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Empowering
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Annual Report 2019
Contents
2 Our growing customer base
4 Our Business Model
6
Size of Market
7 Gaining Traction
and Penetration
8
Success and achievements
so far
10 Chairman’s Letter
12 Managing Director’s Report
14 Directors’ Report Extract
16 Board and Key Executives
19 Financial Report
IBC Corporate directory
About BidEnergy
We operate across Australia, New Zealand, the USA & United Kingdom. Our platform offers
a complete utility spend management solution that combines intelligent automation
and industry expertise to help multi-site businesses minimise cost while maximising their
control over the complex utility spend category.
1
Global rise of smart data meters
(Big Data)
3 global
mega trends
are driving our
enterprise
2
3
Global energy decarbonisation
(Volatility)
Robotic data processing
(Data Integrity)
BidEnergy Annual Report 2019
1
Our growing
customer base
In a world of volatility and rising prices,
the agility within enterprise to decisively
act on opportunities, (powered by
accurate and readily available data)
is becoming increasingly critical for
business success. BidEnergy has
identified and has evolved its offering
to provide a range of services and
provide relevant solutions to the
following audience groups.
2
BidEnergy Annual Report 2019
Sales Channels
Typically find bill
management
as one of many
frustrating tasks
for a small
group of people.
Their time is
better spent
elsewhere in
the business.
1000’s of
bills arriving
every month,
with deeper
requirements
for validation,
exception
management
payment and
audit, and
performance
analytics.
Servicing large
companies
across multiple
commodities
including rates
& taxes, we
can swap their
manual process
for a white
labelled fully
automated bill
management
powerhouse.
Already
managing the
complex world of
bill management
and validation,
we can replace
their human
workforce with
a robotic one,
delivering
unparalleled
speed accuracy
and data
integrity.
Our platform
can be tailored
to service large
numbers of clients
with an enriched
self-service
utility spend
management
experience, with
communications
protocol to digitise
the Retailer
experience for
customers.
Small
Multi-sites
1–500
Bills per
month
Large
Multi-sites
500–6k
Bills per
month
FM’s
6–20k
Bills per
month
Broker/TPI’s
6–20k
Bills per
month
Energy
Retailers
20K-1M+
Bills per
month
Providing a suite of solutions across a wide variety of commodities and service elements
from electricity through to rates and taxes, our core Robotic process automation IP, can
not only read structured PDF bills in seconds, but provide an effortless bill management
capability from bill issue and capture through to payment. A complete end to end solution,
robotic worker tasks include bill validation, exception management, accounts payable,
budgeting & forecasting as well as deep performance analytics.
Electricity
Gas
Water
Rates
& Taxes
Future
Opportunities
Product Verticals
BidEnergy Annual Report 2019
3
Our Business Model
Full Service
End-to-end
utility spend
management
O
B
R O
As a Service
Light touch pain
point solutions
Self Service
Concierge style
service
T I C P R O C E SS AUTOMATIO
N (
R
s
Sit e
P
A
)
Bills
DATA
C
o
n
t
r
a
c
t
s
INTEGRITY
D
A
T
A
BASE O F R E C
a
t
a
D
al
v
Inter
D
R
O
es
vic
r
e
s
t
r
e
p
x
e
n
i
a
h
c
y
l
p
p
u
s
y
g
r
e
n
E
C
O
Network Ta r r i
f s
N
TINUOUS DATA V E R I F I C A
N
T I O
Bill Parsing
& Validation
Energy
Procurement
Bill Exceptions
& Analytics
Bill Payments
& Bill Payment
Files
4
BidEnergy Annual Report 2019
Our Business Model
Delivering a
compelling benefit
to customers
BidEnergy provides customers of varying scale with true data
integrity across a wide variety of utility bills. Through BidEnergy’s
robotic processing automation, we provide clients frictionless
spend management, peace of mind, accuracy and the ability
to make smarter, more agile business decisions.
BidEnergy Annual Report 2019
5
Size of Market
Currently Serviced
900M+
GLOBAL
SMART
METERS
40M+
UK SMART
METRES
150M+
US METRES
Currently Serviced
6
BidEnergy Annual Report 2019
Currently Serviced
Gaining Traction
and Penetration
85,182 Meters
92 total BID Clients
Churn 4%
USA 8 / UK 9 / AUS 79 / NZ 14
Meters under Management
100000
80000
60000
40000
20000
0
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Meters
Annualised Revenue
$10M
$8M
$6M
$4M
$2M
$0M
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Bid Annualised Subscription Revenue1
Annualised Rebate Capture Revenue2
1 Annualised Subscription Revenue (ASR) – refers to the annualised revenues from BidEnergy platform client
accounts, and is comprised of both billable revenue and expected long-tail revenue:
> billable revenue is attributable to active client accounts, which is the annualised monthly fee billed
on active accounts; and
> expected long-tail revenue is attributable to:
– contracted client accounts that are yet to complete the onboarding process for their portfolio of sites; and
– annualised monthly revenue from meters expected to be onboarded over the next 12 months.
2 Annualised Rebate Revenue or AR – refers to BidEnergy USA rebate capture revenues, which are project based and
are annualised on a rolling basis based on the last 12 months of project activity to allow for seasonality inherent
in the rebate business.
BidEnergy Annual Report 2019
7
June 2015
Signs Cotton On
Passes 4,000
meters under
management
4,000
ME T RES
July 2013
Commercialised
Signs first
client – Landmark
Success and
achievements
so far
Commercialised in 2013, Bidenergy
has transformed the world of bill
management with its robotic workforce,
starting with just a handful of sites to
a business that now manages more than
110,000 meters over 4 countries with
over $1bn of utility spend alone
under management.
2015
Our strategic focus at Bidenergy is to grow our platform services across a number of different commodities
for an ever-increasing number of clients in four key territories, Australia & NZ, The UK and Europe, South East Asia
and the USA. Throughout our history, we have ventured in step with our partners, starting with smaller Australian
multi-sites establishing product market fit, moving to larger clients with bigger bill challenges, and evolving our sales
channel strategy to support clients who manage 10’s of thousands and even, potentially, 100’s of thousands of bills
at a time. Now surpassing $1bn of utility spend under management, BidEnergy is set to move rapidly up the adoption
curve. We just don’t see how you can manage thousands of bills accurately and quickly without a robot!
8
BidEnergy Annual Report 2019
June 2016
Becomes listed
on ASX
Passes 5,000
meters under
management
5,000
METRES
June 2017
Expansion into the
UK with BP client
contract
Passes 9,000
meters under
management
June 2018
Meters under
management
passes 15,000
Signs Optus
Signs Salvation
Army
9,000
METRES
15,000
ME T RES
2016
2017
2018
June 2019
Signs Carbon
Numbers and
Catalyst Commercial
in the UK
Signs Aqua
America in the US
Signs LG in the UK
Partners with
Simble solutions,
UCR, to help
BidBilly reach SME
customers in UK
Origin Pilot
commences
Meters under
management
passes 85,000
85,000
ME T RES
2019
December 2016
Signs BP-ANZ
Platform launched
in the US
Acquires Real
Win Win (USA
Rebate business)
Passes 8,000
meters under
management
December 2018
Signs Joann in US.
First 49 State SaaS
Customer in the US
Signs Cushman
& Wakefield
Meters under
management
passes 37,000
December 2017
Passes 10,000
meters under
management
8,000
METRES
10,000
ME T RES
37,000
ME T RES
BidEnergy Annual Report 2019
9
Chairman’s Letter
Dear Shareholder
It is with pleasure that we provide to you the BidEnergy Limited (ASX: BID) 2019 Annual Report – for the financial year
ended 30 June 2019.
In 2019, BidEnergy continued to strengthen its position as a leading provider of utility spend management solutions
in our core markets. BidEnergy’s world class robotic platform solution, combined with our deep domain expertise,
is highly valued by an ever-increasing number of clients. As at this report date, we are now serving over 100 clients
globally through our US rebate and global SAAS utility spend management platform, assisting them to manage over
$1 billion of utility spend on an annual basis.
BidEnergy’s clients typically have multi-site operations and the industries we serve range from traditional retail
shops through to complex commercial & industrial operations. Our platform solution enables clients to centrally
manage and optimise the sourcing and administration of energy and other outgoings across the enterprise – yielding
significant benefits to our clients through improved commercial arrangements, increased administrative productivity
and identifying and resolving billing errors.
In addition to our successful business model of selling directly to clients,
we have rapidly expanded our client market coverage through engagements
with facilities management providers, large energy retailers and third-party
sales channels. These arrangements have accelerated our market coverage
in the core markets of Australia, New Zealand, the United Kingdom and the
United States – and have also taken BidEnergy’s solution deployment to new
jurisdictions, including Singapore, Malaysia and Japan.
BidEnergy has also diversified our spend management capability from its initial focus on electricity to now enable
clients manage the full suite of other typical outgoings, including reticulated gas, bottled gas, water, sewerage, waste,
rates and taxes.
With a similar deregulated energy market to Australia, the UK is proving to be a substantial opportunity for BidEnergy’s
offerings and a key focus for the company going forward. We have also successfully leveraged our growing rebate
business in the United States to secure major multi-site clients, who are now successfully using our utility spend
management platform in the vast North American market.
10
BidEnergy Annual Report 2019
With our robust, proven world class platform and rapidly expanding client base,
BidEnergy’s priority focus for the coming period is sustainable growth through
effective sales execution and successful client deployments. To do this, we
will appropriately invest further in key client facing and client support roles
across our core markets. Further, we will be increasing our focus on expanding
the breadth and depth of the use of our platform at our now substantial list
of existing clients.
I would like to acknowledge my fellow Directors for their ongoing guidance and support during 2019. In particular,
I sincerely thank Leanne Graham for her contributions throughout the year, including chairing the board’s Audit & Risk
Committee. I would also like to welcome Geoff Kleemann, who recently joined our board in September 2019, and brings
a wealth of governance and operating experience to our board.
Finally, I would like to express my sincere and deep appreciation of our wonderful team at BidEnergy. Their incredible
energy and passion for our company is what enables BidEnergy’s success as well as delight to be involved with.
In particular, I congratulate our Managing Director, Guy Maine, for his leadership of the company, working effectively
with our team and board to firmly position BidEnergy as the industry leader. I would also like to recognise the significant
contributions of Anthony Du Preez, one of BidEnergy’s founders and our Chief Technology Officer, in leading the
development of our platform solution and ensuring the platform readily meet the ongoing needs of our expanding
client base.
We are very much looking forward to another year of BidEnergy’s successful and sustainable growth in 2019-20
– and we are off to a great start. We also look forward to you continuing to share that journey with us.
Andrew Dyer
Chairman
BidEnergy Annual Report 2019
11
Managing Director’s Report
Dear Shareholder,
I’m delighted to present BidEnergy’s Annual Report for the year ending 30 June 2019.
SIGNIFICANT PROGRESS MADE AGAINST KEY METRICS
In the past year the Company has made significant progress across all the key metrics of our operations.
Most significantly, with our established technical expertise and sustainable competitive advantage, the company
has invested more aggressively to drive our lead generation and sales pipeline. Pleasingly, this has resulted in
a substantial increase in customer numbers and revenue across all markets in which we operate.
At year end total BID clients had increased to 92 (53 in FY18), which includes multiple significant client wins in
developed markets in the US (8 clients at 30 Jun-19) and UK (9 clients at 30 June-19). Since year end, BidEnergy has
signed a three-year agreement with Origin Energy to deploy its world-leading Robotic Process Automation (RPA)
platform for Origin Energy’s Commercial and Industrial users. Organisations such as Origin Energy with a large and
diverse portfolio of customers are ideal partners for our RPA solution. We are seeing global interest in aspects of our
platform from Utility companies, Energy brokers, and other market participants where our RPA solution can solve
unique data management challenges. Our agreement with Origin Energy reinforces our strategic sales channel that
delivers revenue “As a Service” through white labelling with one partner with provision of services to many customers.
Origin Energy becomes one of the first energy retailers globally to adopt an RPA-enabled customer facing platform,
which will help transform the customer experience and drive significant long-term value.
BidEnergy’s total operating revenue grew to $5.3M in FY19 (FY18: $4.1M) representing a 30% increase year on year.
Importantly this growth was achieved primarily through growth in BidEnergy subscription fee revenue up 53% to $2.9M.
This was delivered through a combination of revenue from significant growth in new client contracts, in Australia and
overseas, as well as recurring revenue from existing clients who took up additional commodities and platform services.
Annualised subscription revenue expected from signed contracts at 30 June 2019 stood at $4.6M and the company
continues to improve cash inflow as sites from these contracts are onboarded onto the Utility spend Management
platform. US energy rebate revenues also grew during the year contributing revenue of $2.4M (FY18: $2.1M).
Annualised Revenue
$10M
$9M
$8M
$7M
$6M
$5M
$4M
$3M
$2M
$1M
$0M
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Bid Annualised Subscription Revenue
Annualised Rebate Capture Revenue
12
BidEnergy Annual Report 2019
In the latter stages of FY19, the Board and Management chose to invest further in our salesforce, product
development and operations to enable it to execute and deliver on growing opportunities domestically and
overseas. The company has made significant investment in its solution for facilities management, energy brokers,
and energy retailer portals. The company is well advanced onboarding several channel opportunities that will
make growing financial contributions in FY20. The company has a strong sales pipeline on which to execute
and the investment made in advancing the companies technology provides a solid platform for growth in FY20.
BidEnergy’s now proven ability to convert enterprise customers of significant
size and stature is a critical validation point. As the only RPA player in utility
spend management, our cloud-based platform delivers information faster, more
accurately and at a fraction of the cost of traditional competitors. As such, we
expect to rapidly build traction and scale in global markets in the coming year.
UK – SUCCESSFUL ENTRY FOLLOWED BY RAPID SCALE
BidEnergy is capitalising on international expansion opportunities with a successful entry into the UK. The UK
represents a large, sophisticated and concentrated energy market five times larger than Australia’s, while being
structurally similar to Australia. The UK has a digitised energy supply chain with electronic bills, readily available
interval data and more than 50 active energy retailers. BidEnergy’s UK and Europe country manager, who has
extensive experience and contacts in the UK market, is tasked with growing our subscription customer base both
in the UK and the larger but more fragmented European market.
OUR PEOPLE
We have worked hard this year to create a culture at BidEnergy that allows employees to more fully participate
in the Company’s journey and success. In addition to refining and revitalising our approach to market, we have
implemented a reward and recognition program for employees. This program has been an effective retention tool
for the company, particularly at a time of skill shortages in the RPA sector. I am very proud of the way our team has
refined processes and taken on the challenges of preparing the company for the next stage of its growth trajectory.
The substantial progress BidEnergy has achieved over financial year 2019 are a direct testament to the great team
we have and their focus on delivering truly transformative and disruptive technology platform.
In May, the Company hired a Chief Commercial Officer, Darren Knihnicki, to further capitalise on these opportunities.
Darren brings a wealth of expertise managing growing SaaS technology companies and will focus on the execution
of the Company’s business pipeline and global growth.
We are now in a strong position to deliver real value to our staff, customers and shareholders, and I am excited by the
opportunities we see for our Company in financial year 2019 and beyond.
Guy Maine
Managing Director
BidEnergy Annual Report 2019
13
Directors’ Report Extract
The Directors present their report, together with the financial statements, on the Consolidated Entity (referred
to hereafter as the ‘Consolidated Entity’) consisting of BidEnergy Limited (referred to hereafter as the ‘Company’
or ‘Parent Entity’) and the entities it controlled at the end of, or during, the year ended 30 June 2019.
Directors
The following persons were Directors of BidEnergy Limited during the financial year and up to the date of this report,
unless otherwise stated:
Andrew Dyer
(Non-Executive Chairman) (appointed as Non-Executive Director on 16 July 2018,
becoming Non-Executive Chairman on 21 February 2019)
Guy Maine
(Managing Director)
Leanne Graham
(Non-Executive Director)
Geoffrey Kleemann
(Non-Executive Director) (appointed on 1 September 2019)
Anthony Du Preez
(Executive Director) (resigned as director on 13 February 2019, continuing as CTO)
James Baillieu
(Non-Executive Chairman) (resigned on 22 February 2019)
Principal activities
During the financial year the principal continuing activities of the Consolidated Entity consisted of carrying on its
business as a provider of utility spend management services through the deployment of its cloud-based software
platform. In the US only, the Consolidated Entity also earns revenue from its rebate management business whereby
fees are earned from clients for managing the submission of information to energy retailers to facilitate the
processing of rebates under the ‘Energy Efficient Infrastructure Program’ applicable in the US.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
BidEnergy’s total operating revenue grew to $5.3M in FY19 (FY18: $4.1M) representing a 30% increase year on year.
