Serko FY23 Full Results Announcement Date – 17 May 2023
Serko Limited, Saatchi Building, Unit 14D 125 The Strand, Parnell, Auckland, New Zealand
PO Box 47-638, Ponsonby, T: +64 9 884 5916, F: +64 9 377 0545, investor.relations@serko.com
Incorporated in New Zealand ARBN 611 613 980
Market Release
17 May 2023
FY23 Full Year Results Announcement
AUDITED FINANCIAL RESULTS FOR THE YEAR TO 31 MARCH 2023
Disciplined Execution Driving Strong Growth
Serko Limited (NZX & ASX: SKO), a leader in travel and expense management for business, today announces results
for the year to 31 March 2023, with total income up 154%, reflecting strong growth and performance. Total income
of $48 million was just ahead of the revised FY23 guidance range of $42 million to $47 million.
Summary of Financial Results:
1
,
2
• Total income $48 million, up 154%
• Average revenue per booking $9.56, up 65%
• Average revenue per completed room night €9.34, up 36%
• Online bookings of 4.1 million, up 93%
• Completed room nights on Booking.com for Business 1.5 million, up 381%
• EBITDAF loss of $21.8 million, a 23% improvement
• Net loss after tax of $30.5 million, a 15% improvement
• Cash and short-term deposits $87.7 million
• Underlying average monthly cash burn $2.7 million
• FY24 guidance for total income of $63 million to $70 million
All dollar amounts are New Zealand dollars unless otherwise stated.
Please find attached the following documents containing additional information:
• Market Release
• Results Announcement (NZX Appendix 2)
• Investor Presentation
• Annual Report
• ESG Report
These documents will also be made available on: www.serko.com/investor-centre/
1
Comparative numbers are for the prior comparative period (FY22) unless otherwise stated. Certain comparative numbers have been reclassified see
note 1 of the Financial Statements for details.
2
See notes to the Market Release for definitions of non-GAAP financial measures used.
Serko Limited, Saatchi Building, Unit 14D 125 The Strand, Parnell, Auckland, New Zealand
PO Box 47-638, Ponsonby, T: +64 9 884 5916, F: +64 9 377 0545, investor.relations@serko.com
Incorporated in New Zealand ARBN 611 613 980
Full Year Results Call
The full year results will be discussed on a conference call at 11.00am (NZT) today.
A live webcast of the call can be accessed at the following link:
https://event.webcasts.com/starthere.jsp?ei=1599337&tp_key=e978afbb21
To participate in the call dial one of the following numbers 5-10 minutes prior to the call start time.
The call confirmation code is 167859.
Location Phone Type Phone Number
New Zealand Tollfree/Freephone 0800 423 972
New Zealand, Auckland Local +64 (0)9 9133 624
Australia Tollfree/Freephone 1 800 590 693
Australia, Sydney Local +61 (0)2 7250 5438
Hong Kong, Hong Kong Local +852 5803 0798
Singapore Tollfree/Freephone 800 120 7297
United Kingdom Tollfree/Freephone 0800 279 0424
United Kingdom, Local Local +44 (0)330 165 3646
United States/Canada Tollfree/Freephone 800-289-0459
For and on behalf of Serko by Shane Sampson, Chief Financial Officer.
ENDS
For further information and investor relations queries please contact:
Shane Sampson
Chief Financial Officer, Serko
+64 9 884 5916
investor.relations@serko.com
For media relations queries please contact:
Coran Lill
The Project
+64 27 342 3836
coran@theproject.co.nz
---
Serko Limited, Saatchi Building, Unit 14D 125 The Strand, Parnell, Auckland, New Zealand
PO Box 47-638, Ponsonby, T: +64 9 884 5916, investor.relations@serko.com
Incorporated in New Zealand ARBN 611 613 980
AUDITED FINANCIAL RESULTS FOR THE YEAR TO 31 MARCH 2023
DISCIPLINED EXECUTION DRIVING STRONG GROWTH
SUMMARY FINANCIAL RESULTS
1
,
2
• Total income $48 million, up 154%
• Average revenue per booking $9.56, up 65%
• Average revenue per completed room night €9.34, up 36%
• Online bookings of 4.1 million, up 93%
• Completed room nights on Booking.com for Business 1.5 million, up 381%
• EBITDAF loss of $21. 8 million, a 23% improvement
• Net loss after tax of $30.5 million, a 15% improvement
• Cash and short-term deposits $87.7 million
• Underlying average monthly cash burn $2.7 million
• FY24 guidance for total income of $63 million to $70 million
All dollar amounts are New Zealand dollars unless otherwise stated.
Serko Limited (NZX & ASX: SKO) today released its financial results for the year to 31 March 2023, with total
income up 154%, reflecting strong growth and performance. Total income of $48 million was just ahead of
the revised FY23 guidance range of $42 million to $47 million.
Serko Chief Executive and Co-Founder, Darrin Grafton, said: “Serko’s result demonstrates strong growth
driven by earlier investment decisions and disciplined execution.”
Growth was underpinned by a significant increase in Booking.com for Business completed room nights of
381% and strategic decisions that allowed Serko to maximise the business travel recovery. Online bookings
rose 93% to 4.1 million from 2.2 million.
Serko’s total income for the FY23 year is 79% higher than for FY20, the financial year immediately prior to
the pandemic and Serko’s previously highest year for revenue.
“The result reflects our focus on cost discipline balanced with targeted investments for scale and growth.
Total spend increased 34% for the period. As a percentage of total income, total spend decreased from
330% in FY22 to 174% in FY23 and cost growth reduced to 3% in the second half. EBITDAF losses of $21.8
million and net losses after tax of $30.5 million improved 23% and 15% respectively.
“We remain well capitalised with underlying average monthly cash burn reducing from $3.3m to $2.7m.
Underlying average monthly cash burn in 2H23 was $1.8 million.“
UNMANAGED TRAVEL
Mr Grafton said: “The significant growth in unmanaged travel is the result of the dedication and hard work
of many and the strength of the partnership with Booking.com.
1
Comparative numbers are for the prior comparative period (FY22) unless otherwise stated..
2
See notes to this release for definitions of non-GAAP financial measures used through-out this release.
2
“We have seen significant growth in Booking.com for Business completed room nights, up 381% to 1.5
million from 320,000 and underpinned by growth in the second half. At the end of the period, the number
of active customers was 157,000 an increase of 144% on the previous year.
“Average Revenue per Completed Room Night (ARPCRN) for the service was €9.34, up 36% from €6.88.
Following the balance date, travel management company CWT has committed to supporting an expanded
Booking.com for Business offering that will include discounted business travel rates, access to membership
rewards from a variety of loyalty programs and complimentary 24/7 travel agent support.
Mr Grafton said: “This is an exciting move, bringing two of our partners together through our Zeno
technology platform to give business travellers a connected trip experience with all the business booking
features, rates and service they want at no cost.”
MANAGED TRAVEL
Mr Grafton said: “The recovery in business travel in Australia and New Zealand has been strong with online
bookings up 77%. In Australasia, average online bookings for the year were 89% of pre-pandemic levels. In
New Zealand, volumes were 136% of pre-pandemic levels and in Australia this was 82%.
“In North America, we have continued to make progress and build our strategic position. We will continue
to keep the market updated on material developments.”
OUTLOOK
Serko has made significant progress towards its goals as reported in FY23. Business travel demand is
tracking strongly and Serko is well positioned to deliver increased scale and operational efficiency.
Serko confirms its aspiration of $100m in total income in FY25.
Serko is well capitalised with cash of $88m and no debt. Underlying monthly cash burn peaked in 1H23 and
Serko is committed to achieving positive cashflow for the FY25 financial year with appropriate cash reserves
on hand at the point of breakeven.
Serko anticipates full year total income of between $63m and $70m for FY24 based on current trends
including the continued business travel recovery, growth in active customers in Booking.com for Business, a
strong Euro:NZD exchange rate and current average revenue per completed room night. There are a
number of initiatives which have the potential to drive further revenue growth, however, the timing and
therefore the impact on FY24 revenues is uncertain.
Serko anticipates total spend of between $86m and $90m based on its current investment plans and
anticipated efficiency gains partially offset by higher volume related costs.
Guidance remains subject to ongoing risks including geo-political and macro-economic risks.
Released for and on behalf of Serko Limited by:
Shane Sampson
Chief Financial Officer
3
INVESTOR CALL
Serko Chief Executive Darrin Grafton and Chief Financial Officer Shane Sampson will host a conference call
and webcast at 11am (NZT) this morning to discuss the results.
Details of the call are available on serko.com/investors. A webcast of the call can also be accessed at the
following link: https://event.webcasts.com/starthere.jsp?ei=1599337&tp_key=e978afbb21
For further information:
Investor relations: Media:
Shane Sampson Coran Lill
Chief Financial Officer
The Project
+64 9 884 5916 +64 27 342 3836
investor.relations@serko.com coran@theproject.co.nz
ABOUT SERKO
Serko is a leader in online travel booking and expense management for the business travel market. Zeno is
Serko’s next generation travel management application, using intelligent technology, predictive workflows,
and a global travel marketplace to transform business travel across the entire journey. Listed on the New
Zealand Stock Exchange Main Board (NZX: SKO) and Australian Securities Exchange (ASX: SKO), Serko is
headquartered in New Zealand, with offices across Australia, China, and the United States. Visit
www.serko.com for more information.
____________________________________________________________________________________________________________
4
Important notes:
Non-GAAP (generally accepted accounting practices) financial measures do not have standardised meanings
prescribed by GAAP and therefore may not be comparable to similar financial information presented by other
entities. The Non-GAAP financial information included in this release has not been subject to review by the
auditors.
Non-GAAP measures are used by management to monitor the business and are considered useful to provide
information to investors to assess business performance. Reconciliation of non-GAAP to GAAP measures can
be found in the Annual Report and Investor Presentation.
• Active customers (unmanaged) is a non-GAAP measure comprising the number of customers who have made a
booking in the preceding 12-month period.
•
Average Revenue Per Booking (ARPB) is a non-GAAP measure. Serko uses this as a useful indicator of the revenue
value per travel booking. ARPB for travel-related revenue is calculated as travel-related revenue divided by the total
number of online bookings.
•
ARPCRN or Average Revenue per Completed Room Night is a non-GAAP measure and comprising the gross
unmanaged supplier commissions revenue per completed room night for revenue generating hotel transactions.
•
Cash on hand is a non-GAAP measure comprising cash and short term investments.
•
Completed room nights is a non-GAAP measure comprising the number of unmanaged hotel room nights which
have been booked and the traveller has completed the stay at the hotel.
• EBITDAF is a non-GAAP measure representing Earnings Before the deduction of costs relating to Interest, Taxation,
Depreciation, Amortisation, Foreign Currency (Gains)/Losses and Fair value measurement.
•
Online Bookings is a non-GAAP measure comprising the number of travel bookings made using Serko’s Zeno and
Serko Online platforms.
•
Total spend is a non-GAAP measure comprising of operating expenses and capitalised development costs. It excludes
depreciation and amortisation.
• Underlying cash flow is a non-GAAP measure comprising cash flows excluding movements between cash and short
term investments, cash flows related to capital raises and unusual items from a timing perspective.
Underlying cash
burn comprises underlying cash out flows.
---
RESULTS ANNOUNCEMENT
17 May 2023
Results for announcement to the market
Name of issuer Serko Limited (“SKO”)
Reporting Period 31 March 2023
Previous Reporting Period 31 March 2022
Currency New Zealand Dollars
Amount (000s) Percentage change
Revenue from continuing
operations
$48,025 Up 1 54%
Total Revenue $48,025 Up 154%
Net profit/(loss) from
continuing operations
($30,540) Improvement
of 15%
Total net profit/(loss) ($30,540) Improvement
of 15%
Interim/Final Dividend
Amount per Quoted Equity
Security
No dividends have been paid during the period and there is no
intention to pay dividends while Serko pursues growth
opportunities
Imputed amount per Quoted
Equity Security
Not applicable
Record Date Not applicable
Dividend Payment Date Not applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.7626 $1.0014
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to the market release and annual report released in
conjunction with this announcement.
Pursuant to ASX listing rule 1.15.3, Serko Limited confirms that it
continues to comply with the rules of its home exchange (NZX
Main Board).
Authority for this announcement
Name of person authorised to
make this announcement
Shane Sampson
Contact person for this
announcement
Shane Sampson, CFO
Contact phone number +64 9 884 5916
Contact email address investor.relations@serko.com
Date of release through MAP 17/05/2023
Audited financial statements for the period ended 31 March 2023 accompany this
announcement.
Serko Limited, Saatchi Building, Unit 14D 125 The Strand, Parnell, Auckland, New Zealand
PO Box 47-638, Ponsonby, T: +64 9 309 4754, F: +64 9 377 0545, investor.relations@serko.com
Incorporated in New Zealand ARBN 611 613 980
---
Financial Results
for thetwelve months to 31 March 2023
Investor Presentation 17 May 2023
Disclaimer
•This presentation has been prepared by Serko Limited ("Serko"). All information is current at the date of this presentation, unless stated otherwise.
All currency amounts are in NZ dollars unless stated otherwise.
•Information in this presentation
•is for general information purposes only, and does not constitute, or contain, an offer or invitation for subscription,
purchase, or recommendation of securities in Serko for the purposes of the Financial Markets Conduct Act 2013
or otherwise, or constitute legal, financial, tax, financial product, or investment advice;
•should be read in conjunction with, and is subject to Serko’s Financial Statements and Annual Reports,
market releases and information published on Serko’s website (www.serko.com);
•mayinclude forward-looking statements about Serko and the environment in which Serko operates,
which are based on assumptions and subject to uncertainties and contingencies outside Serko’s control –
Serko’s actual results;or performance may differ materially from these statements;
•may include statements relating to past performance information for illustrative purposes only and should
not be relied upon as (and is not) an indication of future performance;
•may contain information from third-parties believed to be reliable, however, no representations or warranties
are made as to the accuracy or completeness of such information.
•The informationin this presentation has beenprepared with all reasonable care, howeverneither Serko (includingits related entities),nor any of their
directors, employees, agents or advisers give any representations or warranties (either express or implied) as to the accuracy or completeness of the
information.To the maximum extent permitted by law, no such person/s shall have any liability whatsoever to any other person for any loss (including,
without limitation, arising from any fault or negligence) arising from this presentation or any information supplied or omitted in connection with it.
•Non-GAAP financial information does not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial
information presented by other entities. The non-GAAP financial information included in this release has not been subject to review by auditors.
Non-GAAP measures are used by management to monitor the business and are useful to provide investors to assess business performance.
Serko Limited, 125 The Strand, Parnell, Auckland, New Zealand • T: +64 9 309 4754 • investor.relations@serko.com
Incorporated in New Zealand ARBN 611 613 980
Serko2
Contents
04FY23Highlights
12Strategic Priorities
19Financial Update
27Outlook
Darrin Grafton
CEO
Shane Sampson
CFO
FY23 Highlights
Refer to Appendix for definitions and descriptions of the non-GAAP measures used by management throughout this presentation.
Comparative numbers are for the prior comparative period(FY22) unless otherwise stated.
Serko4
Disciplined execution driving strong growth
Delivery on FY23
growth plans
Investments and
costs targeted
On track for FY25
goals
Serko5
154%
INCREASE
Total
income
Disciplined execution driving strong growth
$82.8m$83.3m$(21.8m)
IMPROVEMENT
EBITDAFloss
$3.1m
Avg. cash burn / mth
$2.7m underlying
average monthly cash
burn
RevenueProfit (loss)CostsBalance sheet
$48m
50%
INCREASE
Operating
expenses
34%
INCREASE
Total
spend
$(30.5m)
IMPROVEMENT
Net loss
after tax
$87.7m
DECREASE
Cash
on hand
Serko6
Total income has more than doubled on FY22
•Total FY23 income of $48m,
up 154%.
•Just ahead ofthetop of
revisedguidance range of
$42m–$47m.
•Growth driven by significant
progressofBooking.comfor
Business and managed
travel recovery.
$9.5m
$9.4m
$19.4m
$28.6m
$0m
$10m
$20m
$30m
$40m
FY22H1FY22H2FY23H1FY23H2
Total income
Serko7
Targeted investments delivering results
•Total spend of $83.3m
increased34% for the period
reflecting planned investments
and higher booking volumes.
•Total spend growth fell to
3% in the second half.
•Underlying average monthly
cash burn reduced from $3.3m
to $2.7m. Underlying average
monthly cash burn was
$1.8 million in 2H23.
Underlying cash burn is adjusted for one-off items such as: net funds from capital raise and payments made in FY23 H2,
that ordinarily would have been paid inFY22 H2 and relate to FY22.
$28.4m
$33.9m
$41.1m
$42.2m
$0m
$10m
$20m
$30m
$40m
$50m
FY22H1FY22H2FY23H1FY23H2
Total spend
Serko8
Growth underpinned by strategic progress
Total income
up 79% since FY20
Total online
bookingsup 93%
Completed room nights
up 381%
$24.6m
$26.8m
$16.9m
$18.9m
$48.0m
FY19FY20FY21FY22FY23
80%
Covid-19 impactTotal incomeTotal online bookingsCompleted room nights
Serko9
2.2 m
4.1 m
FY22FY23
0.3 m
1.5 m
FY22FY23
Revenue growth materially exceeding cost growth
Total spend as a percentage
of total income decreased
from 330% in FY22 to 174%
in FY23 and total spend
growth reduced to 3% in
the second half.
•Total spend
•Total income
Serko10
$28.4m
$33.9m
$41.1m
$42.2m
$9.5m
$9.4m
$19.4m
$28.6m
$ 0m
$ 10m
$ 20m
$ 30m
$ 40m
$ 50m
FY22H1FY22H2FY23H1FY23H2
Reduction in underlying average monthly cash
burn
* Underlying cash burn is adjusted for one-off items such as: net funds from capital raise and payments
made in FY23 H2, that ordinarily would have been paid in FY22 H2 and relate to FY22.
Serko11
$2.9
$3.7
$3.6
$1.8
$ 0 m
$ 1 m
$ 2 m
$ 3 m
$ 4 m
FY22H1FY22H2FY23H1FY23H2
Underlying average monthly cash burn*
-$17.6 m
-$22.1 m
-$21.6 m
-$11.0 m
-$25 m
-$20 m
-$15 m
-$10 m
-$5 m
$0 m
FY22H1FY22H2FY23H1FY23H2
Underlying cash flow
Strategic Priorities
Serko12
Organisational
alignment
Maximisealignment
across our teams and
minimisefriction for
our customers to
increase organisational
efficiency
Culture
Develop a culture of
engaged Serkodians
aligned to our purpose,
mission and values
5
Platform
foundations
Build the marketplace
foundations through
technology enablement
of open integration
platform
Marketplace
and content
Commercialisethe
connected trip
experience through
an open platform
4
Retain
and grow
Scale growth in
North America and
extend our leadership
in the Australia and
New Zealand markets
Managed
revenue
Consistently grow
market share in global
managed travel market
through TMC
partnerships and
inorganic growth
3
Conversion
Grow revenue from
the unmanaged travel
segment by focusing
on customer
conversion
Unmanaged
revenue
Establish significant
market share
in unmanaged
travel market
2
Product health
foundations
Increase customer
satisfaction by
continuing to enhance
the performance and
usability of our
products
Customer
success
Deliver an exceptional
customer experience
(CX) through
experimentation-
driven development
1
3yr
Strategic
Goals
FY23
Objectives
Progress against our FY25 goals
Serko13
2. Unmanaged revenue
Completed room nights
up 381% YoY,
from 320k to 1.5m
Avg. revenue per completed room night
up 36% YoY
Active customers
up 144%
Phase 1
Migration
Phase 2
Activating +
Engaging
Phase 3
Scaling
CompleteH2 FY22 –23FY23 –24
Material progress against our strategy with Booking.com
0.1 m
0.2 m
0.5 m
1.1 m
FY 22 H1FY 22 H2FY 23 H1FY 23 H2
€ 6.61
€ 7.04
€ 10.10
€ 9.03
FY 22 H1FY 22 H2FY 23 H1FY 23 H2
28 k
64 k
109 k
157 k
FY 22 H1FY 22 H2FY 23 H1FY 23 H2
Serko14
Phase 3: Scaling
2. Unmanaged revenue
•Serko has built a new hotel shop experience that is highly
scalable and cost efficient and has the performance
characteristics of consumer eCommerce platforms
•In mid-January 2023 the first of two phases of the new hotel
shop experience launched successfully
•The final phase of the hotel shop experience is scheduled to go
live as we bring the new CWT content online
•The CWT partnership will provide additional hotel, flight and
rental car content including loyalty programmes and servicing
•The launch of this expanded offering is another step forward in
Serko’s strategy to bring the best of business travel to
Booking.com for Business
Phase 1
Migration
Phase 2
Activating +
Engaging
Phase 3
Scaling
CompleteH2 FY22 –23FY23 –24
Serko15
We understand everyone has different travel
preferences. Forsomeit’simportant to maximize
status and loyalty points whenthey travel, while
others are more focused on finding the bestdeal
for their trips. And when disruption happens,
everybodyvalues the ability to contact an agent
any time of day or night toget support. With this
partnership, Booking.comfor Businesscustomers
will have all of this in one place, along with the
toolsto manage cost and duty of care with travel
expert supportwhereverthey arein the world 24/7.
Joshua Wood
Director of Booking.comfor Business
CWTmedia release • 11 May 2023
3. Managed revenue
•Australasia online bookings up 77%.
•Average online bookings for Australasia were 89% of pre-pandemic levels.
(New Zealand 136% of pre-pandemic levels land Australia 82%).
•Strategicprogress in North America.
* Percentages are measured against the same month in 2019 to reflect pre-pandemic volumes.
Capitalising on business travel recovery
1.1m
0.9m
1.7m
1.7m
FY22H1FY22H2FY23H1FY23H2
Australasia online bookings
(millions)
0%
40%
80%
120%
160%
200%
Mar-22May-22Ju l-2 2Sep-22Nov -22Ja n-2 3Mar-23
Australasia transactions as
% of pre-pandemic levels
*
$4.91
$5.11
$5.06
$4.87
FY22H1FY22H2FY23H1FY23H2
Australasia ARPB
•New Zealand TMCs
•Australasia
•Australian TMCs
•Australasia avg. p/workday
Serko16
5. Culture
Targeted people investments to increase capability and scale
312
331
363
364
-
100
200
300
400
FY 22 H1FY 22 H2FY 23 H1FY 23 H2
Total Headcount
Em pl oy eesContractors
Geography of Headcount
New ZealandAustraliaChinaUSA
FY23
FY22
Serko17
Environmental, Social and Governance
Environment
•Improving our understanding of our
carbon footprint —completing our
first GHG inventories
•Readying ourselves for mandatory
climate reporting —providing a
roadmap and FY23 progress report
Social
•Introducing our new Community
Investment Programme
•Having our inaugural Community
Dayfor employees to give back to
their communities
•Publishing our first Pay and Gender
Equity Statement and registering on
the New Zealand ‘Mind the Gap’ Registry
•Comprehensively reviewing and improving
disclosure of our executive remuneration
•Increasing our leave and wellness
entitlements, including introducing
broader parental leave benefits with
gender neutral application
Governance
•Continuing to enhance our business
ethics programme, including introduction
of Modern slavery policy and statement
•Continuing to improve our risk
management framework, including
climate risk
•Establishing our new Data Governance
Group and Technology Advisory
Committee to provide oversight and
guidance on data and
technology-related matters
Highlights demonstrating our commitment to building sustainable business
Serko18
Financial Update
Audited financial results for the year ending 31 March 2023
Serko19
Net profit summary /
EBITDAF reconciliation
•Achieving operating leverage
as revenue grows
•Weaker New Zealand dollar
drove forex gains
•Increasing interest rates and
capital raise in late 2022 have
driven stronger interest income
Net Profit Summary20232022ChangeChange
EBITDAF Reconciliation$'m$'m$'m%
Revenue46.517.928.6160%
Other income1.51.00.550%
Total income48.018.929.2154%
Operating expenses(82.8)(55.1)(27.8)50%
Percentage of revenue(178%)(308%)
Foreign exchange gains/(losses)1.7(0.0)1.8(5063%)
Net finance (expense)/income2.60.62.0349%
Net (loss) before tax(30.5)(35.6)5.2(15%)
Percentage of revenue(66%)(200%)
Income tax expense(0.1)(0.3)0.2(75%)
Net (loss) after tax(30.5)(36.0)5.4(15%)
Percentage of revenue(66%)(201%)
Deduct: net finance (expense)/income(2.6)(0.6)(2.0)349%
Add back: income tax0.10.3(0.2)(75%)
Add back:depreciation and amortisation13.08.05.062%
Add back: net foreign exchange (gains)/losses(1.7)0.0(1.8)(5063%)
EBITDAF (loss)(21.8)(28.1)6.423%
Percentage of revenue(47%)(158%)
Serko20
Revenue analysis
•Significant growth in the Booking
for Business partnership drove an
increase in revenue in the Supplier
Commissions category and in the
Europe and Other geography
•PartialCovid recovery and
marketshare gainssince FY19 drove
increases in Travel platform and
Expense revenuein the Australia
and New Zealand geographies
•ARPB grew driven by the high
ARPCRN and the increased
proportion of Booking.com
for Business transactions
Revenue and other Income by Type20232022ChangeChange
$'m$'m$'m%
Revenue –transaction and usage fees:
Travel platform booking revenue16.39.07.280%
Expense platform revenue5.04.00.923%
Supplier commissions revenue23.43.419.9578%
Services revenue1.61.00.554%
Other revenue0.30.30.03%
Other Income1.51.00.550%
Total income48.018.929.2154%
Revenue by Geography
Australia18.110.77.470%
New Zealand2.51.50.961%
North America3.02.60.416%
Europe and Other22.93.019.8654%
Total Revenue46.517.928.6160%
Total travel bookings (000)4.82.62.288%
Online bookings (000)4.12.22.093%
ARPB (travel related revenue only/online bookings)$9.56$5.80$3.7665%
Average revenue per completed room night (ARPCRN)€9.34€6.88€2.4636%
Serko21
Operating expenses
•Remuneration and benefits increased
reflecting higher headcount and
higher average cost per headcount
and non cash items such as the
employee share scheme and lower
levels of capitalisation
•Third party direct costs increased
reflecting higher booking volumes
•Amortisationhas increased reflecting
a number of projects being amortised
over three years rather than five years
Operating expensesFY23FY22changechange
$'m$'m$'m%
Total remuneration and benefits49.332.117.354%
Percentage of revenue106%180%
Third party direct costs10.46.54.061%
Percentage of revenue22%36%
Other operating expenses10.08.51.518%
Percentage of revenue22%47%
Total amortisation and depreciation13.08.05.062%
Percentage of revenue28%45%
Total Operating expenses82.855.127.850%
Percentage of revenue178%308%
Note: A further breakdown of Operating Expenses
can be found in Note 5 of the financial statements.
22
Serko22
$ 12.93m
$ 1.91m
$ 1.77m
$ 4.00m
$ 5.00m
$ 2.17m
$ 30m
$ 4 0m
$ 50m
$ 60m
$ 7 0m
$ 80m
$ 90m
FY22
Operat ing
Ex penses
Remuneration
and ot her
benefit s
EI SSCap italisat ion3rd party
direct c osts
Am ortisat ion
and
deprecia tion
Other
exp enses
FY23
Operat ing
Ex penses
YoY change in Operating Expenses
Total spend
•Total spend grew by 34% relative
to the prior year but only 3% from
the first half to the second half
as efficiency initiatives began
to offset increased investment
Total Spend20232022changechange
$'m$'m$'m%
Expenses from ordinary activities82.855.127.850%
Add back: capitalised development13.615.3(1.8)(12%)
Deduct:depreciation and amortisation(13.0)(8.0)(5.0)62%
Total Spend83.362.321.034%
Percentage of revenue179%349%
23
Serko23
Product design and development
•Product design and development
(PD&D) costs is a non-GAAP measure
representing the internal and external
costs related to PD&D that have been
included in operating expenses or
capitalised as computer software
development during the period plus
amortisation of previously capitalised
PD&D
•Growth in PD&D expenditure
comprises approximately two thirds
of the growth in operating expenses
during the year and reflects strong
investment into our product and
underlying technology
Product Design and Development Expenditure20232022ChangeChange
Reclassified
1
$'m$'m$'m%
Total Product Design & Development41.730.111.6
39%
Percentage of revenue90%169%
Less: capitalisedproduct development costs(13.6)(15.3)1.8(12%)
Percentage of Product Design & Development costs32%
51%
Total Product Design & Development (excluding amortisation)28.214.8
13.490%
Percentage of revenue61%83%
Add: Amortisation of capitalised development costs11.26.44.875%
Total Product Design and Development Expenditure39.3
21.218.1
86%
Percentage of revenue85%119%
1 We have recognisedadditional costs within the PD&D costs to provide a more comprehensive view.
This does not impact the financial statements.
24
Serko24
Underlying cash flow
•Underlying cash flow is a proxy for
Free Cash Flow and excludes
movements between cash and short
term investments, cash flows related
to capital raises and unusual items
from a timing perspective
•Unusual items related to duplicate
customer receipts in FY22 which were
repaid in FY23 and a payment relating
to calendar 2021 paid in FY23
Adjusted Cash flow20232022ChangeChange
$'m$'m$'m%
Adjusted cash flows from operating activities(19.2)(23.7)4.6(19%)
Adjusted cash flows from investing activities(14.0)(16.1)2.1(13%)
Adjusted cash flows from financing activities0.00.2(0.2)(90%)
Net foreign exchange differences0.5(0.0)0.6(2400%)
Underlying Cash Flow(32.6)(39.6)7.0(18%)
Underlying average monthly cash burn(2.7)(3.3)0.6(18%)
Cash, cash equivalents and short-term
deposits at beginning of year124.579.944.656%
Add back adjustments:
One-off payment relating to 2022 made in 2023(4.1)4.1nm
1
nm
1
Capital Raise (net funds received)-80.1nm
1
nm
1
Reported Cash, cash equivalents and
short-term deposits at the end of the year87.7124.5(36.8)(30%)
24
Serko25
1 nm stands for not meaningful
Balance sheet
•Serko’s balance sheet remains strong
with cash and short terminvestments
of $87.7 million and no debt
•Receivables grew strongly driven by
increased revenue
•Payables declined due to the
repayment noted in the Underlying
Cash Flow commentary partially
offset by higher expenses in the
March 2023 quarter relative to the
March 2022 quarter
Balance Sheet20232022ChangeChange
$'m$'m$'m%
Cash and Short TermDeposits87.7124.5(36.8)(30%)
Other Current Assets13.86.27.6122%
Intangibles35.032.13.09%
Other Non CurrentAssets4.34.4(0.1)(2%)
Total Assets140.9167.2(26.3)(16%)
Current Liabilities12.213.3(1.1)(8%)
Non CurrentLiabilities2.73.0(0.3)(9%)
Equity125.9150.9(25.0)(17%)
Total Liabilities and Equity140.9167.2(26.3)(16%)
Serko26
Outlook
Serko27
Outlook
•Serko has made significant progress towards its goals in FY23as reported.
Business travel demand is tracking strongly and Serko is well positioned to
deliver increased scale and operational efficiency.
•Serko confirms its aspiration of $100m in total income in FY25.
•Serko is well capitalised with cash of $88m and no debt. Underlying monthly cash burn
peaked in 1H23 and Serko is committed to achieving positive cashflow for the
FY25 financial year with appropriate cash reserves on hand at the point of breakeven.
•Serko anticipates full year total income of between $63m and $70m for FY24 based on
current trends including the continued business travel recovery, growth in active customers
in Booking.comfor Business, a strong Euro:NZDexchange rate and current average revenue
per completed room night. There are a number of initiatives which have the potential to
drive further revenue growth, however, the timing and therefore the impact on FY24 revenues
is uncertain.
•Serko anticipates total spend of between $86m and $90m based on its current investment
plans and anticipated efficiency gains partially offset by higher volume related costs.
•Guidance remains subject to ongoing risks including geo-political and macro-economic risks.
Serko28
Q&A
Investor Presentation 17 May 2023
Serko29
Appendix
Serko30
Definitions
Non-GAAP (generally accepted accounting practices) financial measures do not have standardised meanings prescribed by GAAP
and therefore may not be comparable to similar financial information presented by other entities. Non-GAAP measures are used by management to monitor the
business and are considered useful to provide information to investors to assess business performance. Reconciliation of non-GAAP financial measures to GAAP
measures can be found within the Annual Report and this Investor Presentation.
•Active customers (unmanaged) is a non-GAAP measure comprising the number of customers who have made a booking in the preceding 12-month period.
•Average Revenue Per Booking (ARPB)is a non-GAAP measure. Serko uses this as a useful indicator of the revenue value per travel booking. ARPB for travel-
related revenue is calculated as travel-related revenue divided by the total number of online bookings.
•ARPCRN or Average Revenue per Completed Room Night is a non-GAAP measure and comprising the gross unmanaged supplier commissions revenue per
completed room night for revenue generating hotel transactions.
•Cash on hand is a non-GAAP measure comprising cash and short term investments.
•Completed room nights is a non-GAAP measure comprising the number of unmanaged hotel room nights which have been booked and the travellerhas
completed the stay at the hotel.
•EBITDAFis a non-GAAP measure representing Earnings Before the deduction of costs relating to Interest, Taxation, Depreciation, Amortisation, Foreign
Currency (Gains)/Losses and Fair value measurement.
•Headcountis a non-GAAP measure comprising of the number of employees (excluding casual workers) and contractors employed on the last dayof the period.
•Online Bookings is a non-GAAP measure comprising the number of travel bookings made using Serko’s Zeno and Serko Online platforms.
•Operating expenses is a non-GAAP measure comprising expenses excluding costs relating to taxation, interest, finance expenses and foreign exchange gains
and losses.
•Product design and development expenditureis a non-GAAP measure representing the internal and external costs related to the design, development and
maintenance of Serko’s platforms, including costs within operating expenses and amortisation. It excludes capitalised development costs.
