2021 Annual Report
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
(ASX:BTI)
Table of Contents
03 Corporate Summary
04 Board of Directors
06 Letter from the Founders
09 Operating and Financial Review
19 Sustainability Snapshot
23 Corporate Governance Statement
27 Directors’ Report
31 Auditor’s Independence Declaration
32 Statement of Profit or Loss and Other Comprehensive Income
33 Statement of Financial Position
34 Statement of Changes in Equity
35 Statement of Cash Flows
36 Notes to the Financial Statements
52 Directors’ Declaration
53 Independent Auditor’s Report
58 Shareholder Information
61 Corporate Information
Bailador provides investors with
exposure to quality expansion-
stage technology companies at
attractive valuations.
2
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Corporate Summary
The Company
Risk
Bailador Technology Investments Limited (ACN 601 048 275) is
a listed investment company and its shares are quoted on the
Australian Securities Exchange (ASX:BTI).
Objective
Bailador invests in internet-related businesses in Australia and
New Zealand that require growth capital. In particular, Bailador
focuses on software, internet, mobile data and online market-places
with proven revenue generation and management capability,
demonstrated business models and expansion opportunities.
The company invests in expansion stage internet-related
businesses. The value of the shares and the income derived
may fall or rise depending on a range of factors. Refer to
Note 18 of the Financial Report for further information.
Capital Structure
The Company’s capital structure comprises 140,412,595
Ordinary Shares which trade on the Australian Securities
Exchange (ASX:BTI).
Financial KPIs
Share Price
Earnings per share (cents)
Total Assets ($000)
NAV $ per share (pre-tax)
NAV $ per share (post-tax)
30-Jun-21
30-Jun-20
1.330
22.00
236,407
1.529
1.367
0.705
-3.41
171,716
1.235
1.146
Investment Manager
Management Agreement
The Company has outsourced its investment management
function to Bailador Investment Management Pty Ltd (ACN 143
060 511)(AFSL 400811). The Manager is a Sydney-based privately
owned investment manager which commenced trading in 2010.
The Company has an agreement with Bailador Investment
Management Pty Ltd for the provision of management
services, the details of which are contained in Note 5 of
the Financial Report.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
3
Board of Directors
David Kirk
Chairman and Executive Director
Paul Wilson
Executive Director
• David (appointed 2014) has been Chief Executive of two ASX-
• Paul (appointed 2014) has had extensive private equity
listed companies, including diversified media company, Fairfax
Media Limited, where he led a number of successful internet
sector investments. David is currently Chairman of ASX-listed
company Kathmandu Holdings Limited and is Chairman of
Forsyth Barr Limited, a privately owned investment firm, and
the Sydney Festival. David is also an appointed member of
the Lord Howe Island Board. David holds several BTI portfolio
directorships as Chairman of Rezdy and SMI and director
of Instaclustr.
• David is a Rhodes Scholar with degrees in Medicine from Otago
University and Philosophy, Politics and Economics from Oxford
University. David enjoyed a highly successful rugby career,
captaining the All Blacks to win the World Cup in 1987. He was
awarded an MBE in 1987.
• David holds 8,818,363 ordinary shares in BTI and an indirect
interest in a further 828,715 ordinary shares.
• David is a Director and shareholder of Bailador Investment
Management Pty Ltd which holds a contract with Bailador
Technology Investments Limited to act as Manager. Further
details pertaining to this agreement can be found in Note 5 of
the Financial Report.
investment experience as a previous director of CHAMP Private
Equity in Sydney and New York and with MetLife in London.
Paul was also previously Executive Director at media focused
investment group, Illyria Pty Ltd. Paul is a Director of Bailador
investee companies SiteMinder and Straker Translations.
Paul is also a director of ASX-listed Vita Group Limited and the
Rajasthan Royals IPL cricket franchise.
• Paul holds a Bachelor of Business, Banking and Finance from
QUT and is a Fellow of FINSIA. He is a member of the Institute
of Chartered Accountants and of the Australian Institute of
Company Directors.
• Paul holds 3,977,041 ordinary shares in BTI and has an indirect
interest in a further 420,146 ordinary shares.
• Paul is a Director and shareholder of Bailador Investment
Management Pty Ltd which holds a contract with Bailador
Technology Investments Limited to act as Manager. Further
details pertaining to this agreement can be found in Note 5 of
the Financial Report.
4
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Board of Directors (continued)
Andrew Bullock
Independent Non-Executive Director
• Andrew (appointed 2014) is a Managing Director at Adamantem Capital, a private
equity firm based in Sydney. Prior to joining Adamantem, Andrew was for many years
the head of the corporate advisory and private equity practice of Gilbert + Tobin, one
of Australia’s leading law firms. He was also previously a partner of Minter Ellison and
spent three years in the London office of Freshfields Bruckhaus Deringer.
• Andrew has a Bachelor of Arts from Sydney University and a Bachelor of Laws from
the University of New South Wales.
• Andrew is the Chair of Bailador’s Audit and Risk Committee.
• Andrew holds interest in 432,319 ordinary shares in BTI.
Jolanta Masojada
Independent Non-Executive Director
• Jolanta (appointed 2018) is Principal of MasMarket Advisers, providing strategic
investor relations and communications advice to listed companies. She has more
than 25 years’ experience in financial markets and equity research in the media and
technology sectors in Australia and the US. Jolanta was formerly Director Equity
Research at Credit Suisse and Deutsche Bank, with previous roles at Macquarie Bank
and Pierson Sal. Oppenheim in New York.
• Jolanta is a graduate of the University of KwaZulu-Natal and Cambridge University.
She is a fellow of the Financial Services Institute of Australasia, a graduate of the
Australian Institute of Company Directors and a Certified Investor Relations Officer
(CIRO) of the Australasian Investor Relations Association (AIRA).
• Jolanta is the Chair of Bailador’s Nomination and Remuneration Committee.
• Jolanta holds interest in 144,740 ordinary shares in BTI.
Brodie Arnhold
Independent Non-Executive Director
• Brodie (appointed 2019) is an experienced ASX listed board member with over 15
years domestic and international experience in private equity, investment banking
and corporate finance.
• Brodie is the Chairman of iSelect (ASX:ISU). Prior to his current role with iSelect,
Brodie was the CEO of Melbourne Racing Club. He has also worked for Investec Bank
from 2010–2013 where he was responsible for building a high-net-worth private
client business and for Westpac Banking Corporation where he was Investment
Director at Westpac’s private equity fund. Brodie has also worked at leading
accounting and investment firms including Deloitte (Australia), Nomura (UK) and
Goldman Sachs (Hong Kong).
• Brodie is also the Chairman and Non-executive Director of Shaver Shop Group Ltd
(ASX:SSG) and is Chairman of private companies Endota Spa Pty Ltd, Industry Beans
Pty Ltd, Hungry Hungry Pty Ltd, and Prism Pay Pty Ltd. Brodie is a board member of
Curatif Pty Ltd.
• Brodie holds a Bachelor of Commerce and MBA for the University of Melbourne and
is a member of the Institutes of Chartered Accountants in Australia and New Zealand.
• Brodie holds interest in 76,897 ordinary shares in BTI.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
5
Bailador Technology Investment’s (BTI) net profit after tax in 2021 was
$27.6 million. The value of the fund’s investments increased by $52.0
million in the year, and the increase in the Net Tangible Assets per
share of the fund (before tax) was 24%. These are all record results, and
we are pleased to be able to report them to you.
The BTI share price increased by 89% in the year. This stellar
performance was assisted by a low starting point caused by the
COVID-19 induced share market declines of February-March 2020.
The performance in 2021 is all the more satisfying because it was
achieved without any change in the value of our largest investment,
SiteMinder. SiteMinder provides software to the hotel industry and
as shareholders will know, in 2021 international travel was severely
curtailed due to the COVID-19 virus. The team at SiteMinder managed
very effectively through the crisis, retaining customers, conserving cash
and investing in product development to be ready for the return of
travel. SiteMinder is well positioned, and we expect strong growth to
return with the return of travel.
Realisations
The most important driver of the 23% increase in NTA per share in 2021
was the full realisation of two of our investments. In February 2021
DocsCorp was sold to a US software company in the same industry,
and in May 2021 Lendi merged with the Commonwealth Bank-owned
Aussie Home Loans. As part of the merger some investors wished to
increase their shareholding in the merged entity and we sold all our
shares to these parties as part of the transaction.
These two transactions demonstrate some important aspects of our
investment strategy and execution which we discuss here.
Invest in category leaders with best-in-class products
DocsCorp and Lendi were both leaders in their respective industry
categories of document productivity software for legal firms and online
mortgage broking and settlement. Accordingly, when it came to sell (or
merge in Lendi’s case) the businesses were immediately attractive to
buyers or merger partners in their industries.
Hold investments at a value we expect to exceed when we sell
There have now been 24 third-party investments in or sales of
companies in the Bailador portfolio. Every single one of these has been
at a value matching or higher than we were holding the investment
at before the investment or sale. We believe holding our investments
at conservative valuations gives investors confidence that BTI shares
should trade (at least) at the prevailing NAV per share. Holding at
conservative valuations also removes any psychological barrier to fully
realising our positions when the time is right. DocsCorp was sold at a
premium of 53% to our holding value and Lendi was sold at a premium
of 21% to our holding value.
Focus on the right metrics of performance – IRR and Cash-on-Cash
The appropriate measure of investment performance is the percentage
gain over time on money invested. The best measure of this is IRR or
Internal Rate of Return. IRR measures the annualised return on invested
capital over the lifetime of the investment. Both the return and the time-
period are important in calculating IRR. The same dollar return achieved
over three years will have a higher IRR than if it were achieved over five
years. The IRR of our investment in DocsCorp was 30%. The IRR of our
investment in Lendi was 21%. In other words, for the approximately five
years of our investment in DocsCorp the Fund earned 30% a year on the
money invested and for the approximately five years of our investment
in Lendi the Fund earned 21% a year on the money invested.
It was a very active FY21 for the Bailador portfolio
3
full cash
exits
2
follow-on
investments
1
merger
2
new
investments
• 53% uplift to carrying value
• 30% IRR on investment
• 21% uplift to carrying value
• 21% IRR on investment
•
•
• $1.1m uplift to carrying value
$3.8m invested via convertible
note structure (Jun-21)
• Merger with Nosto (Jun-21)
Largely scrip deal at BTI
•
carrying value
•
Global AI-powered e-commerce
personalisation platform
• $11.5m investment (via scrip)
$5.2m invested via Straker’s
$25m equity raising (Jun-21)
•
Leading digital healthcare
platform in Australia
• $5.5m invested (Jul-21)
6
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Letter from the Founders We also note and report cash-on-cash returns, that is, how much cash
we put in and how much cash we got out. We invested $5 million
dollars in DocsCorp and received $17 million when the business was
sold. This was a 3.4x cash-on-cash return. We invested $5.5 million in
Lendi and received $13 million when the business was sold for a 2.4x
cash-on-cash return (on top of the $0.4 million we partially realised
in December 2018). We think both measures of performance are
important. IRR is technically the best measure of wealth creation, but
you can’t buy lunch with percentage returns.
Capital Management
Capital management is one of the most important things we do. As
a Manager we allocate capital to new investments and follow-on
investments in portfolio companies and we judge the best time to sell
investments and return cash to the Fund. As a Board we determine
how much cash is appropriate to hold in the Fund, when to pay a
dividend and when to raise cash by issuing new shares.
In all of this we are guided by our focus on delivering strong investment
returns over the long term. Our primary use of cash is investment in
established (not start-up) fast-growing companies in the broad digital,
internet and information technology markets.
We expect investors in BTI to make their returns from capital
gains and accordingly we do not pay regular dividends. We may pay
Special Dividends when we have significant realisations. Franking
credits are an important consideration as well. As shareholders will
know, franking credits are generated when companies pay cash taxes.
These accumulated tax credits can be distributed to shareholders
with dividends.
This year we announced a Special Dividend of 1.4 cents per share
with our results. The dividend is fully franked and is sized to use up
all our franking credits. It is important for us to reinforce again with
shareholders that we are not a regular dividend paying investment.
We will irregularly pay Special Dividends when we have had significant
realisations and, in most cases, when there are franking credits
available to attach to the dividend.
The cash we hold in the Fund will cycle up and down with the timing
of investments and realisations. We do not have a specific target for
the cash balance in the Fund over the investment cycle, but we will
always hold enough cash to comfortably support operating cost
requirements, maintain flexibility to support portfolio companies with
follow-on investments and take advantage of new opportunities as
they arise. As some of our investments list on the ASX our marketable
securities provide us increased liquidity flexibility and this is something
we would also take into account.
New Investments
In 2021 BTI realised $31 million from the sales of our investments
in DocsCorp, Lendi and Viostream and in May the fund raised $24
million of new capital through a placement and Shareholder Purchase
Plan. Some of this cash has been immediately put to work in current
portfolio companies and a new investment, and we are continuing to
see a wide range of new opportunities.
In June we invested $5.2 million in Straker Translations through a
placement and entitlement offer undertaken by the company. In June
we invested $3.8 million in Instaclustr as part of an internal round
to finance an acquisition and just after year-end we made a new
investment of $5.5 million in InstantScripts, a very exciting business in
the digital health space.
We have a strong pipeline of investment opportunities under review,
and we are uncovering new opportunities constantly. In the coming
year we are likely to invest in at least one or two businesses new to
the portfolio, as well as potentially make additional investments in
existing portfolio companies that we already know well. We remain
focused on founder-led expansion stage companies with strong
growth economics and a clear growth strategy. We continue to think
an investment portfolio of eight to 12 companies is right for the fund,
and we will continue to support our best performing companies with
more capital as they need it.
Inflection Points
An inflection point is a point in time at which a trend makes a definitive
change. In the companies we work with the inflection point we
most often work towards is an inflection point in revenue growth.
An inflection point, because it signals a maintainable change in a
trend, occurs because of structural change in the revenue generating
potential of the business. This structural change can come from many
sources, including a new product release, entering a new market, a
new sales channel partnership or a tipping point in scale and brand
awareness. The important point is the change is maintainable because
it is based on a fundamental structural change in the capacity of the
business to add customers and grow revenue.
As we look back over the nearly seven years BTI has been publicly
listed we see that the first three years were focused on making
investments and raising capital to build out the portfolio. For the next
three years we focused on growing the investments we had made
and, early in the period, cleaning up one or two mistakes. The seventh
year, the year we are reporting on now, was a year of cash realisations,
follow-on investments in successful companies and, just after year end,
an exciting new investment. We believe it is safe to say BTI has moved
into a new era.
In 2021 we delivered record growth in NTA per share and fulfilled the
final stage of our investment strategy by realising investments for cash
and recycling that cash into new investments.
There has been structural change in the portfolio over this seven-year
period. Successful small companies have turned into successful big
companies. SiteMinder’s revenue was about $5 million per annum
when we first invested, it is now over $100 million per annum.
Instaclustr’s revenue is about eight times greater now than when we
first invested. Furthermore, almost all of the companies in the portfolio
have established market-leading positions in the period we have been
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
7
Letter from the Founders (continued) investors. They are the providers of choice to their chosen (large) potential
customer base. The structural changes that have occurred in the portfolio
over this period are a structural increase in scale of investee companies
and a structural decline in risk across the portfolio. Large, well-established
companies are simply less risky than smaller, less established companies.
