APPENDIX 4E
– FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2023
Company Information
Bailador Technology Investments Limited (ASX:BTI)
ABN : 38 601 048 275
Reporting Period : 30 June 2023
Comparatives : 30 June 2022
Results for Announcement to the Market
Key Information
Gains on financial assets
Profit after tax from ordinary activities
attributable to members
Net profit attributable to members
Dividends Paid and Proposed
Increase/Decrease
Change %
Decrease
Decrease
Decrease
(81%)
(84%)
(84%)
To $’000
13,114
5,415
5,415
A fully franked full year dividend of 3.2c per share has been declared by the Board on Wednesday 16 August 2023
to be paid on 7 September 2023 to shareholders on record as 22 August 2023.
The Company’s DRP plan will apply to the final dividend announced on 16 August 2023.
Further details on the dividend are available in the Directors’ Report in the Annual Report.
Statement of Profit or Loss and Other Comprehensive Income with Notes to the Statement
Refer to pages 42 to 61 of the 30 June 2023 annual report and accompanying notes for Bailador Technology
Investments Limited.
Statement of Financial Position with Notes to the Statement
Refer to pages 43 to 61 of the 30 June 2023 annual report and accompanying notes for Bailador Technology
Investments Limited.
Statement of Movements in Equity with Notes to the Statement
Refer to pages 44 to 61 of the 30 June 2023 annual report and accompanying notes for Bailador Technology
Investments Limited.
Statement of Cash Flows with Notes to the Statement
Refer to pages 45 to 61 of the 30 June 2023 annual report and accompanying notes for Bailador Technology
Investments Limited.
APPENDIX 4E
– FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2023 - CONTINUED
Statement of Retained Earnings Showing Movements
Balance as at 1 July 2022
Net profit attributable to members of the parent entity
Dividends paid to members
Balance as at 30 June 2023
Net Tangible Assets per Share
Net tangible assets per share (pre tax)
Net tangible assets per share (post tax)
Control Gained or Lost over Entities in the Period
None
2023
$000
81,087
5,415
(15,468)
71,034
As at
30 June 2023
$/Share
1.587
1.519
As at
30 June 2022
$/Share
1.858
1.594
Investment in Associates and Joint Ventures
The Company does not have any investments in associates and joint ventures.
Commentary on the Results for the Period
Refer to the commentary on the results for the period contained in the “Review of Operations” included within the
operating and financial review section of the annual report.
Status of Audit
The 30 June 2023 financial report and accompanying notes for Bailador Technology Investments Limited have
been audited and are not subject to any disputes or qualifications. Refer to pages 63 to 67 of the 30 June 2023
annual report for a copy of the auditor’s report.
2023
Annual Report
BAILADOR TECHNOLOGY
INVESTMENTS LIMITED
(ASX:BTI)
ANNUAL REPORT 2023
Bailador has an established track record of
successfully making and realising investments in
the fast growth information technology sector.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
s
t
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f
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b
a
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05
06
08
12
26
31
36
41
42
43
44
45
46
62
63
68
71
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
ANNUAL REPORT 2023
Bailador provides
investors with
exposure
to quality
expansion-
stage technology
companies
at attractive
valuations.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Corporate Summary
5
1
2
3
4
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 businesses. The
value of the shares and the income derives 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 144,869,190 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)
Dividends paid per ordinary share (cents)1
30-Jun-23
1.165
3.77
237,030
1.587
1.519
10.9
30-Jun-22
1.445
24.11
277,633
1.858
1.594
1.4
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.
1 Includes special dividend
ANNUAL REPORT 2023
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. He is currently Director of Rajasthan Royals (IPL
cricket), and VRTUS fitness studio.
• Paul is a Director of Bailador investee company SiteMinder
(ASX:SDR).
• 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 4,939,661 ordinary shares in BTI and has an
indirect interest in a further 459,138 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 Director of Bailador investee companies Rezdy
and Rosterfy, and board observer at Mosh.
• 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 10,274,340 ordinary shares in BTI and an
indirect interest in a further 908,769 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 438,708 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 198,172 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 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, iSelect, 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 118,795 ordinary shares in BTI.
ANNUAL REPORT 2023
8
Letter from the Founders
Bailador Technology Investments’ (ASX:BTI) net profit before tax in the
financial year to 30 June 2023 (FY23) was $5.4m. The value of the fund’s
continuing investments increased by $13.1m in the year. Private
company investments increased in the year by $26.2m and public
company investments (SiteMinder and Straker Translations) declined
in the year by $13.1m. Net Tangible Assets per share (before tax) of the
fund after all fees declined by $0.27. With a net increase in the value
of investments over the period, the decline in pre-tax NTA per share
was due to the large payment of tax (following a year of strong cash
realisations in FY22) and the payment of dividends.
After selling a number of investments in FY22 during a period of high
valuation multiples, the fund entered FY23 with over $140m of cash.
$32.9m of cash was deployed into investments in FY23, and after
payments for tax, dividends and operating expenses, the fund closed
out FY23 with $57.8m of cash at hand. Just after year end the proceeds
of the sale of InstantScripts were received and the cash balance was
rebuilt to $109m. While high cash reserves are a constraint on value
accretion in the short term, we feel very confident that deploying cash
selectively through FY23 and being cashed-up again at the start of
FY24 positions us well for consistent long term high returns.
Cash investments and realisations
InstantScripts
InstantScripts is a digital health platform enabling convenient access
to high quality doctor care and routine prescription medication.
BTI initially increased its investment, then realised for cash at an
increased valuation its full investment in InstantScripts during the
year. We made our first investment in InstantScripts in July 2021. In
FY23 we made two follow-on investments of a total $15m and late
in the year (the transaction completed and cash was received in the
first month of FY24) InstantScripts was sold to API, a wholly owned
subsidiary of Wesfarmers.
Our holding period for InstantScripts was shorter than we generally
target but for a variety of reasons including founder wishes and a
committed strategic buyer we sold along with all shareholders after
a two-and-a-half-year holding period. Our returns – a 25% uplift on
holding value at the time, $52m in cash and a 62% IRR – were strong.
Rezdy
Rezdy is a leading global booking and connectivity software provider
for the tours and activities industry. This is a huge, fragmented industry
InstantScripts
Total investment
$30.2m
Cash realised
$52.1m
IRR
62%
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
covering both very large providers such as Big Red Bus tours in London
and very small providers such as a walking tour of The Rocks in Sydney.
The industry is complicated by ticketing, multiple activities on one ticket,
multiple booking channels (online, in-person, telephone, tourist bureaux,
hotel concierge and more) and the fact that most bookings are made
late and in-destination. Rezdy has come a long way in this complex
industry but to compete effectively requires scale and, recognising this,
in FY23 we sold Rezdy for shares into a larger vehicle sponsored by a US
private equity firm. We have retained all of our investment and added
$5m to our position as part of the transaction. The transaction resulted in
a 46% uplift in our carrying value at an IRR of 21% so far.
Access Telehealth
Access Telehealth provides in-person and telehealth services for
Australians with challenges accessing high quality healthcare. For
instance, the company provides access to specialist consultants for rural
and regional Australians and access to psychologists for neuro-diverse
children through the NDIS and access to GP and specialist healthcare for
residents of aged-care facilities.
The key to Access Telehealth’s success is the ability to combine
investment in people (nurses and doctors) and a software platform that
creates an efficiently functioning marketplace for patients (demand)
and doctors (supply), combining in-person consultations and telehealth
provision on one platform. Work rostering, consultations, follow-
up, prescriptions, and record keeping are all integrated into a single
workflow management platform.
Bailador invested $12.5m in Access Telehealth in December 2021. In
January 2023 we happily invested a further $3.1m leading a capital
round. The funds raised in January are being used to further growth
plans and achieve profitability.
New portfolio company - Rosterfy
In April 2023 we invested $9.8m in Rosterfy. Rosterfy is a software-as-a-
service provider of volunteer management solutions for not-for-profit
companies and major events. Rosterfy has an A-grade list of major
events clients including the Superbowl, UEAFA and FIFA, and has more
recently added a focus on not-for-profits.
When we invested, the company was profitable and growing very fast
having raised a small amount of money. Rosterfy had to this point been
“bootstrapped”, meaning it had taken on a small amount of outside
investment but had otherwise grown through keeping costs low and
re-investing cash received from customers. We have great admiration
for successfully bootstrapped companies and think they are likely to be
great prospects for investment. Management that goes a long way on a
small amount of money is our favourite type and a product that engages
world-scale clients at a relatively early stage of product development is
clearly fit-for-purpose and solving a real unmet need.
Since Bailador’s investment the team at Rosterfy have been busy. They
have made key new hires in the US, UK and Australia, established a new
office in Dallas, confirmed a major distribution partnership in the US and
continued to win new customers. We are delighted with their progress.
Current Investing Conditions
Profitability matters
The period of cheap, even free, money has passed and so too has
the period of super high valuation multiples for companies growing
very fast and losing a lot of money. Now and until the next bubble
occurs superior valuation multiples will be achieved by information
technology companies that are growing fast, have strong operating
margins, demonstrate operating leverage (that is, become more
profitable as they grow), fulfil a clear unmet need for customers, and
have an enduring competitive moat.
In particular sustainable profitability now matters again, and
sustainable profitability is only possible if companies are providing a
product or service that solves a real problem for customers, have clear
competitive advantage and good growth economics.
Of course all of this requires a great relationship between us and the
founders of our portfolio businesses. Founders who understand the
importance of capital efficiency and the need for a path to profitability
are crucial in successful expansion stage businesses.
This is what we have always looked for in our investee companies and
we will continue to do so.
Entry valuation matters
Even if a potential investee company has all of the attributes set out
above, this is not enough to ensure a good investment return. In addition
to the company characteristics listed above we need to ensure we
always invest at a valuation multiple (as a proxy for actual valuation) that
is appropriate.
The last two years have been challenging for our team. We have had
plenty of cash to invest and have seen some very interesting companies,
but often we have had to say no to a new investment because of the
asking valuation. We stick by the adage we have mentioned before:
“Agree in haste, repent at leisure.” We are both old enough to have
experienced the pains of both hasty agreement and leisurely repentance.
