2022
Annual Report
BAILADOR TECHNOLOGY
INVESTMENTS LIMITED
(ASX:BTI)
Bailador has an established track record of
successfully making and realising investments in
the fast growth information technology sector
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Corporate Summary
Board of Directors
Letter from the Founders
Operating and Financial Review
Sustainability Snapshot
Corporate Governance Statement
Directors’ Report
Auditor’s Independence Declaration
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Information
Bailador provides
investors with
exposure
to quality
expansion-
stage technology
companies
at attractive
valuations.
Corporate Summary
5
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Company
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 information technology focused 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.
Risk
The Company invests in expansion stage information technology focused 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 140,985,947 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-22
1.445
24.11
277,633
1.858
1.594
30-Jun-21
1.330
22.00
236,407
1.529
1.367
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.
ANNUAL REPORT 2022
6
Board of Directors
David Kirk
Chairman and Executive Director
Paul Wilson
Executive Director
• David (appointed 2014) has been Chief Executive of
• Paul (appointed 2014) has had extensive private equity
investment experience as a previous Executive Director of
CHAMP Private Equity in Sydney and New York, and with
MetLife in London. Paul was also previously Executive
Director at Illyria Pty Ltd, a media-focused investment
group.
• Paul is a Director of Bailador investee companies
SiteMinder (ASX:SDR), Straker Translations (ASX:STG) and
InstantScripts. He is also Director of Rajasthan Royals
(IPL cricket), Vita Group (ASX:VTG), and VRTUS fitness studio.
• Paul holds a Bachelor of Business from QUT, is a Fellow of
the Financial Services Institute of Australasia, a Member
of the Institute of Chartered Accountants Australia and
New Zealand, and a Member of the Australian Institute of
Company Directors.
• Paul holds 4,326,914 ordinary shares in BTI and has an
indirect interest in a further 424,745 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.
two ASX-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 KMD Brands
(ASX:KMD), which is the holding company for outdoor
brands Kathmandu, Rip Curl and Oboz, and is Chairman
of Forsyth Barr Limited, a privately owned investment firm.
He is also Chairman of not-for-profit organisations the
Sydney Festival, KiwiHarvest, New Zealand Food Network
and the New Zealand Rugby Players Association.
• David is Chairman of Bailador investee company Rezdy
and board observer at Mosh. He was previously a Director
of Bailador’s now exited investments, Instaclustr, Standard
Media Index, DocsCorp and Viostream.
• 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 1988.
• David holds 9,257,356 ordinary shares in BTI and an
indirect interest in a further 837,786 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.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
7
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.
• 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, a Certified Investor Relations Officer (CIRO) of the Australasian Investor Relations
Association (AIRA) and a Non-executive Director of Cadence Opportunities Fund (ASX:CDO).
• Jolanta is the Chair of Bailador’s Nomination and Remuneration Committee.
• Jolanta holds interest in 146,324 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 to 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 from the University of Melbourne and is a
member of the Institutes of Chartered Accountants in Australia and New Zealand.
• Brodie holds interest in 109,897 ordinary shares in BTI.
ANNUAL REPORT 2022
8
Letter from the Founders
Bailador Technology Investments’ (ASX:BTI) net profit after tax in the
financial year to 30 June 2022 (FY22) was $34.0m. The value of the fund’s
investments increased by $70.7m in the financial year, and the increase
in Net Tangible Assets per share (before tax) of the fund after all fees was
21.6%. These are all strong results, and we are very pleased to report
them to you.
Cash realisations
FY22 was an excellent year for the fund and we enter FY23 in an extremely
strong position. Due to foresight, hard work and some luck, we were able
to make two major realisations for cash in the second half of FY22. We
realised our investment in Instaclustr for $118m of net cash proceeds
(a 14.2x money-on-money return and an 80% Internal Rate of Return
(IRR)), and our investment in Standard Media Index for $20m of net
cash proceeds (a 2.7x money-on-money return and a 15% IRR). Our
cash realisations proved to be well timed. Soon after we signed binding
agreements, global share markets suffered steep falls. Technology
stocks, especially unprofitable ones, fell the hardest. The value of private
companies is, with some time lags and leads, linked to the value of
comparable publicly listed companies. Accordingly, if we had waited
another three months to realise our investments in Instaclustr and
Standard Media Index, it is likely we would have received lower values or
not been able to sell at all. One of the few certainties in investing is that,
other things being equal, lower purchase prices improve investment
returns. We enter the next stage of the fund’s life with $144m in cash
and the opportunity to invest much of that money at valuations
significantly lower than those we have seen for a number of years.
Instaclustr investment returned 14.2x
invested capital at an IRR of 79.8%
$120m
$100m
$80m
$60m
$40m
$20m
$0m
14.2x
Invested
Realised
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Standard Media Index investment returned
2.7x invested capital at an IRR of 15.0%
$25m
$20m
$15m
$10m
$5m
$0m
2.7x
Invested
Realised
Initial Public Offering (IPO) of
SiteMinder (ASX:SDR)
In November 2021, SiteMinder successfully listed on the Australian
Securities Exchange with a market capitalisation of $1.4bn. We
realised cash of $15m for a small portion of our investment through
the IPO, bringing the total cash realised so far from our investment
in SiteMinder to $29m. Together with the publicly traded value of our
remaining holding position in SiteMinder at 30 June 2022 of $59m, this
represents $88m value, compared to our original $5m investment for a
total 16.8x return on invested capital and a 51.9% IRR on cash realised.
Our remaining shares are escrowed until the release of SiteMinder’s
results for FY22. Our journey with SiteMinder has been an extremely
successful one, and we view SiteMinder as a very high-quality
company, with an exceptional management team, product, business
model and addressable market. We are happy to continue to have
SiteMinder as a cornerstone of the portfolio. Having publicly listed
shares in SiteMinder, as well as our position in Straker Translations
(ASX:STG), provides Bailador with additional flexibility, and means
that a portion of the portfolio is adjusted each month to reflect the
prevailing public market pricing.
Capital management policy
Late in the financial year the board spent many hours discussing the
fund’s capital management policy given the large cash realisations
and growing size of the fund. The principal consideration was how
much and in what form a portion of the cash generated by investment
returns should be returned to shareholders. We were conscious we
needed to establish a policy that would be long lasting, would ensure
9
Letter from the Founders (continued)
SiteMinder investment has delivered $29m of cash for 16.8x return and a 51.9% IRR on cash realised
$90m
$80m
$70m
$60m
$50m
$40m
$30m
$20m
$10m
-
$-10m
Carrying value
at Jun-22
16.8x
Invested
Realised + carrying value
we did not trap shareholder value on the balance sheet in the form
of undistributed franking credits and would strike the right balance
between distributing cash to shareholders and retaining cash in the
company for the team to continue the highly successful investment
strategy we are pursuing.
On June 1 we announced our new policies. They are:
• Payment of an annual fully franked dividend equal to 4% of NTA
pre-tax per share (2% of NTA pre-tax paid each half-year)
• Continuation of the company Dividend Reinvestment Plan
In addition the Company announced its intention to pay a fully
franked special dividend equal to 2% of NTA per share pre-tax co-
incident with the release of the FY22 results.
We stress that BTI remains an investment for shareholders seeking
long-term capital appreciation. The largest component of BTI
investor returns is planned to continue to come from growth in the
value of the companies we invest in on your behalf.
The regular distribution of dividends at 4% of NTA pre-tax per share
per annum, assuming a small share price discount to NTA per share,
will deliver shareholders an annual cash return of something more
than 4% per annum, plus, for those shareholders who benefit from
it, the additional cash benefit of the franking credits we distribute
with the dividend. Added to this will, we believe, be irregular but
more substantial increases in the capital value of shareholders’
investment. Shareholders will receive a blended return of 4% of NTA
pre-tax per share per annum and the capital growth in the underlying
investee companies.
Assuming the annual return from growth in the value of the fund’s
investments is greater than 4%, in theory diverting capital from
capital growth in investments to pay dividends reduces the total
expected return for shareholders. The board considered this issue
carefully and believes that a regular fully franked dividend combined
with the expected capital growth will, in practise, provide a more
consistent and likely superior return for shareholders. There are a
number of reasons for this.
First, the regular dividend payment has the effect of bringing
forward and regularising shareholder cash returns. It takes time
for new investments to grow and for cash to be realised on those
investments. Some of the cash we have recently generated can be
used to underwrite consistent shareholder returns while we work
with new investments to mature and be realised.