It is at this stage of the investment cycle that the benefits of being
a publicly listed fund, and thus able to hold our best investments
for an indefinite period, are coming into focus. Were we a private
fund, within a year or so we would be looking to find buyers for all
our current investments and we would certainly not be making any new
investments.
No doubt in the future we will make mistakes and suffer setbacks, but we are
now, as we were not earlier in the life of the fund, protected by the quality,
growth momentum and scale of our largest investments. Disappointments
at the riskier new investment end of our investment funnel will not have
anything like the impact on overall NTA per share growth that they would
have had two or three years ago. Put simply, the quantum of NTA per
share growth from our now large and successful investments would, we
expect, successfully cushion the impact of a disappointment with a smaller
company.
The Team
The Bailador team – James, Helen, Bevin, Mike, Chloe and Jonathan – have
done a wonderful job for shareholders in 2021. Much of the year was spent
working from home but the team didn’t miss a beat. We thank them all very
much for their contribution to a very successful year.
Annual Meeting
We look forward to engaging with those of you who are able to attend our
Annual General Meeting to be held on 26 October 2021. We had hoped to
be able to see you in person at our AGM, but COVID-19 has changed things
again, and this year the AGM will be online only as you would expect. Further
detail will be provided in our Notice of Meeting available on our website.
David Kirk
Chairman and Executive Director
Paul Wilson
Executive Director
8
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Letter from the Founders (continued) Principal Activities
Operating Results
Bailador Technology Investments Limited (BTI) invests in information
technology businesses in Australia and New Zealand that are seeking
growth capital. The target businesses typically have an enterprise
valuation between $10m and $200m. In particular, the Company focuses
on software, internet, mobile, data and online marketplace businesses
with proven revenue generation and management capability,
demonstrated successful business models and expansion opportunities.
There have been no significant changes in the nature of the
Company’s principal activities during the financial year.
Our Business Model and Objectives
Providing satisfactory returns to shareholders is our primary
objective. Our success in achieving this objective is determined by
total shareholder return (TSR) over time. The TSR we deliver will, over
time, be directly related to the return on invested capital we achieve.
Our business model is to identify, buy and hold investments in
a number of private internet-related businesses with strong growth
prospects. Returns to shareholders will be delivered by growth in
the value of investments held and through potential distributions
to shareholders following the sale of investments. Following sales,
we will continue to make new investments to maintain a portfolio
of investments.
Investments made by BTI are typically structured to provide a level
of contractual protection superior to that available to investors
in ordinary shares, thereby reducing risk. Thorough due diligence
is carried out before investments are made and BTI representation
on most portfolio company boards ensures BTI’s close involvement
with operational decisions.
BTI continues to assess a strong pipeline of potential investments and
will continue to make investments as attractive opportunities arise.
The Company has been classified under AASB 2013-5 as an
Investment Entity whose business purpose is to invest funds solely
for returns via capital appreciation and/or investment returns.
As the Company has been classified as an Investment Entity, the
portfolio investments have been accounted for at fair value through
the profit or loss and shown as Financial Assets in the Statement
of Financial Position.
The profit of the Company for the financial year ended 30 June 2021
was $27,580,000 (2020 $4,118,000 loss), after providing for income tax.
Combined revenue growth of the underlying portfolio companies
(portfolio weighted) for the financial year ended 30 June 2021 was
14% (36% ex-travel investments) and we expect growth to pick up as
travel increases. Further information on individual investee company
growth can be found in the portfolio operating reports.
The performance of the Bailador portfolio, measured as the change
in the Net Tangible Assets (NTA) per share between 1 July 2020 and
30 June 2021 (pre-tax, after all fees), was an increase of 24% for the
year. The Company also completed a successful capital raise in May
2021 raising $24m.
Review of Operations
The 2021 financial year has been a year of excellent achievement for
Bailador and for Bailador’s portfolio companies. In FY21 Bailador:
• Fully realised the investment in three companies, DocsCorp,
Lendi and Viostream all at values above their previous
carrying value;
• Merged Stackla with a highly complementary international
company. It is now known as Nosto in the portfolio;
• Increased the valuation of four of the portfolio companies
(Instaclustr, Standard Media Index, Nosto and Rezdy) along
with experiencing strong gains in the share price of Straker
Translations; and
• Stabilised and prepared the Company’s two travel industry
investments, SiteMinder and Rezdy, for the upcoming bounce
back in travel.
Bailador also completed a successful capital raise in May 2021 via
a placement and security purchase plan. The Company raised $24m
at a price of $1.37 per share. Combined with the proceeds from
realisations, the funds raised have provided Bailador a strong cash
position to capitalise on a strong pipeline of investment opportunities.
Last year we noted, amidst a lot of COVID uncertainty, that “Bailador’s
portfolio companies are well capitalised and are in a strong position
to navigate the uncertainty 2020 has presented to businesses
worldwide”. This has indeed proven to be the case with the fund
performing strongly in FY21 and well positioned for future growth.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
9
Operating and Financial Review Revaluations
The following investments were revalued under BTI’s revaluation
policy, including independent review, by reference to comparable
trading and transaction multiples.
• Instaclustr: increased by 42% ($8m) in August 2020 following
strong trading performance. Due to strong trading performance
and the materiality of the gains in Instaclustr, Bailador revalued
Instaclustr up again in March 2021 by a further 49% ($13.3m).
• Standard Media Index: increased by 25% ($2.5m) in June 2021
following strong trading performance.
• Stackla: increased from nil to $11.5m in September 2020.
Stackla was merged with Nosto in June 2021 via a scrip
transaction at the same valuation.
• Rezdy: increased by 12% ($0.7m) in June 2021, reflecting
Bailador’s seniority in the capital structure.
The value of Straker Translations (ASX:STG) continues to be marked
to the ASX market price of Straker Translations shares. At 30 June
2021 the Straker Translations share price was $1.94 (2020 $0.875)
resulting in a gain on investment for the financial year of $6.9m.
Valuation of Investments
The Board has reviewed the value of the investment portfolio and
the Net Tangible Assets of BTI as at 30 June 2021. In conducting their
valuation review, the Board has had regard to the BTI investment
portfolio Valuation Review Report prepared by BDO Corporate
Finance (Qld) Ltd.
Information regarding the valuation of the investment portfolio is set
out in Note 19 of the financial statements and in the section below
“Operating Reports on Portfolio Companies”.
Investments are currently held at fair value via a mark to market,
the valuation implied by the latest third-party investment or at
a price determined by globally benchmarked revenue multiples
and trading performance.
Review of Operations (continued)
Realisations
DocsCorp
In February 2021 Bailador announced it had realised 100% of its
investment in DocsCorp for $16.8m in cash proceeds. DocsCorp
was sold at a value 53% above its carrying value, representing
a 3.4x return on initial investment and a 30% IRR.
Lendi
In December 2020, Bailador announced that Lendi had entered into
an agreement to merge with Aussie Home Loans. As part of that
transaction, in May 2021 Bailador realised 100% of its investment
in Lendi for $13.0m in cash proceeds. Lendi was sold at a value
21% above its carrying value, representing a 2.4x return on initial
investment and a 21% IRR.
Viostream
In January 2021 Bailador announced it had realised 100% of its
investment in Viostream for $1.1m in cash proceeds. Viostream
had previously been written down to nil.
Investments
Instaclustr
In June 2021 Bailador invested $3.8m in Instaclustr. The investment
was part of an internal round.
Straker Translations
In June 2021 Bailador invested $5.2m in Straker Translations. Straker
Translations raised $25m via a placement and rights issue under
which Bailador took up its pro-rata allocation and sub-underwrote
the retail rights issue.
Portfolio valuation up 35% before follow-on
investments and cash realisations
Baialdor FY21 Portfolio Valuation Movements
$220m
$200m
$180m
$160m
$140m
$120m
$100m
$80m
$60m
$40m
$20m
$0m
= third- party transaction
June-20
Portfolio
Value
Third-party
transaction
uplift
Fair value
uplift
Gross FY21
Portfolio
Value
Follow-on
investments
Cash
realisations
Jun-21
Portfolio
Value
10
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Operating and Financial Review (continued) Review of Operations (continued)
Operating Reports on Portfolio Companies
SiteMinder
SiteMinder is the largest player in the hotel guest acquisition platform
market with hotel subscribers in over 160 countries. SiteMinder’s
platform helps hotels increase online revenue, streamline business
processes and drive down the cost of acquiring bookings. SiteMinder
seamlessly connects to hundreds of distribution partners, including
leading Online Travel Agents (OTAs) such as Booking.com, Expedia,
TripAdvisor, Google, and CTrip. It operates a subscription business
model and has more than $100m in revenue of which more than 90%
is recurring in nature.
FY2021 saw the business deal with the COVID-19 related
disruptions which impacted the travel industry. The company
performed resiliently in the face of these challenges and SiteMinder
outperformed virtually all other travel companies. As SiteMinder
ended FY2021 it was witnessing the return of growth with travel
reopening in some geographies and the business benefiting from
the successful cross-selling of its newer products (SiteMinderPay
and Demand+) to its existing customer base. The increased
penetration of these newer products will allow SiteMinder to
automatically capture revenue growth as travel returns.
SiteMinder’s management team reacted quickly to the potential
impact of COVID-19 and took proactive measures to reduce the
operating cost base of the business. Significant cost savings were
implemented, including reducing staff levels across selective areas of
the business. This allowed the business to operate on a profitable basis
and invest in product development. SiteMinder’s management team
made a conscious decision to maintain as much capacity in the R&D
function in order to push forward key product development efforts.
The SiteMinder product continues to evolve to a true ‘platform’
whereby SiteMinder offers its core channel manager product to hotels
alongside a demand management, yield management, payment,
website hosting and Data-as-a-Service plugins. During FY2021 the
company doubled-down on a number of new go-to-market product
initiatives which are in the process of being launched. These new
initiatives will open up new market opportunities, allow it to expand
its average revenue per subscriber and make SiteMinder’s customer
acquisition process more efficient.
While SiteMinder’s revenue growth stalled temporarily, the work
the business has done throughout FY2021 will enable it to solidify
its strategic position and emerge from the COVID-19 disruption
a much stronger business. The business has maintained a strong
cash position which sets it up well to capitalise on a potentially more
favourable competitive environment. SiteMinder is a leader in its
market and remains a very real IPO prospect in the future.
In January 2020 the company completed a $100m+ capital raise
led by renowned institutional investor, BlackRock. This investment
valued SiteMinder at over $1bn and saw BTI increase the valuation
of its stake in SiteMinder to $82.5m.
After reviewing SiteMinder’s valuation in June 2021 BTI has held its
valuation of SiteMinder at $82.5m which is in line with the valuation
set by third-parties as part of the BlackRock investment round in
January 2020.
Valuation 30 June 2021:
$82.5m
Valuation at 30 June 2020:
$82.5 (after $9.9m realisation)
Realisation since 30 June 2020:
$0.0
Basis for valuation:
Price of third-party investment
Securities held:
Convertible preference shares
Travel Sector 12-month Performance1
+68%
•
•
•
Travel Sector Revenue materially
down in the last 12 months
Capital markets have looked
through that revenue decline to
actually value travel companies
more highly than a year ago
SiteMinder has experienced flat
revenue growth over the last 12
months, materially outperforming
the broader travel sector
-59%
Average revenue
Average enterprise
valuation
Note: 1Travel Sector performance over the 12 months to 30 June 2021. Travel Sector companies include
Airbnb, Booking Holdings, Expedia Group, Trip.com Group, MakeMyTrip, Webjet Limited, eDreams, On
the Beach Group, Despegar.com, lastminute.com, HolidayCheck Group, TripAdvisor, Trivago, Amadeus,
Sabre and TravelSky.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
11
Operating and Financial Review (continued) Review of Operations (continued)
Instaclustr
Instaclustr is a platform that manages the most powerful open-source
database related technologies, empowering customers to deliver big
data applications at scale. The company addresses a multi-billion-
dollar fast growing market and it is well positioned to take advantage
of numerous structural tailwinds including; the exponential growth
in big data driving demand for technologies to process and store the
data; applications and databases moving to the Cloud; the increased
adoption of open source technologies; and companies outsourcing
complex database operations.
Instaclustr’s platform enables its customers to launch applications
on open-source software quickly, reliably, at lower cost and at greater
scale, so that they can focus on their core business and growing their
own customer base. Instaclustr also enables customers to de-risk
their investment in open-source based technology, knowing that the
back-end of their application infrastructure meets stringent SLAs and
is secure, scalable and reliable.
Established in 2013, Instaclustr is trusted by global industry leaders
and counts Atlassian, Sonos, Doordash, Sephora and many other
blue-chip companies as customers. Instaclustr has a diversified
customer base spanning multiple industries and geographies, and
90%+ of Instaclustr’s revenue comes from outside of Australia.
Instaclustr’s revenue is high margin and highly recurring, with
customers on either annual contracts (very similar to a Software-
as-a-Service business model) or paying monthly amounts that vary
slightly with usage. They also have very high customer retention
numbers and strong customer account expansions – this is
where customers increase their spend over time as they use the
service more.
Since BTI invested, Instaclustr has evolved from being a ‘Database-
as-a-Service’ provider, focused on Apache Cassandra, to an
‘Open-Source-as-a-Service’ provider. Instaclustr’s Open-Source-
as-a-Service offering now includes technologies such as Apache
Kafka, Elasticsearch, Redis and PostgreSQL in addition to Apache
Cassandra. More technologies will continue to be added to the
platform as Instaclustr continues its mission to deliver reliability
at scale using open-source technologies.
Building out the multi-tech platform has led to a number of benefits
for the company; 1) It has increased the size of the Total Addressable
Market 2) It has increased revenue and share of wallet per customer,
by being able to upsell additional products 3) It has given Instaclustr
a competitive advantage vs. single technology companies 4) It has
allowed them to have more strategic discussions with large enterprise
customers who are looking to solve business problems vs a specific
technology problem.
12
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
The desire to add additional technologies and capabilities to the
Instaclustr platform drove the acquisition of credativ, a global
provider of support for open-source relational database PostgreSQL,
in March 2021. The acquisition significantly increased the size and
scale of Instaclustr, both financially and operationally. The addition
of credativ also increases Instaclustr’s presence in Europe and
significantly increases Instaclustr’s addressable market.
Over the past 12 months, Instaclustr has continued to build
out a strong Go-To-Market and product team to accelerate the
development and sale of their multi-tech platform and go after
a growing addressable market. The company has also upgraded
its senior management team. In September 2020, the company
promoted founder and former CFO/ COO Peter Lilley to CEO, and in
November they hired Geoff Richardson (ex CFO of SAI Global) as CFO.
Instaclustr has been a standout performer in the BTI portfolio, and
it continued to demonstrate excellent operational performance over
the 12 months ending 30 June 2021, growing at accelerating rates and
delivering excellent customer retention and growth of established
customers. As a result of the strong operating performance, BTI
increased its carrying value in Instaclustr twice throughout FY21.