Importantly this growth was achieved primarily through growth in BidEnergy subscription fee revenue up 53% to $2.9M.
This was delivered through a combination of revenue from significant growth in new client contracts, in Australia
and overseas, as well as recurring revenue from existing clients who took up additional commodities and platform
services. BidEnergy clients grew to 92 at 30 June 2019, from 53 at 30 June 2018. US energy rebate revenues also grew
during the year contributing revenue of $2.4M (FY18: $2.1M).
Underlying EBITDA* loss increased 20% to $4.7M for FY19 as the Company chose to invest this year in its salesforce,
product development and operations to enable it to execute and deliver on growing opportunities domestically and
overseas. The Company has made significant investment in its solution for facilities management, energy brokers,
and energy retailer portals. The Company is well advanced onboarding several channel opportunities that will
make growing financial contributions in FY20. The Company has a strong sales pipeline on which to execute and
the investment made in advancing the companies technology provides a solid platform for growth in FY20.
The statutory loss for the Consolidated Entity after providing for income tax amounted to $6.6M (30 June 2018: $4.5M).
A reconciliation of underlying EBITDA to statutory profit is contained in note 4, operating segments.
14
BidEnergy Annual Report 2019
At 30 June 2019 the Company held $4.2M in cash.
BidEnergy Subscription Fee Revenue
Rebate Revenue
BidEnergy non-subscription fee revenue
Total Revenue
Underlying EBITDA
Statutory net profit after tax
FY19
$’000
2,924
2,353
27
5,304
(4,662)
(6,566)
FY18
$’000
1,908
2,101
58
4,067
(3,900)
(4,518)
% Favourable/
(Unfavourable)
53%
12%
(53%)
30%
(20%)
(45%)
* Underlying EBITDA is a non-IFRS measure calculated as earnings before income tax, and before depreciation and amortisation,
capitalised salaries, share based payments, reorganisation costs, transaction fees, net finance costs and foreign exchange as
detailed in note 4 of the financial report.
Significant changes in the state of affairs
In December 2018, the Consolidated Entity completed the consolidation of its ordinary share capital, options and
performance rights on a 100 for 680 basis, as approved by shareholders at the Annual General Meeting held on
27 November 2018.
On 13 February 2019, Anthony Du Preez resigned as a director of the Company. Anthony continues to hold a senior
executive role as Chief Technology Officer.
On 21 February 2019, Andrew Dyer was appointed chairman of the Board, replacing James Baillieu who became
a Non-Executive Director.
On 22 February 2019, James Baillieu resigned as Non-Executive Director of the Company.
Other than as noted elsewhere in this report, there were no other significant changes in the state of affairs of the
Consolidated Entity during the financial year.
Matters subsequent to the end of the financial year
Supreme Court Proceedings
On 26 July 2019, the Consolidated Entity announced that it received notice that Mr James Baillieu has made an
application in the Supreme Court of Melbourne for an order to commence proceedings on behalf of the Company under
Section 236 of the Corporations Act 2001 against the Company’s directors, Andrew Dyer, Guy Maine and Leanne Graham.
Origin Energy Contract
On 29 August 2019, the Consolidated Entity announced that it has signed an agreement with Origin Energy (ASX: ORG)
to deploy BID’s Robotic Processing Automation (RPA) platform and analytics across Origin Energy’s Commercial and
Industrial (“C&I”) customers and will be progressively rolled out to 14,500 customers from September 2019.
No other matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may significantly
affect the Consolidated Entity’s operations, the results of those operations, or the Consolidated Entity’s state of affairs
in future financial years.
Likely developments and expected results of operations
BidEnergy will continue to focus on growing its customer base to provide utility spend management services. Growth
will be targeted in continued Australian, New Zealand, US and UK expansion, upselling existing platform services, and
cross selling the BidEnergy platform to RealWinWin customers. BidEnergy will continue to pursue new channel partners
through which to distribute the BidEnergy platform.
Environmental regulation
The Consolidated Entity is not subject to any significant environmental regulation under Australian Commonwealth
or State law.
BidEnergy Annual Report 2019
15
Board and Key
Executives
Andrew Dyer
Independent Non-Executive Chairman
(appointed as Non-Executive Director on 16 July 2018,
becoming Non-Executive Chairman on 21 February 2019)
Qualifications: B.E(Hons), MBA, MAICD
Experience and expertise: Mr Dyer’s career includes extensive experience in sales
and operational roles across a range of industries including information technology,
energy, telecommunications and professional services. He has held senior executive
and operational positions in Australia and the United States, including roles at IBM, SMS
Management & Technology, Indus International and Florida Power & Light Group.
Mr Dyer has considerable experience in government, government relations and
international trade. He is the former Commissioner to the Americas for the Victorian
government, and currently serves as the National Wind Farm Commissioner for the
Federal government, reporting to the Australian Parliament.
In addition to his professional and executive career, Mr Dyer has extensive governance
experience as a chairman and non-executive director. He has served as chair and director
of numerous private and public sector organisations – spanning a wide range of sectors
including energy, utilities, telecommunications, insurance, health, education, arts, retail
and wholesale distribution.
Mr Dyer is a Professorial Fellow at Monash University, holds a Bachelor of Engineering
with first class honours from Monash University, and an MBA from Georgetown University
in Washington DC. He is a member of the Australian Institute of Company Directors.
Other current directorships: None
Former directorships (last 3 years): None
Interests in shares: 121,000 fully paid ordinary shares
Interests in options: 294,118 unlisted options
Interests in rights: None
16
BidEnergy Annual Report 2019
Guy Maine
Managing Director (appointed 17 January 2018)
Experience and expertise: Mr Maine has extensive experience building businesses and
developing markets for new technology products for leading Australian service providers
having held integral executive roles at SingTel Optus, Virgin Mobile, and FOXTEL, including
General Management, Director of Sales and Executive Director, respectively.
Mr Maine was responsible for the launch of Optus prepaid mobile phones in Australia,
as well as securing new distribution channels and driving retail strategy. As Director of
Sales for Virgin Mobile, Mr Maine worked with a focused team to launch the challenger
brand in 2000 to profitability, before joining FOXTEL in 2003 as Director of Sales. At FOXTEL
Mr Maine worked with the core executive team and an internationally credentialed Board
on its consumer challenge to convert to digital and heighten consumer growth, and later
became an Executive Director of the company.
Other current directorships: None
Former directorships (last 3 years): None
Interests in shares: 160,643 fully paid ordinary shares
Interests in options: 2,205,883 unlisted options
Interests in rights: None
Leanne Graham
Independent Non-Executive Director
Experience and expertise: Ms Graham is one of New Zealand’s few female IT entrepreneur’s
with over 30 years’ experience at the highest levels in the software sector. She has built
a name for herself by enabling multiple cloud, mobility and SaaS companies to maximise
their global go to market opportunities.
Leanne holds a number of directorships on both public and private companies in Australia
and New Zealand as well as sits on a number of advisory boards globally. She was the
General Manager of Sales at Xero and was the architect of their global sales strategy
around ‘recruit, educate and grow’; a key channel strategy used to build Xero’s customer
base in New Zealand, Australia, United Kingdom and the United States. Through her
strategic investment company Cloud Rainmakers Ltd, she assists technology companies
to identify how they can develop strategic partnerships and disrupt an industry to become
export successes.
Other current directorships: Non-Executive Chairperson of VPC Limited (ASX: VPC)
Non-Executive Director of archTIS Limited (ASX: AR9)
Non-Executive Director of AppsVillage Australia Limited (ASX: APV)
Former directorships (last 3 years): None
Interests in shares: 200,475 fully paid ordinary shares
Interests in options: 367,648 unlisted options
Interests in rights: None
BidEnergy Annual Report 2019
17
Geoffrey Kleemann
Independent Non-Executive Director
(appointed on 1 September 2019)
Experience and expertise: Mr Kleemann commenced his career at Deloitte,
and subsequently completed approximately twenty years as a senior executive
in a listed environment, as Chief Financial Officer for Crown Limited, Publishing
and Broadcasting Limited, Woolworths Limited and Pioneer International Limited.
He is currently a Non-Executive Director of the NSW Telco Authority.
Other current directorships: Independent Non-Executive Director of Domain Holdings
Australia Limited (ASX: DHG)
Former directorships (last 3 years): None
Interests in shares: 150,000 fully paid ordinary shares
Interests in options: None
Interests in rights: None
Anthony Du Preez
Executive Director
(resigned as Director on 13 February 2019, continuing as CTO)
Experience and expertise: Mr Du Preez is an experienced entrepreneur having
founded and built a number of globally scalable technology companies, including:
www.adslot.com (ASX:ADJ), www.bidenergy.com, www.tradeslot.com and
www.carbonnavigator.com. Anthony has a first class honours systems engineering
degree and an MBA from the Melbourne Business School.
Matthew Watson
Chief Finance Officer
Mr Watson has over 15 years experience in the corporate sector and professional
services, including holding senior finance roles with Australian software and technology
businesses expanding overseas. Mr Watson holds a Bachelor of Commerce from the
University of Melbourne and is a Member of The Institute of Chartered Accountants
Australia and New Zealand.
Darren Knihnicki
Chief Commercial Officer
Darren Knihnicki is an experienced commercial executive with a proven track record
in driving shareholder value and growth on a global scale. Mr. Knihnicki has over
15 years’ experience working both locally and globally across a multitude of technology
organisations. He has extensive cross-sector experience and has previously worked as
CFO for eNett and Assembly Payments and also Chief Commercial Officer for Tapendium.
18
BidEnergy Annual Report 2019
Financial
Report
41 Statement of profit or loss and
78 Directors’ declaration
other comprehensive income
Contents
20 Chairman’s letter
– 2019 annual report
21 Managing director’s report
42 Statement of financial position
23 Directors’ report
43 Statement of changes in equity
40 Auditor’s independence
44 Statement of cash flows
declaration
45 Notes to the financial statements
79 Independent auditor’s
report to the members
of BidEnergy Limited
83 Shareholder information
BidEnergy Annual Report 2019
19
Chairman’s Letter – 2019 Annual Report
Dear Shareholder
It is with pleasure that we provide to you the BidEnergy Limited (ASX: BID) 2019 Annual Report – for the financial year
ended 30 June 2019.
In 2019, BidEnergy continued to strengthen its position as a leading provider of utility spend management solutions
in our core markets. BidEnergy’s world class robotic platform solution, combined with our deep domain expertise,
is highly valued by an ever-increasing number of clients. As at this report date, we are now serving over 100 clients
globally through our US rebate and global SAAS utility spend management platform, assisting them to manage over
$1 billion of utility spend on an annual basis.
BidEnergy’s clients typically have multi-site operations and the industries we serve range from traditional retail
shops through to complex commercial & industrial operations. Our platform solution enables clients to centrally
manage and optimise the sourcing and administration of energy and other outgoings across the enterprise
– yielding significant benefits to our clients through improved commercial arrangements, increased administrative
productivity and identifying and resolving billing errors.
In addition to our successful business model of selling directly to clients, we have rapidly expanded our client market
coverage through engagements with facilities management providers, large energy retailers and third-party sales
channels. These arrangements have accelerated our market coverage in the core markets of Australia, New
Zealand, the United Kingdom and the United States – and have also taken BidEnergy’s solution deployment to new
jurisdictions, including Singapore, Malaysia and Japan.
BidEnergy has also diversified our spend management capability from its initial focus on electricity to now enable
clients manage the full suite of other typical outgoings, including reticulated gas, bottled gas, water, sewerage,
waste, rates and taxes.
With a similar deregulated energy market to Australia, the UK is proving to be a substantial opportunity for
BidEnergy’s offerings and a key focus for the company going forward. We have also successfully leveraged our
growing rebate business in the United States to secure major multi-site clients, who are now successfully using
our utility spend management platform in the vast North American market.
With our robust, proven world class platform and rapidly expanding client base, BidEnergy’s priority focus for
the coming period is sustainable growth through effective sales execution and successful client deployments.
To do this, we will appropriately invest further in key client facing and client support roles across our core markets.
Further, we will be increasing our focus on expanding the breadth and depth of the use of our platform at our now
substantial list of existing clients.
I would like to acknowledge my fellow Directors for their ongoing guidance and support during 2019. In particular,
I sincerely thank Leanne Graham for her contributions throughout the year, including chairing the board’s Audit
& Risk Committee. I would also like to welcome Geoff Kleemann, who recently joined our board in September 2019,
and brings a wealth of governance and operating experience to our board.
Finally, I would like to express my sincere and deep appreciation of our wonderful team at BidEnergy. Their incredible
energy and passion for our company is what enables BidEnergy’s success as well as delight to be involved with.
In particular, I congratulate our Managing Director, Guy Maine, for his leadership of the company, working effectively
with our team and board to firmly position BidEnergy as the industry leader. I would also like to recognise the
significant contributions of Anthony Du Preez, one of BidEnergy’s founders and our Chief Technology Officer, in
leading the development of our platform solution and ensuring the platform readily meet the ongoing needs
of our expanding client base.
We are very much looking forward to another year of BidEnergy’s successful and sustainable growth in 2019-20
– and we are off to a great start. We also look forward to you continuing to share that journey with us.
Andrew Dyer
Chairman
20
BidEnergy Annual Report 2019
Managing Director’s Report
Dear Shareholder,
I’m delighted to present BidEnergy’s Annual Report for the year ending 30 June 2019.
SIGNIFICANT PROGRESS MADE AGAINST KEY METRICS
In the past year the Company has made significant progress across all the key metrics of our operations.
Most significantly, with our established technical expertise and sustainable competitive advantage, the company
has invested more aggressively to drive our lead generation and sales pipeline. Pleasingly, this has resulted in
a substantial increase in customer numbers and revenue across all markets in which we operate.
At year end total BID clients had increased to 92 (53 in FY18), which includes multiple significant client wins in
developed markets in the US (8 clients at 30 Jun-19) and UK (9 clients at 30 June-19). Since year end, BidEnergy has
signed a three-year agreement with Origin Energy to deploy its world-leading Robotic Process Automation (RPA)
platform for Origin Energy’s Commercial and Industrial users. Organisations such as Origin Energy with a large and
diverse portfolio of customers are ideal partners for our RPA solution. We are seeing global interest in aspects of
our platform from Utility companies, Energy brokers, and other market participants where our RPA solution can
solve unique data management challenges. Our agreement with Origin Energy reinforces our strategic sales
channel that delivers revenue “As a Service” through white labelling with one partner with provision of services
to many customers. Origin Energy becomes one of the first energy retailers globally to adopt an RPA-enabled
customer facing platform, which will help transform the customer experience and drive significant long-term value.
BidEnergy’s total operating revenue grew to $5.3M in FY19 (FY18: $4.1M) representing a 30% increase year on year.
Importantly this growth was achieved primarily through growth in BidEnergy subscription fee revenue up 53%
to $2.9M. This was delivered through a combination of revenue from significant growth in new client contracts,
in Australia and overseas, as well as recurring revenue from existing clients who took up additional commodities
and platform services. Annualised subscription revenue expected from signed contracts at 30 June 2019 stood at
$4.6M and the company continues to improve cash inflow as sites from these contracts are onboarded onto the
Utility spend Management platform. US energy rebate revenues also grew during the year contributing revenue
of $2.4M (FY18: $2.1M).
In the latter stages of FY19, the Board and Management chose to invest further in our salesforce, product
development and operations to enable it to execute and deliver on growing opportunities domestically and
overseas. The company has made significant investment in its solution for facilities management, energy brokers,
and energy retailer portals. The company is well advanced onboarding several channel opportunities that will
make growing financial contributions in FY20. The company has a strong sales pipeline on which to execute and
the investment made in advancing the companies technology provides a solid platform for growth in FY20.
BidEnergy’s now proven ability to convert enterprise customers of significant size and stature is a critical validation
point. As the only RPA player in utility spend management, our cloud-based platform delivers information faster,
more accurately and at a fraction of the cost of traditional competitors. As such, we expect to rapidly build traction
and scale in global markets in the coming year.