•Total spend is a non-GAAP measure comprising of operating expenses and capitalised development costs. It excludes depreciation and amortisation.
•Total travel bookings include both online and offline bookings. Offline bookings are system automated bookings.
•Underlying cash flow is a non-GAAP measure comprising cash flows excluding movements between cash and short term investments, cash flows related to
capital raises and unusual items from a timing perspective.
Serko31
FY23 Results Summary
1H222H22FY221H232H23FY23FY23 v FY22 %
Financial ($m)
Total income$9.5m$9.4m$18.9m$19.4m$28.6m$48m154%
Total spend$28.4m$33.9m$62.3m$41.1m$42.2m$83.3m34%
EBITDAF($12.4m)($15.8m)($28.2m)($16.9m)($4.9m)($21.8m)(23%)
Net loss after tax($15.2m)($20.8m)($36.0m)($19.7m)($10.8m)($30.5m)(15%)
Average monthly cash burn$2.9m$3.0m$3.0m$3.6m$2.5m$3.1m4%
Underlying average monthly cash burn
(adjusted)$2.9m$3.7m$3.3m$3.6m$1.8m$2.7m(18%)
Operational
Online bookings (millions)1.1m1.0m2.1m2.0m2.1m4.1m93%
Completed room nights (millions)0.1m0.2m0.3m0.4m1.1m1.5m381%
ARPB$5.13$6.55$5.80$7.85$11.16$9.5665%
ARPCRN€6.61€7.04€6.88€10.10€9.03€9.3436%
Serko32
2007
Founded
SKO
ASX & NZSX
360+
Size of our team
5 offices
New Zealand, USA,
Australia, China
6000+
Corporate
customers
c. 600k
SME registered
companies
Thank you
---
ESG Report
Serko 2023
Serko believes in the power of being face-to-face.
Our purpose is to bring people together. Our vision
is a connected, frictionless travel experience.
To deliver that, we’re building the world’s leading
business travel marketplace — connecting business
travellers everywhere with the content, information
and services they need at every stage of the journey.
We bring
people together
Working
towards a
sustainable
future
We are committed to doing what is right for our
business, people, customers and communities.
This will drive our long-term value.
Sustainable
development goals
The United Nations (UN) Sustainable
Development Goals (SDGs) are a set
of global initiatives set by the UN
for everyone to contribute to.
For Serko, the SDGs provide a way
for us to show which areas of
sustainability we are directly
contributing to and how our initiatives
relate to a larger vision for positive
change. The UN SDGs relevant to
Serko and our actions are as follows:
People
Health & Safety
Policies
Training & Intern
Programmes
Diversity &
Inclusion Policies
Remuneration
Policies
Diversity &
Inclusion Policies
Community
Industry Recognition
for Innovation
Sponsorships
& Donations
Environmental
Practices
Privacy &
Security Policies
Customers
02
ESG
Governance
04
Our
strategy
06
Performance
reporting
Environmental ......06
Social ..............15
Governance .........39
Risk management ....54
01
Sustainable
business growth
Contents
This Environmental, Social and Governance (ESG) Report, which incorporates Serko’s Corporate Governance
Statement, was approved by the Board of Serko Limited on 17 May 2023 and is accurate as at that date. The
Board does not undertake any obligation to revise this Report to reflect events or circumstances after 17 May
2023 (other than in accordance with the continuous disclosure requirements of the applicable Listing Rules).
Building
sustainable long-term
business growth
Building sustainability
in our business
Sustainability is embedded
in our approach to long-
term value creation. Here
are the key drivers of our
sustainability strategy:
We believe strong ESG practices give
Serko its social licence to operate,
as well as creating long-term value
for our business.
Continuously innovating —
to adapt to rapid environmental
changes and deliver sustainable
and innovative products
to our customers
03
Being a brand you can
count on — trusted by our
employees, customers,
investors and partners
01
Powering our people —
to do amazing work that
drives our business and
sustainability goals
02
1
As part of our commitment to
sustainability, we are currently
working with internal and
external stakeholders to identify
and assess the most important
issues for us to measure, manage
and report on.
We have developed a set of draft material
issues from a review of internal and external
input information, including current trends,
peer analysis, industry reports and reporting
frameworks, along with internal policy,
procedure and reporting information. In the
first half of FY24 we will engage with our
stakeholders, senior managers and staff to
determine and rate our material ESG topics.
In next year’s Report, we look forward to
sharing with our stakeholders the outcomes
of this process, including our most material
topics and their relative importance to internal
and external stakeholders. These topics will
guide us in focusing our efforts to improve our
sustainability strategy and manage our risks.
ESG Governance
Understanding our material issues
2
While our commitment to ESG
is companywide, governance is
important to keep us on target.
Ownership starts at our Board
and flows through the entire
organisation. Here are the
various roles and responsibilities
for the oversight, planning and
delivery of ESG programmes
and practices at Serko.
The Board has
ultimate responsibility
for overseeing
Serko’s strategy and
performance, including
environmental, social
and governance
(ESG) issues.
ESG
Working Groups
ESG Steering Group
(ESG SteerCo)
Audit, Risk &
Sustainability Committee
The Board
The ESG Steering
Committee oversees
the delivery and
championing of
the ESG roadmap,
including Serko’s
climate roadmap
(via a sub-group).
The Audit, Risk
& Sustainability
Committee has been
delegated oversight
over sustainability
matters relevant to the
business, including
climate disclosure,
risk management and
reporting requirements.
ESG working groups
(including the Climate
Disclosure Working
Group) — comprise
cross-functional teams
who plan and execute
against the projects
that contribute to
the ESG programme
and help advance the
company towards its
ESG goals.
ESG Governance
Roles and responsibilities
3
Our strategy
Our strategy provides our stakeholders —employees,
customers, end users, partners, suppliers, shareholders
and others — with a clear sense of what drives us, where
we are heading and how we will create long-term value.
FY24
Objectives
3 yr
Strategic
Goals
Adopt next generation
technology foundations
Continue the build of
our next-gen technology
platform to optimise scale,
cost and pace of innovation
Unleash the
US market
Our whole team taking
our market-leading A/NZ
experience to improve
the success of our
US-based TMC partners
Make booking for
business easier
Combining Serko’s experience
of what matters most to
business travellers with
the best of Booking.com
Build travel software
that people love
Engage and delight
our customers through data-
driven product improvement
that has the most impact
The best place
to do your work
An environment where you
can do career defining work,
that delights our customers
and partners
Marketplace
and content
Commercialise connected
trip experience through
an open platform
Managed
revenue
Consistently grow market
share in the global managed
travel market through
TMC partnerships and
inorganic growth
Unmanaged
revenue
Establish significant
market share in the
unmanaged travel market
Customer
success
Deliver an exceptional
customer experience (CX)
through experimentation
Culture
Create a culture of engaged
Serkodians aligned to our
purpose, mission and values
12345
Our
Purpose
To create a connected, frictionless travel experience by
building the world’s leading business travel marketplace
Vision +
Mission
We bring people together
4
A year of solid progress
Governance
Continuing to enhance our business
ethics programme, including introduction
of Modern Slavery Policy and statement
Continuing to improve our risk management
framework, including climate risk
Establishing our new Data Governance
Group and Technology Advisory Committee
to provide oversight and guidance on data
and technology-related matters
We have steadily advanced
our sustainability journey over
the past year and are pleased
to report solid progress in the
following detailed sections
of this Report. Here is a
summary of our key areas
of focus and improvement.
Environment
Improving our understanding of our carbon
footprint — completing our first GHG inventories
Readying ourselves for mandatory
climate reporting — providing a roadmap
and FY23 progress report
Social
Introducing our new Community
Investment Programme
Having our inaugural Community day for
employees to give back to their communities
Publishing our first Pay and Gender
Equity Statement and registering on
the New Zealand ‘Mind the Gap’ Registry
Comprehensively reviewing and improving
disclosure of our executive remuneration
Increasing our leave and wellness entitlements,
including introducing broader parental leave
benefits with gender neutral application
5
Environment
6
Our approach to climate change
and the environment
Understanding and
reducing our own
carbon footprint
Assisting our
customers to make
smart, sustainable
business decisions
01
02
As a technology company,
Serko operates in an online,
office-based environment.
Accordingly, our direct
environmental footprint is
relatively small and made
up largely from third-party
data centres, office energy
consumption, employee
travel and from the typical
consumables of a technology
business.
We believe the biggest
environmental impact we
can have is in two core areas:
7
Understanding and
reducing our own
carbon footprint
We have made steady progress
in better understanding our own
carbon footprint as we ready
ourselves to begin mandatory
climate reporting next year.
The Aotearoa New Zealand
Climate Standards (NZ Climate
Standards) form the basis for
the climate-related disclosure
framework in New Zealand and
largely follow the Task Force
on Climate-related Financial
Disclosures (TCFD) framework.
We are still early in our climate reporting
journey, but we are committed to improving
our reporting over time. This roadmap
summarises our journey so far and our
focus areas for FY24 and FY25.
FY23:
Voluntary Disclosure
G
Formalise and document
governance structure and
management accountabilities for
climate-related matters at Serko
S
Undertake desktop analysis of
physical and transitional climate
impacts likely to have material
effects on Serko’s business
S
Consider Serko’s short, medium
and long-term horizons
R
Describe the process for
identifying, assessing and
managing climate-related risks
M
Begin reporting Scope 1,2,3
GHG emissions
FY25:
Second reporting period
**
S
Engage key stakeholders in the
findings of the scenario analysis
and incorporate into materiality
assessment and strategy
SQuantify financial impacts
S
Develop transition and
adaptation plans
R
Establish and describe the
process for risk monitoring
M
Set targets for emissions
intensity reduction
M
Report and set targets for the
key metrics identified to monitor
progress on strategy aspects.
FY24:
First reporting period
*
G
Integrate sustainability
strategy into business strategy
S
Identify temperature-based
scenarios to use alongside
1.5 degree Celsius scenarios
and determine scope of
scenario analysis
S
Conduct climate scenario analysis
process and document the findings
R
Describe the scenario
analysis process externally
M
Develop and monitor climate-
related metrics and targets
(financial and non-financial)
to support the delivery of
sustainability strategy
Serko’s FY23 – 25 NZ Climate-related Disclosure Roadmap
Governance Strategy Risk management Metrics and targets
* with some Year 1 exemptions** with some Year 2 exemptions
8
FY23 Progress
The following is our current
assessment of our progress
against the NZ Climate
Standards as we work towards
mandatory disclosure in FY24.
This year we are voluntarily
providing updates against
the four thematic areas
(Governance, Risk Management,
Strategy and Metrics & Targets)
included in the Standards to
inform shareholders where we
are at on our journey.
We recognise that to be
effective, our sustainability
strategy needs to be integrated
into our business strategy, and
this work will progress into FY24.
The Serko Board has ultimate responsibility for
overseeing Serko’s strategy and performance,
including environmental, social and
governance (ESG) issues.
The Board has delegated to the Audit, Risk
& Sustainability Committee oversight over
sustainability matters relevant to the business.
In doing so, the Committee is required to
ensure Serko has an effective sustainability
strategy, has appropriate processes in place
to deliver against that strategy and meets
climate disclosure risk management and
reporting requirements. The Committee is also
responsible for oversight of Serko’s enterprise
risk management.
The Committee meets quarterly to review
execution against the sustainability strategy
(presented by the ESG SteerCo), oversee risk
management and approve the engagement of
appropriate external experts to support Serko
on its climate disclosure journey.
An Executive-level ESG Steering Committee
has been established to oversee the delivery
and championing of the ESG roadmap,
including Serko’s climate roadmap. The ESG
SteerCo meets monthly (or more frequently
when required) to consider the climate
roadmap and makes day-to-day decisions
within delegated authority limits. The ESG
SteerCo is supported by cross-functional
specialists (the Climate Disclosure Working
Group) from across the business who
manage the day-to-day implementation
of Serko’s climate roadmap, manage
climate-related risks and execute against
climate-related opportunities.
Climate-related risks are managed within
Serko’s enterprise risk management
framework, which is described in more detail
on page 55 of this Report. Enhancements
to our travel booking platform to support
customers make travel choices that minimise
their environmental impact are led by our
Product Team and follow standard product
development processes.
See our ESG Governance summary for more
details about how we manage governance of
our whole ESG workplan.
Governance
9
Risk Management
In the past year we have made significant
progress in better understanding the risks
and opportunities of climate change on our
business. This has included:
• Executive Team members and climate
working group members engaged in
a tailored session with our climate
consultants, EY, to identify climate-related
risks and opportunities. This followed
surveying a range of internal stakeholders
from within the business and undertaking
external benchmarking to collect a broad
range of data points to inform the analysis.
• Development of a short-list of grouped
risks (set out in the following table)
following additional management and
Board workshops to assess the potential
impact of the long-list of risk factors on
Serko’s business. It is intended these risks
will be used as an input into our materiality
assessment and scenario analysis to be
undertaken in FY24.
• Inclusion of climate-related risks in Serko’s
enterprise risk management framework.
Serko’s key risks are reviewed quarterly by
the Audit, Risk & Sustainability Committee
and all identified risks are allocated to
individual Executives to monitor and manage
on a day-to-day basis.
• Consideration of the time horizons
applicable for defining Short, Medium and
Long-Term risk horizons for Serko. These
have been indicatively determined as Short
(0–2 years), Medium (2–5 years) and Long
(5–10 years) to align with Serko’s planning
horizons and capital deployment plans.
Serko’s primary assets are technology and
customer relationships. Serko amortises
internally developed software over 3–5 years
and key customer relationships are typically
not reflected in the financial statements
but are long term.
In FY24 we intend to build on this work,
including:
• Applying a sustainability lens over our
major strategic planning and decision-
making, as well as our capital expenditure
and operating costs.
• Ensuring climate-related risks are fully
incorporated into the risk management
framework and receive the appropriate
level of oversight and management.
• Assessing the materiality of our key risks
and undertaking greater analysis of the
impact of those risk factors.
Climate risk type Nature of risk and description
Transitional
Risks resulting
from the
economic,
regulatory, social,
technological and
legal responses to
climate change.
Reduced travel demand due to changes in consumer preferences
owing to growing awareness of carbon emissions and/or policy
changes resulting in:
• Increased demand for more sustainable travel options
• Decision to travel less often
Inability to meet customer demands for more sustainable choices/data
Increased reputational, regulatory and litigation risks from failing to meet
climate-related regulations and meet Serko’s own climate-related goals
Carbon pricing increases impacting travel costs, and therefore demand,
and also impacting supply chain costs
Physical
Risks resulting
from climate
change itself,
including via
temperature,
rainfall, storms,
extreme events
and sea level rise.
Extreme weather events cause supply chain disruption and impacts
to business continuity resulting in:
• Increased costs (e.g. cost of maintaining data centre (electricity
and water scarcity), freight costs)
• Impacts on network resilience – power and water outages
• Increased insurance costs
Extreme weather events and/or infectious diseases disrupt travel and
wider network resulting in reduced travel demand. Factors may include:
• Increasing sea levels impact airports
• Route changes as a result of extreme regional climate changes
• Pandemics
Grouped climate risks thought to be most relevant to Serko’s business:
10
Our climate roadmap, which has been
approved by the Board, will be integrated more
fully into Serko’s company strategy in FY24.
In accordance with our roadmap, a key focus
of our FY24 workplan will be the strategy
pillar, including conducting scenario analysis
to explore more fully our climate-related risks
and opportunities and their impact on the
resilience of our business model and strategy.
We have spent the last 12 months preparing
our first GHG inventories for FY22 & FY23.
This has enabled us to better understand our
emissions and the extent of our impact on the
environment. We will use this information to
make informed choices and, where possible,
seek to reduce emissions on an intensity
basis as we continue to expand our operations
internationally.
Serko will use FY23 as its baseline year for
assessing appropriate metrics and targets for
managing our carbon emissions. This is due to
the impacts of covid-19 on business activities,
such as travel, in FY22.
During FY24, we will focus on identifying the
appropriate metrics and targets to use to
measure and manage Serko’s climate-related
risks and opportunities.
The following information relating to
Serko’s Greenhouse Gas Inventory should
be read in conjunction with the published
Greenhouse Gas Inventory Report —
see www.serko.com/investors.
Serko has prepared its GHG inventories
for FY22 & FY23 in accordance with the
requirements of the Greenhouse Gas Protocol
Corporate Accounting and Reporting Standard
and ISO 14064:2018-1 standard.
An operational control approach was used
to account for emissions. Given the current
structure of the Serko Group, the financial
control approach is likely to have resulted
in a similar boundary and thus a similar
emissions inventory result.
Greenhouse gas emissions results were
calculated using the Ministry for the
Environment Detailed Greenhouse Gas
Reporting 2023 Guidelines for most
emissions. The United States Environmental
Protection 2023 GHG Emissions Hub was
used for calculation of emissions associated
with emissions sources in the United
States. For power use associated with the
offices in Australia and China, data from
carbonfootprint.com was used.
Our GHG inventory has been limited assurance
reviewed by Deloitte (for FY23) and EY (for
FY22) against the Greenhouse Gas Protocol in
accordance with the International Standards
on Assurance Engagements (NZ) 3000:
Assurance Engagements Other than Audits
or Reviews of Historical Financial Information
(‘ISAE (NZ) 3000’) and the related ISAE 3410:
Assurance Engagements on Greenhouse Gas
Statements.
Our Greenhouse Gas emissions as an intensity
of Total Income has reduced from FY22 to
FY23. This is a result of revenue growth and
return to normal business activities, including
business travel.
tCO
2
e per $m of Total Income
Strategy Metrics & Targets Greenhouse Gas Inventory
Table 1: Intensity of Greenhouse Gas
emissions per Total Income NZD$m
FY22
FY23
11.68
14.94
11
1 The Upstream Scope 3 subcategories included are subcategory 1 (purchased goods and services), 3 (Fuel- and energy-related activities), 6 (Business travel) and 7 (Employee Commuting).
Categories 2 (Capital goods), 4 (Upstream transportation and distribution) and 5 (waste generated in operations) are considered de minimus and have been excluded. Serko has no leased assets (category 8).
2 As defined in the NZ Climate Standards, Scope 1 are Direct GHG emissions from sources owned or controlled by the entity. Scope 2 are Indirect GHG emissions from consumption of purchased electricity, heat, or steam. Scope 3 represent other indirect
GHG emissions not covered in Scope 2 that occur in the value chain of the reporting entity, including upstream and downstream GHG emissions. As defined in the NZ Climate Standards, Scope 3 categories are purchased goods and services, capital
goods, fuel-related and energy-related activities, upstream transportation and distribution, waste generated in operations, business travel, employee commuting, upstream leased assets, downstream transportation and distribution, processing of sold
products, use of sold products, end-of-life treatment of sold products, downstream leased assets, franchises, and investments.
Serko’s location based GHG emissions for FY22 and FY23:
1, 2
600
500
400
300
200
100
The differential in emissions between FY22 and FY23 is largely
attributable to employee business travel normalising following
a covid-affected period where low levels of business travel were
undertaken. As with many technology businesses, our Scope 3
(supply chain) emissions dominate our baseline footprint,
comprising 90% of our total emissions.
The Scope 3 emissions included in the graph include upstream
emissions only. Downstream emissions are not included
as Serko is not the supplier of travel for customers who
book via our online travel platform. However, as a company
providing a travel booking platform that is used by thousands
of organisations around the world, we have an important role
to play in helping reduce the environmental impact of our
customers’ activity. This can be achieved over time by providing
insight into travel-related emissions and environmental impact
at point of sale and enabling corporate travellers to offset their
carbon emissions. In doing so, our travel booking platform
can help to shape user behaviour to encourage lower impact
options and develop more sustainable travel programs.
FY23
01% Scope 3 T&D Losses 2 tCO
2
e
09% Scope 3 Working from home 52 tCO
2
e
06% Scope 3 Staff commuting 32 tCO
2
e
54% Scope 3 Business travel 303 tCO
2
e
21% Scope 3 Azure hosting 118 tCO
2
e
08% Scope 2 Purchased Energy 48 tCO
2
e
01% Scope 1 Purchased Natural Gas 6 tCO
2
e
FY22
01% Scope 3 T&D Losses 2 tCO
2
e
22% Scope 3 Working from home 63 tCO
2
e
05% Scope 3 Staff commuting 13 tCO
2
e
16% Scope 3 Business travel 44 tCO
2
e
38% Scope 3 Azure hosting 109 tCO
2
e
16% Scope 2 Purchased Energy 45 tCO
2
e
02% Scope 1 Purchased Natural Gas 6 tCO
2
e
FY22FY23
282 tCO
2
e
561 tCO
2
e
12
Reducing Our Carbon Footprint
As well as supporting our business
traveller customers to reduce their
carbon footprints, over the past
year we have continued to look at
ways to progressively reduce Serko’s
carbon footprint. With most of our
operational emissions generated from
energy consumption (through our
office spaces and data centres) and
employee business travel (mainly air),
we have focused first on these areas
as opportunities to reduce our impact.
Initiatives in place (or in the process of
being implemented) include:
Energy consumption
• Wherever possible, we host information
technology (IT) and platform services
in the cloud, lowering our on-premise
energy consumption. Our cloud services
platform partner, Microsoft Azure, has been
carbon neutral since 2012. We are working
with Microsoft to optimise how we use
our technology infrastructure, including
offsetting our energy usage through
Microsoft’s pathway to carbon negative
by 2030.
1
We use Microsoft’s Emissions
Impact Dashboard to view and measure our
emissions from data centre usage.
• We have an energy provider for our New
Zealand offices that generates 100%
renewable energy sources. Under this
arrangement, we are issued with Renewable
Energy Certificates for our energy
consumption. The certificates have been
used to lower the reported market-based
greenhouse gas emissions.
Employee travel
• We bring carbon considerations to carbon
decisions. At the end of 2021, we partnered
with Tasman Environmental Markets (TEM)
to integrate BlueHalo, a technology solution
that facilitates carbon reporting and the
offset of travel for mutual customers. Serko
intends to offset its internal travel employee
emissions under a TEM portfolio.
• We see the benefit of reduced carbon
emissions associated with a reduction of
employees commuting. As such, we actively
manage flexibility for our employees to work
from home for part of the work week.
Circular Economy
As an office-based technology business,
Serko’s water usage and waste creation are
minimal. We are co-located in office spaces
that makes accurately measuring our water
usage and waste difficult, however, we remain
committed to reduction in waste and single
use items. Our efforts to reduce, reuse and
recycle include the following initiatives:
• recycling pieces of IT equipment and parts
by donating them to IT equipment recycling
companies with a sustainability focus and
to the Salvation Army to support reuse of
IT equipment.
• reinforcing smart environmental choices
within the corporate culture, particularly in
procurement and entertainment decision
making in the business.
• recycling and composting; and minimising
the use of disposable coffee cups and
single-use water bottles, where possible.
1 For more information on the steps Microsoft Azure is
undertaking to continue to improve its environmental
impact see https://azure.microsoft.com/en-au/global-
infrastructure/sustainability/#carbon-benefits
13
Assisting our customers to make
sustainable business decisions
As an office-based technology
business with relatively low scope
1 and 2 carbon emissions, we see
our greatest area of influence
is supporting our customers to
make informed decisions when
booking travel. Serko’s vision
for supporting efficient business
travel with Mission Zero is built
around four principles:
Real-time data
Serko is collaborating with
its partners to enable Zeno
users to measure the impact
of their flights in real-time.
Net Zero impact
Through our partnership
with TEM, Mission Zero
offers organisations a
measurable way to offset
their greenhouse emissions
by investing in carbon offset
projects that deliver social
and economic benefits to
communities as well as
emissions reduction.
Informed choice
Travel programs can be
designed to minimise
environmental impact, not
just financial cost. The most
efficient flight routes, cabin
classes and vehicle types
can be identified at the point
of purchase to drive more
sustainable buying behaviour.
Mission Zero also offers
‘sustainability badges’, that
allow Booking.com users to
search for accommodation
that meets certain
sustainability criteria.
Impact visibility
By providing complete
visibility of a business travel
program’s environmental
impacts, Zeno enables
organisations to make
policy choices that get their
travellers where they need to
go, while treading as lightly
as possible.
14
Social
15
Our vision for Team Serko is to bring our
people together to do career-defining work,
which ultimately delights our customers and
partners across the world.
We aim to provide Serkodians with a
connected employee experience which is
underpinned by a clear company purpose
and vision and our strong values. These
cornerstones of our company are developed
from, and tested against, the diversity of
perspectives that make up Serko.
Te a m S e r k o
16
We work hard to ensure that our purpose
and mission are well understood by our
stakeholders — employees, customers, end
users, partners, suppliers, shareholders and
others — and provide a very clear sense of
what drives us and where we are heading.
Our values reflect who we are as a company,
the way we work together as a team and
the way we interact with our customers and
partners. They show up in the decisions we
make, who we hire, how we develop, reward
and how we lead our teams.
We track how Serkodians are feeling about
the company, alignment, leadership, their
own development and wellbeing. Our monthly
pulse survey provides regular feedback and
allow real-time adjustments. High levels of
participation (around two-thirds of Serkodians
participate in every check-in) are in themselves
a strong indicator of engagement, as well as
allowing us to be confident in our data.
Our twice-yearly wider engagement
survey also allows us to track progress
using a consistent set of indicators over
a longer period.
We are pleased with our progress. In March
2023, we saw a significant improvement in
Serkodians’ alignment with our purpose and
mission (87% favourable v 77% March 2022);
and understanding of how Serko is tracking
against its goals (86% favourable v 47%
favourable March 2022).
Serkodians also tell us that they have a strong
sense of belonging, with more than 80%
consistently agreeing that they are proud to
work for Serko and 84% agreeing that they
would recommend Serko as a great place
to work.
Driving strong engagement
17
Mastery
Serkodians continuously strive to
become masters of what they do
Our values
Fun
We value humour, laughter and
enjoying our time at Serko
Family
Serkodians are valued as part of the Serko
team working together to do the right thing for
each other and our customers and partners
Success
Serkodians strive toward their goals
to ensure Serko reaches its goals
Integrity
Serkodians are honest, respectful of
others, deliver on their commitments
to each other and our customers and
make ethical business decisions
Passion
Serkodians are passionate about
what they do and what Serko does
Autonomy
Serkodians are able to work independently
and make decisions for themselves
for the benefits of our customers
18
We take pride in offering an
inclusive culture and environment
that allows people to show up
authentically, have their ideas
heard, reach their potential and
have fun along the way.
This environment allows us to serve our
customers well, attract top talent and achieve
our business objectives. We are proud to be an
equal opportunities employer.
Our Diversity and Inclusion Policy (located in
our Corporate Governance Manual) articulates
Serko’s commitment to ensuring diversity
in the skills, attributes and experience of
our Board members, management and staff
across a broad range of criteria (including
but not limited to, culture, gender, sexual
orientation and age).
Diversity and inclusion
We’re committed
to attracting diverse
talent and equitable
hiring practices.
We actively support
flexible, hybrid and
remote ways of working.
We’re committed
to equal pay for
equal work.
We use data to ensure
we can identify and
mitigate unconscious bias
in our decision-making.
01040203
Our key principles
Watch our video to
find out more about a
day in the life at Serko
19
Key objectives FY24Achievements / initiatives in place (FY23):
Gender diversity
target 40:40:20
In progress
• We actively seek to attract and hire diverse talent.
• Our progress on gender diversity numbers is provided on page 21
Increase conscious
awareness focus on
behavioural inclusion:
inclusive mindsets,
skillsets and relationships
In progress
• Serko Pay and Gender Equity statement published in FY23, articulating:
–our commitment to Pay Equity
–published data on median remuneration gender difference (less than 1%) and overall global gender difference (females lower by 12%) (page 23)
–our support of the New Zealand Mind the Gap reporting initiative
• Investment in leadership development programme, using ‘Women Rising’ to support leadership development as Serkodians
make their next career step
• Investment in allyship training using ‘Women Rising’ programme to promote allyship in the workplace. Internally run programmes on allyship are
planned for FY24
• An inclusive employee benefits programme, including:
–parental benefits with enhanced leave and return-to-work entitlements, regardless of gender identity
–resources to support employee wellbeing and mental health (pages 32–33)
–2023 flexible working policy that provides employees with the flexibility to work from home for up to three days a week (page 23)
• Unconscious bias training integrated into key practices, such as annual review and promotion for all employees in FY23
• People processes reviewed and adjusted to address unconscious bias in key areas such as hiring, promotions, annual performance review
and total reward decisions. Changes include:
–a Career Level framework for structured comparison
–integrating unconscious bias micro training for all major people processes
–using data and analysis to identify and mitigate unconscious bias (focused on gender in FY23) in our decision-making
• Celebration of cultural events, such as Sign Language Week, Māori Language Week, Martin Luther King Day, Chinese New Year, Diwali, Pride,
and International Women’s Day
• Continued investment in Business Resource Groups, including ‘Women in Technology’
Define, communicate and report
against Inclusion and Diversity
Objectives with engagement from
Executive team
Achieved
• Regular reporting to Executive and Board
• Monthly check-ins, enabling active listening to the voice of employees and better understanding of how well we are doing on criteria of inclusion,
equal opportunity and listening to employees
We set measurable
objectives that reflect
our commitment to
diversity and report
progress against these
objectives regularly to
the Board. The following
table shows our progress
to date and the many
initiatives in place to
ensure an inclusive
work environment.
20
We greatly value the diverse
thinking, skills, values,
backgrounds, ethnicities and
experiences that our team
members bring to the business
and have accordingly increased
our disclosure of that diversity.
A diverse workforce
In March 2021, Serko’s Board introduced a
new gender diversity target of 40:40:20
1
to be
achieved by the end of FY24
2
across a) the
Board; b) overall employees; c) non-executive
directors; d) executives and e) people leaders,
with achievement of the target defined by
having more than 40% female representation.
At the end of FY23, while we maintained
40% female representation at Board level,
our overall female representation at Serko
had reduced slightly from 41% to 38%, due to
expanded hiring in technology roles, which
still have high non-female representation.
While gaps remain in executive and people
leader roles, we are encouraged that female
people leaders have increased steadily to 34%,
compared to 28% in 2021.
1 40:40:20 represents the following definitions: 40% female/
women (she/her/hers); 40% male/men (he/him/his);
20% unspecified to allow for flexibility and to recognise
that gender is not binary (they/their/them).
2 Historically stated as 2023 calendar year
Employee diversity by group
All directorsf 40% m 60%
femalemalenon-binary
f 67% m 33%Non-executive directors
f 22% m 78%Executives
f 34% m 66%People leaders
All
workforce
Gender
38%01%61%
21
Workforce composition
In FY23, we continued measuring the sense
of inclusion and belonging of Serkodians.
We were pleased to see ongoing improvement,
with 90% of employees agreeing that they
feel respected and valued by teammates;
91% agreeing that their point of view is listened
to; and 88% agreeing that their team has
a climate in which diverse perspectives are
listened to.
As shown, our ethnic representation is
broadly balanced, and we are proud to have
more than 17 nationalities represented at
Serko. Serkodians also have a strong mix of
age and experience, ranging in age from early
20s to mid-60s, with most employees in the
35–44 group.
01% African
34% Asian
26% European / Caucasian
07% Indian
01% Latin American
01% Māori
0.3% Other
0.3% Pacific Peoples
29% Prefer not to say
Ethnic representation
With our total workforce increasing by 7% in
FY23 as we scaled up, the average tenure of
employees has reduced overall with 28% of
Serkodians now having a tenure of less than
a year. On the other hand, the numbers of
longer-serving employees remain firm with
29% of Serkodians with more than four years
at the company. Voluntary turnover reduced
slightly from 21% in FY22 to 19% in FY23.
28% Less than 1 yr
18% 1 yr
25% 2 – 3 yrs
13% 4 – 5 yrs
09% 6 – 9 yrs
07% 10+ yrs
Length of service
86% Full time
07% Contractor
03% Part time
02% Casual
01% Fixed term
01% Parental leave
Age range
02% 18 – 24 yrs
32% 25 – 34 yrs
43% 35 – 44 yrs
18% 45 – 54 yrs
04% 55 – 64 yrs
01% 65+ yrs
03% Private
22
This year we completed a two-
year redesign of our approach
to reward and development.
This framework ensures Serko
has the right foundations in place
to attract, motivate, retain
and reward the highly skilled
talent we need to achieve our
long-term business objectives.
Our focus was in two key areas:
completion of our remuneration
review including our Pay and
Gender Equity Statement;
and enhancing our ways of
working, including our Flexible
Work Policy.
Remuneration and work practices
We support a pay-for-performance culture
where employees are rewarded for individual
and overall company success. Detailed
information is provided in the Remuneration
Report contained in the latest Annual Report.
We are committed to equal pay for equal
work and are continually reviewing our
practices to ensure pay equity for our people.
Our Pay and Gender Equity Statement sets out
our key practices, as well as disclosing our pay
equity status. As at March 2023, our median
market remuneration gap (based on like-for-
like job type and career levels) was less than
1%; and our overall gender pay gap was 12%.
Flexible working practicesPay for performance
Our teams consistently say they operate
best with flexibility and choice in the design
of the work week rhythm, with aligned ways
of working.
They also tell us that different types of work
are better suited to different environments —
sometimes working alone without distraction;
and at other times working collaboratively
in person.
In recognising that these things may have
a different impact on our Serkodians, we
introduced a formal Flexible Work Policy,
which outlines employees’ work, security
and compliance expectations, regardless
of where they do their work (at the office,
at home or hybrid).
The policy aims to provide context and
alignment in ways of flexible working at
Serko. With 86% of Serkodians being full time
employees, this flexibility is critical. It includes
location and time flexibility and emphasises
that the needs of individuals, teams and the
business will be equally considered when
deciding about, and reviewing, flexible working
arrangements. In our annual survey, 90%
of employees noted that they felt genuinely
supported to make use of flexible working
arrangements.
