SYNERTEC
SYNERTEC CORPORATION LIMITED
ARBN 161 803 032
[ASX:SOP]
Annual Report
FOR THE FINANCIAL YEAR ENDED
30:06:2018
ContentN
T
ENTS
Statement from the Chair
Managing Director’s Report
Results at a Glance
Synertec Board Members
Financial Report for the year ended 30 June, 2018
Directors’ Report
Corporate Governance Statement
Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
04
07
09
10
13
16
28
29
60
61
65
Synertec Corporation Limited Annual Report 2018
3
Statement from the Chair
I have great pleasure that I talk to you as Chair of Synertec as it enters a
new and exciting growth phase.
On behalf of shareholders, I would like to begin by once again
acknowledging the stewardship that our former Chair Mr. Poh Kiat
provided during his tenure at SML; and has continued to provide as a
Director on the Synertec Board. As noted in my statement last year, Mr.
Poh’s direction was exceptional particularly throughout the acquisition of
Synertec Pty Ltd, which culminated with the company successfully relisting
on the Australian Securities Exchange (ASX) on 8 August 2017.
Upon relisting on the ASX, one of the first tasks facing the new Board was to deal with mining assets
and company structures that were no longer consistent with our new strategic direction as a provider of
engineering solutions to complex, high-risk and regulated industries. Directors Poh and Freddie Heng
were invaluable in ensuring this process was smooth and did not distract the operations of the Synertec
business.
I am pleased to confirm that the sale of the mining assets for $3.6m equated to a return of capital on
15 January 2018 of 4.4 cents per share for existing shareholders of SML prior to the acquisition, via a
Redemption Note scheme. I am also happy to report that the Group entity structure has been
streamlined with the winding up of several mining-related subsidiaries, and is now optimised for growth,
both domestically and internationally, while maintaining a secure, flexible and tax-effective approach.
While the success of relisting on the ASX was transformative for Synertec, it has not been without its
challenges. Nevertheless, the company has, under the circumstances, delivered a reasonable result.
Synertec reported a loss after tax from continuing operations of $5.1m, however as previously noted in
the half-year financial report, the loss was primarily driven by the total accounting cost of $4.7m (referred
to as Listing expense) of the reverse acquisition of Synertec Pty Ltd and re-listing on the ASX. The result
after tax from operations before the Listing expense was a small loss of $0.3m (2017: profit of $0.9m)
which was dampened by slower-than-expected project awards and commencements. With the
implementation of the transaction behind us, the business is poised to deliver on these project
commitments and expand our impressive specialist engineering capability and products into new
markets and customers.
In terms of corporate governance, I am pleased to note that the Board dynamic has developed strongly
over the past year. Working cohesively with the Executive team, the Board has supported management,
guided strategy and ensured robust leadership for the company as it embarks on its growth
development chapter.
For this new phase, as a provider of engineering solutions to complex, high-risk and regulated industries,
the priorities of the business are: Shareholder value; Industry focus; High performing teams; and
Innovation.
Synertec Pty Ltd Annual Report 2018
4
The commitment to our clients of our Managing Director, Mr. Michael Carroll, and the whole team at
Synertec, and their dedication to grow and improve all facets of the business has been outstanding.
From strategic expansion into new key industry sectors, such as infrastructure, to the further
development of capability by continuing to invest in the team and product innovation; these are all
testament to the values of the Synertec business.
This effort has delivered a strong work-in-hand position and pipeline of opportunities with existing and
new customers in growing markets. Synertec is now poised to capitalise on increasing client activity by
providing innovative products and solutions in automation, controls, instrumentation, process engineering
and construction in order to solve complex, high-risk issues for our clients, who typically operate in highly
regulated environments.
I am delighted to report that through this period of significant change, the entire team has remained
focussed on serving our clients, and in doing so, has provided significant momentum for the business as
it embarks on FY19 and beyond. I take this opportunity to thank everyone for their work and
commitment and look forward to another exciting and successful year for Synertec.
On behalf of the Board, I would also like to thank our clients, suppliers and shareholders for their
continued support during FY18 and into the future.
BOARD CHAIR
Ms. Leeanne Bond
4
Synertec Corporation Limited Annual Report 2018
5
Top: Gorgon LNG plant
Bottom: Wheatstone LNG plant
Images: Chevron
Synertec Corporation Limited Annual Report 2018
6
Managing Director’s Report
I am excited to be sharing the company’s FY18 Annual Report, as it is
the first year of operations since successfully completing the acquisition
of Synertec Pty Ltd and relisting on the Australian Securities Exchange in
August 2017.
Twenty-two years ago, as a founding principal of the Synertec business,
I developed a vision for the company and led it through many years of early
ground-work, a growth and consolidation period, ultimately driving through
to the most recent acquisition and listing process.
I am pleased to say that the company delivered a smooth transition to becoming a publicly ASX-listed
company and I am thankful for the guidance of an experienced and cohesive Board. I believe this
acquisition provides a powerful foundation to leverage Synertec’s unique competitive advantages for
considerable expansion possibilities.
The business has developed a growth strategy which involves targeting industry segments both in
Australia and internationally. The strategy proposes the segments have as many of the following
characteristics as possible: a requirement for complex engineering solutions; large companies with
complex manufacturing or production facilities; a complex regulatory environment; significant revenue
opportunities in Australia, and that the Australian market experience is applicable internationally.
An example of the strategy ‘at work’ is Synertec’s demonstrated ability to solve unique engineering
challenges for various LNG facilities in Australia. Synertec is now exporting those products and solutions
to international ‘mega’ projects such as Shell’s North Caspian Oil Company in Kazakhstan.
I am excited to report that within our first year of engaging internationally approximately 10% of the
Group’s revenue has been derived because of our expansion strategy. We have proven that we offer a
compelling value proposition against international competition and we will continue to pursue
international opportunities that we deem play to our strengths.
Now to the operations wrap-up and key financial results for FY18. As previously mentioned, this year
has represented a period of change and progress for the Group. In the first half, along with the
completion of the acquisition and relisting of the company on the ASX, there was the commissioning of
key projects which contributed to the development of unique products and solutions, particularly in the
oil and gas sector.
In the second half of the year, the company was awarded and commenced several major projects in the
pharmaceutical and infrastructure sectors which contributed to substantial growth in revenue (up 44% on
the first half) and substantial work-in-hand providing strong forward momentum into FY19 and beyond.
This provides a solid platform for growth and economies of scale, while the pipeline of opportunities
continues to grow. The Group has carefully controlled overheads, with the operating cost-base of the
business remaining stable during the past two years.
We have continued to invest in our internal systems for execution of work-in-hand and the growing
pipeline of opportunities. We are confident that our investment provides the necessary framework and
support to our engineering and delivery teams. We are constantly looking for efficiencies and evaluating
the latest trends in project management and delivery to ensure the Group’s efficiency through the
anticipated growth that is ahead of us.
Synertec Corporation Limited Annual Report 2018
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Managing Director’s Report - Continued
As Leeanne also stated in her report, while FY18 did not deliver on expectations in terms of revenue
and earnings, the Board and management were pleased and excited by the projects awarded to the
business. Operations continued to diversify as planned and place the business in a position to expand
over the next few years. This was based on improving market conditions and increasing enquiry for its
products and solutions, particularly EPC opportunities in the pharmaceutical, biotechnology, oil and gas
and infrastructure sectors both locally and internationally.
It is this strategic transformation that the Board and management believe will deliver sustainability and
improve quality in earnings as the business commences its next phase of development. While there
were changes to Synertec’s capital structure in 2018, there remains a few basic principles the company
continues to follow: to preserve balance sheet strength; continue sustainable, profitable and strategic
delivery; invest in people and capability; and focus on costs at every level in the business.
The revenue of the Group for the year ended 30 June 2018 was $11.4m (30 June 2017: $14.7m). The
decline in revenues for the year was mainly due to customers delaying project awards and
commencements for various reasons. This seems to have been a consistent theme within industry for
this period. It is worth noting that revenue grew by 44% from the first half to the second half of the year,
which provides some indication of improved market conditions and reinforces our optimism for the
medium term.
The company delivered an operating net loss after tax (before listing expense) of $0.3m (30 June 2017:
$0.9m profit). This result includes the cost of forming a new Board and various annual listing compliance
costs. These expenses amounted to $0.6m in FY18 and are not expected to exceed this level in the
foreseeable future.
The net loss after tax of the company, from its continuing operations for the period, was $5.1m (30 June
2017: net profit $0.9m). This result includes significant costs associated with the acquisition of Synertec
Pty Ltd and ASX relisting. Major accounting costs related to the transaction during the year include a
deemed Listing expense of $4.7m.
Looking forward to FY19, I feel optimistic about performance and market outlook for the sectors and
regions we are focussed upon. I am also excited by the key projects we have announced. These are
currently progressing well, providing a strong work-in-hand position and are themselves generating
enquiry from other clients due to the prominence of the projects.
In terms of our traditional sectors, such as pharmaceutical and biotechnology, the business is seeing
an upward shift in client investment in expansion of existing facilities, or construction of new facilities in
Australia. I believe that we are very well-placed to capitalise on this trend and we have already received
significant enquiry from former and existing clients, as well as several industry referrals.
In terms of the LNG sector, the business is also receiving increased enquiry for upgrades and expansion
works from domestic and international players. I believe this is the start of a global trend that is in line with
expert opinion that unless substantial global investment in new LNG production capacity is accelerated
now, significant worldwide shortages in future LNG supply will be experienced by the mid-2020s. Again,
we believe Synertec is well-placed to participate in this industry expansion process both locally and
internationally.
With regards to safety and environmental issues for this financial year, I am very pleased that we once
again have no matters to report. Our culture of safety and impeccable record is something we work
incredibly hard to sustain.
Finally, I would like to end by thanking our tenacious and incredibly hard-working team. With an
optimistic and ‘can do’ approach, we will continue driving forwards while refining the strategic direction of
the Group to capitalise on the prevailing market conditions with our agility and strong value proposition.
MANAGING DIRECTOR
Mr. Michael Carroll
Synertec Corporation Limited Annual Report 2018
8
Results at a Glance
$11.4mRevenue
-22% on FY17
44%Revenue growth 2H on 1H
FY18
$0.3mNet operating loss
vs $0.9m profit FY17
$1.0mOperating cash in-flow
vs $1.3m out-flow in FY17
$5.0mTotal cash
(includes $1.5m as security
for bank guarantee facility)
no debt
$3.6mReturned on Redemption Notes
4.4 cents per Note
10%Revenue derived from
overseas
Synertec Corporation Limited Annual Report 2018
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Synertec Board members
INDEPENDENT NON-EXECUTIVE DIRECTOR
CHAIR OF BOARD (AND NOMINATION & REMUNERATION COMMITTEE)
Ms. Leeanne Bond
Ms. Bond is an executive and professional company director with board
roles in the energy, water and engineering services sectors. She has
qualifications in engineering and management, and 30 years’ experience
across a broad range of industrial sectors including energy, minerals,
infrastructure and water resources.
From 1996 to 2006 Ms. Bond held a number of management roles with
Worley Parsons in Queensland, including General Manager (Qld, NT and
PNG), where she negotiated project alliances and supervised contracts and projects with many
Australian and international companies. Ms. Bond was appointed Executive for Diversity & Inclusion at
Downer EDI in December 2017.
Ms. Bond is a non-executive director of Liquefied Natural Gas Limited (ASX: LNG) and Snowy Hydro
Limited. She is also a non-executive director of JKTech, a company wholly owned by the University of
Queensland and a board member of the Clean Energy Finance Corporation and Queensland Building
and Construction Commission. She is the sole director and owner of Breakthrough Energy Pty Ltd, a
project and business development consulting firm.
She has previously held board positions on a number of water and energy businesses, including Tarong
Energy and the Queensland Bulk Water Supply Authority (Seqwater) and was Chair of Brisbane Water.
Ms. Bond was a non-executive director of ASX listed company, Coffey International Limited from
February 2012 to January 2016.
MANAGING DIRECTOR
Mr. Michael Carroll
Mr. Carroll is a founding principal and Managing Director of Synertec and a
significant beneficial owner of Synertec. He has successfully grown the
business of Synertec since it was first established in 1996. His leadership style
is ‘hands-on’ and visionary, ensuring efficient and robust internal processes
that directly support the strategic direction of Synertec.
As Managing Director of Synertec, Mr. Carroll has negotiated complex
agreements with a range of parties, such as large multinational energy
conglomerates, water utilities, defence and pharmaceutical companies. He has direct experience within
the Asian engineering market having established and sold successful companies in both Singapore
and Malaysia.
Mr. Carroll is a member of the Institute of Company Directors and holds a Degree in Applied Science
(Applied Chemistry) and a postgraduate qualification in Chemical Engineering.
Synertec Corporation Limited Annual Report 2018
10
INDEPENDENT NON-EXECUTIVE DIRECTOR
Mr. Kiat Poh
Mr. Poh holds a Certified Diploma in Accounting and Finance from ACCA,
UK, a Diploma in Management Studies from the Singapore Institute of
Management, and a Diploma in Civil Engineering from Singapore
Polytechnic.
He has over 30 years’ experience at the senior management level in the
construction, real estate development, manufacturing industries and financial
markets. Over the years, he also held senior positions in corporate finance
and mezzanine capital investment companies in Malaysia specialising in investments as well as
mergers and acquisitions.
From 1998 to 2005, he was Managing Director of a Singapore Exchange listed company.
Since 2005, Mr. Poh has been managing a Singapore-based investment advisory company that
focuses on participating in strategic stakes in listed companies. Since May 2008, he has been a
Non-Executive Director of Centrex Metals Limited, a company listed on the ASX.
INDEPENDENT NON-EXECUTIVE DIRECTOR
(CHAIR OF AUDIT & RISK MANAGEMENT COMMITTEE)
Mr. Kim Chuan Freddie Heng
Mr. Heng is a Chartered Accountant and holds a BSc (Economics) from the
London School of Economics. He has also worked with an international
accounting firm in London and Singapore.