BTI increased the valuation of its investment in Instaclustr by 42% in
August 2020 to reflect the strong operating performance in the 12 months
since the previous internal valuation. In March 2021, BTI revalued its
investment in Instaclustr up 49% to $40.4m to reflect the strong growth
since August 2020 and to reflect the fact that the credativ acquisition had
materially increased the scale and growth prospects of the business.
BTI believes there is still a long runway of growth ahead of Instaclustr
driven by the strong structural tailwinds of massive growth in big
data, applications and databases moving to the cloud, and adoption
of open-source technologies. Instaclustr has experienced strong
growth over the last few years, and it expects that growth to continue
in the future led by: a rapidly increasing Total Addressable Market,
the addition of new technologies to their multi-tech platform,
the expansion in usage by existing customers, and continuous
improvement in sales and marketing effectiveness.
BTI is very excited about the future prospects of the company,
investing a further $3.8m into Instaclustr in June 2021.
Valuation 30 June 2021:
Valuation 30 June 2020:
Investment since 30 June 2020:
$44.3m
$19.0m
$3.8m
Basis for valuation:
Securities held:
Revenue multiple
Convertible preference shares
Operating and Financial Review (continued) Review of Operations (continued)
Straker Translations
Straker Translations (Straker) is a world-leading AI data-driven
language translation platform powering the global growth of
businesses. Straker has developed a proprietary, enterprise grade,
end-to-end cloud-based translation platform, “Ai RAY”, which utilises
a combination of AI, machine-learning and a crowd-sourced pool
of over 13,000 freelance translators. This AI-driven technology
platform allows Straker to achieve high volume translations with
superior accuracy and deliver industry leading gross margins.
On 21 January 2021, Straker announced the acquisition of Lingotek,
a US-based translation company for a total consideration of US$6.5m
across cash and scrip. Lingotek is an appealing opportunity for
Straker as it provides greater access to enterprise customers to grow
translation services revenue; has excellent overlap of technology;
provides Straker with a larger local team in the critical US-market;
includes a SaaS revenue framework; and has access to strategic
content connectors.
The prospects for Straker are increasingly strong as the business
continues to scale-up its translation platform in the growing
US$57bn language services market. Straker is in a strong capital
position following its recent $25m equity raising in June 2021.
Straker’s increased focus on Enterprise customers will remain a key
element of the Company’s growth strategy going forward. The
acquisition pipeline also remains strong and with a total of eight
acquisitions in the last five years, management now has significant
acquisition and integration experience enabling a faster integration
and margin improvement of the businesses acquired.
As a publicly listed company, the valuation of BTI’s investment
in Straker is determined by the change in closing share price for
the period. As at 30 June 2021, Straker’s share price was $1.94,
representing a 122% increase over 30 June 2020. In June 2021,
BTI participated in Straker’s $25m equity raising which resulted
in a $5.2m increase in BTI’s investment in Straker at a price
of $1.90 per share.
Valuation 30 June 2021:
Valuation 30 June 2020:
Investment since 30 June 2020:
Basis for valuation:
Securities held:
$17.8m
$5.6m
$5.2m
Mark to market
ASX:STG
9,160,354 ordinary shares
The financial year ended 31 March 2021 (FY21) was another
successful year with solid revenue growth of 13% over the prior year
(15% on a constant currency basis) to NZ$31.3m and an adjusted
EBITDA loss of NZ$0.2m. Revenue growth was largely driven by
acquisitions including Lingotek (acquired in Q4 FY21) and NZTC
(acquired in Q4 FY20). On a pro-forma basis, Straker’s FY21 revenue
was NZ$41.2m and included SaaS revenue totalling c.NZ$6m.
Straker also provided FY22 revenue guidance of a minimum NZ$50m,
at an improved gross margin (53% in FY21), expected to be driven
largely by organic revenue growth of c.NZ$10m (93% repeat or SaaS
revenue). This guidance indicates Straker is entering a phase of strong
growth with a forecast minimum 60% increase to revenue in FY22
on a statutory basis, or minimum 21% increase on a pro-forma basis.
Straker has scaled up rapidly over the past few years through
a combination of organic growth and strategic acquisitions. Straker
has a growing base of both Enterprise and SME customers across
three main regions including Asia-Pacific, Europe and North America.
Acquisitions provide Straker an opportunity to add revenue, key
customer relationships in strategically important categories,
geographic diversity, human capital and generate operating leverage
as acquired entities are migrated onto the Company’s proprietary
Ai RAY technology platform.
On 11 November 2020, Straker announced its appointment as
a Strategic Translation Service Provider to IBM in a two-year
agreement, with an option for an additional two years. The
agreement sees Straker’s platform directly linked to IBM’s technology
platforms including IBM Cloud Services, IBM Adaptive Translations
Services and IBM Global Media Localisation. The agreement also
extends Straker’s current relationship with IBM from one language
(Spanish) to 75 languages. Although integration work is yet to be
completed, IBM was a major contributor to the strong revenue result
in Q4 FY21 and is expected to continue growing in FY22.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
13
Operating and Financial Review (continued) Underpinning SMI’s growth initiatives has been the unrivalled
global coverage of ad-spend billing data which SMI has secured via
exclusive agreements with agencies globally. On average, SMI now
captures over 90% of ad spend data pools across all major regions
including the US, Canada, Australia, and the UK. SMI continues to
expand its ad spend coverage to numerous countries across EMEA
and Asia-Pacific region ahead of planned expansions over the next
12 months.
At 30 June 2021, BTI increased the carrying value of SMI by 25%
to $12.1m reflecting the strong performance and growth prospects
of the business.
Valuation 30 June 2021:
Valuation at 30 June 2020:
Investment since 30 June 2020:
Basis for valuation:
Securities held:
$12.1m
$9.6m
$0m
Revenue multiples
Convertible notes,
ordinary shares and warrants
Review of Operations (continued)
Standard Media Index
Standard Media Index (SMI) is the most trusted source of advertising
spend and pricing data globally. SMI has a market leading data
and analytics platform and is the only company in the world that
aggregates actual ad spend data based on real invoices with the
world’s largest media buying groups, across both traditional and
digital markets. This unique, census-data approach provides
decision-grade ad expenditure and pricing metrics which are used
by leading media companies, brands and financial institutions
to understand historical and forward trends and assist making
fundamental strategic decisions.
The 12 months to 30 June 2021 (FY21) was another period of solid
growth for SMI, underpinned by strong sales performance in the US
market which now contributes over 80% of total revenue. Although
the business was impacted by COVID-19 it was mainly confined to the
first half of the year. SMI delivered strong growth across all markets
in the second half of the year and despite increasing its investment
in product development and regional sales and marketing,
the business grew profitably in FY21 and maintained a strong
cash position.
SMI has a strong track record of developing innovative advertising
analytics products for its customers. SMI’s flagship product, AccuTV,
launched in FY18, provides a comprehensive analytical view of the
US TV market for large enterprise clients and is considered the gold
standard for understanding and analysing television media spend
in the US. In June 2021, SMI launched a new pricing intelligence suite
that included multiple CPM pricing products which provide industry-
first measures for return on ad-spend and a new standard for more
accurate comparison in return on ad-spend across linear and OTT
advertising markets.
SMI continues to provide ad-spend data and analytics products to
leading institutional investors, asset managers, hedge funds, family
offices, and private equity firms. These groups use SMI data to
identify changes to companies’ ad revenue and to uncover signals
about a company’s fundamental performance, track revenue against
consensus estimates, and build better models.
SMI’s growth prospects are strong, underpinned by three major
initiatives including 1) Continuing to grow the revenue of AccuTV
in the US market and in new markets such as Canada, which
launched in June 2020, 2) Increasing its addressable market through
the commercialisation of new product innovations such as CPM, and
3) Continuing to grow sales to the financial services market, which
remains a stand-out success.
14
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Operating and Financial Review (continued) Review of Operations (continued)
Nosto (formerly Stackla)
In June 2021, Stackla was acquired by Nosto in a predominately
share-based transaction. BTI accepted shares in Nosto in
consideration for its position in Stackla, and BTI investors will now
get exposure to a larger international business operating a leading
personalisation platform in the very fast growth e-commerce space.
Nosto is a leading e-commerce personalisation platform with
operations in New York, Los Angeles, London, Paris, Berlin,
Stockholm and Helsinki.
Nosto enables retailers to deliver a personalised digital shopping
experience at every touchpoint and across every device. Brands
use Nosto to craft personalised e-commerce experiences that drive
conversion and increase revenue.
Nosto’s commerce experience platform allows customers to quickly
deploy fully personalised, integrated commerce experiences across
product recommendations, content, triggered overlays and popups,
category pages, and more.
Nosto is a larger well capitalised business with a leading position
in the fast growing space of e-commerce personalisation. The
fundamental proposition for the Nosto platform is that e-commerce
sales are growing extremely rapidly worldwide and there is increasing
demand for the personalisation of the e-commerce experience.
The Nosto platform provides e-commerce personalisation,
and the addition of Stackla’s UGC tech capability enhances the
Nosto offering.
Through the combination of Nosto and Stackla, retailers and
brands will be able to collect visual UGC from consumers
across social media platforms to then personalise their onsite
shopping experiences.
In September 2019, BTI wrote down the valuation of its investment
in Stackla to nil when Stackla had its access to the Facebook
platform suspended. Stackla’s access was rightly reinstated after six
weeks. Despite Stackla’s reinstatement, BTI took the conservative
approach of maintaining the carrying value of our investment at nil.
We did this to allow time for any business impact to be clear, and
then when COVID hit, we took further time to ensure we had clarity
of business performance.
After a full year of holding our valuation at nil, BTI revalued its
investment in Stackla up by $11.5m in September 2020 based
on demonstrated business performance and market attractiveness.
Following the acquisition of Stackla by Nosto, the valuation
of BTI’s investment in Stackla remains unchanged at $11.5m,
but has transitioned to a shareholding in Nosto.
Valuation 30 June 2021:
Valuation 30 June 2020:
Investment since 30 June 2020:
$11.5m
$0.0m
$0.0m
Basis for valuation:
Price of third-party transaction
Securities held:
Ordinary shares
“We are excited for
Bailador investors to
get exposure to a larger
international business
operating a leading
personalisation platform
in the very fast growing
e-commerce space”
Paul Wilson, June 2021
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
15
Operating and Financial Review (continued) Review of Operations (continued)
Rezdy
Rezdy is one of the few global independent providers of connectivity
technology and tools to a broad cross-section of the estimated
$250bn tours and activities industry. Rezdy’s B2B marketplace
offering combines leading booking software, channel management
and in-destination agent tools to drive connectivity of online sales
of tours and activities globally.
Despite the strong performance, BTI applied a modest 12% to its
carrying value in Rezdy reflecting the contractual value of its
convertible preference shareholding at 30 June 2021. These
convertible securities represent a senior position in the Rezdy capital
structure, meaning a relatively modest Enterprise Value is required
to redeem face value.
Valuation 30 June 2021:
Valuation 30 June 2020:
Investment since 30 June 2020:
Basis for valuation:
$6.4m
$5.7m
$0m
Revenue multiples and
capital structure seniority
Securities held:
Convertible preference shares
Rezdy’s booking software platform is used by over 3,500 tour and
activity operators globally, simplifying back-end operations for
customers with inventory, scheduling and reservation engines.
Rezdy’s booking engine connects operators to both direct-to-
consumer website bookings as well as to hundreds of online
distribution channels including leading OTAs and over 8,200
independent agents in over 130 countries.
The financial year to 30 June 2021 (FY21) was a challenging
period for Rezdy given the ongoing effects of COVID-19. Despite
the grounding of virtually all international travel, Rezdy proved
resilient and delivered solid revenue growth in FY21. This was largely
attributable to an increase in demand for domestic holidays resulting
in a strong recovery in transaction volumes channelled through
Rezdy’s platform, which peaked higher in the Australia/New Zealand
season than pre-COVID levels. There are positive signs of continued
improvement into FY22 with a strong start to the North American
summer season where Rezdy also expects transaction volumes to
peak higher than pre-COVID levels.
Rezdy’s B2B marketplace offering continues to strengthen with the
business securing a large number of enterprise level agreements
and strategic partnerships across both supply and demand side
channels. During the year, Rezdy also continued the rollout of its
in-destination booking tool through a commercial arrangement
with one of the world’s largest theme and amusement park owners,
providing Rezdy with access to a long-tail of agents and resellers
who serve a large portion of transactions for the estimated 67 million
visitors annually.
Rezdy is well positioned for continued growth as tour suppliers
continue to seek technology to manage their business and tap into
lucrative online channels. Rezdy also benefits from online demand
channels as they seek a greater level of inventory of experiences
in both local and overseas markets, and in-destination resellers as
they seek a more effective tool to manage their customers demand
for experiences.
16
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Operating and Financial Review (continued) Review of Operations (continued)
Brosa
Brosa is a technology-led, vertically integrated furniture brand and
online retailer. Digitally-native brands like Brosa have an advantage
over typical retailers, with access to data across the consumer
purchasing lifecycle that can inform and optimise future investment
in inventory and pricing.
The management of Brosa believes there is an opportunity for
digitally native retailers to utilise technology to optimise all parts
of the furniture purchase and delivery supply chain, from design
to delivery. Brosa is a next generation retailer with a digitally-native
mindset and full vertical integration across the supply chain,
enabling superior control of the customer experience.
Established in 2014, Brosa is based in Melbourne. The business
operates an omni-channel retail model, which includes
predominantly online sales supported by physical showrooms
in Melbourne and Sydney.
Brosa was a net beneficiary from the COVID-19 related lockdowns
that saw e-commerce sales accelerate in FY21. Demand for furniture
was up as people isolated at home, and Brosa’s digital-first model
was perfectly placed to take advantage of consumers increased
willingness to order goods online, driving record results.
In August 2020, Brosa raised ~$4m in a convertible note round.
The funding round, which was oversubscribed, was used to
further accelerate Brosa’s growth plans. The company has made
considerable progress towards establishing itself as the leader in
digital-first furniture shopping experiences, and is poised to take
advantage of the accelerating structural shift to online shopping.
Brosa has traded strongly throughout FY21. Despite this strong
trading, BTI has kept the valuation of Brosa flat in order to remain
conservative. We do believe that there is upside to our current
carrying value as the company continues to perform well, and
consider that there is good prospect that we’ll have a future
realisation above current levels.
Valuation 30 June 2021:
Valuation 30 June 2020:
Basis for valuation:
Securities held:
$3.0m
$3.0m
Third-party transaction
Convertible preference shares
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
17
Operating and Financial Review (continued) Significant Changes in State of Affairs
General Investee Company Risks
There are risks relating to the growth stage internet-related
Businesses in which the Company invests including:
• The business model of a particular investee company may be
rendered obsolete over time by competition or new technology;
• Some investee companies may not perform to the level
expected by the Manager and could fail to implement proposed
business expansion and/or product development, reduce in
size or be wound up;
• Some investee companies may fail to acquire new funding,
whether by way of debt funding or third-party equity funding;
• There is no guarantee of appropriate or timely exit
opportunities for the Company, and accordingly the timeframe
for the realisation of returns on investments may be longer
than expected.
The Company uses a combination of strategies to minimise business
risks, including structural and contractual protections, a clear
investment strategy and representation on portfolio company boards.