Reminding ourselves of the numbers always helps. As an example, if
we set ourselves the task of delivering a minimum 25% IRR on a new
investment (which we do) and we were to invest in a company at a
15x pre-money revenue multiple (which was actually at the low end of
the range for many of the companies we saw during the bubble) and
assume a very respectable 6x exit multiple, over a five-year period we
will need the company to grow revenue at compound 68% per annum
and raise no more capital to achieve our return target. It is unlikely that
the company would not need to raise more capital growing at such a
high rate, which increases the required compound revenue growth rate
further.
Or look at it another way. If the company grows revenue at compound
30% per annum, which is much more likely than 68%, particularly as
the company gets bigger, and again no more capital is invested (very
unlikely) and we again exit is at a 6x revenue multiple after five years,
the IRR will be 5.8%. And all of this assumes the company can become
9
Letter from the Founders (continued)
“I must single out Paul Wilson from
Bailador who showed unshakeable
conviction in the business model from
day one and was prepared to double
down on his investment a number of
times. I reached out to him often for
advice which he offered readily. It was
always insightful and full of clarity.”
Dr Asher Freilich on the sale of InstantScripts to API
Industries Limited (Wesfarmers)
earnings and cashflow positive in the five years, because a 6x exit
multiple is a pipedream if it can’t.
Investor value add matters
The Bailador team members collectively have the following experience:
senior corporate leadership, senior private equity leadership, senior
corporate finance leadership, management consulting, start-up
management, operational management, investment banking, corporate
business development, and investment analysis. This experience and
the resulting skills are top tier in the venture and growth capital investing
world in Australia and New Zealand. They happen to also be great
people to work with. This is why, in addition to making rigorously tested
investment decisions, we can lead capital raisings, sales processes
and IPOs for portfolio companies, and provide advice and support for
important business building tasks such as hiring new senior executives,
reorganising, opening international offices, establishing high-level
relationships, refining go-to-market functions, prioritising product
development and adjusting cost bases. We run a concentrated portfolio
of 8-12 investee companies largely so we can be available to investee
companies for just these purposes.
Investment and Valuation Cycles
An investment cycle is the time from first investment, through growth
and development to final realisation of the investment through a sale
to another party. An IPO or a transfer of our shares into a new vehicle,
as happened with Rezdy in FY23, does not bring the investment cycle
to an end. We expect our investment cycles to last somewhere around
6-10 years. Our permanent capital model ensures this is possible for us
in a way that it is not for private venture and growth capital funds who
are bound to deploy in the first five years and realise in the following
five years.
ANNUAL REPORT 2023
10
Letter from the Founders (continued)
The valuation cycle is the rise and fall of valuation multiples over a
period of rising enthusiasm for high growth technology investment
and the inevitable subsequent disaffection and decline in valuation.
Between February 2021 and July 2023, we realised portfolio
companies Viostream, Standard Media Index, Lendi, DocsCorp,
Instaclustr and InstantScripts. In addition we realised a small amount
of SiteMinder at their IPO. As we have pointed out in the past, the
sharp rise in multiples in 2021 and 2022 was the ideal time to sell
investments.
The graph below shows the our realisations from 30 June 2015, soon
after Bailador Technology Investments listed on the ASX, including
the small sell-downs of Straker Translations and SiteMinder. Overlaid
on the same graph is a line graph showing the revenue valuation
multiples of the Bessemer Cloud Index over the same period.
Where to from here?
The realisation of over $250m marks the end of the first cycle for
Bailador Technology Investments. As is usual the second cycle began
Our permanent capital model allows us to align our investment
cycle with the valuation cycle and that is what we have done.
BTI Realisations vs Bessemer Cloud Index
Realisations (pricing set)
Bessemer Cloud Index (BCI)
)
D
U
A
$
(
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$120m
$100m
$80m
$60m
$40m
$20m
$0m
3,000
2,500
2,000
1,500
1,000
500
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Dec-15
Jun-16 Dec-16
Jun-17 Dec-17
Jun-18 Dec-18
Jun-19 Dec-19
Jun-20 Dec-20
Jun-21 Dec-21
Jun-22 Dec-22
Jun-23
The chart above tells you two things about how we have invested your money.
1. When we saw valuations lifting in late 2019 we made a concerted effort to move into a realisation phase for the fund. We have fully
realised six investments in the three years since including Instaclustr for $118m at the peak of the cycle.
2. We have ensured that we are holding a significant amount of cash as prices return to more sustainable levels.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
11
Letter from the Founders (continued)
Team
The Bailador team goes from strength to strength. We continue to
work together as a cohesive and collaborative team collectively
taking responsibility for the ups and occasional downs in the fund.
Each portfolio company has at least two Bailador team members
across the detail and engaged with the company’s workplan.
We share quick updates on each portfolio company at a weekly
meeting, and dig in where necessary, which allows us to draw on the
experience of the full team for the benefit of all portfolio companies.
We are very pleased with the development of the team’s capabilities.
Annual Meeting
Our Annual Meeting will be held on 2 November this year. We look
forward to welcoming as many shareholders as can make it in person
and to continuing the lively and informed discussion we have come to
expect at the Meetings.
David Kirk
Chairman and Executive Director
Dated this 16th day of August 2023
Paul Wilson
Executive Director
before the first cycle ended. InstantScripts (already realised), Access
Telehealth, Mosh and Rosterfy have us off to a flying start with the
second cycle.
The second cycle starts with three very important differences to the
first.
• First, we have a very valuable base of continuing investments in
SiteMinder, Straker, Nosto and Rezdy. In all of these companies we
see considerable upside. SiteMinder in particular is a world-class
scaled software-as-a-service company performing very well with
an excellent management team. We expect significant growth in
NTA from a re-rating of SiteMinder in due course. We don’t know
when this will occur, but we have high conviction that it will occur.
• Second, we have an established capital management policy which
delivers a 4% of pre-tax NTA return to shareholders annually. At the
30 June 2023 share price, this 4% of pre-tax NTA was equivalent
to a 5.5% dividend yield and 7.3% dividend yield grossed up for
franking credits.
• Third, we have over $100m in cash to invest in growth stage
information technology companies.
Shareholder Return over the last three years is 22.9% pa after all
fees and costs, generated in what many consider to have been a
difficult environment. We expect to continue to generate strong
returns, particularly considering the above three factors, and a more
experienced team.
Where we stand today
Outstanding existing portfolio
Capital management policy delivering fully franked dividends
>$100m ready to invest
ANNUAL REPORT 2023
ANNUAL REPORT 2023
12
Operating and Financial Review
Principal Activities
Bailador Technology Investments Limited (BTI)(Bailador) invests in
information technology businesses in Australia and New Zealand
that are seeking growth capital. The target businesses typically have
an enterprise valuation between $10 million and $200 million. 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.
The performance of the Bailador portfolio, measured as the change
in the Net Tangible Assets (NTA) per share between 1 July 2022 and 30
June 2023 (post-tax, after all fees), was an increase of 2.6% for the year.
This return was made up of a gain in the post-tax portfolio (investment
gains less expenses) of 4.2 cents per share, after crediting the payment
of 10.9 cents per share fully-franked dividends. Bailador paid $30.4m
in income tax in February 2023, following the successful realisations of
Instaclustr and SMI in 2022. The large tax payment resulted in a decline
in NTA pre-tax YoY.
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. Bailador’s regular fully franked
dividends provide investors with an element of de-risking and bringing
forward of their return. However, the primary value driver of the
business remains to identify, buy and hold investments in a number
of private internet-related 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.
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. Contractual
downside risk protections are negotiated where appropriate to do so.
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 2023
was $5,415,000 (2022 $33,969,000), after providing for income tax.
Combined revenue growth of the underlying portfolio companies
(portfolio weighted) for the financial year ended 30 June 2023 was
67%. Further information on individual investee company growth can
be found in the portfolio operating reports.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Private portfolio investments performed very well in the year delivering
an IRR of 36.3% throughout the course of FY23. All of the changes
in the value of private investments throughout FY23 were a result of
independent third-party transactions, including InstantScripts which
has been subsequently realised for cash in July 2023. The private
investments contributed an increase of 8% or 12.6 cents in NTA per
share post tax.
Bailador’s two publicly listed investments SiteMinder and Straker
both declined in value during the year. Both are displaying strong
operational performance.
Bailador held a relatively high cash balance throughout FY23, which
presented somewhat of a drag on overall returns. The Company
continues to maintain a disciplined approach to new investments and
note private technology company valuations are returning to more
sustainable levels.
Realisations
Rezdy
In May 2023 Bailador announced that Rezdy had entered into an
agreement to be acquired by an entity controlled by a US private
equity firm. That sale was completed in June 2023. As part of the sale
transaction, Bailador had the opportunity to roll our existing investment
into scrip in the new entity and elected to do so. There was a 46%
uplift to Bailador’s investment in Rezdy as part of the transaction.
InstantScripts
In June InstantScripts announced that it had entered an agreement
to be acquired by API Industries Limited, a wholly owned subsidiary
of Wesfarmers Limited. The transaction completed in July 2023 and
Bailador received $52m in proceeds for its investment in InstantScripts.
As the transaction was not completed until July, InstantScripts remains
on the list of private portfolio companies for FY23 reporting.
Investments
InstantScripts
Bailador made follow-on investments in InstantScripts of $15m (July
2022 and March 2023).
13
Operating and Financial Review (continued)
Review of Operations (continued)
Access Telehealth
In January 2023 Bailador made a follow-on investment in Access
Telehealth of $3.1m.
Rezdy
On completion of the sale of Rezdy in June 2023, as mentioned above,
Bailador elected to roll its investment into the new US based entity.
Bailador also made an additional $5m follow-on investment in new-
Rezdy following completion of the sale.
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 2023.
• SiteMinder’s share price at 30 June 2023 was $2.92 (June 2022 $3.51).
The decline of 16.8% throughout the year reduced the carrying value
of SiteMinder by $9.9m to $48.8m.
• At 30 June 2023 the Straker Translations share price was $0.67 (2022
$1.02) resulting in a decline on investment for the financial year of
$3.2m (34.3%).
Revaluations
Valuation of Investments
The following investments were revalued under BTI’s revaluation policy
of marking the value of the investment to the price implied by the most
recent independent third-party transaction.