From 1992 to 2000, he was an Executive Director (Finance) in a Singapore
Exchange listed company. During that period, he oversaw the structuring of
four oil pipeline and storage depot projects in Indonesia. He also oversaw
the successful issue of floating rate notes to financial institutions in East Asia
to fund the first of those projects.
Since 2000, Mr. Heng has pursued his own interests in investments, primarily with listed companies.
He is currently a Director of Noel Gifts International Limited- a company listed on the Singapore
Exchange, TMC Life Sciences Berhad - a company listed on the Kuala Lumpur Stock Exchange and
Thomson Medical Group Limited (formerly known as Rowsley Ltd), listed on the Singapore Exchange.
10
Synertec Corporation Limited Annual Report 2018
11
(
Synertec Corporation Limited Annual Report 2018
12
(
SYNERTEC CORPORATION LIMITED
(FORMERLY KNOWN AS SML CORPORATION LIMITED)
ARBN 161 803 032
[ASX:SOP]
FINANCIAL REPORT
FOR THE FINANCIAL YEAR ENDED
30:06:2018
Synertec Corporation Limited Annual Report 2018
13
Synertec Corporation Limited
(formerly known as SML Corporation Limited)
Table of Contents
For the year ended 30 June 2018
Corporate Directory
Directors’ Report
Corporate Governance Statement
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Review Report
15
16
28
29
30
31
32
33
60
61
Synertec Corporation Limited Annual Report 2018
14
Corporate Directory
Directors
Company Secretary
Principal registered office in Bermuda
Registered agent office in Australia
Share registry
Auditor
Ms. Leeanne Bond (Chairperson)
Mr. Michael Carroll (Managing Director)
Mr. Kiat Poh (Non-Executive Director)
Mr. Kim Chuan Freddie Heng (Non-Executive Director)
Mr. David Harris
Level 1, 57 Stewart Street
Richmond, VIC 3121
Clarendon House
2 Church Street
Hamilton HM11
Bermuda
Level 1, 57 Stewart Street
Richmond, VIC 3121
Australia
Telephone: +(61 3) 9274 3000
Boardroom Pty Limited
Grosvenor Place
Level 12, 225 George Street
Sydney, NSW 2000
Australia
Telephone: 1300 737 760 (within Australia)
+(61 2) 9290 9600 (outside Australia)
Facsimile: +(61 2) 9290 9655
Grant Thornton Audit Pty Ltd
Collins Square
Tower 1
727 Collins Street
Melbourne VIC 3008
Australia
Stock exchange listing
Synertec Corporation Limited (formerly known as SML
Corporation Limited) shares are listed on the Australian
Securities Exchange (ASX)
ASX Code: SOP (fully paid ordinary shares)
Website address
www.synertec.com.au
Synertec Corporation Limited Annual Report 2018
15
Directors’ Report
30 June 2018
The Directors present their report together with the financial statements of the consolidated entity for the year ended 30
June 2018.
1. Directors
The following persons were directors of Synertec Corporation Limited (“Synertec” or the Company) during or since the
end of the financial year and up to the date of this report:
Mr. Kiat Poh
Mr. Kim Chuan Freddie Heng
Mr. Shaw Pao Sze (resigned 08.08.2017)
Mr. Furang Li (resigned 08.08.2017)
Mr. Michael Carroll (appointed 08.08.2017)
Ms. Leeanne Bond (appointed 08.08.2017)”
1.1 Information on Directors
MS. LEEANNE BOND – NON-EXECUTIVE DIRECTOR, CHAIR
Ms. Bond is an executive and professional company director with board roles in the energy, water and engineering
services sectors. She has qualifications in engineering and management, and 30 years’ experience across a broad range
of industrial sectors including energy, minerals, infrastructure and water resources.
From 1996 to 2006 Ms. Bond held a number of management roles with Worley Parsons in Queensland, including
General Manager (Qld, NT and PNG), where she negotiated project alliances and supervised contracts and projects with
many Australian and international companies. Ms. Bond was appointed Executive for Diversity & Inclusion at Downer EDI
in December 2017.
Ms. Bond is a non-executive director of Liquefied Natural Gas Limited (ASX: LNG) and Snowy Hydro Limited. She is also
a non-executive director of JKTech, a company wholly owned by the University of Queensland and a board member of
theClean Energy Finance Corporation and Queensland Building and Construction Commission. She is the sole director
and owner of Breakthrough Energy Pty Ltd, a project and business development consulting firm.
She has previously held board positions on a number of water and energy businesses, including Tarong Energy and the
Queensland Bulk Water Supply Authority (Seqwater) and was Chair of Brisbane Water.
Ms. Bond was a non-executive director of ASX listed company, Coffey International Limited from February 2012 to
January 2016.
MR. MICHAEL CARROLL – EXECUTIVE DIRECTOR
Mr. Carroll is a founding principal and Managing Director of Synertec and a significant beneficial owner of Synertec. He
has successfully grown the business of Synertec since the business was first established in 1996. His leadership style is
“hands on” and visionary, ensuring efficient and robust internal processes that directly support the strategic direction of
Synertec.
As Managing Director of Synertec, Mr. Carroll has negotiated complex agreements with a range of parties, such as large
multinational energy conglomerates, water utilities, defence and pharmaceutical companies. Michael has direct
experience within the Asian engineering market having established and sold successful companies in both Singapore
and Malaysia.
Mr. Carroll is a member of the Institute of Company Directors and holds a Degree in Applied Science (Applied Chemistry)
and post graduate qualifications in Chemical Engineering.
Synertec Corporation Limited Annual Report 2018
16
Directors’ Report - continued
1. Directors (continued)
1.1 Information on Directors (continued)
MR. KIAT POH, NON-EXECUTIVE DIRECTOR
Mr. Poh holds a Certified Diploma in Accounting and Finance from ACCA, UK, Diploma in Management Studies from the
Singapore Institute of Management, and a Diploma in Civil Engineering from the Singapore Polytechnic.
He has over 30 years’ experience at senior management level in the construction, real estate development,
manufacturing industries and financial markets. Over the years, he also held senior positions in corporate finance and
mezzanine capital investment companies in Malaysia specialising in investments as well as mergers and acquisitions.
From 1998 to 2005, he was Managing Director of a Singapore Exchange listed company.
Since 2005, Mr. Poh has been managing a Singapore based investment advisory company that focuses on participating
in strategic stakes in listed companies.
Since May 2008, he has been a non-executive director of Centrex Metals Limited, a company listed on the ASX.
MR. KIM CHUAN FREDDIE HENG, NON-EXECUTIVE DIRECTOR
Mr. Heng is a Chartered Accountant and holds a BSc (Economics) from the London School of Economics. He has
worked with an international accounting firm in London and Singapore.
From 1992 to 2000, he was an Executive Director (Finance) in a Singapore Exchange listed company. During that period,
he oversaw the structuring of four oil pipeline and storage depot projects in Indonesia. He also oversaw the successful
issue of floating rate notes to financial institutions in East Asia to fund the first of those projects.
Since 2000, Mr. Heng has pursued his own interests in investments, primarily in listed companies. Mr. Heng is currently a
director of Noel Gifts International Limited, a company listed on the Singapore Exchange, TMC Life Sciences Berhad, a
company listed on the Kuala Lumpur Stock Exchange and Thomson Medical Group Limited (formerly known as Rowsley
Ltd), listed on the Singapore Stock Exchange.
1.2 Directors’ interest in shares
Non-Executive Directors:
Leeanne Bond (Chair)
Kiat Poh
Kim Chuan Freddie Heng
Shaw Pao Sze (resigned 08.08.2017)
Furang Li (resigned 08.08.2017)
Executive Directors:
Michael Carroll (Managing Director)
Interest in Ordinary Shares
-
2,423,417
2,176,433
-
-
98,796,992
16
Synertec Corporation Limited Annual Report 2018
17
Directors’ Report - continued
2. Principal activities
Synertec is a provider of engineering products and solutions which typically incorporate complex automated and highly
instrumented systems and processes designed to enhance clients’ productivity, efficiency and safety. These services are
provided across Australia and overseas through offices in Melbourne, Perth and Sydney.
3. Significant changes in the state of affairs - Reverse acquisition
Synertec Corporation Limited (formerly SML Corporation Limited) completed the acquisition of Synertec Pty Ltd on 8
August 2017. As a result of the acquisition, the former shareholders of Synertec Pty Ltd effectively obtained control of the
combined entity. Accordingly, under the principles of the International Financial Reporting Standard (IFRS) IFRS 3
‘Business Combinations’, Synertec Pty Ltd was deemed to be the accounting acquirer in this transaction.
The acquisition has been accounted for as a reverse acquisition by which Synertec Pty Ltd acquired the net assets and
listing status of Synertec Corporation Limited. For accounting purposes, the acquisition has been treated as a
share-based payment using the reverse acquisition principles of the business combination accounting standard.
Accordingly, the consolidated financial statements of Synertec Corporation Limited have been prepared as a continuation
of the consolidated financial statements of Synertec Pty Ltd. Refer to Financial Statements Note 19 ‘Acquisition
Accounting’.
As the deemed acquirer, Synertec Pty Ltd has accounted for the acquisition of Synertec Corporation Limited from 8
August 2017. The comparative information for the year ended 30 June 2017 presented in the consolidated financial
statements are that of Synertec Pty Ltd. Where necessary, comparative information has been reclassified and
repositioned for consistency with current period disclosures. Most of the accounting policies have changed from those of
Synertec Corporation Limited previously, to those of Synertec Pty Ltd. Refer to the notes to the financial statements for
the year ended 30 June 2018 for more information.
4. Review of operations and results of those operations
Review of operations - Continued operations
Financial year 2018 represented a period of change and progress for the Group. The first half of the year achieved the
completion of the acquisition and re-listing of the Group on the ASX on 8 August 2017 and the formation of the new
Board, as well as the commissioning of key projects which contributed to the development of unique products and
solutions, particularly in the oil and gas sector.
In the second half of the year the Group was awarded and commenced several major projects in the pharmaceutical and
infrastructure sectors which contributed to substantial growth in revenue (up 44% on the first half) and work-in-hand, and
strong forward momentum entering FY19. This provides a solid platform for growth and economies of scale, while the
pipeline of opportunities continues to grow.
Whilst FY18 did not deliver on management’s expectations in terms of revenue and earnings, the Board and
management were pleased and excited by the projects awarded to the Group. The Group’s operations continued to
diversify as planned and placed the Group in a position to expand based on improving market conditions and increasing
enquiry for its products and solutions, particularly EPC opportunities in the pharmaceutical, oil and gas and infrastructure
sectors. It is this strategic transformation that the Board and management believe will deliver sustainability and improved
quality in earnings as the business commences its next phase of development.
Synertec has continued to evolve over the past few years and while there were changes to its capital structure in 2018,
there remains a few basic principles the Group continues to follow:
Preserve balance sheet strength
Continue sustainable, profitable and strategic delivery
Invest in people and capability; and
Focus on costs at every level in the business.
Synertec Corporation Limited Annual Report 2018
18
Directors’ Report - continued
4. Review of operations and results of those operations (continued)
Review of operations - Continued operations (continued)
The revenue of the Group for the year ended 30 June 2018 was $11.4 million (30 June 2017: $14.7 million), which
constitutes revenue produced by wholly-owned subsidiary, Synertec Pty Ltd, on both ongoing and new projects during
the period. The decline in revenues for the year was mainly due to customers extending lead times for confirmation of
major project awards, and the impact of some large projects from prior years completing in the first half of this financial
year before further key projects were awarded. Revenue for FY17 reflected particularly strong performance with major
cornerstone projects in LNG custody transfer being successfully delivered and commissioned at the Wheatstone and
Gorgon LNG plants in Western Australia.
Strong project management capability, underpinned by effective processes and systems, continues to generate solid
gross profit margins. This is especially pleasing as the Group has been awarded more projects in sectors it has been
strategically targeting and developing expertise in for the past few years.
The Group continued to carefully control overheads, with the operating cost base of the business remaining stable over
the past two years. During the year, the business continued to develop expertise in its specialist areas, while strategically
configuring its workforce, capability and systems for execution of its growing pipeline of opportunities and work-in-hand.
The current operating platform of the business, which has been built deliberately to strengthen project management and
accommodate anticipated growth in projects (size and number), can easily support considerable expansion from revenue
levels delivered in the past and present.
The Group delivered an operating net loss after tax (before Listing expense) of $0.3 million (30 June 2017: $0.9 million
profit). This result includes the cost of forming a new Board for the Group and various annual listing compliance costs.
These costs amounted to $0.6m in FY18 and are not expected to exceed this level in the foreseeable future.
The net loss after tax of the Group from its continuing operations for the period was $5.1 million (30 June 2017: net profit
$0.9 million). This result includes significant costs associated with accounting for the acquisition of Synertec Pty Ltd and
ASX re-listing process completed in August 2017. Major accounting costs related to the transaction during the year
include a deemed Listing expense of $4.7 million, as detailed in the financial report.
In Australian dollars ‘000’s
(Loss)/profit before tax and corporate transaction costs
Corporate transaction costs
Income tax expense
(Loss)/profit from operations
Listing expense
(Loss)/profit for the period from continuing operations
Loss from discontinued operations
Total comprehensive income for the year
30 June 2018
(396)
(47)
105
(338)
(4,722)
(5,060)
(3,395)
30 June 2017
1,882
(534)
(409)
939
-
939
-
(8,455)
939
18
Synertec Corporation Limited Annual Report 2018
19
Directors’ Report - continued
4. Review of operations and results of those operations (continued)
Review of operations - Discontinued operations
Further to the Synertec Corporation Limited announcement on 22 September 2017, whereby the Company completed
the sale of 100% of the issued shares in its subsidiary, Australian Gold Mines Pty Ltd (which owns all the shares in Mt.