Second, setting the dividend payout as a percentage of NTA per
share tethers the share price to the underlying NTA per share of the
fund. The BTI share price has often traded at a discount to NTA per
share, which, especially given our conservative valuation approach,
has demonstrably undervalued the company. To a large extent we
believe this discount is explained by longish periods of limited news
flow on the companies we invest in. For years we work hard with
our portfolio companies, growing their revenue, expanding margins
and generally helping them become much more valuable, but there
is little to show in crystalised value along the way. Unsurprisingly,
some shareholders get bored or have a need to realise cash for
another purpose and sell their shares, leading to downward pressure
on the share price. A dividend set at 4% of NTA pre-tax per share
per annum (plus full franking credits) becomes progressively greater
ANNUAL REPORT 2022
10
Letter from the Founders (continued)
than a 4% per share per annum dividend yield the larger the discount
to NTA becomes. Thus, if the dividend yield per share grows, current
shareholders and new investors have an increasingly strong reason
to buy shares in BTI. We believe it will take some time for the share
register to settle and for the various macroeconomic headwinds we
are currently seeing to blow through but as this occurs, we feel very
confident the average share price discount to NTA per share will reduce
materially over the coming years.
Third, franking credits. Franking credits are a record of tax paid by
companies on behalf of shareholders. If franking credits are not
distributed to shareholders, shareholders are effectively taxed twice
on the same profit – first when company tax is paid and again on the
after-tax dividend income they receive. We believe it is appropriate
for companies to pass franking credits on to shareholders and that a
regular dividend is the best way to do this.
Business and valuation cycles
Business cycles are, in simple terms, the ups and downs in economic
growth (GDP per capita) we witness in market economies. The down
period of a cycle is characterised by reduced consumer spending,
reduced business investment and higher unemployment, with the
reverse occurring in the up period of a cycle. There are a number of
monetary effects associated with the business cycle. In the up period
of a cycle, interest rates and consumer debt typically rise and so do
asset values, most relevantly the value of houses and businesses.
The value of businesses is represented by the combined value of the
share market (which is simply a market to exchange ownership of
small pieces of businesses). The rise in share markets flows through to
private companies too. On the way up in a business cycle, valuations of
private businesses rise in concert with publicly listed companies.
Most investment managers link their performance measures to the
business cycle by establishing broad benchmarks – such as the S&P/
ASX 200 Index or the S&P/ASX All Technology Index – and seek to
out-perform the benchmark. These benchmarks move up and down
in concert with the business cycle as explained above and good
performance is defined as achieving investment returns better than
the benchmark. In the down part of the business cycle, it is common
for good performance to be something less negative than a negative
benchmark. This pitch is not very appealing: “I’ve lost you less than the
benchmark.”
We rarely talk about business cycles and their influence on the returns
investors should expect from an investment in BTI. This is because
we primarily take an absolute return focus to the work we do. That
is, we do not aim to deliver a return to shareholders that is better
than a benchmark but focus on delivering a high positive return in
all market conditions. This is not to say that our returns will not vary
with business and valuation cycles. It will be harder (or take longer)
to realise investments at stand-out valuations when benchmark
valuations fall. But our job is to put ourselves and you in a position
where we do not need to realise investments during the down period
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
of the valuation cycle. In addition to managing where we put your
money and helping to grow the businesses we invest in, we need to
be focused on ‘managing the cycle’. That is, investing more during the
down period of the valuation cycle and realising more investments for
cash during the up part of the cycle. The last two years have been the
(very) high plateau of the up part of the cycle. Here is our scorecard
managing the valuation cycle on your behalf:
BTI cash realised, raised and invested - 1 July 2020
to 30 June 2022
Realisations and
New and follow-on
capital raises (Cash in)
investments (Cash out)
Cash
realisations
$182.9m
New cash
investments
$25.5m
Cash raised on
market
$ 24.0m
Cash follow-on
investments
$22.8m
Total
$206.9m
Total
$48.3m
No one can predict the valuation cycle, including us, so how have
we achieved this very positive outcome? Our answer is culture, in
particular two attributes of the Bailador culture: urgency and drive to
realise cash when valuations are high and discipline in sticking rigidly
to our investment strategy when making new investments through the
same period.
In a nutshell, this is our investment strategy:
1.
2.
3.
4.
Invest in companies that are growing fast and solving important
problems for their customers; doing so more effectively or less
expensively than legacy alternatives and known technology-
enabled competitors
Pay great attention to unit economics and the profitability of
growth, in particular ensure that new customers can be acquired,
serviced and retained (customer acquisition cost) for much less
than they provide in revenue and gross margin over their full
lifetime (customer lifetime value)
Pay great attention to capital efficiency; in short, ensure that
the company can grow fast without needing to burn significant
amounts of cash
Invest only with management teams that are hard-working,
smart, humble and aligned with our views on the need for
operational excellence, capital efficiency and the need to be
globally competitive
5. Make new investments at valuation levels we are highly confident
will be higher when we exit
In all market conditions it is difficult to find companies that fulfill all
these requirements and over the last two years it has been virtually
impossible to find companies that fulfill the fifth requirement regarding
valuation levels. Accordingly, we have invested in just three new
companies over the last two years. Each of those investments was into
a company growing revenue very fast and with significant opportunity
for profit margin expansion. At a high level, just three numbers matter
for company valuation – revenue growth, margin growth (including
improvement in unit economics) and valuation multiple. If we expect
to get no help from valuation multiple expansion, we better be very
sure on revenue growth and margin expansion.
The team
The team performed exceptionally well in the 2022 financial year. The
biggest highlight was the appointment of Bevin Shields as a Partner
in the firm. Bevin was instrumental in the process to realise our
investment in Standard Media Index and has been deeply involved
in our investment in Rezdy, which is going very well. In addition, he
continues to steer and lead our extensive work in investor relations.
Again, there were periods in the year when we all worked from home
and the team coped and contributed extremely well throughout as our
results show. During the year we welcomed Alexander Lenartowicz and
Jordan Martenstyn, both of whom have proved to be very smart and
great additions to the team. We had an active intern program in FY22,
giving experience and gaining important input from nine interns, six of
whom were women.
Annual meeting
Our Annual General Meeting this year will be on 11 October 2022. We
look forward to engaging with as many of you as we can on the day.
Further detail will be provided in our Notice of Meeting available on our
website.
David Kirk
Chairman and Executive Director
Dated this 15th day of August 2022
Paul Wilson
Executive Director
11
Letter from the Founders (continued)
ANNUAL REPORT 2022
12
Operating and Financial Review
Principal Activities
Bailador Technology Investments Limited invests in information
technology focused 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
market-place businesses with proven revenue generation and
management capability, demonstrated successful business models
and expansion opportunities.
Combined revenue growth of the underlying portfolio companies
(portfolio weighted) for the financial year ended 30 June 2022 was 63%
(118% ex-travel investments) and we expect growth to continue to
return to pre-covid levels over time. 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 2021 and 30
June 2022 (pre-tax, after all fees), was an increase of 22% for the year.
There have been no significant changes in the nature of the Company’s
principal activities during the financial year.
Review of Operations
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. In 2022
we instituted a capital management plan that will deliver regular fully
franked dividends to shareholders. The regular fully franked dividend
announced in FY22 presents investors with an element of de-risking
and bringing forward of their return but has not changed the primary
value driver of the business. Bailador’s business model remains to
identify, buy and hold investments in a number of private information
technology focused businesses with strong growth prospects. Bailador
aims to sell those investments at attractive valuations and, following
realisations, continue to make new investments and maintain a
portfolio of high growth 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 Marketable Securities and Financial Assets in the Statement of
Financial Position.
Operating Results
The profit of the Company for the financial year ended 30 June 2022
was $33,969,000 (2021 $27,580,000), after providing for income tax.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
The 2022 financial year has been a year of excellent achievement for
Bailador and for Bailador’s portfolio companies. In FY22 Bailador:
• Fully realised its investment in two companies, Instaclustr and
Standard Media Index, both at values well above their previous
carrying value;
• Successfully listed SiteMinder on the ASX (ASX:SDR);
• Completed investments in three new portfolio companies,
InstantScripts, Access Telehealth and Mosh; and
• Completed a follow-on investment in Rezdy
The listing of SiteMinder and cash realisations (net of costs) of
Instaclustr ($118m), Standard Media Index ($20m), and SiteMinder
($15m) prompted a revision of Bailador’s dividend policy. The dividend
policy, announced in June 2022, will see Bailador target a regular
semi-annual fully franked dividend of 4% pa of NTA pre-tax being 2% of
June NTA pre-tax and 2% of December NTA pre-tax. The dividend policy
provides income certainty to shareholders to complement the fund’s
strong capital growth.