Environmental Regulation
The operations of the Company are not subject to any particular
or significant environmental regulations under a Commonwealth,
State or Territory law.
There was no significant change in the Company’s state of affairs
during the year.
Events after the Reporting Period
In July 2021 Bailador announced a $5.5m investment in digital
healthcare platform InstantScripts. Further details on the investment
can be found in Bailador’s July 2021 NTA statement and shareholder
update. Other than the investment in InstantScripts, no matter
or circumstance has arisen since the end of the year that has
significantly affected or may significantly affect the operations of the
Company, the results of those operations or the state of affairs of the
Company in subsequent financial years.
Future Developments, Prospects
and Business Strategies
The BTI portfolio is well positioned for continued growth. The cash
realisations throughout the year combined with the $24m capital
raising see Bailador in a position to capitalise on the strong pipeline
of potential new investment opportunities.
Likely developments, future prospects and the business strategies
and operations of the portfolio companies and the economic
entity and the expected results of those operations have not been
detailed in this report as the directors believe the inclusion of such
information would be likely to result in unreasonable prejudice
to the Company.
Business Risks
The following exposures to business risk may affect the Company’s
ability to deliver expected returns:
Market Risk
Investment returns are influenced by market factors such as changes
in economic conditions, the legislative and political environment,
investor sentiment, natural disasters, war and acts of terrorism.
The investment portfolio is constructed so as to minimise market
risks, but those risks cannot be entirely eliminated and the
investment portfolio may underperform against the broader market.
Liquidity Risk
There is a risk that the investment portfolio’s underlying investments
or securities may not be easily converted to cash. Even when the
Company does have a significant cash holding, that cash will not
necessarily be available to Shareholders.
18
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Operating and Financial Review (continued) Giving Back
The Smith Family Challenge
In FY2021 Bailador again supported The Smith Family Challenge,
sponsoring a team in which Paul Wilson participated and to which the
firm and team members contributed financially. In total the Bailador
team (including non-Bailador members) raised over $100,000 for The
Smith Family. This was our third consecutive year of support for The
Smith Family challenge (our first as a named sponsor) and our most
successful fund-raising year to date. That said, we are competitive at
Bailador, and look forward to raising the bar in FY2022.
Stepping Stone House
Stepping Stone House provides care for homeless children and young
adults in its three houses in Sydney. Each year Stepping Stone House
partners with the Royal Sydney Yacht Squadron to hold a regatta
in which corporates sponsor and sail a boat for the day. Bailador
participated as a Gold Sponsor for the ninth consecutive year and
assisted Stepping Stone House raise just under $100,000 on the day.
And again, for the competitive types amongst us, the Bailador team
took home the Bledisloe Cup in the race itself.
Bailador encourages our team to give back and provides time off for
team members doing charitable work. Our team members are widely
involved in governance roles and giving of their time in supporting
community activities and not-for-profit enterprises. Our team gives
their time to valuable causes such as Sydney Festival, food rescue
organisations and Royal Lifesaving Australia.
Bailador Technology Investments is regulated by ASIC and the ASX
and adheres to the highest standards of corporate governance.
Bailador’s standards of corporate governance are outlined in the
Corporate Governance Statement found on Page 23 of this report.
Bailador Technology Investments is not an operating company.
It has no employees besides its three independent directors and
does not consume resources or produce emissions. Bailador
Technology Investments has outsourced its management to Bailador
Investment Management. For this sustainability snapshot, we will
refer to Bailador Technology Investments and Bailador Investment
Management together as Bailador.
People and Place
Bailador is committed to an inclusive, diverse and merit-based
workplace. Bailador recognises and promotes the values of
diversity, respect and opportunity for learning and development
the workplace.
Male
Female
Total
Partners
Non-partners
Total
3
3
6
100%
60%
75%
0
2
2
0%
40%
25%
3
5
8
100%
100%
100%
Bailador’s work from home policy is flexible and adaptable. Our focus
is providing team members the flexibility and resources to achieve
their best. Our team members attend the office most of the time
as most people feel this supports their professional development
and enhances team building.
In addition to adhering to government leave requirements, Bailador
also offers a period of paid parental leave and encourage our team
to put family first.
In 2020 Bailador moved offices to a 5.5 star NABERS rated office.
The new office has improved natural light, ergonomic sit/stand
workstations and improved end of trip facilities to promote exercise
to and from work. We also invested in a number of break out
rooms to allow the team to chill out and work in a manner most
comfortable to them.
Bailador is a safe place to work and has not had a lost time injury since
founding in 2010. We pay attention to mitigating risks in the office
by ensuring we have good equipment that remains well maintained.
Bailador presents regular opportunities for the team to contribute
to broader strategy and direction, including holding an annual team
offsite to come together as a group and focus our energies for the
year ahead.
Bailador is great at hiring great people. We hire for cultural fit first
and foremost. Excluding interns, our average retention period across
our current team is seven years.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
19
Sustainability Snapshot Bailador adheres to the highest
standards of corporate governance
and ESG principles.
Climate Change and Carbon Emissions
Bailador is committed to Measure, Manage and Mitigate the carbon emissions we are directly responsible for, and which arise indirectly from
our activities.
We follow the Greenhouse Gas Protocol in categorising direct and indirect emissions as set out below.
Measure, Manage & Mitigate
Greenhouse Gas Protocol Category
Measure
Manage
Scope 1 Direct Emissions
Emissions from the direct activities of
Bailador or activities under our control.
Scope 2 Indirect Emissions
Emissions from electricity purchased and
used by Bailador. Emissions are created
during the production of the energy and
eventually used by Bailador.
Scope 3 Other Indirect Emissions
Emissions from activities of Bailador
occurring from sources we do not own or
control. These are emissions associated with,
for example, business travel, procurements,
waste and water usage.
We have no scope 1 emissions.
For much of FY2021 Bailador’s office was
empty and thus a sensible baseline for
electricity usage by Bailador could not
be set. We intent in 2022 to measure our
2022 emissions.
In FY2021 Bailador moved to a 5.5 star
NABERS rated building. The new office
has more natural light and is equipped
with automatic sensor lighting to reduce
emissions.
• Lights with movement and timer switches
• Computer screen savers in use
• Heating and cooling on timer switches
• Energy efficient small appliances
Our Scope 3 carbon footprint derives from
Travel to and from work
• Travel to and from work.
• Travel on firm business.
• Indirect emissions through the purchase
of general office supplies
In FY2021 employees worked long periods
from home and there has been virtually no
inter-state or international travel. Accordingly
we have deferred measuring our Scope
3 emissions but intend to do so to better
measure our carbon footprint in FY2022.
• Encourage travel on public transport
• Bailador moved to a new office with better
end of trip facilities to encourage walking
or cycling to work
Travel on Bailador business
• Use of video conferencing and phone when
appropriate
• Walking to meetings or if too far sharing
taxis
• Tight international travel schedules to
maximise value of air miles
Mitigate
After our data collecting and analysis, which we are ramping up in FY2022, we expect to understand our carbon emissions and carbon intensity
much better and when we do we will assess which mitigating actions to undertake. Our mitigating activities are likely to involve investment in
projects that are removing carbon from the atmosphere and projects that where possible, provide other important benefits to society including
job creation and biodiversity enhancement.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
21
Sustainability Snapshot (continued) Our long-term sustainability framework and goals
Establish best
Integrate ESG principles across
Work and influence
practice at Bailador
the Bailador investment cycle
portfolio companies
Governance
People practices
Climate change and carbon intensity
Giving back
Establish best practice at Bailador
PPPPP
PPPP
P
PPPP
PPP
PPPP
PP
PPP
PPPP
PPP
P
We believe our governance practices at Bailador are best practice for investment funds and we continue to look for opportunities to improve.
Likewise, our people practices and involvement with the community through both financial and in-person contributions are wide-ranging and
meaningful. We know we make a difference.
We have established our framework for understanding and managing our company carbon intensity (Scope 2 and 3) in 2022 and we expect
to make significant progress in both areas.
Integrate ESG principles across the Bailador investment cycle
The Bailador investment cycle
Bailador currently undertakes the following governance and sustainability
has four discrete steps:
activities across the investment cycle:
Step 1: Screening and qualification
of opportunities
P Bailador undertakes a high-level assessment of carbon intensity and social impact of potential
investments. Bailador considers high carbon intensity companies (for example data centres
and bitcoin mining) to have a higher risk profile than low carbon intensity businesses
Step 2: Due diligence, negotiation
P Bailador is meticulous in assessing governance capability and the commitment of founders
and investment
and management to high-class governance
P Background research on founders is undertaken
P Regular information rights (always) and a board seat (where possible) are negotiated and agreed
Step 3: Governance and
P Bailador is almost invariably on the board of investments and from this position is able
management support
for investee companies
to influence governance
P Bailador often takes the chair role
P Bailador works with the investee company to establish board papers and board sub
committees
Step 4: Sale and realisation
of investment
P Bailador remains tightly involved in sale and realisation processes and supports sales only
to reputable buyers
P Bailador engages throughout the realisation process to ensure the fair and equitable
treatment of investee company employees
Work and influence portfolio companies
Bailador’s job as a minority investor is to support founders and management to run their businesses as well as possible.
By establishing best practice in governance and sustainability at Bailador and communicating expectations, we aim to influence and encourage
investee companies.
We expect excellence in governance and people practices in portfolio companies and work hard to ensure these are in place. Over time we hope
to see portfolio companies measuring, managing and mitigating carbon intensity and giving back to their communities but we understand we
are not running investee companies and there will be variable commitment to this across the portfolio.
We aim to be influential over time.
22
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Sustainability Snapshot (continued) Bailador Technology Investments
Limited’s Corporate Governance
Arrangements
The objective of the Board of Bailador Technology Investments
Limited is to create and deliver long-term shareholder value through
a range of diversified investments.
The Board considers there to be an unambiguous and positive
relationship between the creation and delivery of long-term
shareholder value and high-quality corporate governance.
Accordingly, in pursuing its objective, the Board has committed to
corporate governance arrangements that strive to foster the values
of integrity, respect, trust and openness among and between Board
members, management and investee companies.
Bailador Technology Investments Limited and its subsidiaries
operate as a single economic entity with a unified Board. As such,
the Board’s corporate governance arrangements apply to all entities
within the Company.
Bailador Technology Investments Limited is listed on the Australian
Securities Exchange (ASX). Accordingly, unless stated otherwise in
this document, the Board’s corporate governance arrangements
comply with the recommendations of the ASX Corporate Governance
Council (including the 4th edition amendments) as well as current
standards of best practice for the entire financial year ended 30 June
2021 and have been approved by the Board.
A list of the Board’s directors for the year ended 30 June 2021, along
with their biographical details, is provided in the Directors’ Report.
The Board considers the current board composition reflects an
appropriate balance between executive and non-executive directors
that promotes both the generation of shareholder value and
effective governance.
The Board also considers that the current board composition
reflects an appropriate balance of skills, expertise and experience
to achieve its objective of creating and delivering long-term
shareholder value. The diverse range of investments the company
is involved in necessitates the Board having a correspondingly
diverse range of skills, experience and expertise. As BTI invests in
internet-related businesses, directors are required to have a strong
working knowledge of this sector. In addition, directors need to have
a strong understanding of a range of other business requirements,
including finance and contract law. To this end, the Board considers
its current composition to be appropriate and has in place an active
program for assessing whether individual directors and the Board
as a whole have the skills and knowledge necessary to discharge
their responsibilities in accordance with the Board’s governance
arrangements. Details of the skills, expertise and experience of each
director are provided in the Directors’ Report.
The Chair, supported by the Chair of the Nomination and Remuneration
Committee ensures the Board is provided appropriate professional
development opportunities to develop and maintain the skills and
knowledge needed to perform their role as directors effectively.
Board Composition
Ethical Standards
The Board comprises five directors, three of whom are non-executive
and meet the Board’s criteria, and ASX Guidelines, as to be considered
independent. The names of the non-executive/independent
directors are:
Andrew Bullock
Jolanta Masojada
Brodie Arnhold
An independent director is a non-executive director who is not
a member of management and who is free of any business or other
relationship that could materially interfere with, or could reasonably
be perceived to materially interfere with, the independent exercise
of their judgement. For a director to be considered independent,
they must meet all of the following materiality thresholds:
• Not hold, either directly or indirectly through a related person
or entity, more than 5% of the company’s outstanding shares;
• Not benefit, either directly or through a related person or entity,
from any sales to or purchases from the company or any of its
related entities, and
• Derive no income, either directly or indirectly through a related
person or entity, from a contract with the company or any of its
related entities.
The Board is committed to its core governance values of integrity,
respect, trust and openness among and between Board members,
management and portfolio companies. These values are enshrined
in the Board’s Code of Conduct policy which is available at www.
bailador.com.au.
The Code of Conduct policy requires all directors to at all times:
• Act in good faith in the best interests of the Company and for
a proper purpose;
• Comply with the law and uphold values of good corporate
citizenship;
• Avoid any potential conflict of interest or duty;
• Exercise a reasonable degree of care and diligence;
• Not make improper use of information or position; and
• Comply with the company’s Code of Conduct and Securities
Trading Policy.
Directors are required to be independent in judgment and ensure all
reasonable steps are taken to ensure the Board’s core governance
values are not compromised in any decisions the Board makes.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
23
Corporate Governance Statement The Company does not have a formal whistle-blower policy or anti-
bribery and corruption policy. As the Company does not employ any
staff, such policies fall to the responsibility of the Manager. Employees
of the Manager have been provided access to the Chair of the Audit
and Risk Committee as a point of contact for ethics concerns.
The Audit and Risk Committee comprises five directors (including the
Chair of the Board), three of whom are non-executive/independent
directors. Consistent with ASX’s Corporate Governance Principles
and Recommendations, the Chair of the Audit and Risk Committee
is independent and does not hold the position of Chair of the Board.
Share Ownership and Share
Trading Policy
Details of directors’ individual shareholdings in Bailador Technology
Investments Limited are provided in the remuneration report.
The Bailador Technology Investments Limited Securities Trading
Policy is set by the Board. The policy restricts directors from acting
on material information until it has been released to the market and
adequate time has been given for this to be reflected in the company’s
share price. A detailed description of the Board’s policy regarding
directors trading in Bailador Technology Investments Limited shares
is available from the Board’s Code of Conduct and Securities Trading
Policy, both of which are available at www.bailador.com.au.
The names and qualifications of the Audit and Risk Committee
members and their attendance at meetings of the Committee are
included in the Directors’ Report.
Nomination and Remuneration Committee
The role of the Nomination and Remuneration Committee is to assist
the Board by making recommendations to it about the appointment
of new directors of the company and advising on remuneration and
issues relevant to remuneration policies and practices including
for non-executive directors. Specifically, the Nomination and
Remuneration Committee oversees:
• Developing suitable criteria for Board candidates;
• Identifying, vetting and recommending suitable candidates
for the Board;
Directors are prohibited from trading for short term speculative gain.