• Throughout the year there were a number of third-party transactions
involving InstantScripts, including InstantScripts entering into an
agreement in June 2023 to be acquired. Throughout FY23 Bailador
increased the value of its investment in InstantScripts with those
third-party transactions by a total of $20.5m.
• Access Telehealth was written up by $3.0m (31.6%) in line with the
third-party capital raise transaction the business completed in
January 2023.
• Bailador increased the valuation of its investment in Rezdy in May
2023 by $7.1m (46.3%) following the announcement of Rezdy’s sale
transaction.
• Brosa was written down 100% in October 2022 due to Bailador’s
concerns about Brosa’s trading performance. In December 2022
Brosa was placed into administration.
The Board has reviewed the value of the investment portfolio and
the Net Tangible Assets of BTI as at 30 June 2023. 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.
ANNUAL REPORT 2023
“We have incredibly smart and
dedicated teams at our portfolio
companies. They really are a great
group of people to work with. This
year especially, there have been
many late nights and long calls to
get transactions across the line,
but we always get there with good
humour – and still looking ahead
to where we want to go next.”
Bevin Shields,
Partner & Head of Investor
Relations at Bailador
14
Operating and Financial Review (continued)
Review of Operations (continued)
“The tech ecosystem in
Australia is going from
strength to strength. This is
creating lots of interesting
opportunities for Bailador
to invest in and support
great founding teams
scaling their high-growth
businesses globally.”
James Johnstone,
Partner at Bailador
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
15
Operating and Financial Review (continued)
Review of Operations (continued)
Operating Reports on Portfolio Companies
InstantScripts
InstantScripts is a digital healthcare platform that enables consumers
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 and a further
$9.7m during FY2022. In FY2023 BTI increased its investment in
InstantScripts through follow-on investments of $5m in July 2022 and
$10m in March 2023, taking its total cash investment to $30.1m.
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 primary healthcare services.
The platform’s express prescription service enables consumers
to access doctor-approved routine prescription medication in
minutes. 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 half 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 spent FY2023 continuing to invest in brand and
marketing activities along with developing new product offerings
such as chronic condition management and rapid doctor
consultations. The considered investment in brand and marketing,
along with repeat customer usage, saw the business achieve 1m+
annualised patient interactions and 100%+ YoY revenue growth.
This strong growth was also achieved while the business delivered
profitability.
In June 2023 InstantScripts signed an agreement to be acquired
by Wesfarmers Ltd for $135m plus excess cash held on the balance
sheet. This purchase price implied a $52.1m valuation for BTI’s stake.
Wesfarmers Ltd completed its acquisition of InstantScripts on 3 July
2023 upon which BTI’s received its cash proceeds. BTI’s investment in
InstantScripts delivered cash proceeds of $52.1m and an internal rate
of return (IRR) of 62%.
BTI has valued its investment in InstantScripts at $52.1m at June 2023
which reflects Wesfarmers Ltd’s third-party valuation.
Valuation 30 June 2023:
Valuation at 30 June 2022:
Investment since 30 June 2022:
$52.1m
$16.6m
$15.0m
Basis for valuation:
Securities held:
Third-party transaction
Preference and ordinary shares
ANNUAL REPORT 2023
16
Operating and Financial Review (continued)
Review of Operations (continued)
SiteMinder
SiteMinder is the world’s leading commerce platform for
accommodation providers serving more than 39k properties of
all sizes in over 150 countries. Its innovative online platform helps
accommodation providers optimise revenue and profitability by
equipping them with tools that help broaden distribution, generate
insights on their performance, and eliminate costly manual
processes. During FY23, SiteMinder processed more than 100m hotel
bookings valued in excess of A$60b, representing an operational scale
unmatched by its direct competitors.
SiteMinder continued to deliver strong financial results with revenues
growing 31% or 27% year-on-year on a constant currency organic
basis (cc,organic) to reach $151.4m in FY2023. The business grew
its annualised revenue run-rate (ARR) by 24% (cc,organic) to exit
FY2023 at $173.1m. The performance was driven by the acceleration
in subscriber growth, which benefited from investments made in the
business’ go-to-market capabilities. This was complemented by the
moderating but still strong growth in transaction revenues as the
business cycled the abnormally strong Northern Hemisphere summer
travel season last year.
The company continues to execute on its strategy of growing its
customer base and maximising the value of its customers. This
strategy is designed to concurrently deliver sustained high growth
and improving unit economics, with these desired outcomes starting
to materialise during FY2023. SiteMinder added 4.1k subscribers
during FY23 compared to 2.3k in FY22, and the number of transaction
products taken-up by its subscriber base increased by 53% year-
on-year to 19.9k. The acceleration in activity, in-tandem with a
cost management program, helped to almost halve the quarterly
underlying free cash out-flow from -$10.1m at the start of FY23 to
-$5.3m in the last quarter.
As part of its efforts to deliver even more value to its subscribers,
SiteMinder completed the acquisition of GuestJoy and announced
its Smart Platform strategy during FY2023. Together, these initiatives
are designed to help hoteliers optimise the revenue and profit they
generate at each stage of a guest’s journey. GuestJoy is designed to
increase direct bookings and upsell opportunities through automated
guest messaging, while the Smart Platform strategy looks to leverage
SiteMinder’s rich proprietary data assets and deliver intelligent tools
that automate and optimise decisions on critical commercial matters
such as room rates and distribution. These capabilities represent
quantum leap changes in how those functions are currently managed
by many independent hoteliers, and will help accelerate SiteMinder’s
industry leadership and add profitable growth levers to complement
its already strong outlook.
SiteMinder continues to target organic revenue growth of 30% in
the medium term. The Company expects to be underlying EBITDA
profitable and underlying free cash flow positive for H2FY24.
SiteMinder is well capitalised to achieve its strategic initiatives with
$83.6m of liquidity at the end of FY2023. This consists of $51.3m of
cash and cash equivalents, $2.1m of term deposits, and $30.2m of
undrawn debt facilities.
As a publicly listed company, the valuation of BTI’s investment in
SiteMinder is determined by the closing share price for the period. As
of 30 June 2023, SiteMinder’s share price was $2.92 which values BTI’s
investment at $48.8m.
Valuation 30 June 2023:
Valuation at 30 June 2022:
Realisation since 30 June 2022:
Basis for valuation:
Securities held:
$48.8m
$58.7m
$nil
Mark to market
ASX:SDR
16,711,400 ordinary shares
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
17
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 4,000 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 travel agencies in over 130 countries.
Rezdy’s performance in the financial year to 30 June 2023 (FY23) was
strong. Both gross booking value (GBV) and revenue reached new
record highs during the period, with GBV up 30% and revenue up 41%
on FY22. The stronger revenue growth was driven by a combination
of new customers acquired, predominately in North America
and Australia, as well as the successful transition of all remaining
customers to new pricing plans in FY22. The new pricing plans better
align the interests of the business and customers whilst delivering
a higher take rate on booking volumes transacted through Rezdy’s
platform.
Rezdy continued to execute on its B2B marketplace strategy. During
the period Management were successful in securing a number of
enterprise level agreements and strategic partnerships across both
supply and demand side channels. Rezdy is well positioned for
continued growth as tour operators 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 May 2023, the shareholders of Rezdy entered into a binding
agreement to sell 100% of shares held in Rezdy to a highly regarded
US private equity fund. Bailador elected to roll 100% of its investment
in Rezdy into the Buyer’s acquisition vehicle (“TopCo”) and invested
an additional $2.5 million in TopCo equity as part of the transaction.
Bailador has also been invited to join the Board of TopCo alongside
the Buyer.
We are excited about the new chapter of our investment in Rezdy. The
US PE Fund shares our enthusiasm for Rezdy and believe the business
has many of the key characteristics required to dominate the sector.
The fragmented nature of the tours and activities sector provides a
big opportunity for a business that can get the technology, product
fit and complex industry relationship management right. New capital
will be invested in accelerated customer and revenue acquisition
in international markets. We will sit on the board of the new entity
and look forward to keeping you updated on new-Rezdy’s progress,
including an as yet to be announced new trading name.
In FY23, BTI increased its investment in Rezdy by $5.0m as part of
the transaction with the US Private Equity Fund. The total value of
Bailador’s investment at close is $24.9m, which translates to a 46%
valuation uplift and an effective IRR of 21%. Despite challenging
macroeconomic conditions, the growth prospects for the business in
FY24 remain strong as demand for travel remains high.
Valuation 30 June 2023:
Valuation 30 June 2022:
Investment since 30 June 2022:
Basis for valuation:
Securities held:
$24.9m
$12.8m
$5.0m
Price of third-party transaction
Convertible preference shares,
ordinary shares
ANNUAL REPORT 2023
18
Operating and Financial Review (continued)
Review of Operations (continued)
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.
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.
Bailador invested $12.5m in Access Telehealth in December 2021
alongside other sophisticated investors and existing shareholders. In
December 2022 BTI invested an additional $3.1m in Access Telehealth
taking BTI’s total investment to $15.6m. The funds raised by the
company are being used to further its growth plans and achieve
profitability.
During FY2023 the business spent considerable time refining its
revenue model, putting in place the right operating procedures
and delivering software platform enhancements which will act
as the foundations for the business’ future growth plans. Access
Telehealth now has over 250 team members consisting of executives,
management, doctors and nurses who deliver over 13,000
consultations per month, and work alongside aged care operators
right across Australia.
The company is experiencing very strong growth. In the last financial
year revenue has expanded rapidly as the business pivoted its
revenue model in its Aged Care vertical. These strong results have
been achieved with little to no marketing effort such is the strong
product-market fit the business has found. With less than 2% market
share of its addressable market Access Telehealth has a large growth
runway ahead of it and a community who will benefit from its
superior care program.
BTI’s investment now sits at the top of Access Telehealth’s capital
structure. In December 2022 BTI increased the carrying value of
Access Telehealth back to its original investment cost and in line with
the latest third party valuation.
Access Telehealth financial performance has been very strong
throughout FY2023 and the business is on track to be cash flow
profitable. 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 2023:
Valuation 30 June 2022:
Investment since 30 June 2022:
$15.6m
$9.5m
$3.1m
Basis for valuation:
Securities held:
Third-party transaction
Preference and ordinary shares
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
19
Operating and Financial Review (continued)
Review of Operations (continued)
Rosterfy
In April 2023, Bailador invested $9.8m in volunteer management
platform Rosterfy, alongside other sophisticated investors.
