated this 31 day of August 2021

8common Annual Report 2021

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INDEPENDENT AUDIT REPORT TO THE SHAREHOLDERS OF 8COMMON LIMITED

REPORT ON THE FINANCIAL REPORT

OPINION

We have audited the accompanying financial report of 8common Limited (the Company) and its controlled entities (the Group), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the Group comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year.

In our opinion:

(a) the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:

I. giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year ended on that date; and
II. complying with Australian Accounting Standards and the Corporations Regulations 2001.

(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 1.

BASIS FOR OPINION

We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. Our responsibilities under those standards are further described in the Auditor’s responsibility section of our report. We are independent of the Group in accordance with 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 (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.

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KEY AUDIT MATTERS

The key audit matters (“KAM”), are the matters that, in our professional judgement, were of most significance in our audit of the financial report of the current year ended 30 June 2021. The matters were addressed in the context of our audit of the financial report, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters

Going Concern Basis of Accounting (Note 1a) The Group has incurred a net loss after tax for the year ended 30 June 2021 of $1,335,586 (2020: loss of $804,089) and incurred a cash outflow from operating activities of $154,344 (2020: cash outflow of $200,935). These conditions may cast significant doubt on the Group’s ability to continue as a going concern, however, the directors have made an assessment that no material uncertainty exists in relation to the Group’s ability to continue as a going concern as a result of the mitigating factors referred to below. Accordingly the directors have determined that the use of the going concern basis of accounting is appropriate in preparing the financial report.

The mitigating factors are reliant on the Group’s ability to generate sufficient cash surpluses from operations, selling its investment in Cloudaron shares, and continuing to receive financial support from its directors and shareholders.

This area is a key audit matter due to the subjectivity and judgment required by management in preparing the cash flow forecast for the period to 12 months from the date of the signing of the financial report, on which the Group’s ability to continue operating as a going concern has been based.

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|---|---|---|---|---|
|How our audit addressed the KAM|
|Our procedures included, amongst|
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|�|assessing management’s ability to|
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|comparing prior year forecasts to actual|
|results;|
|�|assessing the forecast growth in|
|revenue by reviewing service contracts|
|signed subsequent to 30 June 2021;|
|�|assessing the reasonableness of the|
|significant assumptions used in the|
|cash flow forecast and considering the|
|impacts of COVID-19;|
|�|testing the mathematical accuracy of|
|the cash flow forecast and agreeing the|
|opening cash position to the audited|
|balances;|
|�|performing|sensitivity|analysis|in|
|relation to key assumptions including|
|the sales revenue growth rate, cash|
|outflows|from|operations|and|
|incorporating the impact of events that|
|have occurred subsequent to the|
|balance sheet date but prior to the date|
|of the signing of financial report;|
|�|assessing the adequacy of the related|
|disclosures within the financial report.|

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Capitalised Development Costs – Recognition and Carrying Value (Note 13)

Capitalised software development costs at 30 June 2021 have a net carrying value in the consolidated statement of financial position of $1,049,582 (2020: $525,812) in relation to the Expense8 and CardHero suite of products. AASB 138 Intangible Assets requires that specific criteria are met in order to capitalise development costs. The Expense8 costs are being amortised over a period of 5 years as this is the period over which management expects to generate future economic benefits from license sales. The CardHero costs have not been amortised as the product was not ready for its intended use at year end. This area is a key audit matter due to subjectivity and management judgment applied in the assessment of whether the costs meet the capitalisation criteria and in determining the useful life of the product that forms the amortisation period.

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|||||
|---|---|---|---|
|Our|procedures|included,|amongst|
|others:|
|�|assessing the group’s accounting policy|
|in respect of product development costs|
|for adherence to AASB 138;|
|�|testing a sample of amounts capitalised|
|to|supporting|documentation|and|
|assessing|compliance|with|the|
|recognition criteria of AASB 138;|
|�|recalculating the amortisation expense|
|of assets available for use;|
|�|assessing the reasonableness of the|
|amortisation period by reference to|
|comparable market data; and|
|�|assessing the adequacy of related|
|disclosures within the financial report.|