• Overseeing Board and director performance reviews;
Board Committees
To facilitate achieving its objectives, the Board has established two
sub-committees comprising Board members – the Audit and Risk
Committee and the Nomination and Remuneration Committee. Each
of these committees has formal terms of reference that outline the
committee’s roles and responsibilities, and the authorities delegated
to it by the Board. Copies of these terms of reference are available
at www.bailador.com.au.
Audit and Risk Committee
The role of the Audit and Risk Committee is to assist the Board
by advising on the establishment and maintenance of a framework
of internal controls and to assist the Board with policy on the quality
and reliability of financial information prepared for use by the Board.
Specifically, the Audit and Risk Committee oversees:
• The appointment, independence, performance and
remuneration of the external auditor;
• The integrity of the audit process;
• The effectiveness of the internal controls; and
• Compliance with applicable regulatory requirements.
Information on the Board’s procedures for the selection and
appointment of the external auditor, and for the rotation of the
external audit engagement partners, is available from the company’s
website www.bailador.com.au.
• Developing remuneration policies for directors; and
• Reviewing remuneration packages annually.
The Nomination and Remuneration Committee comprises five
directors (including the Chair of the Board), three of whom are
non-executive/independent directors. Consistent with ASX’s Corporate
Governance Principles and Recommendations, the Chair of the
Nomination and Risk Committee is independent and does not hold
the position of Chair of the Board.
The names and qualifications of the Nomination and Remuneration
Committee members and their attendance at meetings of the
committee are included in the Directors’ Report.
There are no schemes for retirement benefits for directors.
Performance Evaluation
The Board assesses its performance, the performance of individual
directors and the performance of its committees annually through
internal peer review. The Board also formally reviews its governance
arrangements on a similar basis annually. The Chair has conducted
individual performance appraisals with Board members throughout
the year. In addition, the Nomination and Remuneration Committee
have met throughout the year and have found the current board
performance and composition to be appropriate.
Further remuneration policy for non-executive/independent
directors is provided at www.bailador.com.au.
24
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Corporate Governance Statement (continued) Board Roles and Responsibilities
The Board is accountable to the shareholders for creating and
delivering shareholder value through governance of the Company’s
business activities. The discharge of these responsibilities is
facilitated by the Board delivering to shareholders timely and
balanced disclosures about the Company’s performance.
As a part of its corporate governance arrangements, the Board
has established a strategy for engaging and communicating with
shareholders that includes:
• Monthly updates to the ASX and the Company website with the
Company’s net asset backing;
• Presentations to investors and media briefings, which are also
placed on the Company website; and
• Actively encouraging shareholders to attend and participate
in the Company’s Annual General Meeting.
The Board Charter provides independent directors the right to seek
independent professional advice on any matter connected with the
discharge of their responsibilities at the Company’s expense. Written
approval must be obtained from the Chair prior to incurring any such
expense on behalf of the Company.
The Company Secretary of the Company is accountable to the Board,
through the Chair, on all matters to do with the proper functioning
of the Board. All Board members communicate directly with the
Company Secretary.
The Company Secretary through the Chair is responsible for ensuring:
• All members of the Board receive copies of all market
announcements on or prior to release;
• Copies of any Company presentations with new substantive
information are released to the market ahead of any
presentation being given.
A detailed description of the Board’s communication policy is
provided at www.bailador.com.au.
Shareholder Rights
Shareholders are entitled to vote on significant matters impacting
on the business, which include the election and remuneration
of directors, changes to the constitution and receipt of annual and
interim financial statements. All voting matters are determined via
a poll. The Board actively encourages shareholders to attend and
participate in the Annual General Meetings of Bailador Technology
Investments Limited, to lodge questions to be responded to by the
Board and/or the Manager, and to appoint proxies.
The Company ensures its statutory auditor attends the Annual
General Meeting and is available to answer questions from
shareholders relevant to the audit.
The Board ensures security holders are provided with all material
information in its possession relevant to a decision on whether or not
to elect or re-elect a director.
The Board encourages shareholders to receive information
electronically wherever possible.
The Board is first and foremost accountable to provide value to its
shareholders through delivery of timely and balanced disclosures.
The Board has delegated to the Manager, Bailador Investment
Management, all authorities appropriate and necessary to achieve the
Board’s objective to create and deliver long-term shareholder value.
A complete description of the functions reserved for the Board and
those it has delegated to the Manager along with guidance on the
relationship between the Board and the Manager is available from the
Board Charter available at www.bailador.com.au. Notwithstanding, the
Manager remains accountable to the Board and the Board regularly
monitors the decisions and actions of the Manager.
The Board Charter requires all directors to act with integrity and
objectivity in taking an effective leadership role in relation to the
Company. The Chair ensures all directors have a written agreement
outlining their roles and responsibilities and that all directors are in
receipt of relevant governance policies.
The Chair is responsible for ensuring individual directors, the Board
as a whole and the Manager comply with both the letter and spirit
of the Board’s governance arrangements. The Chair discharges their
responsibilities in a number of ways, primarily through:
• Setting agendas in collaboration with other directors and
the Manager;
• Encouraging critical evaluation and debate among directors;
• Managing board meetings to ensure all critical matters are
given sufficient attention; and
• Communicating with stakeholders as and when required.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
25
Corporate Governance Statement (continued) Risk Management
The Board considers identification and management of key risks
associated with the business as vital to creating and delivering
long-term shareholder value.
The main risks that could negatively impact on the performance
of the Company’s investments include:
• General market risk, particularly in worldwide tech sector stocks;
• General interruption to the Australian venture capital sector;
• The ability of the Manager to continue to manage the portfolio,
particularly retention of the Manager’s key management
personnel;
• Minority holdings risk where other larger investors in our
portfolio companies may make decisions the Company
disagrees with; and
• Other operational disruptions within portfolio companies due
to changes in competition or technology, key management
personnel, cash-flow and other general operational matters.
The Board has reviewed its risk management framework, including
the absence of significant environmental or social risk, in the last 12
months and is satisfied the framework is sound and appropriate for
the risk appetite of the Board.
The Company does not have an internal audit function. The Manager
has been delegated the task of implementing internal controls to
identify and manage risks for which the Audit and Risk Committee
and the Board provide oversight. The effectiveness of these controls
is monitored and reviewed regularly.
A summary of the Board’s risk management policy is available
at www.bailador.com.au.
Other Information
Further information relating to the Company’s corporate governance
practices and is at www.bailador.com.au.
26
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Corporate Governance Statement (continued) Your directors submit the financial report of the Company for the
financial year ended 30 June 2021. The information in the preceding
operating and financial review forms part of this Directors’ Report for
the year ended 30 June 2021 and is to be read in conjunction with
this report:
Directors
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.
The names of directors who held office during or since the end
of the year:
Auditor’s Independence Declaration
David Kirk (Chairman)
Paul Wilson
Andrew Bullock
Jolanta Masojada
Brodie Arnhold
Dividends
A fully franked special dividend of 1.4 cents per share amounting
to $2.0m has been declared by the Board on 17 August 2021
to be paid on 8 September 2021 to shareholders on record
as at 24 August 2021. The dividend will be fully franked at 25%.
The Company’s dividend reinvestment plan (DRP) announced
on 13 February 2020 will apply to the dividend announced
on 17 August 2021.
Indemnifying Officers or Auditor
During the year, Bailador Technology Investments Limited paid
a premium to insure officers of the Company. The officers of the
Company covered by the insurance policy include all Directors.
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 the Company,
and any other payments arising from liabilities incurred by the
officers in connection with such proceedings, other than where
such liabilities arise out of 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 to cause detriment to the Company.
The auditor’s independence declaration for the year ended 30 June
2021 has been received and can be found on page 31 of the
Financial Report.
Non-audit Services
The Board of Directors, in accordance with advice from the Audit
and Risk Committee, is satisfied that the provision of non-audit
services during the period is compatible with the general standard
of independence for auditors imposed by the Corporations Act 2001.
The directors are satisfied the services disclosed below did not
compromise the external auditor’s independence as the nature of
the services provided does not compromise the general principles
relating to audit independence in accordance with APES 110:
Code of Ethics for Professional Accountants set by the Accounting
Professional and Ethical Standards Board. All non-audit services
have been reviewed and approved to ensure they do not impact the
integrity and objectivity of the auditor.
The following fees were paid or payable to Hall Chadwick for
non-audit services provided during the year ended 30 June 2021:
Taxation Services
Rounding of Amounts
$
$2,090
The Company has applied the relief available to it under ASIC
Corporations (rounding in Financial/Directors’ Reports) Instrument
2016/191 and accordingly certain amounts in the financial report and
the Directors’ Report have been rounded off to the nearest $1,000.
Details of the amount of the premium paid in respect of insurance
policies are not disclosed as such disclosure is prohibited under
the terms of the contract.
Options
The Company has not otherwise, during or since the end of the
financial period, except to the extent permitted by law, indemnified
or agreed to indemnify any current or former officer or auditor of the
Company against a liability incurred as such by an officer or auditor.
There are no unissued ordinary shares of the Company under
options as at 30 June 2021.
No shares or options are issued to directors of Bailador Technology
Investments Limited as remuneration.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
27
Directors’ Report Information Relating to Directors and Company Secretary
Information on Directors is located on pages 4 and 5 of this report.
Helen Plesek
Company Secretary
• Helen has over 25 years of experience in finance, corporate development and governance holding senior
roles at Inchcape Motors Australia, Tubemakers of Australia and BRW Fast 100 winner and technology
company, LX Group. In addition, Helen has consulted on best practice finance systems across a range
of companies and government bodies.
• Helen holds a Bachelor of Commerce in Accounting and a Masters in Politics and Public Policy. She is a Certified
Practicing Accountant and a Justice of the Peace in NSW.
Meetings of Directors
During the period, nine meetings of directors and four committee meetings were held. Attendances by each director during the period was as follows:
Directors’ Meetings
Committee Meetings
Committee Meetings
Audit & Risk
Nomination and Remuneration
Number eligible
Number
Number eligible
Number
Number eligible
Number
to attend
attended
to attend
attended
to attend
attended
David Kirk
Paul Wilson
Andrew Bullock
Jolanta Masojada
Brodie Arnhold
9
9
9
9
9
9
9
9
9
9
3
3
3
3
3
3
3
3
3
3
1
1
1
1
1
1
1
1
1
1
Remuneration Report (Audited)
Remuneration Policy
Bailador Technology Investments Limited does not employee any personnel. The Board has delegated management of the investment portfolio
to the Manager, Bailador Investment Management Pty Ltd.
David Kirk and Paul Wilson are directors of Bailador Technology Investments Limited and are also directors and owners of Bailador Investment
Management Pty Ltd.
The Manager is responsible for managing the Investment Portfolio in accordance with the Company’s investment strategy. The Manager was
appointed in 2014 for an initial term of 10 years and in accordance with the agreement’s terms will automatically extend after that term until
either the agreement is terminated or a new agreement is agreed.
The Board has recognised the Manager as Key Management Personnel (KMP) given it has the authority and responsibility for planning, directing
and controlling the activities of the Company. At least one of David Kirk or Paul Wilson are required to continue to be directors of the Manager
and must continue to be actively involved in the management of the investment portfolio during the initial term of the agreement.
The Board has agreed that the independent Directors, Andrew Bullock, Jolanta Masojada and Brodie Arnhold, are to receive $60,000 per annum.
The Executive Directors do not receive any remuneration.
Bailador Technology Investments Limited pays a management fee of 1.75% per annum (plus GST) of the portfolio NAV. Fees are calculated and
paid at the beginning of each quarter in advance. The management fee for a quarter is then adjusted and paid at the end of the quarter based on
increases or decreases in the NAV. All the costs of the Manager, including staff, rent, training, and other costs are paid for from this fee.
In addition, the Manager is entitled to receive a performance fee equal to 17.5% per annum (plus GST) of the investment portfolio’s gain each
year subject to outperforming a hurdle of 8.0% per annum (compounded). The performance fee is only payable from realised gains. The hurdle
was reached in FY21 and there are sufficient cash realisations to satisfy the payment of the accrued performance fee.
28
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Directors’ Report (continued) Amounts paid or payable to the Manager relating to the year ended 30 June 2021 are as follows:
Base management fee
Performance fee payable
Reimbursement of portfolio management expenses
Key Management Personnel (KMP) Remuneration
Remuneration paid or payable to each KMP of the Company during the financial year is as follows:
$3,143,799
$7,320,862
$304,388
Position
Directors’ Fees
David Kirk
Paul Wilson
Chairman and Executive Director
Executive Director
Andrew Bullock
Non-Executive Director
Jolanta Masojada
Non-Executive Director
Brodie Arnhold
Non-Executive Director (appointed 30 August 2019)
Non-recoverable GST incurred on director payments
–
–
60,000
60,000
60,000
12,000
192,000
KMP Shareholdings
The number of ordinary shares in Bailador Technology Investments Limited held by each KMP of the Company during the financial year
is as follows:
David Kirk
Paul Wilson
Andrew Bullock
Jolanta Masojada
Brodie Arnhold
Net number
Net number
Balance at
30 June 2020
of shares
acquired
of shares
Balance at
disposed
30 June 2021
8,651,466
3,977,041
410,422
122,843
55,000
166,897
–
21,897
21,897
21,897
13,216,772
232,588
–
–
–
–
–
–
8,818,363
3,977,041
432,319
144,740
76,897
13,449,360
KMP Option Holdings
There were no options on issue to KMP at any point during the financial year.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
29
Directors’ Report (continued) Other Transactions with KMP and their Related Parties
David Kirk and Paul Wilson receive directors’ fees in relation to directorships of portfolio companies. For the year 1 July 2020 to 30 June 2021,
David Kirk earned $37,500 from DocsCorp and $30,000 from Instaclustr. Paul Wilson earned $50,000 from SiteMinder, $80,000 from Stackla and
$60,000 from Straker Translations.
The Manager receives directors’ fees in relation to directorships of portfolio companies. For the year 1 July 2020 to 30 June 2021, the Manager
earned (net of GST) $37,500 from DocsCorp.
There were no other transactions conducted between the Company and related parties, (other than those disclosed above with the Manager),
relating to equity, compensation and loans, that were conducted other than in accordance with normal supplier relationships on terms no more
favourable than those reasonably expected under arm’s length dealings with unrelated persons.
This Directors’ Report, incorporating the remuneration report, is signed in accordance with a resolution of the Board of Directors.
David Kirk
Director
Dated this 17th day of August 2021
Paul Wilson
Director
30
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Directors’ Report (continued) BAILADOR TECHNOLOGY INVESTMENTS LIMITED
ABN 38 601 048 275
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF BAILADOR TECHNOLOGY INVESTMENTS LIMITED
In accordance with Section 307C of the Corporations Act 2001, I am pleased to
provide the following declaration of independence to the directors of Bailador
Technology Investments Limited. As the lead audit partner for the audit of the financial
report of Bailador Technology Investments Limited for the year ended 30 June 2021, I
declare that, to the best of my knowledge and belief, 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.
Hall Chadwick (NSW)
Level 40, 2 Park Street
Sydney, NSW 2000
SANDEEP KUMAR
Partner
Dated: 17 August 2021
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
31
Auditor’s Independence Declaration
Increase/(Decrease) in value of financial assets
Interest income
Accounting fees
ASX fees
Audit fees
Costs of realisation of financial assets
Directors’ fees
Independent valuations
Insurance
Investor relations
Legal fees
Manager’s fees
Manager’s performance fees
Registry administration
Other expenses
Profit/(Loss) before income tax
Income tax (expense)/benefit
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive income/(loss) for the year
Earnings per share
– basic earnings per share (cents)
– diluted earnings per share (cents)
The accompanying notes form part of these financial statements.