Rosterfy provides volunteer and workforce management software to
Not-for-Profit (NFP) organisations, government volunteering bodies
and mass-scale events which enables communities to connect to
events and causes they are passionate about.
Their SaaS platform allows organisations to recruit, screen, train,
and schedule their volunteer community which replaces manual
processes with automations to better engage and retain their
workforce.
Rosterfy is an Australian scale-up company whose customers use
their platform to manage over 1.5m volunteers in 20+ countries.
The business is growing rapidly having increased recurring revenue
more than 100% year-on-year in 2022 as the NFP sector embraces
digitisation.
In addition to enterprise Not-for-Profit and government organisations,
Rosterfy’s software has been pivotal to managing large volunteer
workforces at major global events, including the FIFA World Cup Qatar
2022TM, 2023 Superbowl in Arizona, and the Commonwealth Games
2022.
Rosterfy’s software is also used by NFPs such as Lifeline Australia
and the St Vincent de Paul Society to better recruit and manage their
volunteer workforce and better enable those organisations to achieve
their missions. In the UK, the British Heart Foundation relies on
Rosterfy to engage and manage their 38,000 volunteers across 730+
charity stores and fundraising events each year.
Rosterfy is a high-quality business with all of the positive qualities we
look for in a new investment:
• Founded by a mission-driven and passionate team that intimately
understands the customer problem they are solving having lived
their customers’ problem while previously running an event
management business
• Developed a market-leading product which is globally relevant
and solving a mission-critical pain point for NFP organisations –
recruiting and retaining volunteers
• Addressing a large market that is undergoing a wave of digitisation
– in the US, UK and Australia there are over 2m charitable
organisations that receive $750bn in donations, and 95m people
spend 7.6bn hours each year volunteering
• Exhibits highly compelling unit economics, strong capital efficiency
and is growing recurring revenue at over 100% year-on-year
• Has an attractive growth runway across its existing customer base
and new international markets
The new funding will be used by Rosterfy to further expand its team,
particularly in its fast growing US market, double down on a strong
pipeline of new product development initiatives, and invest in
increased marketing activity in Australia and overseas.
Valuation 30 June 2023:
Investment since 30 June 2022:
$9.8m
$9.8m
Basis for valuation:
Securities held:
Price of third-party transaction
Preference shares
ANNUAL REPORT 2023
20
Operating and Financial Review (continued)
Review of Operations (continued)
Nosto
Nosto is a leading e-commerce platform that enables online brands
to deliver authentic, relevant, and personalised experiences at
every touchpoint, across every device. An AI-Powered Commerce
Experience Platform (CXP) designed for ease of use, Nosto
empowers brands to build, launch, and optimise compelling digital
experiences without the need for dedicated IT resources or a lengthy
implementation process.
In February 2023, Nosto announced the launch of its newest
technology and latest product in its experience platform for online
brands: ecommerce site search. Following the acquisitions of search
technologies Findologic and SearchNode in 2022, Nosto’s new search
product leverages more than a decade of technical ecommerce
search experience, ensuring that Nosto’s CXP offers the most relevant
search results on the market.
Leading brands in over 100 countries use Nosto to grow their business
and delight their customers. Global brands such as Muji, Paul Smith,
Pangaia, Dermalogica, FIGS, SikSilk and Todd Synder trust Nosto
to deliver relevant and authentic commerce experiences. Nosto
supports its clients from its offices in New York, Los Angeles, London,
Paris, Berlin, Stockholm, Salzburg, Sydney, and Helsinki.
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.
In December 2022, Nosto announced that it had acquired Findologic,
an AI-powered ecommerce search leader in Germany, Austria and
Switzerland. Findologic has 50 employees with offices in Austria,
Germany and the UK. This was the third acquisition for Nosto in 18
month, after Stackla (who BTI invested in in 2015) and SearchNode,
and part of its strategy to become the technology of choice for
ecommerce site search and cement its position as the leading CXP for
online brands globally.
Also in February 2023, Nosto announced that it closed a US$16m
funding round led by Helsinki-based Mandatum Asset Management
Growth Equity’s (MAM GE) team. The capital will be used to scale
Nosto’s new personalised site search solution globally, accelerating its
mission to make every online impression relevant.
Bailador reviewed the valuation implied by the MAM GE funding
round, and it was in line with our current carrying value of $9.2m.
Accordingly, BTI held Nosto’s carrying value constant at $9.2m, but
noted that was now a third party valuation.
Valuation 30 June 2023:
Valuation 30 June 2022:
Basis for valuation:
Securities held:
$9.2m
$9.2m
Price of third-party transaction
Ordinary shares
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
21
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
stigmatised men’s health conditions to be treated discreetly 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.
Mosh’s core treatment plans are for hair loss, sexual health and skin
care. During 2023 the team launched to market revamped treatment
plans for both mental health and weight loss management. Mosh’s
new weight loss management plan offers consumers an option of
dietitian programs, weight loss shakes and weight loss medication to
provide a holistic weight loss management solution. This new vertical
has proved very popular with consumers.
Over the course of 2023 Mosh has focussed on altering the way it
invests its marketing spend with an increased focus on performance
marketing as opposed to large scale brand marketing. Alongside
this focus management spent 2023 optimising the business and its
cost base as it moves to profitability. The founders have also been
focussed on building out the team across the entire organisation and
added a well credential CFO which has further bolstered the already
strong executive bench.
Mosh is growing rapidly with over 75,000 Australians having used the
service 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 BTI has valued its investment in Mosh at $7.5m at June
2023 which is in line with the third-party investment cost.
Valuation 30 June 2023:
Valuation 30 June 2022:
Basis for valuation:
Securities held:
$7.5m
$7.5m
Third-party transaction
Convertible note
ANNUAL REPORT 2023
22
Operating and Financial Review (continued)
Review of Operations (continued)
Straker Translations
Straker is a world-leading LanguageCloud platform that incorporates
a comprehensive range of features, translation software, and
translation experts, which enable customers to achieve a seamless
translation process from start to finish.
At the core of Straker’s LanguageCloud platform is an AI-enabled
machine translation engine which is then supplemented with an
expert human-in-the-loop overlay. The platform’s integrations, such
as Slack and Microsoft Teams, enable businesses to effortlessly
access Straker’s translation solution by integrating Straker into their
daily workflows. This AI-driven technology platform allows Straker to
achieve high volume translations with superior accuracy and deliver
industry leading gross margins.
In FY2023 management focussed on integrating the acquisitions of
IDEST and Lingotek, which are now both complete. The completion
of these integrations delivered ~NZ$5m in annual operating costs
savings which delivered improved cash flow and profitability in
FY2023. The completion of the IDEST and Lingotek acquisitions
allowed Straker’s R&D teams to direct more emphasis towards
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
new product development which has materialised in the launch
of Straker’s LanguageCloud platform, including integrations to
workplace productivity apps such as Slack and Microsoft Teams.
Straker has also capitalised on the rapid advancement of AI
technologies and integrated functionality into its LanguageCloud
platform which delivers increased translation automation.
The financial year ended 31 March 2023 (FY2023) was a solid year
for Straker in the face of a difficult macroeconomic environment,
particularly in Europe and North America. The Company delivered
NZ$59.4m of revenue or a 6% increase over the prior year. The
business also delivered on its goal of increasing margins, with gross
margin increasing from 54.3% to 57% for FY2023. The Company also
recorded an adjusted EBITDA profit of NZ$1.4m, up from NZ$0.2m in
the prior year.
The Company remains well funded and has seen a strong rise in
operating cashflows to achieve positive free cash flows of NZ$1
million in H2FY2023. The Company ended its financial year with cash
and cash equivalents at NZ$12.5m and no debt.
The prospects for Straker remain attractive as it leverages its
AI-enabled LanguageCloud platform, the increasing acceptance
and application of AI by enterprises, and a proven track record of
servicing blue-chip customers like IBM. With enterprises embracing
AI technology in a post Chat-GPT world the business is prioritising
organic over acquisitive growth in FY2023. Delivering sustained
revenue growth and increasing operating leverage remains a focus for
management in FY24.
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 2023, Straker’s share price was $0.67,
representing a 34% decrease over 30 June 2022.
Valuation 30 June 2023:
Valuation 30 June 2022:
Realisation/investment since 30
June 2022:
Basis for valuation:
Securities held:
$6.1m
$9.3m
$nil
Mark to market
ASX:STG
9,160,354 ordinary shares
23
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
On 3 July 2023 the sale of InstantScripts to API Industries was
completed and Bailador received $52m in cash proceeds for the
realisation of its investment. Other than the completion of the sale
of 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. Private technology trading multiples
continue to return to sustainable levels and Bailador expects to make
investments in the year ahead.
Likely developments, future prospects and the business strategies
and operations of the portfolio companies and the economic entity
and the expected results of those operations have not been detailed
in this report as the directors believe the inclusion of such information
would be likely to result in unreasonable prejudice to the Company.
Business Risks
The 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 internet-related
Businesses in which the Company invests including:
• The business model of a particular investee company may be
rendered obsolete over time by competition or new technology;
• Some investee companies may not perform to the level expected
by the Manager and could fail to implement proposed business
expansion and/or product development, reduce in size or be
wound up;
• Some investee companies may fail to acquire new funding, whether
by way of debt funding or third-party equity funding;
• There is no guarantee of appropriate or timely exit opportunities for
the Company, and accordingly the timeframe for the realisation of
returns on investments may be longer than expected.
The Company uses a combination of strategies to minimise business
risks, including structural and contractual protections, a clear
investment strategy and representation on portfolio company boards.
The following exposures to business risk may affect the Company’s
ability to deliver expected returns:
Environmental Regulation
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.
ANNUAL REPORT 2023
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Corporate
Sustainability and
Responsibility
ANNUAL REPORT 2023
26
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 31 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
Partners
Non-Partners
Female
0
Female
2
Male
4
Total Staff
Interns
Female
2
Female
3
Male
6.6
Male
2.6
Male
0
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.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
27
Sustainability Snapshot (continued)
People and place (continued)
Bailador intern programme
Bailador office
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.
