road show

SYNERGY
EQUITIES GROUP LIMITED
ABN 44 009 148 529
registered office
Level 1
Westcentre
1260 Hay Street
West Perth WA 6005
AUSTRALIA
mailing address
Private Box 1288
West Perth WA 6872
AUSTRALIA
telephone - national 08 9415 2212
- international +61 8 9415 2212
facsimile - national 08 9415 2221
- international +61 8 9415 2221
email - [email protected]
visit us at - www.synergylimited.com
31 July 2007 ELS004.2008
The Manager
Company Announcements Office
Australian Securities Exchange
Level 4, Exchange Centre
20 Bridge Street
SYDNEY NSW 2000
Via Electronic Lodgement
SYNERGY EQUITIES GROUP LIMITED
4th QUARTER ACTIVITIES REPORT & COMMITMENTS TEST ENTITY
for the period ended 30 June 2007
HIGHLIGHTS
�� cash receipts from customers up by 28%
�� upscaling of the Company’s technical and corporate operations continues
�� recruitment of additional key personnel for sales and rollout of Data-inCrypt® SMX secure registered email
�� significant Data-inCrypt® “online data backup & recovery” customer appointments
�� formation of SYNERGY Integration division
�� SYNERGY National Roadshow set for August 07
OVERVIEW
The Company’s cash receipts from customers increased by 28% (being $167,892) whilst cash outflow from operations
decreased by 11% in this quarter, compared to the previous (the ASX announcement of 30 Apr 07 refers). When
compared to the same period of the previous financial year, the Company’s cash receipts from customers increased by
38%, whilst cash outflow from operations increased by 4% (the ASX announcement of 31 Jul 06 refers).
As at 30 June 07, the Company’s cash position stood at $575,696 and trade debtors totalled $54,352. As at the date of
this report and subsequent to the July 07 share placement to sophisticated investors (the ASX announcement of 27 Jul
07 refers), the Company’s cash position stands at $810,451.
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 2
4th Quarter Report for the period ending 30 June 2007
The increased cash receipts from customers during this quarter reflects the upscaling of the Company’s technical and
corporate operations, the increased sales and market penetration of Data-inCrypt® “online data backup & recovery”
and the launch of SYNERGY Integration.
The sales momentum of Data-inCrypt®’s “online data backup & recovery” service was evidenced by significant new
customer appointments that included State One Stockbroking Ltd, Brandrill Limited, Western Australian General
Practice Education and Training Ltd (WAGPET) and Professionals Kalgoorlie. Discussions / negotiations continued
with a number of strategic alliance and integration / resale partners, including one of Western Australia’s most
successful communications and network integrators and one of Australia’s largest suppliers of notebooks to corporate
and Government (the ASX announcements of 19 & 30 Apr 07 refer).
With regard to potential corporate customers, Data-inCrypt® is preparing to commence an Australia-wide “online data
backup & recovery” pilot with a leading national marketing and distribution company that offers Data-inCrypt® the
opportunity to initially reach over 500 sites. The Company looks forward to keeping the market informed.
The Company’s upscaling of operations and continuing development as a provider of IT products and services was
further demonstrated by the formation of the SYNERGY integration division which offers IT support, project,
management and consulting services to small-to-medium enterprises (SMEs) and corporate organisations. The division
will leverage the Company’s investment in the SYNERGY DataCentre as well as play a pivotal role in the rollout of
Data-inCrypt® SMX secure registered email and the continuing deployment of Data-inCrypt® “online data backup &
recovery”.
During the quarter, the Company continued to head-hunt highly skilled and qualified personnel, making appointments
to the positions of Product Manager (the ASX announcement of 12 Apr 07 refers) and Senior Systems Engineer.
In May, the Company completed a small share placement of 35,000,000 Fully Paid Ordinary Shares at an issue price of
1.2 cents per share to sophisticated and private investors, raising a total of AUD$420,000. The placement was within
the limits set out in the ASX Listing Rules, being issued under the Company’s 15% placement capacity (the ASX
announcement of 30 May 07 refers).
A letter was sent to Shareholders, on behalf of the Board, by the Company’s Managing Director, advising of the holding
of an Extraordinary General Meeting to deal with the regrettable issue of the replacement of auditor and to ratify the
issue of shares (the ASX announcement of 06 Jun 07 refers).