Note
2
6
5
5
3
8
8
30 June 2021
30 June 2020
$000
52,032
100
(281)
(66)
(71)
(953)
(192)
(64)
(216)
(288)
(35)
(3,144)
(7,321)
(57)
(41)
39,403
(11,823)
27,580
–
27,580
22.00
22.00
$000
(1,648)
23
(237)
(74)
(68)
(285)
(192)
(83)
(179)
(261)
(29)
(2,694)
–
(54)
(100)
(5,881)
1,763
(4,118)
–
(4,118)
(3.41)
(3.41)
32
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Statement of Profit or Loss and Other Comprehensive Incomefor the Year Ended 30 June 2021 ASSETS
CURRENT ASSETS
Cash and cash equivalents
Current marketable securities
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Financial assets
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Retained earnings
TOTAL EQUITY
The accompanying notes form part of these financial statements.
As at 30 June 2021
As at 30 June 2020
Note
$000
$000
9
4
10
4
12
11
12
13
43,542
17,771
1,340
62,653
159,741
14,013
173,754
236,407
7,766
7,766
36,685
36,685
44,451
191,956
142,871
49,085
191,956
4,612
5,604
147
10,363
141,594
19,759
161,353
171,716
197
197
30,783
30,783
30,980
140,736
119,231
21,505
140,736
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
33
Statement of Financial Positionas at 30 June 2021 Balance at 1 July 2019
Comprehensive income
Loss for the year
Total comprehensive income for the period
Transactions with owners, in their capacity as owners,
and other transfers
Dividend paid
Shares issued under company DRP and associated placement
Total transactions with owners and other transfers
Balance at 30 June 2020
Balance at 1 July 2020
Comprehensive income
Profit for the year
Total comprehensive income for the period
Transactions with owners, in their capacity as owners,
and other transfers
Shares issued during the period
Costs associated with shares issued during the period
Total transactions with owners and other transfers
Balance at 30 June 2021
The accompanying notes form part of these financial statements.
Note
7
13
7
13
Ordinary Share
Capital
$000
116,475
–
–
–
2,756
2,756
119,231
Retained
Earnings
$000
28,629
(4,118)
(4,118)
(3,006)
–
(3,006)
21,505
Total
$000
145,104
(4,118)
(4,118)
(3,006)
2,756
(250)
140,736
119,231
21,505
140,736
–
–
24,048
(408)
23,640
142,871
27,580
27,580
–
–
–
49,085
27,580
27,580
24,048
(408)
23,640
191,956
34
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Statement of Changes in Equityfor the Year Ended 30 June 2021 CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through profit and loss
Sale of financial assets at fair value through profit and loss
Costs associated with sale of financial assets
Proceeds from / (net cash used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Costs associated with raising capital
Net cash provided by financing activities
Net increase in cash held
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying notes form part of these financial statements.
30 June 2021
30 June 2020
Note
$000
$000
15
13
(4,419)
22
(4,396)
(9,084)
29,738
(792)
19,891
24,048
(582)
23,466
38,931
4,612
43,542
(8,410)
22
(8,388)
–
11,828
–
11,828
1,658
(1,909)
(251)
3,189
1,423
4,612
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
35
Statement of Cash Flowsfor the Year Ended 30 June 2021 Note 1: Summary of Significant
Accounting Policies
Basis of Preparation
These general purpose financial statements have been prepared
in accordance with requirements of 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 Company is a for-profit entity for financial
reporting purposes under Australian Accounting Standards. It is
recommended that this financial report be read in conjunction
with any public announcements made during the period. Material
accounting policies adopted in the preparation of these financial
statements are presented below and have been consistently applied
unless stated otherwise.
Impacts of COVID-19
The company has given particular concern to the impacts of
COVID-19 on the operations of the business and the impacts of
valuation of the portfolio. The Manager has worked closely with the
portfolio throughout the period and has provided regular briefings to
the Board on the impact of COVID-19 on the portfolio of investments.
Bailador holds two investments with substantial exposure to
the travel industry, SiteMinder and Rezdy. Both businesses have
performed well throughout COVID and are returning to growth.
These financial statements were authorised for issue on 17 August 2021.
Accounting Policies
Except for cash flow information, the 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. Investments
The Company has been classified under AASB 2013-5 as an
Investment Entity whose business purpose is to invest funds solely
for returns via capital appreciation and/or investment returns.
As the Company has been classified as an Investment Entity, the
portfolio investments have been accounted for at fair value through
the profit or loss and shown as Financial Assets in the Statement
of Financial Position.
Investments held at fair value through profit or loss are initially
recognised at fair value. Transaction costs related to acquisitions
are expensed to profit and loss immediately. Subsequent to initial
recognition, all financial instruments held at fair value are accounted for
at fair value, with changes to such values recognised in the profit or loss.
In determining year-end valuations, the board considers the annual
valuation review by an independent valuation expert and the
valuation report prepared by the Manager along with other material
deemed appropriate by the board in arriving at valuations.
In determining valuations, whilst considering individual portfolio
company valuations, the board determines the overall value of
the investment portfolio and determines company revenue as the
change in the total value of financial assets held at fair value through
profit or loss. The board will, if relevant, give consideration to any
commercial negotiations underway at the time of valuation and may
maintain the value of an investment if a change in valuation would
prejudice the interests of the company.
Investments are recognised on a trade date basis.
The entity is exempt from consolidating underlying investees it controls
in accordance with AASB 10 Consolidated Financial Statements.
b. Fair Value of Assets and Liabilities
The Company measures some of its assets and liabilities at fair
value on either a recurring or non-recurring basis, depending on the
requirements of the applicable accounting standard.
Fair value is the price the Company would receive to sell an asset or
would have to pay to transfer a liability in an orderly (i.e. unforced)
transaction between independent, knowledgeable and willing
market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent
observable market pricing information is used to determine fair
value. Adjustments to market values may be made having regard
to the characteristics of the specific asset or liability. The fair values
of assets and liabilities that are not traded in an active market are
determined using one or more valuation techniques. These valuation
techniques maximise, to the extent possible, the use of observable
market data.
To the extent possible, market information is extracted from either
the principal market for the asset or liability (i.e. the market with the
greatest volume and level of activity for the asset or liability) or in the
absence of such a market, the most advantageous market available
to the entity at the end of the reporting period (i.e. the market that
maximises the receipts from the sale of the asset or minimises the
payments made to transfer the liability, after taking into account
transaction costs).
The fair value of liabilities and the entity’s own equity instruments
(excluding those related to share-based payment arrangements) may
be valued, where there is no observable market price in relation to
the transfer of such financial instruments, by reference to observable
market information where such instruments are held as assets.
Where this information is not available, other valuation techniques
are adopted and, where significant, are detailed in Note 19.
36
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Notes to the Financial Statementsfor the Year Ended 30 June 2021 Note 1: Summary of Significant Accounting Policies (continued)
The Board has given consideration to detailed analysis and up to
date information that may impact the fair value of the portfolio due
to the impacts of COVID-19. In doing so, the Board also considered
special COVID-19 valuation guidance issued by the International
Private Equity and Venture Capital Valuation Guidelines Board (IPEV).
c. Taxation
The income tax expense for the period comprises current income tax
expense and deferred tax expense.
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 period as well
as unused tax losses.
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.
Financial instruments are initially measured at fair value plus
transaction costs, except where the instrument is classified “at fair
value through profit or loss”, in which case transaction costs are
expensed to profit or loss immediately. Where available, quoted
prices in an active market are used to determine fair value. In other
circumstances, valuation techniques are adopted.
Classification and Subsequent Measurement
Financial instruments are subsequently measured at amortised cost
or fair value through profit or loss.
A financial asset that is managed solely to collect contractual cash
flows and the contractual terms within the financial asset give rise
to cash flows that are solely payments of principal and interest is
measured at amortised cost.
All financial assets that are not measured at amortised cost are
measured at fair value through profit or loss.
(i) Financial assets at fair value through profit or loss
A financial asset is classified at “fair value through profit or loss”
when it eliminates or reduces an accounting mismatch or to
enable performance evaluation where a group of financial assets is
managed on a fair value basis in accordance with a documented risk
management or investment strategy. Such assets are subsequently
measured at fair value with changes in carrying amount being
included in profit or loss.
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.
The initial designation of the financial instruments to measure
at fair value through profit or loss is a one-time option on initial
classification and is irrevocable until the financial asset is
derecognised.
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 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.
d. Financial Instruments
Initial Recognition and Measurement
Financial assets and financial liabilities are recognised when
the entity becomes a party to the contractual provisions to the
instrument. For financial assets, this is equivalent to the date that the
Company commits itself to either the purchase or sale of the asset
(i.e. trade date accounting is adopted).
(ii) Financial liabilities
Financial liabilities other than financial guarantees are subsequently
measured at amortised cost. Gains or losses are recognised in profit
or loss through the amortisation process and when the financial
liability is derecognised.
Impairment
The Company recognises a loss allowance for expected credit losses
on financial assets that are measured at amortised cost.
Impairment losses are recognised in the profit or loss immediately.
At the end of each reporting period, the Company assesses
whether there is any indication that an asset may be impaired. The
assessment will include the consideration of external and internal
sources of information. If such an indication exists, an impairment
test is carried out on the asset by comparing the recoverable
amount of the asset, to the asset’s carrying amount. Any excess
of the carrying amount over its recoverable amount is recognised
immediately in the profit or loss.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
37
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 1: Summary of Significant Accounting Policies (continued)
Derecognition
h. Goods and Services Tax
Financial assets are derecognised when the contractual rights to
receipt of cash flows expire or the asset is transferred to another
party whereby the entity no longer has any significant continuing
involvement in the risks and benefits associated with the asset and the
Company no longer controls the asset.
On derecognition of a financial asset measured at amortised cost,
the difference between the asset’s carrying amount and the sum of
consideration received and receivable is recognised in profit or loss.
An exchange of an existing financial liability for a new one with
substantially modified terms, or a substantial modification to the
terms of a financial liability is treated as an extinguishment of the
existing liability and recognition of a new financial liability. Financial
liabilities are derecognised when the related obligations are
discharged, cancelled or have expired. The difference between the
carrying amount of the financial liability extinguished or transferred
to another party and the fair value of consideration paid, including
the transfer of non-cash assets or liabilities assumed, is recognised
in profit or loss.
e. 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.
f. Trade and Other Receivables
Trade and other receivables include amounts due from government
authorities and prepayments for services performed in the ordinary
course of business. Receivables expected to be collected (or utilised)
within 12 months of the end of the reporting period are classified
as 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. Refer to Note 1(d) for
further discussion on the determination of impairment losses.
g. Trade and Other Payables
Trade and other payables represent the liabilities for goods and
services received by the entity that remain unpaid at the end of the
reporting period. The balance is recognised as a current liability
with the amounts normally paid within 30 days of recognition
of the liability.
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).
Receivables and payables are stated inclusive of the amount of GST
receivable or payable. The net amount of GST recoverable from,
or payable to, the ATO is included with other receivables or payables
in the statement of financial position.
Cash flows are presented on a gross basis. The GST components
of cash flows arising from investing or financing activities which are
recoverable from, or payable to, the ATO are presented as operating
cash flows included in receipts from customers or payments
to suppliers.
i. Interest Income
Interest revenue is recognised using the effective interest method.
j. Rounding of Amounts
The Company has applied the relief available to it under ASIC
Corporations (rounding in Financial/Directors’ Reports) Instrument
2016/191 and accordingly certain amounts in the financial report
and the directors’ report have been rounded off to the nearest $1,000.
k. Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements incorporated
into the financial statements based on historical knowledge and
best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and
economic data, obtained both externally and within the Company.
Detailed information about each of these estimates and judgements
is included in Note 18 in the financial statements.
l. Comparative Figures
When required by accounting standards, comparative figures have
been adjusted to conform to changes in presentation for the current
financial year. The comparative period represents the period from
1 July 2019 to 30 June 2020.
m. New Accounting Standards Implemented
No new accounting standards were adopted during the period.
38
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 2: Profit/(Loss) For The Year
The following revenue and expense items are relevant in explaining the financial performance
for the year:
Fair value gains/(losses) on financial assets and marketable securities at fair value through
profit or loss
(in ‘000s)
Unrealised financial assets and marketable securities of $42,892 where:
30 June 2021
30 June 2020
$000
$000
52,032
(1,648)
• Instaclustr increased $21,374 (112%)
• Nosto increased $11,450 (from $nil)
• Straker Translations increased $6,931 (124%)
• Standard Media Index increased $2,451 (25%)
• Rezdy increased $686 (12%)
Gains on realisation of financial assets of $9,139 where:
• DocsCorp increased on realisation $5,821 (53%)
• Lendi increased on realisation $2,254 (21%)
• Viostream increased on realisation $1,064 (from $nil)
Note 3: Tax Expense
a. The components of tax expense comprise:
Current tax
Deferred tax
b. The prima facie tax on profit/(loss) from ordinary activities before income tax is reconciled
to income tax payable as follows:
Profit/(Loss) for the period before income tax expense
Prima facie tax on (profit)/loss from ordinary activities before income tax at 30%
Tax effect of:
– Other deductions
Income tax attributable to entity
The weighted average effective tax rate is as follows:
30 June 2021
30 June 2020
$000
$000
(253)
(11,570)
(11,823)
39,403
(11,821)
(2)
(11,823)
30%
(778)
2,541
1,763
(5,880)
1,764
(1)
1,763
30%
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
39
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 4: Marketable Securities & Financial Assets
Current Marketable Securities
Straker Translations
Total Current Marketable Securities
Financial Assets
SiteMinder
Instaclustr
Standard Media Index
Nosto
Rezdy
Brosa
DocsCorp
Lendi
Total Financial Assets
Total Financial Assets & Marketable Securities
Note 5: Management fees
As at
As at
30 June 2021
30 June 2020
$000
$000
17,771
17,771
82,536
44,263
12,090
11,450
6,402
3,000
–
–
5,604
5,604
82,536
19,041
9,638
–
5,716
3,000
10,936
10,727
159,741
177,512
141,594
147,198
The Company has outsourced its investment management function to Bailador Investment Management Pty Ltd. Bailador Investment
Management Pty Ltd is a privately owned investment management company and is a related party of Bailador Technology Investments Limited.
a. Management fees
The Manager is entitled to be paid a management fee equal to 1.75% of the portfolio Net Asset Value (NAV) plus GST per annum. The management
fee is calculated and paid quarterly in advance. Each quarter the average of the opening and closing NAV for the quarter is calculated and an
adjustment to the pre-paid fee is made depending on whether NAV has increased or decreased during the quarter.
During the period, the Company incurred $3,143,799 of management fees payable to the Manager, of which $76,678 was unclaimable GST
the manager remitted as GST to the ATO.
b. Reimbursement of portfolio management expenses
Under the management agreement, the Manager is also entitled to be reimbursed for certain out of pocket expenses incurred in the
acquisition and disposal of portfolio assets and in the management of portfolio assets.