UK – SUCCESSFUL ENTRY FOLLOWED BY RAPID SCALE
BidEnergy is capitalising on international expansion opportunities with a successful entry into the UK. The UK
represents a large, sophisticated and concentrated energy market five times larger than Australia’s, while being
structurally similar to Australia. The UK has a digitised energy supply chain with electronic bills, readily available
interval data and more than 50 active energy retailers. BidEnergy’s UK and Europe country manager, who has
extensive experience and contacts in the UK market, is tasked with growing our subscription customer base both
in the UK and the larger but more fragmented European market.
OUR PEOPLE
We have worked hard this year to create a culture at BidEnergy that allows employees to more fully participate
in the Company’s journey and success. In addition to refining and revitalising our approach to market, we have
implemented a reward and recognition program for employees. This program has been an effective retention tool
for the company, particularly at a time of skill shortages in the RPA sector. I am very proud of the way our team has
BidEnergy Annual Report 2019
21
Managing Director’s Report
Continued
refined processes and taken on the challenges of preparing the company for the next stage of its growth trajectory.
The substantial progress BidEnergy has achieved over financial year 2019 are a direct testament to the great team
we have and their focus on delivering truly transformative and disruptive technology platform.
In May, the Company hired a Chief Commercial Officer, Darren Knihnicki, to further capitalise on these opportunities.
Darren brings a wealth of expertise managing growing SaaS technology companies and will focus on the execution
of the Company’s business pipeline and global growth.
We are now in a strong position to deliver real value to our staff, customers and shareholders, and I am excited by
the opportunities we see for our Company in financial year 2019 and beyond.
Guy Maine
Managing Director
22
BidEnergy Annual Report 2019
Directors’ report
The Directors present their report, together with the financial statements, on the Consolidated Entity (referred
to hereafter as the ‘Consolidated Entity’) consisting of BidEnergy Limited (referred to hereafter as the ‘Company’
or ‘Parent Entity’) and the entities it controlled at the end of, or during, the year ended 30 June 2019.
Directors
The following persons were Directors of BidEnergy Limited during the financial year and up to the date of this report,
unless otherwise stated:
Andrew Dyer (Non-Executive Chairman) (appointed as Non-Executive Director on 16 July 2018,
becoming Non-Executive Chairman on 21 February 2019)
Guy Maine (Managing Director)
Leanne Graham (Non-Executive Director)
Geoffrey Kleemann (Non-Executive Director) (appointed on 1 September 2019)
Anthony Du Preez (Executive Director) (resigned as director on 13 February 2019, continuing as CTO)
James Baillieu (Non-Executive Chairman) (resigned on 22 February 2019)
Principal activities
During the financial year the principal continuing activities of the Consolidated Entity consisted of carrying on its
business as a provider of utility spend management services through the deployment of its cloud-based software
platform. In the US only, the Consolidated Entity also earns revenue from its rebate management business whereby
fees are earned from clients for managing the submission of information to energy retailers to facilitate the
processing of rebates under the ‘Energy Efficient Infrastructure Program’ applicable in the US.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
BidEnergy’s total operating revenue grew to $5.3M in FY19 (FY18: $4.1M) representing a 30% increase year on year.
Importantly this growth was achieved primarily through growth in BidEnergy subscription fee revenue up 53% to
$2.9M. This was delivered through a combination of revenue from significant growth in new client contracts, in
Australia and overseas, as well as recurring revenue from existing clients who took up additional commodities and
platform services. BidEnergy clients grew to 92 at 30 June 2019, from 53 at 30 June 2018. US energy rebate revenues
also grew during the year contributing revenue of $2.4M (FY18: $2.1M).
Underlying EBITDA* loss increased 20% to $4.7M for FY19 as the Company chose to invest this year in its salesforce,
product development and operations to enable it to execute and deliver on growing opportunities domestically and
overseas. The Company has made significant investment in its solution for facilities management, energy brokers,
and energy retailer portals. The Company is well advanced onboarding several channel opportunities that will make
growing financial contributions in FY20. The Company has a strong sales pipeline on which to execute and the
investment made in advancing the companies technology provides a solid platform for growth in FY20.
The statutory loss for the Consolidated Entity after providing for income tax amounted to $6.6M (30 June 2018:
$4.5M). A reconciliation of underlying EBITDA to statutory profit is contained in note 4, operating segments.
At 30 June 2019 the Company held $4.2M in cash.
BidEnergy Annual Report 2019
23
Directors’ report
Continued
BidEnergy Subscription Fee Revenue
Rebate Revenue
BidEnergy non-subscription fee revenue
Total Revenue
Underlying EBITDA
Statutory net profit after tax
FY19
$’000
2,924
2,353
27
FY18
$’000
1,908
2,101
58
5,304
4,067
(4,662)
(3,900)
(6,566)
(4,518)
% Favourable/
(Unfavourable)
53%
12%
(53%)
30%
(20%)
(45%)
*
Underlying EBITDA is a non-IFRS measure calculated as earnings before income tax, and before depreciation and amortisation,
capitalised salaries, share based payments, reorganisation costs, transaction fees, net finance costs and foreign exchange
as detailed in note 4 of the financial report.
Significant changes in the state of affairs
In December 2018, the Consolidated Entity completed the consolidation of its ordinary share capital, options and
performance rights on a 100 for 680 basis, as approved by shareholders at the Annual General Meeting held on
27 November 2018.
On 13 February 2019, Anthony Du Preez resigned as a director of the Company. Anthony continues to hold a senior
executive role as Chief Technology Officer.
On 21 February 2019, Andrew Dyer was appointed chairman of the Board, replacing James Baillieu who became
a Non-Executive Director.
On 22 February 2019, James Baillieu resigned as Non-Executive Director of the Company.
Other than as noted elsewhere in this report, there were no other significant changes in the state of affairs of the
Consolidated Entity during the financial year.
Matters subsequent to the end of the financial year
Supreme Court Proceedings
On 26 July 2019, the Consolidated Entity announced that it received notice that Mr James Baillieu has made an
application in the Supreme Court of Melbourne for an order to commence proceedings on behalf of the Company
under Section 236 of the Corporations Act 2001 against the Company’s directors, Andrew Dyer, Guy Maine and
Leanne Graham.
Origin Energy Contract
On 29 August 2019, the Consolidated Entity announced that it has signed an agreement with Origin Energy
(ASX: ORG) to deploy BID’s Robotic Processing Automation (RPA) platform and analytics across Origin Energy’s
Commercial and Industrial (“C&I”) customers and will be progressively rolled out to 14,500 customers from
September 2019.
No other matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may significantly
affect the Consolidated Entity’s operations, the results of those operations, or the Consolidated Entity’s state
of affairs in future financial years.
Likely developments and expected results of operations
BidEnergy will continue to focus on growing its customer base to provide utility spend management services.
Growth will be targeted in continued Australian, New Zealand, US and UK expansion, upselling existing platform
services, and cross selling the BidEnergy platform to RealWinWin customers. BidEnergy will continue to pursue
new channel partners through which to distribute the BidEnergy platform.
24
BidEnergy Annual Report 2019
Environmental regulation
The Consolidated Entity is not subject to any significant environmental regulation under Australian Commonwealth
or State law.
Information on Directors
Name:
Title:
Andrew Dyer
Independent Non-Executive Chairman (appointed as Non-Executive Director
on 16 July 2018, becoming Non-Executive Chairman on 21 February 2019)
Qualifications:
B.E(Hons), MBA, MAICD
Experience and expertise:
Mr Dyer’s career includes extensive experience in sales and operational roles across
a range of industries including information technology, energy, telecommunications
and professional services. He has held senior executive and operational positions
in Australia and the United States, including roles at IBM, SMS Management &
Technology, Indus International and Florida Power & Light Group.
Mr Dyer has considerable experience in government, government relations and
international trade. He is the former Commissioner to the Americas for the Victorian
government, and currently serves as the National Wind Farm Commissioner for the
Federal government, reporting to the Australian Parliament.
In addition to his professional and executive career, Mr Dyer has extensive
governance experience as a chairman and non-executive director. He has served as
chair and director of numerous private and public sector organisations – spanning
a wide range of sectors including energy, utilities, telecommunications, insurance,
health, education, arts, retail and wholesale distribution.
Mr Dyer is a Professorial Fellow at Monash University, holds a Bachelor of
Engineering with first class honours from Monash University, and an MBA from
Georgetown University in Washington DC. He is a member of the Australian Institute
of Company Directors.
Other current directorships:
None
Former directorships
None
(last 3 years):
Interests in shares:
121,000 fully paid ordinary shares
Interests in options:
294,118 unlisted options
Interests in rights:
None
BidEnergy Annual Report 2019
25
Directors’ report
Continued
Name:
Title:
Guy Maine
Managing Director (appointed 17 January 2018)
Experience and expertise:
Mr Maine has extensive experience building businesses and developing markets
for new technology products for leading Australian service providers having held
integral executive roles at SingTel Optus, Virgin Mobile, and FOXTEL, including General
Management, Director of Sales and Executive Director, respectively.
Mr Maine was responsible for the launch of Optus prepaid mobile phones in
Australia, as well as securing new distribution channels and driving retail strategy.
As Director of Sales for Virgin Mobile, Mr Maine worked with a focused team to
launch the challenger brand in 2000 to profitability, before joining FOXTEL in 2003
as Director of Sales. At FOXTEL Mr Maine worked with the core executive team and
an internationally credentialed Board on its consumer challenge to convert to
digital and heighten consumer growth, and later became an Executive Director
of the company.
Other current directorships:
None
Former directorships
None
(last 3 years):
Interests in shares:
160,643 fully paid ordinary shares
Interests in options:
2,205,883 unlisted options
Interests in rights:
None
Name:
Title:
Leanne Graham
Independent Non-Executive Director
Experience and expertise:
Ms Graham is one of New Zealand’s few female IT entrepreneur’s with over 30 years’
experience at the highest levels in the software sector. She has built a name for
herself by enabling multiple cloud, mobility and SaaS companies to maximise their
global go to market opportunities. Leanne holds a number of directorships on both
public and private companies in Australia and New Zealand as well as sits on a
number of advisory boards globally. She was the General Manager of Sales at Xero
and was the architect of their global sales strategy around ‘recruit, educate and
grow’; a key channel strategy used to build Xero’s customer base in New Zealand,
Australia, United Kingdom and the United States. Through her strategic investment
company Cloud Rainmakers Ltd, she assists technology companies to identify
how they can develop strategic partnerships and disrupt an industry to become
export successes.
Other current directorships:
Non-Executive Chairperson of VPC Limited (ASX: VPC)
Non-Executive Director of archTIS Limited (ASX: AR9)
Non-Executive Director of AppsVillage Australia Limited (ASX: APV)
Former directorships
None
(last 3 years):
Interests in shares:
200,475 fully paid ordinary shares
Interests in options:
367,648 unlisted options
Interests in rights:
None
26
BidEnergy Annual Report 2019
Name:
Title:
Geoffrey Kleemann
Independent Non-Executive Director (appointed on 1 September 2019)
Experience and expertise:
Mr Kleemann commenced his career at Deloitte, and subsequently completed
approximately twenty years as a senior executive in a listed environment, as Chief
Financial Officer for Crown Limited, Publishing and Broadcasting Limited, Woolworths
Limited and Pioneer International Limited. He is currently a Non-Executive Director of
the NSW Telco Authority.
Other current directorships:
Independent Non-Executive Director of Domain Holdings Australia Limited
(ASX: DHG)
Former directorships
None
(last 3 years):
Interests in shares:
150,000 fully paid ordinary shares
Interests in options:
Interests in rights:
None
None
Name:
Title:
Anthony Du Preez
Executive Director (resigned as Director on 13 February 2019, continuing as CTO)
Experience and expertise:
Mr Du Preez is an experienced entrepreneur having founded and built a number
of globally scalable technology companies, including www.adslot.com (ASX:ADJ),
www.bidenergy.com, www.tradeslot.com and www.carbonnavigator.com. Anthony
has a first class honours systems engineering degree and an MBA from the
Melbourne Business School.
Name:
Title:
James Baillieu
Non-Executive Chairman (until 21 February 2019, resigned as Non-Executive Director
Qualifications:
LLB and BA
on 22 February 2019)
Experience and expertise:
Mr Baillieu is an investor in and consultant to early stage technology businesses.
He was an early investor in and consultant to Aconex (ACX) and later assumed the
role as SVP of Business Development at Aconex. Prior to this, he spent more than
seven years as a consultant with McKinsey & Co assisting businesses in Australia
and internationally with strategy and operational improvement. He is a lawyer who
practised in commercial law with Mallesons Stephen Jaques in the 1990s. He has
an LLB (First Class Honours) and BA from the University of Melbourne.
‘Other current directorships’ quoted above are current directorships for listed entities only and excludes directorships of all other
types of entities, unless otherwise stated.
‘Former directorships (last 3 years)’ quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
BidEnergy Annual Report 2019
27
Directors’ report
Continued
Company secretary
Miss Erlyn Dale
Miss Dale is an experienced corporate professional with a broad range of corporate governance and capital
markets experience, having been involved with several public company listings, merger and acquisition
transactions and capital raisings for ASX-listed companies across a diverse range of industries.
Miss Dale began her career in Corporate Recovery and Restructuring at Ferrier Hodgson and is now an Associate
Director of corporate services firm, Azalea Consulting, through which she holds positions as company secretary
for several ASX listed companies.
Miss Dale holds a Bachelor of Commerce (Accounting and Finance) and a Graduate Diploma in Applied Corporate
Governance. She is a member of the Governance Institute of Australia and is a Chartered Secretary.
Meetings of Directors
The number of meetings of the Company’s Board of Directors (‘the Board’) and of each Board committee held
during the year ended 30 June 2019, and the number of meetings attended by each Director were:
Full Board
Full Board
Audit and
Risk
Committee
Audit and
Risk
Committee
Remu-
neration and
Nomination
Committee
Remu-
neration and
Nomination
Committee
Special
Purpose
Committee
Special
Purpose
Committee
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Andrew Dyer*
Guy Maine
Leanne Graham
Anthony Du Preez**
James Baillieu***
8
9
9
2
6
9
9
9
5
7
1
–
1
–
–
1
–
1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Held: represents the number of meetings held during the time the Director held office or was a member of the
relevant committee.
*
Andrew Dyer (appointed as Non-Executive Director on 16 July 2018, becoming Non-Executive Chairman on 21 February 2019)
** Anthony Du Prees (resigned as director on 13 February 2019, continuing as CTO)
*** James Baillieu (resigned on 22 February 2019)
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Consolidated
Entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
> Principles used to determine the nature and amount of remuneration
> Details of remuneration
> Service agreements
> Share-based compensation
> Additional information
> Additional disclosures relating to key management personnel
28
BidEnergy Annual Report 2019
Principles used to determine the nature and amount of remuneration
The objective of the Consolidated Entity’s executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement
of strategic objectives and the creation of value for shareholders, and it is considered to conform to the market best
practice for the delivery of reward. The Board of Directors (‘the Board’) ensures that executive reward satisfies the
following key criteria for good reward governance practices:
> competitiveness and reasonableness
> acceptability to shareholders
> performance linkage / alignment of executive compensation
> transparency
The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives.
The performance of the Consolidated Entity depends on the quality of its directors and executives. The remuneration
philosophy is to attract, motivate and retain high performance and high quality personnel.
The reward framework is designed to align executive reward to shareholders’ interests. The Board have considered
that it should seek to enhance shareholders’ interests by:
> having economic profit as a core component of plan design
> focusing on sustained growth in shareholder wealth, through growth in share price, and delivering constant or
increasing return on assets as well as focusing the executive on key non-financial drivers of value
> attracting and retaining high calibre executives
Additionally, the reward framework should seek to enhance executives’ interests by:
> rewarding capability and experience
> reflecting competitive reward for contribution to growth in shareholder wealth
> providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive
director remuneration is separate.
Non-executive directors remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors’ fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice
from independent remuneration consultants to ensure non-executive directors’ fees and payments are appropriate
and in line with the market.
Shareholders approve the maximum aggregate remuneration for non-executive directors. The Board recommends
the actual payments to directors and the Board is responsible for ratifying any recommendations, if appropriate.
ASX listing rules require the aggregate non-executive directors remuneration be determined periodically by a
general meeting. The aggregate approved remuneration for non-executive directors is $500,000.
Executive remuneration
The Consolidated Entity aims to reward executives based on their position and responsibility, with a level and mix
of remuneration which has both fixed and variable components.