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Key audit matters	How our audit addressed the KAM
Intangible Assets – Impairment Testing (Note 13) The Group has intangible assets recorded on the consolidated statement of financial position at 30 June 2021 of $2,289,490 (which includes goodwill of $1,225,108 and development costs – CardHero of $748,621) (2020 intangibles: $1,765,720). No impairment has been recognised in the year. AASB 136_Impairment of Assets_requires that an intangible asset with an indefinite useful life, such as goodwill or an asset not yet available for use such as development costs - CardHero, be tested annually for impairment and an intangible asset with a definite useful life, such as capitalised development costs, be reviewed for indicators of impairment. This is a key audit matter due to the judgment and assumptions applied in preparing a value-in- use model to satisfy the impairment test. Forecasting future cash flows and applying an appropriate discount rate inherently involves a high degree of estimation and judgment by management.	Our procedures included, amongst others: � assessing managements’ ability to prepare accurate forecasts by comparing prior year forecasts to actual results; � assessing the assumptions used for the growth rate by comparing the normalised average revenue actual growth rate from 2014 to 2021 to the growth rate adopted in the impairment model in conjunction with the knowledge and information we have obtained regarding future growth expectations; � assessing the key assumptions for long term growth in the forecast cash flows by comparing them to industry forecasts and considering the potential impacts of COVID- 19; � assessing the discount rate applied to reflect the cost of capital of the group; � engaging external experts to review the discount rate (including the company’s Beta and market risk premium) and assessing the results of the expert; � testing the mathematical accuracy of the value-in-use model; � agreeing the inputs in the value-in-use model to relevant data including approved budgets and latest forecasts; � performing sensitivity analysis in relation to the vital key assumptions, being the 5 year revenue growth rate and; � comparing the carrying value of the cash generating units net assets to the market capitalisation of the company � assessing the adequacy of the related disclosures within the financial report.
Share based payments expense – Measurement (Note 29) During the year ended 30 June 2021, share based payments expense in relation to employee share options granted has been recognised in the statement of profit and loss amounting to $302,806 (2020: $309,060). This area is a key audit matter due to the subjectively and management judgement applied in the assessment of the fair value of the options pursuant to AASB 2_Share-Based_ Payment. Subjectivity and judgement is involved in assessing the expected future stock price volatility of 8common’s shares which is a key variable that is entered into the Black Scholes Option Valuation Model.	Our procedures included, amongst others: � agreeing the options issued to signed documentation from the respective employees; � agreeing the inputs in the model to third party evidence; � reviewing the volatility calculation by reference to historical stock price data and comparable company volatilities; and � assessing the adequacy of related disclosures within the financial report.

Key audit matters

How our audit addressed the KAM

Intangible Assets – Impairment Testing (Note
13)
The Group has intangible assets recorded on the
consolidated statement of financial position at 30
June 2021 of $2,289,490 (which includes
goodwill of $1,225,108 and development costs –
CardHero of $748,621) (2020 intangibles:
$1,765,720).
No
impairment
has
been
recognised in the year.
AASB 136_Impairment of Assets_requires that an
intangible asset with an indefinite useful life, such
as goodwill or an asset not yet available for use
such as development costs - CardHero, be
tested annually for impairment and an intangible
asset with a definite useful life, such as
capitalised development costs, be reviewed for
indicators of impairment.
This is a key audit matter due to the judgment
and assumptions applied in preparing a value-in-
use model to satisfy the impairment test.
Forecasting future cash flows and applying an
appropriate discount rate inherently involves a
high degree of estimation and judgment by
management.

Our procedures included, amongst others:
�
assessing managements’ ability to prepare
accurate forecasts by comparing prior year
forecasts to actual results;
�
assessing the assumptions used for the
growth rate by comparing the normalised
average revenue actual growth rate from
2014 to 2021 to the growth rate adopted in
the impairment model in conjunction with the
knowledge and information we have obtained
regarding future growth expectations;
�
assessing the key assumptions for long term
growth in the forecast cash flows by
comparing them to industry forecasts and
considering the potential impacts of COVID-
19;
�
assessing the discount rate applied to reflect
the cost of capital of the group;
�
engaging external experts to review the
discount rate (including the company’s Beta
and market risk premium) and assessing the
results of the expert;
�
testing the mathematical accuracy of the
value-in-use model;
�
agreeing the inputs in the value-in-use model
to relevant data including approved budgets
and latest forecasts;
�
performing sensitivity analysis in relation to
the vital key assumptions, being the 5 year
revenue growth rate and;
�
comparing the carrying value of the cash
generating units net assets to the market
capitalisation of the company
�
assessing the adequacy of the related
disclosures within the financial report.

Share
based
payments
expense
–
Measurement (Note 29)
During the year ended 30 June 2021, share
based payments expense in relation to employee
share options granted has been recognised in
the statement of profit and loss amounting to
$302,806 (2020: $309,060).
This area is a key audit matter due to the
subjectively
and
management
judgement
applied in the assessment of the fair value of the
options pursuant to AASB 2_Share-Based_
Payment. Subjectivity and judgement is involved
in assessing the expected future stock price
volatility of 8common’s shares which is a key
variable that is entered into the Black Scholes
Option Valuation Model.

Our procedures included, amongst others:
�
agreeing the options issued to signed
documentation
from
the
respective
employees;
�
agreeing the inputs in the model to third party
evidence;
�
reviewing
the
volatility
calculation
by
reference to historical stock price data and
comparable company volatilities; and
�
assessing
the
adequacy
of
related
disclosures within the financial report.