Glossary in brief
SYNERGY is Synergy Equities Group Limited
the Company is Synergy Equities Group Limited
SYNERGY Australia is Synergy Business Solutions Australia Pty
Ltd, SYNERGY’s wholly owned subsidiary
Data-inCrypt® is Data-inCrypt® Pty Ltd, SYNERGY’s
wholly owned Subsidiary
SYNERGY Group is SYNERGY, SYNERGY Australia and
Data-inCrypt®
ASX is Australian Stock Exchange Limited
SYG is SYNERGY’s ASX code
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 3
4th Quarter Report for the period ending 30 June 2007
REVIEW OF OPERATIONS:
TECHNOLOGY
Change of Product Manager
The Company was pleased to announce the appointment of Mr Russell Humphreys as Product Manager. Russell will
lead the team responsible for the support, maintenance and evolution of the Company’s software products, consisting of
the TradeCentre suite including payments gateway and supply chain management solutions; Data-inCrypt® online data
backup & recovery; and Data-inCrypt® SMX secure registered email (the ASX announcement of 12 Apr 07 refers).
Update - Data-inCrypt® Online Data Backup & Recovery
On behalf of its wholly owned subsidiary Data-inCrypt®, the Company provided an “online data backup & recovery”
update on projects which are in progress and also the future of Data-inCrypt® (the ASX announcement of 19 Apr 07
refers).
projects in progress
As part of the ongoing focus on the rollout of its “online data backup & recovery” service (and pending
release of Data-inCrypt® SMX secure registered email), Data-inCrypt® consistently engages in strategic
alliance discussions with national and international organisations. Data-inCrypt® was:
1) undertaking a proof of concept / software integration exercise with a Western Australian based software
development company that has been supplying its own specialised accounting software for over 25 years
and has more than 3,500 clients Australia-wide; and
2) negotiating with a wholly Australian owned stockbroking firm for the provision of disaster recovery
services, including Data-inCrypt® online data backup & recovery in conjunction with “hot site” facilities
in the form of dedicated hardware located in Data-inCrypt®’s DataCentre.
Data-inCrypt® forms strategic alliance with Clements Dunne & Bell
The Company was pleased to announce that its wholly owned subsidiary Data-inCrypt® had formally executed a
memorandum of understanding to enter into a “Teaming Agreement” with Clements Dunne & Bell Pty Ltd (“CDB”)
Chartered Accountants, Business Advisors and Consultants in Victoria, for the delivery of
Data-inCrypt®’s online data backup & recovery service by CDB’s IT consulting division to CDB’s clients (the ASX
announcement of 26 Apr 07 refers).
CDB is a member of BKR Walker Wayland, an association of independent accounting firms located throughout
Australia and New Zealand, and also a member of the BKR International association which represents the combined
expertise of over 130 member firms with over 330 offices in 67 countries around the world.
SYNERGY Forms Integration Division
The Company was pleased to announce on behalf of its wholly owned subsidiary Synergy Business Solutions Australia
Pty Ltd the formation of a new division, SYNERGY Integration, which will offer IT support, project, management
and consulting services to small-to-medium-enterprises (SMEs) and corporate organisations. Martin Eade,
SYNERGY’s Executive Director will lead this division whilst continuing in the role of Relationship Manager /
Infrastructure Architect (the ASX announcement of 10 May 07 refers).
The launch of the SYNERGY Integration division represents a significant milestone in SYNERGY’s upscaling of
operations and continuing development as a provider of IT products and services, and will build on Synergy Business
Solutions Australia Pty Ltd’s and its sister company Data-inCrypt® Pty Ltd’s existing products and services, broad
technical expertise, reputation for the provision of outstanding customer service and the SYNERGY DataCentre. The
division is now recruiting additional technical support engineers and support officers to add to the core of the division
and enable the expansion of its service offering.
As well as providing its own products and services, the division will play a pivotal role in the rollout of Data-inCrypt®
SMX secure registered email and the continuing deployment of Data-inCrypt® online data backup & recovery.
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 4
4th Quarter Report for the period ending 30 June 2007
State One Stockbroking Ltd (www.stateone.com.au) appoints Data-inCrypt®
The Company was pleased to announce on behalf of its wholly owned subsidiary Data-inCrypt® that, as foreshadowed
in the ASX announcement of 19 Apr 07, State One Stockbroking Ltd (“State One”), a wholly Australian owned
stockbroking firm with offices in Sydney, New South Wales and Perth, Western Australia, had selected and
implemented Data-inCrypt®’s “online data backup & recovery” service to protect its critical server-based data
Australia-wide.