23
At Serko we believe in creating
an internal talent market where
our employees can unlock their
potential through the power of
internal mobility. To support
this in FY23, we have focused
on establishing career pathways
for Serkodians which encourage
internal mobility, by identifying
new career opportunities
(lateral or promotions).
Development and career pathways
We are proud of the work we have done in
the technology space to ensure those career
pathways include both management and
individual contributor pathways into the most
senior positions, recognising the influence and
importance of deep technical expertise and
talent at Serko.
We are currently establishing learning
pathways linked to our career pathways with
direct on-the-job learning and application.
These learning pathways are being developed
through the power of Udemy platform (with
access to over 5,000 training courses) that
was rolled out to all employees in Q4 of
FY23. Since February we have seen 86% of
employees activate their licenses and over 330
hours of learning time completed in March.
As a result, we have seen a significant shift
in our monthly pulse survey score for ‘I have
access to the learning and development I need
to do my job well’, which improved from 62%
favorable in March 2022 to 85% favorable in
March 2023.
Over the past year, as we have scaled up as
an organisation, we have created many new
positions, advertised both internally and
externally. We were pleased to achieve an
internal promotion rate to open positions of
17% – our aim is to increase this to 30% in
FY24 through clearly defined career pathways.
Additionally, a focus for this year tied to
diversity and inclusion, was providing
leadership development to women at Serko.
This resulted in the Sponsorship of six
women on the Women Rising Programme
and one allyship seat in FY23.
24
Stories from our people
At Serko we believe in the power of bringing people
together. We take our roles in that journey seriously,
bringing our authentic selves to work to solve challenging
business travel problems through the power of
technology and deliver great customer outcomes.
Across our business, we have many different
teams — including Product, Tech and Customer
Services — who all play a critical part in that journey.
In these stories, some of our team members tell us
why they find working at Serko interesting and
what being a Serkodian means to them.
25
What attracted you to Serko —
what was the interesting challenge?
I joined Serko at the beginning of 2020 as
a contractor bringing a range of experiences
from different businesses. I was tasked to
lead a SWAT team to improve a critical priority
in page transition performance. Making that
improvement exposed many opportunities
for other improvements, and the impact
of those opportunities led me to join Serko
as a Principal Engineer.
What has been your career journey
at S e r ko?
In my three years at Serko, I’ve gone from
a senior consultant to Principal Engineer
and now Senior Principal Engineer. In these
roles I work with our senior architecture,
product and business leaders on our product
and tech strategy, as well as being able to
influence alignment across our wider group
to build reliable, scalable and commercially
differentiated user experiences.
Anne Bilek
Senior Principal Engineer
This progression was an unexpected (but
welcome!) side benefit of digging deep on a
narrow problem – “pulling a thread” and being
able to have an impact.
What have been your development
opportunities? How does it keep you
interested and learning?
Before Serko, I had never really considered
“technical leadership” as a viable path
because it seemed to require stepping into
management – something I was uninterested
in pursuing. But through the Principal and
Senior Principal roles, Serko has offered me a
path as an individual to contribute to high-level
decision-making, to influence and build an
engineering culture that drives strong business
outcomes, and to coach and mentor the next
generation. This excites me.
What makes being a Serkodian
special to you?
At Serko we are solving challenging business
travel problems through the power of
technology, and that means breaking things
down and building them back up until they are
even better. There are so many opportunities
for improvement and there is also a will for
improvement at all levels of the organisation.
Providing clear paths for managers and
individual contributors in technical leadership
is critical for our success. Personally, I really
feel like I have a chance to help Serko succeed
and there are the right career paths at every
level for people like me to make that impact.
Anne’s journey recognises the important
role deep technical leadership plays at Serko.
26
Fiona McCaffrey
Business Analyst Team Lead
What attracted you to Serko —
what was the interesting challenge?
I've seen first-hand how challenging it can
be for businesses and business travellers to
manage travel effectively. As a former tour
guide, and with a background in IT, I knew
I could bring those insights and experiences
to Serko to add value. I was excited about the
prospect of working as part of a team that is
passionate about making a difference and
pushing the boundaries of what's possible.
What has been your career journey
at S e r ko?
I joined Serko as a Business Analyst in 2021,
working closely with a variety of stakeholders,
including Booking.com for Business, our
Product Managers and engineering teams to
define what’s needed to deliver exceptional
customer value. A year later I was promoted
to Senior Business Analyst and then selected
as BA Team Lead. This has given me the
opportunity to take on new challenges and
new responsibilities, including coaching and
mentoring others.
What have been your development
opportunities? How does it keep you
interested and learning?
This year Serko sponsored me on Women
Rising, a leadership development programme.
So far my favourite module has been Radical
Confidence, explaining how I can be my
authentic self and leverage my strengths to
really step into a growth mindset – not as
scary as it sounds!
The opportunity to unlock my potential and
that of others around me is a major drawcard.
I'm excited to network with others and build
strong connections that will help me grow
both personally and professionally. I am
fortunate to work alongside some of the
best talent in the industry.
What makes being a Serkodian
special to you?
As a woman in tech and a member of the
LGBTQ+ community, I know first-hand the
importance of feeling a sense of belonging
in the workplace. Being a Serkodian for me is
more than just a workplace. Being a Serkodian
means I feel valued, supported and fulfilled.
Serko is somewhere I can bring my whole
self to work and make meaningful impacts
on real-world problems with an amazing
community of passionate team members.
Plus our Auckland office is dog friendly.
That’s pretty special to me as well.
Fiona’s journey recognises how the right support
can unlock the potential of our people.
27
What attracted you to Serko —
what was the interesting challenge?
Over 12 years ago I returned to New Zealand
from the UK with a background in the travel
industry and bespoke reservation software.
I found Serko — a travel technology company
with big global ambitions — which I thought
was a great fit and a place where my
experience could contribute to its growth.
What has been your career journey
at S e r ko?
Over the years, through inhouse coaching,
I have had opportunities to use my skills and
work across many different teams, solving
new and exciting problems. I moved from the
implementations team, where I had developed
people leadership and project management
skills, through to new Product offerings
and then expansion into North America,
which took me back into Client Services.
Adam Northgrave
Head of Customer Success
Nowadays I’m part of Serko’s Leadership
Team, heading up Customer Success, which
means focusing on increasing self-sufficiency
amongst our partners while ensuring
exceptional customer experience.
What have been your development
opportunities? How does it keep you
interested and learning?
Working at Serko has given me opportunities
I didn’t anticipate and allowed me to test
myself in ways I did not expect. Throughout
my time at Serko, there’s always been new
challenges and opportunities for growth,
I’ve had to learn and apply new skills, which
has kept me interested and on my toes!
What makes being a Serkodian
special to you?
Growing with the company from a tech
start-up to Hi-Tech company of the year
and becoming an NZX50 company has been
incredibly special. We have audacious goals
to smash, and that’s what keeps me excited.
I also feel privileged to work with such
a passionate and dedicated group of
people — we’ve forged incredible friendships
and we support one another in times of need.
That’s special.
Adam’s journey recognises the infinite opportunities
available to talented people as Serko evolves.
28
At Serko we are building our
base to bring in new ideas and
develop the next generation
of tech talent.
Our Intern Programme has
grown over the past few years,
and this year we hired a diverse
group of eight technology
students (four female, four
male, three mature students)
through the award-winning
Summer of Tech.
Developing the next generation of tech talent
The 10-week programme gave our interns
first-hand product development experience.
Supported by a cross-functional team of
professionals from Engineering, Product
and Design, the interns worked together to
research and solve a real-world problem,
and shared their progress through fortnightly
Company Demos.
In addition, they met with an executive weekly,
and each intern was partnered with two
mentors — some former interns themselves.
It wrapped up with a special team-building day
including more than 30 Serkodians who had
mentored and supported the team over the 10
weeks. The programme also provided our staff
opportunities to build important mentoring
and leadership skills by coaching and guiding
these early-career experiences.
Going forward into FY24, we will continue to
develop the intern programme with an aim to
connect this to a graduate hiring programme
and continue to invest in building future talent
in the technology industry.
29
There are so many people at
Serko who provided support and
guidance throughout my journey
there, and I am thankful for each
and every one of them. Serko is an
amazing place to learn and grow
as a Software Engineer, and I feel
honoured to have been a part of
this incredible community.
Kinzi Ceolin • 2022 intern
30
The amount of support was amazing.
The interns got all the help they seeked,
and always had their questions/needs
answered. The support is arguably
what made this internship standout
as it felt like so much effort was put
into helping the interns and making
this programme great!
Craig Lim • 2022 intern
31
1 LTIFR – Lost Time to Injury Frequency Rate is calculated
as: # of individuals who lost time to a workplace incident
divided by total number of hours available x 1,000,000
2 LTIIR – Lost Time to Injury Incident Rate is # of
individuals who lost time as a proportion of average
number of employees per year – per 100 employees.
At Serko we are committed
to engaging our people in
promoting a safe and healthy
working environment for
everyone working in, or
interacting with, our business.
Our Health and Safety policy is reviewed
annually and the Board reviews progress
against our Health and Safety objectives at
every Board meeting. With the majority of our
workforce being in professional services, and
primarily sedentary roles, we have identified
our key critical health and safety hazards as
being mental wellbeing/stress (see section
following) and sedentary workstation-bound
roles. To mitigate working environment-related
risk this year we have:
• Increased the number of standing desks
available to people who are office-based.
• Introduced ergonomic equipment such
as balance boards and yoga balls to help
engage employees’ muscles while standing
or sitting while working.
• Asked in our monthly pulse surveys for
instances of unhealthy stress that may
be occurring.
• Monitored and promoted our EAP
(Employee Assistance Programme)
programme to assist those that may
have personal or work-related troubles.
• Assessed individual needs before
employees join to ensure they have
safe workstation setups.
• Continually identified, assessed and
controlled possible risks to the health
and safety of people that may arise in
the workplace.
• Provided training to raise awareness of
potential hazards and involved our people in
health and safety decisions that affect them.
• Proactively found opportunities to improve
the health and wellbeing of people at Serko,
to align with Serko’s culture and ensure that
we keep this activity fun and exciting.
• Recognised excellence in health, safety
and wellness innovation by our people.
Measuring our performance
Our health and safety target is simple – zero
harm. We measure our overall health and
safety performance against two key metrics
– Lost Time Injury Frequency Rate (LTIFR
1
)
and Lost Time Injury Incident Rate (LTIIR
2
).
These respectively measure the rate of LTIs
per million hours worked and per number of
employees. The graphs below show our five-
year performance for these measures.
We are proud to have achieved no lost time
injuries (LTIs) over the past three financial
years, however, this year we did not achieve
that goal due to two minor car accidents that
required employee checkups. Because of our
relatively small employee base, this resulted
in an LTIFR score of 4.6 incidents per million
hours worked.
Employee health, safety and wellbeing
3
2
1
0
FY19FY20FY21FY22FY23
LTIIR
16
12
8
4
0
FY19FY20FY21FY22FY23
LT I F R
32
At Serko the health, safety and
wellbeing (physical and mental)
of our teams is something we
continuously think about and
measure. Our aim is to create
the right conditions where
employees have the support and
the tools they need to thrive.
This includes managing day-to-
day pressures to a healthy level
of stress, the opportunity to do
their best work, and where they
can be an ‘architect’ of their own
performance and wellbeing.
Our established mental health and wellbeing
programme is founded on the following
guiding principles:
• Our employees are the architect of their
own wellbeing.
• Wellbeing supports the whole person:
Mind, Body and Heart.
• Our initiatives are evidence-based,
and we aim to measure the impact.
• It is aligned with Serko’s values.
Serkodians are encouraged to prioritise
their own wellbeing with our full support.
This year we strengthened our focus on using
the science of mindfulness, building healthy
habits and testing new ways of working,
led by the following initiatives:
• Delivering employee education on the
science of healthy habits to understand
pressure and stress and the impacts
on the body.
• Mindfulness training in partnership with
BlueSkyMinds, with a focus on ensuring
our employees feel equipped to effectively
manage day-to-day demands through
healthy habits.
• Continuing our Mission You employee
wellbeing day available to all Serkodians,
encouraging them to consciously
disconnect from work and take a day
dedicated to restorative activities
to reconnect with themselves.
• Continued investment in new ways of
working, including flexible working practices
(see page 23), and individual teams testing
meeting-free time blocks to focus.
• Continued investment in employee benefits,
including Mission You, Serko’s outsourced
Employee Assistance Programme (EAP),
life insurance and new to FY23 Day of
Community, discounted healthcare and
discounted gym memberships.
Our primary measure of success is what
Serkodians tell us through the pulse survey
and EAP reporting. We have been pleased
to receive positive employee feedback
and high levels of engagement, with 87%
favourable that ‘Serko demonstrates care for
the health and wellbeing of its people’ and
70% favourable that they ‘feel equipped to
effectively manage the day-to-day demands
and pressures’ (up 5% from the same time last
year in March).
Mental health and wellbeing
33
Community
34
Community
We believe that the power of bringing people together
includes supporting the communities in which we live
and operate. We are doing this in many ways —
by giving back ourselves, contributing financially
or repurposing used equipment.
Giving back to the communities we operate in is incredibly important to us
and is why we launched the Serko Day of Community in September 2022.
Each Serkodian is given a day to spend time working on local community
initiatives that are meaningful to them. This year our global team across
Australia, New Zealand, China and the United States got stuck into social
and environmental programmes within their regions.
This year we gave an estimated 1,100 hours back in a meaningful and highly
valued investment for our teams and communities. We will continue with this
programme in FY24 and look forward to deepening the relationships built
through this day, including with DeadlyScience as outlined on page 38.
In New Zealand our teams
packed nearly 1,000 lunches for
kids with Eat My Lunch; planted
hundreds of trees with Habitat
Restoration Heroes and Motuihe
Project; filled dozens of bags
with environmental waste with
Sustainable Coastlines; packed
countless food parcels for Fair
Food NZ and Auckland City
Mission and served up plenty of
goodness to people in need with
Everybody Eats.
35
Our Australian teams worked
with DeadlyScience (see more
page 38).
In China we collected and
donated clothing to the local
church community.
And in the United States we
worked with Feed My Starving
Children to pack lifesaving
nutritious meals to send
to children.
36
Serko’s investment in community
initiatives is proportionate
to our size, and our budget in
any financial year is NZD 100
per team member per annum
(based on headcount at the
start of the year).
When deciding which initiatives
to support, we are guided by
the principles set out in our
Community Investment Policy.
These principles are focused on
ensuring our investments are:
Investing in our communities
Aligned with our
purpose of bringing
people together,
particularly initiatives
focused on developing
people with opportunities
they would not otherwise
be able to access
Less is more, focused
on a small number of
initiatives with strategic
partnerships and
investments in things
that are important to us
Directly impacting
our communities,
particularly with
programmes that help
contribute to a strong
and thriving ecosystem
Meaningful to our
people, where there
is a strong connection
to Team Serko and
the geographies we
operate in
01040203
The following page shows our most
recent community investment
37
We are excited to have
become a community
partner for DeadlyScience,
an Australian charity that
provides STEM resources
to remote and indigenous
schools and communities.
DeadlyScience is the brainchild of Australian
Corey Tutt, who wanted to address a critical
lack of resources for teaching STEM (Science,
Technology, Engineering and Mathematics)
subjects in remote and indigenous schools.
Since its inception, DeadlyScience has worked
with nearly 200 communities, providing more
than 25,000 books, 10,000 Lego kits, 700
telescopes and many other STEM resources.
Our focus is to assist with the DeadlyLearners
programme, which aims to help Aboriginal
and Torres Strait Islander students (years
3–9) in regional and remote schools.
The programme makes available STEM
professionals to help teachers to deliver
syllabus topics and ‘bring to life’ their area of
specialty. As many of the STEM professionals
are indigenous, this also helps inspire students
towards a STEM career on the basis that
‘if you can see it, you can be it’.
Our first year of funding will provide around
400 students with exposure to high quality
STEM learning sessions and, we hope,
inspire young people towards a STEM career.
We look forward to seeing the outcomes
of this support.
deadlyscience.org.au
Creating Deadly Learners
38
Governance
39
Governance
Serko’s Board and management
are very committed to ensuring
the company maintains best
practice corporate governance
and adheres to the highest
ethical standards.
When establishing our governance framework,
the Board has considered the latest version
of the NZX Listing Rules, as well as a range
of corporate governance recommendations,
including the NZX Corporate Governance Code
dated 1 April 2023 (NZX Code) and the Fourth
Edition of the Australian Securities Exchange
(ASX) Corporate Governance Council
Principles and Recommendations.
The NZX Listing Rules require Serko to
formally report its compliance against
the recommendations contained in the
NZX Code. Our implementation of these
recommendations is set out in this Corporate
Governance Statement. The Board considers
that Serko’s corporate governance structures,
practices and processes have followed all
recommendations in the NZX Code during the
financial year ended 31 March 2023. For the
purposes of Recommendation 3.4, the Board
has determined that the whole Board will carry
out the functions of a nominations committee
owing to the small size of the Board. Refer
to the section entitled ‘Board Committees’
in this ESG Report for more information.
Serko’s governance charters and policies can
be found in our Corporate Governance Manual
on the investor centre of the company’s
website. Our corporate governance charters
and policies have been approved and regularly
reviewed by the Board and are amended to
reflect developments in corporate governance
practices and updates to the NZX Code.
This statement is current as at 17 May 2023
and has been approved by the Board.
This Report has undergone a verification
process by management, with the oversight
of the Board.
Stock Exchange Listings
Serko is listed on the New Zealand Stock
Exchange (NZX Main Board) and on the
Australian Securities Exchange (ASX) as
an ASX Foreign Exempt Listing. As an ASX
Foreign Exempt Listing, Serko needs to comply
with the NZX Listing Rules (other than as
waived by NZX) but does not need to comply
with the vast majority of the ASX Listing
Rule obligations. Serko is incorporated in
New Zealand.
Overview of Serko’s
Governance Structure
The Serko Board has been appointed by
shareholders to protect and enhance the
company’s long-term value and to act in the
best interests of Serko and its shareholders.
The Board is our ultimate decision-making
body and is responsible for Serko’s corporate
governance. The role and responsibilities of
the Board are set out in the Board Charter,
which can be found in our Corporate
Governance Manual.
The Board currently comprises an independent
non-executive Chair, two independent non-
executive directors and two executive
directors, as detailed on the investor centre
of the company’s website and in the latest
Annual Report.
The Board has established two standing
Board Committees to assist in the execution
of the Board’s responsibilities:
• Audit, Risk and Sustainability Committee
(formerly the Audit and Risk Committee
Meeting); and
• People, Remuneration and Culture
Committee (formerly the Remuneration
and Nominations Committee)
The role of the nomination committee
is currently carried out by the full Board
due to the small size of the Board.
40
Ethical Standards
The Board recognises that
high ethical standards and
behaviours are central to good
corporate governance. Serko
has previously implemented a
Code of Ethics, Whistleblowing
Policy and Anti-Bribery &
Corruption Policy to guide
the behaviour of our directors
and employees. More recently
we have also adopted
a Modern Slavery Policy.
Code of EthicsWhistleblowing Policy
A stand-alone Whistleblowing Policy, which is
overseen and monitored by the Board, exists to
support the application of the Code of Ethics
and define the process for raising concerns
about actual, suspected or anticipated
wrongdoings within the Serko Group.
While employees may choose to raise
concerns about wrongdoing with managers
or executives, they can also raise concerns
and report dishonesty or unethical behaviour
via an independent external Whistleblower
hotline. A designated email address,
accessible only by non-executive directors,
is also available for staff to confidentially
raise any concerns they may have.
Our Code of Ethics outlines how Serko people,
such as directors, employees and contractors,
are expected to conduct their professional
lives. Under the Code of Ethics, employees
are expected to behave and make decisions
that meet Serko’s business goals and are
consistent with our values, policies and
legal obligations.
Serko’s Code of Ethics is available to all
employees on the company’s intranet and
sent to every new employee and director
to acknowledge they have read as part of
their induction process. Our employees are
reminded via staff-wide communications of
their obligations to comply with, and report any
concerns they have about, compliance with
the company’s Code of Ethics, other policies
or legal obligations.
The Code of Ethics covers matters such as
acting in accordance with Serko’s Values
(see page 18 of this Report), ensuring conflicts
of interest do not interfere with Serko’s best
interests, not accepting gifts or personal
benefits that may compromise or influence
business decisions, using Serko property and
information for legitimate and authorised
purposes, and maintaining appropriate
security and confidentiality of information
entrusted to employees in their roles. It also
requires Serko people to be familiar with,
and comply with, all relevant laws and
policies, including our delegated authority
framework, and to report on any wrongdoing.
Serko management must provide the Board
with all necessary information to fulfil its
duties, including any information relating
to material breaches of the Code of Ethics.
In addition, the Code of Ethics outlines
additional director responsibilities.
The Board reviews the Code of Ethics
biennially and expects any incidents
arising under it to be brought to directors’
attention immediately.
41
Anti-bribery and
Corruption Policy
Serko’s Anti-Bribery and Corruption Policy
reflects our commitment to conducting our
business in an honest and ethical manner.
We take a zero-tolerance approach to bribery
and corruption and are committed to acting
professionally, fairly and with integrity in all
business dealings and relationships. A gift
register has been established to record the
receipt of gifts above prescribed limits,
along with a process for approving whether
gifts can be retained.
Serko is not aware of any instances
of corruption or of incidents in which
employees were dismissed or disciplined
for corruption during FY23.
Modern
Slavery Policy
Serko is committed to taking reasonable steps
to identify and address the risk of slavery
and human trafficking across our business
operations and supply chain. While Serko
is not a reporting entity under Australia’s
Modern Slavery Act, we have voluntarily
adopted a Modern Slavery Policy. Additionally,
Serko has prepared its first Modern Slavery
Statement covering the FY23 financial year.
The Modern Slavery Statement is intended
to outline Serko’s approach and commitment
to preventing and addressing modern slavery
risks within our organisation and value chain
globally. This Statement is available on the
investor section of the company’s website.
We currently consider there is a low risk of
modern slavery occurring through Serko’s
direct operations and value chain as a result
of the type of business Serko operates and
the regions we, and our suppliers, operate
in. However, more work is required to better
understand our indirect supply chain risks.
For more information, see the Modern
Slavery Statement on the investor section
of Serko’s website.
Other business ethics
initiatives underway
Further initiatives proposed to be introduced
as part of enhancements to our business
ethics programme include rolling out a
Business Partner Code of Conduct. This will
communicate Serko’s expectations in relation
to ethical and other behaviour to our partners.
To support compliance with Serko’s business
ethics compliance programme and to better
understand and manage Serko’s supply chain
risks, we are also enhancing our partner
onboarding processes and implementing
increased due diligence screening on
counterparties.
We are committed to complying with legal
and statutory requirements with respect to
ensuring that directors and employees do
not trade Serko securities while in possession
of inside information.
Serko’s Securities Trading Policy and
Guidelines apply to all directors, officers,
employees and contractors of Serko and
its subsidiaries. This Policy seeks to ensure
that those subject to the Policy do not trade
in Serko securities if they hold undisclosed
price-sensitive information. The Policy sets
out additional rules, which includes the
requirement to seek company consent before
trading, and prescribes certain black-out
periods during which trading is prohibited.
Compliance with the Securities Trading Policy
is monitored through the consent process,
through education and via notification by
Serko’s share registrar when any director or
senior manager trades in Serko securities. All
trading by directors and senior managers (as
defined by the Financial Markets Conduct Act
2013) is required to be reported to NZX and
recorded in Serko’s securities trading registers.
Securities
Trading Policy
42
Board Composition & Performance
The Board is elected by shareholders to govern
Serko in the interests of its shareholders
and to protect and enhance the value of
Serko’s assets. The Board is responsible for
corporate governance and Serko’s overall
strategic direction, and is the overall and final
body responsible for all decision-making
within Serko. The Board Charter describes
the Board’s roles and responsibilities and
regulates internal Board procedure.
The Board has delegated a number
of its responsibilities to Board committees.
The role of each committee is described
below.
To enhance efficiency, remain agile and
ensure decision-making occurs at the right
level, the Board has also delegated to the
Chief Executive Officer the day-to-day
leadership and management of Serko.
The Chief Executive Officer has formally
delegated certain authorities to his direct
reports within set limits. The Board regularly
monitors and reviews management’s
performance in the execution of its delegated
responsibilities and the appropriateness of its
Delegation of Authority Policy.
During the financial year, the Board met for
12 regularly scheduled meetings. Directors
also met periodically, for several additional
special meetings and to undertake strategic
planning for the business.
Board and committee meeting attendance
during the year ended 31 March 2023 is set
out in the latest Annual Report.
Role of the Board
As at 31 March 2023, the Board comprised
five directors — being the two co-founders and
executive directors, Darrin Grafton and Robert
(Bob) Shaw; and three independent non-
executive directors — Jan Dawson, Claudia
Batten and Clyde McConaghy. A biography
of each director can be found on the investor
section of the company’s website and in the
latest Annual Report. Serko is proud to have
a part-Māori co-founder who sits on the Board,
along with two female directors, including
the Chair.
The Board is responsible for making
recommendations relating to the Board’s
size and composition, in accordance with
the limitations prescribed in the NZX
Listing Rules and the provisions of Serko’s
Constitution and the Board Charter.
When considering candidates to act as a
director, the Board will consider factors it
deems appropriate, including the diversity
Board diversity, size and composition
of background, experience and qualifications
of the candidate. When appointing directors,
the Board undertakes appropriate ‘fit and
proper’ checks.
The Board regularly reviews its skills matrix as
part of its succession planning and considers
the appropriate mix of skills required to
govern Serko as its strategy evolves and Serko
expands internationally. A refresh of the Board
commenced in FY22 with the retirement of
Simon Botherway and appointment of Jan
Dawson. During FY23, to continue to enhance
the governance oversight of the business,
the Board established a Technology Advisory
Committee to provide additional oversight
of Serko’s technology strategy. The Board
also appointed two additional board advisers
to support Serko’s international scaling efforts.
As part of its ongoing succession plan,
the Board intends to appoint a fourth,
independent non-executive director to
the Board during 2023.
43
Board tenure
The average tenure of non-executive directors is currently
6.5 years and the average tenure of all directors is 10.5 years.
Director
‘07‘08‘09‘10‘11‘12‘13‘14‘15‘16‘17‘18‘19‘21‘22‘23Te n u r e
Darrin Grafton16 yrs
Bob Shaw16 yrs
Claudia Batten9 yrs
Clyde McConaghy9 yrs
Jan Dawson< 2 yrs
Category
Innovation, entrepreneurship and partnership
International travel industry knowledge
Systems technology, cyber security, and IT
Technology platform development and trends
High-growth company experience
Marketing, sales and channel management on core markets
Legal and regulatory environments
Strategy
Financial and accounting
Operations management
Public company director experience
Governance, compliance and risk management
Client Markets ANZ
Client Markets Other (Europe and USA)
Board skills matrix
Areas of expertise and experience that have been identified as particularly
relevant to governing Serko’s business include, among other skills:
Low Medium High Ve r y h i g h
44
Board appointment, training
and evaluation
The procedure for the appointment and
removal of directors is ultimately governed
by the company’s Constitution and relevant
NZX Listing Rules. A director is appointed
by ordinary resolution of the shareholders
although the Board may fill a casual vacancy.
Every director appointed by the Board must
submit himself or herself for reappointment
by shareholders at the next annual meeting
following his or her appointment by casual
vacancy. Directors are subject to the rotation
requirements set out in the NZX Listing Rules.
At the time of appointment, each new director
signs a comprehensive letter of appointment
setting out the terms of their appointment,
including their duties and expectations in
the role. Each director also receives a copy
of Serko’s Corporate Governance Manual
(comprising all of Serko’s core governance
documents) and is introduced to the business
through a tailored induction programme. All
directors are regularly updated on relevant
industry and company issues and are
expected to undertake training to remain
current on how to best perform their duties
as directors of Serko. During the Board’s
annual evaluation process, training needs are
Independence of directors
The majority of Serko’s directors are
independent. The criteria for assessing the
independence of directors is set out in the
NZX Listing Rules and NZX Code and in
the Board Charter. Generally, a director is
considered to be independent if that director
is not an employee of Serko and if the director
has no direct or indirect interest or relationship
that could reasonably influence or be
perceived to influence, in a material way,
the director’s decisions in relation to Serko.
The Board has determined that each of the
non-executive directors is an independent
director for the purposes of the NZX Listing
Rules and in accordance with the Board
Charter criteria. In doing so, the Board has
considered the relevance of Claudia’s and
Clyde’s tenure on their ability to bring an
independent view to decisions in relation
to Serko. The Board considers that both
directors continue to bring independence of
judgement when carrying out their director
duties. Of relevance to this decision is the fact
that Claudia took over as Chair of the Board
in 2020 and Clyde has led different Board
Committees during his time on the Board. As
detailed above, the Board is actively working
on a succession plan to refresh the Board.
considered to assist directors to
remain upskilled on the business, industry
and legislative developments.
All directors have access to senior
management to discuss issues or obtain
information on specific areas or items to
be considered at Board meetings and each
director actively utilises this access to
support the company and its executives.
The Board, Board committees and each
director have the right to seek independent
professional advice at Serko’s expense
to assist them in carrying out their
responsibilities.
The Board, with support from Committee
Chairs, undertakes a regular review of its
own and its committees’ performance.
This is to ensure it has the right composition
and appropriate skills, qualifications,
experience and background to effectively
govern Serko and to monitor Serko’s
performance in the interests of shareholders.
During the financial period ended 31 March
2023, performance reviews took place
in accordance with that process.
The Board will review any determination
it makes on a director’s independence, on
becoming aware of any new information that
may affect that director’s independence. For
this purpose, directors are required to ensure
they immediately advise Serko of any new
or changed relationship that may affect their
independence or result in a conflict of interest.
The Board supports the separation of the
role of Chair and Chief Executive Officer.
The current Chair has been elected by the
Board from the independent directors, in
accordance with the terms of the Board
Charter. The Chair’s role is to manage and
provide leadership to the Board and to
facilitate the Board’s interface with the
Chief Executive Officer.
45
Conflicts of interest
The Board is conscious of its obligations
to ensure that directors avoid conflicts of
interest (both real and perceived) between
their duty to Serko and their own interests.
The Board Charter outlines the Board’s policy
on conflicts of interest. Serko maintains
an interests’ register in which relevant
disclosures of interest and securities dealings
by the directors are recorded. In addition,
the Board has developed a Charter to govern
the establishment and functioning of an
Independent Committee to be formed, as
and when required, to respond to activity
determined to cause some directors to be
conflicted. The Independent Committee is not
a standing committee of the Board.
Company Secretary
The Company Secretary is responsible for
supporting the effectiveness of the Board by
ensuring that its policies and procedures are
followed and for coordinating the completion
and dispatch of the Board agendas and
papers. The Company Secretary is directly
accountable to the Board, via the Chair,
on all governance matters.
Diversity & Inclusion Policy
Serko has a Diversity and Inclusion Policy
that reflects its commitment to achieving
diversity in the skills, attributes and experience
of our directors, executives and employees
across a broad range of criteria (including
but not limited to, culture, gender and age).
The Board as a whole is responsible for
overseeing and implementing the Diversity
and Inclusion Policy but has delegated
to the People, Remuneration and Culture
Committee the responsibility to develop and
to recommend measurable objectives to
the Board that are designed to adhere to the
Policy. See pages 19–2 2 of this Report for
further information regarding Serko’s Diversity
and Inclusion Policy and practices, and the
Board’s assessment of Serko’s progress
towards achieving its diversity objectives.
We are proud to have met our goal of
achieving 40(female):40(male):20 diversity
split on our Board.
46
Board Committees
The Board uses committees
to deal with issues requiring
detailed consideration, thereby
enhancing the efficiency and
effectiveness of the Board.
However, the Board retains
ultimate responsibility for the
functions of its committees and
determines each committee’s
roles and responsibilities.
Audit, Risk and
Sustainability Committee01
People, Remuneration
and Culture Committee
02
The current standing committees
of the Board are:
Details of the roles and responsibilities
of these committees are described in their
respective charters and summarised below.
From time to time the Board may constitute
an ad hoc committee to deal with a particular
issue that requires specialised knowledge
and experience.
The role of the Nomination Committee is
currently, and was throughout the financial
period ending 31 March 2022, carried out
by the full Board owing to the small size of
the Board.
During the financial year the Board appointed
a Technology Advisory Committee comprising
one Board director, two independent expert
advisers, the Serko Chief Technology
Officer and the Serko Head of Product. The
Committee assists the Board in its oversight
of Serko’s technology strategy and the use
of technology in executing Serko’s overall
business strategy. It also supports the Audit,
Risk and Sustainability Committee in providing
oversight of technology risks. The Technology
Advisory Committee meets on an ad hoc basis
and reports to the Board after each meeting.
47
Takeover
Response Guidelines
Serko’s Takeover Protocol and Independent
Committee Charter sets out the procedure to
be followed in the event Serko was to receive
a takeover offer. This procedure was last
reviewed in 2022. The Independent Committee
is not a standing committee of the Board
and will be formed only as and when required
to respond to a takeover offer that causes
some directors to be conflicted.
People, Remuneration
and Culture Committee
The primary function of the People,
Remuneration and Culture Committee
is to oversee remuneration and people-
related policies and practices at Serko,
oversee executive succession planning and
make recommendations to the Board on
Serko’s culture and employee wellbeing.
The Committee is also tasked with annually
monitoring and evaluating the company’s
performance with respect to its Diversity
and Inclusion Policy.
Under the People, Remuneration and Culture
Committee Charter, the Committee must be
comprised of a minimum of three members,
all of whom are independent directors.
The Chair of the Committee is required to
be independent and may not also be the
Chair of the Board.
The current members of the Committee are
Clyde McConaghy (Chair), Jan Dawson and
Claudia Batten. All members are independent,
non-executive directors. Their qualifications
and experience are set out in the latest
Annual Report.