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Key audit matters How our audit addressed the KAM Revenue Recognition (Note 3) Our procedures included, amongst others: The Group has reported revenue from continuing � reviewing the revenue recognition policy; operations of $3,507,193 as set out in Note 3. � Assessing management’s analysis of the impacts of AASB 15 Revenue from Contracts
Revenue is based on detailed customer with Customers ; contracts that contain different pricing schedules � Testing a sample of revenue recognised to and varying revenue recognition performance Contracts with Customers; obligation triggers. Complexity exists because of � testing a sample of revenue transactions by the specific nature of each customer contract agreeing them to invoices, bank statements which can include license fees, maintenance and contracts (where applicable); fees, change requests, implementation fees and � testing a sample of revenue recognised to consulting fees. evidence of performance obligations satisfied and delivered to customers; and
Management judgement is required to estimate � testing a sample of deferred revenue revenue recognition where cash flows do not balances by agreeing amounts to invoices,
align to contract performance obligations. bank statements and contracts. We have included revenue recognition as a key audit matter due to the significance of revenue to the financial statements and the specific nature of the customer contracts.

OTHER INFORMATION

The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2021 but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, 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.

DIRECTORS’ RESPONSIBILTY FOR THE FINANCIAL REPORT

The directors of the Group are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australia Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparations of the financial report that give a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Australian Accounting Standards AASB 101 Presentation of Financial Statements, that the financial report complies with International Financial Reporting Standards.

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 related 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.

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AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on the financial report based on our audit. 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 than an audit conducted in accordance with 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 judgement and maintain professional scepticism throughout the audit. We also:

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

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.

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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, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period 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 REMUNERATION REPORT

We have audited the Remuneration Report included the Directors’ Report on pages 15 to 20 for the year ended 30 June 2021. The Directors of the Group 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 with Australian Auditing Standards.

OPINION

In our opinion, the Remuneration Report of 8common Limited for the year ended 30 June 2021, complies with Section 300A of the Corporations Act 2001.

RESPONSIBILITIES

The Directors of the Group 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 Australia Auditing Standards.

Walker Wayland NSW Wali Aziz Chartered Accountants Partner

Dated this 31[st] of August 2021, Sydney

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

The following information is current as at 18 August 2021.

The following information is current as at 18 August 2021.
1. Shareholding a. Distribution of Shareholders Category (size of holding): 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over	Number Number Ordinary Share Options 35 - 121 - 230 - 467 10 174 35
	1,027 45

b. The number of shareholdings held in less than marketable parcels is 50.
c. The names of the substantial shareholders listed in the holding company’s register are:

Holder Name

Kah Wui "Nic" Lim

J P MORGAN NOMINEES AUSTRALIA PTY LIMITED Lau Kok Fui

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

Holding Balance 26,608,340 21,911,838 17,224,886 16,952,333

d. Voting Rights The voting rights attached to each class of equity security are as follows:

Ordinary shares

Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.
e. There is no current corporate buyback.

8common Annual Report 2021

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

20 Largest Shareholders - Ordinary Shares

No Holder Name 1 KAH WUI "NIC" LIM 2 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 3 Lau Kok Fui 4 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 5 MAXWEALTH CAPITAL LIMITED 6 MILA INVESTMENT CO PTY LTD 7 UBS NOMINEES PTY LTD 8 ZENYEN LIMITED 9 BNP PARIBAS NOMS PTY LTD 10 NATIONAL NOMINEES LIMITED 11 CASTLEREAGH HOLDINGS PTY LTD 12 BORRMAN HOLDINGS PTY LTD 13 AUSTRAL CAPITAL PTY LTD 14 BNP PARIBAS NOMINEES PTY LTD 15 M CONWAY INVESTMENTS PTY LTD 16 LIGUO CAPITAL PTY LTD 17 CS THIRD NOMINEES PTY LIMITED 18 ASSET GROWTH FUND PTY LTD 19 MR TITUS XIEN TAT HUI 20 CITICORP NOMINEES PTY LIMITED Total	Holding % 26,608,340 11.95% 21,911,838 9.89% 17,224,886 7.77% 16,952,333 7.65% 9,926,652 4.48% 6,390,000 2.88% 5,928,272 2.68% 5,624,232 2.54% 5,245,938 2.37% 4,355,000 1.97% 4,345,987 1.96% 4,037,819 1.82% 3,500,000 1.58% 3,472,730 1.57% 3,000,000 1.35% 2,821,821 1.27% 2,345,063 1.06% 2,300,000 1.04% 2,010,000 0.91% 1,775,501 0.80%
	149,651,923 67.54%