Additionally, State One and Data-inCrypt® continue to engage in discussions with regard to the provision of further
disaster recovery services by Data-inCrypt®, specifically the potential establishment of a “hot site” facility in the form
of dedicated hardware hosted in the Data-inCrypt® DataCentre (the ASX announcement of 28 May 07 refers).
Brandrill Limited (www.brandrill.com) appoints Data-inCrypt®
The Company was pleased to announce on behalf of its wholly owned subsidiary Data-inCrypt® that Brandrill Limited
(“Brandrill”), a public company listed on the Australian Securities Exchange and head-officed in Perth, Western
Australia, has selected Data-inCrypt® “online data backup & recovery” to protect the critical data stored on its fleet of
notebooks (the ASX announcement of 05 Jun 07 refers).
Brandrill provides safe, efficient and cost effective drilling and blasting solutions to Australia’s mining and civil
excavation industries, with a professional and dedicated approach that over the last 25 years has enabled it to become
one of the largest and most respected drill and blast contractors in its market. Brandrill has a workforce of over 400
people and a fleet of over 60 drill rigs actively employed in contracts around Australia.
Western Australian General Practice Education and Training Ltd (“WAGPET”) (www.wagpet.com.au) appoints
Data-inCrypt®
The Company was pleased to announce on behalf of its wholly owned subsidiary Data-inCrypt® that WAGPET, an
independent company established by a consortium of Western Australian organisations with an interest in general
practice education and training, has selected Data-inCrypt® “online data backup & recovery” as a primary provider of
disaster recovery services for its critical server data (the ASX announcement of 19 Jun 07 refers).
Funded by the Commonwealth Department of Health and Ageing, WAGPET is the sole provider of the Australian
General Practice Training Program for GP Registrars in Western Australia and one of 22 Regional Training Providers
(RTPs) in Australia appointed by the national training coordinator, General Practice Education and Training (GPET).
The appointment of Data-inCrypt® by WAGPET further increases Data-inCrypt®’s profile and reputation as a
provider of disaster recovery services to the medical sector Australia-wide – established customers in this sector include
general practitioners & clinics (e.g. Seacrest Medical Centre, Albury After Hours Clinic and Moorabbin Medical
Clinic), dentists (e.g. Cooper Dental Services), nursing homes (e.g. Albury & Districts Private Nursing Home) and
chiropractors (e.g. Burswood Health Professionals).
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 5
4th Quarter Report for the period ending 30 June 2007
Fyson Strachan & Associates Kalgoorlie (“Professionals Kalgoorlie”) (www.professionalskalgoorlie.com.au)
appoints Data-inCrypt®
The Company was pleased to announce on behalf of its wholly owned subsidiary Data-inCrypt® that Fyson Strachan &
Associates Kalgoorlie, a successful “Professionals” real estate agency based in Kalgoorlie, Western Australia, has
selected Data-inCrypt® “online data backup & recovery” to protect its critical notebook and server data (the ASX
announcement of 27 Jun 07 refers).
The Professionals Group Council (parent body of the Professionals Real Estate Group)
(www.professionalsrealestategroup.com) licences its world recognised trademark “Professionals” throughout each State
and Territory of Australia, New Zealand, Papua New Guinea, Thailand, Indonesia, Fiji and Vanuatu. Strategic
partnerships are now in place with key franchisees with high calibre representation in Thailand and Indonesia.
CORPORATE
3rd Quarter Activities Report & Commitments Test Entity
The Company released its 3rd Quarter Activities Report & Commitments Test Entity for the period ended 31 March
2007 (the ASX announcement of 30 Apr 07 refers).
Lapsing of Employee / Consultant Option Incentive Scheme Options
The Company advised the lapsing of Employee Option Incentive Scheme Options (the ASX announcement of 03 May
07 refers).
Appendix 3B – Issue of Options Pursuant to Employee Option Incentive Scheme
The Company released an Appendix 3B – Issue of Options Pursuant to Employee Option Incentive Scheme (the ASX
announcement of 03 May 07 refers).
Share Placement
The Company completed a small share placement of 35,000,000 Fully Paid Ordinary Shares at an issue price of 1.2
cents per share to sophisticated and private investors, raising a total of AUD$420,000. The placement represented 4.2%
of the Company’s enlarged share capital, ranks pari passu in all respects with the existing ordinary shares and was
within the limits set out in the ASX Listing Rules, being issued under the Company’s 15% placement capacity (the
ASX announcement of 30 May 07 refers).