The second half of FY22 has seen a significant decline in market
valuations across all sectors, including technology. Bailador has
always aimed to hold portfolio companies at conservative valuations
that have, in the past, offered a level of protection against short term
market fluctuations and the potential for significant valuation upside
on realisation. Whilst this remained the case through most of H2 FY22,
market declines across May and June 2022 have prompted the fund, to
remain conservative, to write down its investments in Nosto and Access
Telehealth. Publicly traded prices of SiteMinder (ASX:SDR) and Straker
Translations (ASX:STG) were impacted by the falls in the technology
market.
The Manager remains confident in the underlying fundamentals of all of
the companies in the portfolio.
Realisations
Instaclustr
In April 2022 Bailador announced it had realised 100% of its investment
in Instaclustr for $118m in net cash proceeds. Instaclustr was sold at
14.2x Bailador’s investment cost, representing an IRR of 80%.
13
Operating and Financial Review (continued)
Review of Operations (continued)
• Access Telehealth was written down by $3.0m (24.0%) to reflect a
retraction in market multiples since investment.
• Nosto was written down by $2.3m (20.0%) to reflect a retraction in
market multiples and foreign currency movements since the sale of
Stackla to Nosto was completed in FY21.
Bailador holds two portfolio companies via marketable securities on
the ASX. SiteMinder (ASX:SDR) and Straker Translations (ASX:STG) are
marked to the ASX market price at 30 June 2022.
• SiteMinder’s share price at 30 June 2022 was $3.51 which is 20%
below the price implied by Bailador’s private equity valuation at 30
June 2021. SiteMinder was listed in November 2021 at a share price
of $5.06 (21% above the June 2021 carrying value), however, the price
of SiteMinder has softened in CY22 in line with other publicly traded
technology stocks. SiteMinder’s value has declined by $8.8m in FY22.
• At 30 June 2022 the Straker Translations share price was $1.02 (2021
$1.94) resulting in a decline on investment for the financial year of
$8.4m.
Valuation of Investments
The Board has reviewed the value of the investment portfolio and
the Net Tangible Assets of BTI as at 30 June 2022. 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.
Standard Media Index
In March 2022, Bailador announced it had realised 100% of its
investment in Standard Media Index for $20m in net cash proceeds.
Standard Media Index was sold at 2.7x Bailador’s investment cost,
representing an IRR of 15%.
SiteMinder
SiteMinder completed its initial public offering (IPO) in November
2021. As part of the IPO, Bailador realised $15m in net cash proceeds.
The realisation was completed at the SiteMinder IPO price of $5.06
representing a valuation 22.7x Bailador’s entry cost and an IRR of 44%.
Investments
InstantScripts
Bailador invested $5.5m in digital healthcare platform InstantScripts in
July 2021. InstantScripts has performed very well since Bailador’s initial
investment and Bailador has completed two follow-on investments
investing $2.0m at an uplift 5% above our previous carrying value and
then a second follow-on of $7.7m at a further 15% uplift to the previous
carrying value.
Access Telehealth
In December 2021 Bailador invested $12.5m in specialist telehealth
platform Access Telehealth.
Mosh
In December 2021 Bailador invested $7.5m in digital healthcare brand
Mosh.
Rezdy
In October 2021 Bailador completed a $4.0m follow-on investment in
portfolio company Rezdy. The transaction was completed at a valuation
38% above Bailador’s previous carrying value.
Revaluations
The following investments were revalued under BTI’s revaluation policy,
including independent review, by reference to comparable trading and
transaction multiples.
• Brosa was revalued upwards by $1.5m (49.2%) following strong
trading performance.
ANNUAL REPORT 2022
improved workflow, increased connectivity, and access to deep
insights on their business’s performance.
Little Hotelier Basics was rolled out to English speaking regions
towards the end of FY22. Featuring digital on-boarding, digital
customer support, and a hybrid pricing model, Little Hotelier Basics
makes SiteMinder’s technology even more accessible to small
accommodation providers whose uptake of modern technology
solutions remains low.
SiteMinder is well capitalised to achieve its strategic initiatives with
$117.7m of liquidity at the end of FY22. This consists of $26.6m of
cash and cash equivalents, $62.1m of funds on deposit, and $29m in
undrawn debt facilities.
SiteMinder is targeting pre-COVID-19 revenue growth rates (31%
from FY17-FY19) in the future but realisation of this target will
depend on many factors outside of the Company’s control, including
the continued abatement of COVID-19 related influences on the
accommodation and travel industry.
As a publicly listed company, the valuation of BTI’s investment in
SiteMinder is determined by the closing share price for the period.
As at 30 June 2022, SiteMinder’s share price was $3.51 which valued
BTI’s investment at $58.7m.
Valuation 30 June 2022:
Valuation at 30 June 2021:
Realisation since 30 June 2021:
Basis for valuation:
Securities held:
$58.7m
$82.5m
$15m
Marked to market
ASX:SDR
16,711,400 ordinary shares
14
Operating and Financial Review (continued)
Review of Operations (continued)
Operating Reports on Portfolio Companies
SiteMinder
SiteMinder is the world’s leading open hotel commerce platform
serving 34.7k properties of all sizes in over 150 countries. Its
innovative online platform provides hotels with tools to grow
reservations through direct customer acquisition and by connecting
them to established global and regional travel channels, increase
revenue-generating opportunities, get insights on their performance,
and eliminate costly manual processes. The business generated
$116m of revenues in FY22, of which the majority came from
recurring subscription fees.
SiteMinder listed on the ASX in November 2021, and has delivered
strong financial results demonstrating accelerating momentum.
On a constant currency basis, revenue growth has accelerated from
10% in 1HFY22 to 23% in Q4FY22. The business exited FY22 with an
annualised revenue run-rate (ARR) of $129.7m, which represented
25% y/y growth and is 27% higher than the pre-COVID FY19 level
on a constant currency basis. The acceleration in the business was
driven by the increasing customer uptake of SiteMinder’s transaction
products with assistance from the recovery in global travel. During
FY22, the number of transaction products taken-up by SiteMinder’s
customers increased 51% YoY to 13k products.
The company’s strategy is focused on building scale to lay the
foundation for improved unit economics, and for SiteMinder to
become free cash flow positive with high organic growth in the
future. In FY22, SiteMinder focused its investments on new product
initiatives, and the rebuilding of its Go to Market (GTM) capacity
following the COVID driven reductions in March 2020. SiteMinder
made a number of significant product releases during FY22 with the
next generation SiteMinder Platform, the new Little Hotelier Mobile
App, and Little Hotelier Basics.
SiteMinder Platform is the outcome of a multi-year program to evolve
SiteMinder from a product company to a solutions provider. By
integrating SiteMinder’s core channel manager product with its full
suite of plug-ins, the Platform is expected to help SiteMinder grow
average revenue per subscriber by reducing friction for customers
looking to more deeply engage with the SiteMinder ecosystem. The
Platform also offers customers a more intuitive user experience,
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
15
Operating and Financial Review (continued)
Review of Operations (continued)
The InstantScripts team expanded to over 20 staff members which
included the hiring of key executives including the appointment
of Richard Skimin, ex-Managing Director of News.com.au, as Chief
Operating Officer. The team now in place at InstantScripts are highly
capable and well positioned to guide the business on the next phase
of its growth journey.
The business has also been adding new product verticals to its
platform such as pathology referrals, HIV prevention medication,
medicinal marijuana and weight loss management. InstantScripts
also partnered with Healthengine.com.au to offer their audience
online rapid prescriptions and medical certificates.
InstantScripts was experiencing strong growth prior to the COVID-19
disruptions which has accelerated further as consumers experience
the convenience of InstantScripts service. InstantScripts is growing
extremely rapidly and has already served over 400,000 Australians.
The business interacts with over 1,000 patients on a daily basis and
has grown its user base over 250% since BTI first invested.
BTI has valued its investment in InstantScripts at $16.6m at June
2022 which reflects its latest third party valuation.
Valuation 30 June 2022:
Investment since 30 June 2021:
$16.6m
$15.2m
Basis for valuation:
Securities held:
Third-party transaction
Preference and ordinary shares
InstantScripts
InstantScripts is a digital healthcare platform that enables
Australians to conveniently access high quality doctor care and
routine prescription medication in a safe, secure and clinically
responsible manner.
BTI invested $5.5m into InstantScripts in July 2021. BTI increased
its investment in InstantScripts through follow-on investments in
October 2021 and March 2022 taking its total cash investment to
$15.2m.