The executive remuneration and reward framework has four components:
> base pay and non-monetary benefits
> short-term performance incentives
> share-based payments
> other remuneration such as superannuation and long service leave
The combination of these comprises the executive’s total remuneration.
BidEnergy Annual Report 2019
29
Directors’ report
Continued
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually
by the Board based on individual and business unit performance, the overall performance of the Consolidated Entity
and comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor
vehicle benefits) where it does not create any additional costs to the Consolidated Entity and provides additional
value to the executive.
The short-term incentives (‘STI’) program is designed to align the targets of the business units with the
performance hurdles of executives. STI payments are granted to executives based on specific annual targets
and key performance indicators (‘KPI’s’) being achieved. KPI’s include revenue growth, profit contribution and
customer retention.
The long-term incentives (‘LTI’) include long service leave and share-based payments. The Board reviewed the
long-term equity-linked performance incentives specifically for executives during the year ended 30 June 2019.
Consolidated entity performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the Consolidated Entity. A portion of
cash bonus and incentive payments are dependent on defined performance targets being met. The remaining
portion of the cash bonus and incentive payments are at the discretion of the Board.
The Board is of the opinion that the continued improved results can be attributed in part to the adoption of
performance based compensation and is satisfied that this improvement will continue to increase shareholder
wealth if maintained over the coming years.
Voting and comments made at the Company’s 2018 Annual General Meeting (‘AGM’)
At the 2018 Annual General Meeting of shareholders held on 27 November 2018, 92.85% of the votes received
supported the adoption of the remuneration report for the year ended 30 June 2018. The Company did not
receive any specific feedback at the AGM regarding its remuneration practices.
30
BidEnergy Annual Report 2019
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Consolidated Entity are set out in the
following tables.
Short-term benefits
Post-
employment
benefits
Share-
based
payments
Cash
salary and
fees Cash bonus
Non-
monetary
Severance
Super-
annuation
Equity-
settled
2019
Directors:
$
Andrew Dyer*
63,470
$
–
Guy Maine
275,000
120,548
62,404
29,490
–
–
Leanne Graham
James Baillieu**
Other Key
Management
Personnel:
$
–
–
–
–
Anthony Du Preez***
220,833
18,265
9,086
Darren Knihnicki****
Matthew Watson
20,290
198,500
–
9,132
–
–
869,987
147,945
9,086
$
–
–
–
–
–
–
–
–
$
$
Total
$
6,030
37,577
55,432
124,932
57,321
490,446
–
57,778
2,802
–
120,182
32,292
22,714
1,928
–
270,898
8,520
30,738
19,725
136,706
364,063
90,776
315,757
1,433,551
*
Andrew Dyer was appointed as Non-Executive Director on 16 July 2018, becoming Non-Executive Chairman on 21 February 2019.
**
James Baillieu resigned as a Director on 22 February 2019.
*** Anthony Du Preez resigned as a director on 13 February 2019, however he remains with the Consolidated Entity as CTO. His
remuneration is disclosed under “Other Key Management Personnel”, as he did not receive any additional remuneration in his
role as the Director.
**** Darren Knihnicki was appointed as Chief Commercial Officer on 27 May 2019.
BidEnergy Annual Report 2019
31
Directors’ report
Continued
Short-term benefits
Post-
employment
benefits
Share-
based
payments
Cash
salary and
fees Cash bonus
Non-
monetary
Severance
Super-
annuation
Equity-
settled
2018
Directors:
James Baillieu
Leanne Graham
Anthony Du Preez
Phillip Adams**
Robert Browning**
Guy Maine*
Stuart Allinson***
Other Key
Management
Personnel:
Matthew Watson
$
45,662
50,000
123,485
201,681
24,456
114,186
69,000
190,000
818,470
$
–
–
–
$
–
–
–
$
–
–
–
61,766
756
184,263
–
–
–
–
61,766
–
–
–
–
756
$
4,338
–
11,731
–
2,323
10,848
6,555
–
–
–
Total
$
50,000
52,558
135,216
448,466
26,779
$
–
2,558
–
–
–
39,857
164,891
812
76,367
–
18,050
–
208,050
184,263
53,845
43,227
1,162,327
*
Guy Maine was appointed Managing Director 17 January 2018.
** Robert Browning and Phillip Adams resigned as directors on 18 November 2017.
*** Stuart Allinson resigned as a director on 17 November 2017.
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. Details of these agreements are as follows:
Name:
Title:
Guy Maine
Managing Director of BidEnergy Limited
Agreement commenced:
17 January 2018
Term of agreement:
Ongoing
Details:
Mr Maine receives a base salary of $300,000 per annum plus superannuation.
In addition, Mr Maine is entitled to an annual cash bonus, subject to the
achievement of performance milestones, with both the amount and milestones
being set by the Board on a yearly basis. For FY2019, Mr Maine’s maximum annual
cash bonus entitlement was set at $300,000, subject to a series of defined
performance targets. In addition, the Board has recommended the issue of
1,000,000 share options which will be put to shareholders for their consideration
at the 2019 Annual General Meeting.
Either party may terminate the employment by providing the other party with
three (3) months written notice.
32
BidEnergy Annual Report 2019
Name:
Title:
Darren Knihnicki
Chief Commercial Officer
Agreement commenced:
27 May 2019
Term of agreement:
Ongoing
Details:
Mr Knihnicki receives a base salary of $200,000 per annum plus superannuation.
In addition, Mr Knihnicki is entitled to a maximum annual cash bonus of $50,000
or such other amount as specified by the board each year, and is subject to the
achievement of performance targets as defined by the Board.
Further, Mr Knihnicki has been issued 110,000 Class F performance rights that vest
and become exercisable into fully paid ordinary shares after 12 months of
continuous employment with the Company.
Either party may terminate the employment by providing the other party with
three (3) months written notice.
Name:
Title:
Matthew Watson
Chief Financial Officer
Agreement commenced:
10 October 2016
Term of agreement:
Ongoing
Details:
Mr Watson receives a base salary of $198,500 per annum plus superannuation.
In addition, Mr Watson is entitled to a maximum annual cash bonus up to $25,000
or such other amount as specified by the Board each year, and subject to the
achievement of performance targets as defined by the Board.
Further, Mr Watson was issued 184,416 Class E Performance Rights that vested
12 months after the date of issue.
The Company may terminate the employment agreement by providing Mr Watson
with 12 weeks written notice, whilst Mr Watson may resign on giving one month notice.
Name:
Title:
Anthony Du Preez
Chief Technology Officer
Agreement commenced:
1 February 2019
Term of agreement:
Ongoing
Details:
Mr Du Preez receives a base salary of $250,000 per annum plus superannuation.
In addition, Mr Du Preez is entitled to an annual cash bonus, subject to the
achievement of performance milestones, with both the amount and milestones
being set by the Board on a yearly basis. For FY2019/20, the maximum annual cash
bonus entitlement was set at $100,000, subject to the achievement of defined
performance targets.
Either party may terminate the employment by providing the other party with one (1)
months written notice.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
BidEnergy Annual Report 2019
33
Directors’ report
Continued
Share-based compensation
Issue of shares
There were no shares issued to Directors and other key management personnel as part of compensation during
the year ended 30 June 2019.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of Directors
and other key management personnel in this financial year or future reporting years are as follows:
Name
Andrew Dyer
Leanne Graham
James Baillieu**
Number of
options
granted*
Grant
date
Expiry
date
Exercise
price
Fair value
per option at
grant date
294,118
27/11/2018
26/11/2022
294,118
27/11/2018
26/11/2022
294,118
27/11/2018
26/11/2022
$1.19
$1.19
$1.19
$1.19
$0.475
$0.475
$0.475
$0.475
Anthony Du Preez***
294,118
27/11/2018
26/11/2022
*
Post share consolidation on 100 for 680 basis.
**
James Baillieu resigned as a director on 22 February 2019. Options were forfeited.
*** Anthony Du Preez resigned as a director on 13 February 2019. Options were forfeited.
Options granted carry no dividend or voting rights.
Except for the above, there were no options over ordinary shares granted to or vested by Directors and other
key management personnel as part of compensation during the year ended 30 June 2019.
Performance rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration
of Directors and other key management personnel in this financial year or future reporting years are as follows:
Name
Matthew Watson
Darren Knihnicki
Number of
rights
granted*
184,416
110,000
Grant
date
Expiry
date
Exercise
price
20/07/2018
20/10/2019
27/05/2019
05/11/2020
–
–
Fair value
per right at
grant date*
$0.782
$0.810
*
Post share consolidation on 100 for 680 basis.
Performance rights granted carry no dividend or voting rights.
Additional information
The earnings of the Consolidated Entity for the four years to 30 June 2019 are summarised below:
Revenue
Net loss before tax
Net loss after tax
2019
$
2018
$
2017
$
2016
$
5,439,550
4,464,293
2,999,867
1,248,181
(6,599,957)
(4,527,522)
(7,378,001)
(3,302,777)
(6,566,405)
(4,517,631)
(7,185,483)
(3,302,777)
34
BidEnergy Annual Report 2019
The factors that are considered to affect total shareholders return (‘TSR’) are summarised below:
Share price at financial year start ($)
Share price at 2019 financial year start
– adjusted for share consolidation ($)
Share price at financial year end ($)
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
2019*
0.05
0.34
0.83
(6.00)
(6.00)
2018
0.02
–
0.05
(0.66)
(0.66)
2017
0.10
–
0.02
(2.21)
(2.21)
2016
0.11
–
0.10
(1.02)
(1.02)
*
Share price as at 30 June 2019 reflects post share consolidation on 100 to 680 basis.
The table only discloses information for the four years to 30 June 2019 instead of five years as the information prior
to the acquisition of the BidEnergy business, BidEnergy Operations Pty Ltd (previously BidEnergy Pty Ltd), by listed
parent company BidEnergy Ltd (previously Cove Resources Ltd) on 1 July 2016 is not relevant.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of key
management personnel of the Consolidated Entity, including their personally related parties, is set out below:
Balance at
the start of
the year
Additions
(pre share
consolidation)
Share
consolidation
adjustments*
Additions
(post share
consolidation)
Balance at
the end of
the year
Other
Ordinary shares
Andrew Dyer
Guy Maine
–
–
–
554,445
186,595
(632,063)
Leanne Graham
1,100,000
Anthony Du Preez**
46,469,049
–
–
(938,235)
(39,635,365)
86,000
35,000
22,470
–
–
–
–
–
86,000
143,977
184,235
6,833,684
James Baillieu***
61,209,805
3,000,000
(54,767,185)
387,840
(9,830,460)
–
109,333,299
3,186,595
(95,972,848)
531,310
(9,830,460)
7,247,896
* Share consolidation adjustment on a 100 to 680 basis.
** Anthony Du Preez resigned as director on 13 February 2019, continuing as CTO.
*** James Baillieu resigned as director on 22 February 2019. The balance in “Other” column represents his shareholding as at the
date of resignation.
BidEnergy Annual Report 2019
35
Directors’ report
Continued
Option holding
The number of options over ordinary shares in the Company held during the financial year by each Director and
other members of key management personnel of the Consolidated Entity, including their personally related parties,
is set out below:
Options over ordinary shares
Andrew Dyer
Guy Maine
Leanne Graham
James Baillieu**
Anthony Du Preez***
Balance at
the start of
the year
Granted
(Pre share
consolidation)
Share
consolidation
adjustment*
Forfeited
Balance at
the end of
the year
–
2,000,000
(1,705,882)
15,000,000
–
(12,794,117)
500,000
2,000,000
(2,132,352)
–
–
–
294,118
2,205,883
367,648
–
–
2,000,000
(1,705,882)
(294,118)
2,000,000
(1,705,882)
(294,118)
–
–
15,500,000
8,000,000
(20,044,115)
(588,236)
2,867,649
*
Share consolidation adjustment on a 100 to 680 basis.
**
James Baillieu resigned as a director on 22 February 2019. Options were forfeited.
*** Anthony Du Preez resigned as a director on 13 February 2019. Options were forfeited.
Performance rights holding
The number of performance rights over ordinary shares in the Company held during the financial year by each
Director and other members of key management personnel of the Consolidated Entity, including their personally
related parties, is set out below:
Performance rights over
ordinary shares
Matthew Watson
Darren Knihnicki*
Balance at
the start of
the year
Granted
Vested
Expired/
forfeited/
other
Balance at
the end of
the year
–
–
–
184,416
110,000
294,416
–
–
–
–
–
–
184,416
110,000
294,416
*
Unlisted Class F performance rights were issued to Mr Darren Knihnicki (CCO) on 5 August 2019. Under IG4, which is set out in the
Appendix to AASB 2 Share Based Payments, the service commencement date of these performance rights was deemed to be
27 May 2019.
This concludes the remuneration report, which has been audited.
36
BidEnergy Annual Report 2019
Shares under option
Unissued ordinary shares of BidEnergy Limited under option at the date of this report are as follows:
Class
Unlisted Class E
Unlisted Class F
Unlisted Class G
Unlisted Class H
Unlisted Class I
Unlisted Class J
Unlisted Class K
Grant date
Expiry date
Exercise
price
Number
under option
24/11/2016
24/11/2021
16/12/2016
28/07/2020
$0.476
$0.680
567,474
73,530
08/08/2017
31/12/2020
$0.204
882,353
08/08/2017
31/12/2020
$0.306
882,353
08/08/2017
31/12/2020
$0.408
1,250,000
17/01/2018
16/01/2022
$0.136
2,205,883
27/11/2018
26/11/2022
$1.190
588,236
6,449,829
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share
issue of the Company or of any other body corporate.
Shares issued on the exercise of options
The following ordinary shares of BidEnergy Limited were issued during the year ended 30 June 2019 and up to the
date of this report on the exercise of options granted:
Date options granted
Class
27/05/2015
27/05/2015
30/06/2016
Listed BIDO options
Issue of Shares pursuant to listed BIDO option underwriting
Unlisted Class C options
Exercise
price
$0.68
$0.68
$1.02
Number of
shares
issued
3,129,947
1,051,016
553,424
4,734,387
Shares under restricted share units
On 8 February 2019, the Company issued 1,073,000 Unlisted Restricted Share Units (“RSUs”) under the Company’s
2019 Restricted Share Units Plan to US employees. Each RSU will vest and convert into one fully paid ordinary shares
for nil cash consideration on or after 8 March 2020 (“Vesting Date”), provided the holder remains employed by the
Company on vesting date.
Shares issued on the conversion of restricted share units
There were no ordinary shares of BidEnergy Limited issued on conversion of restricted share units during the year
ended 30 June 2019 and up to the date of this report.
BidEnergy Annual Report 2019
37
Directors’ report
Continued
Shares under performance rights
Unissued ordinary shares of BidEnergy Limited under performance rights at the date of this report are as follows:
Class
Unlisted Class A
Unlisted Class F*
Grant date
Expiry date
Exercise
price
Number
under rights
01/07/2016
01/07/2020
$0.85
27/05/2019
05/11/2020
–
328,401
110,000
438,401
* Unlisted Class F performance rights were issued to Mr Darren Knihnicki (CCO) on 5 August 2019. Under IG4, which is set out in the
Appendix to AASB 2 Share Based Payments, the service commencement date of these performance rights was deemed to be
27 May 2019.
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to
participate in any share issue of the Company or of any other body corporate.
Shares issued on the exercise of performance rights
The following ordinary shares of BidEnergy Limited were issued during the year ended 30 June 2019 and up to the
date of this report on the exercise of performance rights granted:
Date performance rights granted
Class
Exercise
price
Number of
shares
issued
01/07/2016
Unlisted Class E
–
2,250,198
Indemnity and insurance of officers
The Consolidated Entity has indemnified the directors and executives of the Consolidated Entity for costs incurred,
in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack
of good faith.
During the financial year, the Consolidated Entity paid a premium in respect of a contract to insure the directors
and executives of the Consolidated Entity against a liability to the extent permitted by the Corporations Act 2001.
The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Consolidated Entity has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the Consolidated Entity or any related entity against a liability incurred by the auditor.
During the financial year, the Consolidated Entity has not paid a premium in respect of a contract to insure the
auditor of the Consolidated Entity or any related entity.
Proceedings on behalf of the Consolidated Entity
On 26 July 2019, the Company announced that it received notice that Mr James Baillieu has made an application
in the Supreme Court of Melbourne for an order to commence proceedings on behalf of the Company under Section
236 of the Corporations Act 2001 against the Company’s directors, Andrew Dyer, Guy Maine and Leanne Graham.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year
by the auditor are outlined in note 24 to the financial statements.