Top 20 Shareholders
The Company announced the names of the top 20 largest holders of its quoted equity securities (the ASX
announcements of 31 May 07 refer).
Letter to Shareholders / Notice of Extraordinary General Meeting to be held on 05 July 2007
A letter was sent to Shareholders, on behalf of the Board, by the Company’s Managing Director, advising of the holding
of an Extraordinary General Meeting to deal with the regrettable issue of the replacement of auditor and to ratify the
issue of shares. Attached to the letter was a copy of the Notice of Meeting, Explanatory Statement and Proxy Form (the
ASX announcement of 06 Jun 07 refers).
Appendix 3B – Issue of Options Pursuant to Employee Option Incentive Scheme
The Company released an Appendix 3B – Issue of Options Pursuant to Employee Option Incentive Scheme (the ASX
announcement of 21 Jun 07 refers).
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 6
4th Quarter Report for the period ending 30 June 2007
Lapsing of Employee / Consultant Option Incentive Scheme Options
The Company advised the lapsing of Employee Option Incentive Scheme Options (the ASX announcement of 29 Jun 07
refers).
DISPOSAL OF RESIDUAL MINING ASSETS
Final Settlement Sum
As part of the Deed of Settlement dated 12 Apr 05 for the disposal of the Company’s residual mining assets to Mr Ron
Morellini and Meridian Mining Limited (“Meridian”), the Company is to receive the equivalent of $250,000 (ex GST)
in shares and options in Meridian (being the final settlement sum) prior to Meridian’s listing on the ASX.
The Company announced that it had received written advice from the Chairman of Meridian, Mr Ron Morellini, that in
general meeting on 08 Feb 07 Meridian had resolved to:
a) issue and allot 1,000,000 (one million) fully paid ordinary shares in the capital of Meridian to
SYNERGY;
b) grant and issue 1,250,000 (one and a quarter million) options having an exercise price of 80 (eighty) cents
each at any time up until 30 June 15 to SYNERGY; and
c) draw a cheque in the amount of $25,000 payable to SYNERGY representing the GST component of this
final settlement sum.
The Company confirmed that it had received a cheque in the amount of $25,000 from Meridian (the ASX
announcement of 04 Apr 07 refers).
TECHNOLOGY (matters subsequent to 30 June 2007)
Data-inCrypt® SMX secure registered email
With the rollout of Data-inCrypt® SMX secure registered email due in August, Data-inCrypt® has commenced the
execution of “confidentiality & non-disclosure agreements” with its initial customers in the legal, stockbroking, medical
and consulting industry sectors.
Appointment of Business Development Manager
The Company was pleased to announce the appointment of Mr Tim Hartley BSc (Hons) to the position of Business
Development Manager. Tim has more than 12 years of management, sales and business development experience in the
Information Technology (IT) sector, both in Australia and overseas. Educated in the United Kingdom, Tim has a
Bachelor of Science degree (with honours) in Business Information Management Systems and has an outstanding track
record working for corporate organisations including IBM and Ricoh in Europe, the Middle East and Australia.
As Business Development Manager, Tim will be responsible for establishing and developing relationships with new and
existing customers in order to meet aggressive revenue targets by increasing sales of the group’s technology products
and services, including Data-inCrypt® SMX secure registered email, Data-inCrypt® online data backup & recovery
and the IT services being offered by the SYNERGY Integration division (the ASX announcement of 25 Jul 07 refers)
CORPORATE (matters subsequent to 30 June 2007)
Results of Extraordinary General Meeting held on 05 July 2007
The Company released the results of its Extraordinary General Meeting held on 05 Jul 2007 (the ASX announcement of
06 Jul 07 refers).
Response to ASX Price Query
The Company responded to an ASX Price Query which resulted from an increase in the price of the Company’s
securities from 1.7 cents per share on 17 Jul 07 to 2.7 cents per share on 23 Jul 07, and an increase in the volume of
trading in the Company’s securities over this period (the ASX announcement of 23 Jul 07 refers).
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 7
4th Quarter Report for the period ending 30 June 2007
As part of its response, the Company reiterated information that had been contained in its recent ASX announcements.
