Annual Report 2019
$24.1m
Revenue
vs $11.4m FY18
111%
Revenue growth
FY19 on FY18
$0.1m
EBITDA profit vs
$0.3m loss FY18
$0.8m
Net operating cash in-flow
$1.0m in FY18
$5.8m
Total cash
(includes $1.5m as security
for bank guarantee facility)
no
debt
60Talented people across
Australia
70%
Revenue consistently derived
from repeat clients
CONTENTS
Statement from the Chair
Managing Director’s Report
Synertec Board Members
Financial Report for the year ended 30 June 2019
Corporate Directory
Directors’ Report
Corporate Governance Statement
03
05
08
11
12
13
23
Statement of Profit or Loss and Other Comprehensive Income 24
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash flows
Notes to the financial statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
25
26
27
28
52
53
56
1
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Board
Opposite
from left
Mr. Michael Carroll
Ms. Leeanne Bond
Below
from left
Mr. David Harris (Company Secretary)
Mr. Kiat Poh
Mr. Freddie Heng
2
STATEMENT FROM THE CHAIR
Building on the strong foundations set in previous years, the
Company is well positioned in the markets it has targeted
and continues to focus and deliver on its key stated priorities:
Shareholder Value; Industry Focus; High Performing Teams;
and Innovation.
On behalf of the Board of Directors of Synertec, I have great
pleasure to present to you our 2019 Annual Report.
With the acquisition of Synertec Pty Ltd and transition of
Synertec Corporation as an ASX-listed company completed
last financial year, the Company has been focused this year
on delivering several large and strategic project commitments
and expanding our impressive specialist engineering products
and solutions into new markets and customers – delivering
record levels of revenue, a return to positive earnings before
taxes depreciation and amortisation (‘EBITDA’), and effective
working capital management.
It is pleasing to report that all the Company’s major projects
were successfully delivered to a high standard of quality, on
time and on budget for our customers. This further
strengthens Synertec’s reputation for quality, innovation and
reliability when it comes to successful delivery of challenging,
high risk and mission-critical engineering solutions for our
clients.
Building on the strong foundations set in previous years, the
Company is well positioned in the markets it has targeted
and continues to focus and deliver on its key stated priorities:
Shareholder Value; Industry Focus; High Performing Teams;
and Innovation.
The commitment and client-centric focus of our Managing
Director, Mr. Michael Carroll and the whole Synertec team is
best-in-class and represents one true point of differentiation.
Synertec has entrenched itself as a leading provider of
innovative products and solutions in mission-critical
automation, controls, instrumentation, process engineering
and construction management in its chosen fields of
expertise.
Looking ahead, and from my involvement across the energy
sector through various Board and senior appointments, I am
buoyed by Synertec’s pipeline of business opportunities that
assist our growth strategy. We are confident that the
Company has developed a solid strategic plan and supporting
platforms to enable it to continue its growth trajectory with the
ultimate objective to deliver strong shareholder returns.
It is pleasing to report that the Board and management
dynamic has continued to develop strongly, and we have
worked cohesively over the past year to provide the business
with solid leadership, as well as refine and deliver on the
growth strategy. I am excited by the recent announcement of
the appointment to our Board of Mr. Dennis Lin as an
independent non-executive director as he brings a strong
depth of experience in M&A and cross border trade and
investment with Asia. Mr. Lin is well known to Synertec, having
worked with us over the past year on strategic initiatives.
At the same time, we also announced the pending retirement
of our long-serving non-executive director, Mr. Freddie Heng.
Mr. Heng has provided excellent service to the Company over
many years and will retire formally at the Company’s 2019
Annual General Meeting. Mr. Lin will take on the role of Audit
and Risk Committee Chair after a handover from Mr Heng.
Finally, I am extremely grateful to our dedicated team,
suppliers, customers and shareholders for their loyal
support of Synertec. I would also like to thank my fellow
Board members for their ongoing counsel, commitment and
valuable contribution to the growth of the Company.
BOARD CHAIR
Ms. Leeanne Bond
3
SYNERTEC ANNUAL REPORT 2018 : 2019
Chevron’s Wheatstone LNG
loading facility near Onslow in
Western Australia, site of
Synertec’s second Custody
Transfer System installation.
7
MANAGING DIRECTOR’S REPORT
The Company continues to deliver on its core growth objectives,
resulting in record annual revenues of $24.1 million, a 111%
increase on the prior year. This has resulted in a return to
positive earnings, continuing strong positive operating net cash
flows and no debt.
I am delighted to share the Company’s 2019 Annual Report,
showcasing the second year of operations since the
Company successfully completed the acquisition of Synertec
Pty Ltd and re-listed on the Australian Securities Exchange.
This year has been pivotal in the development of Synertec
and testament to the hard work by our dedicated team in
ensuring our products and solutions delivered for our clients,
many of which are mission-critical, are of the highest quality,
while being timely and value-adding.
The Company continues to deliver on its core growth
objectives, resulting in record annual revenues of $24.1
million, a 111% increase on the prior year. This has resulted
in a return to positive earnings before taxes depreciation and
amortisation (‘EBITDA’) of $0.1m (30 June 2018; EBITDA
loss of $0.3m), continuing strong positive
operating net cash flows and no debt.
Leading into FY19, the Group anticipated substantial growth
in revenue following the award of several large and
strategically important projects (as announced to the
Australian Securities Exchange (ASX). While the earnings
delivered did not meet our expectations, overall margins
for the year are reflective of the high proportion of revenue
derived from fixed price solutions and projects which had
large materials procurement and construction management
components typically at lower margins than our traditional
engineering services consulting.
However, it is important to note that the results achieved
also include a substantial amount of deliberate strategic
investment by Synertec in the development of new
products and know-how as we work with our clients.
We have been diligent in the pursuit of new opportunities in
key target markets and/or with specific new strategic
customers. We see the development of new products and
know-how that delivers high-quality outcomes to our clients
as an effective commercial approach to the execution of our
growth strategy, while at the same time deepening customer
relationships. As a result, I am excited about the progress
of our strategic initiatives during FY2019 and their potential
to deliver further significant and sustained growth into the
future.
I am pleased to report that this strategy is already delivering
results. Our more recent blue-chip customers who we
delivered significant projects to over the past year, are
continuing to trust our expertise by issuing further requests
for innovative solutions on complex engineering matters
across their key assets.
Our growth strategy has multiple initiatives. Over the
FY2019 period we have explored potential high-growth
avenues outside of our project work, be it through strategic
collaborations with other businesses and/or complementary
know-how which would deepen and expand our offering to
customers. We have also continued to invest in developing
our systems and people to ensure our teams and business
platforms accommodate our anticipated growth.
The pillars of our strategy remain steadfast with Synertec
deliberately targeting complex engineering environments,
with potential high risks for our customers, and typically in
highly regulated industry segments both in Australia and
internationally. These core markets include Liquified Natural
Gas (LNG), Critical Infrastructure, Pharmaceuticals, Water
and Defence. In FY2019, Synertec consolidated its growing
niche position in these markets with a focus on building
reputation and recognition through the delivery of projects
which we believe will enable significant growth through
specialisation and productisation globally.
5
SYNERTEC ANNUAL REPORT 2018 : 2019
MANAGING DIRECTOR’S REPORT
ANNUAL REVENUE BY HALF YEAR ($m)
AND ANNUAL GROWTH RATE (%)
REVENUE BY CATEGORY ($m) &
ANNUAL GROWTH RATE
$25.0
$20.0
$15.0
$10.0
$5.0
$0
FY17 FY18 FY19
115%
95%
75%
55%
35%
15%
-5%
-25%
$25.0
$20.0
$15.0
$10.0
$5.0
$0
FY17 FY18 FY19
115%
95%
75%
55%
35%
15%
-5%
-25%
1H
2H
REVENUE GROWTH
ENGINEERING SERVICES
REVENUE GROWTH
FIXED PRICE PROJECTS & TRANSFER OF GOODS
I am proud to report that key project successes during the
year included delivery of automated integrated control
systems on Jemena’s Northern Gas Pipeline, the Metro
Trains Melbourne brownfield tunnel safety system upgrade,
the Cross Yarra Partnership’s interim design of tunnel
ventilation and building management systems, and the
design and construction management of a significant berth
expansion at Newcastle Port shipping terminal; all of which
involved high quality products delivered on time and on
budget for our customers.
The design and construction of a large state-of-the-art
pharmaceutical manufacturing facility in Victoria, Australia,
continues to progress as planned. This customer is one
of the largest vaccine manufacturers in the world and this
facility represents their Global Centre of Excellence for this
product. This complex and highly regulated project is one
which Synertec is uniquely positioned to deliver.
This solidifies Synertec’s reputation as a leading Australian
provider of specialised and innovative engineering products
and solutions in its chosen fields with the ability to compete
globally.