Audit, Risk and
Sustainability Committee
The primary function of the Audit, Risk and
Sustainability Committee (formerly the Audit
and Risk Committee Meeting) is to assist the
Board in fulfilling its oversight responsibilities
relating to Serko’s risk management and
internal control framework, the integrity of its
financial reporting and its auditing processes.
In carrying out its risk management functions,
the Committee is specifically responsible
for oversight of information security risk
practices. The Board receives regular updates
from Serko’s Chief Information Security Officer
on information security threats, risks and
mitigation plans.
The Board has also recently extended the
Committee’s responsibilities to provide formal
oversight over sustainability matters relevant
to the business. In doing so, the Committee
is required to ensure Serko has an effective
sustainability strategy, appropriate processes
in place to deliver against that strategy and
meets climate disclosure risk management
and reporting requirements.
Under the Audit, Risk and Sustainability
Committee Charter, the Committee must be
comprised of a minimum of three members
who are each non-executive directors, the
majority of whom are also independent
directors and at least one director with an
accounting or financial background. Further,
the Chair of the Committee is required to be
independent and not also be the Chair of the
Board. The Chair of the Committee is not
permitted to have been an audit partner or
senior manager at Serko’s external audit firm
within the past three years.
The current members of the Committee are
Jan Dawson (Chair), Clyde McConaghy and
Claudia Batten. All members are independent,
non-executive directors. Their qualifications
and experience are set out in the latest Annual
Report. Jan Dawson is a financial expert.
48
Reporting & Disclosure
Serko is committed to the promotion
of investor confidence by ensuring
that the trading of company shares
takes place in an efficient, competitive
and informed market. The Board is
tasked with ensuring the integrity of
financial and non-financial reporting
to shareholders. During the financial
year, we have focused on readying
Serko for climate disclosure reporting
and enhancing other non-financial
reporting. A comprehensive ESG
programme is being implemented
to support these initiatives, which is
overseen quarterly by the Audit, Risk
and Sustainability Committee.
Market Disclosure Policy
Our Market Disclosure Policy guides Serko’s
compliance with the continuous disclosure
requirements of the NZX Main Board. In
addition, directors and management consider
at each Board meeting whether there are any
issues that have arisen that require disclosure
to the market.
Serko has established a Disclosure
Committee whose role it is to determine
whether information is ‘material information’
and whether the material information is
required to be released to the NZX and ASX.
The Disclosure Committee comprises the
Board Chair, the Audit, Risk and Sustainability
Committee Chair, the Chief Executive
Officer, the Chief Financial Officer and
the General Counsel.
The Disclosure Committee is governed
by the Market Disclosure Policy and is
responsible for implementing that Policy.
Financial Reporting
The Board is responsible for ensuring the
integrity of its financial reporting. The Audit,
Risk and Sustainability Committee closely
monitors financial reporting risks in relation
to the preparation of the financial statements.
The Audit, Risk and Sustainability Committee,
with the assistance of management, also
works to ensure that the financial statements
are founded on a sound system of risk
management and internal control and that the
system is operating effectively in all material
respects in relation to financial reporting risks.
As part of this process, the Chief Executive
Officer and Chief Financial Officer are required
to state in writing to the Board that, to the
best of their knowledge, the company’s
financial reports:
• Present a true and fair view of the
company’s financial condition and
operational results;
• Are prepared in accordance with the
relevant accounting standards; and
• Are founded on a sound system of risk
management and internal control that is
operating effectively.
Non-financial Reporting
To assist shareholders to make meaningful
investment decisions, in addition to reporting
historical statutory financial information, we
are committed to providing shareholders with
a balanced and understandable assessment
of Serko’s performance, business model,
strategic objectives and progress against
meeting those objectives at each earnings
announcement and in its full-year reports.
Serko is committed to developing long-term
value creation. As part of this commitment,
the Board is focused on delivering a
sustainable future for its business, people,
customers, partners and communities by
doing what is right.
To demonstrate this, Serko has chosen
to report against the UN Sustainable
Development Goals (SDGs), which are a set of
global initiatives set by the United Nations for
everyone to contribute to. For Serko, the SDGs
are a way to see which areas of sustainability
it is directly contributing to and how they
relate to a larger vision for positive change.
Information about Serko’s ESG initiatives are
set out in this ESG Report.
49
Remuneration
Serko is committed to remunerating its non-
executive directors, executive directors and
employees fairly, transparently and reasonably.
Our remuneration practices are detailed in the
Remuneration Report included in the latest
Annual Report.
Serko is committed to proactively and
consistently managing risk to:
• Enhance and protect Serko’s value
by delivering on its commitments and
meeting stakeholders’ expectations;
• Allow Serko to pursue opportunities
in an informed way and aligned with
the Board’s risk appetite; and
• Ensure a safe and secure environment for
Serko’s people (employees and contractors),
partners and customers.
Serko’s Risk Management Policy is included in
the Corporate Governance Manual published
on its website. We have a comprehensive risk
management framework for the oversight and
management of financial and non-financial
business risks, as well as related internal
compliance systems.
The Board has ultimate responsibility for
Serko’s risk management and internal
control system, setting the ‘tone at the top’
with regards to our risk culture. The Audit,
Risk and Sustainability Committee, under
Risk Management
delegation from the Board and in conjunction
with management, regularly reports to the
Board on the effectiveness of the company’s
management of its material business risks and
whether the risk management framework and
systems of internal compliance and control
are operating effectively and efficiently in all
material respects.
The Audit, Risk and Sustainability Committee
conducts at least quarterly reviews of Serko’s
risk management framework, risk appetite
and principal risks, to satisfy itself that the
company’s approach to risk continues to be
sound. A comprehensive review of Serko’s
risk management framework and capabilities
was conducted in FY22, with continued
enhancements implemented during FY23.
Further details on Serko’s risks and risk
management processes are detailed on
pages 54–58 of this Report.
50
External Auditor Independence
Auditors
Serko has an External Audit Independence
Policy that requires, and sets out the criteria
for, the external auditor to be independent.
The Policy recognises the importance of
the Board’s role in facilitating frank dialogue
among the Audit, Risk and Sustainability
Committee, the auditor and management.
The Policy prescribes the services that can
and cannot be undertaken by the external
auditor, which are designed to ensure that
services provided by Serko’s external auditor
are not perceived as conflicting with its
independent role.
The Policy requires that the key audit partner
is changed at least every five years so that no
such persons shall be engaged in an audit of
Serko for more than five consecutive years. In
addition, three years must expire between the
rotation of an audit partner and that partner’s
While Serko has an internal auditor to oversee
the company’s data security processes, it does
not have a dedicated internal audit function.
Instead, internal controls are managed on
a day-to-day basis predominantly by the
finance, legal, compliance and security teams.
Compliance with certain internal controls
is reviewed annually by Serko’s external
auditor. The Board, finance, legal, compliance
and security teams regularly consider how
Serko can improve its internal assurance and
risk management practices during Serko’s
annual governance review, quarterly risk
reviews, preparation of interim and full-year
financial statements and following Serko’s
annual financial audit. The Audit, Risk and
Sustainability Committee oversees these
reviews and the controls Serko has in place
to manage risk.
Internal Audit
next engagement by Serko. In accordance with
this Policy and the NZX Listing Rules, the key
audit partner rotated at the end of the FY22
audit. Serko last changed its audit firm in 2017.
The Audit, Risk and Sustainability Committee
Charter requires the Committee to facilitate
the continuing independence of the external
auditor by assessing the external auditor’s
independence and qualifications and
overseeing and monitoring its performance.
This involves monitoring all aspects of the
external audit, including the appointment of
the auditor, the nature and scope of its audit
and reviewing the auditor’s service delivery
plan. In carrying out these responsibilities
the Audit, Risk and Sustainability Committee
meets regularly with the auditor without
executive directors or management present,
and the key audit partner has direct contact
with the Chair of the Audit, Risk and
Sustainability Committee.
The auditor is restricted in the non-audit work
it may perform, as detailed in Serko’s External
Audit Independence Policy. For further details
on the audit fees paid and work undertaken
during the period, refer to the latest Annual
Report. The Audit, Risk and Sustainability
Committee regularly monitors the ratio of
fees for audit to non-audit work.
The lead audit partner will be present at
Serko's Annual Shareholder Meeting to
answer questions from shareholders in
relation to the audit.
51
Shareholder Rights & Relations
Serko is committed to maintaining a full and
open dialogue with our shareholders (and
other interested stakeholders) and we have
in place an investor relations programme to
facilitate effective two-way communications
with shareholders.
The aim of Serko’s investor relations and
communications programme is to provide
shareholders with information about the
company and to enable them to actively
engage with the company and exercise their
rights as shareholders in an informed manner.
We facilitate communications with
shareholders through written and electronic
communications and by facilitating
shareholder access to directors,
management and the company’s auditor.
Information for Shareholders
We provide shareholders with communications
through the following channels:
• The investor section of Serko’s website;
• Full-year reporting and half-year results;
• The annual shareholders’ meeting;
• Regular disclosures on company
performance and news via stock
exchange online disclosure platforms; and
• Disclosure of presentations provided
to analysts and investors during
regular briefings.
Serko’s website is an important part of
the company’s shareholder communications
strategy. Included on the website is a range
of information relevant to shareholders
and others concerning the operation of
the company. Serko has published on its
website this ESG Report, which outlines
our governance practices.
Shareholders may, at any time, direct
questions or requests for information
to directors or management through
Serko’s website or by sending emails to
investor.relations@serko.com.
We provide shareholders with the option
to receive communications from, and send
communications to, the company and its
share registrar electronically. The majority
of Serko shareholders have elected to
receive electronic communications.
52
Annual Shareholders’ Meeting
Serko’s 2023 Annual Shareholders’ Meeting is
intended to be conducted as a hybrid meeting,
enabling shareholders to attend in person or
participate in the meeting virtually. A hybrid
meeting is considered to provide the broadest
opportunity for shareholder engagement with
the company.
Shareholders will be given an opportunity at
the meeting to ask questions and comment on
relevant matters. In addition, Serko’s lead audit
partner from Deloitte will attend the meeting
and will be available to answer any questions
about its Audit Report. A Notice of Meeting
will be sent to shareholders in advance of
the meeting.
Shareholder protections
and voting rights
All ordinary shares on issue have the same
voting rights, each conferring on the registered
holder an equal right to vote on any resolution
at a meeting of shareholders.
In accordance with the Companies Act 1993,
Serko’s Constitution and the NZX Listing
Rules, Serko refers major decisions that may
change the nature of Serko to shareholders
for approval.
Serko conducts voting at its shareholder
meetings by way of polls, reflecting the
principle of one share, one vote. Further
information on shareholder voting rights
is set out in Serko’s Constitution.
Serko did not raise any capital during
the period.
53
Risk Management
54
Serko is committed to proactively
and consistently managing risk to:
• Enhance and protect Serko’s
value by delivering on our
commitments and meeting
stakeholders’ expectations;
• Allow Serko to pursue
opportunities in an informed
way and aligned with the
Board’s risk appetite; and
• Ensure a safe and secure
environment for our people
(employees and contractors),
partners and customers.
Risk management framework
Serko has a comprehensive risk management
framework for the oversight and management
of financial and non-financial business risks,
as well as related internal compliance systems
that are designed to:
• Optimise the return to, and protect the
interests of, stakeholders;
• Safeguard the company’s assets and
maintain its reputation;
• Improve the company’s operating
performance;
• Fulfil the company’s strategic objectives; and
• Manage the risks associated with
Serko’s operations.
A comprehensive review of Serko’s risk
management framework and capabilities
was conducted in FY22, with continued
enhancements implemented during FY23.
The Audit, Risk and Sustainability Committee
continues to oversee the implementation of
the recommendations resulting from the
review and the ongoing programme of work
to continue to enhance risk management
practices throughout the organisation.
Serko has in place mitigation strategies
for managing its key risks within Board-
defined tolerances based on the approved
risk appetite statement. In addition to its
mitigation strategies, Serko maintains
comprehensive insurance coverage.
Risk Management
55
The following table highlights
some of the key business risks
for Serko and the mitigation
activities that are in place or
planned. Each of these risks,
if realised, could impact
Serko’s ability to achieve
planned revenues or to
execute on its strategy.
Principal
business risks
Mitigation Strategies
Risks
Impact of global events
As a travel technology provider, Serko faces
significant exposure to changes in demand
for business travel services due to a variety of
global events that could impact the travel industry.
Significantly weakened global conditions, as
a result of the pandemic, geo-political instabilities
or other events, could harm our business and
financial condition.
Platform stability and data security
Serko faces significant exposure to hacking, cyber-attack or similar due to its online
software hosting, Cloud/SaaS services revenue model and role as a data processor.
Serko may also suffer loss of service as the result of failure or unplanned outage
of IT hosting providers due to its online software hosting and Cloud/SaaS services
revenue model.
• Alternative operating models in place targeting
different traveller types, across multiple markets
• Monitoring key trends in global and regional travel
• Expanding our offering to different content
channels and alternative, more sustainable modes
of transportation
• Maintaining sufficient capital reserves
• Business continuity and disaster recovery planning
• Continuous platform monitoring and incident response process
• Platform modernisation and openisation initiative
• Payment Card Industry Data Security Standard (PCI DSS) compliance and regular audits
• Data security awareness training for all Serko employees
• Governance and oversight by the Audit, Risk and Sustainability Committee and maturity
assessment programme
• Dedicated Chief Information Security Officer and Security Team to manage data security
risks on a daily basis
• External parties for independent testing as appropriate
• Incident management programme
• Serko hosts its data in Microsoft Azure data centres in several geographic locations.
All locations have the same security practices and procedures in place to protect Serko’s
and our customers’ information
• Developers educated on NIST (National Institute of Standards and Technology)
secure coding methodology
• Code scanned prior to production release for coding vulnerabilities
• Vulnerability management employed across code libraries
56
Attracting and retaining
skilled employees
Serko’s business strategy requires us to attract
and retain highly skilled talent in a competitive
labour market globally. Coming out of Covid-19
restrictions we anticipate seeing employees look
to explore global career opportunities. This may
impact the flow of talent both into and out of
New Zealand and, therefore, Serko.
Competition and
new technologies
Serko continues to face exposure to a variety of new
and existing competitors in new and established
markets. New technologies could alter the existing
value chain for travel and expense, disrupting
existing flows, processes, players and/or underlying
technology that Serko’s business is based on.
Access to capital
Serko’s growth in key markets and changing
market conditions continue to impact Serko’s ability
to forecast revenues with precision. Prudent capital
management is essential. Serko’s expansion into
new markets introduces many treasury complexities
and also requires careful capital management
practices to ensure that the level of investment
in development work is appropriate and that Serko
can continue to fund its operations.
Key customer and partner relationships
Serko relies on the strength of its relationship with
Booking.com for its unmanaged travel offering and
its reseller relationships for its core online booking
tool business.
• Focus on building strong sustainable pipelines
of internal and external talent for critical or
hard-to-fill roles
• Identification of critical talent, execution of stay
interviews and retention planning
• Increased focus on career development pathways
and learning and development opportunities for
our teams
• Review of our total reward structure to ensure we
remain competitive with the technology market
• Succession planning for Senior Leadership roles
and critical or hard-to-fill roles
• A culture of continuous innovation
• Systems in place for monitoring and responding
to competitive threats
• Continued development of strategic partnerships
• Use of scenario planning in conjunction with
forecasting and budgeting processes with strict
capital management targets
• Governance oversight of capital allocation and
investment by the Board
• Monthly treasury and capital management
reporting to the Board
• Strong investor relations programme
• Developing unmanaged travel offering and
different content offerings
• Programmes to incorporate customer feedback
into product design and prioritisation
• Product health monitoring and quality controls
for product development and release
• Continued investment into portfolio and program
management and monitoring capabilities
• Continuing to pursue global reseller relationships
in new geographies to reduce concentration risk,
with continued investment in direct go-to-market
sales
• Investing in Customer Advisory Group workshops
to develop community engagement with key
customers
• Developing Serko’s channel partner programme
to support sales and operational enablement for
strong and healthy reseller partnerships
Principal business risks (continued)
Mitigation Strategies
Risks
57
1 For more information on how Serko manages its Health &
Safety risks, refer to the Social section of this ESG Report.
Health and safety
The covid-19 years had Serko’s Health, Safety and
Wellbeing focus on enabling the workforce through
flexible and remote working practices. As people
are now returning in high numbers to regular office-
based work, our focus has shifted to ensuring
safety when bringing people together through
offering ergonomic workstation options, wellbeing
workshops and a zero tolerance for bringing illness
to work.
1
Operational risks associated
with global expansion
Serko has operations in New Zealand, Australia,
China, USA and UK. As Serko grows in these
markets and expands globally, the complexity of its
business increases, as will a range of associated
operational and compliance risks.
Environmental risks (including risks
associated with climate change)
Environmental disasters or catastrophic events and
the impact of such events on the travel industry
or on the global economy could have negative
effects on our business, partners, suppliers and
customers. Those events could include impacts of
climate change, including the increased likelihood
of extreme weather events and longer-term impacts
like the predicted rise in global sea levels.
Data privacy
Serko’s business involves the collection, use and
processing of personal data. The global data privacy
landscape is complex and evolving. As Serko’s
business expands with new products and into
additional markets, Serko will become subject to
additional data privacy regulations. The failure to
protect personal data and comply with data privacy
regulations could result in financial penalties,
operational inefficiencies, intervention by regulators
and negative impacts to reputation.
• Dedicated programmes to support employee
wellbeing, including flexible work arrangements
and wellness
• Regular pulse and listening surveys
• Pandemic policies that are regularly reviewed
to adapt to the changing health and safety risks
presented by pandemics
• Strategic initiatives aligned top-down with
operating plans and OKRs (objectives and
key results) to regularly measure progress
• Enhanced risk management framework and
processes
• A comprehensive risk assessment of global
expansion has been completed
• Enhanced privacy risk assessment processes
implemented during FY23 with a commitment
to complete privacy obligation assessments
for all new markets
• Detailed climate-related risk analysis completed.
Risks identified are to be managed through our
risk management framework.
• A roadmap has been developed to meet climate
disclosure requirements in FY24
• Carbon emissions inventory prepared and
assurance reviewed to inform opportunities
to reduce Serko’s carbon footprint over time
• Offering sustainability tools to assist our
customers to assist them to manage their
carbon emissions and climate-related risks
• Establishment of Data Governance Group to
provide oversight and guidance on specified
data-related matters; review and implement
new and improved processes for data-related
work streams and projects
• Further embedding a privacy culture within
the business and roll out of additional training
• Enhanced privacy processes implemented
during FY23
• Privacy obligations assessments for new markets
• Data security initiatives and protections as
referred to above
Principal business risks (continued)
Mitigation Strategies
Risks
58
Serko Environmental, Social & Governance Report 2023serko.com
---
Annual
Report
2023
This Annual Report is dated 17 May 2023 and is signed on behalf
of the Board of Directors (Board) of Serko Limited by Claudia Batten,
Chair, and Darrin Grafton, Chief Executive Officer (CEO).
Darrin Grafton
Chief Executive Officer
Claudia Batten
Chair
Contents
Serko at a Glance 2
Chair & CEO Letter 4
Our Leadership 8
Our Strategy 10
Our Products 12
Sustainable Business Growth 14
Management Commentary 16
Financial Statements 34
Independent Auditor’s Report 68
Remuneration Report 73
Corporate Governance & Disclosures 89
Glossary 102
Company Directory 104
We bring people
together
Serko believes in the power of being face-to-face.
Our purpose is to bring people together. Our vision
is a connected, frictionless travel experience.
To deliver that, we’re building the world’s leading
business travel marketplace — connecting business
travellers everywhere with the content, information
and services they need at every stage of the journey.
About Serko
Serko is a leader in online travel booking and expense management for the
business travel market. Zeno is Serko’s next generation travel management
application, using intelligent technology, predictive workflows and a global
travel marketplace to transform business travel across the entire journey.
Listed on the New Zealand Stock Exchange Main Board (NZX:SKO) and
Australian Securities Exchange (ASX:SKO) Serko is headquartered in
New Zealand, with offices across Australia, China and the United States (US).
For more information, visit serko.com
2
* EBITDAF is a non-GAAP (Generally Accepted Accounting Principles) measure representing
Earnings Before the deduction of costs relating to Interest, Taxation, Depreciation, Amortisation,
Foreign Currency (Gains)/Losses and Fair value remeasurement of contingent consideration.
After a year that saw significant growth in Booking.com
for Business and Australasian booking volumes recovering
to pre-pandemic levels Serko is achieving significant operating
leverage and is well positioned for further growth
$ 8 7.7m
Cash and short-term deposits
($30.5m)
Net loss after tax
($21.8m)
EBITDAF
*
Loss
$48m
Total income
1.5m
Completed room nights
93%
Increase in online
booking transactions
At a glance
3
Serko at a glance
4
Dear fellow shareholders,
Serko’s achievements in the past year
reflect the dedication of a talented team
and the benefits from prior investments.
We completed the year with a sense
of accomplishment and are more
focused than ever on building a globally
competitive business.
At the start of 2023, we undertook to maximise the
business travel recovery and deliver significant growth
under the Booking.com for Business partnership.
We have achieved both, in an often complex and
uncertain external environment.
What we’ve achieved also demonstrates an evolution
in how we operate. This includes investing in the right
capability and technology expertise to be poised to win
in our chosen markets and to increase global scale and
operational efficiency.
Key highlights
• Serko’s total income for the FY23 year is
79% higher than for FY20, the financial year
immediately prior to the pandemic and
Serko’s previously highest year for revenue.
• The number of online bookings rose 93%
year on year to 4.1 million from 2.2 million.
• Booking.com for Business completed room
nights were up 381%, and underpinned by
growth in the second half.
• The number of online bookings were up
77% in Australasia year on year to 89% of
pre-pandemic levels.
Unmanaged travel
Unmanaged travel demonstrated significant growth in
2023 through the Booking.com for Business platform.
The progress we have made to date is testament to the
collaborative partnership between the teams at Serko
and Booking.com.
We have seen significant growth in completed room
nights, driven by the Booking.com for Business
partnership, up 381% to 1.5 million from 320,000.
In the second half, completed room nights increased
to over 1 million. Average Revenue per Completed
Room Night (ARPCRN) for the service was €9.34,
up 36% from €6.88.
In May 2023, travel management company and
North American-headquartered Serko partner CWT
announced it had entered into an agreement with
Booking.com for Business to support an expanded
Booking.com for Business offering. This brings two of
our key partners together to deliver new and exciting
content for business customers across the world.
The launch of this expanded offering is another
step forward in Serko’s strategy to bring the best of
business travel to Booking.com for Business and is the
culmination of many months of planning by Serko,
CWT and Booking.com.
5
chair & ceo letter
Managed travel
Our managed travel segment remains an important
part of our strategy and focus. It is made up of our
established markets in Australia and New Zealand and
the newer North American market. In these markets
we partner with travel resellers (TMCs) to deliver online
travel and expense management services to medium
and large organisations.
The recovery in business travel in Australia and
New Zealand has been strong, with online bookings
up 77%. In Australasia, average online bookings for the
year were 89% of pre-pandemic levels. In New Zealand,
volumes were 136% of pre-pandemic levels and in
Australia this was 82%.
In North America, we have continued to make progress
and build our strategic position. We signed additional
reseller agreements and we have continued to develop
technology to support NDC, a data standard that
allows airlines to evolve how they personalise and
sell inventory. We have also launched new updates
to our expense technology within the market and
we are piloting some innovations in this space with
key customers.
Financial performance and funding
Our FY23 focus was to build a global scaled
business, underpinned by appropriate cost discipline.
We continue to make strategic investments to grow
the company profitably.
Total income increased 154% to $48 million reflecting
business travel recovery and Booking.com for
Business growth.
Total income was well ahead of the guidance provided
at the start of FY23 of approximately doubling revenue.
We closed FY23 just ahead of our revised FY23
guidance range of $42 million to $47 million.
Total spend increased 34% to $83.3 million. Total spend
as a percentage of revenue decreased from 349%
in FY22 to 179% in FY23 and cost growth reduced to
3% in the second half.
Both EBITDAF loss and net losses after tax improved
in the FY23 year. EBITDAF losses were $21.8 million,
an improvement of 23% and net losses after tax were
$30.5 million, an improvement of 15%.
We remain well capitalised, with average underlying
monthly cash burn reducing from $3.3m to $2.7m.
Underlying average monthly cash burn in 2H23
was $1.8 million.
Our priorities and how we will deliver
We are firmly focused on the execution of our growth
priorities in managed and unmanaged travel and
ensuring that growth is sustainable and profitable.
We are also focused on how we achieve this,
ensuring we have the right international expertise
across all disciplines. We are increasingly using
an experimentation-based approach to product
development, evident most recently in our work
on the Booking.com for Business platform.
This approach is underpinned by data-driven
decision-making and a systems approach across
the entire organisation.
Building a sustainable business
We have steadily advanced our sustainability journey
over the past year and have reported solid progress
across environment, social and governance categories.
We are committed to continuously improving what we
focus on regarding sustainability and how we measure,
manage and report on it. We encourage you to read the
ESG Report released with this Annual Report.
6
Darrin Grafton
CEO & Co-founder
Claudia Batten
Chair
Outlook
Serko has made significant progress towards its
goals as reported in FY23. Business travel demand is
tracking strongly and Serko is well positioned to deliver
increased scale and operational efficiency.
Serko confirms its aspiration of $100m in Total Income
in FY25.
Serko is well capitalised with cash of $88m and no
debt. Underlying monthly cash burn peaked in 1H23 and
Serko is committed to achieving positive cashflow for
the FY25 financial year with appropriate cash reserves
on hand at the point of breakeven.
Serko anticipates full year total income of between
$63m and $70m for FY24 based on current trends
including the continued business travel recovery, growth
in active customers in Booking.com for Business, a
strong Euro:NZD exchange rate and current average
revenue per completed room night. There are a number
of initiatives which have the potential to drive further
revenue growth, however, the timing and therefore the
impact on FY24 revenues is uncertain.
Serko anticipates total spend of between $86m and
$90m based on its current investment plans and
anticipated efficiency gains partially offset by higher
volume related costs.
Guidance remains subject to ongoing risks including
geo-political and macro-economic risks.
Annual Meeting
We are pleased to invite you to our annual meeting
of shareholders at 2pm (NZT) on Wednesday, 28 June
2023. It is currently intended that shareholders will
be able to attend the meeting physically in Auckland
or virtually online. Other details relating to the
Annual Meeting will be advised in the Notice
of Meeting, which will be sent in due course.
Thank you
Thank you to our shareholders. Your commitment
has meant we have been able to continue to invest
to maximise opportunities - and we are seeing the
benefits of this. Our commitment to you is that we
are 100% focused on executing on our strategy and
to building a globally competitive, profitable business.
To our valued customers and partners, thank you for
your support. We love what we do and it’s our privilege
to deliver technology that supports your people and
your business.
Our greatest thanks is to the great people at Serko.
You stepped up to another level this year and our
work continues. Thank you for striving for excellence.
7
chair & ceo letter
Our Board of Directors
Darrin Grafton
Executive Director, Chief Executive Officer & Co-founder
Appointed 5 April 2007, re-elected August 2022
Darrin has more than 30 years’ experience in travel technology and is a recognised industry innovator,
previously named as one of the top 25 most influential executives in the travel industry by the BTN
Group. Darrin has held directorships and senior management positions across a number of private
and public companies, including the Gullivers Travel Group. In 2021 Darrin was awarded the INFINZ
Leadership Award and has previously been awarded the NZX Hi-Tech Entrepreneur Award. He is a
member of the Institute of IT Professionals NZ and the Institute of Directors NZ.
Bob Shaw
Executive Director, Chief Strategy Officer & Co-founder
Appointed 5 April 2007, re-elected August 2021
Bob has been involved in transforming the travel industry since 1987, collaborating with the world’s
leading airlines, travel agencies and global distribution systems. He has held a number of directorships
and senior management positions in various high-profile ventures, including Gullivers Travel Group and
Interactive Technologies. Bob has been a past finalist for the EY Entrepreneur of the Year Award. He is
a member of the Institute of IT Professionals NZ, the Institute of Directors NZ/Australia and NZCDP.
Claudia Batten
Independent Non-executive Director, Chair, New Zealand
Appointed 30 April 2014, re-elected August 2020
Claudia has been a founding member of two highly successful entrepreneurial ventures. The first venture
was Massive Incorporated, a network for advertising in video games. Massive was sold to Microsoft in
2006. In 2009 she co-founded Victors & Spoils (‘V&S’), the first advertising agency built on the principles
of crowdsourcing. V&S was majority acquired by French holding company Havas Worldwide in 2011.
Claudia is a strong supporter of the New Zealand start-up scene as an active mentor and adviser. She is
also a director of Air New Zealand and Vista Group. Claudia holds an LLB (Hons) and BCA from Victoria
University (Wellington).
Jan Dawson
Independent Non-executive Director, New Zealand
Appointed on 18 August 2021, elected August 2022
Jan is Chair of Ports of Auckland Limited. She is a member of the University of Auckland Council
and was previously a member of the Capital Investment Committee of the National Health Board.
Jan was previously Chair of Westpac New Zealand, Deputy Chair for Air New Zealand, and director
of Beca, AIG NZ and Meridian Energy Limited. She was a partner of KPMG for 30 years and the Chair
and Chief Executive of KPMG New Zealand from 2006 until 2011. She holds a Bachelor of Commerce
from the University of Auckland and is a fellow of the New Zealand Institute of Chartered Accountants
and a fellow of the Institute of Directors in New Zealand.
Clyde McConaghy
Independent Non-executive Director, Australia
Appointed 30 April 2014, re-elected August 2022
Clyde is based in Australia. He is the founder of Optima Boards, providing independent director and
advisory services to public, private, family office and charitable entities around the world. Clyde has
worked in publishing, media, online and technology sectors, living in the UK, Germany, China and
Australia. He is a director of Neuroscience Research Australia and holds a BBus (University of South
Australia), as well as an MBA from Cranfield University (UK). Clyde is a fellow of the Australian Institute
of Company Directors.
8
Our Executive Team
Nick Whitehead
Chief Marketing Officer
Nick has a 20-year track record
of commercialising technology
through the development of effective
go-to-market strategies and leads
Serko’s global marketing and
communications function.
Murray Warner
SVP Managed Travel
Murray has 20 years’ experience
working with cloud software
technology, building new sales and
revenue operations. He has previously
held several senior management
positions with Concur Technologies,
an SAP company, across Asia-Pacific,
Europe and North America.
Shane Sampson
Chief Financial Officer (CFO)
Shane joined Serko with over 30 years’
experience in finance and commercial
leadership roles at Vector, Spark and
Pulse Energy and most recently as the
CFO of PushPay. Shane has a BCA and
LLB (Hons) from Victoria University
of Wellington and is a member of
Chartered Accountants Australia
and New Zealand.
Rachael Satherley
Chief People Officer
Rachael has 20 years of experience in
people leadership roles across Europe,
North America and Asia-Pacific, most
recently with Expedia Group. She has
a passion for unlocking individual,
team and organisational potential
through transformation.
Duanne O’Brien
Chief Technology Officer
Duanne is a technology leader with
over 25 years’ experience, specialising
in building global enterprise SaaS
(software as a service) platforms.
Duanne leads the largest of our global
teams, designing, building and running
Serko’s platforms and products.
Charlie Nowaczek
Chief Operating Officer (COO)
Charlie has over 25 years’ experience
as an operations executive and
management adviser, specialising
in business transformation and
operational excellence. Over the
last decade he has been COO for
a number of technology start-ups
in the US and Canada.
9
our leaderShip
FY24
Objectives
Make booking
for business easier
combine Serko’s experience
of what matters most to
business travellers with the
best of Booking.com
Build travel software
that people love
engage and delight our
customers through data-
driven product improvement
that has the most impact
Our
Purpose
We bring people together
Our Vision
+ Mission
To create a connected, frictionless
travel experience by building the world’s
leading business travel marketplace
3 yr
Strategic
Goals
21
Unmanaged
revenue
Establish significant
market share
in the unmanaged
travel market
Customer
success
deliver an exceptional
customer experience (cX)
through experimentation
Our strategy
10
Adopt next generation
technology foundations
continue the build of our
next-gen technology
platform to optimise scale,
cost and pace of innovation
Unleash the
US market
our whole team taking
our market-leading a/nZ
experience to improve the
success of our uS-based
tMc partners
The best place
to do your work
an environment where you
can do career defining work,
that delights our customers
and partners
43
Marketplace
and content
commercialise
connected trip
experience through
an open platform
Managed
revenue
consistently grow market
share in the global managed
travel market through
tMc partnerships and
inorganic growth
Culture
create a culture
of engaged Serkodians
aligned to our purpose,
mission and values
5
Our strategy provides our stakeholders —employees,
customers, end users, partners, suppliers, shareholders
and others — with a clear sense of what drives us, where
we are heading and how we will create long-term value.
11
our Strategy
Our products
Zeno is an integrated travel and expense platform that is revolutionising
the world of corporate travel and expense management globally.
Zeno Travel
Zeno Travel is an Online Booking Tool (OBT) that is
used by corporate travellers to book flights, trains,
hotels, rental cars and airport transfers in line with
their corporate travel policies.
This provides the oversight and control that travel
managers need to ensure that spend is effectively
managed, with the ease of use and personalised
experience that encourages corporate travellers
to use the OBT and avoid travel program ‘leakage’
to supplier websites or leisure travel retailers.
Zeno achieves this with an intuitive interface that
makes booking business travel super simple,
intelligent technology that provides personalised
itinerary recommendations based on traveller
preferences and a global marketplace that allows
travellers to connect with preferred suppliers
at every stage of the journey.
Zeno Expense
Zeno Expense automates the process of corporate card
and out-of-pocket expense submission, reconciliation
and reimbursement. Employees capture receipts
via the mobile app, or email receipts directly to Zeno,
add a description or cost centre if needed and submit
for approval there and then. To make it even simpler,
Zeno also offers automated integrations with providers,
such as Uber for Business.