Pictured: (l-r) Alexander Lenartowicz, Investment Associate at
Bailador, and Liana Isaias-White. Liana joined Bailador’s intern
programme from May to June 2023. Liana did a great presentation
for our team on the ChatGPT technology landscape.
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-Star Green Star (V3) 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 bus
and 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.
Bailador has a flexible approach to working but 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 regular strategy days and a
team offsite to come together as a group and focus our energies.
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 and
by communicating regularly with our team about their needs.
Bailador is great at hiring great people. Excluding interns, our average
retention period across our current team is 7.4 years.
ANNUAL REPORT 2023
28
Sustainability Snapshot (continued)
Giving Back
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 11th consecutive year and
assisted Stepping Stone House to raise
funds for a very good cause.
The Smith Family Challenge
The Smith Family does terrific work in helping disadvantaged kids get an education. In FY23 Bailador again supported The Smith Family
Challenge, our fifth consecutive year supporting the event.
Donating our time
Bailador encourages our team to give back and provides time off for team members doing charitable work. Our team members are widely
invovled in governance roles and giving of their time in supporting community activities and not-for-profit enterprises.
Our team gives their time to valuable causes such as Sydney Festival, food rescue organisations, and Royal Lifesaving Australia.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
29
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
4.89 (FY22 3.69) (tonnes CO2e) fully offset
Bailador has purchased carbon credits to
fully offset our Scope 2 carbon emissions.
4.02 (FY22 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.
In FY23 Bailador staff returned to working from the office, and both international and domestic business travel resumed with the opening of
borders. As such, Bailador’s emissions increased from FY22. Despite purchasing credits to offset our emissions, Bailador’s goal is to reduce our
emissions use wherever possible. 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.
ANNUAL REPORT 2023
30
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
P The social impact of investments is a consideration in Bailador’s investment decisions. Over
the preceding two years Bailador has invested in digital health businesses (InstantScripts,
Access Telehealth, Mosh) and a software business that helps charities manage their volunteer
networks (Rosterfy)
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.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
31
Corporate Governance Statement
Bailador’s Corporate Governance
Arrangements
The objective of the Board of Bailador Technology Investments Limited
is to create and deliver long-term shareholder value through a range of
diversified investments.
The Board considers there to be a unambiguous and positive
relationship between the creation and delivery of long-term shareholder
value and high-quality corporate governance. Accordingly, in pursuing
its objective, the Board has committed to corporate governance
arrangements that strive to foster the values of integrity, respect, trust
and openness among and between Board members, management and
investee companies.
Bailador Technology Investments Limited and its subsidiaries operate
as a single economic entity with a unified Board. As such, the Board’s
corporate governance arrangements apply to all entities within the
Company.
Bailador Technology Investments Limited is listed on the Australian
Securities Exchange (ASX). Accordingly, unless stated otherwise in this
document, the Board’s corporate governance arrangements comply
with the recommendations of the ASX Corporate Governance Council
(including the 4th edition amendments) as well as current standards of
best practice for the entire financial year ended 30 June 2023 and have
been approved by the Board.
Principle 1: Foundations for
Management and Oversight
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 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 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 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 Company Secretary of the Company is accountable to the Board,
through the Chair, on all matters to do with the proper functioning of
the Board. All Board members communicate directly with the Company
Secretary.
The Company Secretary through the Chair is responsible for ensuring:
• All members of the Board receive copies of all market announcements
on or prior to release
• Copies of any Company presentations with new substantive
information are released to the market ahead of any presentation
being given.
Composition and Diversity
The Board considers the current board composition reflects an
appropriate balance between executive and non-executive directors
that promotes both the generation of shareholder value and effective
governance.
The Board also considers that the current board composition reflects
an appropriate balance of skills, expertise and experience to achieve its
objective of creating and delivering long-term shareholder value. The
diverse range of investments the company is involved in necessitates
the Board having a correspondingly diverse range of skills, experience
and expertise. As BTI invests in internet-related businesses, directors are
required to have a strong working knowledge of this sector. In addition,
directors need to have a strong understanding of a range of other
business requirements, including finance and contract law. To this end,
the Board considers its current composition to be appropriate and has
in place an active program for assessing whether individual directors
and the Board as a whole have the skills and knowledge necessary
to discharge their responsibilities in accordance with the Board’s
governance arrangements. Details of the skills, expertise and experience
of each director are provided in the Directors’ Report.
For further information on diversity composition, refer to the Company’s
skills matrix below.
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.
ANNUAL REPORT 2023
32
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
P
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 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
Principle 2: Structure of the Board
Nomination and Remuneration Committee
To facilitate structuring the Board to be effective and add value, the
Board has established the Nomination and Remuneration Committee.
The Nomination and Remuneration Committee 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.
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.
Further remuneration policy for non-executive/independent directors is
provided at www.bailador.com.au.
There are no schemes for retirement benefits for directors.
The Nomination and Remuneration Committee charter can be found at
www.bailador.com.au.
Independence
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
33
Corporate Governance Statement (continued)
A list of the Board’s directors for the year ended 30 June 2023, along
with their biographical details is provided in the Directors’ Report.
An independent director is a non-executive director who is not a
member of management and who is free of any business or other
relationship that could materially interfere with, or could reasonably
be perceived to materially interfere with, the independent exercise of
their judgement. For a director to be considered independent, they
must meet all of the following materiality thresholds:
• Not hold, either directly or indirectly through a related person or
entity, more than 5% of the company’s outstanding shares;
• Not benefit, either directly or through a related person or entity,
from any sales to or purchases from the company or any of its
related entities, and
• Derive no income, either directly or indirectly through a related
person or entity, from a contract with the company or any of its
related entities.
The length of service of each director is disclosed with each director’s
profile in the Director’s report.
Professional Development
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. A copy of Bailador’s Board skills matrix can be found on
Page 32.
Principle 3: 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.
ANNUAL REPORT 2023
34
Corporate Governance Statement (continued)
Directors are required to be independent in judgement 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 Technology Investments Limited Securities Trading
Policy is set by the Board. The policy restricts directors from acting
on material information until it has been released to the market
and adequate time has been given for this to be reflected in the
company’s share price. A detailed description of the Board’s policy
regarding directors trading in Bailador Technology Investments
Limited shares is available from the Board’s Code of Conduct and
Securities Trading Policy, both of which are available at www.
bailador.com.au.
Directors are prohibited from trading for short term speculative gain.
Principle 4: Integrity of Reporting
Audit and Risk Committee
To facilitate safeguarding the integrity of corporate reports, the
Board has established the Audit and Risk Committee. The Audit
and Risk Committee 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.
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
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
external audit engagement partners, is available from the company’s
website www.bailador.com.au.
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 names and qualifications of the Audit and Risk Committee
members and their attendance at meetings of the Committee are
included in the Directors’ Report.
A copy of the Company’s Audit and Risk Committee charter can be
found at www.bailador.com.au.
Declaration by the Manager
Before approval of the Company’s financial statements for a financial
period, the Board receives a declaration from the Manager that in
their opinion, the financial records of the entity have been properly
maintained and that the financial statements comply with the
appropriate accounting standards and give a true and fair view of the
financial position and performance of the entity and that the opinion
has been formed on the basis of a sound system of risk management
and internal control which is operating effectively.
Other Periodic Reporting
The Board has delegated to the Manager, Bailador Investment
Management, all authorities appropriate and necessary to issue
periodic corporate reports to the market that are not audited or
reviewed by an external auditor. Through regular reporting to the
Board, the Manager provides on-going confidence to the board of the
integrity of announcements to market. These processes include:
• A clear line of authority for release of announcements, including
approval by one executive director prior to release;
• Cross checking calculations across multiple qualified staff and
checking to source documentation.
Principle 5: Balanced and Timely
Disclosure
The Board is accountable to the shareholders for creating and
delivering shareholder value through governance of the Company’s
business activities. The discharge of these responsibilities is facilitated
by the Board delivering to shareholders timely and balanced
disclosures about the Company’s performance.
As a part of its corporate governance arrangements, the Board
has established a strategy for engaging and communicating with
shareholders that includes:
• Monthly updates to the ASX and the Company website with the
Company’s net asset backing;
35
Corporate Governance Statement (continued)
• Presentations to investors and media briefings, which are also
placed on the Company website; and
Principle 7: Risk Management
• Actively encouraging shareholders to attend and participate in the
Company’s Annual General Meeting.
The Board considers identification and management of key risks
associated with the business as vital to creating and delivering long-
term shareholder value.
The Company maintains an “ASX First” communication and ensures
new and substantive presentations are released to the ASX prior to the
announcement being circulated or presented.
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;
A detailed description of the Board’s communication policy is provided
at www.bailador.com.au.
The Board receives copies of all market announcements either before
announcement or promptly thereafter.
Principle 6: Respecting Shareholders
The Board is first and foremost accountable to provide value to its
shareholders through delivery of timely and balanced disclosures.
Shareholders are entitled to vote on significant matters impacting
on the business, which include the election and remuneration of
directors, changes to the constitution and receipt of annual and
interim financial statements. All voting matters are determined via
a poll. The Board actively encourages shareholders to attend and
participate in the Annual General Meetings of Bailador Technology
Investments Limited, to lodge questions to be responded to by the
Board and/or the Manager, and to appoint proxies.
The Company ensures its statutory auditor attends the Annual General
Meeting and is available to answer questions from shareholders
relevant to the audit.
The Board ensures security holders are provided with all material
information in its possession relevant to a decision on whether or not
to elect or re-elect a director.
• General interruption to the Australian venture capital sector;
• The ability of the Manager to continue to manage the portfolio,
particularly retention of the Manager’s key management personnel;
• Minority holdings risk where other larger investors in our portfolio
companies may make decisions the Company disagrees with; and
• Other operational disruptions within portfolio companies due to
changes in competition or technology, key management personnel,
cash-flow and other general operational matters.
The 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.
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.
A summary of the Board’s risk management policy is available at www.
bailador.com.au.
Other Information
The Board encourages shareholders to receive information
electronically wherever possible.
Further information relating to the Company’s corporate governance
practices and is at www.bailador.com.au.