Synertec is well positioned to continue its expansion, with a
strong pipeline of potential contracts with both repeat and
new clients. Over many years now, Synertec has continued
to consistently deliver around 70% of its revenue from its
existing blue-chip customer base. Importantly, the Company
is excited by the development and earnings potential of its
“productised IP” in generating higher margin future business
in key target markets which have many years of investment
to come, providing Synertec with significant growth potential
and best-in-class industry margins.
I am especially excited by the steep trajectory of major
investment planned over the next 5-10 years in the LNG and
critical infrastructure industries, both domestically and in-
ternationally. Synertec has been specifically targeting these
industries with its proven proprietary products and
solutions, including our advanced integrated control
systems (focussed on human safety and mission critical
functionality) and our fiscal custody transfer systems (for
precise measurement of quality and volume of gas, oil and
related products).
We are constantly working on a strategy of substantially
improving margins and efficiencies as this type of
productised IP begins to account for a greater share of
revenue. This strategy is underpinned by a cycle of
establishing and deepening customer relationships through
fit-for-purpose solutions, incorporating strategic innovation,
followed by replication, expansion and enhanced
offerings. With tailwind exposure across these industries,
and dedication to ongoing innovation, we anticipate
Synertec’s effective evolution and growth path will
continue.
Across the critical infrastructure sector of rail in Australia
alone, there are tens of billions of dollars committed to
major projects, all of which have a requirement for systems
like those we have successfully designed and implemented
for our existing customers.
In LNG, the world is fast approaching another point of
inflexion with demand overtaking supply in the next few
years as countries like China aggressively pursue cleaner
and more efficient energy sources, becoming the world’s
largest importer of LNG. Synertec is now extremely
well-positioned with its first-hand experience of solving
mission-critical engineering challenges presented within
new and brownfield LNG facilities and the transportation
and trade of gas and its by-products.
6
TOTAL CASH, OPERATING NET CASH FLOWS & CURRENT RATIO
$7.0
$6.0
$5.0
$4.0
$3.0
$2.0
$1.0
$0
-$1.0
-$2.0
FY17 FY18 FY19
TOTAL CASH
CURRENT RATIO
OPERATING NET CASHFLOWS
2.0
1.8
1.6
1.4
1.2
1.0
I believe our new Board appointment of Mr. Dennis Lin
deepens our experience in dealing with the Asian
markets, particularly China, and provides a strong channel
of advice when it comes to exploring strategic alliances.
Having worked closely with Mr. Lin over the past year on
various strategic initiatives, I am confident his appointment
will contribute to be a step-change in the development and
growth of Synertec, and a maturing of our company within
the capital markets.
I am very grateful to Mr. Freddie Heng for his service and
guidance to Synertec and wish him well in his other
pursuits following his retirement from the Board of
Synertec at our AGM in November 2019.
Importantly, I would like to thank our dedicated team of
talented people for their outstanding efforts in helping
Synertec achieve a record year in terms of both revenue and
the successful and safe execution of so many substantial
and strategically important projects. I am also very grateful
to our loyal customers, suppliers and shareholders for their
continued support of Synertec.
MANAGING DIRECTOR
Mr. Michael Carroll
7
SYNERTEC ANNUAL REPORT 2018 : 2019
SYNERTEC BOARD MEMBERS
Ms. Leeanne Bond
Independent Non-Executive Director
Chair of Board (and Nomination & Remuneration Committee)
Ms. Bond is an executive and professional company director with Board roles in the energy,
water and engineering services industries. She has qualifications in engineering and
management, and 30 years’ experience across a broad range of industrial sectors including
energy, minerals, infrastructure and water.
From 1996 to 2006 Ms. Bond held a number of management roles with Worley 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. 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.
Mr. Michael Carroll
Managing 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 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. Mr. Carroll 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.
8
Mr. Kiat Poh
Independent Non-Executive Director
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.
Mr. Poh 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, Mr. Poh 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
Independent Non-Executive Director, (Chair of Audit & Risk Management Committee)
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, Mr. Heng 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. 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 Exchange and Thomson Medical Group Limited (formerly known as Rowsley
Ltd), listed on the Singapore Exchange.
Mr. David Harris
Company Secretary
Mr. Harris is an Australian Chartered Accountant and fellow of the Financial Services
Institute of Australasia and the Governance Institute of Australia, and a member of the
Australian Institute of Company Directors. He has strong local and international experience in
senior leadership positions for global and ASX-listed companies and is also an experienced
Board member and Audit Risk Committee Chair. Mr. Harris is also the Chief Financial Officer
of Synertec.
9
SYNERTEC ANNUAL REPORT 2018 : 2019
10
SYNERTEC CORPORATION LIMITED
ARBN 161 803 032
[ASX:SOP]
Financial Report
FOR THE FINANCIAL YEAR ENDED
30:06:2019
8
SYNERTEC ANNUAL REPORT 2018 : 2019
Corporate Directory
Directors
Company Secretary
Principal registered office in Bermuda
Registered agent office in Australia
Share registry
Auditor
Ms. Leeanne Bond (Chair)
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
Synertec Corporation Limited
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 5
727 Collins Street
Melbourne VIC 3008
Australia
Stock exchange listing
Synertec Corporation Limited shares and options are listed on the
Australian Securities Exchange (ASX)
ASX Code:
SOP (fully paid ordinary shares)
SOPOA (options)
Website address
www.synertec.com.au
SYNERTEC ANNUAL REPORT 2018 : 2019
12
Synertec Corporation Limited
Directors’ Report
30 June 2019
The Directors present their report together with the financial statements of the consolidated entity for the year ended 30 June 2019.
1. Directors
The following persons were directors of Synertec Corporation Limited during or since the end of the financial year and up to the date
of this report:
- Ms. Leeanne Bond
- Mr. Michael Carroll
- Mr. Kiat Poh
- Mr. Kim Chuan Freddie Heng
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
industries. She has qualifications in engineering and management, and 30 years’ experience across a broad range of industrial
sectors including energy, minerals, infrastructure and water.
From 1996 to 2006 Ms. Bond held a number of management roles with Worley 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. 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.
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 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. Mr. Carroll 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 post
graduate qualification in Chemical Engineering.
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 Singapore Polytechnic.
Mr. Poh 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, Mr. Poh 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, Mr. Poh has been a non-executive director of Centrex Metals Limited, a company listed on the ASX.
13
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Directors’ Report
30 June 2019
1. Directors (continued)
1.1 Information on Directors (continued)
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, Mr. Heng 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 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 Exchange and Thomson Medical Group Limited (formerly known as Rowsley Ltd), listed on the Singapore Exchange.
1.2 Directors’ interest in shares and options
Non-Executive Directors:
Leeanne Bond (Chair)
Kiat Poh
Kim Chuan Freddie Heng
Executive Directors:
Michael Carroll (Managing Director
Interest in Ordinary Shares
Interest in Options
2,185,576
2,423,417
2,176,433
-
-
435,287
94,796,992
-
Mr. Carroll is the beneficial owner of 52.1% of the benefits and rights in the Pinnacle (MCGA) Retirement Fund, which in turn owns
100% of the ordinary shares in New Concept Corporation Limited. New Concept Corporation Limited is the registered holder of
94,796,992 shares (43.0% of total shares) in Synertec Corporation Limited.
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 and Perth.
3. Significant changes in the state of affairs
No signifcant changes noted in the year ended 30 June 2019.
During the year ended 30 June 2018, Synertec 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 was 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.
SYNERTEC ANNUAL REPORT 2018 : 2019
14
Synertec Corporation Limited
Directors’ Report
30 June 2019
4. Review of operations and results of those operations
Continuing operations
PROFIT AND LOSS PERFORMANCE
Revenue and Costs
In FY19, Synertec Corporation Limited (“Synertec” or the “Group”) achieved record revenue of $24.1 million (30 June 2018: $11.4
million), growing 111% on the prior year, as well as an improved earnings performance and continued strong net positive operating
cash flows - while continuing its strong track-record as a multidisciplined and integrated business, delivering end-to-end proprietary
products and solutions.
This record revenue and growth in FY19 demonstrates the Group’s ability to successfully and simultaneously deliver large projects in
target industries across a blue-chip customer base and continue the trend over many years of delivering around 70% of work from
repeat clients and improved project diversification.
Leading into FY19, the Group anticipated substantial growth in revenue following the award of several large and strategically
important projects which were announced to the ASX over the past two years. These projects have delivered advanced integrated
control systems, custody transfer solutions and innovative and practical design and construction management, including:
• Jemena’s Northern Gas Pipeline: Design, supply and commission the control safety system.
• Metro Trains Melbourne: Critical fire and life system upgrade of the Melbourne Underground Rail Loop (MURL)
• Melbourne’s Cross Yarra Partnership (CYP) underground rail infrastructure project: interim design for the Tunnel
Ventilation Control System (TVCS) and Building Management System (BMS)
• Newcastle Shipping Terminal Expansion: Berth pipeline relocation for Koppers Carbon Materials & Chemicals and
Stolthaven Terminals Pty Ltd
Contracted work and services contracts with many long-term customers continued successfully during the year. The design and
construction of a large state-of-the-art pharmaceutical manufacturing facility in Victoria, Australia, continues to progress as planned.