Zeno’s intelligent technology proactively identifies and
manages out-of-policy claims, helping prevent expense
claim fraud and dramatically streamlining the expense
administration function.
Zeno also provides managers and finance teams with
a full suite of analysis tools that help them to run their
travel and expense budgets more effectively, identify
problem areas and optimise expense policies.
Serko generates revenue through corporate customers paying
a booking fee per transaction and through supplier commission.
Serko generates revenue through corporate customers paying
a fee per active user or per expense report submitted.
12
Booking.com for Business · Powered by Zeno
In 2019 Booking Holdings extended its partnership with Serko to enable Booking.com to
resell the Zeno platform, white-labelled under the Booking.com for Business brand, with a
commercial partnership based on a revenue share model between Booking.com and Serko.
Dedicated teams at both companies worked together to bring to market an initial product that
went live in the UK and Ireland in May 2020 ahead of a global roll out that began in early 2021.
The platform is now available in multiple languages across more than 190 countries.
The new Booking.com for Business platform powered by Zeno aims to provide a one-stop-
shop for all business travel needs, helping save time and money and making life easier
for business travellers and their administration teams alike. In addition to Booking.com
accommodation content, we are continuing to build a global connected trip offer, including
flights and rail content in selected countries.
Serko generates revenue through supplier commission from
travel bookings completed through Booking.com for Business.
13
our productS
We believe strong ESG practices
give Serko its social licence to
operate, as well as creating
long-term value for
our business.
Building sustainability
in our business
Sustainability is embedded
in our approach to long-
term value creation. Here
are the key drivers of our
sustainability strategy:
Building sustainable
long-term business growth
Continuously
innovating — to adapt
to rapid environmental
changes and deliver
sustainable and innovative
products to our customers
Being a brand you can
count on — trusted by our
employees, customers,
investors and partners
Powering our people —
to do amazing work that
drives our business and
sustainability goals
030102
Serko’s 2023 ESG Report available
now at www.serko.com/investors
14
As an office-based technology business with relatively low
scope 1 and 2 carbon emissions, we see our greatest area of
influence is supporting our customers to make informed decisions
when booking travel. Serko’s vision for supporting efficient
business travel with Mission Zero is built around four principles:
Real-time data
Serko is collaborating
with its partners to
enable Zeno users to
measure the impact of
their flights in real-time.
Net Zero impact
Through our partnership
with TEM, Mission Zero
offers organisations
a measurable way to
offset their greenhouse
emissions by investing
in carbon offset projects
that deliver social and
economic benefits to
communities as well as
emissions reduction.
Informed choice
Travel programs can be
designed to minimise
environmental impact,
not just financial cost.
The most efficient flight
routes, cabin classes
and vehicle types can
be identified at the
point of purchase to
drive more sustainable
buying behaviour.
Mission Zero also offers
‘sustainability badges’,
that allow Booking.
com users to search
for accommodation
that meets certain
sustainability criteria.
Impact visibility
By providing complete
visibility of a business
travel program’s
environmental
impacts, Zeno enables
organisations to make
policy choices that get
their travellers where
they need to go, while
treading as lightly
as possible.
Assisting our customers
to make sustainable
business decisions
15
SuStainaBle BuSineSS growth
Management
commentary
Please read the following commentary with the financial statements
and the related notes in this report. Some parts of this commentary
include information regarding the plans and strategy for the
business and include forward-looking statements that involve risks
and uncertainties.
Actual results and the timing of certain events may differ materially
from future results expressed or implied by the forward-looking
statements contained in the following commentary. All amounts
are presented in New Zealand dollars (NZD), except where indicated.
All references to a year are the financial year ended 31 March, unless
otherwise stated.
Non-GAAP (generally accepted accounting practice) measures have
been included, as we believe they provide useful information for
readers to assist in understanding Serko’s financial performance.
Non-GAAP financial measures do not have standardised meanings
and should not be viewed in isolation or considered as substitutes
for measures reported in accordance with New Zealand Equivalents
to International Financial Reporting Standards (NZ IFRS). These
measures have not been independently audited or reviewed.
16
Year ended 31 March20232022Change%
$ (000)$ (000)$ (000)
Revenue46,49217,85528,637160%
Other income1,5331,01951450%
Total income48,02518,87429,151154%
Operating expenses(82,819)(55,057)(27,762)50%
Percentage of revenue(178%)(308%)
Foreign exchange gains/(losses)1,737(35)1,772(5063%)
Net finance (expense)/income2,5965782,018349%
Net (loss) before tax(30,461)(35,640)5,179(15%)
Percentage of revenue(66%)(200%)
Income tax expense(79)(319)240(75%)
Net (loss) after tax(30,540)(35,959)5,419(15%)
Percentage of revenue(66%)(201%)
($30.5m)
Net loss before tax
Business results
Revenue increased 160% to $46.5 million primarily due to significant growth in Booking.com for Business and
business travel recovery. Total income for the year to 31 March 2023 increased 154% to $48 million. Operating
costs increased by 50% to $82.8 million, as the Group continued to scale to drive future growth opportunities.
Serko recorded a net loss result after tax of $30.5 million, an improvement of 15% against the prior year net loss
of $36.0 million.
The Group recognised $1.5 million in other income (primarily grants), an increase of $0.5 million or 50% from the prior
year. Other income primarily comprised of the research and development tax credit (RDTI). Grant income in relation
to RDTI of $1.6 million was claimed, while a portion was treated as deferred income as the costs to which the grants
related had been capitalised. This deferred income will be recognised in future years over the useful lives of the
related assets.
Foreign exchange gains resulted in a favorable variance of $1.7 million compared to prior year, this is due to a weaker
New Zealand Dollar against both the Euro and United States Dollar. Net finance income increased 349% to $2.6 million
primarily reflecting increased interest earned on increased short-term investments.
17
ManageMent coMMentary
Growth in Total Income continued to be strong in the second half of the financial year while growth in Total Spend
declined to 3% relative to the first half as Serko largely completed scaling and implemented some initial efficiency
initiatives. Serko is achieving operating leverage as revenue continues to grow. Total spend is a non GAAP measure
which Serko uses internally to measure spend before the impacts of capitalisation and amortisation. In software
businesses the nature of the projects being worked on can result in significant differences in the proportion of product
design and delivery costs capitalised. We consider that Total Spend is a more useful measure of the cost base of the
business as it removes the volatility which can occur as a result of capitalisation decisions.
Total spend Revenue & other income
Fy22 h1
Fy22 h2Fy23 h1Fy23 h2
$0m
$10m
$20m
$30m
$40m
$50m
$9. 5 m
$9.4 m
$ 1 9.4 m
$28.6m
$42.2m
$41.1m
$33.9m
$28.4m
18
Year ended 31 March20232022Change%
$ (000)$ (000)$ (000)
Net (loss) after tax(30,540)(35,959)5,41915%
Deduct: net finance (expense)/income(2,596)(578)(2,018)349%
Add back: income tax79319(240)(75%)
Add back: depreciation and amortisation 13,0408,0385,00262%
Add back: net foreign exchange (gains)/losses(1,737)35(1,772)(5063%)
EBITDAF (loss)(21,754)(28,145)6,39123%
Percentage of revenue(47%)(158%)
EBITDAF
($21.8m)
EBITDAF Loss
EBITDAF is a non-GAAP measure representing Earnings Before the deduction of costs relating to Interest, Taxation,
Depreciation, Amortisation, Foreign Currency (Gains)/Losses and Fair value remeasurement.
EBITDAF improved by $6.4 million from a loss of $28.1 million to a loss of $21.8 million reflecting increased Total
Income partially offset by increased expenditure.
Depreciation and amortisation increased by $5 million over the prior year primarily reflecting an increase in the
average balance of computer software assets over the prior year. Depreciation includes right-of-use assets (leased
premises) under IFRS-16 (Leases) adoption of $1.1 million (FY22 $0.9 million).
19
ManageMent coMMentary
Year ended 31 March20232022Change%
$ (000)$ (000)$ (000)
Revenue – transaction and usage fees:
Travel platform booking revenue16,2839,0427,24180%
Expense platform revenue4,9604,03992123%
Supplier commissions revenue23,3633,44719,916578%
Services revenue1,5551,00754854%
Other revenue331320113%
Other Income1,5331,01951450%
Total income48,02518,87429,151154%
Total travel bookings (000)4,8042,5562,24888%
Online bookings (000)4,1462,1531,99393%
ARPB (travel related revenue only/online bookings)$9.56$5.80$3.7665%
Average revenue per completed room night (ARPCRN)€9.34€6.88€2.4636%
Revenue and other income (total income)
$48.0m
Total income
Travel related revenue includes travel platform booking revenue and supplier commissions revenue.
Total income includes revenue from customers and other income such as grants but excludes finance income.
Total income increased by 154% to $48.0 million.
Travel platform revenue increased by 80% to $16.3 million. Expense platform revenue, which includes fixed
components to pricing, increased by $0.9 million.
Supplier commissions revenue increased by $19.9 million (578%) to $23.4 million reflecting growth in revenue
from Booking.com for Business. Supplier commissions revenue is recognised net of consideration payable to
customers of $1.8 million (2022: $0.9 million).
Services revenue increased by 54% to $1.6 million, while other revenues was flat at $0.3 million.
Total travel platform bookings by volume increased 88% over the prior year. Total travel bookings during FY23
were 4.8 million. Total travel bookings include 0.6 million Offline bookings (system automated bookings) that
don’t contribute significantly to revenue or are bundled into the ‘Online’ booking rate. Online bookings for the
year increased 94% to 4.2 million.
Average Revenue Per Booking (ARPB) for travel-related revenue (Travel platform and supplier commissions)
increased during the year by 65% to $9.56 from $5.36 based on Online bookings and driven by a higher Average
Revenue per Completed Room Night (ARPCRN) and the increased proportion of Booking.com for Business bookings.
20
Revenue increased by 80% relative to FY20, the last year unaffected by Covid and the previous highest revenue
year for Serko.
Long Term Revenue Trends
Booking volumes
1
1 Booking volumes are total volumes and include Offline Bookings, which can be either bundled into a price per Online booking or at an additional price,
as these are primarily automated bookings but processed through the booking tool.
Other bookings
Online bookings
Fy13Fy14Fy15Fy16Fy17Fy18Fy19Fy20Fy21Fy22Fy23
$0m
$10m
$20m
$30m
$40m
$50m
covid-19
impact
Fy13Fy14Fy15Fy16Fy17Fy18Fy19Fy20Fy21Fy22Fy23
1m
2m
3m
4m
5m
covid-19
impact
Services
Supplier commissions
& other
Expense platform
Travel platform
21
ManageMent coMMentary
Recent Revenue Trends
Total income grew strongly in FY23 with an increase in total income of $9.2 million or 47% from the first half to
the second half. The growth in the second half was driven by increased Active Customers on Booking.com for
Business as business travel recovered and by a full six months of using the Booking.com hotel shop experience
as communicated at the Annual Shareholder Meeting in August 2022.
Total income ($m)
Fy22 h1
$9. 5 m
Fy22 h2
$9. 4 m
Fy23 h1
$ 1 9. 4 m
Fy23 h2
$28.6m
Total online bookings
Fy22 h1
1.13m
Fy22 h2
1.02m
Fy23 h1
1.99m
Fy23 h2
2.15m
22
Unmanaged revenue
Unmanaged revenue relates to Booking.com for Business and primarily comprises Supplier commissions revenue
from hotel bookings. The ARPCRN is impacted by the price of the hotel room and the commission rate for that hotel.
Revenue is recognised on the date the hotel stay is completed. Bookings can be for multiple rooms and Serko does
not receive revenue in relation to bookings which are subsequently cancelled. Serko therefore focuses on Completed
Room Nights (CRN) and Average Revenue per Completed Room Night (ARPCRN) as key metrics unlike in Managed
where bookings and ARPB are the key metrics. Completed room nights are higher than the number of bookings so
that ARPB is higher than the ARPCRN.
Completed
room nights
Fy22 h1
0.1m
Fy22 h2
0.2m
Fy23 h1
0.5m
Fy23 h2
1.1m
Average
revenue per
completed
room night
Fy22 h1
€6.61
Fy22 h2
€ 7.0 4
Fy23 h1
€10.10
Fy23 h2
€ 9.03
Active
customers
Fy22 h1
28k
Fy22 h2
64k
Fy23 h1
109k
Fy23 h2
157k
23
ManageMent coMMentary
Managed revenue
Travel volumes in Australia and New Zealand continued to recover throughout the 2023 financial year with online
bookings growing 77% relative to FY22. Over the year total bookings in Australasia were 89% of 2019 levels, the
last pre-pandemic calendar year. New Zealand was at 136% of 2019 levels reflecting the onboarding of a major
New Zealand TMC during 2019 and Australia was at 82% of 2019 levels reflecting business travel having not fully
recovered. March volumes were strong, partly driven by the relative number of work days in March 2023 relative to
March 2019 and partly to the continued recovery across the year.
Australasia transactions as % of pre-Covid-19
Australasia Online Bookings
Fy22 h1
1.06m
Fy22 h2
0.87m
Fy23 h1
1.73m
Fy23 h2
1.68m
Australasia ARPB
Fy22 h1
$4.91
Fy22 h2
$5.11
Fy23 h1
$5.06
Fy23 h2
$4.87
New Zealand TMCs
Australasia
Mar-22May-22Jul-22Sep-22nov-22Jan-23Mar-2 3
0%
200%
160%
120%
80%
40%
Australian TMCs
Australasia avg. per workday
24
Revenue by geography
Year ended 31 March20232022Change%
$ (000)$ (000)$ (000)
Australia18,13010,6867,44470%
New Zealand2,4801,53994161%
North America3,0152,59741816%
Europe and Other22,8673,03319,834654%
Total Revenue46,49217,85528,637160%
Serko earned 39% (FY22: 60%) of revenue from Australia and 5% (FY22: 9%) from New Zealand sources,
with New Zealand-sourced income up 61% and Australian-sourced income up 70% over the prior year.
North American revenue increased by 16% but declined as a proportion of total revenue (FY23: 6%, FY22: 15%)
due to the growth in Europe and Other.
Europe and Other revenue increased by 654% to $22.9 million driven by growth in revenue from the Booking.com
for Business partnership.
25
ManageMent coMMentary
Serko’s main source of revenue is Travel platform revenue from Serko Online and Zeno however Supplier commissions
revenue is growing.
Travel platform revenue is made up of transaction fees, ancillary service fees and contracted minimum payments
(where applicable) and is stated net of volume-related rebates and discounts. Travel platform revenue is generally
recognised at the time a booking is made.
Serko also earns commission income on a portion of bookings when corporates opt to book Serko-sourced hotel
and other traveller-related services. Serko is paid directly from the suppliers of these services, therefore income
from this source through its platforms is included in supplier commissions. The Booking.com for Business platform
provided in partnership with Booking.com is a free service with Booking.com receiving commissions from suppliers,
primarily hotels. The commissions earned through this platform are recognised under supplier commissions. Supplier
commission revenue is recognised at the time the relevant stay is completed as bookings which are cancelled do not
result in revenue.
Serko also earns income from its expense management platform Serko Expense, which allows registered users of
corporate customers to process travel and expense claims for accounting and reimbursement. Revenues are derived
from a combination of fees for active users, registered users and reports processed.
Other revenue includes income from Serko Mobile licence fees and other miscellaneous revenues.
Services revenue is derived from installation service and customized software development undertaken on behalf of
the TMCs. It also includes the fees charged to develop connections to third party systems wanting to integrate with
Serko’s platforms. The basis of charging can vary depending on the contractual terms with the customer, which may
specify time and materials, capped or fixed pricing.
Other income historically has been primarily government grants for research and development projects and
international growth grants. With the change of R&D grants to a tax credit regime, Serko no longer receives research
and development grants and instead receives research and development tax incentives (RDTI).
How Serko makes money
Business traveller
submits receipts using
Serko platforms
Monthly
user fee
Business traveller
makes a booking
via Serko platforms
Business traveller books
a hotel, car or taxi
via Serko platforms
Supplier
commissions
Booking and
other fees
$$$
26
Operating ExpensesFY23FY22changechange
$'000$'000$'000%
Total remuneration and benefits49,32932,07417,25554%
Percentage of revenue106%180%
Third party direct costs10,4456,4833,96261%
Percentage of revenue22%36%
Other operating expenses10,0058,4621,54318%
Percentage of revenue22%47%
Total amortisation and depreciation13,0408,0385,00262%
Percentage of revenue28%45%
Total Operating Expense82,81955,05727,76250%
Percentage of revenue178%308%
Operating Expenses
Operating expenses grew by 50% to $82.8 million but declined as a percentage of revenue from 308% to
178% as revenue grew and operating leverage was achieved.
Operating expense growth included growth in non-cash items including: amortisation and depreciation and
the Employee Incentive Share Scheme (EISS). The table below shows the year on year (YoY) change in total
operating expenses.
YoY change in operating expenses
FY22
Operating
Expenses
Remuneration
and other
benefits
EISSCapital-
isation
3rd party
direct
costs
Amortisation
and
depreciation
Other
expenses
FY23
Operating
Expenses
$30m
$90m
$80m
$70m
$60m
$50m
$40m
$12.93m$1.91m
$1.77m
$4.00m
$5.00m$2.17m
27
ManageMent coMMentary
Total Spend20232022changechange
$'m%
Expenses from ordinary activities82,81955,05727,76250%
Add back: capitalised development13,55115,320(1,769)(12%)
Deduct: depreciation and amortisation (13,040)(8,038)(5,002)62%
Total Spend83,33062,33920,99134%
Percentage of revenue179%349%
As noted above Total Spend is a non GAAP measure which Serko uses internally to measure spend before the impacts
of capitalisation and amortisation. In software businesses the nature of the projects being worked on can result in
significant differences in the proportion of product design and delivery costs capitalised. We consider that total spend
is a more useful measure of the cost base of the business as it removes the volatility which can occur as a result of
capitalisation decisions.
Total spend for the year increased from $62.3 million to $83.3 million (34% increase). This is due to the scaling
of operations to accommodate the revenue growth. Total spend as a percentage of revenue however, decreased
from 349% in FY22 to 179% in FY23.
Operating expense growth included growth in non-cash items including: amortisation and depreciation and the
Employee Incentive Share Scheme (EISS).
Growth in Total Spend from the first half to the second half declined to 3%. Serko has been scaling the business
to support revenue growth and has largely reached the scale required to achieve its revenue targets. The majority
of Serko’s Total Spend relates to remuneration and benefits and has grown as headcount has increased. In the
second half Serko continued to invest in new growth and cost efficiency initiatives but these were partly funded from
efficiency gains rather than new spending.
Fy22 h1Fy22 h2Fy23 h1Fy23 h2
Total spend
$28.4m
$33.9m
$41.1m
$42.2m
28
Product design and development (PD&D) costs
Year ended 31 March20232022Change%
$ (000)$ (000)$ (000)
Total Product Design & Development41,73530,12111,61439%
Percentage of revenue90%169%
Less: capitalised product development costs(13,551)(15,320)1,769(12%)
Percentage of Product Design & Development costs32%51%
Total Product Design & Development
(excluding amortisation)
28,18414,80113,38390%
Percentage of revenue61%83%
Add: Amortisation of capitalised development costs11,1636,3864,77775%
Total39,34721,18718,16086%
Percentage of revenue85%119%
Product design and development (PD&D) costs is a non-GAAP measure representing the internal and external costs
related to PD&D that have been included in operating costs or capitalised as computer software development during
the period. PD&D includes all activities related to the design, development and maintenance of Serko’s product but
excludes operating costs such as Hosting expenses. PD&D expenses include employee and contractor remuneration
related to these activities.
Total PD&D costs increased by 39% to $41.7 million reflecting increased average PD&D headcount. As a percentage
of revenue PD&D costs reduced by 79 percentage points to 90%. Capitalised PD&D costs decreased by 12% to
$13.6 million due to less spend on capitalisable projects.
29
ManageMent coMMentary
Headcount and average revenue per headcount
Year ended 31 March20232022Change%
Product development and maintenance2612263515%
Sales and marketing2023(3)(13%)
Customer support424112%
Administration4141——
Total headcount at end of the year3643313110%
Average income per headcount (NZD $000)1386177126%
By function:
Headcount increased from 331 at 31 March 2022 to 364 at 31 March 2023, a 10% increase. The majority of the
increase in headcount was in Product Development and maintenance.
Year ended 31 March20232022Change%
New Zealand2502183215%
Australia1518(3)(17%)
United States2741(14)(34%)
China72541833%
Total headcount at end of the year3643313310%
By Region:
Headcount growth was in the New Zealand and China offices. In the United States Serko’s US expense product design
and development team was scaled down on completion of a major product release.
Geography
of headcount
Administration
Sales & marketing
Customer support
Product development
& maintenance
USA
Australia
China
New Zealand
FY22FY22
FY23
FY23
30
By Employment type:
Year ended 31 March20232022Change%
Permanent staff336312248%
Contractors2819947%
Total headcount at end of the year3643313310%
Serko increased the number of contractors to support key product development initiatives while retaining the flexibility
to reduce resourcing once those initiatives are complete.
After significant headcount growth in prior halves in the second half of FY23 headcount growth was minimal as Serko
reached its targeted resourcing level.
Fy22 h1Fy22 h2Fy23 h1Fy23 h2
0
400
300
200
100
Total Headcount
312
331
363
364
Employees Contractors
31
ManageMent coMMentary
Year ended 31 March20232022Change%
$ (000)$ (000)$ (000)
Adjusted cash flows from operating activities(19,156)(23,731)4,575(19%)
Adjusted cash flows from investing activities(14,014)(16,094)2,080(13%)
Adjusted cash flows from financing activities21200(179)(90%)
Net foreign exchange differences529(23)552(2400%)
Underlying cash flow(32,620)(39,648)7,028(18%)
Average monthly underlying cash burn(2,718)(3,304)586(18%)
Cash, cash equivalents and short-term deposits at beginning of year124,51379,91944,59456%
Add back adjustments:
One-off payment relating to 2022 made in 2023(4,149)4,149nm
1
nm
1
Capital Raise (net funds received)—80,093nm
1
nm
1
Reported Cash, cash equivalents and short term deposits at the end of the year87,744124,513(36,769)(30%)
Underlying cash flows
nm
1
stands for not meaningful
The table above reconciles Underlying Cash Flows to the Cash flow Statement in the Financial Statements. Underlying
cash flow is cash flows adjusted for items which are technically cash flows but do not reflect the operating cash
requirements of the business such as: net flows between cash and short term investments and net funds from capital
raise. We have also made adjustments for payments paid in FY23 that would ordinarily been paid in FY22 and relate
to FY22.
Cash flows from operating activities decreased from a net outflow of $23.7m to a net outflow of $19.2m which
is as a result of increased receipts from customers due to increased revenue.
Cash flows from investing activities, includes cash outflows for property, plant and equipment and intangibles.
The decrease in outflow is reflective of the decrease in capitalised internal development, effectively increasing the
reported cash flows from operating activities.
Financing cash flows for the year includes receipts for share options exercised by employees.
Total underlying cash burn for the year decreased from $39.6 million to $33.1 million representing a 18% reduction
in cash burn. The underlying average monthly cash burn decreased from $3.3 million to $2.7 million, a 18% decrease
in average outflow per month.
Cash balances and short-term deposits decreased 30% to $87.7 million as at 31 March 2023,
a $36.8 million reduction.
32
Balance Sheet20232022ChangeChange
$'m$'m$'m%
Cash and Short Term Deposits87,744124,513(36,769)(30%)
Other Current Assets13,8356,2267,609122%
Intangibles35,04132,0582,9839%
Other Non Current Assets4,2964,394(98)(2%)
Total Assets140,916167,191(26,275)(16%)
Current Liabilities12,24213,300(1,058)(8%)
Non Current Liabilities2,7443,010(266)(9%)
Equity125,930150,881(24,951)(17%)
Total Liabilities and Equity140,916167,191(26,275)(16%)
Looking across the last four halves underlying cash flows peaked at $22.1 million in the six months to 31 March 2022
($3.7 million average monthly cash burn) and has declined to $11.0 million in the second half of FY23 ($1.8 million
average monthly cash burn) reflecting strong operating leverage as revenue has grown.
Underlying average
monthly cash-burn
Underlying cash flow
Fy22 h1
$2 .9m
Fy22 h2
$3.7m
Fy23 h1
$3.6m
Fy23 h2
$1.8m
Fy22 h1
-$ 1 7. 6 m
Fy22 h2
-$22.1m
Fy23 h1
-$21.6m
Fy23 h2
-$11.0m
Serko’s balance sheet remains strong with cash and short-term investments of $87.7 million and no debt. Receivables
grew strongly driven by increased revenue while payables declined due to the repayment noted in the Underlying Cash
Flow commentary, partially offset by higher expenses in the March 2023 quarter relative to the March 2022 quarter.
Statement of Financial Position
33
ManageMent coMMentary
Financial
Statements
For the year ending 31 March 2023
Consolidated statement of comprehensive income36
Consolidated statement of changes in equity37
Consolidated statement of financial position38
Consolidated statement of cash flows39
Notes to the financial statements40
Independent auditor’s report68
34
The directors of Serko Limited are pleased to present the financial statements
for Serko Limited and its subsidiaries (the Group) for the year ended 31 March 2023
to shareholders.
The directors are responsible for presenting financial statements in accordance with
New Zealand law and generally accepted accounting practice, which fairly present the
financial position of the Group as at 31 March 2023 and the results of its operations
and cash flows for the year ended on that date.
The directors consider the financial statements of the Group have been prepared using
accounting policies that have been consistently applied and supported by reasonable
judgements and estimates and that all relevant financial reporting and accounting
standards have been followed.
The directors believe that proper accounting records have been kept that enable,
with reasonable accuracy, the determination of the financial position of the Group
and facilitate compliance of the financial statements with the Companies Act 1993,
NZX Listing Rules, Financial Reporting Act 2013 and the Financial Markets Conduct
Act 2013.
The directors consider they have taken adequate steps to safeguard the assets
of the Group and to prevent and detect fraud and other irregularities. Internal control
procedures are also considered to be sufficient to provide a reasonable assurance
as to the integrity and reliability of the financial statements.
The financial statements are signed on behalf of the Board of Directors
on 17 May 2023 by:
Jan Dawson
Chair of Audit, Risk and Sustainability Committee
Claudia Batten
Chair
35
Financial StateMentS
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2023
Notes31 Mar 202331 Mar 2022
$ (000)$ (000)
Revenue4 46,492 17,855
Other income4 1,533 1,019
Total income 48,025 18,874
Remuneration and benefits (49,329) (32,074)
Other operating expenses (20,450) (14,945)
Amortisation and depreciation (13,040) (8,038)
Expenses from ordinary activities5 (82,819) (55,057)
Loss before finance items (34,794) (36,183)
Foreign exchange gains/(losses) – net 1,737 (35)
Finance income5 2,878 696
Finance expenses5 (282) (118)
Loss before income tax (30,461) (35,640)
Income tax expense6 (79) (319)
Net loss attributable to the shareholders of the company (30,540) (35,959)
Movement in foreign currency reserve (440) (57)
Total comprehensive loss for the period (30,980) (36,016)
Earnings per share
Basic and diluted earnings/(loss) per share (dollars)17 (0.26) (0.33)
The accompanying notes form part of these financial statements.
36
Consolidated Statement of Changes in Equity
For the year ended 31 March 2023
* Items in other comprehensive income may be reclassified to the income statement and are shown net of tax.
The accompanying notes form part of these financial statements.
Notes
Share
capital
Share-based
payment
reserve
Foreign
currency
reserve
Accumulated
lossesTotal
$ (000)$ (000)$ (000)$ (000)$ (000)
Balance as at 1 April 2022 235,101 7,483 (236) (91,467) 150,881
Net loss for the year - - - (30,540) (30,540)
Other comprehensive loss* - - (440) - (440)
Total comprehensive loss for the year - - (440) (30,540) (30,980)
Transactions with owners
Equity-settled share-based payments 2,875 3,154 - - 6,029
Balance as at 31 March 202316 237,976 10,637 (676) (122,007) 125,930
Balance as at 1 April 2021 153,706 4,509 (179) (55,508) 102,528
Net loss for the year - - - (35,959) (35,959)
Other comprehensive loss* - - (57) - (57)
Total comprehensive loss for the year - - (57) (35,959) (36,016)
Transactions with owners
Issue of share capital 83,281 - - - 83,281
Cost of equity issued (3,188) - - - (3,188)
Equity-settled share-based payments 1,055 2,929 - - 3,984
Shares vested with employees via Restricted
Share Plan
- 95 - - 95
Shares forfeited by employees via Restricted
Share Plan
- (3) - - (3)
Non-executive director’s settlement of non-
recourse loan
247 (47) - - 200
Balance as at 31 March 202216 235,101 7,483 (236) (91,467) 150,881
37
Financial StateMentS
Jan Dawson
Chair of Audit, Risk and Sustainability Committee
Claudia Batten
Chair
Consolidated Statement of Financial Position
As at 31 March 2023
For and on behalf of the Board of Directors, who authorise these financial statements for issue on 17 May 2023
Notes31 Mar 202331 Mar 2022
$ (000)$ (000)
Current assets
Cash at bank and on hand11 15,244 34,513
Short-term deposits11 72,500 90,000
Receivables7 13,691 6,226
Derivative financial instruments8 144 —
Total current assets 101,579 130,739
Non-current assets
Property, plant and equipment9 3,946 4,319
Intangible assets 10 35,041 32,058
Deferred tax asset6 350 75
Total non-current assets 39,337 36,452
Total assets 140,916 167,191
Current liabilities
Trade and other payables12 9,862 11,308
Deferred income14 1,204 1,008
Interest-bearing loans and borrowings15 — 28
Lease liabilities13 1,093 820
Derivative financial instruments8 — 16
Income tax payable 83 120
Total current liabilities 12,242 13,300
Non-current liabilities
Deferred income14 727 853
Lease liabilities13 2,017 2,157
Total non-current liabilities 2,744 3,010
Total liabilities 14,986 16,310
Equity
Share capital16 237,976 235,101
Share-based payment reserve16 10,637 7,483
Foreign currency reserve (676) (236)
Accumulated losses (122,007) (91,467)
Total equity 125,930 150,881
Total equity and liabilities 140,916 167,191
The accompanying notes form part of these financial statements.
38
Consolidated Statement of Cash Flows
As at 31 March 2023
Notes31 Mar 202331 Mar 2022
$ (000)$ (000)
Cash flows from operating activities
Receipts from customers 43,102 22,878
Receipts from government grants - Covid-19 subsidies— 962
Interest received 2,170 228
Receipts from government grants - other 1,629 856
Taxation paid (393) (44)
Payments to suppliers and employees (70,812) (43,637)
Interest payments on lease liabilities (223) (69)
Net GST refunded 2,201 370
Net cash flows (used in)/from operating activities20 (22,326) (18,456)
Cash flows from investing activities
Purchase of property, plant and equipment (463) (774)
Capitalised development costs and other intangible assets (13,551) (15,320)
Short-term deposits 17,500 (45,000)
Net cash flows (used in)/from investing activities 3,486 (61,094)
Cash flows from financing activities
Issue of ordinary shares 21 83,281
Cost of new share issue— (3,188)
Payment of lease liabilities (951) (1,064)
Non-executive directors non-recourse loan — 200
Net repayment of loans (28) (62)
Net cash flows (used in)/from financing activities (958) 79,167
Net decrease in total cash (19,798) (383)
Net foreign exchange difference 529 (23)
Cash and cash equivalents at beginning of period 34,513 34,919
Cash and cash equivalents at the end of the period 15,244 34,513
Cash and cash equivalents comprises the following:
Cash at bank and on hand11 15,244 34,513
15,244 34,513
The accompanying notes form part of these financial statements.
39
Financial StateMentS
Notes to the Financial Statements
For the year ended 31 March 2023
1. CORPORATE INFORMATION
The financial statements of Serko Limited (‘the
Company’ or ‘Serko’) and subsidiaries (‘the Group’)
were authorised for issue in accordance with a Board
resolution.
The Company is a limited liability company domiciled
and incorporated in New Zealand under the Companies
Act 1993 and is listed on the New Zealand Stock
Exchange (NZX) and the Australian Securities Exchange
(ASX) as an ASX Foreign Exempt Listing. Its registered
office is at Unit 14d, 125 The Strand, Parnell, Auckland.
The Group provides online business travel booking
software solutions and is headquartered in Auckland,
New Zealand.
2. BASIS OF ACCOUNTING
The principal accounting policies applied in the
preparation of these consolidated financial statements
are set out in the respective notes and in this note.
These policies have been consistently applied to
all the years presented, unless otherwise stated.
a) Basis of preparation
The financial statements have been prepared in
accordance with generally accepted accounting practice
in New Zealand (NZ GAAP) and the requirements of
the Financial Markets Conduct Act 2013. The financial
statements comply with New Zealand equivalents to
International Financial Reporting Standards (NZ IFRS)
and International Financial Reporting Standards, as
appropriate for profit-oriented entities. Other than
where described below, or in the notes, the consolidated
financial statements have been prepared using the
historical cost convention.
The financial statements are presented in New Zealand
dollars and all values are rounded to the nearest
thousand dollars unless stated otherwise.
The financial statements provide comparative
information in respect of the previous period.
b) Going Concern
The Board has considered the ability of the Group to
continue to operate as a Going Concern for at least the
next 12 months from the date the financial statements
are authorised for issue. It is the conclusion of the
Board that the Group will continue to operate as a
going concern and the financial statements have been
prepared on that basis. In reaching their conclusion the
Board has considered the following factors:
• Cash reserves (Cash at bank and Short-term
deposits) at 31 March 2023 of $87.7 million provides
a sufficient level of headroom to help support the
business for at least the next 12 months; and
• Average monthly cash burn for the year was
$3.1 million, while the second half average was
$2.5 million.
c) Basis of consolidation
The Group financial statements incorporate the financial
statements of the Company and entities controlled by
the Company. Control is achieved when the Company:
• Has power over the investee;
• Is exposed, or has the rights, to variable returns from
its involvement with the investee; and
• Has the ability to use its power to affect its returns.