Wills Gold Mines Pty Ltd, the holder of the mining assets) and an immaterial related parcel of land under a Contract for
the Sale (“Mining Assets”) as intended, the Company announced on 23 December 2017 that all sale warranties were
completed.
The Mining Assets were sold for $3.5 million and net proceeds of $3.6 million were distributed to eligible Redemption
Note holders on 15 January 2018 (refer to Note 20 of the Financial Statements), equating to 4.4 cents per share. The
Sale of the Mining Assets resulted in a loss on sale of those assets of $3.2 million, recognised in the result from
discontinuing operations.
In determining the Net Sale Proceeds, all direct costs and taxes payable have been deducted from the gross sale
proceeds. The company was able to obtain a refund of some tenement rental costs from Government authorities and
a refund of a bank deposit placed in support of a tenement bond. There was also bank interest earned on the cash
consideration placed as a term deposit. As a result, the Net Sale Proceeds exceeded the cash consideration received for
the Mining Assets.
Upon completion of the warranties and determining the Net Sale Proceeds for the sale of the Mining Assets in December
2017, a loss on sale of the Mining Assets of $3.2 million was calculated and recognised in the financial statements of
Synertec Corporation Limited as at 30 June 2018 as part of the loss from discontinuing operations.
Net operating costs from mining subsidiaries of $0.2 million has been included in the loss from discontinuing operations.
These costs relate to the Sale of Mining Assets, execution of Redemption Note obligations and winding down of the
mining subsidiaries (during the year, subsidiary company Mitta Omeo Metals Pty Ltd, was wound up and deregistered).
Therefore, total loss from discontinuing operations was $3.4 million (30 June 2017: nil).
Financial Position
The Group’s balance sheet remains strong, closing the year with total cash of $5.0 million, including $3.5 million in cash
available to operations (30 June 2017: $3.0 million) and $1.5 million in cash on term deposit (30 June 2017: $0.7 million)
as security for the bank guarantee facility. The business continues to operate with no debt.
It is this fiscal discipline which the Board and management consider important and appropriate for the current
engineering environment and to deliver on the strategy and projected growth for the business.
Net cash generated from operations during the year of $1.0 million (2017: net cash outflow of $1.3 million) effectively
funded the increase of $1.1 million in the cash-backed bank guarantee facility, taking the facility to $1.5 million at 30 June
2018 (30 June 2017: $0.4 million), which was required following the award of several large projects in the second half
of the financial year. There is headroom in the facility at 30 June 2018 of $0.4 million. Contracts have been appropriately
structured and working capital managed to ensure future cash flows are well coordinated.
Synertec Corporation Limited Annual Report 2018
20
Directors’ Report - continued
5. Litigation
There has been no litigation in the year period and to the best of the Directors’ knowledge there are no circumstances
that would give rise to any potential litigation relating to this same period.
6. Dividends
There were no dividends paid, declared or recommended during the current or previous financial period.
7. Subsequent events
No matter or circumstance has arisen since 30 June 2018 that has significantly affected or may significantly affect the
consolidated entity’s operations, the results from those operations, or the consolidated entity’s state of affairs in future
years.
8. Likely developments
Aside from the subsequent events noted above, it is not foreseen that the Group will undertake any change in its general
operations during the coming financial period.
9. Environmental legislations
The Group’s operations are not subject to significant environmental regulations under both Commonwealth and State
legislation.
10. Company Secretary
Mr. David Harris
Mr. David Harris is Chief Financial Officer of Synertec Corporation Limited and in addition to this role, has assumed the
role of Company Secretary from Mr. Andrew Metcalfe as from 16 April 2018. Mr. Metcalfe was appointed on 8 August
2017 and resigned on 16 April 2018.
Mr. Harris is an Australian Chartered Accountant and fellow of the Financial Services Institute of Australasia and the
Governance Institute of Australia, with strong local and international experience in senior leadership positions for global
and ASX-listed companies. David is also an experienced Board member and Audit Risk Committee Chair.
20
Synertec Corporation Limited Annual Report 2018
21
Directors’ Report - continued
11. Directors’ Meetings
The number of meetings of the Company’s Board of Directors (“the Board”) and of each Board committee held during
the period 8 August to 30 June 2018, and the number of meetings attended by each Director were:
Board Meetings
Audit and Risk Committee
DIRECTORS
Leeanne Bond
Michael Carroll
Kiat Poh
Kim Chuan Freddie Heng
OTHERS
David Harris
CFO/Company Secretary
Andrew Metcalfe -
Company Secretary
(resigned 16.04.18)
A
5
5
5
5
5
3
B
5
5
5
5
5
3
A
3
3
3
3
3
1
B
3
3
3
3
3
1
Nomination and
Remuneration Committee
A
B
2
2
2
2
2
1
2
2
2
2
2
1
Where:
column A is the number of meetings the Director was entitled to attend
column B is the number of meetings the Director attended
12. Unissued shares under option
Under the Prospectus issued by the Company in June 2017, and following the successful execution of the Share Sale
Agreement with Synertec Pty Ltd on 8 August 2017, the Company issued 16,175,970 bonus options to existing
shareholders (options record date: 26 June 2017). The options have an exercise price of $0.053 and are exercisable
on or before 8 August 2020. No shares have been issued during or since the end of the financial year as a result of the
exercise of any options. No other options have been granted or exercised.
13. Remuneration report
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity.
Key management personnel are those persons having authority for planning, directing and controlling the activities of the
entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
• Principles used to determine the nature and amount of remuneration;
• Details of remuneration; and
• Additional disclosures relating to key management personnel.
Synertec Corporation Limited Annual Report 2018
22
Directors’ Report - continued
13. Remuneration report (continued)
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity’s executive reward framework is to ensure reward for performance is competitive
and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic
objectives and the creation of value for the shareholders. The Board of Directors (“the Board”) ensures that executive
reward satisfies the following key criteria for good reward governance practices:
• competitiveness and reasonableness
• acceptability to shareholders
• performance linkage/alignment of executive compensation
• transparency
The Board has established a Nomination and Remuneration Committee which operates in accordance with its charter as
approved by the Board and is responsible for determining and reviewing compensation arrangements for the Directors
and the Executive Team.
The Nomination and Remuneration Committee assess the appropriateness of the nature and amount of remuneration
on a periodic basis by reference to recent employment market conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high quality Board and Executive Team.
The Group seeks to remunerate Directors and executives in accordance with the general principles recommended by
the ASX. The Group is committed to remunerating executives in a manner that is market-competitive, reflects duties and
supports the interests of shareholders.
The reward framework is designed to align executive reward to shareholders’ interest. The Board have considered that it
should seek to enhance shareholders’ interests by:
• focusing on sustained growth in shareholder wealth, consisting of growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of
value; and
• attracting and retaining high calibre executives.
Additionally, the reward framework should seek to enhance executives’ interests by:
• rewarding capability and experience;
• reflecting competitive reward for contribution to growth in shareholder wealth; and
• providing a clear structure for earning rewards.
In accordance with best practice corporate governance, the structure of non-executive directors and executive remuner-
ation is separate.
Non-executive directors’ remuneration
Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the
directors. Non-executive directors’ fees and payments are reviewed by the Board as a whole.
ASX Listing rules requires that the aggegate non-executive directors remuneration shall be determined periodically by a
general meeting. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to
approval by shareholders at the Annual General Meeting.
22
Synertec Corporation Limited Annual Report 2018
23
Directors’ Report - continued
13. Remuneration report (continued)
Details of remuneration
Amounts of remuneration
Details of remuneration of key management personnel of the consolidated entity are set out in the following tables.
Short-term benefits
2018
Cash salary
and fees
Bonus
Post-
employment
benefits
Long-term
benefits
Super-
annuation
$
Long
service leave
$
-
-
-
-
-
-
-
-
-
-
Total
$
76,422
48,333
47,392
5,475
-
$
76,422
48,333
47,392
5,475
-
$
-
-
-
-
-
Non-Executive Directors1
Leeanne Bond (appointed 08.08.2017)*
Kiat Poh**
Kim Chuan Freddie Heng
Shaw Pao Sze (resigned 08.08.2017)
Furang Li (resigned 08.08.2017)
Executive Directors2
Michael Carroll (Managing Director)
320,170
-
28,838
11,147
360,155
Other Key Management Personnel2
Joern Buelter - COO
David Harris - CFO/Company Secretary
158,871
141,763
-
-
14,963
13,467
5,297
572
179,131
155,802
Total remuneration of key
management personnel
798,426
-
57,268
17,016
872,710
* This was paid to Breakthrough Energy Pty Ltd
** This was paid to Asiaphere Pty Ltd
Short-term benefits
2017
Cash salary
and fees
Bonus
Non-Executive Directors1
Leeanne Bond (appointed 08.08.2017)
Kiat Poh
Kim Chuan Freddie Heng
Shaw Pao Sze (resigned 08.08.2017)
Furang Li (resigned 08.08.2017)
Executive Directors2
Michael Carroll (Managing Director)
Post-
employment
benefits
Long-term
benefits
Super-
annuation
$
Long
service leave
$
-
-
-
-
-
-
-
-
-
-
Total
$
-
30,000
30,000
32,850
-
$
-
30,000
30,000
32,850
-
$
-
-
-
-
-
325,682
-
30,790
3,826
360,298
Other Key Management Personnel2
Joern Buelter - COO
David Harris - CFO/Company Secretary
151,283
-
-
-
13,741
11,639
-
-
176,663
-
Total remuneration of key
management personnel
569,815
-
44,531
15,465
629,811
1. Remuneration of Non-Executive Directors relates to the Non-Executive Directors of Synertec Corporation Limited.
2. Executive Directors and Other Key Management Personnel are remunerated from subsidiary company, Synertec
Pty Ltd. Accordingly, current year and prior year comparative amounts are derived from the records of Synertec Pty Ltd.
Synertec Corporation Limited Annual Report 2018
24
Directors’ Report - continued
13. Remuneration report (continued)
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at
1 July 2017
Received as
part of
remuneration
Balance at
Additions Options 30 June 2018
Bonus
Non-Executive Directors
Leeanne Bond
(appointed 08.08.2017)
Kiat Poh1
Kim Chuan Freddie Heng2
Shaw Pao Sze (resigned 08.08.2017)
Furang Li (resigned 08.08.2017)
Executive Directors
Michael Carroll (Managing Director)3
Other Key Management Personnel
Joern Buelter - COO
David Harris - CFO/Company Secretary
Notes:
-
2,423,417
2,176,433
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,423,417
2,176,433
-
-
-
98,796,992
-
98,796,992
-
-
250,000
-
-
-
250,000
-
1. Shares held by Kiat Poh and joint names under Kiat Poh & Ju-Lynn Poh.
2. Shares held by HSBC Custody Nominees (Australia) Limited.
3. Shares held by New Concept Corporation Limited (“New Concept”) in which Michael Carroll is considered to have a 50% interest in
the shares in New Concept. All the issued share capital of New Concept (held in voluntary escrow from 8 August 2017 to 8 August
2018) is beneficially owned by TMF Trustees Singapore Limited as trustee of the Pinnacle (MCGA) Retirement Fund.
Options held by key management personnel
Balance at
1 July 2017
Received as
part of
remuneration
Balance at
Bonus
Additions Options 30 June 2018
Non-Executive Directors
Leeanne Bond
Kiat Poh
Kim Chuan Freddie Heng
Shaw Pao Sze (resigned 08.08.2017)
Furang Li (resigned 08.08.2017)
Executive Directors
Michael Carroll (Managing Director)
Other Key Management Personnel
Joern Buelter - COO
David Harris - CFO/Company Secretary
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
484,683
435,287
-
-
-
-
-
-
-
-
-
-
-
-
-
-
484,683
435,287
-
-
-
-
-
A bonus issue of one (1) Option (Bonus Option) for every five (5) Shares held by the Existing Shareholders of Synertec Corporation Ltd
(formerly SML Corporation Limited) for nil consideration was issued on 8 August 2017, being the date of completion of the sale
transaction between Synertec Corporation Limited (formerly SML Corporation Limited) and Synertec Pty Ltd. Each Bonus Option
entitles the holder to subscribe for one Share and is exercisable at $0.053 on or before 3 years from the date of issue of the Bonus
Options (8 August 2020).
Synertec Corporation Limited Annual Report 2018
25
Directors’ Report - continued
13. Remuneration report (continued)
Additional disclosures relating to key management personnel
Loans to key management personnel
The table below provides information relating to Group’s loans to key management personnel during the year:
Balance at the start of the year
Interest paid and payable
Interest not charged
Repayment
Balance at the end of the year
2018
$
372,208
846
-
(373,054)
-
The loan represented an amount due from Michael Carroll at 1 July 2017. As part of the conditions in the Share Sale
Agreement with Synertec Corporation Limited (formerly SML Corporation Ltd), all loans owed by the Synertec Pty Ltd
Directors were settled on 8 August 2017, being the date of completion of the transaction.
Other transactions with key management personnel
There were no other transactions with key management personnel during the year.
14. Indemnities given to, and insurance premiums paid for, officers and auditors
Officers
During the year, Synertec Corporation Limited paid a premium to insure officers of the Group. The officers of the Group
covered by the insurance policy include all Directors.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedingss that may be brought
against the officers in their capacity as officers of the Group, and any other payments arising from liabilities incurred by
the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful
breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for
themselves or someone else to cause detriment to the Group.
Details of the amount of the premium paid in respect of insurance policies are not disclosed as such disclosure is
prohibited under the terms of the contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify any current or former officer of the Group against a liability incurred as such by an
officer.
Auditors
The Group has not agreed to indemnify the auditor of the Group and any related entity against a liability incurred by the
auditor.
During the financial year, the Group has not paid a premium in respect of a contract to insure the auditor of the Group or
any related entity.