38
BidEnergy Annual Report 2019
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or
by another person or firm on the auditor’s behalf), is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 24 to the financial statements do not
compromise the external auditor’s independence requirements of the Corporations Act 2001 for the following
reasons:
> all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
> none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the
Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
Officers of the Consolidated Entity who are former partners of RSM Australia
Partners
There are no officers of the Consolidated Entity who are former partners of RSM Australia Partners.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out immediately after this Directors’ report.
Auditor
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations
Act 2001.
On behalf of the Directors
Andrew Dyer
Non-Executive Chairman
26 September 2019
BidEnergy Annual Report 2019
39
Auditor’s independence declaration
40
BidEnergy Annual Report 2019
19 AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the financial report of BidEnergy Limited for the year ended 30 June 2019, I declare that, to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. RSM AUSTRALIA PARTNERS J S CROALL Partner Dated: 26 September 2019 Melbourne, Victoria Statement of profit or loss and other
comprehensive income
For the year ended 30 June 2019
Revenue
Other income
Expenses
Third party support and development costs
Depreciation and amortisation expense
Employee benefits expense
Share based payments
Administration expense
Marketing expense
Occupancy expense
Travel expense
Ameresco transaction costs
Reorganisation costs
Ameresco break fee
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit for the year attributable
to the owners of BidEnergy Limited
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the
Consolidated
2019
$
2018
$
5,304,110
4,066,742
135,440
397,551
Note
5
6
(1,253,374)
(698,518)
7
(542,858)
(707,415)
(5,471,025)
(4,669,059)
33
(2,540,114)
(331,673)
(1,388,034)
(711,023)
(243,702)
(248,497)
(388,236)
(351,297)
(212,164)
(149,899)
–
–
–
(308,694)
(458,612)
(357,128)
(6,599,957)
(4,527,522)
8
33,552
9,891
(6,566,405)
(4,517,631)
69,552
(185,829)
69,552
(185,829)
owners of BidEnergy Limited
(6,496,853)
(4,703,460)
Basic earnings per share
Diluted earnings per share
Cents
(6.00)
(6.00)
Cents
(4.47)
(4.47)
32
32
The above Statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
BidEnergy Annual Report 2019
41
Statement of financial position
As at 30 June 2019
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Financial assets at amortised cost
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee benefits
Other
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2019
$
2018
$
9
10
11
12
13
14
15
16
17
18
19
4,198,978
5,275,956
287,745
37,500
662,971
187,861
37,500
65,567
5,187,194
5,566,884
40,514
28,247
2,198,309
2,033,759
70,008
51,716
2,308,831
2,113,722
7,496,025
7,680,606
748,090
378,069
317,362
198,809
182,162
355,880
1,247,614
932,758
165,719
92,793
189,154
49,229
258,512
238,383
1,506,126
1,171,141
5,989,899
6,509,465
20
21
25,797,430
22,360,257
3,714,150
1,104,484
(23,521,681)
(16,955,276)
5,989,899
6,509,465
The above Statement of financial position should be read in conjunction with the accompanying notes.
42
BidEnergy Annual Report 2019
Statement of changes in equity
For the year ended 30 June 2019
Consolidated
Balance at 1 July 2017
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Shares issued in lieu of accrued corporate advisory
services fees
Issue of shares (rights issue)
Cost of capital raising
Transfers
Share based payments to advisors
Share based payments to employees
Issued
Capital
$
Accumulated
Losses
$
Reserves
$
Total equity
$
16,021,604
(12,496,931)
1,017,926
4,542,599
–
–
–
(4,517,631)
–
(4,517,631)
–
(185,829)
(185,829)
(4,517,631)
(185,829)
(4,703,460)
110,000
6,706,774
(478,121)
–
–
–
–
–
–
–
–
–
59,286
(59,286)
–
–
264,417
67,256
110,000
6,706,774
(478,121)
–
264,417
67,256
Balance at 30 June 2018
22,360,257
(16,955,276)
1,104,484
6,509,465
Consolidated
Balance at 1 July 2018
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Issued
Capital
$
Accumulated
Losses
$
Reserves
$
Total equity
$
22,360,257
(16,955,276)
1,104,484
6,509,465
–
–
–
(6,566,405)
–
(6,566,405)
–
69,552
69,552
(6,566,405)
69,552
(6,496,853)
Contributions of equity, net of transaction costs
(note 20)
3,303,489
Shares issued to RWW vendors for earn out settlement
133,684
Share based payments (note 33)
–
–
–
–
–
–
3,303,489
133,684
2,540,114
2,540,114
Balance at 30 June 2019
25,797,430
(23,521,681)
3,714,150
5,989,899
The above Statement of changes in equity should be read in conjunction with the accompanying notes.
BidEnergy Annual Report 2019
43
Statement of cash flows
For the year ended 30 June 2019
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Receipts from research and development incentive
Receipts from other grants
Interest received
Net cash used in operating activities
Cash flows from investing activities
Payments for term deposit
Payments for property, plant and equipment
Payments for intangibles (capitalised development costs)
Receipts from research and development incentive (offset against
capitalised development costs)
Proceeds from disposal of plant and equipment
Ameresco break fee
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Consolidated
Note
2019
$
2018
$
5,502,945
4,242,879
(8,753,476)
(8,191,648)
82,880
173,825
–
155,855
52,561
67,871
31
(3,115,090)
(3,551,218)
13
14
14
–
(37,500)
(27,983)
(95,787)
(1,019,496)
(900,175)
391,575
399,867
–
–
20,274
(357,128)
(655,904)
(970,449)
20
2,686,856
6,706,774
–
(478,120)
2,686,856
6,228,654
(1,084,138)
1,706,987
5,275,956
3,568,969
7,160
–
Cash and cash equivalents at the end of the financial year
9
4,198,978
5,275,956
The above Statement of cash flows should be read in conjunction with the accompanying notes.
44
BidEnergy Annual Report 2019
Notes to the financial statements
30 June 2019
Note 1. General information
The financial statements cover BidEnergy Limited as a Consolidated Entity consisting of BidEnergy Limited and the
entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars,
which is BidEnergy Limited’s functional and presentation currency.
BidEnergy Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business are:
Registered office
Suite 5, CPC
145 Stirling Highway
Nedlands, Western Australia 6009
Principal place of business
15 William Street
Melbourne, Victoria 3000
A description of the nature of the Consolidated Entity’s operations and its principal activities are included in the
Directors’ report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on
26 September 2019.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Consolidated Entity has adopted all of the new or amended Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
The following Accounting Standards and Interpretations are most relevant to the Consolidated Entity:
AASB 9 Financial Instruments
This standard replaces AASB 139 Financial Instruments: Recognition and Measurement. AASB 9 includes revised
guidance on the classification and measurement of financial instruments, including a new expected credit loss
model for calculation of impairment on financial assets, and new general hedge accounting requirements. It also
carries forward guidance on recognition and derecognition of financial instruments from AASB 139.
To assess for any expected credit losses under AASB 9, there is consideration around the probability of default
upon initial recognition of the asset, and subsequent consideration as to whether there have been any significant
increases in credit risk on an ongoing basis at each reporting period. To assess whether there is a significant
increase in credit risk the Consolidated Entity compares the risk of a default occurring on the asset as at the
reporting date with the risk of default as at the date of initial recognition.
In making this assessment, as far as available, the Consolidated Entity considers both quantitative and qualitative
information that is reasonable and supportable, including historical experience and forward-looking information
that is available without undue cost or effort. Forward-looking information considered includes the future prospects
of the industries in which the Consolidated Entity’s debtors operate, obtained from economic expert reports,
financial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as
consideration of various external sources of actual and forecast economic information that relate to the
Consolidated Entity’s core operations.
In particular, as far as available, the following information is taken into account when assessing significant
movements in credit risk:
BidEnergy Annual Report 2019
45
Notes to the financial statements
Continued
Note 2. Significant accounting policies (continued)
> actual or expected significant adverse changes in business, financial or economic conditions that are expected
to cause a significant change to the borrower’s ability to meet its obligations;
> actual or expected significant changes in the operating results of the borrower
> significant increases in credit risk on other financial instruments of the same borrower
> external credit rating
> significant changes in the value of the collateral supporting the obligation or in the quality of third-party
guarantees or credit enhancements
> significant changes in the expected performance and behaviour of the borrower, including changes in the
payment status of borrowers in the Consolidated Entity and changes in the operating results of the borrower
> macroeconomic information such as market interest rates and growth rates
The Consolidated Entity assesses on a forward-looking basis the expected credit losses associated with its financial
assets. The impairment methodology applied depends on whether there has been a significant increase in credit
risk. For trade receivables, the Consolidated Entity applies the simplified approach permitted by AASB 9, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
Impact on application of AASB 9 Financial instruments
There is no impact to the financial statements on application of AASB 9.
AASB 15 Revenue from Contracts with Customers
The Consolidated Entity has adopted AASB 15 from 1 July 2018. The standard provides a single standard for revenue
recognition. The core principle of the standard is that an entity will recognise revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services.
The standard requires:
> contracts (either written, verbal or implied) to be identified, together with the separate performance obligations
within the contract;
> determination of the transaction price, adjusted for the time value of money excluding credit risk
> allocation of the transaction price to the separate performance obligations on a basis of relative stand-alone
selling price of each distinct good or service, or estimation approach if no distinct observable prices exist; and
> recognition of revenue when each performance obligation is satisfied.
Credit risk is presented separately as an expense rather than adjusted to revenue. For goods, the performance
obligation would be satisfied when the customer obtains control of the goods. For services, the performance
obligation is satisfied when the service has been provided, typically for promises to transfer services to customers.
For performance obligations satisfied over time, an entity would select an appropriate measure of progress to
determine how much revenue should be recognised as the performance obligation is satisfied. Contracts with
customers will be presented in an entity’s statement of financial position as deferred revenue, accrued revenue,
or a receivable, depending on the relationship between the entity’s performance and the customer’s payment.
AASB 15 uses the terms “contract asset” and “contract liability”. To maintain consistency in presentation with prior
periods, the Consolidated Entity has retained the use of “accrued revenue” and “deferred revenue” respectively.
Accrued revenue is presented as part of the other current assets in the Consolidated Entity’s statement of financial
position, and deferred revenue is presented as part of other current liabilities.
Impact on application of AASB 15 Revenue from Contracts with Customers
The pattern of revenue recognition remains the same under AASB 15 Revenue from Contracts with Customers as it
had been recognised under AASB 118 Revenue. Therefore, management believes the application of AASB 15 has not
resulted in any adjustments.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations
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BidEnergy Annual Report 2019
Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International
Financial Reporting Standards as issued by the International Accounting Standards Board (‘IASB’).
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through
other comprehensive income, investment properties, certain classes of property, plant and equipment and
derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Consolidated Entity’s accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Consolidated
Entity only. Supplementary information about the Parent Entity is disclosed in note 28.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of BidEnergy Limited
(‘Company’ or ‘Parent Entity’) as at 30 June 2019 and the results of all subsidiaries for the year then ended. BidEnergy
Limited and its subsidiaries together are referred to in these financial statements as the ‘Consolidated Entity’.
Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity controls
an entity when the Consolidated Entity is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Consolidated Entity.
They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Consolidated
Entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary
to ensure consistency with the policies adopted by the Consolidated Entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised
directly in equity attributable to the parent.
Where the Consolidated Entity loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The Consolidated Entity recognises the fair value of the consideration received and the
fair value of any investment retained together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the ‘management approach’, where the information presented is
on the same basis as the internal reports provided to the Chief Operating Decision Makers (‘CODM’). The CODM
is responsible for the allocation of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is BidEnergy Limited’s functional and
presentation currency.
BidEnergy Annual Report 2019
47
Notes to the financial statements
Continued
Note 2. Significant accounting policies (continued)
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the
average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting
foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve
in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment
is disposed of.
Revenue recognition
The Consolidated Entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Consolidated Entity is expected to
be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the
Consolidated Entity: identifies the contract with a customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates of variable consideration and the time value
of money; allocates the transaction price to the separate performance obligations on the basis of the relative
stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as
each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or
services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such
as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent
events. Such estimates are determined using either the ‘expected value’ or ‘most likely amount’ method.
The measurement of variable consideration is subject to a constraining principle whereby revenue will only
be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative
revenue recognised will not occur. The measurement constraint continues until the uncertainty associated
with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining
principle are recognised as a refund liability.
Platform subscription fees
Platform subscription fee revenue is recognised over the period to which the customer receives services, once the
performance obligations are satisfied and there is a valid sales contract. Amounts disclosed as revenue are net
of sales returns and trade discounts.
RWW rebate revenue
RWW rebate revenue is recognised at the point where cash rebates are received from utility providers, the
performance obligations are satisfied and there is a valid sales contract. Amounts disclosed as revenue are
net of sales returns and trade discounts.
Non-subscription revenue
Non-subscription revenue from utility spend review services is recognised by reference to the stage of completion of
the contracts.
Stage of completion is measured by reference to labour hours incurred to date as a percentage of total estimated
labour hours for each contract. Where the contract outcome cannot be reliably estimated, revenue is only
recognised to the extent of the recoverable costs incurred to date.
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BidEnergy Annual Report 2019
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods,
where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied
when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively
enacted, except for:
> When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting nor taxable profits; or
> When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures,
and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will
be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised
to the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same
taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in
the Consolidated Entity’s normal operating cycle; it is held primarily for the purpose of trading; it is expected to be
realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are
classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Consolidated Entity’s normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months
after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
BidEnergy Annual Report 2019
49
Notes to the financial statements
Continued
Note 2. Significant accounting policies (continued)
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days.
The Consolidated Entity has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped
based on days overdue.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of
the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is determined
based on both the business model within which such assets are held and the contractual cash flow characteristics
of the financial asset unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred
and the Consolidated Entity has transferred substantially all the risks and rewards of ownership. When there is no
reasonable expectation of recovering part or all of a financial asset, it’s carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified
as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for
trading, where they are acquired for the purpose of selling in the short-term with an intention of making a profit,
or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements are
recognised in profit or loss.
Impairment of financial assets
The Consolidated Entity recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the loss
allowance depends upon the Consolidated Entity’s assessment at the end of each reporting period as to whether
the financial instrument’s credit risk has increased significantly since initial recognition, based on reasonable and
supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset’s lifetime expected credit losses
that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become
credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on
the asset’s lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis
of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at
the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised
within other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and
equipment (excluding land) over their expected useful lives as follows:
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BidEnergy Annual Report 2019
Buildings
Leasehold improvements
Plant and equipment
Plant and equipment under lease
Computer equipment
Office equipment
40 years
3-10 years
2-5 years
2-5 years
2-5years
2-5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the
lease or the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic
benefit to the Consolidated Entity. Gains and losses between the carrying amount and the disposal proceeds
are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly
to retained profits.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair
value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite
life intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life
intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses
recognised in profit or loss arising from the derecognition of intangible assets are measured as the difference
between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of
finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life
are accounted for prospectively by changing the amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for
impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is
carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and
are not subsequently reversed.
Customer lists
Customer lists acquired in a business combination are amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 7.5 years.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period
of their expected benefit, being their finite life of 2–5 years.
Capitalised development costs
Software development costs are capitalised at the direct costs incurred and amortised on a straight line basis
over the period of their expected benefit being their finite life of 2-3 years. Amortisation starts at the time that the
technology is activated and issued by both internal and external customers. The capitalised costs include the direct
costs of internal staff and any supporting software acquired from a third party.
Brand
The brand of an entity arises on the acquisition of a business. The brand is amortised on a straight-line basis over
the period of their expected benefit, being their finite life of 7.5 years.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are
tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might
BidEnergy Annual Report 2019
51
Notes to the financial statements
Continued
Note 2. Significant accounting policies (continued)
be impaired. Other non-financial assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in-use
is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to
the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are
grouped together to form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end of the
financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are
not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to
be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting
date are measured at the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date using the projected unit credit method. Consideration is given to expected
future wage and salary levels, experience of employee departures and periods of service. Expected future payments
are discounted using market yields at the reporting date on national government bonds with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services,
where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with
non-vesting conditions that do not determine whether the Consolidated Entity receives the services that entitle the
employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over
the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the
award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting
period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting
date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying
either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on
which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated
as follows:
> during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied
by the expired portion of the vesting period.