ANNUAL REPORT 2023
36
Directors’ Report
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Your directors submit the financial report of the Company for the
financial year ended 30 June 2023. The information in the preceding
operating and financial review forms part of this Directors’ Report for
the year ended 30 June 2023 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 3.2 cents per share amounting to $4.6m
has been declared by the Board on 16 August 2023. The final dividend
will be paid on 7 September 2023 to shareholders on record as at 22
August 2023.
The final dividend announced on 16 August 2023 represents a regular
dividend of 2% of company NTA pre-tax which is in line with the
company target announced to shareholders on 1 June 2022.
The Company’s dividend reinvestment plan (DRP) announced on 13
February 2020 will apply to the dividend announced on 16 August
2023.
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.
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.
37
Directors’ Report (continued)
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
2023 has been received and can be found on page 41 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 (including Independence
Standards)(the Code) set by the Accounting Professional & 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 2023:
Taxation Services
Rounding of Amounts
$
$11,660
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.
Share Capital
There are no unissued ordinary shares of the Company under
options as at 30 June 2023.
No shares or options are issued to directors of Bailador Technology
Investments Limited as remuneration.
ANNUAL REPORT 2023
38
Directors’ Report (continued)
Information Relating to Directors and Company Secretary
Refer to Pages 6 and 7 for information on directors.
Helen Foley
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, 8 meetings of directors and 4 committee meetings were held. Attendances by each director during the period was as follows:
Directors’ Meetings
Committee Meetings
Committee Meetings
Audit & Risk
Nomination & 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
8
8
8
8
8
8
8
8
8
8
3
3
3
3
3
3
3
3
3
3
1
1
1
1
1
1
1
1
1
1
Remuneration Report (Audited)
Remuneration Policy
Bailador Technology Investments Limited does not employee any personnel. The Board has delegated management of the investment portfolio
to the Manager, Bailador Investment Management Pty Ltd.
David Kirk and Paul Wilson are directors of Bailador Technology Investments Limited and are also directors and owners of Bailador Investment
Management Pty Ltd.
The Manager is responsible for managing the Investment Portfolio in accordance with the Company’s investment strategy. The Manager was
appointed in 2014 for an initial term of 10 years and in accordance with the agreement’s terms will automatically extend after that term until
either the agreement is terminated or a new agreement is agreed.
The Board has recognised the Manager as Key Management Personnel (KMP) given it has the authority and responsibility for planning, directing
and controlling the activities of the Company. At least one of David Kirk or Paul Wilson are required to continue to be directors of the Manager
and must continue to be actively involved in the management of the investment portfolio during the initial term of the agreement.
The Board has agreed that the independent directors, Andrew Bullock, Jolanta Masojada and Brodie Arnhold, are to receive $70,000 per annum.
The Executive Directors do not receive any remuneration.
Bailador Technology Investments Limited pays a management fee of 1.75% per annum (plus GST) of the portfolio NAV. Fees are calculated and
paid at the beginning of each quarter in advance. The management fee for a quarter is then adjusted and paid at the end of the quarter based on
increases or decreases in the NAV. All the costs of the Manager, including staff, rent, training, and other costs are paid for from this fee.
In addition, the Manager is entitled to receive a performance fee equal to 17.5% per annum (plus GST) of the investment portfolio’s gain each
year subject to outperforming a hurdle of 8.0% per annum (compounded). The performance fee is only payable from realised gains.
During the period the Company did not exceed the performance fee hurdle and there is no performance fee payable to the Manager for FY23.
The Company has made a provision for future performance fees payable based on the growth in applicable net tangible assets throughout the
financial year.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
For further information on performance fee calculation please see the Company’s prospectus.
Amounts paid or payable to the Manager relating to the year ended 30 June 2023 are as follows:
Base management fee
Reimbursement of portfolio management expenses
Key Management Personnel (KMP) Remuneration
39
Directors’ Report (continued)
Remuneration Report (continued)
$4,353,389
$301,932
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
–
–
70,000
70,000
70,000
14,000
224,000
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 2022
shares acquired
shares disposed
30 June 2023
9,257,356
4,326,914
432,319
146,324
109,897
1,016,984
612,747
6,389
51,848
8,898
14,272,810
1,696,866
–
–
–
–
–
–
10,274,340
4,939,661
438,708
198,172
118,795
15,969,676
KMP Option Holdings
There were no options on issue to KMP at any point during the financial year.
ANNUAL REPORT 2023
40
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. Paul Wilson earned $131,667 from SiteMinder,
and $29,167 from Straker Translations and $12,500 from InstantScripts. David Kirk did not receive any director’s fees during the period.
The Manager received a fee from Rezdy of $300,000 for operating as the seller’s agent on the sale of Rezdy.
The Manager received $40,833 from Straker Translations for director’s fees relating to James Johnstone’s role on the Straker Translations board.
There were no other transactions conducted between the Company and related parties, (other than those disclosed above with the Manager),
relating to equity, compensation and loans, that were conducted other than in accordance with normal supplier relationships on terms no more
favourable than those reasonably expected under arm’s length dealings with unrelated persons.
This Directors’ Report, incorporating the remuneration report, is signed in accordance with a resolution of the Board of Directors.
David Kirk
Director
Paul Wilson
Director
Dated this 16th day of August 2023
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Auditor’s Independence Declaration
41
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 2023, 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
Stewart Thompson
Partner
Dated: 16 August 2023
SYDNEY · PENRITH · MELBOURNE · BRISBANE · PERTH · DARWIN
Liability limited by a scheme approved under Professional Standards Legislation
www.hallchadwick.com.au
ANNUAL REPORT 2023
42
Statement of Profit or Loss and Other Comprehensive Income
for the Year Ended 30 June 2023
Increase in value of financial assets
FX gains
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
5
5
3
8
8
30 June 2023
30 June 2022
$000
13,114
110
2,902
(351)
(82)
(73)
(19)
(224)
(56)
(252)
(288)
(55)
(4,353)
(1,833)
(69)
(81)
8,390
(2,975)
5,415
$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
5,415
33,969
3.77
3.77
24.11
24.11
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Statement of Financial Position
for the Year Ended 30 June 2023
43
As at 30 June 2023
As at 30 June 2022
Note
$000
$000
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
Trade and other payables
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.
9
4
10
4
12
11
12
13
57,755
54,935
2,580
115,270
118,980
2,780
121,760
237,030
231
-
231
1,833
14,953
16,786
17,017
220,013
148,979
71,034
220,013
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
ANNUAL REPORT 2023
44
Statement of Changes in Equity
for the Year Ended 30 June 2023
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 compay DRP
Total transactions with owners and other transfers
Balance at 30 June 2022
Balance at 1 July 2022
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 2023
The accompanying notes form part of these financial statements.
Ordinary
Retained
Share Capital
Earnings
Note
$000
$000
Total
$000
142,871
49,085
191,956
7
13
7
13
-
-
-
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
143,599
81,087
224,686
-
-
-
5,380
5,380
148,979
5,415
5,415
5,415
5,415
(15,468)
(15,468)
-
5,380
(15,468)
71,034
(10,088)
220,013
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Statement of Cash Flows
for the Year Ended 30 June 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Income tax paid
Interest received
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through profit and loss
Realisation of financial assets at fair value through profit and loss
FX gains relating to investments
Costs associated with sale of financial assets
Proceeds from / (net cash used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid
Costs associated with raising capital
Net cash provided by financing activities
Net increase in cash held
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying notes form part of these financial statements.
45
30 June 2023
30 June 2022
Note
$000
$000
15
13
(16,382)
(30,391)
2,856
(43,917)
(32,855)
756
107
-
(31,992)
(10,096)
(24)
(10,120)
(86,029)
143,784
57,755
(13,317)
-
127
(13,190)
(39,166)
159,777
-
(5,937)
114,674
(1,233)
(9)
(1,242)
100,242
43,542
143,784
ANNUAL REPORT 2023
46
Notes to the Financial Statements
for the Year Ended 30 June 2023
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.
These financial statements were authorised for issue on 16 August
2023.
Accounting Policies
Except for cash flow information, the financial statements have been
prepared on an accruals basis and are based on historical costs,
modified, where applicable, by the measurement at fair value of
selected non-current assets, financial assets and financial liabilities.
a. Investments
The Company has been classified under AASB 2013-5 as an Investment
Entity whose business purpose is to invest funds solely for returns via
capital appreciation and/or investment returns. As the Company has
been classified as an Investment Entity, the portfolio investments have
been accounted for at fair value through the profit or loss and shown as
Financial Assets in the Statement of Financial Position.
Investments held at fair value through profit or loss are initially
recognised at fair value. Transaction costs related to acquisitions
are expensed to profit and loss immediately. Subsequent to initial
recognition, all financial instruments held at fair value are accounted
for at fair value, with changes to such values recognised in the profit or
loss.
In determining year-end valuations, the board considers the annual
valuation review by an independent valuation expert and the valuation
report prepared by the Manager along with other material deemed
appropriate by the board in arriving at valuations.
In determining valuations, whilst considering individual portfolio
company valuations, the board determines the overall value of the
investment portfolio and determines company revenue as the change
in the total value of financial assets held at fair value through profit or
loss. The board will, if relevant, give consideration to any commercial
negotiations underway at the time of valuation and may maintain the
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
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.
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.
47
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
Note 1: Summary of Significant Accounting Policies (continued)
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.
(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).
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.
(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.
Derecognition
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
ANNUAL REPORT 2023
48
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
Note 1: Summary of Significant Accounting Policies (continued)
the transfer of non-cash assets or liabilities assumed, is recognised in
profit or loss.
e. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available
on demand with banks, other short term highly liquid investments
with original maturities of 3 months or less.
f. Trade and Other Receivables
Trade and other receivables include amounts due from government
authorities and prepayments for services performed in the ordinary
course of business. Receivables expected to be collected (or utilised)
within 12 months of the end of the reporting period are classified as
current assets.
Trade and other receivables are initially recognised at fair value and
subsequently measured at amortised cost using the effective interest
method, less any provision for impairment. Refer to Note 1(d) for
further discussion on the determination of impairment losses.
g. Trade and Other Payables
Trade and other payables represent the liabilities for goods and
services received by the entity that remain unpaid at the end of the
reporting period. The balance is recognised as a current liability
with the amounts normally paid within 30 days of recognition of the
liability.
h. Goods and Services Tax
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 2021 to 30 June 2022.