Synertec Corporation Limited Annual Report 2018
26
Directors’ Report - continued
15. Auditor
Grant Thornton Audit Pty Ltd continues in office.
16. Officers of the Group who are former audit partners of auditor
There are no officers of the Group who are former audit partners of Grant Thornton Audit Pty Ltd.
17. Non-audit services
During the year, the firm of Grant Thornton, the Group’s auditors, performed certain other services in addition to their
statutory audit duties.
The Board has considered the non-audit services provided during the year by the auditor and, in accordance with written
advice provided by resolution of the Audit and Risk Committee, is satisfied that the provision of those non-audit services
during the year is compatible with, and did not compromise, the auditor independence requirements for the following
reasons:
• all non-audit services were subject to the corporate governance procedures adopted by the Group and
have been reviewed by the Audit and Risk Committee to ensure they do not impact upon the impartiality
and objectivity of the auditor; and
•
the non-audit services do not undermine the general principles relating to auditor independence as set out
in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the
auditor’s own work, acting in a management or decision-making capacity for the Group, acting as an
advocate for the Group or jointly sharing risks and rewards.
Details of the amounts paid to the auditors of the Group, Grant Thornton, and its related practices for audit and non-
audit services provided during the year are set out in Note 22 to the financial statements.
18. Proceedings on behalf of the Group
No person has applied to the Court for leave to bring proceedings on behalf of the Group, or to intervene in any
proceedings to which the Group is a party, for the purpose of taking responsibility on behalf of the Group for all or part of
those proceedings.
This report is made in accordance with a resolution of directors.
On behalf of the Directors,
Michael Carroll
Managing Director
Melbourne
29 August 2018
Synertec Corporation Limited Annual Report 2018
27
Corporate Governance Report
The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such,
Synertec Corporation Limited and its controlled Entities (the Group) have adopted the third edition of the Corporate
Governance Principles and Recommendations which was released by the ASX Corporate Governance Council on 27
March 2014 and became effective for financial years beginning on or after 1 July 2014.
The Group’s Corporate Governance Statement for the financial year ending 30 June 2018 is dated as at 30 June 2018
and was approved by the Board on 24 August 2018. The Corporate Governance Statement is available on the Synertec
Corporation Limited website at www.synertec.com.au.
Synertec Corporation Limited Annual Report 2018
28
Consolidated Statement of profit or loss and other comprehensive income
For the year ended 30 June 2018
In Australian dollars
Note
30 June 2018
30 June 2017
Continuing operations
Revenue
Revenue
Profit on disposal of motor vehicles
5
11,432,670
-
14,682,303
2,024
Expenses
Materials and service expense
Employee benefits expense
Superannuation expense
Depreciation and amortisation expense
Occupancy expenses
Business development expense
Telecommunication costs
Legal and professional fees
Other expenses
Corporate transaction costs
Results from operating activities
Finance income
Finance costs
Net finance income/(costs)
(Loss)/profit before tax
Income tax benefit/(expense)
(Loss)/profit from operations
Listing expense
(Loss)/profit for the period from continuing operations
6
7(i)
19
(4,394,924)
(5,762,092)
(470,497)
(95,199)
(180,829)
(110,512)
(136,838)
(169,919)
(581,957)
(47,414)
(517,511)
103,136
(28,988)
74,148
(443,363)
105,383
(337,980)
(4,722,112)
(5,060,092)
Discontinued operations
Loss from discontinued operations
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
20
(3,395,147)
-
(8,455,239)
(6,548,342)
(4,867,410)
(387,767)
(98,720)
(155,668)
(151,227)
(139,871)
(100,806)
(302,151)
(534,340)
1,398,025
59,940
(110,075)
(50,135)
1,347,890
(408,995)
938,895
-
938,895
-
-
938,895
Earnings per share
Basic (loss)/earnings per share - from continuing operations
18
Diluted (loss)/earnings per share - from continuing operations 18
(2.45)
(2.45)
1.16
1.16
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
Synertec Corporation Limited Annual Report 2018
29
Consolidated Statement of financial position
As at 30 June 2018
In Australian dollars
Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Work in progress
Current tax assets
Total current assets
Non-current assets
Net deferred tax assets
Other assets
Property, plant and equipment
Total non-current assets
Total assets
Liabilities
Trade and other payables
Current tax liability
Loans and borrowings
Employee benefits
Deferred income
Total current liabilities
Non-current liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Other contributed equity
Retained earnings
Total equity
Note
30 June 2018
30 June 2017
8
9
10
11
7
10
12
13
14
15
14
16
3,509,672
3,515,042
162,553
1,949,536
98,403
9,235,206
435,609
1,514,552
409,071
2,359,232
11,594,438
2,929,479
-
-
513,993
2,742,698
6,186,170
2,956,694
3,998,252
107,672
967,448
-
8,030,066
330,228
674,576
369,249
1,374,053
9,404,119
1,373,002
402,932
17,569
476,360
290,413
2,560,276
62,893
62,893
6,249,063
61,080
61,080
2,621,356
5,345,375
6,782,763
641,113
-
4,704,262
5,345,375
950
132,904
6,648,909
6,782,763
The above statement of financial position should be read in conjunction with the accompanying notes
Synertec Corporation Limited Annual Report 2018
30
Consolidated Statement of changes in equity
For the year ended 30 June 2018
In Australian dollars
Note
Issued
capital
Other equity
contributed
Retained
earnings
Total
Balance at 1 Jul 2016
Profit for the year
Other comprehensive income
Total comprehensive income
Balance at 30 June 2017
Balance at 1 Jul 2017
Loss for the year
Other comprehensive income
Total comprehensive income
Issue of share capital to the Vendors for
the acquisition of Synertec Pty Ltd
Shares issued pursuant to the Share Offer
Shares issued to Advisor for services
related to the acquisition
Capital raising costs
Net proceeds paid to Redemption Note
holders from Sale of Mining Assets
Consolidation of reserves and equity
Balance at 30 June 2018
950
-
-
-
950
950
-
-
-
16 3,235,194
750,000
16
16
16
650,000
(413,531)
132,904 5,710,014 5,843,868
938,895
938,895
-
-
938,895
938,895
6,782,763
132,904 6,648,909
-
-
-
132,904 6,648,909
-
-
-
-
-
-
-
(8,455,239)
-
(8,455,239)
-
-
-
-
6,782,763
(8,455,239)
-
(8,455,239)
3,235,194
750,000
650,000
(413,531)
16 (3,581,500)
-
641,113
-
(132,904)
-
-
6,510,592
4,704,262
(3,581,500)
6,377,688
5,345,375
The above statement of changes in equity should be read in conjunction with the accompanying notes
Synertec Corporation Limited Annual Report 2018
31
Consolidated Statement of cash flows
For the year ended 30 June 2018
In Australian dollars
Note
30 June 2018
30 June 2017
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash generated from operations
Interest paid
Interest received
Income taxes paid
Net cash from/(used in) operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Proceeds from financial assets
Allocation of funds to term deposit as bank guarantee security
Tenement rent refunded
Proceeds from disposal of discontinued operations
Redemption notes payment
Acquisition of property, plant and equipment
Net cash from/(used in) investing activities
Cash flows from financing activities
Loans provided/paid to directors/related parties
Repayment of loan to/from related parties
Payment of finance lease liabilities
Net cash from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalent at beginning of the year
Cash and cash equivalents at end of the year
8A(i)
20
20
8A(iii)
13,389,612
(11,982,406)
1,407,206
-
86,510
(501,333)
992,383
-
-
(839,976)
118,379
3,500,000
(3,581,360)
(135,022)
(937,979)
-
-
(17,569)
(17,569)
36,835
3,472,837
3,509,672
16,595,836
(16,399,860)
195,976
(60,155)
47,506
(1,478,898)
(1,295,571)
25,910
199,677
(59,777)
-
-
-
(139,282)
26,528
(966,431)
193,839
(29,960)
(802,552)
(2,071,595)
5,028,289
2,956,694
The above statement of cash flows should be read in conjunction with the accompanying notes
Synertec Corporation Limited Annual Report 2018
32
Notes to the financial statements
For the year ended 30 June 2018
1. General information and statement of compliance
The financial statements cover Synertec Corporation Limited (formerly known as SML Corporation Limited) as a
consolidated entity consisting of Synertec Corporation Limited (referred as the ‘Company’ or ‘Parent Company’) and
the entities it controlled at the end of, or during, the year ended 30 June 2018 (together referred to as the ‘Group’).
Synertec Corporation Limited is the Group’s Ultimate Parent Company. It is a public company (limited by shares)
incorporated in Bermuda, and listed on the Australian Securities Exchange (ASX:SOP).
Its registered office is: Clarendon House, 2 Church Street, Hamilton HM11, Bermuda.
Its registered office in Australia is: Level 1, 57 Stewart Street, Richmond, VIC 3121, Australia.
A description of the nature of the consolidated entity’s operations and its principal activities is included in the Directors’
report, which is not part of the financial statements.
The financial statements were approved and authorised for issue, in accordance with a resolution of directors, on 24
August 2018.
2. Significant Accounting policies
(a) Basis of accounting
The consolidated general purpose financial statements of the Group have been prepared in accordance with the
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Synertec Corporation Limited is a for-profit entity for the purpose of preparing the financial statements.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis unless otherwise stated.
(c) Functional and Presentational Currency
These financial statements are presented in Australian dollars, which is the Group’s functional currency and
presentation currency.
(d) Basis of consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June
2018. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the
subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have a
reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains
and losses on transactions between Group companies.
Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency
with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised
from the effective date of acquisition; or up to the effective date of disposal, as applicable.
(e) Acquisition of Synertec Pty Ltd
Synertec Corporation Limited (formerly SML Corporation Limited) completed the acquisition of Synertec Pty Ltd on 8
August 2017. As a result of the acquisition, the former shareholders of Synertec Pty Ltd effectively obtained control of the
combined entity. Accordingly, under the principles of IFRS 3 ‘Business Combinations’, Synertec Pty Ltd was deemed to
be the accounting acquirer in this transaction. The acquisition has been accounted for as a reverse acquisition by which
Synertec Pty Ltd acquired the net assets and listing status of Synertec Corporation Limited. Accordingly, the
consolidated financial statements of Synertec Corporation Limited have been prepared as a continuation of the business
and operations of Synertec Pty Ltd.
As the deemed acquirer, Synertec Pty Ltd has accounted for the acquisition of Synertec Corporation Limited from 8
August 2017. The comparative information for the 12 months ended 30 June 2017 and the statement of financial
position at 30 June 2017 presented in the consolidated financial statements are that of Synertec Pty Ltd. Where
necessary, comparative information has been reclassified and repositioned for consistency with current period
disclosures.
The excess of the fair value of Synertec Corporation Limited’s shares over the fair value of its net assets (excluding the
Mining Assets - refer Note 19) at the acquisition date has been recognised as a listing expense.
Synertec Corporation Limited Annual Report 2018
33
Notes to the financial statements
For the year ended 30 June 2018
2. Significant Accounting policies (continued)
(f) Revenue and other income
Revenue is recognised when it is probable that the economic benefit will flow to the Group and the revenue can be
reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
Synertec Pty Ltd is involved in providing consulting engineering services on hourly rate, and also fixed rate projects where
billing is made on pre-determined project milestones. If the services under a single arrangement are rendered in different
reporting periods, then the consideration is allocated on a relative fair value basis between the different services.
Synertec Pty Ltd recognises revenue from fixed price projects in proportion to the stage of completion of the transaction
at the reporting date. The stage of completion is assessed based on surveys of work performed. The revenue that is
accrued but not yet invoiced is included as work in progress.
Contract revenue includes the initial amount agreed in the contract plus any variations, claims and incentive payments to
the extent that it is probable that they will result in revenue and can be measured reliably.
An unconditional government grant is recognised in profit or loss as other income when the grant becomes receivable.
Advance receipts
Contracts for which progress billings and recognised losses exceed costs incurred plus recognised profits are presented
as deferred income/revenue in the statement of financial position. Cash advances received from customers are
presented as deferred income/revenue in the statement of financial position.
(g) Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.
(h) Finance income and finance costs
The Group’s finance income and finance costs include:
interest income;
interest expense;
the net gain or loss on financial assets at fair value through profit or loss; and
the foreign currency gain or loss on financial assets and financial liabilities;
Interest income or expense is recognised using the effective interest method.
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of the Group at the exchange
rates at the dates of the transactions (spot exchange rate).
Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the
exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign
currency are translated to the functional currency at the exchange rate when the fair value was determined. Foreign
currency differences are generally recognised in profit or loss. Non-monetary items that are measured based on
historical cost in a foreign currency are not translated.
(j) Income taxes
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and unused tax losses and under and over provision in prior periods, where applicable.
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it
relates items recognised directly in equity or in other comprehensive income (OCI).
Synertec Corporation Limited Annual Report 2018
34
Notes to the financial statements
For the year ended 30 June 2018
2. Significant accounting policies (continued)
(j) Income taxes (continued)
(i) Current tax
Current income tax assets and / or liabilities comprise those obligations to, or claims from, the Australian
Taxation Office (ATO) and other fiscal authorities relating to the current or prior reporting periods that are
unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the
financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or
substantively enacted by the end of the reporting period.
(ii) Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognised for temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which they can be
used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they
reverse, using tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against
future taxable income, based on the Group’s forecast of future operating results which is adjusted for significant
non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. Deferred tax
liabilities are always provided for in full.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which
the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if the Group has a right and intention to set-off current tax
assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit
or loss, except where they relate to items that are recognised in other comprehensive income (such as the
revaluation of land) or directly in equity, in which case the related deferred tax is also recognised in other
comprehensive income or equity, respectively.
Synertec Corporation Limited and its wholly-owned Australian controlled entities have implemented the tax
consolidation legislation. As a consequence, these entities are taxed as a single entity and the deferred tax
assets and liabilities of these entities are set off in the consolidated financial statements.