InstantScripts was founded in 2018 by doctor and entrepreneur,
Asher Freilich. Dr Freilich realised the potential for InstantScripts
during his training as a GP when he saw the opportunity to optimise
and streamline a lot of the inefficiencies that exist in the provision of
routine healthcare services.
The platform’s express prescription service enables consumers
to access doctor-approved routine prescription medication in
minutes. It also enables streamlined access to certain routine
pathology tests and is developing AI-driven results interpretation
tools supplementing the doctor’s input. Consumers can also access
live medical advice via telehealth consultations. The service’s digital
healthcare platform is underpinned by doctor-designed clinical
questionnaires that streamline the patient eligibility process before a
doctor-approved prescription is provided.
InstantScripts enjoys strong support from the pharmacist
community, with over 40% of Australian pharmacies already
registered with the platform. It also has e-prescription integration
and is on the Australian Digital Health Agency (ADHA) conformance
register.
InstantScripts has spent FY22 cautiously deploying the capital it
raised. The company launched its first mass-market TV advertising
campaign which successfully lifted the brand profile of InstantScripts
and general awareness of the more convenient digital healthcare
category.
ANNUAL REPORT 2022
Rezdy continued to execute on its B2B marketplace strategy. During
the period Management were successful in securing a large number
of enterprise level agreements and strategic partnerships across
both supply and demand side channels. 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.
In October 2021, BTI increased its investment in Rezdy by $4.0m
as part of a $7.5m equity raising by the Company. The valuation of
the equity raising resulted in a 38% uplift to the valuation of BTI’s
investment in Rezdy prior to the transaction. Rezdy’s annualised
recurring revenue has increased over 50% since the time of the
equity raising, however BTI has maintained a conservative valuation
approach and held Rezdy flat at 30 June 2022.
Valuation 30 June 2022:
Valuation 30 June 2021:
Investment since 30 June 2021:
Basis for valuation:
Securities held:
$12.8m
$6.4m
$4.0m
Price of third party transaction
Convertible preference shares,
ordinary shares
16
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
$300bn+ tours and activities industry. Rezdy’s B2B marketplace
offering combines leading booking software, distribution and in-
destination agent tools to drive connectivity of online sales of tours
and activities globally.
Rezdy’s booking software platform is used by over 4,200 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 thousands of
independent agents in over 130 countries.
After a challenging period following the outbreak of COVID-19,
FY22 saw a return to strong growth. This is despite the continued
grounding of virtually all international travel as populations
continued to seek out domestic travel destinations and experiences.
It is pleasing to see Rezdy finished FY22 with both revenue and
gross booking value (GBV) well above the peak levels achieved
prior to the COVID-19 outbreak. Despite macroeconomic conditions
deteriorating, the growth prospects for the business in FY23 remain
strong as the demand for travel remains high and international
borders continue to reopen.
Rezdy’s product offering continued to strengthen with several
key developments during the period. Management successfully
transitioned its booking software customers to new pricing plans
which better align the interests of the business and customers
whilst delivering a higher take rate on booking volumes transacted
on Rezdy’s platform. Management also successfully launched its
second-generation payments platform, RezdyPay, which has seen
strong adoption amongst Rezdy’s new and existing customers. Rezdy
has also continued to focus on its global expansion with additional
senior hires in North America and a number of key product
enhancements which resulted in a strong ramp up of new customer
activity in the region.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
17
Operating and Financial Review (continued)
Review of Operations (continued)
The company is experiencing strong growth. In the last financial year
revenue has expanded rapidly and the number of residents under
its care has more than doubled in the six months since BTI invested.
These strong results have been achieved with little to no marketing
effort such is the strong product-market fit the business has found.
With approximately 200,000 residents in aged care the business has
a large growth runway ahead of it and a community who will benefit
from its superior care program.
Despite Access Telehealth’s strong fundamental performance BTI
wrote down the valuation of Access Telehealth by 24% to $9.5m
to reflect the general decline in equity valuations. BTI maintains
a positive outlook on Access Telehealth’s future prospects
underpinned by the strong and resilient demand for healthcare
along with the innovative model they are using to deliver superior
levels of care to Australian consumers.
Valuation 30 June 2022:
Investment since 30 June 2021:
Basis for valuation:
Securities held:
$9.5m
$12.5m
Revenue multiple
Ordinary shares
Access Telehealth
Founded in 2016, Access Telehealth is a specialist telehealth platform
that combines technology and a community of doctors to better
connect regional communities, aged care residents and National
Disability Insurance Scheme (NDIS) participants to high-quality
healthcare.
Bailador invested $12.5m in Access Telehealth in December 2021
alongside other sophisticated investors and existing shareholders.
The funds raised by the company are being used to accelerate its
growth plans, continue product development and rapidly expand
the network of medical professionals available to consumers via the
platform.
Access Telehealth employs a unique hybrid patient care model
that combines both telehealth and in-person care to deliver an
ongoing healthcare program for each patient. By utilising telehealth
technologies, the company provides patients with convenient and
timely access to a large network of specialist medical professionals.
The company enjoys strong support from the medical community
with over 200 medical specialists active on the Access Telehealth
platform.
Since BTI’s investment the business has spent considerable effort
expanding its team and rolling out software improvements to
service the demand the business is experiencing. Access Telehealth’s
team now consists of over 200 team members consisting of
executives, management, doctors and nurses who deliver over 8,000
consultations per month, and work alongside aged care operators
right across Australia.
ANNUAL REPORT 2022
18
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.
The NZ financial year ended 31 March 2022 (FY22) was an exceptional
year for Straker. The Company delivered NZ$55.9m of revenue
or a 79% increase over the prior year, surpassing management’s
minimum revenue forecast by 12%. The business also delivered on
its goal of increasing margins, with gross margin reaching 54.3% for
the year, up on the prior year’s gross margin of 53.4%. The Company
also recorded an adjusted EBITDA profit of NZ$1.2m, up from the
EBITDA loss of NZ$0.2m in the prior year.
The strong growth was largely driven by the continued ramp
up in the Company’s IBM contract over the year, as well as the
impact of acquisitions of Lingotek (acquired in Q4 FY21) and IDEST
Communication (acquired in Q3 FY22). 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.
The Company remains well funded and has seen a strong rise in
operating cashflows to achieve positive cash flows of $1m in the
second half of the year. Straker’s A$25m capital raising in the first
quarter of the financial year further strengthened its balance sheet
the Company ended the year with cash and cash equivalents at
NZ$15.1m and no debt.
The prospects for Straker remain strong as the business continues to
scale-up its translation platform in the growing US$57bn language
services market. 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 nine acquisitions in the last six years, management now has
significant acquisition and integration experience enabling a faster
integration and margin improvement of the businesses acquired. The
Company expects the strong momentum to continue into FY23 and
has forecast profitable revenue growth of 20% for FY23 on a gross
margin exceeding the 54.3% recorded in FY22.
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 2022, Straker’s share price was $1.02,
representing a 47% decrease since 30 June 2021.
Valuation 30 June 2022:
Valuation 30 June 2021:
Realisation/investment
since 30 June 2021:
Basis for valuation:
Securities held:
$9.3m
$17.8m
$nil
Mark to market
ASX:STG
9,160,354 ordinary shares
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
19
Operating and Financial Review (continued)
Review of Operations (continued)
Nosto
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 received
exposure to a larger international business operating a leading
personalisation platform in the very fast growth e-commerce space.
(the former Stackla product) and Shoppable Instagram, a new
product launched in April 2022. The Shoppable Instagram tool
gathers UGC from a brand’s Instagram account, syncs it with their
Nosto product catalogue and highlights it across key store pages as
shoppable content.
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.
Since Nosto acquired Stackla they’ve added two new User Generated
Content (UGC) related products to the Nosto platform, Visual UGC
In January 2022, Nosto acquired SearchNode, a global cloud-based
ecommerce search technology company. Nosto plans to integrate
the SearchNode technology into its platform, enabling retailers
to provide the most relevant search results and personalised
experiences across the entire shopping journey. This transaction was
the second acquisition for Nosto, following the Stackla acquisition in
2021.
Following the acquisition of Stackla by Nosto in June 2021, the
valuation of BTI’s investment in Stackla remained unchanged at
$11.5m, but it transitioned to a shareholding in Nosto.
In June 2022, BTI made the decision to write down our carrying value
in Nosto by 20% to $9.2m, recognising that public markets at first
rose and have now fallen, as well as exchange rate movements since
the relevant transaction in June 2021.