No
Holder Name
1
KAH WUI "NIC" LIM
2
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
3
Lau Kok Fui
4
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
5
MAXWEALTH CAPITAL LIMITED
6
MILA INVESTMENT CO PTY LTD
7
UBS NOMINEES PTY LTD
8
ZENYEN LIMITED
9
BNP PARIBAS NOMS PTY LTD
10
NATIONAL NOMINEES LIMITED
11
CASTLEREAGH HOLDINGS PTY LTD
12
BORRMAN HOLDINGS PTY LTD
13
AUSTRAL CAPITAL PTY LTD
14
BNP PARIBAS NOMINEES PTY LTD
15
M CONWAY INVESTMENTS PTY LTD
16
LIGUO CAPITAL PTY LTD
17
CS THIRD NOMINEES PTY LIMITED
18
ASSET GROWTH FUND PTY LTD
19
MR TITUS XIEN TAT HUI
20
CITICORP NOMINEES PTY LIMITED
Total

Holding
%
26,608,340
11.95%
21,911,838
9.89%
17,224,886
7.77%
16,952,333
7.65%
9,926,652
4.48%
6,390,000
2.88%
5,928,272
2.68%
5,624,232
2.54%
5,245,938
2.37%
4,355,000
1.97%
4,345,987
1.96%
4,037,819
1.82%
3,500,000
1.58%
3,472,730
1.57%
3,000,000
1.35%
2,821,821
1.27%
2,345,063
1.06%
2,300,000
1.04%
2,010,000
0.91%
1,775,501
0.80%

149,651,923
67.54%

8common Annual Report 2021

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

Directors
CEO
Company Secretary
Corporate Governance Statement
Registered Office
Principal place of
Business
Share Registry
Auditor
Stock Exchange Listing
Web site

Kah Wui Lim (Chairman)
Adrian Bunter
Nyap Liou Gan
John Du Bois
Kok Fui Lau
Andrew Bond
David Hwang
Rebecca Woodman
Refer tohttp://www.8common.com/wp-
content/uploads/2015/03/Corporate-Governance-Statement1.pdf
Level 11, Suite 11.01, 60 Castlereagh Street, SYDNEY NSW 2000
Level 7
320 Pitt Street
Sydney NSW 2000
Automic Registry Services
Level 5, 126 Phillip Street,
SYDNEY NSW 2000
Walker Wayland NSW Chartered Accountants
Level 11, Suite 11.01,
60 Castlereagh Street,
SYDNEY NSW 2000
8common Limited and Controlled entities shares are listed on the
Australian Securities Exchange (ASX code: 8CO)
www.8common.com

8common Annual Report 2021

[email protected] Level 7, 320 Pitt Street Sydney NSW 2000, Australia

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AI assistant

8COMMON LIMITED — Annual Report 2021

64263_rns_2021-08-31_e9eae205-5b05-45fd-b33f-8f5a36517dac.pdf

ASX Release

1 September 2021

Updated 2021 Annual Report

Further information

About 8common Limited

2021 ANNUAL REPORT

Contents

Chairman and CEO Message

Dear fellow shareholders,

Technology partnerships and ecosystem growth

Cementing our position in Federal Government

Expense8 – increasing customer breadth

CardHero –the next phase of growth

Financial Strength – well capitalised to accelerate growth

Outlook

Directors’ Report

General Information

Directors

Principal Activities

Operating Results and Review of Continuing Operations

Operational Review

Leading cloud-based platform for employee travel and expense management

TARGET USE CASES

FY21 Highlights:

DELIVERING

Operational Review

CARDHERO REVENUE MODEL

EMPLOYEE PURCHASING

FUND DISBURSEMENT

+

Financial Review

Total Revenue

Financial Review

CardHero Rollout

Driving technology improvements

Capital Raise

Significant Changes in State of Affairs

Events after Reporting Year

Environmental Issues

Dividends Paid or Recommended

Indemnifying and insurance of officers

Indemnifying and insurance of auditor

Proceedings on Behalf of Company

Non-audit Services

Employee Share Options

Auditor’s Independence Declaration

Auditor

Options

Information Relating to Directors

Adrian Bunter

John Du Bois

Kok Fui Lau

Meetings of Directors

REMUNERATION REPORT - AUDITED

Role of the remuneration committee

A. Principles used to determine the nature and amount of remuneration

Remuneration structure

Non-executive director remuneration

Objective

Structure

Executive remuneration

Objective

Structure

Fixed remuneration

Remuneration Policy and Performance

Relationship between remuneration policy and company performance

B. Details of remuneration (audited)

C. Service agreements

D. Share-based compensation (audited)

Loans to directors and executives

Share holdings of key management personnel.

Options holdings of key management personnel.

Description of options/rights issued and remuneration

END OF REMUNERATION REPORT

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF 8COMMON LIMITED AND CONTROLLED ENTITIES

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021

8COMMON LIMITED Annual Report 2021