This customer is one of the largest vaccine manufacturers in the world and this facility represents their Global Centre of Excellence
for this product. This complex and highly regulated project is one which Synertec is uniquely positioned to deliver.
From the core growth strategy developed several years ago of deliberately targeting industry segments with high barriers to entry
and projects with high risks for clients, the Group continued to invest during the year in further refinement of the strategy and
development of skills, solutions and products to more significantly advance delivery of growth to shareholders. In some cases, this
investment was deliberately embedded within a project to ensure a commercial approach to innovation and developing know-how
which could be leveraged by Synertec across new clients, industries and/or geographies.
Whilst FY19 did not deliver on management’s expectations in terms of earnings, it was a significant improvement on the prior year
and Synertec’s customers, Board and management were pleased and excited by the quality of projects delivered. Margins this year
are reflective of the proportion of revenue from Fixed Price Solutions and Engineering Services respectively. Fixed Price Solutions
revenue of $21.1 million (30 June 2018: $7.9 million) has grown by 2.7 times the revenue produced for this category in the prior year
and represents 88% of total revenue. This category incorporates a large proportion of materials procured on behalf of clients for
projects and on-charge of these items at a substantially lower selling margin than typical high-end engineering services. Engineering
Services revenue was $3.1 million (30 June 2018: $3.5 million).
The Group’s operations continued to diversify as planned and place the Group in a position to continue expansion over the next few
years based on improving market conditions and increasing enquiry for its products and solutions. The Board and management
believe this will foster sustainability and improved quality in earnings during this important phase in Synertec’s growth.
As Synertec continues to evolve, there remains a few basic principles the Group continues to follow:
• Preserve balance sheet strength;
• High-quality, timely, sustainable and profitable delivery to our customers;
• Invest in people, capability and strategic growth opportunities; and
• Focus on costs at every level in the business.
While the Group has continued to control overheads and the operating cost base of the business has remained relatively stable over
the past few years, during the year the Group investigated and invested in several potential high-growth strategic opportunities, the
costs of which are included in other expenses. The tax deductibility of some of these costs is required to be apportioned over five
years or considered capital in nature for tax purposes, and not deductible in the current financial year.
The solid operating platforms of the business are being optimised to further leverage technology, strengthen project management
and accommodate anticipated growth in activity so it can continue to support expansion from current revenue levels.
15
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Directors’ Report
30 June 2019
4. Review of operations and results of those operations (continued)
Continuing operations (continued)
PROFIT AND LOSS PERFORMANCE (CONTINUED)
Earnings
The Group delivered a small operating net loss before tax and net finance costs of $36 thousand (30 June 2018: $479 thousand).
The total net loss after tax of the Group from its continuing operations for the year was $85 thousand (30 June 2018: $5,060
thousand). The 2018 result includes significant costs associated with the acquisition of Synertec Pty Ltd and ASX re-listing process
completed in August 2017.
In Australian dollars ($’000’s)
Profit / (loss) before tax, net finance costs, depreciation, corporate
transaction costs & implementation of new accounting standards
Implementation of new accounting standards
Depreciation
Corporate transaction costs
Results from operating activities
Net finance (costs) / income
Income tax (expense) / benefit
Loss from operations after tax
Listing expense
Loss from continuing operations
Loss from discontinued operations
Total comprehensive income for the year
30 June 2019
30-Jun-18
131
(40)
(128)
-
(36)
(17)
(31)
(85)
-
(85)
(12)
(97)
(337)
-
(95)
(47)
(479)
36
105
(338)
(4,722)
(5,060)
(3,395)
(8,455)
Several new accounting standards became effective for the Group during the year, most notably the implementation of IFRS 15
Revenue from Contracts with Customers, which replaced IFRS 118 Revenue, IFRS 111 Construction Contracts and several
revenue-related accounting Interpretations. The impact on the results for this period which would otherwise have been reported, from
the implementation of IFRS 15, was a decrease in revenue of $53 thousand and decrease in profit of $40 thousand. There was no
impact on the Group’s cash flows.
Statement of Profit or Loss and
Other Comprehensive Income (Extract)
(Continuing operations)
In Australian dollars (‘000’s)
Revenue
Costs of sales and operating expenses
Results from operating activities
Net finance costs
Income tax expense
Total comprehensive loss for the period
Amounts under
IFRS 118 & 111
Adoption of
IFRS 15
Amounts under
IFRS 15
24,202
(24,199)
3
(17)
(31)
(45)
(53)
13
(40)
-
-
(40)
24,149
(24,186)
(36)
(17)
(31)
(85)
SYNERTEC ANNUAL REPORT 2018 : 2019
16
Synertec Corporation Limited
Directors’ Report
30 June 2019
4. Review of operations and results of those operations (continued)
FINANCIAL POSITION
The Group’s balance sheet remains strong, closing the year with net assets of $5.2 million (30 June 2018: $5.3 million), including total
cash of $5.8 million (30 June 2018: $5.0 million). This includes $4.3 million in cash available to operations (30 June 2018: $3.5 million)
and $1.5 million in cash on term deposit (30 June 2018: $1.5 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 Group.
Net cash generated from operations during the year of $0.8 million (2018: $1.0 million) maintains the Group’s strong level of working
capital. Contracts continue to be structured and working capital managed to ensure future cash flows are well coordinated. This is
evident in the contract liabilities balance of $0.3m (30 June 2018: $2.7 million) which has reduced by $2.4 million over the course of the
year as planned, with the delivery of large key projects, some of which provided substantial upfront funding for procurement of major
components and engagement of key suppliers.
Discontinued operations
During the year, the Group completed the formalities required for the dissolution and wind-up of legacy non-core mining-related entities;
Synergy Metals Pty Ltd (incorporated in Australia) and SML Resources Limited (incorporated in British Virgin Islands). This completes
the Group’s corporate reorganisation activities planned as part of the ASX-relisting in 2017, providing an efficient structure for the Group
going forward.
5. Litigation
There has been no litigation in the year 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 2019 that has significantly affected or may significantly affect the Group’s
operations, the results from those operations, or the Group’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 is Company Secretary and Chief Financial Officer of Synertec Corporation Limited.
Mr. Harris is an Australian Chartered Accountant and fellow of the Financial Services Institute of Australasia and the Governance
Institute of Australia, and a member of the Australian Institute of Company Directors. He has strong local and international
experience in senior leadership positions for global and ASX-listed companies and is also an experienced Board member and Audit
Risk Committee Chair.
17
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Directors’ Report
30 June 2019
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 1
July to 30 June 2019, and the number of meetings attended by each Director were:
Board Meetings Audit and Risk Nomination and
Committee Remuneration Committee
Directors
Leeanne Bond
Michael Carroll
Kiat Poh
Kim Chuan Freddie Heng
Others
David Harris - CFO/Company Secretary
A
8
8
8
8
8
B
8
8
8
8
8
A
3
3
3
3
3
B
3
3
3
3
3
A
3
3
3
3
3
B
3
3
3
3
3
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
• Additional disclosures relating to key management personnel
SYNERTEC ANNUAL REPORT 2018 : 2019
18
Synertec Corporation Limited
Directors’ Report
30 June 2019
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 remuneration
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 require 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.
19
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Directors’ Report
30 June 2019
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.
2019
Non-Executive Directors
Leeanne Bond*
Kiat Poh**
Kim Chuan Freddie Heng
Short-term benefits
Post-employment Long-term
benefits
benefits
Cash salary
and fees
Bonus
Superannuation Long service
leave
Total
$
$ $
$
$
85,000
50,000
50,000
-
-
-
-
-
-
-
-
-
85,000
50,000
50,000
Executive Directors
Michael Carroll (Managing Director)
322,240
-
31,415
3,855
357,510
Other Key Management Personnel
Joern Buelter - COO
David Harris - CFO/Company Secretary***
174,254
288,844
Total remuneration of key management personnel
970,338
-
-
-
16,459
26,364
6,142
2,129
196,855
317,337
74,238
12,126
1,056,702
* This was paid to Breakthrough Energy Pty Ltd
** This was paid to Asiaphere Pty Ltd
*** David Harris was appointed as CFO, on a part time basis, in July 2017 and in addition to this role has assumed the role of
Company Secretary as from 16 April 2018. Subsequently, David Harris’ appointment changed to full time from 1 January 2019.