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).
m. New Accounting Standards Implemented
No new accounting standards were adopted during the period.
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
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
49
Note 2: Profit For The Year
The following revenue and expense items are relevant in explaining the financial performance for the year:
Fair value gains on financial assets and marketable securities at fair value through profit or loss
13,114
70,667
30 June 2023
30 June 2022
$000
$000
(in ‘000s)
Gains on marketable securities and financial assets where:
- InstantScripts increased $20,461
- SiteMinder decreased $9,860
- Rezdy increased $7,088
- Access Telehealth increased $3,000
- Straker Translations decreased $3,206
- Brosa decreased $4,476
Costs of realisation of financial assets
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:
- Permanent difference on FY22 income tax clawback
- Other deductions
Income tax attributable to entity
The weighted average effective tax rate is as follows:
19
5,774
30 June 2023
30 June 2022
$000
$000
(457)
(2,518)
(2,975)
8,390
(2,517)
(457)
(1)
(2,975)
35%
(30,390)
15,750
(14,640)
48,609
(14,583)
-
(57)
(14,640)
30%
ANNUAL REPORT 2023
50
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
Note 4: Marketable Securities & Financial Assets
Current Marketable Securities
SiteMinder
Straker Translations
Total Current Marketable Securities
Financial Assets
InstantScripts
Rezdy
Access Telehealth
Rosterfy
Nosto
Mosh
Brosa
Total Financial Assets
Total Financial Assets & Marketable Securities
Note 5: Management Fees
As at
As at
30 June 2023
30 June 2022
$000
$000
48,797
6,138
54,935
52,069
24,896
15,591
9,764
9,160
7,500
-
118,980
173,915
58,657
9,344
68,001
16,607
12,808
9,500
-
9,160
7,500
4,476
60,051
128,052
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 $4,353,389 of management fees payable to the Manager, of which $106,180 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 $301,932 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
51
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
Note 5: Management fees (continued)
The performance fee will be accrued on an annual basis in arrears and will only be paid at times when proceeds received from realisation of
investments is available to the Company and will be paid in respect of the whole amount of the gain (not just the amount over the 8% hurdle),
subject to the following caveats:
• If the performance fee for a financial year is a positive amount but the investment return for the financial year does not exceed the hurdle
return for the financial year, no performance fee shall be payable to the manager in respect of that financial year, and the positive amount of
the performance fee shall be carried forward to the following financial year;
• If the performance fee for a financial year is a negative amount, no performance fee shall be payable to the manager in respect of that financial
year, and the negative amount shall be carried forward to the following year; and
• Any negative performance fee amounts from previous financial years that are not recouped in a financial year shall be carried forward to the
following financial year.
The performance fee can be fully or partially paid by the issue of shares in Bailador Technology Investments Limited or in cash at the Manager’s
election, the details of which are outlined below:
If the Manager elects at least 5 business days prior to the performance fee payment date that all or part of the performance fee is to be applied
to the issue of shares in the company, the company must, if permitted by applicable laws (including the Listing Rules and the Corporations Act)
without receiving any approvals from the shareholders of the Company, apply the cash payable in respect of the relevant amount to the issue of
shares to the Manager or its nominee on the performance fee payment date where
N = PF / Issue Price
Where
N is the number of shares issued
PF is the cash value of the performance fee to be paid in shares
Issue Price is the lesser of:
• The volume weighted average price of shares traded on the ASX during the period of 30 calendar days up to but excluding the performance fee
payment date; and
• The last price on the last day on which the shares were traded on the ASX prior to the performance fee payment date.
During the period the Company did not exceed the performance fee hurdle and there is no performance fee payable to the Manager for FY23.
The Company has made a provision for future performance fees payable based on the growth in applicable net tangible assets throughout the
financial year.
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 2023
30 June 2022
$000
$000
73
11
84
67
22
89
ANNUAL REPORT 2023
52
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
Note 7: Dividends
Final dividend of prior year
Interim dividend of current year
Special dividends
Franking Credits
Franking credits available as at 30 June
Franking credits arising from the payment of tax
Total franking credits available
30 June 2023
30 June 2022
$000
5,216
5,035
5,217
15,468
23,763
-
23,763
$000
–
–
1,967
1,967
1
30,390
30,391
Dividends paid in FY23 were fully franked at 30%. The Company’s franking rate for payment of dividends in FY24 will be 25%.
Note 8: Earnings per Share
Profit/(Loss) after income tax
Weighted average number of ordinary shares used in calculating basic and diluted
earnings per share
Basic earnings per share
Diluted earnings per share
Note 9: Cash and Cash Equivalents
Cash at bank
30 June 2023
30 June 2022
$000
5,415
$000
33,969
Number
Number
143,589,622
140,877,262
Cents
3.77
3.77
Cents
24.11
24.11
As at
As at
30 June 2023
30 June 2022
$000
57,755
57,755
$000
143,784
143,784
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 2023 all receivables and prepayments were within expected terms.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
53
Note 10: Trade and Other Receivables
CURRENT
GST receivable
Income tax receivable
Interest receivable
Investment exits receivable
Other prepayments
Note 11: Trade and Other Payables
CURRENT
Trade creditors
Performance fee payable
Other payables
NON CURRENT
Performance fee accrued
Note 12: Income Tax
CURRENT
Income tax payable
Income tax receivable
As at
As at
30 June 2023
30 June 2022
$000
$000
77
2,286
120
-
97
2,580
97
-
75
664
98
934
As at
As at
30 June 2023
30 June 2022
$000
$000
160
-
71
231
1,833
1,833
22
10,625
126
10,773
-
-
As at
As at
30 June 2023
30 June 2022
$000
$000
-
2,286
30,391
-
ANNUAL REPORT 2023
54
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
Note 12: Income Tax (continued)
NON-CURRENT
Deferred tax liabilities
Tax on unrealised gains
Tax on acquisition assets on opening
Deferred tax liabilities
Tax on unrealised gains
Tax on acquisition assets on opening
Deferred tax assets
Provisions
Transaction costs on acquisitions
Transaction costs on equity issue
Deferred losses on financial assets
Losses carried forward
Deferred tax assets
Provisions
Transaction costs on acquisitions
Transaction costs on equity issue
Deferred losses on financial assets
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
36,685
(24,064)
(838)
(24,902)
-
-
-
10,163
1,620
11,783
Balance at
Charged to
Charged
Balance at
30 June 2022
profit or loss
directly to equity
30 June 2023
$000
$000
$000
$000
10,163
1,620
11,783
Balance at
1 July 2021
$000
2,222
58
140
0
11,593
14,013
3,170
3,170
-
-
-
13,333
1,620
14,953
Charged to
Charged
Balance at
profit or loss
directly to equity
30 June 2022
$000
$000
994
(15)
(36)
1,497
(11,593)
(9,153)
-
-
3
-
-
3
$000
3,216
43
107
1,497
-
4,863
Balance at
Charged to
Charged
Balance at
30 June 2022
profit or loss
directly to equity
30 June 2023
$000
3,216
43
107
1,497
4,863
$000
$000
$000
(2,644)
4
(37)
587
(2,090)
-
-
7
-
7
572
47
77
2,084
2,780
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 2023 (continued)
55
Note 13: Issued Capital
Movements in share capital are set out below:
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
Opening balance at 1 July 2022
Ordinary shares issued under company DRP
Costs associated with capital raised
Closing balance at 30 June 2023
Capital Management
No.
$
140,412,595
142,871,259
573,352
-
733,317
(5,741)
140,985,947
143,598,835
140,985,947
3,883,243
-
143,598,835
5,396,326
(16,616)
144,869,190
148,978,545
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: Internet-related Businesses in Australia. It earns revenue from gains on revaluation of financial assets
held at fair value through profit or loss, interest income and other returns from investment. This operating segment is based on the internal
reports that are reviewed and used by the directors in assessing performance and in determining the allocation of resources. There is no
aggregation of operating segments.
The Company invests in securities recorded as financial assets and marketable securities held at fair value through profit or loss.
ANNUAL REPORT 2023
56
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
Note 15: Cash Flow Information
Reconciliation of Cash Flow from Operation with Profit after Income Tax
Profit after income tax
Non-operating cash flows in profit:
Unrealised (gains)/losses on financial assets at fair value through profit or loss
Realised gains on financial assets received as cash flows from investing activities
Realised gains on financial assets receivable as cash flows from investing activities
Costs related to investment exits
FX gains relating to investment activities
Increase in trade and other receivables
(Decrease)/increase in trade and other payables
Derease in trade and other payables attributable to payment of costs on investing activities
(Decrease)/Increase in current tax
Increase/(Decrease) in deferred tax
Cash flow from operating activities
Note 16: Contingent Liabilities
There were no contingent liabilities at 30 June 2022 and 30 June 2023.
Note 17: Events After the Reporting Period
30 June 2023
30 June 2022
$000
5,415
(12,908)
(206)
-
29
(107)
(25)
(8,685)
-
(32,677)
5,247
(43,917)
$000
33,969
19,773
(89,777)
(664)
5,767
-
(68)
3,008
161
30,391
(15,750)
(13,190)
On 3 July 2023 the sale of InstantScripts to API Industries was completed and Bailador received $52m in cash proceeds for the realisation of
its investment. Other than the completion of the sale of InstantScripts, no matter or circumstance has arisen since the end of the year that
has significantly affected or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the
Company in subsequent financial years.
Note 18: Financial Risk Management
The Company’s financial instruments consist mainly of cash (cash at bank) and financial assets designated at fair value through profit or loss,
accounts receivable and payable. The total for each category of financial instrument, measured in accordance with AASB 9: Financial Instruments
as detailed in the accounting policies to these financial statements are as follows:
Financial assets
Cash and cash equivalents
Current marketable securities
Financial assets at fair value through profit or loss
Trade and other receivables
Total financial assets
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
30 June 2023
30 June 2022
Note
$000
$000
9
4
4
10
57,755
54,935
118,980
2,580
234,250
143,784
68,001
60,051
934
272,770
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
Note 18: Financial Risk Management (continued)
57
Financial liabilities
Financial liabilities at amortised cost
Total financial liabilities
11
231
231
10,773
10,773
Financial Risk Management Policies
2. Credit Risk
The Company is exposed to a variety of financial risks as a result of its
activities. These risks include market risk (price risk), credit risk, and
liquidity risk. The Company’s risk management investment policies,
approved by the directors of the responsible entity, aim to assist
the Company in meeting its financial targets while minimising the
potential adverse effects of these risks on the Company’s financial
performance.