Valuation 30 June 2022:
Valuation 30 June 2021:
Realisation/investment
since 30 June 2021:
Basis for valuation:
Securities held:
$9.2m
$11.5m
$nil
Revenue multiple
Ordinary shares
ANNUAL REPORT 2022
20
Operating and Financial Review (continued)
Review of Operations (continued)
Mosh
Mosh is a digital healthcare brand that makes men’s health and
wellness accessible, easy and affordable.
BTI invested $7.5m in Mosh in December 2021. BTI holds convertible
notes in Mosh and invested alongside a number of other
institutional investors.
Mosh was launched in 2019 by David Narunsky and Gabriel Baker
who saw the opportunity to create a digital health solution that
enabled sensitive men’s health conditions to be treated discretely
and conveniently.
The company offers subscription treatment plans for hair loss, sexual
health, skin care and mental health. Mosh’s medical consultations
are delivered digitally which increases convenience, accessibility
and privacy while also lowering the cost of treatment. The business’
all-inclusive treatment plans cover membership, medical treatment,
pharmaceuticals and delivery.
Over the course of 2022 Mosh has been carefully investing the
capital it raised into TV advertising and sponsorship opportunities to
continue growing the Mosh brand and subscriber base. The founders
have also been focussed on building out the team across the entire
organisation and in key executive positions which will position the
business well for its next chapter of growth.
Mosh’s core treatment plans are for hair loss, sexual health and skin
care. During 2022 the team launched to market revamped treatment
plans for both mental health and weight loss. Mosh’s new mental
health treatment plan enables consumers to access a personalised
and Doctor-recommended treatment plan within 24 hours, complete
with online counsellor sessions and medications which are discretely
shipped to a customer’s door.
Mosh is growing rapidly with over 30,000 active subscribers and
has developed a strong brand in the fast-growing men’s digital
healthcare market.
BTI’s convertible note converts into equity at a discount to a future
valuation and so BTI has valued its investment in Mosh at $7.5m at
June 2022 which is in line with the third-party investment cost.
Valuation 30 June 2022:
Investment since 30 June 2021:
Basis for valuation:
Securities held:
$7.5m
$7.5m
Third-party transaction
Convertible note
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
21
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.
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 continued to upgrade its management team in FY22 and
their Chief Commercial Officer was included in Inside Retail’s Top 50
people in e-commerce.
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 October 2021, BTI revalued its investment in Brosa up by 49%
($1.5m) to $4.5m to reflect its strong operating performance over the
prior 12 months.
Valuation 30 June 2022:
Valuation 30 June 2021:
Basis for valuation:
Securities held:
$4.5m
$3.0m
Revenue multiple
Convertible preference shares
ANNUAL REPORT 2022
22
Operating and Financial Review (continued)
Significant Changes in State of Affairs
There was no significant change in the Company’s state of affairs
during the year.
Events after the Reporting Period
In July 2022 Bailador announced a $5m follow-on investment in
portfolio company and digital healthcare platform InstantScripts.
The investment was completed at a valuation 10% above the
previous carrying value of InstantScripts. Other than the follow-on
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 with a significant portion of
the portfolio held in cash. Moving into an investment cycle, recent
declines in technology trading multiples are expected to present
improvement in investment prices.
Likely developments, future prospects, 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.
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.
General Investee Company Risks
There are risks relating to the growth stage information technology
focused 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.
Business Risks
Environmental Regulation
The following exposures to business risks 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 operations of the Company are not subject to any particular or
significant environmental regulations under a Commonwealth, State
or Territory law.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Corporate
Sustainability and
Responsibility
24
Sustainability Snapshot
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 30 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 team
Male
Female
Total
Partners
Non-partners
Total
4
2.5
6.5
100%
56%
76%
0
2
2
0%
44%
24%
4
4.5
8.5
100%
100%
100%
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Bailador is committed to being an inclusive, diverse, and merit-
based workplace. Bailador recognises and promotes the values of
diversity, respect and opportunity for learning and development
in the workplace.
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 predominantly choose
to work from our office 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 we
encourage our team to put family first.
25
Sustainability Snapshot (continued)
People and place (continued)
Bailador intern programme
Pictured (l-r): Jordan Martenstyn and David Kirk. Jordan joined Bailador’s internship programme in October 2021 and was promoted to a
permanent position as Investment & Portfolio Analyst in April 2022.
Bailador offers a paid internship programme for undergraduates who
have an interest in the technology and finance sectors. Most interns are
university students and choose to work one or two days per week over
a three-month period, with the opportunity to assist the team with
financial analysis, industry sector research, and report preparation on
investment opportunities. Interns are assigned a member of the team
to act as a mentor and help provide guidance and support during
their tenure.
Male
Female
Total
Interns
3
33%
6
67%
9
100%
ANNUAL REPORT 2022
26
Sustainability Snapshot (continued)
People and place (continued)
Bailador office
Bailador has been at its current office at 20 Bond Street in Sydney
since 2020. The A-Grade building has a 5.5 Star NABERS Energy Base
Building rating and a 4.5 star NABERS Water rating. The building is
operated by Mirvac and is net carbon positive for Scope 1 and Scope 2
emissions.
The Bailador office is located close to major transport links, such as
light rail stops, train stations and ferry services. The 20 Bond Street
building also has End of Trip facilities, including showers, changing
rooms, and bicycle storage and maintenance facilities, to encourage
exercise to and from work.
While we are not able to measure the emissions of the Bailador team’s
commute, the team commute to work by bus, rail, ferry, walking,
cycling or electric vehicle.
Bailador staff have personal workstations with ergonomic sit-stand
desks, and the office is designed with several breakout rooms to
allow the team to work comfortably. The full team meets weekly,
with staff choosing to attend in person or remotely, to encourage
communication, collaboration and the sharing of ideas and insights.
CY22 has seen a return to work and the majority of the Bailador team
choose to spend most of their time working from the office.
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 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 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 6.4 years.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Giving Back
The Smith Family Challenge
The Smith Family does terrific work in helping disadvantaged kids get
an education. In FY22, Bailador again supported The Smith Family
Challenge, sponsoring a team led by Paul Wilson and to which the
firm and team members contributed financially. Event participants
had two days to run, paddle and navigate their way through the
bush, over mountains and up rivers to complete the course that is
more than 100km long.
In total, Team Bailador, including non-Bailador members, raised over
$94,000 for The Smith Family. This was our fourth consecutive year
of support for The Smith Family challenge, and second as a named
sponsor.
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 10th consecutive
year and assisted Stepping Stone House to raise around $140,000 on
the day.
27
Sustainability Snapshot (continued)
Bigger Than Us
Bailador sponsored five screenings of the documentary film
Bigger Than Us held around Australia in April and May. Bailador’s
sponsorship allowed 400 young people to see the film which features
the lives of seven young people from around the world who are
fighting for a better future. Their stories focused on the areas of
education for refugees, refugee rescue, environmental justice, food
security, women’s rights and youth empowerment.
Steptember
Bailador sponsored Helen Plesek, our Chief Financial Officer and
Company Secretary, when she took on the Steptember walking
challenge this year to raise funds for people living with cerebral palsy.
The cause is particularly close to Helen’s heart as she has a nephew
who lives with the disorder. The team of four collectively took 1.4m
steps as part of the challenge, and Helen raised $2,000 for the
Cerebral Palsy Alliance.
Donating our time
Our team gives their time to valuable causes such as Sydney Festival,
food rescue organisations and Royal Lifesaving Australia.
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.
ANNUAL REPORT 2022
28
Sustainability Snapshot (continued)
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.
We have no scope 1 emissions.
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.
Mitigate
3.69 (tonnes CO2e) fully offset.
Bailador has purchased carbon credits to
fully offset our Scope 2 carbon emissions.
1.47 (tonnes CO2e) fully offset. Our Scope 3
carbon footprint derives from travel on firm
business.
Bailador has purchased carbon credits to fully
offset our Scope 3 carbon emissions. Bailador
is working to improve our measuring of Scope
3 emissions.
While FY22 included a period of working from home and continued restrictions on international travel, we were able to measure and mitigate
our carbon emissions. We have decided to invest in projects that remove carbon from the atmosphere and projects that where possible, provide
other important benefits to society including job creation and biodiversity enhancement.