Short-term benefits
Post-employment Long-term
benefits
benefits
2018
Cash salary
and fees
Bonus
Superannuation Long service
leave
Total
$
$ $
$
$
Non-Executive Directors
Leeanne Bond (appointed 08.08.2017)*
Kiat Poh**
Kim Chuan Freddie Heng
Shaw Pao Sze (resigned 08.08.2017)
Executive Directors
Michael Carroll (Managing Director)
76,422
48,333
47,392
5,475
-
-
-
-
-
-
-
-
-
-
-
-
76,422
48,333
47,392
5,475
320,170
-
28,838
11,147
360,155
Other Key Management Personnel
Joern Buelter - COO
David Harris - CFO/Company Secretary***
158,871
141,763
Total remuneration of key management personnel
798,426
-
-
-
14,963
13,467
5,297
572
179,131
155,802
57,268
17,016
872,710
SYNERTEC ANNUAL REPORT 2018 : 2019
20
Synertec Corporation Limited
Directors’ Report
30 June 2019
13. Remuneration report (continued)
Additional disclosures relating to key management personnel (continued)
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:
Non-Executive Directors
Leeanne Bond1
Kiat Poh2
Kim Chuan Freddie Heng3
Executive Directors
Michael Carroll (Managing Director)4
Other Key Management Personnel
Joern Buelter - COO
David Harris - CFO/Company Secretary5
Balance at Received as part
of remuneration
1 July 2018
Additions/
Bonus
(Disposals) Options
Balance at
30 June 2019
-
2,423,417
2,176,433
-
-
-
2,185,576
-
-
-
-
-
2,185,576
2,423,417
2,176,433
98,796,992
-
(4,000,000)
-
94,796,992
250,000
-
-
-
-
1,384,531
-
-
250,000
1,384,531
Notes:
1. Shares held by Bondatron Pty Ltd ATF Bondatron Super Fund A/C.
2. Share/options held by Kiat Poh and joint names under Kiat Poh & Ju-Lynn Poh.
3. Share/options held by HSBC Custody Nominees (Australia) Limited.
4. Shares held by New Concept Corporation Limited (”New Concept”) in which Michael Carroll is considered to
have 52% interest in the shares in New Concept. All the issued share capital of New Concept is beneficially owned by
TMF Trustees Singapore Limited as trustee of the Pinnacle (MCGA) Retirement Fund. Mr. Carroll has not disposed of any shares
in which he has a direct beneficial interest during the year and up to the date of this report.
5. Shares/options held by DDGG Harris Holdings Pty Ltd ATF DDGG Harris Superannuation Fund.
Options held by key management personnel
Balance at Received as part
of remuneration
1 July 2018
Additions/
Bonus
(Disposals) Options
Balance at
30 June 2019
Non-Executive Directors
Leeanne Bond
Kiat Poh2
Kim Chuan Freddie Heng3
Executive Directors
Michael Carroll (Managing Director)
Other Key Management Personnel
Joern Buelter - COO
David Harris - CFO/Company Secretary5
-
484,683
435,287
-
-
-
-
-
-
-
-
-
-
(484,683)
-
-
-
-
-
-
435,287
-
-
-
359,813
-
-
-
-
359,813
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).
21
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Directors’ Report
30 June 2019
13. Remuneration report (continued)
Additional disclosures relating to 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 proceedings 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.
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 23 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.
For and on behalf of the Directors,
Mr. Michael Carroll
Managing Director
Melbourne
26 August 2019
SYNERTEC ANNUAL REPORT 2018 : 2019
22
Synertec Corporation Limited
Corporate Governance Report
30 June 2019
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 2019 is dated as at 30 June 2019 and was
approved by the Board on 26 August 2019. The Corporate Governance Statement is available on the Synertec Corporation Limited
website www.synertec.com.au.
23
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2019
In Australian dollars
Continuing operations
Revenue
Revenue
Other income
Expenses
Materials and service expense
Employee benefits expense
Superannuation expense
Depreciation and amortisation expense
Occupancy expenses
Business development expense
IT and telecommunication costs
Legal and professional fees
Other expenses
Loss on disposal of motor vehicles
Directors fees
Corporate transaction costs
Results from operating activities
Interest income
Finance costs
Net finance (costs)/income
Loss before tax
Income tax (expense)/benefit
Loss from operations
Listing expense
Loss for the period from continuing operations
Discontinued operations
Loss from discontinued operations
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Earnings per share (cents)
Basic loss per share - from continuing operations
Diluted loss per share - from continuing operations
Note
30 June 2019
30 June 2018
6
24,149,105
8,656
11,432,670
-
(14,862,341)
(6,986,918)
(579,804)
(127,562)
(224,051)
(262,272)
(187,970)
(114,936)
(652,519)
(10,834)
(185,000)
-
(36,446)
34,520
(51,801)
(17,281)
(53,727)
(31,118)
(84,845)
-
(84,845)
(4,394,924)
(5,543,144)
(470,497)
(95,199)
(180,829)
(329,460)
(136,838)
(169,919)
(371,107)
-
(172,576)
(47,414)
(479,237)
64,862
(28,988)
35,874
(443,363)
105,383
(337,980)
(4,722,112)
(5,060,092)
(12,002)
-
(96,847)
(3,395,147)
-
(8,455,239)
(0.04)
(0.04)
(2.45)
(2.45)
7
8(i)
20
21
19
19
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
SYNERTEC ANNUAL REPORT 2018 : 2019
24
Synertec Corporation Limited
Consolidated Statement of Financial Position
As at 30 June 2019
In Australian dollars
Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Contract assets
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
Warranty provision
Employee benefits
Contract liabilities
Total current liabilities
Non-current liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained earnings
Total equity
Note
30 June 2019
30 June 2018
9
10
11
12
8
11
13
14
15
16
15
17
4,336,500
1,541,861
231,383
1,373,049
14,188
7,496,981
502,893
1,500,000
262,349
2,265,242
9,762,223
3,548,855
39,709
479,903
345,477
4,413,944
99,751
99,751
4,513,695
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
62,893
62,893
6,249,063
5,248,528
5,345,375
641,113
4,607,415
5,248,528
641,113
4,704,262
5,345,375
The above statement of financial position should be read in conjunction with the accompanying notes
25
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2019
In Australian dollars Note Issued Other Retained Total
capital contributed earnings
$ $ $ $
equity
Balance at 1 July 2017
Loss for the year - continued operations
Loss for the year - discontinued operations
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
Balance at 1 July 2018
Loss for the year - continued operations
Loss for the year - discontinued operations
Other comprehensive income
Total comprehensive income
950
-
-
-
-
132,904
-
-
-
-
6,648,909
(5,060,092)
(3,395,147)
-
(8,455,239)
6,782,763
(5,060,092)
(3,395,147)
-
(8,455,239)
3,235,194
750,000
650,000
(413,531)
-
-
-
-
-
-
-
-
3,235,194
750,000
650,000
(413,531)
(3,581,500)
-
641,113
-
(132,904)
-
-
6,510,592
4,704,262
(3,581,500)
6,377,688
5,345,375
641,113
-
-
-
-
-
-
-
-
-
4,704,262
(84,845)
(12,002)
-
(96,847)
5,345,375
(84,845)
(12,002)
-
(96,847)
Balance at 30 June 2019
641,113
-
4,607,415
5,248,528
The above statement of changes in equity should be read in conjunction with the accompanying notes
SYNERTEC ANNUAL REPORT 2018 : 2019
26
Synertec Corporation Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2019
In Australian dollars
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash generated from operations
Interest received
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Receipt/(payment) of funds on term deposit
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
Payment of finance lease liabilities
Net cash used in financing activities
Note
30 June 2019
30 June 2018
9A(i)
26,850,590
(26,045,040)
805,550
34,520
(14,187)
825,883
116,220
14,552
-
-
-
(129,827)
945
-
-
826,828
3,509,672
4,336,500
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
Net increase in cash and cash equivalents
Cash and cash equivalent at beginning of the year
Cash and cash equivalents at end of the year
9A(iii)
The above statement of cash flows should be read in conjunction with the accompanying notes
27
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
1. General information and statement of compliance
The financial statements cover Synertec 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 2019
(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 26 August 2019.
2. Changes in significant accounting policies
2.1 New standards adopted as at 1 July 2018
IFRS 15 Revenue from contracts with customers
IFRS 15 replaces IFRS 118 Revenue, IFRS 111 Construction Contracts and several revenue-related Interpretations.
The new Standard has been applied to the Group as at 1 July 2018 using the modified retrospective approach. Under this method,
the cumulative effect of initial application is recognised as an adjustment to the opening balance of retained earnings at 1 July 2018
and comparatives are not restated. In accordance with the transition guidance, IFRS 15 has only been applied to contracts that are
incomplete as at 1 July 2018.
The adoption of IFRS 15 has mainly affected the following areas:
● contracts with multiple performance obligations
● contracts with warranty periods
● contracts with payment upon completion/transfer of goods to client
Contracts with multiple performance obligations
Many of the Group’s contracts comprise a variety of performance obligations including, but not limited to, elements of design and
customisation, installation and commissioning. Under IFRS 15, the Group has evaluated the separability of the promised goods or
services based on whether they are ‘distinct’. A promised good or service is ‘distinct’ if both:
a) the customer benefits from the item either on its own or together with other readily available resources; and
b) it is ‘separately identifiable’ (i.e. the Group does not provide a significant service integrating, modifying or customising it).