Synertec Holdings Pty Ltd is responsible for recognising the current tax liabilities of the Australian tax
consolidated group. The tax consolidated group has entered into an agreement whereby each component in
the Group contributes to income tax payable in proportion to their contributions to the taxable profit of the tax
consolidated group.
(iii) Non-financial assets
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. They are allocated to reduce the carrying amount of assets in
the CGU on a pro rata basis. An impairment loss is reversed only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if
no impairment loss had been recognised.
Synertec Corporation Limited Annual Report 2018
35
Notes to the financial statements
For the year ended 30 June 2018
2. Significant Accounting policies (continued)
(k) Profit or loss from discontinued operations
A discontinued operation is a component of the entity that either has been disposed of, or is classified as held for sale,
and:
represents a separate major line of business or geographical area of operations
is part of a single coordinated plan to dispose of a separate major line of business or geographical area
of operations; or
is a subsidiary acquired exclusively with a view to resale
Profit or loss from discontinued operations, including prior year components of profit or loss, are presented in a single
amount in the statement of profit or loss and other comprehensive income. This amount, which comprises the post-tax
profit or loss of discontinued operations and the post-tax gain or loss resulting from the measurement and disposal of
assets classified as held for sale (see also Note 2), is further analysed in Note 20.
(l) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
(m) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for
as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
(ii) Subsequent expenditure
Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated
with the expenditure will flow to the Group.
(iii) Depreciation
Depreciation is calculated to write off the cost of property, plant and equipment less their estimated residual
values using the straight-line basis over their estimated useful lives, and is generally recognised in profit or loss.
Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably
certain that the Group will obtain ownership by the end of the lease term.
The estimated useful lives of property, plant and equipment are as follows:
• Motor Vehicles 10 years
• Furniture and Equipment 16 years
• Computers 3 years
In the case of leasehold improvements, expected useful lives are determined by reference to comparable
owned assets or over the term of the lease if shorter.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
Synertec Corporation Limited Annual Report 2018
36
Notes to the financial statements
For the year ended 30 June 2018
2. Significant accounting policies (continued)
(n) Impairment
(i) Non-derivative financial assets
Financial assets not classified as at fair value through profit or loss, are assessed at each reporting date to
determine whether there is objective evidence of impairment.
Objective evidence that financial assets are impaired includes:
default or delinquency by a debtor;
restructuring of an amount due to the Group on terms that the Group would not consider otherwise;
indications that a debtor or issuer will enter bankruptcy;
adverse changes in the payment status of borrowers or issuers;
the disappearance of an active market for a security.
(ii) Financial assets measured at amortised cost
The Group considers evidence of impairment for these assets measured at both a specific asset and collective level.
All individually significant assets are assessed for specific impairment. Those found not to be specifically impaired are
then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not
individually significant are collectively assessed for impairment by grouping together assets with similar risk
characteristics.
In assessing collective impairment the Group uses historical information on the timing of recoveries and the
amount of loss incurred, and makes an adjustment if current economic and credit conditions are such that the
actual losses are likely to be greater or lesser than suggested by historical trends.
An impairment loss is calculated as the difference between an asset’s carrying amount and the present value
of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are
recognised in profit or loss and reflected in an allowance account. When the Group considers that there are no
realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss
subsequently decreases and the decrease can be related objectively to an event occurring after the impairment
was recognised, then the previously recognised impairment loss is reversed through profit or loss.
(iii) Non-financial assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than stock on
hand and deferred tax assets) to determine whether there is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell.
Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
(o) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probably that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed the reimbursement is recognised as a separate but
only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of
profit or loss net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the
liability. Where discounting is used, the unwinding of the discount is recognised as finance cost.
No liability is recognised if an outflow of economic resources as a result of present obligation is not probable. Such
situations are disclosed as contingent liabilities, unless the outflow is remote in which case, no liability is recognised.
Synertec Corporation Limited Annual Report 2018
37
Notes to the financial statements
For the year ended 30 June 2018
2. Significant accounting policies (continued)
(p) Employee benefits
(i) Defined contribution plans
Obligations for contributions to defined contribution plans are expensed as the related service is provided.
Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future
payments is available.
(ii) Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the
amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be estimated reliably.
(iii) Other long-term employee benefits
The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that
employees have earned in return for their service in the current and prior periods. That benefit is discounted to
determine its present value using high quality corporate bond rates. Remeasurements are recognised in profit
or loss in the period in which they arise.
(q) Leases
Determining whether an arrangement is a lease
At the inception of an arrangement, the Group determines whether the arrangement, is or contains, a lease.
At inception or on reassessment of an arrangement that contains a lease, the Group separates payments and other con-
sideration required by the arrangement into those for the lease and those for other elements on the basis of their relative
fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an
asset and a liability are recognised at an amount equal to the fair value of the underlying asset;
subsequently, the liability is reduced as payments are made and an imputed finance cost on the liability is recognised
using the Group’s incremental borrowing rate.
Leased assets
Assets held by the Group under leases that transfer to the Group substantially all of the risks and rewards of
ownership are classified as finance leases. The leased assets are measured initially at an amount equal to the lower of
their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the assets are
accounted for in accordance with the accounting policy applicable to that asset.
Assets held under other leases are classified as operating leases and are not recognised in the Group’s statement of
financial position.
Lease payments
Payments made under operating leases are recognised in the profit or loss on a straight line basis over the term of the
lease.
(r) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is
not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial
position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are
classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
Synertec Corporation Limited Annual Report 2018
38
Notes to the financial statements
For the year ended 30 June 2018
2. Significant accounting policies (continued)
(s) Financial instruments
The Group does not hold derivative financial assets. Where required the Group classifies non-derivative financial
assets into the following categories: financial assets at fair value through profit or loss, and loans and receivables.
The Group classifies non-derivative financial liabilities into the other financial liabilities category.
(i) Non-derivative financial assets and financial liabilities - recognition and derecognition
The Group initially recognises loans and receivables and debt securities issued on the date when they are
originated. All other financial assets and financial liabilities are initially recognised on the trade date.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire,
or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks
and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially
all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in
such derecognised financial assets that is created or retained by the Group is recognised as a separate asset
or liability.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled,
or expire.
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial
position when, and only when, the Group has a legal right to offset the amounts and intends either to settle
them on a net basis or to realise the asset and settle the liability simultaneously.
(ii) Non-derivative financial assets - measurement
Loans and receivables
These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to
initial recognition, they are measured at amortised cost using the effective interest method.
Cash and cash equivalents
In the statement of cash flows, cash and cash equivalents includes bank overdrafts that are repayable on
demand and form an integral part of the Group’s cash management.
(iii) Non-derivative financial liabilities - measurement
Non-derivative financial liabilities are initially recognised at fair value less any directly attributable transaction
costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective
interest method.
(iv) Share capital
Ordinary shares
Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognised
as a deduction from equity.
Synertec Corporation Limited Annual Report 2018
39
Notes to the financial statements
For the year ended 30 June 2018
2. Significant accounting policies (continued)
(t) Going concern
In preparing the financial statements, the Directors have made an assessment of the ability of the Group to
continue as a going concern. In considering their position, the Directors have had regard to the current cash reserves,
the level of forecast cash expenditure and the likelihood of being able to raise funds in future, should the need arise.
The Directors have concluded there are reasonable grounds to believe the Group is a going concern and will be able
to continue pay its debts as and when they become due and payable.
The Group experienced operating losses of $337,980 during the year ended 30 June 2018 and has cash reserves of
$3,509,672 as at 30 June 2018. The working capital position as at 30 June 2018 of the consolidated entity results in
an excess of current assets over current liabilities of $3,049,036 (30 June 2017: $5,469,790).
(u) New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by
the International Accounting Standards Board (IASB) that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
(i) IFRS 15 Revenue from Contracts with Customers
IFRS 15 replaces IAS 18 Revenue, IAS 11 Construction Contracts and some revenue related Interpretations
and:
Establishes a new revenue recognition model
Changes the basis for deciding whether revenue is to be recognised over time or at a point in time
Provides new and more detailed guidance on specific topics (e.g. multiple element arrangements,
variable pricing, rights of return, warranties and licensing)
Expands and improves disclosures about revenue.
Adoption is mandatory for financial years commencing on or after 1 January 2018. The Group intends to adopt
the standard using the modified retrospective approach which means that the cumulative impact of the adoption
will be recognised in retained earnings as of 1 July 2018, and that comparatives will not be restated.
Management has assessed the effect of applying the new standard and notes that it will be impacted where the
Group is a party to procurement contracts, i.e. control is transferred at a point in time and there is no
enforceable right to receive payment for work to date until delivery
Management notes that there will be no retrospective impact on the basis that all such contracts were originated
and delivered within the financial year, and no such contracts were outstanding at period end.
(ii) IFRS 16 Leases
IFRS 16 replaces IAS 17 Leases and some lease-related interpretations and:
Requires all leases to be accounted for ‘on-balance sheet’ by lessees, other than short-term and low
value asset leases
Provides new guidance on the application of the definition of lease and on sale and lease back accounting
Largely retains the existing lessor accounting requirements in IAS 17
Requires new and different disclosures about leases
Synertec Corporation Limited Annual Report 2018
40
Notes to the financial statements
For the year ended 30 June 2018
2. Significant accounting policies (continued)
(u) New or amended Accounting Standards and Interpretations adopted (continued)
(ii) IFRS 16 Leases (continued)
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard re
places IAS 17 “Leases” and for lessees will eliminate the classification of operating leases and finance leases.
Subject to exceptions, a ‘right-of-use’ asset will be capitalised in the statement of financial position, measured
at the present value of the unavoidable future lease payments to be made over the lease term. The exceptions
relate to short-term leases of 12 months or less and leases of low-value assets (such as printers) where an
accounting policy choice exists whereby either a ‘right-of-use’ assets is recognised or lease payments are
expensed to profit or loss as incurred.
A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease
incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling
costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the
leased asset (included in operating costs). In the earlier periods of the lease, the expenses associated with the
lease under IFRS 16 will be higher when compared to lease expenses under IAS 17. However EBITDA
(Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense
is replaced by depreciation in profit or loss under IFRS 16.
The consolidated entity will adopt this standard from 1 July 2019. Based on the entity’s preliminary
assessment, there will be no material impact on the transactions and balances recognised in the financial
statements.
(iii) IFRS 9 Financial Instruments
IFRS 9 introduces new requirements for the classification and measurement of financial assets and liabilities
and includes a forward-looking ‘expected loss’ impairment model and a substantially-changed approach to
hedge accounting. These requirements improve and simplify the approach for classification and measurement
of financial assets compared with the requirements of IAS 39.
Based on the entity’s preliminary assessment, there will be no material impact on the transactions and balances
recognised in the financial statements.
3. Use of judgements and estimates
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the
application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised propectively.
(a) Judgements
Information about critical judgements in applying accounting policies that have the most significant effect on
the amounts recognised in the financial statements is included in note [2(f)] – Revenue and other income.
(b) Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material
adjustment within the year ended 30 June 2018 are included:
Synertec Corporation Limited Annual Report 2018
41
Notes to the financial statements
For the year ended 30 June 2018
3. Use of judgements and estimates (continued)
(b) Assumptions and estimation uncertainties (continued)
Note 11 - Work in progress - recognition of project revenue
Recognising project revenue requires judgement in determining milestones, actual work performed and/or the
estimated costs to complete the work.
Note 12 - Property, Plant and Equipment - useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the
expected utility of assets. Uncertainties in these estimates relate to potential obsolescence that may change the
utility of certain equipment.
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial
and non-financial assets and liabilities.
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair
value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierar-
chy as the lowest level input that is significant to the entire measurement.
Further information about the assumptions made in measuring fair values is included in note [23] - financial
instruments.
4. Operating Segments
The Group has a single reportable segment in which it operates, being engineering services, and this is based on
information that is internally provided to the Chief Operating Decision Makers (“”CODM’) for assessing performance
and making operating decisions. Therefore, no additional disclosures in relation to the revenues, profit or loss, assets
and liabilities and other material items have been made. The Company is based in Australia.
The demand for engineering services is not subject to seasonal fluctuations.
Synertec Corporation Limited Annual Report 2018
42
Notes to the financial statements
For the year ended 30 June 2018
5. Revenue
In Australian dollars
Rendering of services
Fixed price projects
6. Finance income and finance costs
Recognised in profit or loss
Note
30 June 2018
30 June 2017
3,505,920
7,926,750
11,432,670
2,096,134
12,586,169
14,682,303
In Australian dollars
Note
30 June 2018
30 June 2017
Interest income
Realised foreign currency gains
Unrealised foreign currency gains
Finance income
6(i)
Facility interest
Unrealised foreign currency losses
Hire purchase charges
Interest expense
Finance costs
Net finance income/(costs) recognised in profit or loss
6(ii)
64,862
5,823
32,451
103,136
(5,338)
-
(1,161)
(22,489)
(28,988)
74,148
47,506
12,434
-
59,940
(55,812)
(49,920)
(2,661)
(1,682)
(110,075)
(50,135)
6(i) The interest income comprised of interest earned on deposits held as security by EFIC and ANZ.
6(ii) The Goup incurred finance costs during the year related to bank guarantees, and hire purchase
facilities provided by ANZ.
Synertec Corporation Limited Annual Report 2018
43
Notes to the financial statements
For the year ended 30 June 2018
7. Taxes
(i) Tax recognised in profit or loss
In Australian dollars
Current tax benefit/(expense)
Current year
Deferred tax benefit
Origination and reversal of temporary differences
Tax benefit/(expense) from continuing operations
Note
30 June 2018
30 June 2017
-
-
(581,442)
(581,442)
105,383
105,383
105,383
172,447
172,447
(408,995)
The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of
many factors, including interpretations of tax law and prior experience. The current tax asset is $98,403 (2017: Tax
liability $402,932).