> from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
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BidEnergy Annual Report 2019
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash
paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all
other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases
the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Consolidated Entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the Consolidated Entity or employee
and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining
vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the
cancelled and new award is treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes,
the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date; and assumes that the transaction will take
place either: in the principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based
on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity
instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any
non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the acquiree
is measured at either fair value or at the proportionate share of the acquiree’s identifiable net assets. All acquisition
costs are expensed as incurred to profit or loss.
On the acquisition of a business, the Consolidated Entity assesses the financial assets acquired and liabilities
assumed for appropriate classification and designation in accordance with the contractual terms, economic
conditions, the Consolidated Entity’s operating or accounting policies and other pertinent conditions in existence
at the acquisition-date.
Where the business combination is achieved in stages, the Consolidated Entity remeasures its previously held
equity interest in the acquiree at the acquisition-date fair value and the difference between the fair value and
the previous carrying amount is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value.
Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is recognised
in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent settlement
is accounted for within equity.
BidEnergy Annual Report 2019
53
Notes to the financial statements
Continued
Note 2. Significant accounting policies (continued)
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-
controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any
pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-
existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to
the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-date,
but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling
interest in the acquiree, if any, the consideration transferred and the acquirer’s previously held equity interest in
the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the
provisional amounts recognised and also recognises additional assets or liabilities during the measurement
period, based on new information obtained about the facts and circumstances that existed at the acquisition-date.
The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the
acquirer receives all the information possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of BidEnergy Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
Goods and Services Tax (‘GST’) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or
as part of the expense.
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 tax authority is included in other receivables or other payables in the statement
of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
tax authority.
Funds held in trust
The Company holds funds and pays utility bills on behalf of its clients. These funds do not meet the definition
of an asset, therefore it is not recognised in the statement of financial position.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not
yet mandatory, have not been early adopted by the Consolidated Entity for the annual reporting period ended
30 June 2019. The Consolidated Entity’s assessment of the impact of these new or amended Accounting Standards
and Interpretations, most relevant to the Consolidated Entity, are set out below.
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BidEnergy Annual Report 2019
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces
AASB 117 ‘Leases’ and for lessees will eliminate the classifications of operating leases and finance leases. Subject to
exceptions, a ‘right-of-use’ asset will be capitalised in the statement of financial position, measured at the present
value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term
leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture)
where an accounting policy choice exists whereby either a ‘right-of-use’ asset is recognised or lease payments are
expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised,
adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future
restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a
depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised
lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease
under AASB 16 will be higher when compared to lease expenses under AASB 117. However EBITDA (Earnings Before
Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by
interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash
flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating
or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor
accounts for leases. The Consolidated Entity will adopt this standard from 1 July 2019 and it is not expected to have
a material impact on the Consolidated Entity’s financial performance and position.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually evaluates its
judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management
bases its judgements, estimates and assumptions on historical experience and on other various factors, including
expectations of future events, management believes to be reasonable under the circumstances. The resulting
accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates
and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities (refer to the respective notes) within the next financial year are discussed below.
Share-based payment transactions
The Consolidated Entity measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined by using either
the Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were
granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have
no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact
profit or loss and equity.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on
the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall
expected credit loss rate for each group. These assumptions include recent sales experience and historical
collection rates.
Fair value measurement hierarchy
The Consolidated Entity is required to classify all assets and liabilities, measured at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1:
Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly; and Level 3: Unobservable inputs for the asset or liability. Considerable
judgement is required to determine what is significant to fair value and therefore which category the asset or
liability is placed in can be subjective.
BidEnergy Annual Report 2019
55
Notes to the financial statements
Continued
Note 3. Critical accounting judgements, estimates and assumptions (continued)
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include
discounted cash flow analysis or the use of observable inputs that require significant adjustments based on
unobservable inputs.
Estimation of useful lives of assets
The Consolidated Entity determines the estimated useful lives and related depreciation and amortisation charges
for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as
a result of technical innovations or some other event. The depreciation and amortisation charge will increase where
the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have
been abandoned or sold will be written off or written down.
Goodwill and other indefinite life intangible assets
The Consolidated Entity tests annually, or more frequently if events or changes in circumstances indicate
impairment, whether goodwill and other indefinite life intangible assets have suffered any impairment, in
accordance with the accounting policy stated in note 2. The recoverable amounts of cash-generating units have
been determined based on value-in-use calculations. These calculations require the use of assumptions, including
estimated discount rates based on the current cost of capital and growth rates of the estimated future cash flows.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Consolidated Entity assesses impairment of non-financial assets other than goodwill and other indefinite life
intangible assets at each reporting date by evaluating conditions specific to the Consolidated Entity and to the
particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is
determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number
of key estimates and assumptions.
Income tax
The Consolidated Entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement
is required in determining the provision for income tax. There are many transactions and calculations undertaken
during the ordinary course of business for which the ultimate tax determination is uncertain. The Consolidated Entity
recognises liabilities for anticipated tax audit issues based on the Consolidated Entity’s current understanding of the
tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will
impact the current and deferred tax provisions in the period in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Consolidated Entity considers
it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Employee benefits provision
As discussed in note 2, the liability for employee benefits expected to be settled more than 12 months from the
reporting date are recognised and measured at the present value of the estimated future cash flows to be made
in respect of all employees at the reporting date. In determining the present value of the liability, estimates of
attrition rates and pay increases through promotion and inflation have been taken into account.
Business combinations
As discussed in note 2, business combinations are initially accounted for on a provisional basis. The fair value of
assets acquired, liabilities and contingent liabilities assumed are initially estimated by the Consolidated Entity
taking into consideration all available information at the reporting date. Fair value adjustments on the finalisation
of the business combination accounting is retrospective, where applicable, to the period the combination occurred
and may have an impact on the assets and liabilities, depreciation and amortisation reported.
Note 4. Operating segments
Identification of reportable operating segments
The Consolidated Entity is organised into operating segments: based on the business activities in Australia, UK and
US. These operating segments are based on the internal reports that are reviewed and used by the Board of
56
BidEnergy Annual Report 2019
Directors (who are identified as the Chief Operating Decision Makers (‘CODM’)) in assessing performance and in
determining the allocation of resources. There is no aggregation of operating segments.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to
operating segments are determined in accordance with accounting policies that are consistent with those adopted
in the annual financial statements of the Consolidated Entity.
For financial year 2019 the entity has altered its accounting segments to align with its three separate operating
regions – Australia, the USA, and the UK. The UK was previously reported with Australia as an operating segment,
however in financial year 2019 the UK is being managed by UK based employees as distinct from financial year 2018.
Also, in financial year 2019, the US is being reported as one segment rather than separately for utility spend
management and rebate businesses. USA staff are responsible for jointly servicing utility spend management
and rebate clients and as such the USA staff will be reported as one segment going forward.
The principal continuing activities of the entity consisted of carrying on its business as a provider of utility spend
management services through the deployment of the Company’s proprietary cloud-based software platform in
Australia, UK and the USA. In the US only, the entity also earns revenue from its rebate management business
whereby fees are earned from clients for managing the submission of information to energy retailers to facilitate
the processing of rebates under the ‘Energy Efficient Infrastructure Program’ applicable in the US.
Operating segment information
Consolidated – 2019
Platform subscription fees
Non-subscription revenue
RWW rebate revenue
Revenue
Australia
$
UK
$
USA
$
Total
$
2,697,784
44,207
181,950
2,923,941
27,080
–
–
–
–
27,080
2,353,089
2,353,089
2,724,864
44,207
2,535,039
5,304,110
Third party support and development costs
(1,090,396)
–
(162,978)
(1,253,374)
Administration expense
Employee benefits expense
Marketing expense
Travel expense
Occupancy expense
(1,030,166)
(23,612)
(324,256)
(1,378,034)
(4,381,297)
(254,841)
(1,854,384)
(6,490,522)
(108,399)
(37,718)
(97,585)
(243,702)
(151,629)
(15,537)
(44,998)
(212,164)
(221,071)
–
(167,165)
(388,236)
Total operating expenses
(6,982,958)
(331,708)
(2,651,366)
(9,966,032)
Underlying EBITDA from core operations
(4,258,094)
(287,501)
(116,327)
(4,661,922)
Government grants
Capitalised labour (software)
Depreciation and amortisation
Share based payments
Interest – other
Foreign exchange
82,880
1,019,497
(415,264)
(2,540,114)
51,441
–
–
–
–
–
(14,445)
4,445
–
–
82,880
1,019,497
(127,594)
(542,858)
–
(2,540,114)
1,119
–
52,560
(10,000)
Loss before income tax benefit for the year
(6,074,099)
(283,056)
(242,802)
(6,599,957)
Income tax
–
–
33,552
33,552
Loss after income tax benefit for the year
attributable to the owners of BidEnergy Limited
(6,074,099)
(283,056)
(209,250)
(6,566,405)
BidEnergy Annual Report 2019
57
Notes to the financial statements
Continued
Note 4. Operating segments (continued)
Consolidated – 2018
Platform subscription fees
Non-subscription revenue
RWW rebate revenue
Revenue
Australia
$
UK
$
USA
$
Total
$
1,876,195
16,234
15,490
1,907,919
57,835
–
–
–
–
57,835
2,100,988
2,100,988
1,934,030
16,234
2,116,478
4,066,742
Third party support and development costs
(698,519)
–
–
(698,519)
Administration expense
Employee benefits expense
Marketing expense
Travel expense
Occupancy expense
(700,779)
(15,248)
(233,431)
(949,458)
(3,645,102)
(172,676)
(94,406)
(193,517)
–
–
–
–
(1,924,128)
(5,569,230)
(75,822)
(248,498)
(55,493)
(149,899)
(157,780)
(351,297)
Total operating expenses
(5,504,999)
(15,248)
(2,446,654)
(7,966,901)
Underlying EBITDA from core operations
(3,570,969)
986
(330,176)
(3,900,159)
Reorganisation costs
Ameresco transaction costs
Ameresco break fee
Government grants
Capitalised labour (software)
Depreciation and amortisation
Share based payments
Interest – other
Foreign exchange
(229,226)
–
–
329,680
900,175
(589,135)
(331,673)
67,852
54,299
–
–
–
–
–
–
–
–
(229,386)
(458,612)
(308,694)
(308,694)
(357,127)
(357,127)
–
–
329,680
900,175
(118,281)
(707,416)
–
19
(331,673)
67,871
22,259
161,875
238,433
Profit/(loss) before income tax benefit for the year
(3,368,997)
23,245
(1,181,770)
(4,527,522)
Income tax
–
–
9,891
9,891
Profit/(loss) after income tax benefit for the year
attributable to the owners of BidEnergy Limited
(3,368,997)
23,245
(1,171,879)
(4,517,631)
58
BidEnergy Annual Report 2019
Note 5. Revenue
Platform subscription fees
Non-subscription revenue
RWW Rebate Revenue
Revenue
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Major product lines
Platform subscription fees
Non-subscription revenue
RWW Rebate Revenue
Geographical regions
Australia
USA
UK
Timing of revenue recognition
Services transferred over time
Services transferred at point in time
Note 6. Other income
Interest
Grant income
Other income
Consolidated
2019
$
2018
$
2,923,941
1,907,919
27,080
57,835
2,353,089
2,100,988
5,304,110
4,066,742
Consolidated
2019
$
2018
$
2,923,941
1,907,919
27,080
57,835
2,353,089
2,100,988
5,304,110
4,066,742
2,724,864
1,934,030
2,535,039
2,116,478
44,207
16,234
5,304,110
4,066,742
2,923,941
1,907,919
2,380,169
2,158,823
5,304,110
4,066,742
Consolidated
2019
$
2018
$
52,560
67,871
82,880
329,680
135,440
397,551
BidEnergy Annual Report 2019
59
Notes to the financial statements
Continued
Note 7. Expenses
Loss before income tax includes the following specific expenses:
Depreciation
Computer equipment
Office equipment
Total depreciation
Amortisation
Software
Brands
Customer List
Total amortisation
Total depreciation and amortisation
Note 8. Income tax benefit
Numerical reconciliation of income tax benefit and tax at the statutory rate
Loss before income tax benefit
Tax at the statutory tax rate of 27.5%
Non-deductible expenses
Research and development
Unrecognised income tax benefit in respect of current year losses
Consolidated
2019
$
2018
$
3,485
12,231
15,716
1,889
18,384
20,273
436,013
605,570
68,566
22,563
527,142
542,858
61,376
20,196
687,142
707,415
Consolidated
2019
$
2018
$
(6,599,957)
(4,527,522)
(1,814,988)
(1,245,069)
698,531
91,210
(22,792)
(47,801)
1,200,116
1,153,812
Amount not brought to account as deferred tax asset in the current year
(60,868)
47,848
Amounts brought to account as deferred tax asset in the current year
(23,435)
(15,618)
Other amounts not recognised relating to foreign exchange
Income tax benefit
(10,116)
(33,552)
5,727
(9,891)
Consolidated
2019
$
2018
$
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
12,415,806
11,628,528
Potential tax benefit @ 27.5%
3,414,347
3,197,845
The above potential tax benefit for tax losses has not been recognised in the statement of financial position.
These tax losses can only be utilised in the future if the continuity of ownership test is passed, or failing that,
the same business test is passed, and the Company earns sufficient taxable profit to absorb the losses.
60
BidEnergy Annual Report 2019
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Employee entitlements
Capital raising costs
Other
Tax losses
Less deferred tax liability not recognised – prepayments
Net deferred tax assets not recognised
Consolidated
2019
$
2018
$
102,557
68,210
270,358
307,303
34,978
9,864
3,414,347
3,197,845
(10,328)
(16,260)
3,811,912
3,566,962
The above potential tax benefit, which includes tax losses, for deductible temporary differences has not been
recognised in the statement of financial position as the recovery of this benefit is uncertain.
Note 9. Current assets – cash and cash equivalents
Cash at bank
Note 10. Current assets – trade and other receivables
Trade receivables
Consolidated
2019
$
2018
$
4,198,978
5,275,956
Consolidated
2019
$
2018
$
287,745
187,861
Due to the short term nature of the receivables, their carrying value is assumed to approximate their fair value.
No collateral or security is held. The Consolidated Entity has financial risk management policies in place to ensure
that all receivable are received within the credit time frame.
Allowance for expected credit losses
Movements in the allowance for expected credit losses are as follows:
Opening balance
Receivables written off during the year as uncollectable
Unused amounts reversed
Closing balance
Consolidated
2019
$
–
–
–
–
2018
$
45,999
(22,515)
(23,484)
–
BidEnergy Annual Report 2019
61
Notes to the financial statements
Continued
Note 11. Current assets – financial assets at amortised cost
Term deposit
Note 12. Current assets – Other current assets
Prepayments
Other
Note 13. Non-current assets – property, plant and equipment
Computer equipment – at cost
Less: Accumulated depreciation
Office equipment – at cost
Less: Accumulated depreciation
Consolidated
2019
$
2018
$
37,500
37,500
Consolidated
2019
$
46,178
616,793
662,971
Consolidated
2019
$
25,043
(5,549)
19,494
106,540
2018
$
59,126
6,441
65,567
2018
$
17,002
(1,889)
15,113
86,423
(85,520)
(73,289)
21,020
40,514
13,134
28,247
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are
set out below:
Consolidated
Balance at 1 July 2017
Additions
Disposals
Depreciation expense
Balance at 30 June 2018
Additions
Depreciation expense
Balance at 30 June 2019
62
BidEnergy Annual Report 2019
Office
Equipment
At cost
Computer
Equipment
At cost
$
27,157
4,361
$
–
91,426
–
(74,424)
(18,384)
(1,889)
13,134
20,117
(12,231)
21,020
15,113
7,866
(3,485)
19,494
Total
$
27,157
95,787
(74,424)
(20,273)
28,247
27,983
(15,716)
40,514
Note 14. Non-current assets – intangibles
Goodwill – at cost
Customer list – at cost
Less: Accumulated amortisation
Software – at cost
Less: Accumulated amortisation
Brand – at cost
Less: Accumulated amortisation
Consolidated
2019
$
2018
$
693,472
657,767
156,479
148,422
(53,895)
(31,332)
102,584
117,090
2,168,632
1,534,471
(1,078,158)
(631,428)
1,090,474
903,043
475,559
451,073
(163,780)
(95,214)
311,779
355,859
2,198,309
2,033,759
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are
set out below:
Consolidated
$
$
$
$
Goodwill
Software
Brands
Customer
Lists
Total
$
Balance at 1 July 2017
634,503
1,008,534
401,282
132,037
2,176,356
Additions
R&D refund
–
–
900,175
(399,867)
–
–
–
–
900,175
(399,867)
Foreign exchange differences
23,264
(229)
15,953
5,249
44,237
Amortisation
–
(605,570)
(61,376)
(20,196)
(687,142)
Balance at 30 June 2018
657,767
903,043
355,859
117,090
2,033,759
Capitalised development costs
R&D refund
–
–
1,019,496
(391,575)
–
–
–
–
1,019,496
(391,575)
Foreign exchange differences
35,705
(4,477)
24,486
8,057
63,771
Amortisation
–
(436,013)
(68,566)
(22,563)
(527,142)
Balance at 30 June 2019
693,472
1,090,474
311,779
102,584
2,198,309
Impairment Testing of Intangible balances
BidEnergy holds intangible balances relating to goodwill and other intangibles purchased as part of the US based
RealWinWin energy rebate capture business purchased in November 2016, as well as intangible balances relating
to developed software for the BidEnergy utility spend management business. The recoverable amount of these
intangibles has been determined based on a value in use calculation using separate cash flow projections for the
BidEnergy US and BidEnergy cash generating units (CGU’s) over a five-year period respectively. Cash flow beyond
the five year forecast are extrapolated using estimated terminal growth rates.