SYNERTEC ANNUAL REPORT 2018 : 2019
28
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
2. Changes in significant accounting policies (continued)
2.1 New standards adopted as at 1 July 2018 (continued)
IFRS 15 Revenue from contracts with customers (continued)
While this represents significant new guidance, the implementation of this new guidance did not have a significant impact on the
timing or amount of revenue recognised by the Group during the period.
Contracts with warranty periods
In the case of projects which contain a warranty obligation (i.e. repair or replace products/services that develop faults within a
specified period from the time of sale in accordance with the contract or a statutory requirements), the warranty shall be treated as a
separate performance obligation and they are measured and recognised as separate liabilities in accordance with IFRS 137
Provisions, Contingent Liabilities and Contingent Assets.
Contracts with payment upon completion/transfer of goods
For revenue recognised at a point in time, IFRS 15 requires the entity to determine that point in time by reference to when control of
the goods transfer to the customer, whereas IFRS 118 focuses on the transfer of risks and rewards of the goods.
The tables below highlight the impact of IFRS 15 on the Group’s statement of profit or loss and other comprehensive income and
the statement of financial position for the year ending 30 June 2019. The adoption of IFRS 15 has not impacted the Group’s cash
flows.
Statement of Profit or Loss and Other Comprehensive Income (Extract)
Amounts under
IFRS 118 & 111
Adoption of
IFRS 15
Amounts under
IFRS 15
Revenue
Costs of sales
Results from operating activities
Net finance costs
Income tax expense
Total comprehensive loss for the period
24,201,702
(19,060,363)
3,263
(17,281)
(31,118)
(45,136)
(52,597)
12,888
(39,709)
-
-
(39,709)
24,149,105
(19,047,475)
(36,446)
(17,281)
(31,118)
(84,845)
Statement of Financial Position (Extract)
Current Assets
Contract assets
Total Assets
Current Liabilities
Warranty provision/contract liabilities
Total Liabilities
Equity
Retained earnings
Amounts under
IFRS 118 & 111
Adoption of
IFRS 15
Amounts under
IFRS 15
1,373,049
9,762,223
-
4,473,986
-
-
39,709
39,709
1,373,049
9,762,223
39,709
4,513,695
4,647,124
(39,709)
4,607,415
Impact of IFRS 15 on opening balance
There was no impact on initial application of IFRS 15 as at 1 July 2018 and for the comparative period ended 30 June 2018 due to
the nature, terms and timing of projects in progress at that time.
29
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
2. Changes in significant accounting policies (continued)
2.1 New standards adopted as at 1 July 2018 (continued)
IFRS 9 Financial Instruments
IFRS 9 Financial Instruments replaces IFRS 39 Financial Instruments: Recognition and Measurement requirements. It makes chang-
es to the previous guidance on the classification and measurement of financial assets and introduces an ‘expected credit loss’
model for impairment of financial assets.
While this represents significant new guidance, the implementation of new guidance including an expected credit losses model did
not have an impact on trade receivables or contract assets. As such, the Group has applied transitional relief and elected not to
restate prior periods. No difference was noted in opening retained earnings as at 1 July 2018.
Reconciliation of financial instruments on adoption of IFRS 9 - 1 July 2018
Measurement
category
Carrying Amount
Financial Assets Original IFRS 139
Classification
New IFRS 9
Classification
Closing balance Adoption of Opening balance
30 June 2018
(IFRS 139)
1 July 2018
(IFRS 9)
IFRS 9
Trade and other Loans and Amortised cost
receivables
receivables
$3,515,042
-
$3,515,042
2.2 New standards issued not yet effective
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
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces 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 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.
Based on the entity’s assessment, it is expected that the first-time adoption of IFRS 16 for the year ending 30 June 2020 will have a
material impact on the transactions and balances recognised in the financial statements, in particular:
• lease assets and financial liabilities on the balance sheet will increase by $280,516 and $280,516 respectively
(based on the facts at the date of the assessment)
• there will be a reduction in the reported equity as the carrying amount of lease assets will reduce more quickly than the carrying
amount of lease liabilities
• EBIT in the statement of profit or loss and other comprehensive income will be higher as the implicit interest in lease payments
for former off balance sheet leases will be presented as part of finance costs rather than being included in operating
expenses
• operating cash outflows will be lower and financing cash flows will be higher in the statement of cash flows as principal
repayments on all lease liabilities will now be included in financing activities rather than operating activities.
Interest can also be included within financing activities
SYNERTEC ANNUAL REPORT 2018 : 2019
30
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
3. Significant Accounting policies
3.1 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.
3.2 Basis of measurement
The financial statements have been prepared on the historical cost basis unless otherwise stated.
3.3 Functional and presentational currency
These financial statements are presented in Australian dollars, which is the Group’s functional currency and presentation
currency.
3.4 Basis of consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2019. 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.
3.5 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 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 20) at the acquisition date has been recognised as a listing expense.
3.6 Revenue and other income
The Group’s revenue arises from contracts for the design, engineering and/or construction of engineering products and solutions.
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 contract assets.
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. Variations are variable consideration that is
estimated using either the ‘expected value’ or the ‘most likely amount’, and is subject to the constraint that it can only be included in
the transaction price if it is highly probable that there will not be a significant revenue reversal.
31
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
3. Significant Accounting policies
3.6 Revenue and other income (continued)
To determine whether to recognise revenue, the Group follows a 5-step process:
1. Identifying the contract with a customer;
2. Identifying the performance obligations;
3. Determining the transaction price;
4. Allocating the transaction price to the performance obligations; and
5. Recognising revenue when/as performance obligations(s) are satisfied.
The Group is often engaged by customers to provide engineering solutions – known as “Projects”. In all Projects, the total
transaction price for a contract is allocated amongst the various performance obligations based on their relative value.
Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance obligations by transferring
the promised goods or services to its customers.
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports
these amounts as deferred income in the statement of financial position. Similarly, if the Group satisfies a performance obligation
before it receives the consideration, the Group recognises either a contract asset or a receivable in its statement of financial position,
depending on whether something other than the passage of time is required before the consideration is due.
Transfer of Goods
Revenue from the sale of custom products engineered by the Group for a fixed fee is recognised when or as the Group transfers
control of the assets to the customer. Invoices for goods transferred are due after receipt of the invoice by the customer.
For sales of engineered products that are not subject to significant integration services, control transfers at the point in time the
customer takes undisputed delivery of the goods.
Engineering Services
The Group provides engineering services relating to the design and engineering of customised Process, Chemical,
Mechanical Design, Automation, Safety, Electrical and Software Engineering solutions. Revenue from these services is recognised
on a time-and-materials basis as the services are provided. Customers are invoiced monthly as work progresses. Any amounts
remaining unbilled at the end of a reporting period are presented in the statement of financial position as Work In Progress (asset) as
only the passage of time is required before payment of these amounts will be due.
Fixed Price Solutions
The Group enters into contracts for the design, engineering and construction of customised engineering solutions in exchange for a
fixed fee and recognises the related revenue over time. Due to the high degree of interdependence between the various elements of
these projects, they are accounted for as a single performance obligation. When a contract also includes a warranty period, the total
transaction price is allocated to each of the distinct performance obligations identifiable under the contract on the basis of its relative
stand-alone selling price.
To depict the progress by which the Group transfers control of the systems to the customer, and to establish when and to what
extent revenue can be recognised, the Group measures its progress towards complete satisfaction of the performance obligation
by comparing actual costs (hours and purchases) spent to date with the total estimated costs required to design, engineer, and
construct each solution. The percentage complete basis provides the most faithful depiction of the transfer of goods and services
to each customer due to the Group’s ability to make reliable estimates of the total number of costs required to complete the Project,
arising from its significant historical experience constructing similar solutions.
Advanced Receipt
When payments received from customers exceed revenue recognised to date on a particular contract, any excess (a contract
liability) is reported in the statement of financial position as contract liabilities.
Warranty Period
The Group provides warranty on its engineering solutions. Under the terms of this warranty customers can request rectification or
replacement works if the solution provided by the Group fails to perform in accordance with the agreed contract and specifications.
These warranties are accounted for under IFRS 137 Provisions, Contingent Liabilities and Contingent Assets.
SYNERTEC ANNUAL REPORT 2018 : 2019
32
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
3. Significant accounting policies (continued)
3.7 Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.
3.8 Finance income and finance costs
The Group’s finance income and finance costs include:
• interest income;
• interest expense; and
• the net gain or loss on financial assets at fair value through profit or loss
Interest income or expense is recognised using the effective interest method.
3.9 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.
3.10 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).
(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.
33
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
3. Significant accounting policies (continued)
3.10 Income taxes (continued)
(ii) Deferred tax (continued)
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 has been recognised.
3.11 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.
3.12 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.