Subsidiaries are consolidated from the date the
Company obtains control. They are de-consolidated
from the date that control is lost. The acquisition
method of accounting is used to account for
the acquisition of subsidiaries by the Group.
The consideration transferred for an acquisition is
measured as the fair value of the assets transferred
by the Group, equity instruments issued, and liabilities
incurred or assumed, by the Group at the date of
exchange. Costs directly attributable to the acquisition
are recognised in the income statement. At the
acquisition date the identifiable assets acquired and
the liabilities assumed are recognised at their fair value.
40
A change in the ownership interest of a subsidiary,
without a cease of control, is accounted for as an
equity transaction. If the Group ceases control over
a subsidiary, it:
• Derecognises the assets (including goodwill)
and liabilities of the subsidiary;
• Derecognises the carrying amount of any
noncontrolling interests;
• Derecognises the cumulative translation
difference recorded in equity;
• Recognises the fair value of the consideration
received;
• Recognises the fair value of any investment retained;
• Recognises any surplus or deficit in profit or loss; and
• Reclassifies the parent’s share of components
previously recognised in other comprehensive income
to profit or loss or retained earnings, as appropriate,
as would be required if the Group had directly
disposed of the related assets or liabilities.
Intra-Group transactions, balances and unrealised gains
and losses on transactions between Group companies
are eliminated. Accounting policies of subsidiaries are
consistent with the policies adopted by the Group.
d) Foreign currency translation
i) Functional and presentation currency
Items included in these financial statements of each of
the Group’s entities are measured using the currency of
the primary economic environment in which the entity
operates (the ‘functional currency’). These financial
statements are presented in New Zealand dollars, which
is the Group’s presentation currency and the parent’s
functional currency.
Key factors supporting the determination that New
Zealand dollars are the parent’s functional currency are:
• Serko is NZX listed and has raised capital in
New Zealand dollars;
• Serko generates revenue in multiple currencies; and
• New Zealand dollars are the primary currency for
labour, operating cost and capital expenditure.
ii) Transactions and balances
Transactions in foreign currencies are initially recorded
in the functional currency by applying the exchange
rates ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies
are retranslated at the rate of exchange ruling at
balance date.
Non-monetary items measured in terms of historical
cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction.
Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates
at the date when the fair value was determined.
Foreign exchange gains and losses resulting from
the settlement of such transactions, and from
the translation at year end of exchange rates for
monetary assets and liabilities denominated in
foreign currencies, are recognised in the profit and loss.
iii) Foreign currency translation reserve
(FCTR)
Serko translates the results of its foreign operations
from their functional currencies to the presentation
currency using the closing exchange rate at balance
date for assets and liabilities and the average monthly
exchange rates for income and expenses. The
difference arising from the translation of the statement
of financial position at the closing rates and the
statement of comprehensive income at the average
rates is recognised in other comprehensive income and
accumulated within the foreign currency translation
reserve within the statement of changes in equity.
41
noteS to Financial StateMentS
e) Sales tax
The Income Statement and the Statement of Cash
Flows have been prepared so that all components are
stated exclusive of sales tax, except where sales tax is
not recoverable. All items in the Statement of Financial
Position are stated net of sales tax with the exception
of trade receivables and trade payables, which include
sales tax payable. Sales tax includes Goods and
Services Tax.
f) Application of new and revised
standards, amendments and
interpretations.
There are no new revised or amended IFRS
Standards that have a material impact on the
Group for the year. The accounting policies
adopted are consistent with the prior year.
3. SIGNIFICANT ACCOUNTING
ESTIMATES AND JUDGEMENTS
The preparation of the Group’s consolidated financial
statements requires the Group to make judgements,
estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities
and the accompanying disclosures.
The significant judgements, estimates, and
assumptions made by management in the preparation
of these financial statements are outlined within
the financial statement notes to which they relate.
A summary of these judgements is as follows:
• Capitalised development costs (note 10)
• Impairment of intangible assets (note 10)
• Revenue (note 4)
4. REVENUE AND OTHER INCOME
Revenue is recognised and measured at the fair value
of the consideration received or receivable to the
extent it is probable that the entity will collect the
consideration to which it will be entitled in exchange
for the goods or services that will be transferred to
the customer. Revenue is disclosed net of credit notes,
rebates and discounts.
a) Revenue from transaction and usage fees
Revenue from transaction and usage fees include travel
platform booking revenue, expense platform revenue
and supplier commission revenue.
Revenue from travel platform bookings is recorded at
the time the travel bookings are processed through
Serko’s platforms. The revenue generated is derived
from numerous customer contracts that feature diverse
pricing structures including transactional and usage
fees with varying triggers for recognising revenue.
Some contracts have fixed minimum booking volume
arrangements. These commitments typically cover the
duration of the agreement and extend across multiple
financial reporting periods, and revenue is recognised
over the period of volume commitment. Serko records
revenue from its portfolio of contracts with reference to
actual transactions, forecast transactions and minimum
contracted commitments. Management exercises
judgement to estimate future transaction volumes in
order to determine projected revenue and accrued and
defer revenue accordingly. For contracts without fixed
consideration, we have applied the ‘as invoiced’ basis
of recognition.
Expense platform revenue is earned over a month,
however we have applied the practical expedient by
recognising revenue at a point in time. Revenue is
recognised on an active user basis at the end of
each month.
Supplier commission revenue, predominantly from
hotel bookings, is recognised when the performance
obligation is fulfilled, which is when the reservation
has been completed (completed stay). Management
exercises judgement to estimate the amount of accrued
commissions due at reporting date due to the timing of
commissions received from partners.
b) Revenue from services
Revenue from services is generated from installation
or other chargeable work orders and is recognised
upon completion of the contract or services.
42
4. REVENUE AND OTHER INCOME (continued)
c) Contract assets
Contract assets primarily relate to accrued supplier commissions revenue (refer note 7).
The contract asset is reclassified to trade receivables at the point at which it is invoiced to the customer. Contract
modifications arising from changes in pricing minimum guaranteed volumes are assessed on an individual basis and
are accounted for prospectively, rather than adjusting the revenue for already satisfied performance obligations.
d) Contract liabilities
If payments received exceed the revenue recognised to date, a contract liability is recognised for the difference
(refer note 14).
Notes20232022
$ (000)$ (000)
Revenue – transaction and usage fees:
Travel platform booking revenue16,2839,042
Expense platform revenue4,9604,039
Supplier commissions revenue23,3633,447
Services revenue1,5551,007
Other revenue331320
Total revenue46,49217,855
Government grants14 1,5331,006
Other-13
Total other income1,5331,019
Total income48,02518,874
20232022
$ (000)$ (000)
Geographic information
Australia18,13010,686
New Zealand2,4801,539
US3,0152,597
Europe and Other22,8673,033
Total revenue46,49217,855
43
noteS to Financial StateMentS
4. REVENUE AND OTHER INCOME (continued)
The Board and Executive team monitor the results of the Group’s operations as a whole for the purpose of making
decisions about resource allocation and performance assessment and therefore the Board has determined the
Group is a single reportable operating segment. As required under NZ IFRS 8 Serko is required to report on major
customers making up more than 10% of the revenue for the year. Under this disclosure Serko advises that two
customers (2022: three) had revenue more than 10% of the revenue for the Group. These customers accounted for
$33,268,500 of the revenue for the year ended 31 March 2023 (2022: $9,335,635).
Serko reduces supplier commissions revenue by the amount of consideration payable to customers relating to jointly
agreed marketing fees. For the year ended 31 March 2023, consideration payable to customers was $1,816,833
(2022: $911,000).
5. EXPENSES
20232022
$ (000)$ (000)
Operating loss before taxation includes the following expenses:
Employee remuneration37,99526,059
Contributions to pension plans4,6881,303
Share-based payment expenses6,0084,095
Other remuneration and benefits638617
Total remuneration and benefits49,32932,074
Hosting expenses6,6384,932
Third party connection costs1,889894
Other platform related costs1,918657
Auditor remuneration and other assurance fees268275
Directors' fees*465493
Movement of expected credit loss allowance on receivables28(23)
Bad debts written off13195
Rental and operating lease expenses134172
Professional fees1,6271,618
Computer licences1,5401,306
Insurance costs986705
Marketing expenses1,6101,536
Recruitment fees567365
Donations111
Travel and entertainment1,128308
Other expenses1,6281,511
Total other operating expenses20,45014,945
Amortisation on intangibles11,1636,386
Depreciation1,8771,652
Total amortisation and depreciation13,0408,038
Expenses from ordinary activities82,81955,057
* Directors’ fees include $18,000 (2022: $25,000) earned by a director of subsidiary, Serko India Private Limited.
44
20232022
$ (000)$ (000)
Finance income and expenses includes:
Finance income
Interest received2,877695
Dividends received11
Total finance income2,878696
Finance expenses
Interest expense on lease liabilities(223)(69)
Other finance expenses(59)(49)
Total finance expenses(282)(118)
Total finance income and expenses2,596578
Auditor remuneration
20232022
$ (000)$ (000)
Amounts for services performed by Deloitte Limited:
Audit of financial statements238267
Tax services--
Other assurance services*308
Total audit fees268275
5. EXPENSES (continued)
* Other assurance services relate to the Greenhouse Gas Emissions Inventory assurance review in the current year and the review of the Group’s
compliance with Callaghan Innovation Grant requirements in prior year.
45
noteS to Financial StateMentS
6. INCOME TAX
Income tax expense comprises of current and deferred tax movements.
Tax assets and liabilities for the current period are measured at the amount expected to be recovered from, or paid to,
the taxation authorities based on the current period’s taxable income. The tax rates and tax laws used to compute
the amounts are those that are enacted or substantively enacted in the jurisdictions in which the Group operates
at the reporting date. Taxation is recognised in the income statement, except when it relates to items recognised
directly in equity.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• Where the entity has unrecognised losses sufficient to cover the deferred income tax liability; and
• For a deferred income tax liability arising from the initial recognition of goodwill; and
• Where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss.
Deferred income tax assets are recognised for all deductible temporary differences and unused tax losses,
to the extent that it is probable that taxable profit will be available against which the deductible temporary differences
can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax
asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) relevant to the appropriate
tax jurisdiction, that have been enacted or substantively enacted at the balance date.
20232022
$ (000)$ (000)
Current income tax
Current income tax charge509419
Adjustments in respect of income tax(144)(141)
365278
Deferred income tax
Origination and reversal of temporary differences(286)41
Income tax expense/(benefit) reported in the statement of comprehensive income79319
46
6. INCOME TAX (continued)
The prima facie tax payable on profit before income tax is reconciled to the income tax expense as follows:
20232022
$ (000)$ (000)
Accounting loss before income tax(30,461)(35,640)
At the statutory income tax rate of 28% (2022:28%) (8,529)(9,979)
Non-deductible items4,7282,658
Adjustments in respect of income tax(144)(141)
Foreign taxes224460
Tax losses and temporary differences unrecognised4,1967,650
Effect of tax on overseas subsidiaries at different rate(396)(329)
Income tax (benefit)/expense79319
At effective income tax rate of:-0.3%-0.9%
Deferred income tax at 31 March relates to the following:
20232022
Statement of
financial
position
Statement of
comprehensive
income
Statement of
financial
position
Statement of
comprehensive
income
$ (000)$ (000)$ (000)$ (000)
Deferred income tax liabilities recognised
Intangibles(19)65(72)(19)
Deferred income tax asset recognised
Intangibles and non-current assets*32——
Employee entitlements18538147(22)
Bonus provision181181——
Net deferred tax asset recognised35028675(41)
Deferred income tax liabilities not recognised
Intangibles—22(22)8
Deferred income tax asset not recognised
Intangibles and non-current assets*1329043(52)
Provision for expected credit loss601148(12)
Employee entitlements52872456131
Bonus provision45072378(155)
Share based payments1,592(49)1,6411,115
Capital expenditure - patents1—2(177)
Deferred income tax asset not recognised2,7632182,546858
47
noteS to Financial StateMentS
6. INCOME TAX (continued)
Unrecognised tax losses carried forward include $98.6m (2022: $74.8m) relating to New Zealand and $10.8m
(2022: $7.9m) relating to foreign jurisdictions.
The New Zealand group has a history of tax losses which do not expire. Given the current uncertainty that exists,
no recognition of New Zealand temporary or tax loss assets has occurred.
7. RECEIVABLES
Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
Collectability of receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off
when identified. In accordance with NZ IFRS 9: Financial instruments, trade receivables are assessed for impairment
and an expected credit loss (ECL) provision made based on lifetime expected credit losses. The ECL model considers
various aspects of credit risk within a risk matrix, considering history of debtor write off, ageing of invoices, country,
market and product risk.
The impairment, and any subsequent movement, including recovery, is recognised in the statement of
comprehensive income.
20232022
$ (000)$ (000)
Trade receivables3,2892,354
Expected credit loss provision(220)(192)
Trade receivables (net)3,0692,162
GST receivable545312
Sundry debtors1766
Contract assets8,2872,373
Prepayments1,7731,313
Total receivables13,6916,226
Foreign currency risk
The carrying amounts of the group’s receivables are denominated in the following currencies:
New Zealand dollars2,6362,702
Australian dollars2,5091,716
US dollars376430
Other6,39765
11,9184,913
Total0-30 days31-60 days61-90 days91+ days
$ (000)$ (000)$ (000)$ (000)$ (000)
At 31 March the ageing analysis of receivables was as follows:
2023Trade receivables11,5767,9633,01571527
2022Trade receivables4,7273,44592386273
48
7. RECEIVABLES (continued)
Allowance for impairment loss – Trade receivables
Group trade receivables over 60 days were $598,000 (2022: $359,000). An ECL provision of $220,000 (2022: $192,000)
has been made, resulting in a movement for the period of $28,000. Additionally within the ECL provision,
the Group recognises a specific allowance of individual receivables if there is objective evidence of credit
impairment or non-collectability.
Trade receivables are non-interest bearing and are generally on 30 to 60-day terms. Serko has historically low levels
of impairment on trade receivables.
Movement in ECL provision during the year was as follows:
20232022
$ (000)$ (000)
Balance at 1 April 2022192215
Bad Debts written off(13)(195)
Expected credit loss provision41172
Balance at 31 March 2023220192
8. FINANCIAL INSTRUMENTS
Derivative financial instruments
The Group uses derivatives in the form of forward exchange contracts (FECs) to reduce the risk that movements
in the exchange rate will affect the Group’s New Zealand dollar cash flows. Such derivative financial instruments
are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently
remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial
liabilities when the fair value is negative.
The following table presents the Group’s foreign currency forward exchange contracts measured at fair value:
Derivative financial instruments have been determined to be within level 2 of the fair value hierarchy. Foreign currency
forward exchange contracts have been fair valued using published market foreign exchange rates and contract
forward rates discounted at rates that reflect the credit risk of the counterparties.
20232022
$ (000)$ (000)
Current:
Foreign currency forward exchange contracts: asset/(liability)144(16)
Contractual amounts of forward exchange contracts outstanding were as follows:
Foreign currency forward exchange contracts38,8062,853
49
noteS to Financial StateMentS
9. PROPERTY, PLANT AND EQUIPMENT
All items of property, plant and equipment are recorded at cost less accumulated depreciation and impairment.
Cost includes expenditure that is directly attributable to the acquisition of the asset.
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset.
The following estimates have been used:
• Leasehold improvements - Term of lease (16.7% - 25%)
• Furniture and fittings - 10% - 13.5%
• Computer equipment - 17.5% - 48%
• Right-of-use asset - Term of lease
Leasehold
improvement
Furniture &
fittings
Computer
equipment
Right-of-use
asset*Total
$ (000)$ (000)$ (000)$ (000)$ (000)
2023
Cost or valuation
Balance at 1 April 20226098702,5745,0869,139
Additions7853711,0181,481
Disposals-(6)(28)(379)(413)
Currency translation13314883
Balance at 31 March 20236179522,9485,77310,290
Depreciation
Balance at 1 April 20224774211,6802,2424,820
Depreciation expense69866081,1141,877
Disposals-(2)(28)(379)(409)
Currency translation(3)-263356
Balance at 31 March 20235435052,2863,0106,344
Net carrying amount744476622,7633,946
2022
Cost or valuation
Balance at 1 April 20216088271,8463,0916,372
Additions-427322,6283,402
Disposals--(9)(641)(650)
Currency translation115815
Balance at 31 March 20226098702,5745,0869,139
Depreciation
Balance at 1 April 20213453371,1631,9583,803
Depreciation expense130845209181,652
Disposals--(9)(641)(650)
Currency translation2-6715
Balance at 31 March 20224774211,6802,2424,820
Net carrying amount1324498942,8444,319
* Right-of-use assets relate to premises leases.
50
9. PROPERTY, PLANT AND EQUIPMENT
(continued)
a) Impairment
The carrying values of property, plant and equipment
are reviewed for impairment when events or changes
in circumstances indicate the carrying value may not
be recoverable.
If any such indication exists and where the carrying
values exceed the estimated recoverable amount, the
assets are written down to their recoverable amounts.
b) Disposal
An item of property, plant and equipment is
derecognised upon disposal or when no further
future economic benefits are expected from its use
or disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between
the net disposal proceeds and the carrying amount
of the asset) is included in profit or loss in the year
the asset is derecognised.
10. INTANGIBLES
Intangible assets consist of both internally generated
intangible assets such as capitalised expenditure
for software development, and externally generated
intangible assets such as trademarks, intellectual
property and goodwill upon acquisition.
Key judgements on the capitalisation
of development costs
An intangible asset arising from development
expenditure on an internal project is recognised
only when the Group can demonstrate the technical
feasibility of completing the intangible asset so that
it will be available for use or sale, its intention to
complete and its ability to use or sell the asset.
Also considered by management is how the asset
will generate future economic benefits, the availability
of resources to complete the development and the
ability to reliably measure the expenditure attributable
to the intangible asset during its development.
Following initial recognition of the development
expenditure, the cost model is applied requiring the
asset to be carried at cost less any accumulated
amortisation and impairment losses. Any expenditure
capitalised is amortised over the period of expected
benefit from the related project.
Software assets in the current year relate to the
continued development of the Group’s Booking.com
integration with Zeno. The group capitalises software
development costs based on direct costs associated
with the project and a proportion of employee costs
that directly relate to the software development project.
Computer software development costs recognised
as assets are amortised over their estimated useful
lives and tested for impairment whenever there is an
indication that the intangible asset may be impaired.
Intangible assets under development and not yet
completed at balance date are recorded as capital
work in progress.
Other expenditures that do not meet the above criteria
are recognised as expenses as they are incurred.
This includes research costs and costs associated with
maintaining internal computer software programs.
Amortisation and Impairment of
non-financial assets
Amortisation is recognised as an expense in the income
statement. The estimated useful lives are as follows:
• Goodwill and Other intangible assets
(indefinite useful life, not amortised but tested
annually for impairment);
• Intellectual property (finite, amortised on
5 years straight-line basis); and
• Computer software (finite, amortised between
3 and 5 years on a straight-line basis).
For the purpose of impairment testing, goodwill
acquired in a business combination is, from the
acquisition date, allocated to each of the Group’s
cash-generating units expected to benefit from the
combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.
51
noteS to Financial StateMentS
10. INTANGIBLES (continued)
Goodwill is tested annually for impairment, or
immediately if events or changes in circumstances
indicate that it might be impaired and carried at cost
less accumulated impairment losses. Impairment
losses on goodwill are not reversed.
Any gain on bargain purchase is recognised
immediately on acquisition to profit and loss.
Intangible assets that are recorded as capital work
in progress or that have indefinite useful lives are
not subject to amortisation. These assets are tested
annually for impairment or more frequently if events
or changes in circumstances indicate that they might
be impaired. Other assets are tested 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 to sell, and
value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which
there are separately identifiable cash inflows that
are largely independent of the cash inflows from
other assets or groups of assets (cash-generating
units (‘CGUs’). Non-financial assets, including
development work in progress and computer software,
are assessed for impairment at a Group level under
one CGU.
Non-financial assets, other than goodwill that
suffered impairment, are tested for possible reversal
of the impairment whenever events or changes in
circumstances indicate that the impairment may
have reversed.
The recoverable amount of the cash-generating unit
is determined from a value-in-use calculation that uses
a discounted cash flow analysis. The key assumptions
for the value-in-use calculation are those regarding
the discount rate, growth rates and forecast financial
performance and cash flows.
Management estimates the discount rate using rates
that reflect current market assumptions of the time
value of money and risk specific to the cash-generating
unit. The growth rates are based on management’s
best estimate. Forecast revenues, direct and indirect
costs, are based on historical experience/past practices
and expectations of future changes in the markets the
Group operates in and services.
Key judgements and estimates —
impairment considerations
In undertaking an impairment review of the single
cash-generating unit the following assumptions
were used in the impairment model:
• Cash flow projections across a five-year
forecast period;
• The assumptions with the greatest impact
on impairment testing are as follows:
– The retention of and continued growth in
revenues from key customers.
–A pre tax discount rate of 16.6% (2022: 15.6%),
equivalent to a post tax weighted average cost
of capital of 13.4% (2022: 12.2%)
– The Discount factor is applied using a mid-year
convention; and
–Terminal growth rate of 3% (2022: 2%).
In assessing the sensitivity of the forecasts to
changes in assumptions, an analysis in key underlying
assumptions was performed and applied to the
weighted average scenario. This included reducing the
estimated revenue in the fifth year by 20%, reducing the
terminal growth rate by 3% and increasing the discount
rate by 2%. These reasonably possible changes in
assumptions did not result in any impairment.
52
Goodwill
Intellectual
property
Other
intangible
assets
Development
work in
progress
Computer
softwareTotal
$ (000)$ (000)$ (000)$ (000)$ (000)$ (000)
2023
Cost
Balance at 1 April 20221,3361,409786,27536,77445,872
Additions———13,551—13,551
Transfer of cost———(15,448)15,448—
Currency translation185194——416795
Balance at 31 March 20231,5211,603784,37852,63860,218
Amortisation and impairment
Balance at 1 April 2022—928——12,88613,814
Amortisation—321——10,84211,163
Currency translation—114——86200
Balance at 31 March 2023—1,363——23,81425,177
Net carrying amount1,521240784,37828,82435,041
2022
Cost
Balance at 1 April 20211,4451,524781,34526,36830,760
Additions———15,320—15,320
Transfer of cost———(10,433)10,433—
Currency translation(109)(115)—43(27)(208)
Balance at 31 March 20221,3361,409786,27536,77445,872
Amortisation and impairment
Balance at 1 April 2021—668——6,7887,456
Amortisation—286——6,1006,386
Currency translation—(26)——(2)(28)
Balance at 31 March 2022—928——12,88613,814
Net carrying amount1,336481786,27523,88832,058
10. INTANGIBLES (continued)
53
noteS to Financial StateMentS
11. CASH AT BANK AND ON HAND AND SHORT-TERM DEPOSITS
Cash in the statement of financial position comprise cash at bank, and on hand, short-term highly liquid investments
with an original maturity of three months or less.
20232022
$ (000)$ (000)
Cash at bank – New Zealand dollar balances6,33827,323
Cash at bank – foreign currency balances8,9067,190
Cash at bank and on hand15,24434,513
The carrying amounts of the group’s cash at bank and on hand are denominated
in the following currencies:
New Zealand dollars6,33827,323
Australian dollars602661
Chinese Yuan1,330896
US dollars5,8572,552
European Euros1,1173,081
15,24434,513
Short term deposits72,50090,000
Cash includes USD$1 million (2022: USD$1.5 million) of restricted cash in the form of a minimum bank balance
required in the US to provide same-day clearance for expense reimbursement services.
Short-term deposits of $72.5 million (2022: $90 million) represent term deposits with a maturity period of more
than 90 days, but less than one year. Short-term deposits are all New Zealand dollars denominated.
12. TRADE AND OTHER PAYABLES
Trade and other payables
Trade and other payables are carried at amortised cost and represent liabilities for goods and services provided
to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to
make future payments in respect of the purchase of these goods and services.
The average credit period on trade payables is approximately 30 days.
54
12. TRADE AND OTHER PAYABLES (continued)
Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, long-service leave and annual leave expected
to be settled within 12 months of the reporting date, are recognised in respect of employees’ services up to the
reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.
20232022
$ (000)$ (000)
Trade payables2,3111,945
Other payables–3,376
Accrued expenses4,6443,628
Annual leave accrual2,9072,359
Total trade and other payables9,86211,308
Disclosed as:
Current9,86211,308
Non-current––
9,86211,308
Foreign currency risk
The carrying amounts of the group’s payables are denominated in the following currencies:
New Zealand dollars7,4169,112
Australian dollars716654
US dollars1,1331,393
Other597149
9,86211,308
13. LEASE LIABILITIES
Recognition and measurement of Serko leasing activities
The Group leases property for fixed periods of between one and six years and some include extension options.
These extension options are usually at the discretion of The Group and are included in the measurement of the
lease asset if management concludes it is reasonably certain that the extension will be exercised.
Lease liabilities include the net present value of fixed payments less any lease incentives receivable. The lease
payments are discounted using the lessee’s incremental borrowing rate, being the rate that the lessee would have
to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with
similar terms and conditions.
The amortisation of the discount applied on recognition of the lease liability is recognised as interest expense
in the income statement.
55
noteS to Financial StateMentS
13. LEASE LIABILITIES (continued)
Low value and short term leases are expensed to the income statement. These include leases on property of $78,744
(2022: $172 000) that are short term in nature.
Key movements relating to lease balances are presented below:
20232022
$ (000)$ (000)
Balance at 1 April 20222,9771,407
Leases entered into during the period1,0732,628
Principal repayments(951)(1,064)
Foreign exchange adjustment116
Closing balance3,1102,977
Classified as:
Current1,093820
Non-current2,0172,157
Closing balance3,1102,977
Maturity analysis - contractual undiscounted cash flows:
Less than 1 year1,2631,023
Later than 1 year and not later than 2 years1,142962
Later than 2 years and not later than 5 years1,0171,365
Total undiscounted lease liabilities at 31 March3,4223,350
14. GOVERNMENT GRANTS AND DEFERRED INCOME
Deferred income is presented in the table below:
Government grants are not recognised until there is reasonable assurance that the Group will comply with the
conditions attaching to them and that the grants will be received.
The Research and development tax credit is recognised as income as it is expected to be recognised in cash.
20232022
$ (000)$ (000)
Opening deferred income1,861-
Covid-19 government subsidies(151)377
Research and development tax credit (RDTI)293994
Contract liabilities(72)490
Closing deferred income1,9311,861
Deferred income disclosed as:
Current1,2041,008
Non-current727853
1,9311,861
56
14. GOVERNMENT GRANTS AND DEFERRED INCOME (continued)
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group
recognizes as expenses the related costs for which the grants are intended to compensate. As some grants relate
to costs capitalised to depreciable assets, amounts are recognised as deferred income in the consolidated statement
of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the
related assets.
Income relating to grants is presented in table below:
20232022
$ (000)$ (000)
During the year, the Group claimed the following grants:
Covid-19 government subsidies—969
Research and development tax credit (RDTI)1,5891,337
Other government grants8676
Total compensation1,6752,382
Income recognised
Covid-19 government subsidies151587
Research and development tax credit (RDTI)1,296343
Other government grants8676
Total income recognised1,5331,006
15. INTEREST-BEARING LOANS AND BORROWINGS
20232022
$ (000)$ (000)
Current
Leasehold fitout loan—28
—28
Non-current
Leasehold fitout loan——
——
Total Interest-bearing loans and borrowings—28
57
noteS to Financial StateMentS
2023202220232022
Number of
shares
Number of
shares
$ (000)$ (000)(000)(000)
Ordinary shares
Balance at 1 April235,101153,706119,921107,822
Issue of shares pursuant to institutional capital placement-75,000-10,638
Issue of shares pursuant to Share Purchase Plan (SPP) placement-8,281-1,209
Transaction costs for issue of new shares-(3,188)--
Non-executive director's settlement of non-recourse loan-247--
Issue of shares pursuant to US Options plan21481
Issue of shares pursuant to RSU scheme2,8541,051514251
Share capital at 31 March237,976235,101120,443119,921
Share-based payment reserve
Balance at 1 April7,4834,509
RSUs expensed during the year6,5424,051
Shares vested to employees via RSU scheme(2,854)(1,051)
RSUs forfeited by employees(516)(108)
Shares vested to employees via RSP-95
Shares forfeited by employees via RSP-(3)
Non-executive director's settlement of non-recourse loan-(47)
Share-based payments - employee share options(18)37
Share-based payment reserve at 31 March10,6377,483
16. EQUITY
Ordinary share capital is recognised at the fair value of the consideration received. Transaction costs relating to
the listing of new ordinary shares and the simultaneous sale and listing of existing shares are allocated to those
transactions on a proportional basis.
Transaction costs relating to the sale and listing of existing shares are not considered costs of an equity
instrument as no equity instrument is issued and, consequently, costs are recognised as an expense in the statement
of comprehensive income when incurred. Transaction costs relating to the issue of new share capital are recognised
directly in equity as a reduction of the share proceeds received.
During the year the Group allocated the following restricted shares to Serko employees (refer to note 18):
• In respect of the Restricted Share Plan (RSP), the Group allocated nil shares (2022: nil).
Unallocated shares are 1,263,865 (2022: 1,263,865); and
• In respect of Restricted Share Units (RSU), the Group allocated 1,168,329 (2022: 801,984).
58
17. EARNINGS PER SHARE (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit / (loss) attributable to ordinary equity holders of the parent
by the weighted average number of ordinary shares outstanding during the year, plus the weighted average number
of shares that would be issued on conversion of all of the dilutive potential ordinary shares into ordinary shares.
Potential ordinary shares are treated as dilutive when their conversion to ordinary shares would decrease EPS
or increase the loss per share.
The following reflects the Income and share data used in the basic and diluted EPS computations:
20232022
$ (000)$ (000)
Loss attributable to ordinary equity holders of the parent
Continuing operations(30,540)(35,959)
(30,540)(35,959)
Notes20232022
NumberNumber
(000)(000)
Basic earnings per share
Issued ordinary shares16120,443119,921
Weighted average of issued ordinary shares 120,344 111,839
Adjusted for unallocated employee restricted share plan shares(1,264)(1,264)
Weighted average of issued ordinary shares outstanding119,080110,575
Basic and diluted earnings/(loss) per share (dollars)(0.26)(0.33)
20232022
CentsCents
Net tangible assets per security76.26100.14
Net tangible assets per security is a non-GAAP measure and is provided for NZX reporting purposes. Net tangible
assets per security is calculated as Total assets less Total liabilities less Intangible assets divided by the issued
ordinary shares (excluding treasury shares) as at 31 March.
59
noteS to Financial StateMentS
18. SHARE-BASED PAYMENTS
Employees of the Group receive remuneration at the Board’s discretion in the form of share-based payment
transactions, where services are provided as consideration for the receipt of equity instruments.
The cost of share-based payment transactions are recognised, together with a corresponding increase in equity,
over the period in which the service conditions are fulfilled. The cumulative expense recognised for share-based
transactions at each reporting date, until the vesting date, reflects the extent to which the vesting period has expired
and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit
for a period represents the movement in cumulative expenses recognised at the beginning and end of that period.
No cumulative expense is recognised for awards that do not ultimately vest except where vesting is conditional upon
a market condition.
Employee Restricted Share Plan
The employee Restricted Share Plan has been superseded by the Restricted Share Units scheme. There are no future
plans to allocate the shares held by the trustee.
20232022
Number of sharesNumber of shares
Unvested shares at 1 April—343,880
Forfeited during the year—(1,081)
Vested during the year—(342,799)
Unvested shares at 31 March - allocated to employees——
Ageing of unvested shares
Vest within one year——
Ageing of unvested shares at 31 March - allocated to employees——
Unallocated shares - held by trustee1,263,8651,263,865
Employee Restricted Share Units scheme (RSUs)
Under the Restricted Share Units scheme (RSUs), ordinary shares in Serko Limited are allocated to employees at
grant date with a zero-exercise price and will be taxable to the employee in the income year when the awards vest.
Vesting conditions are based on:
• Continued employment at vesting date and/or;
• Performance hurdles, such as performance against revenue targets.
The weighted average grant date fair value of RSUs issued during the year was determined by either the volume
weighted average price (VWAP) of shares traded in the previous 20 trading days preceding the date of grant or
closing price the day before issue.
60
2023202320222022
Weighted
average price
NZ$
Number
of RSUs
Weighted
average price
NZ$
Number
of RSUs
Outstanding at 1 April1,997,2221,514,291
Allocated to employees during the year4.451,168,329 6.79 801,984
Cancelled during the year4.91(271,968) 5.70 (68,114)
Vested during the year5.55(514,588) 4.19 (250,939)
Outstanding at 31 March2,378,9951,997,222
Employee incentive share options scheme
There were no options granted during the year, as this scheme has been replaced with employees now receiving RSUs.
Options are conditional on the completion of the necessary years of service (the vesting period) as appropriate to
that tranche. The options are considered graded equity instruments that vest in tranches over two to five years from
the grant date. No options can be exercised later than five years from grant date. There were 21 holders of options
at 31 March 2023 (2022: 37).
The Group has no legal or constructive obligation to repurchase or settle the options in cash. Movements in the
number of options outstanding and their related weighted average exercise prices are as follows:
2023202320222022
Weighted
average exercise
price ($)Options
Weighted
average exercise
price ($)Options
Outstanding at 1 April148,309168,667
Cancelled during the year 3.63 (45,497) 3.61 (19,365)
Exercised during the year 2.68 (7,838) 3.32 (993)
Outstanding at 31 March94,974148,309
Options outstanding at 31 March fall within the following ranges:
20232022
GrantedExpiry dateGrant price (NZ$)OptionsOptions
2018-19 2023-24 2.68-3.32 24,32456,521
2019-20 2023-24 3.95-4.49 40,93042,750
2020-21 2023-24 4.80 29,72049,038
94,974148,309
18. SHARE-BASED PAYMENTS (continued)
61
noteS to Financial StateMentS
b. Transactions with related parties
There were no transactions with related parties for the year other than key management remuneration.
c. Key management remuneration*
* Key management personnel includes Serko’s board of directors, the Chief Executive Officer and direct reports. Share-based payments represent the
value movement in the unvested share-based payments granted that will vest in future years.