Our long-term sustainability framework and goals
Establish best
Integrate ESG principles across the
Work and influence
practice at Bailador
Bailador investment cycle
portfolio companies
Governance
People practices
Climate change and carbon intensity
Giving back
Establish best practice at Bailador
PPPPP
PPPP
PPP
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.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
29
Sustainability Snapshot (continued)
Our Long-term Sustainability Framework and Goals (continued)
Integrate ESG principles across the Bailador investment cycle
The Bailador investment cycle has four
Bailador currently undertakes the following governance and sustainability activities
discrete steps:
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 to
management support
for investee companies
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.
ANNUAL REPORT 2022
30
Corporate Governance Statement
Bailador’s Corporate Governance
Arrangements
The objective of the Board of Bailador 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 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 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 fourth edition amendments) as well as current
standards of best practice for the entire financial year ended 30 June
2022 and have been approved by the Board.
Board Composition
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
A list of the Board’s directors for the year ended 30 June 2022, along
with their biographical details, is provided in the Directors’ Report.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
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 information technology
focused 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.
Ethical Standards
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.
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.
Share Ownership and Share
Trading Policy
Details of directors’ individual shareholdings in Bailador Technology
Investments Limited are provided in the remuneration report.
The Bailador 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 shares is available from the Board’s Code of Conduct and
Securities Trading Policy, both of which are available at
www.bailador.com.au.
Directors are prohibited from trading for short term speculative gain.
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.
31
Corporate Governance Statement (continued)
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;
• Overseeing Board and director performance reviews;
• 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.
Board Roles and Responsibilities
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.
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.
ANNUAL REPORT 2022
32
Corporate Governance Statement (continued)
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;
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
• Presentations to investors and media briefings, which are also
announcements on or prior to release
placed on the Company website; and
• Actively encouraging shareholders to attend and participate in the
Company’s Annual General Meeting.
• 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.
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.
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
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 Bailador Annual General Meetings, 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.
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.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
33
Corporate Governance Statement (continued)
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.
ANNUAL REPORT 2022
34
Corporate Governance Statement (continued)
Board skills matrix
Governance skills
Strategy
Financial performance
Risk and compliance oversight
Board experience
Commercial experience
Qualifications
Capital Management Experience
Sustainability
Industry skills
Expertise in or with SaaS, marketplace or other information technology businesses
Qualifications and/or experience in valuing technology businesses
Experience in or with listed investment businesses
Private equity/investment banking experience
Experience with investor relations
Experience in building a business to scale
Directors
PPPPP
PPPPP
PPPPP
PPPPP
PPPPP
PPPP
PPPPP
PP
Directors
PPPP
PPPPP
PPP
PPPPP
PPPP
PPPP
Importance
Essential
Essential
Essential
Essential
Essential
Desirable
Desirable
Desirable
Importance
Essential
Essential
Desirable
Desirable
Desirable
Desirable
Personal attributes
Integrity (ethics)
Description
A commitment to:
•
•
understanding and fulfilling the duties and responsibilities of a director, and maintaining
knowledge in this regard through professional development
acting with the utmost integrity and objectivity, striving at all times to enhance the
reputation and performance of the Company
acting in good faith in the best interests of the Company’s and for a proper purpose
•
•
being transparent and declaring any activities or conduct that might be a potential conflict
•
acting with care and diligence
• maintaining Board confidentiality
Influencer and negotiator
Critical and innovative thinker
Industry contributor
Leader
The ability to negotiate outcomes and influence others to agree with those outcomes, including
an ability to gain broad stakeholder support for the Board’s decisions
The ability to critically analyse complex and detailed information, readily understand key issues,
and develop innovative approaches and solutions to problems
A passion and interest in keeping abreast of technology businesses and industry movements
Leadership skills including the ability to:
•
•
• make and take responsibility for decisions and actions
appropriately represent the organisation
set appropriate Board and Company culture
The Chair should also have the personal attributes to effectively undertake usual Chair functions such as: chairing Board meetings; developing
a constructive relationship with the CEO; successfully managing Board succession planning and Board performance; and representing/being a
spokesperson for the Company.
Diversity composition
The board is committed to seeking gender representation and, where possible, diversity on the Board should be reflective of the Company’s
geographic and cultural footprint. Some age diversity should be sought among directors to bring different generational perspectives to the
Board’s deliberations and the Board should comprise a diverse range of professional experience. The Board should collectively comprise
directors who demonstrate competence and experience at board level and/or who have completed formal training in directorship/governance.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Directors’ Report
Your directors submit the financial report of the Company for the
financial year ended 30 June 2022. The information in the preceding
operating and financial review forms part of this Directors’ Report for
the year ended 30 June 2022 and is to be read in conjunction with
this report:
Directors
The names of directors who held office during or since the end of the
year:
• David Kirk (Chairman)
• Paul Wilson
• Andrew Bullock
• Jolanta Masojada
• Brodie Arnhold
Dividends
A fully franked final dividend of 3.7 cents per share amounting to $5.2m
has been declared by the Board on 15 August 2022. In addition, the
board has announced a fully franked special dividend of 3.7 cents per
share amounting to $5.2m. The final dividend and special dividend
will be paid together and are to be paid on 16 September 2022 to
shareholders on record as at 2 September 2022.
The dividends announced on 15 August 2022 are in line with Bailador’s
dividend policy anounced on 1 June 2022 of a regular dividend of 4%
pa of NTA pre-tax paid semi-annually, plus a special dividend of 2%
of company NTA pre-tax. The final dividend of 3.7c per share is 2% of
Company NTA pre-tax and represents the first dividend for FY23 with a
further regular dividend of 2% of NTA pre-tax to be announced with the
December 2022 financial report in February 2023.
The Company’s dividend reinvestment plan (DRP) announced on 13
February 2020 will apply to the dividends announced on 15 August 2022.
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.
35
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.
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.
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.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June
2022 has been received and can be found on Page 39 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 2022:
Taxation Services
Rounding of Amounts
$
$21,097
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.
ANNUAL REPORT 2022
36
Directors’ Report (continued)
Options
There are no unissued ordinary shares of the Company under options as at 30 June 2022.
No shares or options are issued to directors of Bailador Technology Investments Limited as remuneration.
Information Relating to Directors and Company Secretary
Information on Directors is located on Pages 6 and 7 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 Fellow of
CPA Australia, a graduate of the Australian Institute of Company Directors and a Justice of the Peace in NSW.
Meetings of Directors
During the period, 13 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
13
13
13
13
13
13
13
13
13
13
Remuneration Report (Audited)
Remuneration Policy
3
3
3
3
3
3
3
3
3
3
1
1
1
1
1
1
1
1
1
1
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 $70,000 per annum
(increased from $60,000 per annum from 1 October 2021). The Executive Directors do not receive any remuneration.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
37
Directors’ Report (continued)
Remuneration Report (continued)
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 FY22 and there are sufficient cash realisations to satisfy the payment of the accrued performance fee.
Amounts paid or payable to the Manager relating to the year ended 30 June 2022 are as follows:
Base management fee
Performance fee payable
Reimbursement of portfolio management expenses
Key Management Personnel (KMP) Remuneration
$4,451,132
$10,625,331
$296,842
Remuneration paid or payable to each KMP of the Company during the financial year is as follows:
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
Non-recoverable GST incurred on director payments
–
–
67,500
67,500
67,500
13,500
216,000
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
Balance at
Net number of
Net number of
Balance at
30 June 2021
shares acquired
shares disposed
30 June 2022
8,818,363
3,977,041
432,319
144,740
76,897
438,993
349,873
–
1,584
33,000
13,449,360
823,450
–
–
–
–
–
–
9,257,356
4,326,914
432,319
146,324
109,897
14,272,810
KMP Option Holdings
There were no options on issue to KMP at any point during the financial year.
ANNUAL REPORT 2022
38
Directors’ Report (continued)
Remuneration 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 2021 to 30 June 2022,
David Kirk earned $26,613 from Instaclustr. Paul Wilson earned $104,917 from SiteMinder, and $60,000 from Straker Translations.
The Manager received a fee from Standard Media Index of US$250,000 for operating as the seller’s agent on the sale of Standard Media Index.
David Kirk and Paul Wilson sold their shareholdings in Standard Media Index as part of the sale of Standard Media Index completed in May 2022,
and received US$135,594 each in proceeds.