3.13 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 ANNUAL REPORT 2018 : 2019
34
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
3. Significant accounting policies (continued)
3.14 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.
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.
3.15 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.
35
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
3. Significant accounting policies (continued)
3.16 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.
3.17 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 consideration
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 recog-
nised 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.
3.18 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.
3.19 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.
SYNERTEC ANNUAL REPORT 2018 : 2019
36
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
3. Significant accounting policies (continued)
3.19 Financial instruments (continued)
(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.
3.20 Changes to presentation - classification of expenses
Synertec Corporation Ltd decided in the current financial year to modify the classification of its expenses in the consolidated
statement of profit or loss to disaggregate some categories of expenses, providing more detailed financial information. We believe
this will provide more relevant information to our stakeholders. The comparative information has been reclassified accordingly.
4. 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 prospectively.
4.1 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 [3.6] – Revenue and other income.
4.2 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 2019 are included:
Note 12 - Contract assets - 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 13 - 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.
37
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
4. Use of judgements and estimates (continued)
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 hierarchy 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 [24] - financial instruments.
5. 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 operating entity is based in Australia.
The demand for engineering services is not subject to seasonal fluctuations.
6. Revenue
Engineering services
Fixed price solutions and transfer of goods
7. Finance income and finance costs
Recognised in profit or loss
Interest income
Finance income
Facility interest & charges
Hire purchase charges
Interest expense
Finance costs
Net finance income/(costs) recognised in profit or loss
Note
30 June 2019
30 June 2018
3,063,731
21,085,374
24,149,105
3,505,920
7,926,750
11,432,670
7(i)
7(ii)
34,520
34,520
(50,725)
-
(1,076)
(51,801)
(17,281)
64,862
64,862
(27,827)
(1,161)
-
(28,988)
35,874
7(i) The interest income comprised of interest earned on deposits held as security by ANZ.
7(ii) The Group incurred finance costs during the year related to bank guarantees, and hire purchase facilities provided by ANZ.
SYNERTEC ANNUAL REPORT 2018 : 2019
38
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
8. Taxes
(i) Tax recognised in profit or loss
Current tax benefit/(expense)
Current year
Deferred tax benefit
Origination and reversal of temporary differences
Tax benefit from continuing operations
Note 30 June 2019
30 June 2018
-
-
-
-
(31,118)
(31,118)
(31,118)
105,383
105,383
105,383
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 $14,188 (2018: Tax asset $98,403).
(ii) Reconciliation of effective tax rate
Loss before tax from continuing operations
Income tax benefit using the Group’s domestic tax rate (27.5%)
Non-deductible expenses
Carried forward section 40-880 ITAA expenditure not booked prior year
Adjustment in deferred tax carried forward losses
Adjustment to prior year current tax provision
Income tax expense/(benefit)
(iii) Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
(53,727)
(14,775)
30,856
(29,825)
(53,542)
98,403
31,118
(443,363)
(121,925)
16,542
-
-
-
(105,383)
Assets
Liabilities
Net
Employee benefits
Corporate transaction costs
Deferred income
Other payables
Carry forward tax losses
Net deferred tax assets /
(liabilities)
30-June-2019 30-June-2018 30-June-2019 30-June-2018 30-June-2019 30-June-2018
158,644
-
108,582
-
(3,998)
-
53,449
-
118,932
158,644
108,582
(3,998)
53,449
118,932
159,405
111,473
(2,901)
63,600
171,316
159,405
111,473
(2,901)
63,600
171,316
-
-
-
-
502,893
435,609
-
-
502,893
435,609
39
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
8. Taxes (continued)
(iv) Movement in deferred tax balances during the year
Balance Recognised Recognised Balance Recognised Recognised Balance
01-Jul-2017 in profit in other 30-Jun-2018 in profit in other 30-Jun
or loss comprehensive or loss comprehensive 2019
income
income
161,232
Employee benefits
Deferred income
11,076
Corporate transaction costs 128,241
29,679
Other payables
-
Carry forward tax losses
330,228
(2,588)
(15,073)
(19,658)
23,770
118,932
105,383
-
-
-
-
-
-
158,644
(3,998)
108,583
53,449
118,932
435,609
761
1,097
2,891
10,151
52,384
67,284
-
-
-
-
-
-
159,405
(2,901)
111,473
63,600
171,316
502,893
9. Cash and cash equivalents
Bank balances
Cash on hand
Cash and cash equivalents
Note
30 June 2019
30 June 2018
4,335,153
1,347
4,336,500
3,508,325
1,347
3,509,672
9A. Cash flow information
(i) Reconciliation of cash flows from operating activities
Cash flows from operating activities
Loss for the year
Adjustments:
Depreciation
Net interest (income)/costs
Loss on sale of property, plant and equipment
Listing expense
Loss from discontinued operations
Tax expense/(benefit)
Change in contract assets
Change in other assets
Change in trade and other receivables
Change in trade and other payables
Change in employee benefits
Change in contract liabilities
Cash generated from operating activities
Interest paid net of interest received
Realised foreign currency gains recognised as investing activities
Income taxes paid
Net cash from operating activities
13
7
8
(96,847)
(8,455,239)
127,562
17,281
10,834
-
6,740
31,118
96,688
576,487
(50,289)
1,969,192
659,085
2,768
(2,397,221)
856,710
(17,281)
642
(14,187)
825,883
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
SYNERTEC ANNUAL REPORT 2018 : 2019
40
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
9. Cash and cash equivalents (continued)
9A. 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:
Note
30 June 2019
30 June 2018
Financial guarantee
Credit Card
Total
Utilised
Financial guarantee
Credit Card
Total
(iii) Reconciliation of cash and cash equivalents at beginning of year
Synertec Pty Ltd
Synertec Corporation Limited
Synergy Metals Pty Ltd
10. Trade and other receivables
Current
Sundry debtors
Trade receivables
Other receivables
Current
1,500,000
155,000
1,655,000
1,500,000
155,000
1,655,000
815,267
60,075
875,342
1,137,043
70,929
1,207,972
3,421,837
87,835
-
3,509,672
2,956,694
309,228
206,914
3,472,837
-
1,531,311
10,550
1,541,861
586
3,499,917
14,539
3,515,042
The Company’s exposure to credit and market risks, and impairment losses related to trade and other receivables, are disclosed in
Note 24.
11. Other assets
Current
Prepayments and other debtors
Deposits
Stock on hand
Current
Non-Current
ANZ term deposits(i)
Non-current
188,518
30,603
12,262
231,383
118,455
31,836
12,262
162,553
1,500,000
1,500,000
1,514,552
1,514,552
(i) The Company has $1,500,000 in deposits with ANZ held as cash security for the bank guarantee facility.
41
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
12. Contract assets
Work in progress
Note 30 June 2019 30 June 2018
1,949,536
1,373,049
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.
Contract assets have decreased compared to the previous year as work on those projects was completed through the year.
At 30 June 2019, aggregate costs incurred under open contracts and recognised profits earned, net of recognised losses,
amounted to $1,373,049 (2018: $1,949,536).
13. Property, plant and equipment
Computers Furniture and Leasehold Motor TOTAL
equipment improvements vehicles
Cost
Balance at 1 July 2017
Additions
Disposals
Balance at 30 June 2018
Balance at 1 July 2018
Additions
Disposals
Balance at 30 June 2019
376,961
10,000
-
386,961
386,961
30,000
(215,865)
201,096
425,299
50,897
-
476,196
476,196
82,804
-
559,000
116,933
74,125
-
191,058
191,058
17,023
(52,000)
156,081
21,157
-
-
21,157
21,157
-
-
21,157
940,350
135,022
-
1,075,372
1,075,372
129,826
(267,865)
937,333
Computers Furniture and Leasehold Motor TOTAL
571,101
-
95,199
666,301
666,301
(118,878)
127,562
674,984
369,248
409,071
409,071
262,349
equipment improvements vehicles
Accumulated depreciation
Balance at 1 July 2017
Disposals
Depreciation expense
Balance at 30 June 2018
Balance at 1 July 2018
Disposals
Depreciation expense
Balance at 30 June 2019
108,082
-
46,712
154,795
154,795
(113,940)
48,930
89,785
359,209
-
36,894
396,103
396,103
-
60,641
456,743
85,189
-
11,086
96,275
96,275
(4,938)
17,586
108,923
18,621
-
507
19,128
19,128
-
406
19,534
Carrying amounts
at 1 July 2017
at 30 June 2018
at 1 July 2018
at 30 June 2019
66,090
80,094
80,094
102,257
31,744
94,783
94,783
47,159
2,536
2,029
2,029
1,623
268,879
232,167
232,167
111,310
SYNERTEC ANNUAL REPORT 2018 : 2019
42
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
14. Trade and other payables
Trade payables
Other payables
Fixed price project accruals
Note
30 June 2019
30 June 2018
2,483,379
303,544
761,932
3,548,855
1,500,397
814,915
614,167
2,929,479
The Company’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 24.