Specific Financial Risk Exposures and Management
1. Market Risk
Market risk is the risk that the fair value of future cash flows of a
financial instrument will fluctuate because of changes in market
prices. The Company is currently exposed to the following risks as
it presently holds financial instruments measured at fair value and
short-term deposits:
i. Price Risk
The Company is exposed to equity securities price risk. This arises
from investments held by the Company and classified in the
statement of financial position as financial assets at fair value
through profit or loss.
The Company seeks to manage and constrain market risk
by diversification of the investment portfolio across multiple
investments and through use of structural and contractual
protections in its investments such as investing in preference shares
or convertible notes, requiring minority protections in investment
documentation and maintaining active directorships in its
investment companies.
The portfolio is monitored and analysed by the Manager.
The Company’s net equity exposure is set out in Note 4 of the
financial statements.
Sensitivity Analysis
The following table illustrates sensitivities to the Company’s
exposures to changes in equity prices. The table indicates the impact
on how profit and equity values reported at the end of the reporting
period would have been affected by changes in the relevant risk
variable that management consider to be reasonably possible.
30 June 2023
Profit
$000
Equity
$000
+/- 5% in gain on equity investments
370
370
Exposure to credit risk relating to financial assets arise from the
potential non-performance by counterparties that could lead to a
financial loss to the Company. The Company’s objective in managing
credit risk is to minimise the credit losses incurred mainly on trade
and other receivables.
Credit risk is managed by the Company through maintaining
procedures that ensure, to the extent possible, that counterparties
to transactions are of sound credit worthiness. As the Company
generally does not have trade receivables, receivables are usually
in the order of prepayments for particular services. The Company
ensures prepayments are only made where the counterparty is
reputable and can be relied on to fulfil the service.
The Company’s maximum credit risk exposure at the end of the
reporting period in relation to each class of recognised financial
assets is the carrying amount of those assets as indicated in the
statement of financial position. None of these assets are past due or
considered to be impaired.
The cash and cash equivalents are all held with one of Australia’s
reputable financial institutions.
3. Liquidity Risk
Liquidity risk arises from the possibility that the Company might
encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. As the Company’s major
cash outflows are the purchase of investments, the level of this is
managed by the Manager. The Company also manages this risk
through the following mechanisms:
• preparing forward-looking cash flow analyses in relation to
operating, investing and financing activities;
• managing credit risk related to financial assets;
• maintaining a clear exit strategy on financial assets; and
•
investing surplus cash only with major financial institutions.
Note 19: Fair Value Measurement
a. Fair Value Hierarchy
AASB 13: Fair Value Measurement requires the disclosure of fair value
information by level of the fair value hierarchy, which categorises fair
value measurements into one of three possible levels based on the
lowest level that an input that is significant to the measure can be
categorised into, as follows:
ANNUAL REPORT 2023
58
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
Note 19: Fair Value Measurement (continued)
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.
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.
Level 2 Measurements based on inputs other than quoted prices
included in Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 3
Measurements based on unobservable inputs for the asset
or liability.
The fair values of assets and liabilities that are not traded in an active
market are determined using one or more valuation techniques.
These valuation techniques maximise, to the extent possible, the
use of observable market data. If all significant inputs required to
measure fair value are observable, the asset or liability is included in
Level 2. If one or more significant inputs are not based on observable
market data, the asset or liability is included in Level 3.
b. Valuation Techniques
In the absence of an active market for an identical asset or liability,
the Company selects and uses one or more valuation techniques to
measure the fair value of the asset or liability. The Company selects
a valuation technique that is appropriate in the circumstances
and for which sufficient data is available to measure fair value. The
availability of sufficient and relevant data primarily depends on the
specific characteristics of the asset or liability being measured. The
valuation techniques selected by the Company are consistent with
one or more of the following valuation approaches:
• Market approach: valuation techniques that use prices and
other relevant information generated by market transactions
for identical or similar assets or liabilities including ongoing
discussions with potential purchasers.
• Income approach: valuation techniques that convert estimated
future cash flows or income and expenses into a single discounted
present value.
• Cost approach: valuation techniques that reflect the current
replacement cost of an asset at its current service capacity.
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
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
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 2023 (continued)
Note 19: Fair Value Measurement (continued)
59
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 2023
Carrying Amount
$000
Fair Value
$000
57,755
54,935
118,980
2,580
234,250
231
231
57,755
54,935
118,980
2,580
234,250
231
231
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 2023 Using:
Quoted Prices in
Observable Inputs
Significant
Active Markets for
Other than
Significant
Identical Assets
Level 1 Inputs
Unobservable Inputs
$000
(Level 1)
54,935
-
54,935
$000
(Level 2)
-
118,980
118,980
$000
(Level 3)
-
-
-
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)
$000
(Level 2)
$000
(Level 3)
68,001
-
68,001
-
36,915
36,915
-
23,136
23,136
ANNUAL REPORT 2023
60
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
Note 19: Fair Value Measurement (continued)
e. Valuation Techniques and Inputs Used to Determine Level 2 Fair Values
InstantScripts
Rezdy
Access Telehealth
Rosterfy
Nosto
Mosh
Fair Value at
30 June 2023
$000
52,069
24,896
15,591
9,764
9,160
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
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
As at 30 June 2023 the Company was not holding any investments at Level 3.
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)
Opening balance 30 June 2022
Transfers out to Level 2
Closing balance 30 June 2023
Financial Assets
$000
23,136
(23,136)
-
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Notes to the Financial Statements for the Year Ended 30 June 2023 (continued)
61
Note 20: Related Party Transactions
Remuneration paid or payable to key management personnel (KMP) of the Company during the period are:
• Management Fees of $4,353,389 (including $106,180 unclaimable GST).
• Directors fees of $224,000 (including $14,000 unclaimable GST).
• Salary and director’s fees paid to KMP by portfolio companies on arms-length terms of $214,167.
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 Rezdy sale transaction $300,000
• Reimbursement of expenses to the Manager of $301,932.
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 2023.
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 2023
62
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 42-61, 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
a.
give a true and fair view of the financial position as at 30 June 2023 and of the performance for the period ended on that date.
2.
In the directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
3.
The directors have been given the declarations required by s295A of the Corporations Act 2001.
David Kirk
Director
Paul Wilson
Director
Dated this 16th day of August 2023
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
Independent Auditor’s Report
63
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 2023, 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
2023 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 & Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant
to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We 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 2023
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
KEY AUDIT MATTER
Valuation of Investments $173.9 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.
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
Of these financial assets, $54.9M were classified as ‘level 1’,
$119.0M were classified as ‘level 2’ and $0 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.
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 separately
by the manager and the valuer is reasonable
in comparison to a credible external source;
the
selected multiples;
reference to market data; revenue growth
rates and other business characteristics that
are reasonable.
rationale
for
No financial assets were classified as ‘level 3’ in accordance with
AASB 13 Fair Value Measurement. The measurements of level 3
financial assets are based on unobservable inputs for the asset.
This requires a higher level of judgement.
• 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
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
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 2023, 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.
ANNUAL REPORT 2023
66
Independent Auditor’s Report (continued)
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
ABN 38 601 048 275
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
BAILADOR TECHNOLOGY INVESTMENTS LIMITED AND CONTROLLED ENTITITES
– Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company to cease to continue as a going concern.
– Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
– Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Company audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and these are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
We have audited the remuneration report included in pages 38 to 40 of the directors’ report for the year
ended 30 June 2023.
In our opinion the remuneration report of Bailador Technology Investments Limited for the year ended 30
June 2023 complies with s 300A of the Corporations Act 2001.
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
67
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
Stewart Thompson
Partner
Dated: 16 August 2023
ANNUAL REPORT 2023
68
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 2023.
Ordinary
% of
Shares Held
Issued Shares
22,050,000
10,274,340
8,828,678
7,298,023
4,939,661
4,725,947
2,000,000
1,975,422
1,645,635
1,310,331
1,000,000
999,978
938,447
918,886
812,898
802,114
796,000
776,057
752,099
690,234
15.22%
7.09%
6.09%
5.04%
3.41%
3.26%
1.38%
1.36%
1.14%
0.90%
0.69%
0.69%
0.65%
0.63%
0.56%
0.55%
0.55%
0.54%
0.52%
0.48%
73,534,750
50.76%
Ordinary Shares
22,050,000
10,274,340
Holder Name
Washington H Soul Pattinson and Company Limited
David Kirk
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
Paul Wilson
JP Morgan Nominees Australia Limited
Paul Lewis
Patagorang Pty Ltd
BNP Paribas Nominees Pty Ltd Hub24 Custodial Services Ltd
Mr Simon Fenwick
Mrs Virginia Hancock
Mr Paul Kendrick
BNP Paribas Nominees Pty Ltd
Mr Alan Draper and Mrs Evelyn Draper
Merrill Lynch (Australia) Nominees Pty Limited
Macareus Pty Ltd
Finance Associates Pty Ltd
Mr Sam Morgan
Hobson Wealth Custondians Ltd
Hibour Holdings Pty Ltd
Total
Substantial Shareholders
The names of the substantial shareholders in the Company’s register are:
Washington H Soul Pattinson and Company Limited
David Kirk
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
69
Shareholder Information (continued)
Distribution of Shares
Analysis of numbers of equity security holders, by size of holding as at 30 June 2023.
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
977
1,599
658
1,155
156
4,545
569,231
4,324,589
5,085,837
34,454,102
100,435,431
144,869,190
0.39%
2.99%
3.51%
23.78%
69.33%
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 2023 is 327.
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.
ANNUAL REPORT 2023
BAILADOR TECHNOLOGY INVESTMENTS LIMITED
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 Foley
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
ANNUAL REPORT 2023
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
BAILADOR TECHNOLOGY INVESTMENTS LIMITED