BidEnergy Annual Report 2019
63
Notes to the financial statements
Continued
Note 14. Non-current assets – intangibles (continued)
Key assumptions used for value in use calculations
BidEnergy US
The following key assumptions were used in the discounted cashflow model for RealWinWin goodwill and intangible
asset assessment of $1,124,630:
(a) 20.9% pre-tax discount rate;
(b) 43% per annum average projected revenue growth rate;
(c) 23% per annum increase in operating costs and overheads;
(d) Terminal growth rate of 2% at the end of the forecast period.
The discount rate of 20.9% pre-tax reflects management’s estimate of the time value of money and the
Consolidated Entity’s weighted average cost of capital adjusted for RealWinWin, the risk-free rate and the volatility
of the share price relative to market movements.
Management believes the projected 43% revenue growth rate is reasonable and justified, based on known contracts
and market conditions.
Results of impairment testing and sensitivity to changes in assumptions
Based on the impairment testing of BidEnergy US goodwill and intangible assets for 2019, there was no requirement
to impair intangibles as the recoverable amounts exceed the intangible carrying amounts.
The Group has considered changes in key assumptions that it believes to be reasonably possible. For the BidEnergy
US CGU, the recoverable amount exceeds the carrying amount when testing for reasonably possible changes in key
assumptions and there is no reasonable possible change in a key assumption that would result in impairment.
BidEnergy
The following key assumptions were used in the discounted cashflow model for BidEnergy capitalised software
assessment of $1,090,474:
(a) 20.9% pre-tax discount rate;
(b) 59% per annum average projected revenue growth rate;
(c) 34% per annum increase in operating costs and overheads;
(d) Terminal growth rate of 2.0% at the end of the forecast period.
The discount rate of 20.9% pre-tax reflects management’s estimate of the time value of money and the
Consolidated Entity’s weighted average cost of capital adjusted for the BidEnergy software platform, the risk-free
rate and the volatility of the share price relative to market movements.
Management believes the projected 59% revenue growth rate is reasonable and justified, based on known contracts
and market conditions
Results of impairment testing and sensitivity to changes in assumptions
Based on the impairment testing of BidEnergy capitalised software for 2019, there was no requirement to impair the
intangible asset as the recoverable amounts exceed the intangible carrying amounts.
Management believes that other reasonable changes in the key assumptions on which the recoverable amount
of BidEnergy’s capitalised software is based would not cause the CGU’s intangible carrying amount to exceed its
recoverable amount.
64
BidEnergy Annual Report 2019
Note 15. Non-current assets – other
Security deposits
Note 16. Current liabilities – trade and other payables
Trade payables
Accrued expenses
Other payables
Refer to note 22 for further information on financial instruments.
Note 17. Current liabilities – Employee benefits
Annual leave
Note 18. Current liabilities – other
Deferred revenue
Contingent consideration
Contingent consideration
Consolidated
2019
$
70,008
2018
$
51,716
Consolidated
2019
$
271,490
166,385
2018
$
47,819
96,604
310,215
233,646
748,090
378,069
Consolidated
2019
$
2018
$
317,362
198,809
Consolidated
2019
$
2018
$
182,162
203,991
–
151,889
182,162
355,880
Contingent consideration relates to the value of the potential earn out payable relating to the acquisition of the
RealWinWin US energy rebate capture business completed on 24 November 2016. The contingent consideration
is based on the annual contract value of the BidEnergy utility spend management subscription services sold to
existing RealWinWin customers from 1 January 2018 to 31 December 2018.
On 10 May 2019, the Consolidated Entity issued 112,566 at deemed share price of $1.187 to settle the earn out provision.
BidEnergy Annual Report 2019
65
Notes to the financial statements
Continued
Note 19. Non-current liabilities – Employee benefits
Long service leave
Note 20. Equity – issued capital
Consolidated
2019
$
2018
$
92,793
49,229
Ordinary shares – fully paid
113,770,785
740,677,364
25,797,430
22,360,257
Consolidated
2019
Shares
2018
Shares
2019
$
2018
$
Movements in ordinary share capital
Details
Balance as at 1 July 2017
Ordinary
shares
$
329,838,682
16,021,604
Shares issued in lieu of accrued corporate advisory services fees
5,500,000
110,000
Issue of shares (rights issue)
Costs of capital raising
Conversion of performance shares
Balance as at 30 June 2018
Share consolidation
Exercise of options
Issue of Earn Out Shares to RWW Vendors
Issue of Shares pursuant to BIDO option underwriting*
Costs of capital raising
Balance as at 30 June 2019
335,338,682
6,706,774
–
(478,121)
70,000,000
–
740,677,364
22,360,257
(631,753,532)
–
3,683,371
2,692,856
112,566
1,051,016
133,684
714,691
–
(104,058)
113,770,785
25,797,430
* On 13 June 2019, the Consolidated Entity announced that it entered into an Underwriting Agreement with Canaccord Genuity
(Australia) Limited to fully underwrite the exercise of BIDO options. As at 30 June 2019, the remaining options were deemed to
be issued in accordance with AASB 132.
Movements in listed share options (ASX: BIDO)
Details
Balance as at 1 July 2018
Share consolidation adjustment
Exercise of BIDO options
Issue of Shares pursuant to BIDO option underwriting*
Balance as at 30 June 2019
66
BidEnergy Annual Report 2019
Listed
options
28,430,006
(24,249,043)
(3,129,947)
(1,051,016)
–
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value
and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
Capital risk management
The Consolidated Entity’s objectives when managing capital is to safeguard its ability to continue as a going
concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an
optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is
calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Consolidated Entity may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Consolidated Entity would look to raise capital when an opportunity to invest in a business or company was
seen as value adding relative to the current Company’s share price at the time of the investment.
The capital risk management policy remains unchanged from the 2018 Annual Report.
Note 21. Equity – reserves
Foreign currency reserve
Options reserve
Movements in reserves
Consolidated
2019
$
2018
$
(59,590)
(129,142)
3,773,740
1,233,626
3,714,150
1,104,484
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2017
Foreign currency translation
Share based payments for Advisors
Share based payments for employees
Transfer to retained earnings
Balance at 30 June 2018
Foreign currency translation
Foreign
currency
reserve
Options
reserve
$
$
Total
$
56,687
961,239
1,017,926
(185,829)
–
(185,829)
–
–
–
264,417
67,256
264,417
67,256
(59,286)
(59,286)
(129,142)
1,233,626
1,104,484
69,552
–
69,552
Share based payments for employees and directors
–
2,540,114
2,540,114
Balance at 30 June 2019
(59,590)
3,773,740
3,714,150
BidEnergy Annual Report 2019
67
Notes to the financial statements
Continued
Note 22. Financial instruments
Financial risk management objectives
The Consolidated Entity’s activities expose it to a variety of financial risks: market risk (including foreign currency risk,
price risk and interest rate risk), credit risk and liquidity risk. The Consolidated Entity’s overall risk management
program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the
financial performance of the Consolidated Entity. The Consolidated Entity uses different methods to measure
different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate,
foreign exchange and other price risks, ageing analysis for credit risk and beta analysis in respect of investment
portfolios to determine market risk.
Derivatives are not currently used by the Consolidated Entity for hedging purposes. The Consolidated Entity does not
speculate in the trading of derivative instruments.
Market risk
Foreign currency risk
The Consolidated Entity undertakes certain transactions denominated in foreign currency and is exposed to foreign
currency risk through foreign exchange rate fluctuations, in particular United States dollars.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity
analysis and cash flow forecasting.
The carrying amount of the Consolidated Entity’s foreign currency denominated financial assets and financial
liabilities at the reporting date were as follows (holdings are shown in AUD equivalent):
Consolidated
US dollars
GBP
Price risk
Assets
2019
$
2018
$
Liabilities
2019
$
2018
$
482,962
285,840
(97,111)
(53,339)
26,019
13,428
(21,613)
–
508,981
299,268
(118,724)
(53,339)
The Consolidated Entity is not exposed to any significant price risk.
Interest rate risk
The Consolidated Entity not have any debt that may be affected by interest rate risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Consolidated Entity. The Consolidated Entity has a strict code of credit, including obtaining agency credit information,
confirming references and setting appropriate credit limits. The Consolidated Entity obtains guarantees where
appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial
assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement
of financial position and notes to the financial statements. The Consolidated Entity does not hold any collateral.
The Consolidated Entity has adopted a lifetime expected loss allowance in estimating expected credit losses to
trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions
are considered representative across all customers of the Consolidated Entity based on recent sales experience,
historical collection rates and forward-looking information that is available.
The Consolidated Entity does not have any material credit risk exposure to any single receivable or group
of receivables under financial instruments entered into by the economic entity.
68
BidEnergy Annual Report 2019
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this
include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make
contractual payments for a period greater than 1 year.
Liquidity risk
Liquidity risk arises from the possibility that the Consolidated Entity might encounter difficulty in settling its debts
or otherwise meeting its obligations related to financial liabilities. The Consolidated Entity manages this risk by
preparing forward looking cash flow analysis in relation to its operational, investing and financing activities and
monitoring its cash assets and assets readily convertible to cash in the context of its forecast future cash flows.
The Consolidated Entity manages liquidity risk by maintaining adequate cash reserves and available borrowing
facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial
assets and liabilities.
Remaining contractual maturities
The following tables detail the Consolidated Entity’s remaining contractual maturity for its financial instrument
liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the
earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal
cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying
amount in the statement of financial position.
Weighted
average
interest rate
1 year or less
Between 1
and 2 years
Between 2
and 5 years Over 5 years
Consolidated – 2019
%
$
Non-derivatives
Non-interest bearing
Trade and other payables
–
748,090
Total non-derivatives
748,090
$
–
–
$
–
–
$
–
–
Weighted
average
interest rate
1 year or less
Between 1
and 2 years
Between 2
and 5 years Over 5 years
Consolidated – 2018
%
$
Non-derivatives
Non-interest bearing
Trade and other payables
–
378,069
Total non-derivatives
378,069
$
–
–
$
–
–
$
–
–
Remaining
contractual
maturities
$
748,090
748,090
Remaining
contractual
maturities
$
378,069
378,069
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
BidEnergy Annual Report 2019
69
Notes to the financial statements
Continued
Note 23. Key management personnel disclosures
Directors
The following persons were Directors of BidEnergy Limited during the financial year:
Mr Andrew Dyer
Non-Executive Chairman (appointed as Non-Executive Director on 16 July 2018,
becoming Non-Executive Chairman on 21 February 2019)
Mr Guy Maine
Managing Director (appointed 17 January 2018)
Ms Leanne Graham
Non-Executive Director (appointed 28 July 2016)
Mr Anthony Du Preez
Executive Director (resigned as director on 13 February 2019, continuing as CTO)
Mr James Baillieu
Non-Executive Chairman (resigned on 22 February 2019)
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major
activities of the Consolidated Entity, directly or indirectly, during the financial year:
Mr Darren Knihnicki
Chief Commercial Officer (appointed 27 May 2019)
Mr Matthew Watson
Chief Financial Officer
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the
Consolidated Entity is set out below:
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
Consolidated
2019
$
2018
$
1,027,018
880,992
90,776
53,845
–
184,263
315,757
43,227
1,433,551
1,162,327
Note 24. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by RSM Australia Partners,
the auditor of the Consolidated Entity:
Audit services – RSM Australia Partners
Audit or review of the financial statements
Other services – RSM network firms
Advisory services
Tax and compliance
70
BidEnergy Annual Report 2019
Consolidated
2019
$
2018
$
76,660
68,000
1,500
17,611
19,111
22,759
39,006
61,765
95,771
129,765
Note 25. Contingent assets and liabilities
The Directors are not aware of any contingent assets or contingent liabilities as at 30 June 2019 (2018: Nil).
Note 26. Commitments
Consolidated
2019
$
2018
$
215,669
172,268
35,361
251,030
139,871
312,139
Lease commitments – operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
The company has no capital expenditure commitments as at 30 June 2019 (2018: Nil).
Note 27. Related party transactions
Parent entity
BidEnergy Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 29.
Key management personnel
Disclosures relating to key management personnel are set out in note 23 and the remuneration report included
in the Directors’ report.
Transactions with related parties
The following transactions occurred with related parties:
Payment for other expenses:
Consulting fees paid to director (Guy Maine) for provision
of sales and market strategy meetings
Consulting fees paid to director related entity (Andrew Dyer –
Consolidated
2019
$
2018
$
–
14,000
through Collins Street Management) for provision of support services
6,251
36,000
Receivable from and Payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current payables:
Trade payables to director related entity (Andrew Dyer –
through Collins Street Management) for provision of support services
–
4,167
Consolidated
2019
$
2018
$
BidEnergy Annual Report 2019
71
Notes to the financial statements
Continued
Note 27. Related party transactions (continued)
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 28. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Options reserve
Accumulated losses
Total equity
Parent
2019
$
2018
$
(3,298,114)
(960,544)
(3,298,114)
(960,544)
Parent
2019
$
2018
$
3,923,192
4,182,693
15,641,542
12,767,896
245,647
103,602
245,647
103,602
18,328,523
14,891,351
3,496,213
956,099
(6,481,271)
(3,183,156)
15,343,465
12,664,294
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2018 and 30 June 2019.
Capital commitments – Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 2018 and 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Consolidated Entity, as disclosed
in note 2, except for the following:
> Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
> Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may
be an indicator of an impairment of the investment.
72
BidEnergy Annual Report 2019
Note 29. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries
in accordance with the accounting policy described in note 2:
Name
BidEnergy (Operations) Pty Ltd
BidEnergy Limited
BidEnergy Inc
Principal place of business /
Country of incorporation
Australia
United Kingdom
United States
Ownership interest
2019
%
100%
100%
100%
2018
%
100%
100%
100%
Note 30. Events after the reporting period
Supreme Court Proceedings
On 26 July 2019, the Consolidated Entity announced that it received notice that Mr James Baillieu has made an
application in the Supreme Court of Melbourne for an order to commence proceedings on behalf of the Company
under Section 236 of the Corporations Act 2001 against the Company’s directors, Andrew Dyer, Guy Maine and
Leanne Graham.
Origin Energy Contract
On 29 August 2019, the Consolidated Entity announced that it has signed an agreement with Origin Energy
(ASX: ORG) to deploy BID’s Robotic Processing Automation (RPA) platform and analytics across Origin Energy’s
Commercial and Industrial (“C&I”) customers and will be progressively rolled out to 14,500 customers from
September 2019.
No other matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may significantly
affect the Consolidated Entity’s operations, the results of those operations, or the Consolidated Entity’s state of
affairs in future financial years.