15. Employee benefits
Annual leave
Long service leave
Current
Long service leave
Non-Current
16. Contract liabilities
Billing in advance of work completed
30 June 2019
286,120
193,783
479,903
30 June 2018
273,577
240,416
513,993
99,751
99,751
62,893
62,893
30 June 2019
345,477
345,477
30 June 2018
2,742,698
2,742,698
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.
Contract liabilities have decreased compared to the previous year as work on those projects was completed through the year. As a
result, the amount of contract liabilities included in the revenue for the year ended 30 June 2019 was $2,397,221.
17. Issued capital
30 June 2019
30 June 2018
30 June 2019
30 June 2018
Shares Shares $ $
Ordinary shares - fully paid
220,701,277
220,701,277
220,701,277
220,701,277
641,113
641,113
641,113
641,113
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
18. 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:
Less than one year
Between one and five years
30 June 2019
240,414
176,274
416,688
30 June 2018
200,303
159,912
360,215
The Group leased the head office and other rental properties under operating leases during the year. The head office lease has been
extended for another year to December 2020. Lease payments are increased every year as indexed to CPI.
During the year $256,319 was recognised as an expense in profit or loss in respect of operating leases (2018: $170,014).
43
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
19. 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 2019 or 2018).
In accordance with the principles of reverse acquisition accounting, the weighted average number of ordinary shares outstanding
during the year ended 30 June 2019 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 IFRS 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.
Earnings per share from continuing operations
Loss after income tax (in Australian dollars)
30 June 2019
30 June 2018
(84,845)
(5,060,092)
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
220,701,277
220,701,277
206,144,526
206,144,526
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
(0.04)
(0.04)
(2.45)
(2.45)
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 2019. These options could potentially dilute basic earnings per share in the future.
SYNERTEC ANNUAL REPORT 2018 : 2019
44
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
20. Acquisition accounting
For the year ended 30 June 2018
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 21) 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 net assets acquired and the amount recognised as an ASX listing expense, are as follows:
Acquiree’s carrying value
before acquisition
$
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 acquired (see above)
Corporate advisory fees (shares issued in lieu of cash for services)
Amount recognised as ASX Listing expense upon 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
45
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
21. Discontinued operations
For the year ended 30 June 2019
During the year, the Group completed the formalities required for the dissolution and wind-up of legacy non-core mining-related
entities; Synergy Metals Pty Ltd (incorporated in Australia) and SML Resources Limited (incorporated in British Virgin Islands).
This completes the Group’s corporate reorganisation activities planned as part of the ASX-relisting in 2017, providing an efficient
structure for the Group going forward.
Net operating costs from mining subsidiaries of $12,002 (2018: $158,033) has been included in the loss from Discontinued
operations. These costs relate to the dissolution of the mining subsidiaries.
Net operating costs from mining subsidiaries
Loss on disposal of Mining Assets
Net loss from discontinued operations
30 June 2019
12,002
-
12,002
30 June 2018
158,033
3,237,114
3,395,147
For the year ended 30 June 2018
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 $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.
SYNERTEC ANNUAL REPORT 2018 : 2019
46
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
22. Related parties
Short-term employee benefits
Post-employment benefits
Other long-term employment benefits
Note
30 June 2019
781,446
74,237
111,417
967,100
30 June 2018
602,820
57,268
92,686
752,774
Compensation of the Company’s key management personnel includes salaries, accrued leave balances, non-cash benefits and
contributions to an employee defined contribution plan.
23. Auditor’s remuneration
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
In relation to other services
24. 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
72,000
72,000
72,000
72,000
10,000
27,593
109,593
10,000
-
82,000
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 adherece 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:
Trade and other receivables
Cash and cash equivalents
ANZ deposit
Deposits
Carrying amount
10
9
11
11
30 June 2019
1,541,861
4,336,500
1,500,000
30,603
7,408,964
30 June 2018
3,515,042
3,509,672
1,514,552
31,836
8,571,102
47
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
24. Financial instruments
Financial risk management (continued)
(i) Credit Risk (continued)
Exposure to credit risk (continued)
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.
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.
Australia
Note
Carrying amount
30 June 2019
1,541,861
1,541,861
30 June 2018
3,515,042
3,515,042
The Group’s most significant balance outstanding to a single customer, accounts for $881,323 of the trade and other receivables
carrying amount at 30 June 2019 (2017: $1,420,430). 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.
Neither past due nor impaired
Past due 1 - 30 days
Past due 31 - 90 days
Past due 91 - 120 days
30 June 2019
30 June 2018
1,297,196
234,115
-
-
1,531,311
2,414,693
879,899
205,325
586
3,500,503
Cash and cash equivalents (including deposits)
The Group held cash and cash equivalents of $4,336,500 at 30 June 2019 (2018: $3,509,672) 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 $1,500,000 (2018: $1,514,552) on deposit with ANZ being held as security for the performance guarantee bond
facility which was only partially utilised at 30 June 2019.
(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 2019, the expected cash flows from trade and other receivables maturing within two months are $1,254,703 (2018:
$3,399,506). This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural
disasters.
SYNERTEC ANNUAL REPORT 2018 : 2019
48
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
24. 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 2019
Non-derivative financial liabilities
Trade payables
30 June 2018
Non-derivative financial liabilities
Trade payables
Carrying
amount
3,548,855
3,548,855
Carrying
amount
2,929,479
2,929,479
Contractual cashflow
Total
3,548,855
3,548,855
0-1 years
3,548,855
3,548,855
1-2 years
-
-
2-5 years
-
-
Contractual cashflows
Total
2,929,479
2,929,479
0-1 years
2,929,479
2,929,479
1-2 years
-
-
2-5 years
-
-
(iii) Market risk
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,
GBP, EUR and USD.
At any point in time, the Group holds EUR, GBP and USD in anticipation of future purchase orders. The Group reviews the market
regularly to evaluate if the cost of obtaining derivatives outweighs 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.
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.
30 June 2019
30 June 2018
USD
GBP
EURO
USD
GBP
EURO
Trade and other receivables
Cash and cash equivalents
Financial assets
Trade and other payables
Financial liabilities
-
1,248,893
1,248,893
-
159,643
159,643
-
-
-
-
-
19,313
19,313
-
-
434,926
695,401
1,130,327
-
-
Net exposure
1,248,893
159,643
19,313
1,130,327
-
-
-
-
-
-
-
19,372
19,372
87,841
87,841
107,213
49
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
24. Financial instruments (continued)
(iii) Market risk (continued)
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.
30 June 2019
USD
GBP
Euro
Currency exchange risk (net)
30 June 2018
USD
GBP
Euro
Currency exchange risk (net)
Profit or loss, net of tax
10% increase 10% decrease 10% increase 10% decrease
Equity, net of tax
(79,475)
(10,159)
(1,229)
(90,863)
97,136
12,417
1,502
111,055
(79,475)
(10,159)
(1,229)
(90,863)
97,136
12,417
1,502
111,055
(44,253)
-
(1,233)
(45,486)
54,087
-
1,507
55,594
(44,253)
-
(1,233)
(45,486)
54,087
-
1,507
55,594
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
Nominal amount
30 June 2019 30 June 2018
18.99%
18.99%
2.10%-2.35% 2.10%-2.35%
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.
30 June 2019
Variable rate instruments
Cash flow sensitivity (net)
30 June 2018
Variable rate instruments
Cash flow sensitivity (net)
1% increase
Profit or loss
1% decrease
1% increase
Equity, net of tax
1% decrease
10,500
10,500
10,602
10,602
(10,500)
(10,500)
(10,602)
(10,602)
10,500
10,500
10,602
10,602
(10,500)
(10,500)
(10,602)
(10,602)
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.
SYNERTEC ANNUAL REPORT 2018 : 2019
50
Synertec Corporation Limited
Notes to the financial statements
For the year ended 30 June 2019
24. Financial instruments (continued)
(iii) Market risk (continued)
Accounting classifications and 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.
Note
Loans and Other financial Other financial
liabilities
receivables
assets
Total carrying
amount
9
10
11
11
14
9
10
11
11
14
4,336,500
1,541,861
-
-
5,878,361
-
-
1,500,000
30,603
1,530,603
-
-
-
-
-
-
-
-
-
3,548,855
3,548,855
4,336,500
1,541,861
1,500,000
30,603
7,408,964
3,548,855
3,548,855
Loans and Other financial Other financial
liabilities
receivables
assets
Total carrying
amount
3,509,672
3,515,042
-
-
7,024,714
-
-
1,514,552
31,836
1,546,388
-
-
-
-
-
-
-
-
-
-
-
-
2,929,479
2,929,479
3,509,672
3,515,042
1,514,552
31,836
8,571,102
-
2,929,479
2,929,479
30 June 2019
Cash and cash equivalents
Trade and other receivables
ANZ deposits
Deposits
Trade and other payables
30 June 2018
Cash and cash equivalents
Trade and other receivables
ANZ deposits
Deposits
Finance lease liabilities
Trade and other payables
25. Interest in subsidiaries
Composition of the Group
Name of subsidiary Country of Principal Group proportion of
incorporation / activity ownership interests
principle place of
business
30 June 2019 30 June 2018
Synertec Holdings Pty Ltd
Australia
Holding
company
Synertec Pty Ltd
SML Resources Ltd
Synergy Metals Pty Ltd
Australia Consultancy and
British Virgin
Islands /Australia
Australia
Engineering
Holding
company
Mining
100%
100%
-
-
100%
100%
100%
100%
Synergy Metals Pty Ltd was liquidated on 14 December 2018 and SML Resources Ltd was liquidated on 29 April 2019.