(ii) Reconciliation of effective tax rate
In Australian dollars
(Loss)/profit before tax from continuing operations
Tax using the Group’s domestic tax rate
Non-deductible expenses
Income tax (benefit)/expense
Note
27.5%
30 June 2018
(443,363)
(121,925)
16,542
(105,383)
30 June 2017
1,347,890
404,367
4,628
408,995
(iii) Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
In Australian dollars Assets
Liabilities
Net
Employee benefits
Corporate transaction
costs
Deferred income
Other payables
Carry forward tax losses
Net deferred tax asset/
(liabilities)
30-June-2018 30-June-2017 30-June-2018 30-June-2017 30-June-2018 30-June-2017
161,232
-
161,232
158,644
158,644
-
108,582
(3,998)
53,449
118,932
128,241
11,076
29,679
-
435,609
330,228
-
-
-
-
-
-
-
108,582
(3,998)
53,449
118,932
128,241
11,076
29,679
-
-
435,609
330,228
Synertec Corporation Limited Annual Report 2018
44
Notes to the financial statements
For the year ended 30 June 2018
7. Taxes (continued)
(iv) Movement in deferred tax balances during the year
In Australian dollars
01-Jul-
2016
Balance Recognised Recognised
in other
in profit or
compre-
loss
hensive
income
Balance Recognised Recognised
in other
in profit
30-Jun-
compre-
or loss
2017
hensive
income
Balance
30-Jun
-2018
Employee benefits
Deferred income
Corporate transaction
costs
Other payables
Carry forward tax losses
129,355
-
31,877
11,076
-
28,426
-
157,781
128,241
1,253
-
172,447
-
-
-
-
-
-
161,232
11,076
(2,588)
(15,073)
128,241
29,679
-
330,228
(19,658)
23,770
118,932
105,383
-
-
-
-
-
-
158,644
(3,998)
108,582
53,449
118,932
435,609
8. Cash and cash equivalents
In Australian dollars
Bank balances
Cash on hand
Cash and cash equivalents
Note
30 June 2018
3,508,325
1,347
3,509,672
30 June 2017
2,955,379
1,315
2,956,694
8A. Cash flow information
(i) Reconciliation of cash flows from operating activities
In Australian dollars
Cash flows from operating activities
(Loss)/profit for the year
Adjustments:
Depreciation
Net interest (income)/costs
Gain on sale of property, plant and equipment
Listing expense
Loss from discontinued operations
Tax expense
Change in work in progress
Change in other assets
Change in trade and other receivables
Change in trade and other payables
Change in employee benefits
Change in deferred income/revenue
Cash generated from operating activities
Interest paid net of interest received
Realised foreign currency gains/(losses) recognised as
investing activities
Income taxes paid
Net cash from operating activities
Note
30 June 2018
30 June 2017
(8,455,239)
938,895
12
6
18
20
7
95,199
(74,148)
-
4,722,112
3,237,114
(105,383)
(580,345)
(982,088)
(34,053)
(862,778)
1,387,899
39,445
2,452,285
1,420,365
35,874
37,477
(501,333)
992,383
98,720
50,135
(2,024)
-
-
408,996
1,494,722
1,537,111
(16,234)
(903,967)
(1,800,817)
106,255
(183,608)
233,462
(12,649)
(37,486)
(1,478,898)
(1,295,571)
Synertec Corporation Limited Annual Report 2018
45
Notes to the financial statements
For the year ended 30 June 2018
8. Cash and cash equivalents (continued)
8A. Cash flow information (continued)
(ii) Credit standby arrangement and loan facilities
The Company has the following credit standby facilities which are subject to bank review annually:
In Australian dollars
30 June 2018
Note
30 June 2017
Financial guarantee
Credit Card
Total
Utilised
Financial guarantee
Credit Card
Total
(iii) Reconciliation of cash and cash equivalents at beginning of year
1,500,000
155,000
1,655,000
1,137,043
70,929
1,207,972
400,000
155,000
555,000
313,862
44,273
358,135
2,956,694
309,229
206,914
3,472,837
5,028,289
-
-
5,028,289
Note
30 June 2018
586
3,499,917
-
-
14,539
3,515,042
30 June 2017
-
2,661,953
30,021
1,288,778
17,500
3,998,252
In Australian dollars
Synertec Pty Ltd
Synertec Corporation Limited
Synergy Metals Pty Ltd
9. Trade and other receivables
Current
In Australian dollars
Sundry debtors
Trade receivables
Amounts due from related parties
Amounts due from directors(i)
Other receivables
Current
The Company’s exposure to credit and market risks, and impairment losses related to trade and other receivables, are
disclosed in Note 23.
(i) As part of the conditions in the Share Sale Agreement with Synertec Corporation Limited (formerly SML
Corporation Ltd), all loans owed by the Synertec Pty Ltd Directors were settled on 8 August 2017, being the
date of completion of the transaction.
10. Other assets
Current
In Australian dollars
Prepayments
Deposits
Stock on hand
Current
Non-Current
In Australian dollars
ANZ term deposits(i)
EFIC deposits
Non-current
Note
Note
30 June 2018
118,455
31,836
12,262
162,553
30 June 2017
71,168
24,242
12,262
107,672
30 June 2018
1,514,552
-
1,514,552
30 June 2017
409,777
264,799
674,576
(i) The Company has $1,514,552 in deposits with ANZ held as cash security for the bank guarantee facility.
Synertec Corporation Limited Annual Report 2018
46
Notes to the financial statements
For the year ended 30 June 2018
11. Work in progress
In Australian dollars
Work in progress
Note
30 June 2018
1,949,536
1,949,536
30 June 2017
967,448
967,448
Determining when to recognise contract revenue requires a degree of judgement. Contract revenue and expenses are
recognised in accordance with the percentage of completion method unless the outcome of the contract cannot be
reliably estimated. The percentage of completion is estimated by assessing milestones, actual work performed and the
estimated costs to complete the work.
At 30 June 2018, aggregate costs incurred under open contracts and recognised profits earned, net of recognised
losses, amounted to $1,949,536 (2017: $967,448).
12. Property, plant and equipment
In Australian dollars
Computers
Furniture and
equipment
Leasehold
improvements
Motor
vehicles
Cost
Balance at 1 July 2016
Additions
Disposals
Balance at 30 June 2017
Balance at 1 July 2017
Additions
Disposals
Balance at 30 June 2018
Accumulated depreciation
Balance at 1 July 2016
Disposals
Depreciation expense
Balance at 30 June 2017
Balance at 1 July 2017
Disposals
Depreciation expense
Balance at 30 June 2018
Carrying amounts
at 1 July 2016
at 30 June 2017
at 1 July 2017
at 30 June 2018
397,750
27,549
-
425,299
425,299
50,897
-
476,197
116,247
686
-
116,933
116,933
74,125
-
191,058
21,157
-
-
21,157
21,157
-
-
21,157
333,009
111,047
(67,096)
376,961
376,961
10,000
-
386,961
Computers
Furniture and
equipment
Leasehold
improvements
Motor
vehicles
315,960
-
43,249
359,209
359,209
-
36,894
396,103
81,790
66,090
66,090
80,094
78,317
-
6,872
85,189
85,189
-
11,086
96,275
37,930
31,744
31,744
94,783
17,987
-
634
18,621
18,621
-
507
19,128
3,170
2,536
2,536
2,029
103,327
(43,210)
47,965
108,082
108,082
-
46,712
154,794
229,682
268,879
268,879
232,167
TOTAL
868,163
139,282
(67,095)
940,350
940,350
135,022
-
1,075,372
TOTAL
515,591
(43,210)
98,720
571,101
571,101
-
95,199
666,300
352,572
369,248
369,249
409,071
Synertec Corporation Limited Annual Report 2018
47
Notes to the financial statements
For the year ended 30 June 2018
13. Trade and other payables
In Australian dollars
Note
30 June 2018
30 June 2017
Trade payables
Other payables
Fixed price project accruals
1,500,397
814,915
614,167
2,929,479
118,937
527,419
726,646
1,373,002
The Company’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 23.
14. Employee benefits
In Australian dollars
Annual leave
Long service leave
Current
Long service leave
Non-Current
15. Deferred income
In Australian dollars
Billing in advance of work completed
Note
30 June 2018
30 June 2017
273,577
240,416
513,993
62,893
62,893
218,886
257,474
476,360
61,080
61,080
Note
30 June 2018
2,742,698
2,742,698
30 June 2017
290,413
290,413
Where progress billings and recognised losses exceed costs incurred plus recognised profits earned, the Group
recognises these amounts as billing in advance of work completed.
Synertec Corporation Limited Annual Report 2018
48
Notes to the financial statements
For the year ended 30 June 2018
16. Issued capital
Ordinary shares - fully paid
Movement in ordinary share capital - fully paid
Details
Fully paid ordinary share capital of Synertec
Corporation Limited (formerly SML
Corporation Limited)
Completion of Synertec Corporation
Ltd capital consolidation
- 107,839,799 shares
(4 shares into 3)
Acquisition of Synertec Pty Ltd
Elimination of Synertec Corporation
Ltd issued capital upon completion
Issue of Ordinary shares to the Vendors (shareholders
of Synertec Pty Ltd) for the acquisition of
Synertec Corporation Limited
Issue of Ordinary shares to Advisor for the acquisition
of Synertec Corporation Limited
30 June 2018 30 June 2017 30 June 2018 30 June 2017
$
950
950
Shares
220,701,277
220,701,277
$
641,113
641,113
Shares
950
950
Date
Shares
Issue price
$
1-Jul-17 107,839,799
108,051
8-Aug-17
80,879,849
8-Aug-17
8-Aug-17
-
-
-
-
108,051
950
-
(108,051)
8-Aug-17 107,142,857
0.0302
3,235,194
8-Aug-17
13,928,571
0.0467
650,000
Proceeds from shares issued under the Public Offer
8-Aug-17
18,750,000
0.0400
750,000
Transaction costs associated with issuing shares
8-Aug-17
-
-
(413,531)
Net proceeds paid to Redemption Note holders
from Sale of Mining Assets (refer Note 20)
Balance
22-Sep-17
-
30-Jun-18 220,701,277
-
(3,581,500)
641,113
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
17. Operating leases
Leases as the lessee
At the end of the reporting period, the future minimum lease payments under non-cancellable operating leases are
payable as follows:
In Australian dollars
Less than one year
Between one and five years
Note
30 June 2018
200,303
159,912
360,215
30 June 2017
141,816
200,585
342,401
The Group leased the head office and other rental properties under operating leases during the year. The head office
lease has been extended for a further two years to December 2019. Lease payments are increased every year as
indexed to CPI.
During the year $170,014 was recognised as an expense in profit or loss in respect of operating leases
(2017: $160,728).
Synertec Corporation Limited Annual Report 2018
49
Notes to the financial statements
For the year ended 30 June 2018
18. Earnings per share (from continuing operations)
Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the
Parent Company as the numerator (i.e no adjustments to profit were necessary in 2018 or 2017).
In accordance with the principles of reverse acquisition accounting, the weighted average number of ordinary
shares outstanding during the year ended 30 June 2018 has been calculated as:
(a) the weighted average number of ordinary shares of Synertec Pty Ltd outstanding during the period before
acquisition multiplied by the exchange ratio established in the acquisition accounting, and
(b) the actual number of ordinary shares of Synertec Corporation Limited outstanding during the period after
acquisition.
The basic earnings per share for the comparative period before the acquisition date presented in the
consolidated statements following a reverse acquisition is calculated by dividing (a) by (b):
(a) the profit or loss of Synertec Corporation Limited attributable to ordinary equity holders of the Company in
the period.
(b) Synertec Corporation Limited’s historical weighted average number of ordinary shares outstanding
multiplied by the exchange ratio established in the acquisition accounting.
In accordance with IAS 33 ‘Earnings Per Share’, as potential ordinary shares may only result in a situation where
their conversion results in an increase in loss per share or decrease in profit per share from continuing operations,
no dilutive effect has been taken into account for the year ended 30 June 2018.
In Australian dollars
Earnings per share from continuing operations
(Loss)/profit after income tax
Weighted average number of ordinary shares used in
calculating basic earnings per share
Weighted average number of ordinary shares used in
calculating diluted earnings per share
30 June 2018
30 June 2017
(5,060,092)
938,895
206,144,526
80,879,849
206,144,526
80,879,849
Basic (loss)/earnings per share (cents per share)
Diluted (loss)/earnings per share (cents per share)
(2.45)
(2.45)
1.16
1.16
There have been no transactions involving ordinary shares or potential ordinary shares that would significantly
change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the
date of completion of these financial statements.
The 16,175,970 options granted on 8 August 2017 are not included in the calculation of diluted earnings per share
because they are antidilutive for the year ended 30 June 2018. These options could potentially dilute basic earnings
per share in the future.
Synertec Corporation Limited Annual Report 2018
50
Notes to the financial statements
For the year ended 30 June 2018
19. Acquisition Accounting
On 8 August 2017, Synertec Corporation Limited (formerly known as SML Corporation Limited) acquired 100% of the
issued shares of Synertec Pty Ltd. As a result of the acquisition, the former shareholders of Synertec Pty Ltd effectively
obtained control of the combined entity. At the date of the transaction, it was determined that Synertec Corporation
Limited was not a business. For accounting purposes, the acquisition has been treated as a share-based payment using
the reverse acquisition principles of the business combination accounting standard. Accordingly, the consolidated
financial statements of Synertec Corporation Limited have been prepared as a continuation of the consolidated financial
statements of Synertec Pty Ltd.
As the deemed acquirer, Synertec Pty Ltd has accounted for the acquisition of Synertec Corporation Limited from 8
August 2017. The comparative information for the 12 months ended 30 June 2017 and the statement of financial
position at 30 June 2017 presented in the consolidated financial statements are that of Synertec Pty Ltd. Where
necessary, comparative information has been reclassified and repositioned for consistency with current period
disclosures.