BidEnergy Annual Report 2019
73
Notes to the financial statements
Continued
Note 31. Reconciliation of loss after income tax to net cash used
in operating activities
Loss after income tax benefit for the year
(6,566,405)
(4,517,631)
Consolidated
2019
$
2018
$
Adjustments for:
Depreciation and amortisation
Foreign exchange differences
Share based payments
Ameresco break fee
Loss on sale of plant and equipment
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in other assets
Increase/(decrease) in trade and other payable
Decrease in deferred tax liabilities
Decrease in other liabilities
Increase/(decrease) in provisions
542,858
707,415
4,754
2,540,114
_
_
_
331,673
357,128
54,150
(99,881)
(49,715)
(5,199)
(46,361)
370,021
(94,185)
(23,435)
(24,176)
(40,034)
(206,239)
162,117
(63,277)
Net cash used in operating activities
(3,115,090)
(3,551,218)
Note 32. Earnings per share
Consolidated
2019
$
2018
$
Loss after income tax attributable to the owners of BidEnergy Limited
(6,566,405)
(4,517,631)
Weighted average number of ordinary shares used in calculating
basic earnings per share
Weighted average number of ordinary shares used in calculating
diluted earnings per share
Basic earnings per share
Diluted earnings per share
Number
Number
109,517,914
101,019,387
109,517,914
101,019,387
Cents
(6.00)
(6.00)
Cents
(4.47)
(4.47)
As at 30 June 2019, the Consolidated Entity has 9,648,619 options, 2,578,599 performance rights and 1,073,000
restrictive share units on issue. These equity instruments are considered to be anti-dilutive, as the Consolidated
Entity generated loss after income tax.
74
BidEnergy Annual Report 2019
Note 33. Share-based payments
Advisor options
The Consolidated Entity issued advisor options for corporate advisory services in the previous financial year.
These options were independently valued using the Black-Scholes valuation method. For the year ended
30 June 2019, no share based payments expense was recognised as the full option valuation was recognised
in prior year when the options were vested immediately upon issuance (2018: $264,417).
Set out below are the advisor options on issue at financial year end:
2019
Class
Grant
date
Expiry
date
Exercise
Price
Balance at
the start of
the year
Share
Consoli-
dation*
Expired/
forfeited/
other
Balance at
the end of
the year
Grant
Unlisted Class G 08/08/2017 31/12/2020
$0.204
6,000,000
Unlisted Class H 08/08/2017 31/12/2020
$0.306
6,000,000
–
–
(5,117,647)
(5,117,647)
Unlisted Class I 08/08/2017 31/12/2020
$0.408
8,500,000
– (7,250,000)
20,500,000
– (17,485,294)
–
–
–
–
882,353
882,353
1,250,000
3,014,706
* Following shareholder approval, the Company consolidated its issued capital on 100 for 680 shares basis.
2018
Class
Grant
date
Expiry
date
Exercise
price
Balance at
the start of
the year
Grant
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
Unlisted Class A
01/07/2016 30/09/2017
$0.100
10,798,670
Unlisted Class B 01/07/2016
31/12/2018
$0.125
9,243,759
Unlisted Class D 01/07/2016 30/06/2019
$0.150 25,000,000
–
–
–
Unlisted Class G 08/08/2017 31/12/2020
$0.030
Unlisted Class H 08/08/2017 31/12/2020
$0.045
Unlisted Class I 08/08/2017 31/12/2020
$0.060
–
–
–
6,000,000
6,000,000
8,500,000
– (10,798,670)
– (9,243,759)
– (25,000,000)
–
–
–
–
–
–
–
–
–
6,000,000
6,000,000
8,500,000
45,042,429 20,500,000
– (45,042,429) 20,500,000
Director options
As part of director remuneration, the Consolidated Entity offers ownership based remuneration in the form of share
option plans. The options are issued for nil consideration and are granted in accordance with guidelines established
by the Board. Details of share based director remuneration is also included in the remuneration report. $225,964 of
share based payment expense was recorded in relation to director options for the financial year 30 June 2019.
Set out below are summaries of options on issue to directors at financial year end:
2019
Grant date
Expiry
date
Exercise
price
Balance at
the start of
the year
Granted*
Share
consoli-
dation**
Forfeited***
Balance at
the end of
the year
30/11/2016
28/07/2020
$0.680
500,000
17/01/2018
16/01/2022
$0.136
15,000,000
–
–
(426,470)
(12,794,117)
–
–
73,530
2,205,883
27/11/2018
26/11/2022
$1.190
–
8,000,000
(6,823,528)
(588,236)
588,236
15,500,000
8,000,000
(20,044,115)
(588,236)
2,867,649
*
On 27 November 2018, the Consolidated Entity issued 8,000,000 class K options to Directors. The plan was valued at $558,919,
using Binomial Valuation method. As at 30 June 2019, $166,297 had been recognised as share-based payments.
**
Following shareholder approval, the Company consolidated its issued capital on 100 for 680 shares basis.
*** Mr James Baillieu resigned as Non-Executive Director on 22 February 2019. Mr Anthony Du Preez resigned as Executive
Director on 13 February 2019, continuing as CTO. As a result of both Board resignations, 588,236 Class K options (post share
consolidation) were forfeited.
BidEnergy Annual Report 2019
75
Notes to the financial statements
Continued
Note 33. Share-based payments (continued)
2018
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted*
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
30/11/2016
28/07/2020
$0.100
500,000
–
17/01/2018
16/01/2022
$0.020
–
15,000,000
500,000
15,000,000
–
–
–
–
–
–
500,000
15,000,000
15,500,000
* On 17 January 2018, the Consolidated Entity issued 15,000,000 class J director incentive options to Guy Maine. The plan was valued
at $121,260, using Binomial Valuation method. As at 30 June 2018, $39,857 had been recognised as share-based payments.
Valuation of options granted during FY19
For the options granted during the current financial year, the valuation model inputs used to determine the fair value
at the grant date, are as follows:
Grant date
Expiry date
Share price at
grant date
Exercise
price
Expected
volatility
Risk-free
interest rate
Fair value at
grant date
27/11/2018
26/11/2022
$0.817
$1.190
100.00%
2.09%
$0.475
Employee performance rights plan
The Consolidated Entity provides ownership-based remuneration schemes to executive directors, nominated
employees and key management personnel. For the year ended 30 June 2019 $1,698,836 has been recognised as a
share based payment expense in relation to performance rights of employees. Set out below are those performance
rights outstanding at the end of the financial year.
2019
Class
Class A
Class E
Grant
date
Expiry
date
Exercise
price*
Balance at
the start of
the year
Granted
Share
Consoli-
dation*
Expired/
forfeited/
other
Balance at
the end of
the year
01/07/2016 01/07/2020
$0.85
2,233,084
– (1,904,683)
20/07/2018 20/10/2019
Class F**
27/05/2019 05/11/2020
–
–
–
–
15,301,277 (13,051,079)
110,000
–
2,233,084
15,411,277 (14,955,762)
–
–
–
–
328,401
2,250,198
110,000
2,688,599
*
Share consolidation adjustment on a 100 to 680 basis.
** Unlisted Class F performance rights were issued to Mr Darren Knihnicki (CCO) on 5 August 2019. Under IG4, which is set out in
the Appendix to AASB 2 Share Based Payments, the service commencement date of these performance rights was deemed
to be 27 May 2019.
2018
Class
Grant
date
Expiry
date
Exercise
price
Balance at
the start of
the year
Expired/
forfeited/
other
Balance at
the end of
the year
Granted
Class A
01/07/2016
01/07/2020
$0.125
2,424,313
–
(191,229)
2,233,084
Restricted Share Units
The Consolidated Entity issued 1,073,000 Unlisted Restricted Share Units (“RSUs”) under the Company’s 2019
Restricted Share Units Plan to US Employees of the Company. Each RSU will vest and convert into one Fully Paid
Ordinary Share for nil cash consideration on or after 8 March 2020 (“Vesting Date”), provided the holder remains
employed by the Company on Vesting Date.
$615,314 of share based payment expense was recorded in relation to RSU for the financial year 30 June 2019.
76
BidEnergy Annual Report 2019
Reconciliation of share based payments expense recorded in the statement of profit and loss relating to each class
of share based payment:
Performance rights payment
Restrictive Share Units issued to BidEnergy Inc. employees
Options payment to Directors
Options payment to Advisors
Total share-based payments expense
Note 34. Funds held in trust
Consolidated
2019
$
2018
$
1,698,836
24,840
615,314
225,964
–
2,540,114
–
42,416
264,417
331,673
The Company holds funds and pays utility bills on behalf of its clients. As at 30 June 2019 the amount held on trust
was $1,179,974 (2018: $904,756).
BidEnergy Annual Report 2019
77
Directors’ declaration
30 June 2019
In the Directors’ opinion:
> the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting requirements;
> the attached financial statements and notes comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board as described in note 2 to the financial statements;
> the attached financial statements and notes give a true and fair view of the Consolidated Entity’s financial position
as at 30 June 2019 and of its performance for the financial year ended on that date; and
> there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
Andrew Dyer
Non-Executive Chairman
26 September 2019
78
BidEnergy Annual Report 2019
Independent auditor’s report to the members
of BidEnergy Limited
BidEnergy Annual Report 2019
BidEnergy Annual Report 2019
79
79
57 INDEPENDENT AUDITOR’S REPORT To the Members of BidEnergy Limited Opinion We have audited the financial report of BidEnergy Limited (the Company) and its Controlled Entities (the Group), which comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group's financial position as at 30 June 2019 and of its financial performance for the year then ended; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report. 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. Independent auditor’s report to the members of BidEnergy Limited
Continued
80
BidEnergy Annual Report 2019
58 Key Audit Matters (continued.) Key Audit Matter How our audit addressed this matter Capitalisation of Software Development Costs Refer to Note 14 in the financial statements At 30 June 2019, the Group’s balance sheet includes capitalised software development costs of $2.2 million, of which $0.6 million has been capitalised during the financial year. The calculation of the software development costs involves significant judgement in respect of factors such as, probability of future economic benefits and accuracy of inputs such as wage rate and overhead calculations. We identified this as a key audit matter due to the judgement involved in capitalising software development costs, in particular when capitalising wages and overheads. Our audit procedures in relation to capitalised research and development included: • Challenged management on the basis for capitalisation and expected future benefit from a sample of projects; • Reviewed projects for any indicators of impairment; • Reviewed completed projects previously capitalised and obtained an update on the status of projects from management review of sales projected during the current year; • Assessed the costs capitalised on a sample basis to determine whether they meet the definition of development activity and are correctly treated; • Reviewed a sample of costs which were expensed in the year to identify if these were eligible for capitalisation; • Reviewed wage rates used in capitalisation; and • Agreed overhead expense percentages. Impairment of goodwill and intangible assets Refer to Note 14 in the financial statements The Group has net book value goodwill of $0.7 million in respect of the acquisitions of subsidiaries and $1.5 million of other intangible assets as at 30 June 2019. We identified this area as a Key Audit Matter due to the size of the balance, and because the directors’ assessment of the ‘value in use’ of the cash generating unit’s (“CGU’s”) involves significant judgements about the future underlying cash flows of the business, discount rates and terminal growth applied. For the year ended 30 June 2019 management performed an impairment assessment of the goodwill and intangible assets balance by: • Calculating the value in use for the CGU’s using a discounted cash flow model. The model used cash flows (revenues, expenses and capital expenditure) for the CGU’s for 5 years, with a terminal growth rate applied to the 5th year. The cash flows were then discounted to net present value using the Company’s weighted average cost of capital (WACC); and • Comparing the resulting value in use of the CGU to its respective book value. Management also performed a sensitivity analysis of the value in use calculations, by varying the WACC and other assumptions. Our audit procedures in relation to management’s impairment assessment involved the assistance of our Corporate Finance team where required, and included: • Assessing management’s determination that the goodwill and intangible assets should be allocated to two CGU’s based on the nature of the Group’s business and the manner in which results are monitored and reported; • Assessing the valuation methodology used; • Challenging the reasonableness of key assumptions, including the cash flow projections, exchange rates, discount rates, and sensitivities used; and • Checking the mathematical accuracy of the cash flow model, and reconciling input data to supporting evidence, such as approved budgets and considering the reasonableness of these budgets. BidEnergy Annual Report 2019
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59 Key Audit Matters (continued.) Key Audit Matter How our audit addressed this matter Valuation of performance rights and options Refer to Note 33 in the financial statements During the year, the Group entered into the following share-based payment arrangements: • the issue of 15,301,277 Class E Performance Rights to employees through the Employee Share Option Plan; • the issue of 8,000,000 Class K Options to Directors; • the issue of 1,073,000 Unlisted Restricted Share Units to US employees; and • the issue of 110,000 Performance Rights to an employee. Management have accounted for these arrangements in accordance with AASB 2 Share-Based Payments. We consider this to be a key audit matter because of the complexity of the accounting required to value the instruments and the judgmental nature of inputs into the valuation models, including the likelihood of vesting conditions being met, and the appropriate valuation methodology to apply. Our audit procedures in relation to valuation of performance rights and options included: • Assessed the valuation methodology used; • Reviewed the inputs used by management in the option valuation model to ensure they are appropriate; • Assessed the valuation of options and performance rights against the requirements of AASB 2 Share-based payment; and • Reviewed management’s assessment of the probability of vesting conditions being met to ensure their assessment is appropriate. Other Information The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2019, but does not include the financial report and the 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 Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the 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 ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Independent auditor’s report to the members of BidEnergy Limited
Continued
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BidEnergy Annual Report 2019
60 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. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our auditor's report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2019. In our opinion, the Remuneration Report of BidEnergy Limited., for the year ended 30 June 2019, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. RSM AUSTRALIA PARTNERS J S CROALL Partner Dated: 26 September 2019 Melbourne, Victoria Shareholder information
30 June 2019
Shareholder Information
The shareholder information set out below was applicable as at 2 September 2019.
1. Quotation
Listed securities in BidEnergy Limited are quoted on the Australian Securities Exchange under ASX code BID
(Fully Paid Ordinary Shares).
2. Voting Rights
The voting rights attached to the Fully Paid Ordinary shares of the Company are:
(a) at a meeting of members or classes of members each member entitled to vote may vote in person
or by proxy or by attorney; and
(b) on a show of hands every person present who is a member has one vote, and on a poll every person
present in person or by proxy or attorney has one vote for each ordinary share held.
There are no voting rights attached to any Options or Performance Rights on issue.
3. Distribution of Shareholders
i)
Fully Paid Ordinary Shares
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
Holders
508
518
274
566
Units
230,767
1,386,874
2,091,857
19,311,359
132
92,445,200
%
0.20
1.20
1.81
16.72
80.06
1,998
115,466,057
100.00%
On 2 September 2019, there were 395 holders of unmarketable parcels of less than 127,079 ordinary shares
(based on the closing share price of $0.6750).
ii) Unlisted Restricted Share Units vesting 8 March 2020
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
1 There are no holders who hold more than 20% of securities.
Holders
Units
–
–
–
%
–
–
–
–
–
–
10
3
13
740,000
333,000
68.97
31.03
1,073,0001
100.00%
BidEnergy Annual Report 2019
83
Shareholder information
Continued
iii) Class A Performance Rights
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
1 Holders who hold more than 20% of securities are:
Jimmy Harjadi – 123,919 performance rights
iv) Class E Performance Rights
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
1 Holders who hold more than 20% of securities are:
Ms Justine Anne Kelly – 184,416 performance rights
Ms Carolyn Palmer – 114,005 performance rights
v) Class F Performance Rights
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
1 Holders who hold more than 20% of securities are:
Ms Claire Knihnicki – 110,000 performance rights
vi) Class E Options exercisable at $0.476 on or before 24 November 2021
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
1 Holders who hold more than 20% of securities are:
Merrill Lynch (Australia) Nominees Pty Limited – 283,737 options
Mr Douglas A Bloom – 189,159 options
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BidEnergy Annual Report 2019
Holders
Units
–
–
10,378
194,104
123,9191
%
–
–
3.16
59.11
37.73
328,401
100.00%
Holders
Units
256,505
298,4211
46.22
53.78
554,926
100.00%
Holders
Units
110,0001
100.00
110,000
100.00%
Holders
Units
%
–
–
–
%
–
–
–
–
%
–
–
–
–
–
–
–
–
–
–
–
–
–
94,578
472,8961
16.67
83.33
567,474
100.00%
–
–
2
8
1
11
–
–
–
3
2
5
–
–
–
–
1
1
–
–
–
1
2
3
vii) Class F Options exercisable at $0.68 on or before 28 July 2020
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
1 Holders who hold more than 20% of securities are:
L Graham Trustees Ltd + Erca Trustees (LG) Ltd
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