20232022
$ (000)$ (000)
Non-executive directors’ remuneration465468
Salary and other short-term benefits4,2513,595
Share-based payments3,3772,093
Total compensation8,0936,156
d. Terms and conditions of transactions with related parties
Outstanding balances at year end are unsecured and settlement occurs in cash.
For the year ended 31 March 2023 the Group has not made any allowance for impairment loss relating to amounts
owed by related parties (2022: $nil). An impairment assessment is undertaken each financial year by examining the
financial position of the related party and the market in which the related party operates, to determine whether there
is objective evidence that a related party receivable is impaired. When such objective evidence exists, the Group
recognises an allowance for the impairment loss.
19. RELATED PARTIES
The Group has related party relationships with its controlled entities and with key management personnel.
a. Subsidiaries
The consolidated financial statements include the financial statements of Serko Limited and subsidiaries as listed in
the following table:
% Equity interest
Principal activity2023
Serko Australia Pty LimitedSales and marketing100%
Serko Trustee LimitedTrustee100%
Serko India Private LimitedNon-trading100%
Serko Investments LimitedNon-trading100%
Foshan Sige Information Technology LimitedResearch and development services100%
Serko IncSales and marketing100%
InterplX IncExpense management100%
62
20232022
$ (000)$ (000)
Net loss after tax(30,540)(35,959)
Add non-cash items
Amortisation11,1636,386
Depreciation1,8771,652
Deferred tax loss/(gain)(275)41
Loss on foreign exchange transactions(1,681)27
Share-based compensation6,0084,076
(13,448)(23,777)
Add/(less) movements in working capital items
(Increase)/decrease in receivables(7,465)(833)
Increase/(decrease) in income tax payable(37)127
(Decrease)/increase in trade and other payables(1,376)6,027
(8,878)5,321
Net cash flow used in operating activities(22,326)(18,456)
21. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise cash at bank and on hand, short-term deposits, derivatives,
receivables, payables and loans.
Group capital consists of share capital and retained earnings. To maintain or adjust the capital structure, the Group
may adjust amounts of dividends paid to shareholders, return capital to shareholders, issue new shares or amend
capital spending plans.
Financial assets:
Cash at bank and on hand, short term deposits and receivables are financial assets measured at amortised cost. When
financial assets are recognised initially they are measured at fair value plus directly attributable transaction costs.
20. RECONCILIATION OF OPERATING PROFIT TO NET CASH OUTFLOW
FROM OPERATING ACTIVITIES
63
noteS to Financial StateMentS
21. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Financial liabilities:
Financial liabilities are classified as ‘other financial liabilities’. Other financial liabilities, including interest-bearing loans
and borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently
measured at amortised cost using the effective interest method.
The effective interest method calculates the amortised cost of a financial liability and allocates the interest expense
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments
through the expected life of the financial liability or, where appropriate, a shorter period to the net carrying amount of
the liability. Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after balance date.
The main risks arising from the Group’s financial instruments are foreign currency, interest, credit and liquidity risk.
The Group uses different methods to measure and manage the different types of risks to which it is exposed.
These include monitoring levels of exposure to foreign exchange risk and assessments of market forecasts for
foreign exchange. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk.
Liquidity risk is monitored through the development of future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below.
a) Risk exposures and responses
i) Interest rate risk
At balance date this year and prior year, the Group did not have any financial liabilities exposed to variable interest
rate risk.
Excess funds over the forecasted requirements for the 12-month period following year end are invested in short-term
deposits with a mixture of maturity dates to manage interest rate risk and liquidity risks.
ii) Liquidity and interest rate risk
Liquidity risk represents the Group’s ability to meet its financial obligations on time. In terms of managing its liquidity
risk, the Group holds sufficient cash reserves to meet its obligations arising from its financial liabilities.
The following table sets out the contractual cash flows for all non-derivative financial liabilities settled
on a gross cash flow basis:
Weighted average
effective interest
rate %
Contractual
cash flows
6 months
or less
6-12
months
1-2
years
2-5
years
More than
5 years
$ (000)$ (000)$ (000)$ (000)$ (000)$ (000)
Group - 2023
Trade and other payables0%9,8629,862————
Lease liability10%3,4236166481,1421,017—
13,28510,4786481,1421,017—
Group - 2022
Trade and other payables0%11,30811,308————
Leasehold fitout loan8%2828————
Lease liability8%3,3505484759621,365—
14,68611,8844759621,365—
64
21. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
b) Currency risk
The Group has exposure to foreign exchange risk as a result of transactions denominated in foreign currencies.
The risk specifically relates to the variability of foreign exchange rates for the currencies the Group trades in and
the impact this has on the Group’s financial results. The majority of the Group’s expenditure occurring in New Zealand
dollars, however, sales to overseas customers are transacted in Euros, Australian dollars and US dollars.
Refer to notes 7 (receivables), 11 (cash at bank and on hand and short-term deposits) and 12 (trade and other
payables) for further details on the Group’s foreign currency denominated accounts receivable, accounts payable
and cash and short-term deposit balances.
The following table summarises the sensitivity to foreign currency exchange rate movements.
A sensitivity of +/- 20% (2022: +/-15%) has been selected owing to exchange rate volatility observed.
The sensitivity table below is excluding the impact of foreign exchange contracts:
Foreign currency risk
+20%-20%
Carrying
amount
Post-tax
profit
Equity
Post-tax
profit
Equity
$ (000)$ (000)$ (000)$ (000)$ (000)
2023
Foreign exchange balances
Cash at bank8,9061,0691,069(1,603)(1,603)
Trade receivables9,2821,1141,114(1,671)(1,671)
Trade payables(2,445)(293)(293)440440
Net exposure15,7431,8901,890(2,834)(2,834)
2022+15%-15%
Foreign exchange balances
Carrying
amount
Post-tax
profit
Equity
Post-tax
profit
Equity
Cash at bank7,190675675(914)(914)
Trade receivables2,211288288(390)(390)
Trade payables(2,196)(206)(206)279279
Net exposure7,205757757(1,025)(1,025)
65
noteS to Financial StateMentS
21. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
c) Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash at bank and on hand, short-term
deposits, receivables and contract assets. The Group’s exposure to credit risk arises from potential default
of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. Exposure
at balance date is addressed in each applicable note.
The Group does not hold any credit derivatives to offset its credit exposure.
The Group monitors and manages the exposure to credit risk by ensuring customers have an appropriate
credit history.
The credit risk associated with Expense customers is small owing to the inherently low transaction value
and the distribution over a large number of customers.
The Group’s other largest concentration of credit risk is with one customer, with $6,359,074 receivable
at 31 March 2023 (2022:$988,000).
At reporting date the Group’s cash and short-term deposits were held in several banks with the following distribution:
Two banks held 34% each and the remaining 32% were held in other banks (2022: 53% held with one bank and
47% in other banks). A total of 92% of cash is held by New Zealand and Australian banks with a credit rating of
at least ‘AA-’. The Group has no other concentrations of credit risk.
d) Fair value
The Board considers that the carrying amounts of financial assets and financial liabilities recognised in the
consolidated financial statements approximate their fair value.
22. EVENTS AFTER BALANCE SHEET DATE
There were no significant events between the balance sheet date and the date these financial statements
were authorised for issue.
23. CONTINGENT LIABILITIES
There were no contingent liabilities at balance date (2022: $nil).
66
67
noteS to Financial StateMentS
Independent Auditor’s Report
To the Shareholders of Serko Limited
Opinion We have audited the consolidated financial statements of Serko Limited and its
subsidiaries (the ‘Group’), which comprise the consolidated statement of financial position
as at 31 March 2023, and the consolidated statement of comprehensive income,
statement of changes in equity and statement of cash flows for the year then ended, and
notes to the consolidated financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages 36 to 66
present fairly, in all material respects, the consolidated financial position of the Group as
at 31 March 2023, and its consolidated financial performance and cash flows for the year
then ended in accordance with New Zealand Equivalents to International Financial
Reporting Standards (‘NZ IFRS’) and International Financial Reporting Standards (‘IFRS’).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (‘ISAs’)
and International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International
Independence Standards) (New Zealand) issued by the New Zealand Auditing and
Assurance Standards Board and the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants (including International
Independence Standards), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Other than in our capacity as auditor and the provision of assurance services, we have no
relationship with or interests in the Company or any of its subsidiaries, except that
partners and employees of our firm may deal with the Company and its subsidiaries on
normal terms within the ordinary course of trading activities of the business of the
Company and its subsidiaries.
Audit materiality We consider materiality primarily in terms of the magnitude of misstatement in the
financial statements of the Group that in our judgement would make it probable that the
economic decisions of a reasonably knowledgeable person would be changed or
influenced (the ‘quantitative’ materiality). In addition, we also assess whether other
matters that come to our attention during the audit would in our judgement change or
influence the decisions of such a person (the ‘qualitative’ materiality). We use materiality
both in planning the scope of our audit work and in evaluating the results of our work.
We determined materiality for the Group financial statements as a whole to be
$1,500,000.
Key audit matters Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period.
These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
68
Key audit matter How our audit addressed the key audit matter
Revenue Recognition
Included within total revenue of $46.5 million is travel
booking platform revenue ($16.3 million) and supplier
commissions revenue ($23.4 million), as set out in note 4
‘Revenue and other income’.
The recognition of revenue is a key audit matter due to the
significance of revenue to the financial statements and
judgements involved in determining the timing of revenue
recognition.
•Travel platform booking revenue is derived from
multiple customer contracts that contain different
pricing schedules and varying revenue recognition
triggers. Complexity exists because customer contracts
can include transactional and usage fees (sometimes
with minimum contracted commitments),
establishment and installation fees, and chargeable
work orders, which impact on the allocation of revenue
across different goods and services. The group must
exercise judgement to determine accrued or deferred
revenue accordingly, dependent on estimated future
transaction volumes impacting the timing of when
revenue is recognised.
•Supplier commissions revenue is predominantly from
hotel bookings. It is recognised net of performance
marketing fees, and is not recognised until a reservation
has been completed. Judgement is required to estimate
the amount of accrued commissions as at the reporting
date.
For travel platform booking revenue:
•We evaluated the systems, processes and controls in
place to recognise revenue.
•We engaged our Information Technology specialists to
test the IT environment in which bookings occur and
interfaces with the general ledger.
•We recalculated travel platform booking revenue
recognised for a sample of material customers by
reconciling transactions recorded in the relevant IT
systems to the general ledger and validating pricing
inputs to invoices and signed customer contracts.
•We considered the application of NZ IFRS 15: Revenue
from Contracts with Customers for new and material
contracts or significant variations to contracts entered
into during the year.
For supplier commissions revenue:
•We built an understanding of how bookings data is
obtained from third party systems, what activities are
undertaken by the Group to validate the information
received, and how the information flows through to the
Group’s general ledger.
•We reconciled underlying transactional data to cash
subsequently received.
•We obtained a third party confirmation of total
commissions paid to the Group for the period (net of
marketing fees), and assessed the Group’s estimate of
accrued revenue by challenging the inputs within
management’s calculation.
We tested samples of manual journal entries recorded
outside of normal business processes by profiling for unusual
revenue impacting journals.
Capitalisation of software development including
impairment considerations
The Group capitalises costs for internally developed work in
progress and transfers those to software upon completion
of the project. In the current year the Group capitalised
costs of $13.6 million and transferred $15.4 million of work
in progress to software assets, as set out in note 10
'Intangibles'. $4.4 million of development work in progress
has been recognised as at balance date.
Capitalisation of software development
As a Software as a Service (“SaaS”) provider, the Group
incurs significant expenditure in developing and enhancing
software products.
Judgement is required to determine whether the
recognition criteria under NZ IAS 38 Intangible Assets have
been met in order to capitalise the applicable costs of
development. This includes considering whether the costs
are directly attributable to the development of an asset, and
Capitalisation of software development
We evaluated the nature of expenditure, the stage of
product development, and how the Group distinguishes
expenditure between research, development and
maintenance costs.
We assessed the Group’s processes and controls for
recording time spent on products and the allocation
between research or software development to be capitalised
under NZ IAS 38.
We tested a sample of additions to evaluate whether the
recognition criteria under NZ IAS 38 have been met.
Impairment assessment
We considered existing software for technical obsolescence,
by ensuring appropriate revenues exist for those products
and corroborating with management whether features or
product enhancements previously capitalised are still in use.
We challenged the key assumptions within the cash flow
69
independent auditor'S report
Key audit matter How our audit addressed the key audit matter
whether the Group can demonstrate that the asset is in the
development stage. This includes demonstrating the
technical feasibility of completing the intangible asset so
that it will be available for use, the Group’s intention to
complete the asset, how the asset will generate future
economic benefits, the viability of resources to complete
the asset development and the ability of the Group to
reliably measure the expenditure attributable to the
intangible asset.
Impairment assessment
The Group must also assess each period whether there are
any indications that the software development assets are
impaired and must perform impairment testing on any
capitalised development costs for which there are indicators
of impairment, or which relate to software that is not yet
available for use.
The recoverable amount of the group’s cash-generating unit
is sensitive to assumptions around the retention of and
continued growth in revenue from key customers, as well as
to the terminal growth rate and discount rate applied in the
discounted cash flow model.
We have included capitalisation and impairment
considerations of software development as a key audit
matter due to the level of judgement required.
forecasts by considering historical cashflows, our
understanding of the business strategy and other relevant
external information.
We used our internal valuation specialists to assist in
evaluating the assumptions used in the Group’s discounted
cash flow model, specifically the discount rate and terminal
growth rates used, to support the carrying value of assets as
at 31 March 2023.
We performed sensitivity analysis over key drivers in the
Group’s impairment model, particularly assumptions around
forecast travel bookings and volume growth on Booking for
Business platform.
Other information The directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Annual Report that accompanies the
consolidated financial statements and the audit report.
Our opinion on the consolidated financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If so, we are required to report that
fact. We have nothing to report in this regard.
Directors’ responsibilities for
the consolidated financial
statements
The directors are responsible on behalf of the Group for the preparation and fair
presentation of the consolidated financial statements in accordance with NZ IFRS and
IFRS, and for such internal control as the directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf
of the Group for assessing the Group’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the
audit of the consolidated
financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated
financial statements as a whole are 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 ISAs and ISAs (NZ) will always detect a material misstatement when it
70
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 these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial
statements is located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-
responsibilities/audit-report-1
This description forms part of our auditor’s report.
Restriction on use This report is made solely to the Company’s shareholders, as a body. Our audit has been
undertaken so that we might state to the Company’s shareholders those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than
the Company’s shareholders as a body, for our audit work, for this report, or for the
opinions we have formed.
Paul Seller
Partner
for Deloitte Limited
Auckland, New Zealand
17 May 2023
71
independent auditor'S report
72
Remuneration
Report
PRAC Committee Chair’s Letter74
Governance76
Remuneration Strategy & Framework77
Remuneration Structure & Policy78
Remuneration Benchmarking78
CEO Remuneration81
Employee Remuneration85
Executive Director Remuneration87
Non-Executive Director Remuneration88
73
reMuneration report
As Chair of Serko’s People, Remuneration
and Culture Committee (PRAC Committee),
I am pleased to present to you Serko’s first
comprehensive Remuneration Report,
covering the financial year ended
31 March 2023.
To better enable our shareholders to understand how
we reward our executives and employees, and how our
remuneration practices are aligned with our business
strategy and performance, we have sought to provide
greater transparency through enhanced disclosures
this year. We trust shareholders will find the additional
information useful.
PRAC Committee Chair’s Letter
At Serko we have always believed that a well-designed
and flexible remuneration framework is crucial to
attracting, retaining and motivating our top talent to
deliver our growth strategy. Equally, it must ensure our
employees’ interests are aligned with the long-term
success of our company and delivering value
to shareholders.
We are pleased with the significant progress we
have made over the past two years in redesigning,
embedding and enhancing our approach to total
rewards, creating a solid foundation for remuneration
to reinforce performance as we deliver on our 3-year
strategic objectives.
Serko’s remuneration practices over the past few
years were redesigned to align with practices across
the technology industry, placing a major focus on
attraction and retention of key talent as we faced
unprecedented challenges due to the pandemic and
seized unprecedented commercial alliances.
In FY23, we introduced a range of enhancements to
align incentives more closely with delivery of strategic
objectives and generation of long-term shareholder
value. This included the introduction of a more
comprehensive performance scorecard against
which execution of strategic objectives was measured.
These measures comprised minimum, target and
maximum thresholds and saw the introduction of
revenue and cash reserve performance gateways.
74
Clyde McConaghy
Chair • People, Remuneration
and Culture Committee
Other areas of focus for the year included:
• Driving Serko’s strategic OKRs (Objectives and
Key Results) across the business to support
focused execution and prioritisation.
• Embedding Serko’s career level framework,
thereby ensuring a strong foundation for
benchmarking, analysis and reward decisions.
• Ensuring a data driven approach to remuneration
reviews, using external Radford/AON
benchmarking and consistent methodology
to differentiate performance.
• Publishing our first Pay and Gender Equity
Statement and registering on the New Zealand
‘Mind the Gap’ Registry.
• Enhancing our leave and wellness entitlements,
including introducing broader parental leave
benefits with gender neutral application.
Remuneration Outlook
In response to the changing macro-economic
environment, and as travel revenue returns to post-
Covid-19 levels, the PRAC Committee has spent the
latter part of the financial year reviewing the current
remuneration framework to ensure it remains fit for
purpose. In doing so, we have reviewed the Executive
Team’s (including the CEO’s) remuneration structure,
with a particular focus on incentive structure
and market benchmarking. This review has been
undertaken with the assistance of independent
remuneration consultants, AON and Guerdon
Associates. The information obtained from these
reviews has been used to inform Serko’s FY24
remuneration policy.
As a result, our aim over the next two years is to:
1. Ensure a broader and more informed assessment to
ensure our remuneration remains in line with industry
trends and the macroeconomic environment.
2. Structure at-risk long-term incentives for Executives
with increased alignment to improved shareholder
returns, as well as tenure, which has been a prime
retention method in the past.
The Board has made the considered decision not
to increase the CEO’s base salary. The proportions
allocated to short term and EISS long term
remuneration are also not anticipated to change.
The CEO’s long-term EISS incentive will adapt to reflect
measures relating to an increase in shareholder return.
We are keen to engage in ongoing dialogue with
shareholders to understand their perspectives on our
remuneration practices. Should you have any questions,
you can contact me directly at RemChair@Serko.com.
75
reMuneration report
Governance
The PRAC Committee is responsible for annually
reviewing Serko’s remuneration policies and
framework and recommending any changes to the
Board. The PRAC Committee is tasked with ensuring
the remuneration framework is transparent, fair and
reasonable for employees and shareholders.
The PRAC Committee is also responsible for making
recommendations to the Board in relation to the
remuneration of the Chief Executive Officer (CEO) and
of the company’s executives (in consultation with the
CEO). Company-wide performance measures and
targets that relate to incentives are reviewed annually by
the PRAC Committee and approved by the Board.
The Board retains ultimate responsibility for approving
Serko’s remuneration frameworks, setting criteria
for, and evaluating the performance of the CEO and
approving his remuneration.
The current members of the PRAC Committee are Clyde
McConaghy (Chair), Jan Dawson and Claudia Batten.
All members are independent, non-executive directors.
For more information on the role and responsibilities
of the Board and PRAC Committee with respect to
remuneration practices, see our latest ESG Report —
Governance Section.
76
Remuneration Strategy & Framework
Serko’s Purpose is to bring people together. This Purpose is underpinned by our vision and mission, and by
our strategic goals and annual objectives (summarised on page 10 of this Annual Report). Serko’s remuneration
strategy and framework is designed to attract and retain high-calibre talent who are empowered to deliver
against these strategic goals and objectives, and to create long-term shareholder value.
Serko’s Remuneration Policy outlines the remuneration principles that apply to all employees to ensure remuneration
practices within Serko are fair and equitable and there is a clear link between remuneration and employee and
company performance. The Remuneration Policy separately outlines principles to apply to director remuneration.
The Remuneration Policy is available on the investor section of the company’s website in the Corporate
Governance Manual.
Serko’s remuneration framework and policy reflects the following principles:
Each year, the PRAC Committee conducts a review of Serko’s Remuneration Policy to assess whether any
changes are required to ensure it continues to deliver a remuneration structure and levels that are consistent
with the policy principles.
Remuneration PrinciplesThe Principle Explained
Organisational alignment
clear alignment with Serko’s
Mission, Vision, Values, and Strategy
Valued by employees
Supports the attraction, retention
and engagement of employees
Clear
clearly understood by employees
and other stakeholders
Fair, competitive & equitable
Equitable and flexible. Appropriately competitive
with the market and within an organisational context
Rewards performance
recognises company and individual performance
and differentiates reward for individuals achieving
high performance
Shareholder alignment
recognises company performance and the
creation of long-term shareholder value
77
reMuneration report
Serko’s remuneration framework is applied to all
employees. Its global banding structure ensures
roles are mapped into specific bands with broadly
equivalent work scope and complexity. Pay ranges for
each band are determined based on local benchmarking
of market rates.
Total remuneration at Serko includes a mix of fixed
remuneration and variable at-risk remuneration,
delivered via Serko’s incentive programmes. The
proportion of at-risk remuneration increases with the
seniority of employees. Variable at-risk components
are tied to company performance, as well as individual
performance. This approach is designed to support the
policy of ‘pay for performance’ and to ensure alignment
to shareholder value over the short and longer term.
Company and individual short-term objectives are
agreed annually. The PRAC Committee reviews
performance against the company objectives following
the release of the results for the first six months of the
financial year and again at year end.
Every employee, including the CEO, has regular
performance reviews and is subject to a formal annual
performance review. The annual review is measured
against agreed key performance targets, both financial
and non-financial. During the year ended 31 March
2023, performance reviews took place in accordance
with that process.
In addition, Serko offers benefits that may have
a monetary benefit to employees but are not considered
part of remuneration.
Remuneration Structure & Policy
The PRAC Committee reviews Serko’s Remuneration
Policy on a regular basis to ensure it remains fit for
purpose and continues to support delivery of Serko’s
strategic objectives and shareholder value.
During FY23, a comprehensive review was undertaken
of executive remuneration. To assist with this review,
the Board engaged external independent remuneration
consultants, Guerdon Associates and AON.
Guerdon Associates was engaged to provide feedback
on the executive incentive remuneration structure.
Aon was engaged to undertake independent executive
remuneration benchmarking, and also to provide
benchmark data for remuneration at all levels of
the organisation.
Each remuneration consultant signed a declaration
attesting to their independence when carrying out
their review and reported to the Chair of the PRAC
Committee during the review.
Remuneration Benchmarking
78
Component Summary Link to Strategy and Performance
Fixed Remuneration • Base salary
• Benefits: Including employer
retirement contributions
(e.g. Kiwisaver and Australian
Superannuation).
• Based on individual skills, experience,
accountabilities, and performance.
• Benchmarked to the median of the
market in Serko’s respective locations.
• Reviewed annually based on market
data, internal benchmark relativities
and performance criteria.
Short Term Incentive
(STI)
At risk
• Discretionary at-risk cash payment
with targets set as a percentage of
base salary.
• Eligible to selected roles –
primarily Executive and Senior
Leadership Teams.
Additional terms of the scheme
are detailed on page 80
• Designed to reward performance of
annual financial and strategic objectives
for the respective financial year, creating
alignment with shareholder value creation.
• Rewards the achievement of company
and individual performance
Equity-based / Long
Term Incentive Scheme
(LTI)
At risk
• Equity-based award in the form
of Restricted Share Units (RSUs)
that convert into Serko shares
at vesting.
• At-risk with targets set as a
percentage of base salary.
• Eligible to all permanent
employees in New Zealand,
Australia and the United States
Additional terms of the scheme
are detailed on page 80
• Designed to retain key people to
support delivery of multi-year strategy,
and align rewards with longer-term
shareholder value.
• The RSU awards are performance-based,
having gateways that must be met before
a grant is made.
• Rewards the achievement of company
and individual performance
Sales Incentive Plans
At risk
• Discretionary cash-based payment
linked directly to sales/business
development performance targets.
• Eligible to select sales roles.
• Designed to support the delivery
of Serko’s revenue and customer-
base growth
The following table summarises each component of employee remuneration offered at Serko:
In addition to offering RSUs, Serko has historically also offered employees equity incentives in the form of
Restricted Shares and Options (in the US only). The Restricted Share Plan has subsequently been grandfathered
and no restricted shares were allocated during the current financial period. No employees currently have unvested
Restricted Shares allocated to them. Similarly, no new Options were offered to US employees during the period,
with RSUs being offered in their place. The number of Options currently on issue is detailed in the Governance and
Disclosures section of this Annual Report.
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reMuneration report
Incentive Schemes – Key Terms
* In limited circumstances outside of these countries, cash-based incentives are offered in place of equity-based incentives due to the regulatory
complexity of offering securities into that jurisdiction.
Short-Term IncentiveEquity-Based Long-Term Incentive
Purpose Designed to reward performance
of annual financial and strategic
objectives for the respective
financial year
Designed to align rewards with longer-term shareholder value and retain key
staff to support delivery of multi-year strategy.
EligibilityEligible to selected roles only –
primarily Executive and Senior
Leadership Teams.
All permanent employees in New Zealand, Australia and the United States*.
Since Serko’s inception, the Founders have been committed to supporting all
employees (where possible) to own shares in the Company. This is achieved
by the majority of employees being eligible for Equity-Based LTI as a % of
base remuneration.
Pay VehicleCash-based payment with target
incentive based on pre-determined,
% of base salary.
Award of restricted share units with a target % of base salary.
Performance
Criteria
Rewards the achievement of company performance based on a company scorecard of metrics (measuring “what”
outcomes are achieved) including longer-term strategic deliverables. Includes individual performance objectives
and measures (measuring “what” outcomes are achieved and “how” those outcomes are achieved).
Vesting
Criteria
Annual cash payment following
achievement of company and
individual performance criteria.
Three-year vesting period following the end of the respective financial year
with a vesting schedule of one third each year.
No incentive to be paid/awarded if minimum gross revenue and cash reserve performance gateways are not met.
Vesting is subject to meeting threshold performance hurdles based on the financial and strategic metrics detailed
in the table on page 83.
Board
Discretion
The Board retains broad discretion in relation to the STI & LTI schemes.
TerminationUnless Board discretion is
exercised, if a participant is no
longer employed at the time of
payment, they will not be eligible
under the Scheme.
Unless Board discretion is exercised, if a participant ceases employment
with the Company, any unvested awards will be forfeited.
Malus/
Clawback
Payment of any incentive under
the Scheme is at the absolute
discretion of the Board.
The RSU Scheme Rules permit the Board to exercise discretion to clawback
an award or require repayment of the net proceeds of shares sold, in the
event of fraud, dishonesty or breach of other obligations (including a
material misstatement of financial information). This provision is designed
to ensure no unfair benefit is obtained by any participant.
Capital EventThe Board has discretion to adjust awards to account for capital changes to
obtain an equitable outcome for participants. The Board also retains broad
discretion to determine the treatment of unvested awards in the event of a
change of control.
Economic
Risk
No director or employee is permitted to enter into financial products or
arrangements that operate to limit the economic risk of their vested or
unvested entitlements.
80
CEO Remuneration
CEO Performance Pay
*
Fixed remuneration STI (Cash-based award) LTI (Equity-based award)
This section describes the remuneration received by the CEO, Darrin Grafton, who is also an Executive Director of
Serko. Darrin Grafton receives remuneration and other benefits in his capacity as Chief Executive Officer in line with
the Remuneration Policy outlined above and, accordingly, does not receive directors’ fees. No termination payments
are payable to the CEO in the event of serious misconduct. As noted above, the RSU Scheme Rules enable clawback of
awards/net proceeds of sale of shares in the event of misconduct.
The table below shows the CEO’s target and maximum total remuneration for FY23:
* The CEO has a STI gross annual target of 50% of the base salary following each financial year, up to a maximum of 75% of base salary if
outperformance occurs in both company performance and individual measures; and a LTI target value of 100% of the base salary remuneration.
Maximum value is 150% of target value if outperformance occurs in both company performance and individual measures.
1.41.21.00.80.60.40.20
($million)
target total rem
Max total rem
Fixed rem
32%23%45%
41%20%39%
100%
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The tables below (and accompanying notes) set out the total remuneration and value of other benefits received by the
Serko CEO during the financial period ended 31 March 2023:
1 Base salary includes employer contributions towards KiwiSaver at 3%. CEO Darrin Grafton also received a carpark and life insurance, which do not
have individually allocated values.
2 Taxable benefits include health insurance.
3 The short-term incentive stated was earned in FY22 and paid in FY23.
4 Equity-based incentives previously granted to the CEO that vested during the financial period. Refer to table below for more detail. Represents the
NZX closing price of SKO (Serko) ordinary shares on the day of vesting, multiplied by the number of securities vested. Vesting was settled via the
issue of new shares.
1 Base salary includes employer contributions towards KiwiSaver at 3%. CEO Darrin Grafton also received a carpark and life insurance, which do not
have individually allocated values.
2 Taxable benefits include health insurance.
3 The short-term incentive stated was earned in FY23 and will be paid in FY24.
4 An equity-based incentive is intended to be granted in May 2023 for non-cash consideration. The restricted share units will vest at one third a year
over three years after the allocation date. The value stated is the gross amount earned. The number of securities to be issued will be calculated based
on the 20-day volume weighted average price of Serko (SKO) shares on NZX at the time of grant.
Base
salary
1
Taxable
benefits
2
Subtotal
Pay for performance
Total
remuneration
STI
3
EISS / LTI
4
Subtotal
$432,482 $11,186 $443,668 $100,375 $177,459 in the form
of 43,817 restricted
share units
$277,834 $721,502
Base
salary
1
Taxable
benefits
2
Subtotal
Pay for performance
Total
remuneration
STI
3
EISS / LTI
4
Subtotal
$432,482 $11,186 $443,668 $193,200 $336,000 in the form
of restricted share
units to be issued
$529,200 $972,868
(92% of STI target)(80% of LTI target)
The following equity-based incentives previously granted to the CEO vested during the financial period ended 31 March 2023:
The tables below (and accompanying notes) set out the total remuneration and value of other benefits earned by the
Serko CEO relating to the financial period ended 31 March 2023. Some of this remuneration will be paid in FY24:
1 Represents the NZX closing price of SKO (Serko) ordinary shares on the day of vesting, multiplied by the number of securities vested. Vesting was
settled via the issue of new shares.
2 Note that grants made in FY22 (relating to FY21 performance) and onwards, had the new vesting schedule of one third per year over 3 years.
3 The FY21 grant relating to FY20 performance had a 3-year vesting period, which is due to vest in May 2023 and therefore no restricted share units
vested during the year. 5,082 restricted share units had a shorter vesting period (and vested in December 2020). These restricted share units were
granted as part of a Covid-related salary sacrifice scheme implemented in early 2020.
Form of
equity
Grant
Year
Grant
Amount
Vested
in FY23
Value on
vesting
1
Remaining
unvested
Final
vesting year
Restricted share unitsFinancial Year 202031,89931,899$129,191—2023
Restricted share unitsFinancial Year 2021
3
50,145——45,0632024
Restricted share unitsFinancial Year 2022
2
35,75211,918$48,26823,8342024
Restricted share unitsFinancial Year 2023
2
65,320——65,3202025
Total43,817$177,459
82
FY23 CEO Performance Metrics and Outcomes
The CEO’s performance-based remuneration components are assessed annually based on individual performance
and company performance against a performance scorecard, comprising financial and strategic measures. Individual
key performance metrics were set by the Board at the beginning of the year for the CEO. These related to qualitative
supporting initiatives required to successfully execute against Serko’s strategic objectives.
The company measures applied for FY23 were as follows:
* Previously Marketplace and Content
1 Each measure has a defined threshold, target and stretch/maximum target. Achievement below the threshold results in 0% outcome for
that component. No STI or LTI is payable if minimum annual gross revenue and cash reserve targets are not met. These gateway targets
were met for FY23.
Serko ScorecardFinancial MetricsKey Strategic Objectives
Strategic goal
FY23-FY25
Revenue
Customer
Success
Platform
Optimisation
*
Culture
FY23 OKR
summary
Establish
significant
market share in
the unmanaged
travel market.
Consistently
grow the market
share in the global
managed travel
market
Deliver an
exceptional
customer
experience
through
experimentation
Optimise Serko
technology
platform
Organisational
alignment &
engagement
Ta r g e t
measurement
1
Gross revenue
increase (based on
audited financial
statements)
Customer
Satisfaction
(CSAT) score
Modernisation of
legacy technology
Employee
engagement
Equity-based LTI
weighting
40% 60%
STI weighting
60% 40%
FY23 resulttarget exceededSlightly below target, threshold achieved
The overall results for FY23 were determined to be:
• 92% for STI company performance against objectives.
• 80% for LTI company performance against objectives.
These calculations are used to determine the Company multiplier applied when assessing incentive performance
outcomes. When assessing the performance outcomes against the pre-agreed objectives and target measures, the
Board gave particular attention to the incentive outcomes in a year where the share price had declined materially.
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reMuneration report
CEO Pay Relative to Performance
Serko’s Total Shareholder Returns (TSR) over the last five years, as at 31 March, are shown below, along with incentive
payments and equity grants awarded against on-target performance.
1 Cash-burn is adjusted for one-off items, such as net funds from capital raise and payments made in FY23 that ordinarily would have been paid in FY22.