The excess of the fair value of Synertec Corporation Limited’s shares over the fair value of its net assets (excluding the
Mining Assets - refer Notes 20) at the acquisition date has been recognised as a listing expense.
Under the acquisition, Synertec Corporation Limited (formerly SML Corporation Limited) acquired all the shares in
Synertec Pty Ltd by issuing 107,142,857 shares in Synertec Corporation Limited and paying $5.0 million to the Synertec
Pty Ltd shareholders.
The value of the Synertec Corporation Limited shares provided was determined by reference to the capital raising offer
price, which was deemed to be $3.2 million (calculated as 80,879,849 existing shares at the share offer price of $0.04
each in the public Share Offer).
The pre-acquisition equity balances of Synertec Corporation Limited were eliminated against the increase in share capital
upon consolidation and the balance deemed to be the amount paid for the ASX listing status of Synertec Corporation
Limited, being $4.7 million.
The net assets acquired and the amount recognised as an ASX listing expense, are as follows:
In Australian dollars
Net assets acquired
Cash and cash equivalents
Trade and other receivables
Other assets
Assets held for sale
Trade and other payables
Sale of the Mining Assets
Cash consideration to Synertec Pty Ltd
Net asset deficiency acquired
Fair value of Synertec Corporation Limited consideration shares
Net asset deficiency
Corporate advisory fees (shares issued in lieu of cash for services)
Amount recognised as ASX Listing expense upon acquisition
Acquiree’s carrying value
before acquisition
$
4,162,547
5,049
2,704
6,855,238
(7,218)
11,018,320
(6,855,238)
(5,000,000)
(836,918)
3,235,194
836,918
4,072,112
650,000
4,722,112
Synertec Corporation Limited Annual Report 2018
51
Notes to the financial statements
For the year ended 30 June 2018
20. Discontinued operations
Further to the Synertec Corporation Ltd announcement on 22 September 2017, whereby the Company completed
the sale of 100% of the issued shares in its subsidiary, Australian Gold Mines Pty Ltd (which owns all the shares in Mt
Wills Gold Mines Pty Ltd, the holder of the mining assets) and an immaterial related parcel of land under a Contract
for the Sale (“Mining Assets”) as intended, the Company announced on 23 December 2017 that all warranties were
completed.
The Mining Assets were sold for $3.5 million and net proceeds of $3.6 million were distributed to Redemption Note
holders (in accordance with the former Prospectus dated 23 June 2017 on 15 January 2018. The Sale of the Mining
Assets resulted in a loss on sale of those assets of $3.2 million, recognised as the result from Discontinuing
operations.
An amount equal to the Net Sale Proceeds of the sale of the Mining Assets was distributed to those shareholders
of the Group who were registered in the Group’s register of shareholders as a holder of shares in the Group as at
5.00pm (AEST) on 26 June 2017 (Eligible Shareholders); such distribution was made to Eligible Shareholders on a pro
rata basis via the Redemption Notes issued to them by the Group. The net sale proceeds paid to each Redemption
Note was determined by dividing the net sale proceeds by the number of Redemption Notes issued.
In determining the Net Sale Proceeds, all direct costs and taxes payable have been deducted from the gross sale
proceeds. The Group was able to obtain a refund of some tenement rental costs from Government authorities and
a refund of a bank deposit placed in support of a tenement bond. There was also bank interest earned on the cash
consideration placed as a term deposit. As a result, the Net Sale Proceeds exceeded the cash consideration received
for the Mining Assets.
Upon completion of the warranties and determining the Net Sale Proceeds for the sale of the Mining Assets in
December 2017, a loss on sale of the Mining Assets of $3.2 million was calculated and recognised in the financial
statements of Synertec Corporation Limited as at 30 June 2018 as a loss from discontinued operations. At the same
time, a liability to return this capital to Redemption Note holders was also recognised.
Net operating costs from mining subsidiaries of $158,033 has been included in the loss from Discontinued operations.
These costs relate to the Sale of Mining Assets, execution of Redemption Note obligations and winding up of the
mining subsidiaries.
SML Resources Ltd and Synergy Metals Pty Ltd are in the process of being liquidated and are expected to be wound
up by December 2018. Mitta Omeo Metals - the company will be de-registered with the ASIC by 14 June 2018. I will
follow up again.
$
Net operating costs from mining subsidiaries
Loss on disposal of Mining Assets
Net Loss from Discontinued operations
158,033
3,237,114
3,395,147
Synertec Corporation Limited Annual Report 2018
52
Notes to the financial statements
For the year ended 30 June 2018
21. Related parties
In Australian dollars
Short-term employee benefits
Post-employment benefits
Other long-term employment benefits
Note
30 June 2018
602,820
57,268
92,686
752,774
30 June 2017
521,688
44,414
109,756
675,858
Compensation of the Company’s key management personnel includes salaries, accrued leave balances, non-cash
benefits and contributions to an employee defined contribution plan.
Details regarding loans receivable / (payable) outstanding at the end of the reporting period to key management
personnel and their related parties, are as follows:
In Australian dollars
Michael Carroll (i)
Gassan Abdallah (ii)
Note
30 June 2018
-
-
-
30 June 2017
372,208
916,570
1,288,778
9
(i) Michael Carroll is the Managing Director of Synertec Corporation Limited (since 8 August 2017). He was
Managing Director of Synertec Pty Ltd prior to the acquisition by Synertec Corporation Limited.
(ii) Gassan Abdallah was a director of Synertec Pty Ltd prior to the acquisition by Synertec Corporation
Limited. He is no longer a director or employee of any of the companies within the Group.
22. Auditor’s remuneration
In Australian dollars
Note
30 June 2018
30 June 2017
Audit and review services
Auditors of the Company - Grant Thornton Audit Pty
Ltd Audit and review of financial statements
Other services
Auditors of the Company - Grant Thornton Australia Limited
In relation to taxation
72,000
72,000
10,000
82,000
35,000
35,000
10,000
45,000
52
Synertec Corporation Limited Annual Report 2018
53
Notes to the financial statements
For the year ended 30 June 2018
23. Financial instruments
Financial risk management
Overview
The Group has exposure to the following risks from its use of financial instruments:
credit risk
liquidity risk
market risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies
and processes for measuring and managing risk, and the Group’s management of capital.
Risk management framework
The Group’s Directors have overall responsibility for the establishment and oversight of the risk management
framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through
their training and management standards and procedures, aims to develop a disciplined and constructive control
environment in which all employees understand their roles and obligations.”
(i) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Group’s receivables from customers and investment
securities.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk at the end of the reporting period was as follows:
In Australian dollars
Trade and other receivables
Cash and cash equivalents
ANZ deposit
EFIC deposits
Amount due from directors
Deposits
Amounts due from related parties
Carrying amount
Note
9
8
10
10
10
10
10
30 June 2018
3,515,042
3,509,672
1,514,552
-
-
31,836
-
8,571,102
30 June 2017
2,661,953
2,956,694
409,777
264,799
1,288,778
24,242
30,021
7,636,264
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,
management also considers the demographics of the Group’s customer base, including the default risk of the industry
and country in which customers operate, as these factors may have an influence on credit risk.
As the Group provides services under contract, each new customer is analysed individually for creditworthiness before
the Group’s standard payment and delivery terms and conditions are offered.
The Group historically has had negligible bad debts, and as such does not establish an allowance for impairment that
represents its estimate of incurred losses in respect of trade and other receivables and investments.
Synertec Corporation Limited Annual Report 2018
54
Notes to the financial statements
For the year ended 30 June 2018
23. Financial instruments (continued)
(i) Credit risk (continued)
The Group does not require collateral in respect of trade and other receivables. The maximum exposure to credit risk for
trade and other receivables at the reporting date by type of counterparty was as follows.
In Australian dollars
Australia
Note
30 June 2018
3,515,042
3,515,042
Carrying amount
30 June 2017
2,661,953
2,661,953
The Group’s most significant balance outstanding to a single customer, accounts for $1,420,430 of the trade and other
receivables carrying amount at 30 June 2018 (2017: $1,404,037). The amount was received subsequent to year end.
Impairment losses
The aging of the trade and other receivables balance at the end of the reporting period that were not impaired was as
follows.
In Australian dollars
30 June 2018
30 June 2017
Note
Neither past due nor impaired
Past due 1 - 30 days
Past due 31 - 90 days
Past due 91 - 120 days
2,414,693
879,899
205,325
586
3,500,503
2,627,721
5,500
28,632
100
2,661,953
Cash and cash equivalents (including deposits)
The Group held cash and cash equivalents of $3,509,672 at 30 June 2018 (2017: $2,956,694) which represents its
maximum credit exposure on these assets. The cash and cash equivalents are held with a reputable bank and financial
institution counterparties. The Group has $1,514,552 (2017: $674,576) on deposit with ANZ being held as security for
the performance guarantee bonds held.
(ii) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group uses detailed project plans, which assists it in monitoring cash flow requirements and optimising its cash
return on projects delivered. The Group aims to maintain the level of its cash and cash equivalents at an amount in
excess of expected cash outflows on financial liabilities (other than trade payables) over the succeeding 60 days. The
Group also monitors the level of expected cash inflows on trade and other receivables together with expected cash
outflows on trade and other payables. At 30 June 2018, the expected cash flows from trade and other receivables
maturing within two months are $3,399,506 (2017: $2,633,221). This excludes the potential impact of extreme
circumstances that cannot reasonably be predicted, such as natural disasters.
54
Synertec Corporation Limited Annual Report 2018
55
Notes to the financial statements
For the year ended 30 June 2018
23. Financial instruments (continued)
(ii) Liquidity risk (continued)
The following are the remaining contractual maturities at the end of the reporting period of financial liabilities, including
estimated interest payments and excluding the impact of netting agreements:
30 June 2018
In Australian dollars
Non-derivative financial liabilities
Finance lease liabilities
Trade payables
30 June 2017
In Australian dollars
Non-derivative financial liabilities
Finance lease liabilities
Trade payables
(iii) Market risk
Contractual cashflows
Carrying
amount
-
2,929,479
2,929,479
Total
-
2,929,479
2,929,479
0-1 years
-
2,929,479
2,929,479
1-2 years
-
-
-
2-5 years
-
-
-
Contractual cashflows
Carrying
amount
17,569
1,373,002
1,390,571
Total
18,774
1,373,002
1,391,776
0-1 years
18,774
1,373,002
1,391,776
1-2 years
-
-
-
2-5 years
-
-
-
Market risk is the risk that changes in market prices – such as foreign exchange rates and interest rates– will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while optimising the return.
Currency risk
The Group is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales
and purchases and cash and cash equivalents are denominated. The currencies in which these transactions are
primarily denominated are AUD, EUR and USD.
At any point in time, the Group holds EUR and USD in anticipation of future purchase orders. The Group reviews
the market regularly to evaluate if the cost of obtaining derivatives outweights the risk of currency movement. They
have not invested in any derivative financial assets. The Group has reviewed contract terms with customers where
significant currency risk on purchase orders may occur, and have enforceable provisions protecting them from adverse
currency movements.
Synertec Corporation Limited Annual Report 2018
56
Notes to the financial statements
For the year ended 30 June 2018
23. Financial instruments (continued)
(iii) Market risk (continued)
In respect of other monetary assets and liabilities denominated in foreign currencies, the Group’s policy is to ensure that
its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to
address short-term imbalances.
Exposure to currency risk
The summary quantitative data about the Group’s exposure to currency risk as reported to the management of the
Group is as follows.
Trade and other receivables
Cash and cash equivalents
Financial assets
Trade and other payables
Financial liabilities
30 June 2018 30 June 2017
USD
EURO
USD
EURO
434,926
695,401
1,130,327
-
-
-
19,372
19,372
87,841
87,841
-
268,086
268,086
-
-
-
152,783
152,783
-
-
Net exposure
1,130,327 107,213
268,086
152,783
Currency risk sensitivity analysis for currencies in which monetary assets are held
A reasonably possible change of 10% in exchange rates at the reporting date would have increased/(decreased) equity
and profit or loss by the amounts shown below. This analysis assumes an increase/(decrease) in the value of the
Australian dollar against the currencies shown below.
Profit or loss, net of tax Equity, net of tax
10% increase 10% decrease
10% increase 10% decrease
30 June 2018
USD
Euro
Currency exchange risk (net)
30 June 2017
USD
Euro
Currency exchange risk (net)
(44,253)
(1,233)
(45,486)
(17,060)
(9,723)
(26,783)
54,087
1,507
55,594
20,851
11,883
32,734
(44,253)
(1,233)
(45,486)
(17,060)
(9,723)
(26,783)
54,087
1,507
55,594
20,851
11,883
32,734
Exposure to interest rate risk
The interest rate profile of the Group’s interest-bearing financial instruments as reported to the management of the Group
is as follows.
Variable rate instruments
ANZ interest expense
Interest on ANZ deposits
Related party interest rates
Nominal amount
30 June 2018
30 June 20
18.99%
2.10%-2.35%
-
18.99%
2.35%
5.40%
Synertec Corporation Limited Annual Report 2018
57
Notes to the financial statements
For the year ended 30 June 2018
23. Financial instruments (continued)
(iii) Market risk (continued)
Cash flow sensitivity analysis for variable rate instruments
A reasonably possible change of 1% in interest rates at the reporting date would have increased (decreased) equity
and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign
currency rates, remain constant.
Profit or loss
Equity, net of tax
1% increase
1% decrease
1% increase
1% decrease
30 June 2018
Variable rate instrument
Cash flow sensitivity (net)
30 June 2017
Variable rate instruments
Cash flow sensitivity (net)
10,602
10,602
11,890
11,890
(10,602)
(10,602)
(11,890)
(11,890)
10,602
10,602
11,890
11,890
(10,602)
(10,602)
(11,890)
(11,890)
Capital Management
The board’s policy is to maintain a strong capital base to sustain future development of the business. Capital consists
of total equity. The Directors monitor the return on capital as well as the level of dividends to ordinary shareholders.