26. Contingent liabilities
The consolidated entity does not have any contingent liabilities at reporting date.
27. Subsequent events
No matter or circumstance has arisen since 30 June 2019 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.
51
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Directors’ Declaration
For the year ended 30 June 2019
Directors’ Declaration
1. In the opinion of the Directors of Synertec Corporation Limited (“the Group”):
(a) the financial statements and notes thereto, set out on pages 24 to 51:
(i) present fairly the financial position of the Group as at 30 June 2019 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 3 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 2019, 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 26 August 2019
Mr. Michael Carroll
Director
SYNERTEC ANNUAL REPORT 2018 : 2019
52
Synertec Corporation Limited
Independent Auditor’s Report
For the year ended 30 June 2019
Independent Auditor’s Report
To the Members of Synertec Corporation Limited
Report on the audit of the financial report
Opinion
Collins Square, Tower 5
727 Collins Street
Melbourne 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
We have audited the financial report of Synertec Corporation Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of profit
or loss and other comprehensive income, 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 2019 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 auditor 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.
53
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Independent Auditor’s Report
For the year ended 30 June 2019
Key audit matter
Revenue Recognition
Synertec Corporation Limited recognised a large portion of
their revenue using the percentage completion method for
fixed price projects. Revenue in respect to hourly rate projects
are recognised as the associated labour expense is incurred.
As these projects may be ongoing at year end, there is
significant estimation required when recognising the
associated contract asset or contract liability or deferred
revenue. There is a risk in ensuring that an appropriate
amount of revenue has been recognised under IFRS 15
Contracts with Customers.
The engagement team has identified this area as a significant
risk due to the significant judgement involved in using the
percentage completion method for fixed price projects and in
appropriately capturing the time and material costs for the
hourly rate projects to recognise revenue under IFRS 15.
Due to the significant estimation involved, the engagement
team has determined this as a Key Audit Matter.
How our audit addressed the key audit matter
Our procedures included, amongst others:
Documenting the processes and controls over revenue
recognition;
Evaluating management’s assessment of the adoption of
IFRS 15 and related revenue recognition policies;
Obtaining a revenue listing by projects at an invoice level
and selecting a sample over which the following procedures
were performed:
1) Agreeing the total contract price per the listing to the
contract and variations (if applicable) and reading
through the contract to assess against the criteria of
IFRS 15;
2) Agreeing the invoice amount to evidence of cash
received. Where no payment had been received,
confirmation was sought from the customer;
3) Where projects were incomplete at 30 June 2019,
obtaining the year end contract asset and contract
liabilities reconciliation and agreeing to the financial
report;
4) Obtaining the expense listing for projects costs
recognised during the financial year and agreeing to
the contract asset and contract liabilities report at
30 June 2019;
5) Testing a sample of project expenditures by agreeing
to supporting documentation (invoices and timesheets)
to evaluate accuracy of project expenditure as this is
an input to the percentage completion of the project
and the resulting revenue recognition; and
6) Holding discussions with management to understand
the project’s stage of completion and have assessed
amounts billed post year end to assess
appropriateness of revenue recognition;
Performing cut-off testing by selecting a sample of
transactions close to year end and assessing the
recognition period for appropriateness;
Performing revenue and cost of sales analytics between
FY2019 and FY2018 results and the FY2019 budget and
discussing with management the results outside
expectations; and
Assessing the adequacy of financial statement disclosures.
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 2019, but does not include the financial report and our auditor’s report
thereon.
SYNERTEC ANNUAL REPORT 2018 : 2019
54
Synertec Corporation Limited
Independent Auditor’s Report
For the year ended 30 June 2019
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 Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with International Accounting Standards as issued by the International Accounting Standards Board 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’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: 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, 26 August 2019
55
SYNERTEC ANNUAL REPORT 2018 : 2019
Synertec Corporation Limited
Shareholder information
As at August 23 2019
Securities
Fully Paid Ordinary Shares
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
Holders
67
37
16
307
84
511
Total Units
15,855
84,449
119,311
12,037,455
208,444,207
220,701,277
%
0.007
0.038
0.054
5.454
94.446
100.000
The number of unmarketable parcel holders as at 23 Augfust 2019 based upon a share price of $0.046 (4.6 cents) is 123
shareholders holding in aggregate 251,663 ordinary shares.
The number of unmarketable parcel holders as at 28 August 2018 (date of last report) based upon a share price of $0.043
(4.3 cents) was 424 shareholders holding in aggregate 1,537,302 ordinary shares.
Top 20 Holdings
Name/Holder
NEW CONCEPT CORPORATION LIMITED
NORTHWEST NONFERROUS AUSTRALIA MINING PTY LTD
KIPBERG PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MISS LAY HONG GOH
MR CHEE KOK TEO
MR STEPHEN HAROLD BAKER
CITICORP NOMINEES PTY LIMITED
MR GOO TONG ANG
MR SIK ERN WONG
SPOTTED CHOOK INVESTMENTS PTY LTD
MR KIAT POH & MISS JU-LYNN POH
MR EWE GHEE LIM & MISS CHARLENE YULING LIM
BNP PARIBAS NOMINEES PTY LTD
BONDATRON PTY LTD
EVERY STONE RECRUITMENT PTY LTD
DDGG HARRIS HOLDINGS PTY LTD
KHOKHANI SUPER PTY LTD
LJEG SMSF PTY LTD
EQUITY TRUSTEES LTD
Total Securities of Top 20 Holdings
Total of Securities
Number held
94,796,992
39,375,000
7,942,514
6,688,766
5,253,571
5,000,000
5,000,000
3,572,218
2,761,806
2,539,800
2,440,220
2,423,417
2,360,531
2,216,875
2,097,702
1,917,000
1,384,531
1,250,000
1,161,716
1,053,559
191,236,218
220,701,277
%
42.953%
17.841%
3.599%
3.031%
2.380%
2.266%
2.266%
1.619%
1.251%
1.151%
1.106%
1.098%
1.070%
1.004%
0.950%
0.869%
0.627%
0.566%
0.526%
0.477%
86.649%
Substantial shareholders of the Company are set out below:
NEW CONCEPT CORPORATION LIMITED
NORTHWEST NONFERROUS AUSTRALIA MINING PTY LTD
94,796,992
39,375,000
42.953%
17.841%
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.
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)
SYNERTEC ANNUAL REPORT 2018 : 2019
56
Synertec Corporation Limited
Shareholder Information
As at August 23 2019
Securities
Listed Options $0.053 Expiring 7 August 2020
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
Top 20 Holdings
Holders
266
229
52
59
10
616
Total Units
86,668
566,176
354,108
1,667,340
13,501,678
16,175,970
Name/Holder
Number held
NORTHWEST NONFERROUS AUSTRALIA MINING PTY LTD
7,875,000
LJEG SMSF PTY LTD
1,609,873
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
1,531,281
CITICORP NOMINEES PTY LIMITED
742,428
BNP PARIBAS NOMINEES PTY LTD
478,867
MR GOO TONG ANG
472,176
DDGG HARRIS HOLDINGS PTY LTD
359,813
MR KAH HONG CHAN
170,990
160,000
KENG CHUEN THAM
MR DAVID KEITH EDWARDS & MRS ROBERTA MAY EDWARDS 101,250
96,595
JOMOT PTY LTD
85,778
MRS LILIANA TEOFILOVA
84,618
MR KA FAI MARTIN WONG
80,000
MR CHER TZE HANG MATTHIAS
79,780
SUBZERO COMMERCIAL REFRIGERATION PTY LTD
66,808
MR GORDON BURDEKIN & MRS NOELLE BURDEKIN
56,250
MR IVAN PRGOMET
51,200
MR IANAKI SEMERDZIEV
49,078
RAND MINING LIMITED
45,703
TRIBUNE RESOURCES N/L
Total Securities of Top 20 Holdings
Total of Securities
14,197,488
16,175,970
%
0.536
3.500
2.189
10.308
83.467
100.000
%
48.683%
9.952%
9.466%
4.590%
2.960%
2.919%
2.224%
1.057%
0.989%
0.626%
0.597%
0.530%
0.523%
0.495%
0.493%
0.413%
0.348%
0.317%
0.303%
0.283%
87.769%
57
SYNERTEC ANNUAL REPORT 2018 : 2019