During the period, the Company reimbursed the Manager $304,388 for travel and other expenses incurred in the management of the
investment portfolio.
c. Performance fees
At the end of each financial year, the Manager is entitled to receive a performance fee from the Company, the terms of which are outlined below:
The performance fee will be calculated as 17.5% of the NAV gain per annum plus GST, being the amount by which the portfolio NAV at the end
of a financial year exceeds or is less than the portfolio NAV at the start of the financial year and where that gain exceeds a compound hurdle rate
of 8%.
40
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 5: Management fees (continued)
The performance fee will be accrued on an annual basis in arrears and will only be paid at times when proceeds received from realisation of
investments is available to the Company and will be paid in respect of the whole amount of the gain (not just the amount over the 8% hurdle),
subject to the following caveats:
• If the performance fee for a financial year is a positive amount but the investment return for the financial year does not exceed the hurdle
return for the financial year, no performance fee shall be payable to the manager in respect of that financial year, and the positive amount
of the performance fee shall be carried forward to the following financial year;
• If the performance fee for a financial year is a negative amount, no performance fee shall be payable to the manager in respect of that
financial year, and the negative amount shall be carried forward to the following year; and
• Any negative performance fee amounts from previous financial years that are not recouped in a financial year shall be carried forward
to the following financial year.
The performance fee can be fully or partially paid by the issue of shares in Bailador Technology Investments Limited or in cash at the Manager’s
election, the details of which are outlined below:
If the Manager elects at least 5 business days prior to the performance fee payment date that all or part of the performance fee is to be applied
to the issue of shares in the company, the company must, if permitted by applicable laws (including the Listing Rules and the Corporations Act)
without receiving any approvals from the shareholders of the Company, apply the cash payable in respect of the relevant amount to the issue
of shares to the Manager or its nominee on the performance fee payment date where
N = PF / Issue Price
Where
N is the number of shares issued
PF is the cash value of the performance fee to be paid in shares
Issue Price is the lesser of:
• The volume weighted average price of shares traded on the ASX during the period of 30 calendar days up to but excluding the performance
fee payment date; and
• The last price on the last day on which the shares were traded on the ASX prior to the performance fee payment date.
During the period the Company exceeded the performance fee hurdle and $7,320,862 (including $178,558 non-recoupable GST) has been
accrued as performance fees payable. In line with performance fee policy, payment of performance fee may only be made from the proceeds
of cash realisations. Throughout the period, the Company realised $16.8m from its investment in DocsCorp, $13.0m from its investment in Lendi
and $1.1m from its investment in Viostream. The FY21 performance fee will be paid from these proceeds. For further information on performance
fee calculation please see the Company’s prospectus.
Note 6: Auditor’s Remuneration
Remuneration of the auditor for:
Auditing or reviewing the financial statements
Taxation services
30 June 2021
30 June 2020
$000
$000
71
2
73
68
10
78
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
41
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 7: Dividends
No dividends were paid during the period (2020 2.5c per share fully franked)
30 June 2021
30 June 2020
$000
–
$000
3,006
At 30 June 2021, Bailador’s franking account balance is $656,649. The 1.4 cent per share dividend declared on 17 August 2021 will fully utilise the
Company’s franking account. The Company’s approach to paying dividends is set out in the Company’s prospectus.
Note 8: Earnings per Share
Profit/(Loss) after income tax
Weighted average number of ordinary shares used in calculating basic and diluted
earnings per share
Basic earnings per share
Diluted earnings per share
Note 9: Cash and Cash Equivalents
Cash at bank
30 June 2021
30 June 2020
$000
27,580
$000
(4,118)
Number
Number
125,381,189
120,934,673
Cents
22.00
22.00
Cents
(3.41)
(3.41)
As at
As at
30 June 2021
30 June 2020
$000
43,542
43,542
$000
4,612
4,612
42
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 10: Trade and Other Receivables
CURRENT
GST receivable
Interest receivable
Investment exits receivable
Other prepayments
As at
As at
30 June 2021
30 June 2020
$000
$000
110
5
1,138
87
1,340
56
1
–
90
147
The Company does not have Trade Receivables. The Company uses the approaches in Note 1(d) in assessing credit losses on GST, interest
receivable and other prepayments. At 30 June 2021 all receivables and prepayments were within expected terms.
Note 11: Trade and Other Payables
CURRENT
Trade creditors
Performance fee payable
Other payables
Note 12: Income Tax
CURRENT
Income tax payable
NON-CURRENT
Deferred tax liabilities
Tax on unrealised gains
Tax on acquisition assets on opening
As at
As at
30 June 2021
30 June 2020
$000
$000
305
7,321
140
7,766
101
–
96
197
As at
As at
30 June 2021
30 June 2020
$000
$000
–
–
Balance at
Charged to
Charged directly
Balance at
30 June 2019
profit or loss
to equity
30 June 2020
$000
$000
$000
$000
26,481
2,458
28,939
1,844
–
1,844
–
–
–
28,325
2,458
30,783
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
43
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 12: Income Tax (continued)
NON-CURRENT
Deferred tax liabilities
Tax on unrealised gains
Tax on acquisition assets on opening
Deferred tax assets
Provisions
Transaction costs on acquisitions
Transaction costs on equity issue
Deferred losses on financial assets
Losses carried forward
Deferred tax assets
Provisions
Transaction costs on acquisitions
Transaction costs on equity issue
Deferred losses on financial assets
Losses carried forward
Balance at
Charged to
Charged directly
Balance at
30 June 2020
profit or loss
to equity
30 June 2021
$000
$000
$000
$000
28,325
2,458
30,783
5,902
–
5,902
–
–
–
34,227
2,458
36,685
Balance at
1 July 2019
$000
Charged to
Charged directly
Balance at
profit or loss
to equity
30 June 2020
$000
$000
$000
1,235
80
129
2,083
12,624
16,151
(1,215)
(3)
(87)
5,692
(779)
3,608
–
–
–
–
–
–
20
77
42
7,775
11,845
19,759
Balance at
Charged to
Charged directly
Balance at
30 June 2020
profit or loss
to equity
30 June 2021
$000
$000
$000
$000
20
77
42
7,775
11,845
19,759
2,202
(19)
(77)
(7,775)
(252)
(5,921)
–
–
175
–
–
175
2,222
58
140
–
11,593
14,013
The benefits of the above temporary differences and unused tax losses will only be realised if the conditions for deductibility set out in Note 1(c)
occur. These amounts have no expiry date.
The Board has considered the deferred tax balances and is confident there will be sufficient future profits to utilise the deferred tax assets.
44
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 13: Issued Capital
Movements in share capital are set out below:
Opening balance at 1 July 2019
Ordinary shares issued
Closing balance at 30 June 2020
Opening balance at 1 July 2020
Ordinary shares issued via placement and SPP May 2021
Costs associated with capital raised
Closing balance at 30 June 2021
Capital Management
The Company’s objectives for managing capital are as follows:
No.
120,247,831
2,611,432
122,859,263
122,859,263
17,553,332
$
116,475,156
2,755,697
119,230,853
119,230,853
24,048,069
(407,663)
140,412,595
142,871,259
• to invest the capital in investments meeting the description, risk exposure and expected return of the investment strategy of the Company;
• to maximise the returns to shareholders while safe-guarding capital by investing in a portfolio in line with investment strategies of the
Company; and
• to maintain sufficient liquidity to meet the ongoing expenses of the Company.
Note 14: Operating Segments
The Company has one operating segment: Internet-related Businesses in Australia. It earns revenue from gains on revaluation of financial assets
held at fair value through profit or loss, interest income and other returns from investment. This operating segment is based on the internal
reports that are reviewed and used by the directors in assessing performance and in determining the allocation of resources. There is no
aggregation of operating segments.
The Company invests in securities recorded as financial assets and marketable securities held at fair value through profit or loss.
Note 15: Cash Flow Information
Reconciliation of Cash Flow from Operation with Profit/(Loss) after Income Tax
Profit/(Loss) after income tax
Non-operating cash flows in profit:
Unrealised (gains)/losses on financial assets at fair value through profit or loss
Realised gains on financial assets received as cash flows from investing activities
Realised gains on financial assets receivable as cash flows from investing activities
Costs related to investment exits
Increase in trade and other receivables
Increase/(Decrease) in trade and other payables
Increase/(Decrease) in deferred tax
Cash flow from operating activities
30 June 2021
30 June 2020
$000
$000
27,580
(42,892)
(8,075)
(1,064)
792
(130)
7,570
11,823
(4,396)
(4,118)
1,648
–
–
–
(25)
(4,130)
(1,763)
(8,388)
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
45
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 16: Contingent Liabilities
There were no contingent liabilities at 30 June 2020 and 30 June 2021.
Note 17: Events After the Reporting Period
In July 2021 Bailador announced a $5.5m investment in digital healthcare platform InstantScripts. Further details on the investment can be
found in Bailador’s July 2021 NTA statement and shareholder update. Other than the investment in InstantScripts, no matter or circumstance
has arisen since the end of the year that has significantly affected or may significantly affect the operations of the Company, the results of those
operations or the state of affairs of the Company in subsequent financial years.
Note 18: Financial Risk Management
The Company’s financial instruments consist mainly of cash (cash at bank) and financial assets designated at fair value through profit or loss,
accounts receivable and payable. The total for each category of financial instrument, measured in accordance with AASB 9: Financial Instruments
as detailed in the accounting policies to these financial statements are as follows:
Financial assets
Cash and cash equivalents
Current marketable securities
Financial assets at fair value through profit or loss
Trade and other receivables
Total financial assets
Financial liabilities
Financial liabilities at amortised cost
Total financial liabilities
Financial Risk Management Policies
30 June 2021
30 June 2020
Note
$000
$000
9
4
4
10
10
43,542
17,771
159,741
1,340
222,394
7,766
7,766
4,612
5,604
141,594
147
151,957
197
197
The Company is exposed to a variety of financial risks as a result of its activities. These risks include market risk (price risk), credit risk, and
liquidity risk. The Company’s risk management investment policies, approved by the directors of the responsible entity, aim to assist the
Company in meeting its financial targets while minimising the potential adverse effects of these risks on the Company’s financial performance.
Specific Financial Risk Exposures and Management
1. Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The
Company is currently exposed to the following risks as it presently holds financial instruments measured at fair value and short-term deposits:
i. Price Risk
The Company is exposed to equity securities price risk. This arises from investments held by the Company and classified in the statement
of financial position as financial assets at fair value through profit or loss.
The Company seeks to manage and constrain market risk by diversification of the investment portfolio across multiple investments and through
use of structural and contractual protections in its investments such as investing in preference shares or convertible notes, requiring minority
protections in investment documentation and maintaining active directorships in its investment companies.
The portfolio is monitored and analysed by the Manager.
The Company’s net equity exposure is set out in Note 4 of the financial statements.
46
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 18: Financial Risk Management (continued)
Note 19: Fair Value Measurement
Sensitivity Analysis
The following table illustrates sensitivities to the Company’s
exposures to changes in equity prices. The table indicates the impact
on how profit and equity values reported at the end of the reporting
period would have been affected by changes in the relevant risk
variable that management consider to be reasonably possible.
30 June 2021
Profit
$000
Equity
$000
+/- 5% in gain on equity investments
1,471
1,471
2. Credit Risk
Exposure to credit risk relating to financial assets arise from the
potential non-performance by counterparties that could lead
to a financial loss to the Company. The Company’s objective
in managing credit risk is to minimise the credit losses incurred
mainly on trade and other receivables.
Credit risk is managed by the Company through maintaining
procedures that ensure, to the extent possible, that counterparties
to transactions are of sound credit worthiness. As the Company
generally does not have trade receivables, receivables are usually
in the order of prepayments for particular services. The Company
ensures prepayments are only made where the counterparty
is reputable and can be relied on to fulfil the service.
The Company’s maximum credit risk exposure at the end of the
reporting period in relation to each class of recognised financial
assets is the carrying amount of those assets as indicated in the
statement of financial position. None of these assets are past due
or considered to be impaired.
The cash and cash equivalents are all held with one of Australia’s
reputable financial institutions.
3. Liquidity Risk
Liquidity risk arises from the possibility that the Company might
encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. As the Company’s major
cash outflows are the purchase of investments, the level of this
is managed by the Manager. The Company also manages this risk
through the following mechanisms:
• preparing forward-looking cash flow analyses in relation
to operating, investing and financing activities;
• managing credit risk related to financial assets;
• maintaining a clear exit strategy on financial assets; and
•
investing surplus cash only with major financial institutions.
a. Fair Value Hierarchy
AASB 13: Fair Value Measurement requires the disclosure of fair value
information by level of the fair value hierarchy, which categorises fair
value measurements into one of three possible levels based on the
lowest level that an input that is significant to the measure can be
categorised into, as follows:
Level 1
Level 2
Measurements based on quoted prices (unadjusted)
in active markets for identical assets or liabilities that
the entity can access at the measurement date.
Measurements based on inputs other than quoted
prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 3
Measurements based on unobservable inputs for the
asset or liability.
The fair values of assets and liabilities that are not traded in an active
market are determined using one or more valuation techniques.
These valuation techniques maximise, to the extent possible, the
use of observable market data. If all significant inputs required to
measure fair value are observable, the asset or liability is included in
Level 2. If one or more significant inputs are not based on observable
market data, the asset or liability is included in Level 3.
b. Valuation Techniques
In the absence of an active market for an identical asset or liability,
the Company selects and uses one or more valuation techniques to
measure the fair value of the asset or liability. The Company 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 Company 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 including ongoing
discussions with potential purchasers.
• 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.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
47
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) AVCAL provides guidance on a range of valuation methodologies
that are commonly used to determine the value of private equity
investments in the absence of an active market, including:
• price of recent investments;
• earnings multiples;
• revenue multiples;
• net asset values;
• discounted cash flows of the underlying assets;
• discounted cash flows of the investment; and
•
industry valuation benchmarks.
The “price of recent investment” methodology refers to the price
at which a significant amount of new investment into a company has
been made which is used to estimate the value of other investments
in the company, but only if the new investment is deemed to
represent fair value and only for a limited period following the
date of the investment. The methodology therefore requires an
assessment at the measurement date of whether any changes or
events during the limited period following the date of the recent
investment have occurred that imply a change in the investment’s
fair value.
A “revenue multiple” methodology is often used as the basis
of valuation for early and development stage businesses. Under
this method, the enterprise value is derived by multiplying the
normalised historical or projected revenue of the business with
a multiple or range of multiples. The multiple or range of multiples
applied should be an appropriate and reasonable indication of
the value of each company, given the company’s size, risk profile
and growth prospects. The multiple or range of multiples is
usually derived from market data observed for entities considered
comparable to the companies being valued.
Note 19: Fair Value Measurement (continued)
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 Company 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.
The Australian Private Equity and Venture Capital Association (AVCAL)
has prepared the International Private Equity and Venture Capital
Guidelines (Valuation Guidelines). The Valuation Guidelines set out
recommendations on the valuation of private equity investments
which are intended to represent current best practice. The directors
have referred to the Valuation Guidelines in order to determine the
“fair value” of the Company’s financial assets.