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
Chairman and Executive Director
Dated this 15th day of August 2022
Paul Wilson
Executive Director
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Auditor’s Independence Declaration
39
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 2022,
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: 15 August 2022
SYDNEY · PENRITH · MELBOURNE · BRISBANE · PERTH · DARWIN
Liability limited by a scheme approved under Professional Standards Legislation
www.hallchadwick.com.au
ANNUAL REPORT 2022
40
Statement of Profit or Loss and Other Comprehensive Income
for the Year Ended 30 June 2022
Increase 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 before income tax
Income tax expense
Profit for the year
Other comprehensive income
Total comprehensive income 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
2
5
5
3
8
8
30 June 2022
30 June 2021
$000
70,667
197
(295)
(76)
(67)
(5,774)
(216)
(65)
(244)
(288)
(32)
(4,451)
(10,625)
(70)
(52)
48,609
(14,640)
33,969
$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
33,969
27,580
24.11
24.11
22.00
22.00
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Statement of Financial Position
for the Year Ended 30 June 2022
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
Income tax payable
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.
41
As at 30 June 2022
As at 30 June 2021
Note
$000
$000
9
4
10
4
12
11
12
13
143,784
68,001
934
212,719
60,051
4,863
64,914
277,633
10,773
30,391
41,164
11,783
11,783
52,947
224,686
143,599
81,087
224,686
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
ANNUAL REPORT 2022
42
Statement of Changes in Equity
for the Year Ended 30 June 2022
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
Balance at 1 July 2021
Comprehensive income
Profit 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
Total transactions with owners and other transfers
Balance at 30 June 2022
The accompanying notes form part of these financial statements.
Ordinary
Retained
Share Capital
Earnings
Note
$000
$000
Total
$000
119,231
21,505
140,736
13
13
7
13
-
-
27,580
27,580
24,048
(408)
23,640
-
-
-
27,580
27,580
24,048
(408)
23,640
142,871
49,085
191,956
142,871
49,085
191,956
-
-
-
728
728
143,599
33,969
33,969
(1,967)
-
(1,967)
81,087
33,969
33,969
(1,967)
728
(1,239)
224,686
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Statement of Cash Flows
for the Year Ended 30 June 2022
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 investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Dividends paid
Costs associated with raising capital
Net cash (used in)/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.
43
30 June 2022
30 June 2021
Note
$000
$000
15
13
(13,317)
127
(13,190)
(39,166)
159,777
(5,937)
114,674
-
(1,233)
(9)
(1,242)
100,242
43,542
143,784
(4,419)
22
(4,396)
(9,084)
29,738
(792)
19,862
24,048
-
(582)
23,466
38,931
4,612
43,542
ANNUAL REPORT 2022
44
Notes to the Financial Statements
for the Year Ended 30 June 2022
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 15 August 2022.
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
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
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.
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
Note 1: Summary of Significant Accounting Policies (continued)
45
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.
ANNUAL REPORT 2022
46
Notes to the Financial Statements for the Year Ended 30 June 2022 (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 three 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 2020 to 30 June 2021.
m. New Accounting Standards Implemented
No new accounting standards were adopted during the period.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
47
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
70,667
52,032
30 June 2022
30 June 2021
$000
$000
(in ‘000s)
Gains on marketable securities and financial assets where:
- Instaclustr increased $78,619 (178%) and was fully realised in cash during the year
- Standard Media Index increased $9,242 (76%) and was fully realised in cash during the year
- Rezdy increased $2,406 (37%)
- Brosa increased $1,476 (49%)
- InstantScripts increased $1,441 (10%)
- SiteMinder decreased $8,800 (11%) with $15m realised in cash during the year
- Straker Translations decreased $8,427 (47%)
- Access Telehealth decreased $3,000 (24%)
- Nosto decreased $2,290 (20%)
Costs of realisation of financial assets
5,774
953
- Instaclustr costs of full cash realisation completed May 2022 $3,932
- Standard Media Index costs of full cash realisation completed May 2022 $1,359
- SiteMinder costs of partial realisation completed November 2021 as part of SiteMinder IPO $490
Note 3: Tax Expense
a.
The components of tax expense comprise:
Current tax
Deferred tax
b.
The prima facie tax on profit from ordinary activities before income tax is reconciled to income tax
payable as follows:
Profit for the period before income tax expense
Prima facie tax on profit 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 2022
30 June 2021
$000
$000
(30,390)
15,750
(14,640)
48,609
(14,583)
(57)
(14,640)
30%
(253)
(11,570)
(11,823)
39,403
(11,821)
(2)
(11,823)
30%
ANNUAL REPORT 2022
48
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
Note 4: Marketable Securities & Financial Assets
Current Marketable Securities
SiteMinder
Straker Translations
Total Current Marketable Securities
Financial Assets
InstantScripts
Rezdy
Access Telehealth
Nosto
Mosh
Brosa
SiteMinder
Instaclustr
Standard Media Index
Total Financial Assets
Total Financial Assets & Marketable Securities
Note 5: Management fees
As at
As at
30 June 2022
30 June 2021
$000
$000
58,657
9,344
68,001
16,607
12,808
9,500
9,160
7,500
4,476
-
-
-
60,051
128,052
-
17,771
17,771
-
6,402
-
11,450
-
3,000
82,536
44,263
12,090
159,741
177,512
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 $4,451,132 of management fees payable to the Manager, of which $108,564 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 $296,842 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%.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
49
Notes to the Financial Statements for the Year Ended 30 June 2022 (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 five 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 $10,625,331 (including $259,154 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 $118m from its investment in Instaclustr, $20m from its investment in Standard
Media Index and $15m from its investment in SiteMinder.
The FY22 performance fee will be paid from these proceeds following release of these financial statements. 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 2022
30 June 2021
$000
$000
67
22
89
71
2
73
ANNUAL REPORT 2022
50
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
Note 7: Dividends
Special dividend of 1.4c per share fully franked (2021 no dividend paid)
30 June 2022
30 June 2021
$000
1,967
$000
–
At 30 June 2022, Bailador’s franking account balance is $1k. Bailador will pay sufficient tax in FY23 to ensure all FY23 dividends are fully franked.
Note 8: Earnings per Share
Profit 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
Note 10: Trade and Other Receivables
CURRENT
GST receivable
Interest receivable
Investment exits receivable
Other prepayments
30 June 2022
30 June 2021
$000
33,969
$000
27,580
Number
Number
140,877,262
125,381,189
Cents
24.11
24.11
Cents
22.00
22.00
As at
As at
30 June 2022
30 June 2021
$000
143,784
143,784
$000
43,542
43,542
As at
As at
30 June 2022
30 June 2021
$000
97
75
664
98
934
$000
110
5
1,138
87
1,340
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 2022 all receivables and prepayments were within expected terms.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
51
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
NON-CURRENT
Deferred tax liabilities
Tax on unrealised gains
Tax on acquisition assets on opening
As at
As at
30 June 2022
30 June 2021
$000
$000
22
10,625
126
10,773
305
7,321
140
7,766
As at
As at
30 June 2022
30 June 2021
$000
30,391
$000
–
Balance at
Charged to
Charged
Balance at
30 June 2020
profit or loss
directly 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
Charged to
Charged
Balance at
30 June 2021
profit or loss
directly to equity
30 June 2022
$000
$000
$000
$000
34,227
2,458
(24,064)
(838)
36,685
(24,902)
-
-
-
10,163
1,620
11,783
ANNUAL REPORT 2022
52
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
Note 12: Income Tax (continued)
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
1 July 2020
$000
20
77
42
7,775
11,845
19,759
Charged to
Charged
Balance at
profit or loss
directly to equity
30 June 2021
$000
$000
2,202
(19)
(77)
(7,775)
(252)
(5,921)
-
-
175
-
-
175
$000
2,222
58
140
-
11,593
14,013
Balance at
Charged to
Charged
Balance at
30 June 2021
profit or loss
directly to equity
30 June 2022
$000
2,222
58
140
-
11,593
14,013
$000
$000
$000
994
(15)
(36)
1,497
(11,593)
(9,153)
-
-
3
-
-
3
3,216
43
107
1,497
-
4,863
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.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
53
Note 13: Issued Capital
Movements in share capital are set out below:
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
Opening balance at 1 July 2021
Ordinary shares issued under company DRP September 2021
Costs associated with capital raised
Closing balance at 30 June 2022
Capital Management
No.
122,859,263
17,553,332
140,412,595
$
119,230,853
24,048,069
(407,663)
142,871,259
140,412,595
142,871,259
573,352
-
733,317
(5,741)
140,985,947
143,598,835
The Company’s objectives for managing capital are as follows:
• 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: Information technology focused 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.
ANNUAL REPORT 2022
54
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
Note 15: Cash Flow Information
Reconciliation of Cash Flow from Operations with Profit after Income Tax
Profit after income tax
Non-operating cash flows in profit:
Unrealised losses/(gains) 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 in trade and other payables
Decrease in trade and other payables attributable to payment of costs on investing activities
Increase in current tax
(Decrease)/Increase in deferred tax
Cash flow from operating activities
Note 16: Contingent Liabilities
There were no contingent liabilities at 30 June 2021 and 30 June 2022.