1 There were no STI pay-outs awarded for FY20 due to the impacts of Covid-19.
CEO Remuneration (actual as a % of target) over five-year period
Metric2023
($000)
2022
($000)
Change
($000)
Change
%
Total income$48,02518,874$29,151
154%
NPAT-$30,540-$35,959$5,419
-15%
Market capitalisation$287,859$558,832-$270,973
-48%
Underlying average monthly cash-burn
1
$2,718$3,304-$586 -18%
Total
Remuneration
% STI awarded
against on-target
performance
STI Performance
Period
% LTI awarded
against on-target
performance
Span to
LTI Performance
Periods
FY23$972,86892%FY2380%
FY22$722,89850%FY2275%May 2022 to May 2025
FY21$690,56850%FY2173%Aug 2021 to May 2024
FY20
1
$598,8410%FY2056%Sept 2020 to May 2023
FY19$556,73429%FY1936%July 2019 to May 2022
Mar-1 8Mar-19Mar-20Mar-21Mar-22Mar-2 3
-100%
300%
200%
100%
0%
Total shareholder returns
SKO NZX50 MSCI ACWI
84
Employee Remuneration
The table below shows the number of employees and former employees of Serko and its subsidiaries, not being
directors of Serko, who, in their capacity as employees, received remuneration and other benefits during the year
ended 31 March 2023 totalling at least NZ$100,000.
The remuneration of employees paid outside of New Zealand has been converted into New Zealand dollars as at
31 March 2023. No employee appointed as a director of a subsidiary company of Serko receives any remuneration
or other benefits for acting in that capacity.
The table below includes base salaries, short-term incentives, contributions to pension plans and vested or
exercised equity-based payments. The table does not include equity-based incentives that have been granted
and have not yet vested.
1 Specifies total number of employees within the range whose remuneration includes equity-based payments that have vested during the period.
Table excludes the executive directors’ remuneration.
Remuneration range (NZD)Number of employees whose remuneration
includes vested share-based payments
1
Total number of
employees in range
$100,000 - $110,000925
$110,000 - $120,000416
$120,000 - $130,000517
$130,000 - $140,0001428
$140,000 - $150,000715
$150,000 - $160,0001323
$160,000 - $170,0001119
$170,000 - $180,000913
$180,000 - $190,000810
$190,000 - $200,00024
$210,000 - $220,00055
$220,000 - $230,00066
$230,000 - $240,00012
$240,000 - $250,00022
$250,000 - $260,00011
$260,000 - $270,00033
$270,000 - $280,00011
$290,000 - $300,00011
$300,000 - $310,00011
$320,000 - $330,00011
$340,000 - $350,00011
$380,000 - $390,00011
$390,000 - $400,00022
$430,000 - $440,00011
$450,000 - $460,00011
$480,000 - $490,00011
$490,000 - $500,00011
$600,000 - $610,00011
$680,000 - $690,00011
$890,000 - $900,00011
Total number of employees and former employees115204
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reMuneration report
1 Based on comparative ratio positioning to remuneration mid points
for salaries by career level.
2 This figure represents the straight mean for base salaries, converted
to NZD. Analysis includes all permanent employees and represents
full time equivalent salaries.
Pay Equity
We are committed to ensuring we pay our people
fairly and we are continually reviewing our practices
to check we have the right policies and processes
in place to ensure pay equity for our people.
Serko’s Pay and Gender Equity Statement can
be viewed at www.serko.com/careers.
We support the New Zealand Mind The Gap reporting
initiative. When benchmarked to the median market
remuneration (based on career levels), the median
remuneration difference for males and females is
less than 1%
1
when comparing roles of comparable
scope and complexity. As of 31 March 2023, Serko’s
overall global gender pay gap is 12%
2
. This is impacted
by distribution of females and males at different
levels across the organisation. We are committed to
maintaining pay equity across all roles at Serko.
For more information on Serko’s broader diversity and
inclusion initiatives, see our latest ESG Report, located
at www.serko.com/investors.
86
Executive Director Remuneration
The executive directors, Darrin Grafton and Bob Shaw, receive remuneration and other benefits in their respective
executive roles as Chief Executive Officer (CEO) and Chief Strategy Officer (CSO) and, accordingly, do not receive
directors’ fees. As detailed above, the remuneration packages for the CEO, CSO and other Executive Team members
are set by the Board to reflect the scope and complexity of each role, with reference to comparative market data.
Darrin Grafton’s remuneration and other benefits are detailed on page 82.
Remuneration for Chief Strategy Officer
During the period ended 31 March 2023, the CSO’s variable remuneration components were based on Company
and individual performance against the scorecard detailed on page 83.
The tables below (and accompanying notes) set out the total remuneration and value of other benefits received by
Serko’s CSO during the financial period ended 31 March 2023:
The tables below (and accompanying notes) set out the total remuneration and value of other benefits earned by
Bob Shaw relating to the financial period ended 31 March 2023. Some of this remuneration will be paid in FY24:
Base
salary
1
Taxable
benefits
2
Subtotal
Pay for performance
Total
remuneration
STI
3
EISS / LTI
4
Subtotal
$295,013$9,144 $304,157 $72,519 $76,436 in the form
of 18,873 restricted
share units
$148,955 $453,112
Base
salary
1
Taxable
benefits
2
Subtotal
Pay for performance
Total
remuneration
STI
3
EISS
4
Subtotal
$295,013$9,144 $304,157 $122,544 $213,120 in the form
of restricted share
units to be issued
$335,664 $639,821
1 CSO Bob Shaw also received a carpark and life insurance, which do not have individually allocated values.
2 Taxable benefits include health insurance.
3 The short-term incentive stated was earned in FY22 and paid in FY23.
4 Equity-based incentives previously granted to the CSO that vested during the financial period. Represents the NZX closing price of SKO (Serko)
ordinary shares on the day of vesting, multiplied by the number of securities vested. Vesting was settled via the issue of new shares.
1 CSO Bob Shaw also received a carpark and life insurance, which do not have individually allocated values.
2 Taxable benefits include health insurance.
3 The short-term incentive stated was earned in FY23 and will be paid in FY24.
4 An equity-based incentive is intended to be granted in May 2023 for non-cash consideration. The restricted share units will vest at one third a year
over three years after the allocation date. The value stated is the gross amount earned. The number of securities to be issued will be calculated based
on the 20-day volume weighted average price of Serko (SKO) shares on NZX at the time of grant.
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reMuneration report
Non-Executive Director Remuneration
The fees paid to non-executive directors are structured to reflect the global nature and complexity of Serko’s
business, and the time commitment and level of governance required by the Serko Board. In August 2021,
Serko’s shareholders approved a total cap of NZ$600,000 per annum for non-executive directors’ fees for
the purposes of the NZX Listing Rules.
The Board has agreed that there will be no change to the directors’ fees paid in FY24. Accordingly, the following
fixed annual fees will apply to all non-executive directors for the year ending 31 March 2024:
Position Fees per annum (AUD)
Board of Directors Chair 140,000
Non-executive directors 95,000
Audit, Risk & Sustainability Committee Committee Chair 20,000
Committee Member 9,000
People, Remuneration & Culture Committee Committee Chair 20,000
Committee Member 9,000
Periodically, by exception, non-executive directors receive special exertion fees for ad hoc committee meetings
attended (for example, in relation to capital raisings or merger and acquisition (M&A) activity). Where special fees
are paid, they are required to fall within the shareholder-approved fee cap. No special fees were paid during FY23.
Non-executive directors received the following directors’ fees, remuneration and other benefits from the Company
in the year ended 31 March 2023:
* Indicates Chair of the Board/Committee.
1 The figures shown are gross amounts, which have been converted into NZD from AUD and exclude GST (where applicable).
In addition to directors’ fees, Serko meets costs incurred by non-executive directors that are incidental to the
performance of their duties. This includes paying the costs of directors’ travel. As these costs are incurred by Serko
to enable directors to perform their duties, no value is attributable to them as benefits to directors for the purposes
of the above table.
The non-executive directors do not receive any performance-based remuneration to ensure incentives do not
conflict with their obligations to bring independent judgement to matters before the Board. However, it is Serko’s
policy to encourage directors to hold shares in the company to increase alignment with shareholder interests.
Director shareholdings are disclosed in the Corporate Governance & Disclosures section of this Annual Report.
No retirement benefits will be paid to non-executive directors on their retirement unless required under legislation.
Remuneration and value of other benefits received
1
Name of director
Non-executive
directors’ Board fees
Audit, Risk &
Sustainability
Committee fees
People, Remuneration &
Culture Committee fees
Total
remuneration
Claudia Batten$153,880 *$9,892$9,892$173,665
Clyde McConaghy$104,396$9,890$21,978 *$136,264
Jan Dawson$104,729$22,048 *$9,922$136,699
Total$363,005$41,831$41,792$446,628
88
Corporate
Governance
& Disclosures
89
corporate goVernance & diScloSureS
Corporate Governance & Disclosures
For the year ended 31 March 2023
Introduction
The Board and management of Serko Limited (Serko
or the Company) are committed to ensuring that
Serko maintains best practice corporate governance
and adheres to the highest ethical standards.
The Board has considered the applicable versions
of the NZX Listing Rules and a number of corporate
governance recommendations when establishing its
governance framework, including the NZX Corporate
Governance Code dated 1 April 2023 (NZX Code)
and the Fourth Edition of the Australian Securities
Exchange (ASX) Corporate Governance Council
Principles and Recommendations.
The NZX Listing Rules require Serko to formally
report its compliance against the recommendations
contained in the NZX Code. Serko’s implementation of
these recommendations is set out in Serko’s Corporate
Governance Statement, which is included in its 2023
ESG Report and can be found on the investor centre of
the Company’s website. Go to: serko.com/investors.
The Board considers that Serko’s corporate governance
structures, practices and processes have followed all
of the recommendations in the NZX Code during the
financial year ended 31 March 2023 and as at the date
of this Report. For the purposes of Recommendation
3.4, the Board has determined that the whole Board
will carry out the functions of a nomination committee
owing to the small size of the Board.
Serko’s governance charters and policies can also be
found on the investor centre of the Company’s website.
Serko’s corporate governance charters and policies
have been approved by the Board and are regularly
reviewed by the Board and amended (as appropriate) to
reflect developments in corporate governance practices
and/or changes to relevant recommendations.
Stock Exchange Listings
Serko is listed on the New Zealand Stock Exchange
(NZX Main Board) and on the Australian Securities
Exchange (ASX) as an ASX Foreign Exempt Listing.
As an ASX Foreign Exempt Listing, Serko needs to
comply with the NZX Listing Rules but does not need
to comply with the vast majority of the ASX Listing Rule
obligations.
Serko is incorporated in New Zealand.
90
Overview of Serko’s Governance
Structure
The Serko Board has been appointed by
shareholders to protect and enhance the long-term
value of Serko and to act in the best interests of
Serko and its shareholders. The Board is the
ultimate decision-making body of the Company and
is responsible for the corporate governance of the
Company. The role and responsibilities of the Board
are set out in the Board Charter, which can be found
in our Corporate Governance Manual on the investor
centre of our website.
The Board currently comprises an independent non-
executive Chair, two independent non-executive
directors and two executive directors, as detailed
on page 8 of this Annual Report. These directors
held office throughout the financial year ended
31 March 2023.
The Board has established two standing Board
Committees to assist in the execution of the Board’s
responsibilities:
• Audit, Risk and Sustainability Committee (formerly
the Audit and Risk Committee) – The current
members of the Committee are Jan Dawson (Chair),
Clyde McConaghy and Claudia Batten. All members
are independent, non-executive directors. Their
qualifications and experience are set out under Board
of Directors on page 8 of this Annual Report; and
• People, Remuneration and Culture Committee –
The current members of the Committee are Clyde
McConaghy (Chair), Jan Dawson and Claudia
Batten. All members are independent, non-executive
directors. Their qualifications and experience are
set out under Board of Directors on page 8 of this
Annual Report.
The role of the nomination committee is currently, and
was throughout the financial period ending 31 March
2023, carried out by the full Board owing to the small
size of the Board.
During the financial year the Board appointed a
Technology Advisory Committee comprising one
Board director, two independent expert advisers,
the Serko Chief Technology Officer and the Serko
Head of Product. The Committee assists the Board
in its oversight of Serko’s technology strategy and
the use of technology in executing Serko’s overall
business strategy. It also supports the Audit, Risk and
Sustainability Committee in providing oversight of
technology risks. The Technology Advisory Committee
meets on an ad hoc basis and reports to the Board after
each meeting.
91
corporate goVernance & diScloSureS
Diversity
Female20232022
no.%no.%
All directors240%240%
Non-executive directors267%267%
Officers
1
220%220%
Senior employees
2
529%1352%
All workforce12938%12941%
Male20232022
no.%no.%
All directors360%360%
Non-executive directors133%133%
Officers
1
880%880%
Senior employees
2
1271%1248%
All workforce20762%18359%
1. Officers are considered to be the Chief Executive Officer and his direct reports (the Executive Team). Note that Chief Executive Officer,
Darrin Grafton, and Chief of Strategy, Bob Shaw, are included in both the number of directors and officers reported.
2. Direct reports to the Executive Team with managerial responsibilities.
Our Diversity and Inclusion Policy articulates our commitment to achieving diversity in the skills, attributes and
experience of Serko’s Board members, management and staff across a broad range of criteria (including but not
limited to, culture, gender and age). The Board as a whole is responsible for overseeing and implementing the
Diversity and Inclusion Policy but has delegated to the People, Remuneration and Culture Committee the responsibility
to develop, recommend and assess measurable objectives to the Board that are designed to adhere to Serko’s
Diversity and Inclusion Policy.
The Board’s evaluation of Serko’s performance and progress to date against measurable objectives is set out in the
latest ESG Report, which can be found on the investor centre of the Company’s website.
The respective numbers and proportions of men and women at various levels within the Serko workforce
as at 31 March 2022 and 31 March 2023 are set out in the table below:
92
Board and Committee Attendance
Director attendanceBoard
Audit, Risk &
Sustainability Committee
People, Remuneration
& Culture Committee
Claudia Batten12/124/44/4
Jan Dawson12/124/44/4
Darrin Grafton12/12**
Clyde McConaghy12/124/44/4
Bob Shaw12/12**
Key: Attended meeting / eligible to attend meeting
*Indicates the director is not a member of the Committee (although they may have been in attendance for these meetings).
The table below shows the Board and Committee meeting attendance during the year ended 31 March 2023:
Directors also met for several additional special meetings and to undertake strategic planning for the business
outside of scheduled Board and Committee meetings.
Director Independence
The Board currently comprises five directors – being the two co-founders and executive directors, Darrin Grafton and
Bob Shaw; and three non-executive directors – Claudia Batten, Jan Dawson and Clyde McConaghy.
The Board has determined, based on information provided by directors regarding their interests, which has been
evaluated against the criteria in the Board Charter, that as at 31 March 2023 and the date of this Annual Report,
Claudia Batten, Jan Dawson and Clyde McConaghy are independent directors. In doing so, the Board has considered
the relevance of Claudia’s and Clyde’s tenure on their ability to bring an independent view to decisions in relation to
Serko. The Board considers that both directors continue to bring independence of judgement when carrying out their
director duties. Of relevance to this decision is the fact that Claudia took over as Chair of the Board in 2020 and Clyde
has led different Board Committees during his time on the Board. More information about the Board’s plan to refresh
the Board is outlined in Serko’s latest ESG Report.
The Board has also determined that Darrin Grafton and Bob Shaw are not independent directors owing to also being
executives and major shareholders in Serko.
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corporate goVernance & diScloSureS
Director Interest Disclosures
DirectorEntityRelationship
Claudia BattenBroadli Inc
Serko Inc
1
Westpac New Zealand Limited
Vista Group Limited
Air New Zealand Limited
Wonderful Investments Limited
Ceased to be Director
Director
Ceased to be Board Adviser
Director
Director
Appointed Director
Darrin GraftonFinancial Equities Limited
Grafton-Howe No.2 Trust
InterplX Inc
1
Serko Australia Pty Limited
1
Serko Inc
1
Serko India Private Limited
1
Serko Investments Limited
1
Travelog World for Windows Pty. Limited
Director / Shareholder
Trustee / Beneficiary
Director
Director
Director
Director
Director
Director
Clyde McConaghyOptima Boards
Neuroscience Research Australia
Mindgardens Neuroscience Network
Director
Director
Ceased to be Director
Bob ShawFinancial Equities Limited
Ripon Trust
Serko Australia Pty Limited
1
Serko India Private Limited
1
Serko Investments Limited
1
Travelog World for Windows Pty. Limited
Director / Shareholder
Trustee / Beneficiary
Director
Director
Director
Director
Jan DawsonPorts of Auckland Limited
Meridian LTI Trustee Limited
Meridian Energy Limited
Jan Dawson Limited
AIG Insurance New Zealand Limited
Director/Chair
Ceased to be Director
Ceased to be Director
Director
Ceased to be Director
1. Serko subsidiary as detailed on page 100.
There were no disclosures of interests pursuant to section 140(1) of the Companies Act 1993 recorded in Serko’s
Interests Register during the financial year ended 31 March 2023.
Directors have given general notices disclosing interests pursuant to section 140(2) of the Companies Act 1993. All
of those interests, and any changes to interests notified and recorded in Serko’s Interests Register during the financial
year ended 31 March 2023 and subsequently, are set out below:
94
Director Interest Disclosures continued...
In accordance with section 148(2) of the Companies Act 1993, directors disclosed the following acquisitions or
disposals of relevant interests in Serko ordinary shares during the financial year ended 31 March 2023:
NameNature of relevant interest
Number of
securities
acquired/
(disposed)
Consideration
paid/
received
4
Date of
acquisition/
disposal
Claudia
Batten
On market automated sale by the custodian under the Non-Executive
Director Fixed Trading Plan to settle administration fees arising
in relation to the administration and management of the Plan
(following completion of the term of the Plan)
1
(128.44)$479.10 5-Jul-22
On market automated sale by the custodian under the Non-Executive
Director Fixed Trading Plan to settle administration fees arising
in relation to the administration and management of the Plan
(following completion of the term of the Plan)
1
(129.63)$379.82 1-Nov-22
On market automated sale by the custodian under the Non-Executive
Director Fixed Trading Plan to settle administration fees arising
in relation to the administration and management of the Plan
(following completion of the term of the Plan)
1
(113.18)$267.09 2-Mar-23
Darrin
Grafton
Registered holder and beneficial owner of ordinary shares issued
upon vesting of restricted shares units pursuant to the Serko
Employee Long Term Incentive Scheme
43,817
2
Nil / Services20-May-22
Indirect interest in ordinary shares issued upon vesting of
restricted share units pursuant to the Serko Employee Long Term
Incentive Scheme, by virtue of a personal relationship with the
registered holder
1,089
2,3
Nil / Services20-May-22
Legal holder of unlisted restricted share units granted under the
Serko Employee Long Term Incentive Scheme
65,320
2
Nil / Services30-May-22
Indirect interest in unlisted restricted share units granted under
Serko Employee Long Term Incentive Scheme
1,430
2,3
Nil / Services30-May-22
Registered holder and beneficial owner of shares acquired on-market17,000
4
$39,772.20 21-Dec-22
Bob ShawRegistered holder and beneficial owner of ordinary shares issued
upon vesting of restricted shares units pursuant to the Serko
Employee Long Term Incentive Scheme.
18,873
2
Nil / Services20-May-22
Legal holder of unlisted restricted share units granted under the
Serko Employee Long Term Incentive Scheme
47,192
2
Nil / Services30-May-22
Registered holder and beneficial owner of shares acquired on-market21,250
4
$49,717.0121-Dec-22
1. As described in the Company’s FY22 ESG Report (available in the investor centre of Serko’s website), the Non-executive Director Fixed Trading Plan
is now grand-fathered. Shares held under this Plan may not be disposed of while the holder remains a director of Serko.
2. These shares are subject to a deed restricting exercise of any voting rights attached to the shares/any shares issued upon vesting.
3. By virtue of Darrin Grafton’s personal relationship, he is implied to have the power to exercise, or to control the exercise of,
any right to vote attached to these shares by virtue of a personal relationship with the beneficial holder of these shares (Donna Bailey).
These shares are subject to a deed restricting exercise of voting rights attached to the shares.
4. The consideration for on-market trades is stated as the market price paid, excluding fees and taxes.
95
corporate goVernance & diScloSureS
In accordance with the NZX Listing Rules, as at 31 March 2023, directors had a relevant interest (as defined in the
Financial Markets Conduct Act 2013) in Serko shares as follows:
NameRelevant interestPercentage
Darrin Grafton
1
12,300,65110.21%
Bob Shaw
2
9,232,883 7.67%
Clyde McConaghy
3
182,9090.15%
Claudia Batten
4
125,505.900.10%
Jan Dawson00.00%
1. The relevant interest includes: 10,884,629 ordinary shares held via a trust in which the director is a trustee and beneficiary; 186,123 ordinary shares
held directly; and an indirect interest in 1,229,899 ordinary shares by virtue of a personal relationship with the beneficial holder of these shares.
Darrin Grafton is also the registered holder and beneficial owner of 134,217 unlisted restricted share units allocated pursuant to the Serko Employee
Incentive Share Scheme and has an indirect interest in 3,044 unlisted restricted share units by virtue of a personal relationship with the beneficial
owner.
2. The relevant interest includes: 9,151,250 shares held via a trust in which the director is a trustee and beneficiary and 81,633 ordinary shares held
directly. Bob Shaw is also the registered holder and beneficial owner of 86,857 unlisted restricted share units allocated pursuant to the Serko
Employee Incentive Share Scheme.
3. 181,818 ordinary shares are held via a trust in which the director is a trustee and beneficiary.
4. 42,051.90 ordinary shares are held in custody pursuant to the now grand-fathered, Serko Non-executive Director Fixed Trading Plan.
For the purposes of section 161 of the Companies Act 1993, the following entries were made in the Interests Register
in relation to the payment of remuneration and other benefits to directors:
Date of disclosureDirectorParticulars of Board authorisation
27-May-22Bob Shaw
Darrin Grafton
The payment of remuneration and the provision of other benefits by the
Company to the executive directors on the terms detailed in the Board
minutes dated 17 May 2022 and on the grounds set out in the corresponding
directors’ certificate.
For the purposes of section 162 of the Companies Act 1993, an entry was made in the Interests Register in relation to
insurance effected for directors and officers of Serko in relation to any act or omission in their capacity as directors.
There were no new entries made in the subsidiary company Interests Registers during the financial reporting period.
Director Interest Disclosures continued...
96
As at 31 March 2023 there were 120,443,023 Serko ordinary shares on issue, each conferring on the registered holder
the right to vote on any resolution at a meeting of shareholders. These shares were held as follows:
Size of shareholdingNumber of holders%Number of ordinary shares%
1 - 1,0001,54348.04671,0010.56
1,001 - 5,0001,08833.872,627,2472.18
5,001 - 10,0002748.532,074,7351.72
10,001 - 50,0002186.794,547,3853.78
50,001 - 100,000351.092,529,4582.10
100,001 and over541.68107,993,19789.66
Total
1
100100
1. Includes 1,263,865 ordinary shares with restrictive conditions held by Serko Trustee Limited (all unallocated) pursuant to the now grand-fathered
Serko Restricted Share Plan (detailed in previous Annual Reports available on the investor centre of Serko’s website). The last tranche of allocated
restricted shares vested during FY22. Restricted shares, when allocated, have voting rights attached, which are exercised on behalf of a beneficial
holder by the Trustee at the direction of the beneficial holder.
As at 31 March 2023, the following securities were on issue:
• 1,263,865 ordinary shares with restrictive conditions held by Serko Trustee Limited (all unallocated) pursuant to the
now grand-fathered Serko Restricted Share Plan. The last tranche of allocated restricted shares vested during FY22;
• 21 participants holding a total of 94,974 options pursuant to the Serko (US) Share Incentive Plan; and
• 182 participants holding a total of 2,378,995 restricted share units pursuant to the Serko Employee Long Term
Incentive Scheme (ANZ) and Serko Employee Share Incentive Plan (US).
Further information on these incentive plans is contained in the Notes to the financial statements and the
Remuneration Report included in this Annual Report.
Shareholding Information
97
corporate goVernance & diScloSureS
Set out below are details of the 20 largest shareholders of Serko as at 31 March 2023:
Shareholder
1
Number of ordinary shares held %
1TEA Custodians Limited16,861,52014.0
2Darrin Grafton & Geoffrey Robertson Ashley Hosking10,884,6299.04
3Robert James Shaw & Michael John Moore9,151,2507.6
4Custodial Services Limited6,263,8755.2
5BNP Paribas Nominees NZ Limited Bpss406,244,5455.18
6Accident Compensation Corporation5,500,0754.57
7Coronado Pte Limited5,406,4314.49
8Hobson Wealth Custodian Limited4,187,5523.48
9HSBC Nominees (New Zealand) Limited3,969,0853.3
10Citibank Nominees (NZ) Ltd3,706,1713.08
11Premier Nominees Limited3,564,7092.96
12New Zealand Superannuation Fund Nominees Limited2,707,1262.25
13New Zealand Depository Nominee2,215,5201.84
14JPMORGAN Chase Bank1,936,5311.61
15National Nominees New Zealand Limited1,883,1501.56
16PT Booster Investments Nominees Limited1,741,2011.45
17NZ Permanent Trustees Ltd Grp Invstmnt Fund No 201,393,9701.16
18FNZ Custodians Limited1,298,3831.08
19Serko Trustee Limited1,263,8651.05
20Donna Bailey1,217,5941.01
1. The shareholding of New Zealand Central Securities Depository Limited (custodian for members trading through NZClear) has been reallocated to the
applicable members.
Shareholding Information continued...
98
Shareholding Information continued...
According to Serko records and disclosures made to Serko under the Financial Markets Conduct Act 2013,
the following persons were substantial product holders as at 31 March 2023:
Substantial product holder
Number of ordinary shares in which
relevant interest is held% of class held at balance date
6
Harbour Asset Management Limited
1
13,558,824
4
11.257%
Darrin Grafton 12,300,651
5
10.213%
Geoffrey Hosking
2
10,884,629
5
9.037%
Fisher Funds Management Limited 10,636,309
4
8.831%
Robert (Bob) Shaw9,232,883
5
7.666%
Michael Moore
3
9,151,250
5
7.598%
Jarden Securities Limited
1
982,231
4
0.816%
1. Harbour Asset Management Limited and Jarden Securities Limited file joint substantial product holder notices.
2. Geoffrey Hosking is a trustee of the Grafton-Howe No. 2 Family Trust, of which Darrin Grafton is a trustee and a beneficiary.
3. Michael Moore is a trustee of the Ripon Trust, of which Robert Shaw is a trustee and a beneficiary.
4. Based on last substantial product holder notice filed prior to 31 March 2023.
5. Based on Serko’s records and on the last substantial product holder notice filed prior to 31 March 2023.
6. Based on issued share capital of 120,443,023 as at 31 March 2023.
99
corporate goVernance & diScloSureS
Subsidiary Company Directors
SubsidiaryDirectors
Foshan Sige Information Technology Limited (China)
1
Rob Wright (Legal Representative)
Mark Xu (Supervisor)
InterplX Inc. (US)
Darrin Grafton
Tony D’Astolfo
Serko Australia Pty Limited (Australia)
Darrin Grafton
Bob Shaw
Murray Warner
Serko Inc (US)
Darrin Grafton
Claudia Batten
Serko India Private Limited (India)
Darrin Grafton
Bob Shaw
Yogita Chadha
Serko Investments Limited (New Zealand)
Darrin Grafton
Bob Shaw
Serko Trustee Limited (New Zealand)
2
Sarah Miller
Rachael Satherley
1. Gerard Nielson retired during the year and Mr Wright was appointed in his place.
2. Sarah Miller retired and Shane Sampson was appointed in her place on 1 April 2023.
With the below exception, directors of Serko’s subsidiaries do not receive any remuneration or other benefits in
respect of their appointments. The remuneration and other benefits of any such directors who are employees of
the group totalling $100,000 or more during the year ended 31 March 2023 are included in the relevant bandings for
remuneration disclosed on page 85 of this Annual Report.
Serko has agreed to pay Yogita Chadha NZ$18,000 per year in relation to acting as a director of Serko India Private
Limited. During the financial year ended 31 March 2023, she earned, and was paid, NZ$18,000 during the year.
The following persons held office as directors of subsidiary companies as at 31 March 2023:
100
Regulatory Matters
No NZX waivers were granted or relied on by the Company during the financial year.
Donations
Refer to the Notes to the Financial Statements for any donations made via the Serko Group during FY23.
Serko does not make any political donations.
Credit Rating
Serko does not presently have an external credit rating status.
Distributions / Dividends
There were no dividends or distributions paid to shareholders during the financial period. Dividends and other
distributions with respect to the shares are only made at the discretion of the Serko Board. Serko is a growth
technology company and is not intending to pay a dividend for FY24.
101
corporate goVernance & diScloSureS
Glossary
ANZ: Australia and New Zealand
ARPB: Average Revenue Per Booking
Asia Pacific: Vietnam, Thailand, Taiwan, Sri Lanka,
South Korea, South Africa, Singapore, Philippines,
Pakistan, New Zealand, Malaysia, Japan, Indonesia,
India, Hong Kong, China, Bangladesh and Australia
for the purposes of this Annual Report
ASX: ASX Limited, also known as the Australian
Securities Exchange
ATMR: ATMR (Annualised Transactional Monthly
Revenue) is a non-GAAP measure. It is based on the
monthly transactions and average revenue per booking
(for its Travel platform revenue) and monthly user
charges (for its Expense platform revenue) annualised
AUD or A$: Australian dollars
Australasia: New Zealand and Australia for the
purposes of this Annual Report
Booking.com for Business: A global online travel
booking offering targeting small to medium sized
companies with Booking.com for Business branding
powered by Zeno
BBZ: An abbreviation of Booking.com for Business
(see above)
Board or Board of Directors: The board of directors
of Serko
Cloud or cloud-based: Cloud computing is when the
software and associated data is hosted outside the
customer’s premises and delivered over a network
or the Internet as a service, which allows immediate
access to the software
Company or Serko: Serko Limited, a New Zealand
incorporated company
EBITDAF (refer page 19): EBITDAF is a non-GAAP
measure representing Earnings Before the deduction
of costs relating to Interest, Taxation, Depreciation,
Amortisation, Impairment, Foreign Exchange gains/
losses and Fair value remeasurements
ESG: Environmental Social Governance
FTE: Full-time equivalent
FX: Foreign exchange
FY: Financial year ended, or ending, on 31 March
(unless otherwise stated)
GST: Goods and Services Tax
IFRS: International Financial Reporting Standards
Independent Directors: Claudia Batten,
Clyde McConaghy and Jan Dawson
IPO: Initial Public Offering
Listing: The date Serko shares started trading
on the NZX Main Board, 24 June 2014
NDC or New Distribution Capability: A data exchange
format for airlines to create and distribute relevant
offers to the customer regardless of the distribution
channel
NORAM: North America
NZ: New Zealand
NZD or NZ$: New Zealand dollars
NZ GAAP or GAAP: New Zealand Generally Accepted
Accounting Practice
NZ IFRS or IFRS: New Zealand equivalents to
International Financial Reporting Standards
NZX: NZX Limited, also known as the New Zealand
Stock Exchange
102
NZX Listing Rules or Listing Rules: The Listing Rules
applying to the NZX Main Board as amended from
time to time
NZX Main Board: The New Zealand main board equity
security market operated by NZX
R&D: Research and Development expenditure
SaaS: Software-as-a-service
Serko Expense Management: Serko’s online expense
management solution that enables the capture and
processing of corporate credit cards and out-of-pocket
claims
Serko Mobile: Serko’s mobile app for iPhones and
Android devices that gives users access to information
and travel booking functionality on their mobile devices
Serko Online: Serko’s legacy cloud-based online travel
booking solution for large organisations
SME: Small and medium enterprise
TMC, Travel Agency or Travel Management Company:
A travel management company that provides
specialised travel-related services to corporate
customers
USD or US$: United States dollars
Zeno: Serko’s premium cloud-based online travel
booking platform
Zeno Expense: Serko’s Expense management solution
$: All figures are in New Zealand dollars, unless
otherwise stated
103
gloSSary
Company Directory
Serko’s ESG Report, which includes its Corporate Governance Statement,
can be found at www.serko.com/investors.
Serko is a company incorporated with limited liability under
the New Zealand Companies Act 1993
New Zealand Companies Office registration number 1927488
Australian Registered Body Number (ARBN) 611 613 980
For investor relations queries contact: investor.relations@serko.com
Registered office
New Zealand
Saatchi Building
Level 1, 125 The Strand
Parnell, 1010
+64 9 309 4754
Australia
Boardroom Pty Limited
Level 12, 225 George Street
Sydney 2000
NSW, Australia
Principal Administration Office
New Zealand
Saatchi Building
Level 1, 125 The Strand
Parnell, 1010
+64 9 309 4754
Australia
Level 8, 75 Elizabeth Street
Sydney 2000
NSW, Australia
+61 2 9435 0380
Share Registrar
New Zealand
Link Market Services Limited
Level 30, PwC Tower
15 Customs Street West
Auckland 1010, New Zealand
+64 9 375 5998
serko@linkmarketservices.co.nz
Australia
Link Market Services Limited
Level 12, 680 George Street
Sydney 2000
NSW, Australia
+61 1300 554 474
DirectorsAuditor
Claudia Batten (Chair)
Jan Dawson
Darrin Grafton
Robert (Clyde) McConaghy
Robert (Bob) Shaw
Deloitte Limited
Deloitte Centre
80 Queen Street
Auckland 1040, New Zealand
+64 9 303 0700
104
coMpany directory
31 Mar 2024
Financial-Year End
Nov 2023
Half-year Results Announced
30 Sep 2023
Half-Year End
28 Jun 2023
Annual Shareholders’ Meeting
Key Dates
annual report 2023 · Serko limited
serko.com
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