Surf board and umbrella rental shop owner Zaenal told Denpasar District Court on Wednesday that he was on his motorbike when he saw British DJ David Taylor at around 1.45am on August 17 on the road running near Kuta Beach.
Taylor, he said, was holding a flashlight and was "covered with blood".
Zaenal, who is only known by one name, told the court he thought the 35-year-old was drunk and had been a fight so didn't stop. 
Some time that same night, motorbike taxi driver Gede Suartama said a woman stopped him and asked that he take her to a police station because she had lost her purse and driver's license.
British national David Taylor talks to his lawyers inside a holding cell before a trial at the Denpasar District Court in Bali, Indonesia, 30 November 2016. Source: EPA
He refused as there was a blood stain on her shirt, he said.
The court also heard from the owner of Kubu Kauh Hotel in Kuta, where Connor and Taylor were staying.
Putu Nita Agustini said Taylor had been there since August 9 for 100,000 rupiah a night (around A$10). However, after the 12th he bargained the price down to around 80,000 rupiah a night (around A$8).
She said the pair checked out at around 7.30pm on August 17, with Taylor telling the hotel he had to leave because his "parent-in-law" had died.
Police and staff later found bloodstains on the towel, bedsheets, floors and stairway to the room, the court heard.
Taylor and Connor face charges of murder, fatal assault in company and assault causing death, with prosecutors alleging they attacked Wayan Sudarsa on Kuta Beach on the night of August 16 and then left his lifeless body in the sand.
Australian Sara Connor listens to her interpreter during a trial at the Denpasar District Court in Bali, Indonesia, 24 November 2016. Source: EPA
The court has previously heard Taylor confronted Mr Sudarsa on the beach and accused him of stealing Connor's purse.
Taylor's matter will return next week while Connor is expected to face court for a further hearing on Thursday.