Note 17: Events After the Reporting Period
30 June 2022
30 June 2021
$000
$000
33,969
27,580
19,773
(89,777)
(664)
5,767
(68)
3,008
161
30,391
(15,750)
(13,190)
(42,892)
(8,075)
(1,064)
792
(130)
7,570
-
-
11,823
(4,396)
In July 2022 Bailador announced a $5m follow-on investment in portfolio company and digital healthcare platform InstantScripts.
The investment was completed at a valuation 10% above the previous carrying value of InstantScripts. Other than the follow-on 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 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 finacia 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
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
30 June 2022
30 June 2021
Note
$000
$000
9
4
4
10
11
143,784
68,001
60,051
934
272,770
10,773
10,773
43,542
17,771
159,741
1,340
222,394
7,766
7,766
55
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
Note 18: Financial Risk Management (continued)
Financial Risk Management Policies
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:
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.
i. Price Risk
3. Liquidity 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.
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.
Note 19: Fair Value Measurement
Sensitivity Analysis
a. Fair Value Hierarchy
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 2022
Profit
$000
Equity
$000
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
Measurements based on quoted prices (unadjusted) in
active markets for identical assets or liabilities that the
entity can access at the measurement date.
+/- 5% in gain on equity investments
1,834
1,834
Level 2
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
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.
ANNUAL REPORT 2022
56
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
Note 19: Fair Value Measurement (continued)
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.
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
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
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.
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.
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
Note 19: Fair Value Measurement (continued)
57
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 2022
Carrying Amount
$000
Fair Value
$000
143,784
68,001
60,051
934
272,770
10,773
10,773
143,784
68,001
60,051
934
272,770
10,773
10,773
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 2022 Using:
Quoted Prices in
Observable Inputs
Significant
Active Markets for
Other than
Significant
Identical Assets
Level 1 Inputs
Unobservable Inputs
$000
(Level 1)
68,001
–
68,001
$000
(Level 2)
-
36,915
36,915
$000
(Level 3)
-
23,136
23,136
Fair Value Measurements at 30 June 2021 Using:
Quoted Prices in
Observable Inputs
Significant
Active Markets for
Other than
Significant
Identical Assets
Level 1 Inputs
Unobservable Inputs
$000
(Level 1)
17,771
–
17,771
$000
(Level 2)
–
96,986
96,986
$000
(Level 3)
–
62,755
62,755
ANNUAL REPORT 2022
58
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
Note 19: Fair Value Measurement (continued)
e. Valuation Techniques and Inputs Used to Determine Level 2 Fair Values
InstantScripts
Rezdy
Mosh
Fair Value at
30 June 2022
$000
16,607
12,808
7,500
Valuation Techniques
Range of
Observable Inputs
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
Access Telehealth
Nosto
Brosa
Fair Value at
30 June 2022
Significant
Range of
$000
Valuation Techniques
Unobservable Inputs
Unobservable Inputs
9,500
9,160
4,476
Revenue multiple
Revenue multiple
Revenue multiple
Revenue multiple
Revenue multiple
Revenue multiple
3.2x – 8.3x
5.8x – 7.9x
1.1x – 1.6x
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
Increase
Decrease in Input
Decrease
There were no significant interrelationships between unobservable inputs except as indicated above.
h. Reconciliation of Recurring Fair Value Measurement Amounts (Level 3)
Financial Assets
$000
62,755
(62,755)
26,950
(3,814)
23,136
Opening balance 30 June 2021
Transfers out to Level 2
Transfers in from Level 2
Gains and losses recognised in profit or loss
Closing balance 30 June 2022
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
59
Note 20: Related Party Transactions
Remuneration paid or payable to key management personnel (KMP) of the Company during the period are:
• Management Fees of $4,451,132 (including $108,564 unclaimable GST).
• FY22 performance fee payable to the Manager (not yet paid) of $10,625,331 (including $259,154 unclaimable GST)
• Directors fees of $216,000 (including $13,500 unclaimable GST).
• Salary and director’s fees paid to KMP by portfolio companies on arms-length terms of $191,530.
Other related party transactions for the Company during the period are:
• Transaction selling agent fees paid to the Manager on arms-length terms as part of the Standard Media Index sale transaction US$250,000.
• Reimbursement of expenses to the Manager of $296,842.
• David Kirk, Paul Wilson, Jolanta Masojada and Brodie Arnhold purchased shares in the SiteMinder IPO on the same terms as other IPO
participants. Brodie Arnhold has since sold his ASX:SDR shares in normal on-market trades. Andrew Bullock received shares in SiteMinder via
an in-specie distribution from the Bailador SiteMinder Co-investment Trust on the same commercial terms as other IPO participants.
• David Kirk and Paul Wilson realised the notes and warrants they held in Standard Media Index for US$135,594 each.
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 2022.
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
ANNUAL REPORT 2022
60
Directors’ Declaration
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 40-59, 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 2022 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
Chairman and Executive Director
Dated this 15th day of August 2022
Paul Wilson
Executive Director
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Independent Auditor’s Report
61
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 2022, 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
2022 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
ANNUAL REPORT 2022
62
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
KEY AUDIT MATTER
Valuation of Investments $128.1 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, $68M were classified as ‘level 1’, $36.9M
were classified as ‘level 2’ and $23.1M 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
external
available market
to
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;
the rationale for selected multiples; reference
to market data; revenue growth rates and
other business characteristics
that are
reasonable.
The remaining financial assets of $23.1M 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 financial 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.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
63
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 2022, 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.
– 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
ANNUAL REPORT 2022
64
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
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 36 to 38 of the directors’ report for the year ended
30 June 2022.
In our opinion the remuneration report of Bailador Technology Investments Limited for the year ended 30 June
2022 complies with s 300A of the Corporations Act 2001.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
65
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: 15 August 2022
ANNUAL REPORT 2022
66
Shareholder Information
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 2022.
Holder Name
Washington H Soul Pattinson and Company Limited
David Kirk
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
JP Morgan Nominees Australia Limited
Paul Wilson
Paul Lewis
DDH Graham Limited
Patagorang Pty Ltd
BNP Paribas Nominees Pty Ltd Hub24 Custodial Services Ltd
Mr Simon Fenwick
National Nominees Limited
Bond Street Custodians
Mrs Virginia Hancock
Mr Paul Kendrick
Mr Paul Meehan
Mr Alan Draper and Mrs Evelyn Draper
Macareus Pty Ltd
Finance Associates Pty Ltd
Merrill Lynch (Australia) Nominees Pty Limited
Mr Sam Morgan
Total
Substantial Shareholders
The names of the substantial shareholders in the Company’s register are:
Washington H Soul Pattinson and Company Limited
David Kirk
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Ordinary
% of
Shares Held
Issued Shares
22,936,846
16.27%
9,257,356
8,425,835
6,369,701
6,318,327
4,326,914
2,000,000
1,999,999
1,975,422
1,482,676
1,212,177
1,061,087
1,047,940
1,000,000
999,978
926,545
850,054
802,114
800,000
776,057
776,057
6.57%
5.98%
4.52%
4.48%
3.07%
1.42%
1.42%
1.40%
1.05%
0.86%
0.75%
0.74%
0.71%
0.71%
0.66%
0.60%
0.57%
0.57%
0.55%
0.55%
75,345,085
53.44%
Ordinary Shares
22,936,846
9,257,356
67
Shareholder Information (continued)
Distribution of Shares
Analysis of numbers of equity security holders, by size of holding as at 30 June 2022.
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Numbers of
Shareholders
Ordinary
% of
Shares Held
Issued Shares
910
1,528
586
956
154
4,134
519,552
4,076,744
4,519,615
29,260,026
102,610,010
140,985,947
0.37%
2.89%
3.21%
20.75%
72.78%
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 2022 is 178.
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.
ANNUAL REPORT 2022
Registered Office
Bailador Technology Investments 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
Company Secretary
Helen Plesek
Manager
Bailador Investment Management Pty Ltd
Suite 3, Level 20
20 Bond Street
Sydney NSW 2000
(AFSL 400811)
Share Registry
Link Market Services Limited
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
ASX
BTI
Bailador Technology Investments Limited
ABN 38 601 048 275
ACN 601 048 275
Suite 3, Level 20, 20 Bond Street, Sydney NSW 2000
+61 2 9223 2344 | www.bailador.com.au