The Directors seek to maintain a balance between the higher returns that might be possible with higher levels of
borrowings and the advantages and security afforded by a sound capital position.
There were no changes in the Group’s approach to capital management during the year.
Accounting classifications and fair values
Fair values vs carrying amount
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial
position are as follows. The carrying amounts for financial assets and liabilities approximates fair value.
In Australian dollars
Note Loans and
receivables
30 June 2018
Cash and cash equivalents
Trade and other receivables
Amount due from related parties
Amount due from directors
ANZ deposits
EFIC deposits
Deposits
Finance lease liabilities
Trade and other payables13
8
9
10
10
10
3,509,672
3,515,042
-
-
-
-
-
7,024,714
Other
financial
assets
-
-
-
-
1,514,552
-
31,836
1,546,388
Other
financial
liabilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,929,479
2,929,479
Total
carrying
amount
3,509,672
3,515,042
-
-
1,514,552
-
31,836
8,571,102
-
2,929,479
2,929,479
Synertec Corporation Limited Annual Report 2018
58
Notes to the financial statements
For the year ended 30 June 2018
23. Financial instruments (continued)
(iii) Market risk (continued)
Accounting classifications and fair values (continued)
Fair values vs carrying amount (continued)
In Australian dollars
30 June 2017
Cash and cash equivalents
Trade and other receivables
Amount due from related parties
Amount due from directors
ANZ deposits
EFIC deposits
Deposits
Note
Loans
and
receivables
8 2,956,694
9 2,661,953
-
-
-
-
-
5,618,647
10
10
10
Other
financial
assets
-
-
30,021
1,288,778
409,777
264,799
24,242
2,017,617
Other
financial
liabilities
-
-
-
-
-
-
-
-
Finance lease liabilities
Trade and other payables
13
-
-
-
-
-
-
17,569
1,373,002
1,390,571
Total
carrying
amount
2,956,694
2,661,953
30,021
1,288,778
409,777
264,799
24,242
7,636,264
17,569
1,373,002
1,390,571
24. Interest in subsidiaries
Composition of the Group
Name of subsidiary
Country of
incorporation
and principle
place of
business
Principal Group proportion of
activity ownership interests
30 June 2018
30 June 2017
Synertec Holdings Pty Ltd
Synertec Pty Ltd
SML Resources Ltd
Synergy Metals Pty Ltd
Mitta Omeo Metals Pty Ltd
Australia Holding company
Consultancy and
Australia
Engineering
Australia Holding company
Mining
Australia
Mining
Australia
100%
100%
100%
100%
-
-
-
100%
100%
100%
During the year, Synertec Holdings Ltd was incorporated. Synertec Holdings Ltd owns 100% shares in Synertec Pty Ltd.
25. Contingent liabilities
The consolidated entity does not have any contingent liabilities at reporting date.
26. Subsequent events
No matter or circumstance has arisen since 30 June 2018 that has significantly affected or may significantly affect the
consolidated entity’s operations, the results from those operations, or the consolidated entity’s state of affairs in future
years.
58
Synertec Corporation Limited Annual Report 2018
59
Directors’ Declaration
For the year ended 30 June 2018
1. In the opinion of the Directors of Synertec Corporation Limited (“the Group”):
(a) the financial statements and notes thereto, set out on pages 29 to 59:
(i) present fairly the financial position of the Group as at 30 June 2018 and its performance, as represented
by the results of its operations and its cash flows, for the year ended on that date;
(ii) comply with International Financial Reporting Standards as issued by the International Accounting
Standards Board as described in Note 2 to the financial statements; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
2. In respect of the year ended 30 June 2018, the persons performing the roles of Chief Executive Officer and
Chief Financial Officer have declared that the Company has:
(a) kept such accounting records as correctly record and explain its transactions and financial position;
(b) kept its accounting records such that financial statements of the Group that are presented fairly can be prepared
from time to time; and
(c) kept its accounting records accordingly so that the financial statements of the Company can be conveniently
and properly audited.
Signed in accordance with a resolution of the Directors:
Dated at 29 August 2018
Michael Carroll
Director
Synertec Corporation Limited Annual Report 2018
60
Independent Auditor’s Report
Collins Square, Tower 1
727 Collins Street
Docklands VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Synertec Corporation Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Synertec Corporation Limited and its subsidiaries (the Group), which comprises the
consolidated statement of financial position as at 30 June 2018, the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and
the directors’ declaration.
In our opinion, the accompanying financial report of the Group gives us a true and fair view of the Group’s financial position
as at 30 June 2018 and of its performance for the year ended on that date and in accordance with International Financial
Reporting Standards as issued by the International Accounting Standards Board.
Basis for opinion
We conducted our audit in accordance with International Financial Reporting Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report.
We are independent of the Group in accordance with the independence requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit
of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
60
Synertec Corporation Limited Annual Report 2018
61
Independent Auditor’s Report
Key audit matter
Revenue Recognition
Synertec Corporation Ltd recognise a large portion of their revenue
using the percentage completion method for their fixed price projects.
The hourly rate projects are recognised as the associated labour
expense is incurred. As these projects may be ongoing at year end
there is also significant estimation required when recognising the work
in progress and deferred revenue.
The engagement team has identified this area as a significant risk due
to the significant judgement involved in using the percentage
completion method for the fixed price projects and in appropriately
capturing the time and material costs for the hourly rate projects to
recognise revenue.
Due to the significant estimation involved, the engagement team has
determined this as a Key Audit Matter.
Sale of Shares and Listing Expense
On the 10th March 2017 SML Corporation Ltd entered into a share
sale agreement to conditionally acquire 100% of the issued share of
Synertec Pty Ltd. The consideration payable for this acquisition was
$5m in cash and $5m in shares.
The engagement team has identified this as a risk area with respect to
how the acquisition of the new entity should be recognised, and the
subsequent measurement of this acquisition. This applies particularly
to the transfer of control where Synertec Corporation Ltd (formerly
SML Corporation Ltd) takes control of Synertec Pty Ltd and the
associated listing expense that will need to be recognised for Synertec
Pty Ltd.
Due to the risk around the recognition of the new entity and this being
a once off event we have determined this as a Key Audit Matter.
How our audit addressed the key audit matter
Our procedures included, amongst others:
• Documented the processes and controls around revenue
recognition;
• Obtained a revenue listing by project split between complete and
incomplete projects and projects that had debtor balances at 30
June 2018. This was tied to the financial report and a sample was
taken from this listing on a project level basis. For our sample
identified we:
1) Agreed the total contract price per the listing to the contract
and variations;
2) Obtained subsequent receipts for all invoices for the projects
sampled to evidence that revenue recognised was appropriate.
For balances where no payment has been received debtors
confirmations were obtained;
3) For incomplete projects sampled we obtained the 30 June
2018 work in progress reconciliation and agreed to the financial
report;
4) We obtained the expense listing for project costs recognised to
30 June 2018 for our sample and reconciled to the work in
progress report at 30 June 2018;
5) Selected a sample of project expenditure and agreed to
supporting documentation to ensure that expenditure had been
correctly recorded and appropriately accounted for;
6) Performed cut-off testing by selecting a sample of sales close
to year end and ensured that these were appropriately
recognised in the correct period; and
7) Performed revenue and cost of sales analytics between
FY2018 results and FY2017 results and discussed with
management. Any results outside of expectation were
assessed further.
Our procedures included, amongst others:
• Review of the Share Sale Agreement and assessment of key
conditions within the agreement;
• Assessment of the transfer of control, in accordance with IFRS 3
Business Combinations;
• Audit of the balance sheet at the date of change in control; and
• Review of disclosures within the financial report.
Synertec Corporation Limited Annual Report 2018
62
Independent Auditor’s Report
Sale of Assets and Return of Capital
Under the Share Sale Agreement, SML Corporation Ltd were to divest
Our procedures included, amongst others:
the mining and associated assets, this was subject to the successful
completion of the acquisition of Synertec Pty Ltd. At 30 June 2017
these assets had a total book value of $6,855,238 which was
recognised as a Non-Current Asset Held for Sale. The sale of these
assets was to be completed within six months of acquisition, with net
proceeds distributed to the existing shareholders of the company prior
to the reverse acquisition. To achieve this, pre-existing shareholders
were issued with redemption notes.
• Reviewed the accounting for the disposal in relation to My Wills
Gold Mines Pty Ltd;
• Reviewed material components of the transaction to supporting
documentation;
• Reviewed documentation associated with the redemption notes
issued, and the ultimate return of capital for funds associated with
the sale of mining and associated assets; and
• Review disclosure with the financial report.
The engagement team has identified this area as a risk with respect to
accounting to the sale of assets and the disclosure within the financial
report.
Due to the complexity involved in this transaction the engagement
team have identified this area as a Key Audit Matter.
Information Other than the Financial Report and Auditor’s Report Thereon
The Directors are responsible for the other information. The other information comprises the information included in the Group’s
annual report for the year ended 30 June 2018, but does not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the Financial Report
The Directors of the Group are responsible for the preparation of the financial report that gives a true and fair view in accordance
with International Financial Reporting Standards as issued by the International Accounting Standards and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either
intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
62
Synertec Corporation Limited Annual Report 2018
63
Independent Auditor’s Report
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
Grant Thornton Audit Pty Ltd
Chartered Accountants
A C Pitts
Partner - Audit & Assurance
Melbourne, 29 August 2018
Synertec Corporation Limited Annual Report 2018
64
Shareholder Information
Fully Paid Ordinary Shares
Analysis of holdings as at 28 August 2018
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-99,999,999,999
Totals
Holders
145
147
103
330
78
803
Total Units
44,560
384,740
789,745
12,979,490
206,502,742
220,701,277
%
0.020
0.174
0.358
5.881
93.567
100.000
The number of unmarketable parcel holders as at 28 August 2018 based upon a share price of $0.043 (4.3 cents),
is 424 shareholders holding in aggregate 1,537,302 ordinary shares.
Top 20 Holdings as at 28 August 2018
Holder Name
NEW CONCEPT CORPORATION LIMITED
NORTHWEST NONFERROUS AUSTRALIA MINING PTY LTD
INAYA LIMITED
KIPBERG PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
MR SIK ERN WONG
MR GOO TONG ANG
SPOTTED CHOOK INVESTMENTS PTY LTD
MR EWE GHEE LIM & MISS CHARLENE YULING LIM
MR KIAT POH & MISS JU-LYNN POH
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
MR STEPHEN HAROLD BAKER
EST MR TREVOR NEIL HAY
EVERY STONE RECRUITMENT PTY LTD
MS LEE LUANG YEO
MR LARRY SCHREIER
MR KAH HONG CHAN
KENG CHUEN THAM
MR DAVID KEITH EDWARDS & MRS ROBERTA MAY EDWARDS
Substantial Shareholders of the Company are set out below:
NEW CONCEPT CORPORATION LIMITED
NORTHWEST NONFERROUS AUSTRALIA MINING PTY LTD
INAYA LIMITED
Number Held
98,796,992
39,375,000
13,928,571
8,345,865
6,610,747
3,629,629
2,539,800
2,446,675
2,440,220
2,360,531
2,170,376
2,038,928
2,000,000
1,607,526
1,516,094
1,408,180
900,000
854,949
800,000
506,250
194,276,333
Number Held
98,796,992
39,375,000
13,928,571
%
44.765
17.841
6.311
3.782
2.995
1.645
1.151
1.109
1.106
1.070
0.983
0.924
0.906
0.728
0.687
0.638
0.408
0.387
0.362
0.229
88.027
%
44.765
17.841
6.311
Voting rights attached to ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon poll each share
shall have one vote.
Synertec Corporation Limited Annual Report 2018
65
Share Options
Analysis of holdings as at 28 August 2018
Listed Options $0.053 Expiring 8 August 2020
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-99,999,999,999
Totals
Holders
267
233
52
66
12
630
Total Units
87,616
574,480
353,840
1,917,377
13,242,657
16,175,970
%
0.542
3.551
2.187
11.853
81.866
100.000
Top 20 Holdings as at 28 August 2018
Number Held
7,875,000
1,531,282
714,677
507,960
481,636
472,176
472,106
434,075
321,505
170,990
160,000
Holder Name
NORTHWEST NONFERROUS AUSTRALIA MINING PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
MR SIK ERN WONG
MS LEE LUANG YEO
MR GOO TONG ANG
MR EWE GHEE LIM & MISS CHARLENE YULING LIM
MR KIAT POH & MISS JU-LYNN POH
EST MR TREVOR NEIL HAY
MR KAH HONG CHAN
KENG CHUEN THAM
MR DAVID KEITH EDWARDS & MRS ROBERTA MAY EDWARDS
MRS LILIANA TEOFILOVA
MR KA FAI MARTIN WONG
MR CHER TZE HANG MATTHIAS
SUBZERO COMMERCIAL REFRIGERATION PTY LTD
MISS LAY HONG GOH
MR GORDON BURDEKIN & MRS NOELLE BURDEKIN
66,808
MR CHEE KOK TEO
60,628
PERSHING AUSTRALIA NOMINEES PTY LTD 60,552
101,250
85,778
84,618
80,000
79,780
75,000
%
48.683
9.466
4.418
3.140
2.977
2.919
2.919
2.683
1.988
1.057
0.989
0.626
0.530
0.523
0.495
0.493
0.464
0.413
0.375
0.374
Unissued equity securities
There were no unissued equity securities at the date of this report.
Securities exchange
The Company is listed on the Australian Securities Exchange (ASX: SOP).
13,835,791
85.534
Synertec Corporation Limited Annual Report 2018
66
Synertec Corporation Limited Annual Report 2018
67
SYNERTEC
Synertec Corporation Limited Annual Report 2018
68