In addition to the AVCAL Valuation Guidelines, the Board has given
consideration to detailed analysis and up to date information that
may impact the fair value of the portfolio due to the impacts of
COVID-19. In doing so, the Board also considered special COVID-19
valuation guidance issued by the International Private Equity and
Venture Capital Valuation Guidelines Board (IPEV).
The “fair value” of financial assets is assumed to be the price that
would be received for the financial asset in an orderly transaction
between knowledgeable and willing but not anxious market
participants acting at arm’s length given current market conditions
at the relevant measurement date. Fair value for unquoted or illiquid
investments is often estimated with reference to the potential
realisation price for the investment or underlying business if it were
to be realised or sold in an orderly transaction at the measurement
date, regardless of whether an exit in the near future is anticipated and
without reference to amounts received or paid in a distressed sale.
AVCAL suggests that one or more techniques should be adopted to
calculate a private equity investment based on the valuer’s opinion
of which method or methods are considered most appropriate given
the nature, facts and circumstances of the particular investment.
In considering the appropriateness of each technique, AVCAL
suggests the economic substance of the investment should take
priority over the strict legal form.
48
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 19: Fair Value Measurement (continued)
c. Financial Instruments
The following table represents a comparison between the carrying amounts and fair values of financial assets and liabilities:
Financial assets:
Cash and cash equivalents
Current marketable securities
Financial assets
Trade and other receivables
Financial liabilities:
Trade and other payables
30 June 2021
Carrying Amount
$000
43,542
17,771
159,741
1,340
222,394
7,766
7,766
Fair Value
$000
43,542
17,771
159,741
1,341
222,395
7,766
7,766
d. Recurring and Non-recurring Fair Value Measurement Amounts and the Level of the Fair Value Hierarchy within which the Fair Value
Measurements Are Categorised
Description
Recurring fair value measurements
Current marketable securities
Financial assets at fair value through profit or loss
Description
Recurring fair value measurements
Current marketable securities
Financial assets at fair value through profit or loss
Fair Value Measurements at 30 June 2021 Using:
Significant
Quoted Prices in
Observable Inputs
Significant
Active Markets for
Other than
Unobservable
Identical Assets
Level 1 Inputs
$000
(Level 1)
17,771
–
17,771
$000
(Level 2)
–
96,986
96,986
Inputs
$000
(Level 3)
–
62,755
62,755
Fair Value Measurements at 30 June 2020 Using:
Significant
Quoted Prices in
Observable Inputs
Significant
Active Markets for
Other than
Unobservable
Identical Assets
Level 1 Inputs
$000
(Level 1)
5,604
–
$000
(Level 2)
–
96,263
Inputs
$000
(Level 3)
–
45,331
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
49
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 19: Fair Value Measurement (continued)
e. Valuation Techniques and Inputs Used to Determine Level 2 Fair Values
Fair Value at
30 June 2021
5,604
96,263
45,331
SiteMinder
Nosto
Brosa
$000
Valuation Techniques
Range of Observable Inputs
82,535
11,450
3,000
Price of third-party transaction
Price of third-party transaction
Price of third-party transaction
Price of third-party transaction
Price of third-party transaction
Price of third-party transaction
f. Valuation Techniques and Inputs Used to Determine Level 3 Fair Values
Fair Value at
30 June 2021
Range of
Unobservable
$000
Valuation Techniques
Significant Unobservable Inputs
Inputs
Instaclustr
Standard Media Index
Rezdy
44,263
12,090
Revenue multiple
Revenue multiple
6,402
Revenue multiple
Revenue multiple
Revenue multiple
Revenue multiple
4.8x – 6.4x
2.5x – 3.5x
1.3x – 1.9x
Interest on Convertible Instruments
Interest on Convertible Instruments
There were no changes during the year in the valuation techniques used by the Company to determine Level 3 fair values.
g. Sensitivity Information
The relationships between the significant unobservable inputs and the fair value are as follows:
Inputs
Revenue multiple
Impact on Fair Value from
Impact on Fair Value from
Increase in Input
Decrease in Input
Increase
Decrease
There were no significant interrelationships between unobservable inputs except as indicated above.
h. Reconciliation of Recurring Fair Value Measurement Amounts (Level 3)
Opening balance 30 June 2020
Transfers out to Level 2 (Nosto $11.5m, DocsCorp $10.9m)
Additions
Gains and losses recognised in profit or loss
Closing balance 30 June 2021
50
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Financial Assets
$000
45,332
(22,385)
3,847
35,961
62,755
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) Note 20: Related Party Transactions
Remuneration paid or payable to key management personnel (KMP) of the Company during the period are:
• Management Fees of $3,143,799 (including $76,678 unclaimable GST).
• FY21 performance fee payable to the Manager (not yet paid) of $7,320,861 (including $178,558 unclaimable GST)
• Directors fees of $192,000 (including $12,000 unclaimable GST).
• Salary and director’s fees paid to KMP by portfolio companies on arms-length terms of $302,500.
• Reimbursement of expenses to the Manager of $304,388.
• David Kirk and Jolanta Masojada participated in the Straker Translations rights issue for shareholders on the same terms as all other
Straker Translations shareholders.
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each member of the
Company’s KMP for the year ended 30 June 2021.
Note 21: Company Details
The principal place of business and registered office of the company is:
Suite 3, Level 20
20 Bond Street
Sydney NSW 2000
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
51
Notes to the Financial Statement for the Year Ended 30 June 2021 (continued) In accordance with a resolution of the directors of Bailador Technology Investments Limited, the directors of the Company declare that:
1.
The financial statements and notes, as set out on Pages 32-51, 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 period ended on that date.
2.
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.
3.
The directors have been given the declarations required by s295A of the Corporations Act 2001.
David Kirk
Director
Dated this 17th day of August 2021
Paul Wilson
Director
52
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Directors’ Declaration BAILADOR TECHNOLOGY INVESTMENTS LIMITED
ABN 38 601 048 275
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Opinion
We have audited the financial report of Bailador Technology Investments Limited, which
comprises the statement of financial position as at 30 June 2021, the statement of profit or
loss and other comprehensive income, the statement of changes in equity, the statement of
cash flows for the year then ended and notes comprising a summary of significant
accounting policies and other explanatory information, and the directors’ declaration.
In our opinion the accompanying financial report of the Bailador Technology Investments
Limited is in accordance with the Corporations Act 2001, including:
i.
ii.
giving a true and fair view of the Company’s financial position as at 30 June
2021 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001
Basis of 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 Responsibilities for the Audit of the Financial Report
section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110: Code of Ethics for
Professional Accountants (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 confirm that the independence declaration required by the Corporations Act 2001 has
been given to the directors of the company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report of the current period. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
SYDNEY · PENRITH · MELBOURNE · BRISBANE · PERTH · DARWIN
Liability limited by a scheme approved under Professional Standards Legislation
www.hallchadwick.com.au
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
53
Independent Auditor's Report
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
ABN 38 601 048 275
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
BAILADOR TECHNOLOGY INVESTMENTS LIMITED AND CONTROLLED ENTITITES
KEY AUDIT MATTER
Valuation of Investments $177.5 million
Refer to:
Note 4 - Financial Assets & Marketable Securities
Accounting policy Note 1(d) & Note 19 Fair Value
Measurement
The Company has been classified under AASB 2013-5 as an
Investment Entity whose business purpose is to invest funds
solely for returns via capital appreciation and/or investment
returns.
The entity is exempt from consolidating underlying investees it
controls in accordance with AASB 10 Consolidated Financial
Statements.
As the Company has been classified as an Investment Entity, the
portfolio investments have been accounted for at fair value
through the profit or loss and shown as Financial Assets and
Marketable Securities in the Statement of Financial Position.
In determining year-end valuations, the board considers the
annual valuation review by an independent valuation expert and
the valuation report prepared by the Manager.
Of these financial assets, $17.8M were classified as ‘level 1’,
$97M were classified as ‘level 2’ and $62.8M were classified as
‘level 3’ financial instruments in accordance with AASB 13 Fair
Value Measurement.
The measurement of level 1 marketable securities are based on
quoted prices in active markets.
The measurement of level 2 financial assets are based on inputs
other than quoted prices that are observable for the asset, either
directly or indirectly. The valuation of the level 2 financial
instruments therefore requires a higher level of judgement.
HOW OUR AUDIT ADDRESSSED THE KEY
AUDIT MATTER
Our procedures included amongst others:
Evaluated the manager’s valuation approach
to value the investments; cross checking
with growth achieved and
comparable
market data.
Assessed
the valuation
the
manager’s valuation and implied revenue
multiple.
range
to
Assessed the scope, expertise and the
independence of external valuer engaged by
the Company.
Evaluated
the appropriateness of
the
valuation methodologies selected by the
manager and separately by the external
valuer
the
investment to accepted market practices
and our industry experience.
fair value of
to determine
valuer
Independently assessed and compared the
key inputs adopted by the manager and the
available market
to
external
information relating to similar transactions.
We
to
involved our valuation specialist
assess that the market data used seperately
by the manager and the valuer is reasonable
in comparison to a credible external source;
selected multiples;
the
reference to market data; revenue growth
rates and other business characteristics that
are reasonable.
rationale
for
The remaining financial assets of $62.8M were classified as ‘level
3’ in accordance with AASB 13 Fair Value Measurement. The
measurements of
financial assets are based on
unobservable inputs for the asset. This requires a higher level of
judgement.
level 3
Assessed the adequacy of disclosure of
level 1, level 2 and level 3 finacial assets in
accordance with AASB 13 Fair Value
Measurement.
We have focussed on this area as a key audit matter due to the
company being an investment entity; amounts involved being
material; and the inherent judgement involved in determining the
fair value of investments.
54
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Independent Auditor's Report (continued)
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
ABN 38 601 048 275
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
BAILADOR TECHNOLOGY INVESTMENTS LIMITED AND CONTROLLED ENTITITES
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the 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.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australia Accounting Standards and the Corporations Act 2001 and for such
internal control as directors determine is necessary to enable the preparation of the financial report that gives
a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the
financial report, the directors are responsible for assessing the Consolidated Entity’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 Consolidated Entity or to cease operations, or
have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
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 Company’s internal control.
– Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
55
Independent Auditor's Report (continued)
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
ABN 38 601 048 275
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
BAILADOR TECHNOLOGY INVESTMENTS LIMITED AND CONTROLLED ENTITITES
– 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 Company’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 Company 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 Company to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Company audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, 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 these 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 in pages 28 to 30 of the directors’ report for the year
ended 30 June 2021.
In our opinion the remuneration report of Bailador Technology Investments Limited for the year ended 30
June 2021 complies with s 300A of the Corporations Act 2001.
56
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Independent Auditor's Report (continued) BAILADOR TECHNOLOGY INVESTMENTS LIMITED
ABN 38 601 048 275
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
BAILADOR TECHNOLOGY INVESTMENTS LIMITED AND CONTROLLED ENTITITES
Responsibilities
The directors of the company are responsible for the preparation and presentation of the remuneration
report in accordance with s 300A of the Corporations Act 2001. Our responsibility is to express an opinion
on the remuneration report, based on our audit conducted in accordance with Australian Auditing
Standards.
Hall Chadwick (NSW)
Level 40, 2 Park Street
Sydney, NSW 2000
SANDEEP KUMAR
Partner
Dated: 17 August 2021
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
57
Independent Auditor's Report (continued)
Additional Information
The additional information required by the Australian Stock Exchange Limited Listing Rules is set out below.
20 Largest Shareholders
Details of the 20 largest ordinary shareholders and their respective holdings as at 30 June 2021.
Ordinary
% of
Shares Held
Issued Shares
24,190,921
17.23%
9,118,084
8,818,363
6,670,119
6,658,578
3,977,041
2,000,000
1,999,999
1,954,033
1,824,817
1,435,274
1,243,280
1,199,052
1,106,521
1,000,000
999,978
926,545
840,850
829,927
802,114
6.49%
6.18%
4.75%
4.74%
2.83%
1.42%
1.42%
1.39%
1.30%
1.02%
0.89%
0.85%
0.79%
0.71%
0.71%
0.66%
0.60%
0.59%
0.57%
77,595,496
55.26%
Ordinary Shares
24,190,921
8,818,363
Holder Name
Washington H Soul Pattinson and Company Limited
HSBC Custody Nominees (Australia) Limited
David Kirk
JP Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited
Paul Wilson
Paul Lewis
DDH Graham Limited
Patagorang Pty Ltd
Bond Street Custodians
Pepstock II Pty Ltd
BNP Paribas Nominees Pty Ltd Hub24 Custodial Services Ltd
Mr Simon Fenwick
National Nominees Limited
Mrs Virginia Hancock
Mr Paul Kendrick
Mr Paul Meehan
Mr Alan Draper and Mrs Evelyn Draper
UBS Nominees Pty Ltd
Macareus Pty Ltd
Total
Substantial Shareholders
The names of the substantial shareholders in the Company’s register are:
Washington H Soul Pattinson and Company Limited
David Kirk
58
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Shareholder Information Distribution of Shares
Analysis of numbers of equity security holders, by size of holding as at 30 June 2021.
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Numbers of
Ordinary
% of
Shareholders
Shares Held
Issued Shares
544
938
445
861
151
2,939
324,614
2,633,892
3,562,089
27,056,468
106,835,532
140,412,595
0.23%
1.88%
2.54%
19.27%
76.09%
100.00%
The number of holders possessing less than a marketable parcel of the Company’s ordinary shares, based on the closing market price
as at 30 June 2021 is 125.
Other Stock Exchanges Listing
Quotation has been granted for all ordinary shares and options of the Company on all member exchanges of the ASX.
Restricted Securities
The Company has no restricted securities.
Unquoted Securities
There are no unquoted securities on issue by the Company.
Buy-Back
There is currently no on market buy-back.
Use of Funds
For the purposes of ASX Listing Rule 4.10.19, the Company confirms that it has used its cash and assets in a form readily convertible to cash,
that it had at the time of admission, in a manner consistent with its business objectives, for the financial year.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
59
Shareholder Information (continued) THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.
60
BAILADOR TECHNOLOGY INVESTMENTS LIMITED ANNUAL REPORT 2021
Corporate Information
Registered Office
Share Registry
Bailador Technology Investments Limited
Link Market Services Limited
Suite 3, Level 20
20 Bond Street
Sydney NSW 2000
www.bailador.com.au
Directors
David Kirk (Chairman)
Paul Wilson
Andrew Bullock
Jolanta Masojada
Brodie Arnhold
Level 12
680 George Street
Sydney NSW 2000
www.linkmarketservices.com.au
Auditor
Hall Chadwick
Level 40
2 Park Street
Sydney NSW 2000
www.hallchadwick.com.au
Company Secretary
Australian Stock Exchange Code
Shares : BTI
Helen Plesek
Manager
Bailador Investment Management Pty Ltd
Suite 3, Level 20
20 Bond Street
Sydney NSW 2000
(AFSL 400811)
Bailador Technology Investments Limited
ABN 38 601 048 275
Suite 3, Level 20, 20 Bond Street, Sydney NSW 2000
+61 2 9223 2344 | www.bailador.com.au