A$400K Share Placement
The Company completed a A$400,000 share placement comprising 20 million Fully Paid Ordinary Shares at an issue
price of 2 cents per share to sophisticated investors. The share placement represents 2.3% of the Company’s enlarged
share capital, will rank pari passu in all respects with the existing ordinary shares and is within the limits set out in the
ASX Listing Rules, being issued under the Company’s 15% placement capacity (the ASX announcement of 27 Jul 07
refers).
The capital raised pursuant to the placement will be used to fund the corporate and administrative activities of the
Company as the upscaling of its technical and corporate operations continues, as well as provide working capital for the
sales & marketing of the Company's suite of Internet technology products and services including Data-inCrypt® SMX
secure registered email and the SYNERGY Integration division. In addition, the fund raising will ensure that the
Company can continue to attract highly skilled and qualified personnel.
DISPOSAL OF RESIDUAL MINING ASSETS (matters subsequent to 30 June 2007)
No matters subsequent.
Dated this 31st day of July 2007.
Signed on behalf of the Board of Synergy Equities Group Limited
Mark Popham
Company Secretary & CFO
SYNERGY EQUITIES GROUP LIMITED
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 8
4th Quarter Report for the period ending 30 June 2007
Rule 4.7B
Appendix 4C
Quarterly report
for entities admitted
on the basis of commitments
Introduced 31/3/2000. Amended 30/9/2001, 24/10/05
Name of entity
SYNERGY EQUITIES GROUP LIMITED
ABN Quarter ended (“current quarter”)
44 009 148 529 30 JUNE 2007
Consolidated statement of cash flows
Cash flows related to operating activities
Current
quarter
$A’000
Year to date
(12 months)
$A’000
1.1 Receipts from customers 168 570
1.2 Payments for (a) staff costs
(b) advertising and marketing
(c) research and development
(d) leased assets
(e) other working capital
(171)
-
-
-
(169)
(680)
(4)
-
-
(598)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature received 4 12
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Other – research & development tax off-set - 58
Net operating cash flows (168) (642)
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 9
4th Quarter Report for the period ending 30 June 2007
Current
quarter
$A’000
Year to date
(12 months)
$A’000
1.8 Net operating cash flows (carried forward) (168) (642)
Cash flows related to investing activities
1.9 Payment for acquisition of: (a) businesses (item 5)
(b) equity investments
(c) intellectual property
(d) physical non-current assets
(e) other non-current assets
-
-
-
-
-
-
-
-
(2)
-
1.10 Proceeds from disposal of: (a) businesses (item 5)
(b) equity investments
(c) intellectual property
(d) physical non-current assets
(e) other non-current assets
-
-
-
-
-
-
-
-
-
25
1.11 Loans to other entities - -
1.12 Loans repaid by other entities - -
1.13 Other (provide details if material) - -
Net investing cash flows - 23
1.14 Total operating and investing cash flows (168) (619)
Cash flows related to financing activities
1.15 Proceeds from issues of shares, options, etc. 420 1,096
1.16 Proceeds from sale of forfeited shares - -
1.17 Proceeds from borrowings - -
1.18 Repayment of borrowings - -
1.19 Dividends paid - -
1.20 Other (6) (30)
Net financing cash flows 414 1,066
Net increase (decrease) in cash held 246 447
1.21 Cash at beginning of quarter/year to date 329 128
1.22 Exchange rate adjustments to item 1.20 - -
1.23 Cash at end of quarter 575 575
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 10
4th Quarter Report for the period ending 30 June 2007
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
Current quarter
$A'000
1.24 Aggregate amount of payments to the parties included in item 1.2 88,818
1.25 Aggregate amount of loans to the parties included in item 1.11 -
1.26 Explanation necessary for an understanding of the transactions
Gross salary totalling $53,863 was paid by the Company to Mr Ronald Moir, a Director, in his capacity as
Managing Director of the Company for the period commencing 01 April 2007 to 30 June 2007.
Gross salary totalling $17,015 was paid by the Company to Mr Mark Popham, a Director, in his capacity as
Company Secretary and Chief Financial Officer of the Company for the period commencing 01 April 2007
to 30 June 2007.
Gross salary totalling $17,940 was paid by SYNERGY Australia to Mr Martin Eade, a Director, in his
capacity as Relationship Manager / Infrastructure Architect of the SYNERGY Group for the period
commencing 01 April 2007 to 30 June 2007.
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and
liabilities but did not involve cash flows
NIL
2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the
reporting entity has an interest
NIL
Financing facilities available
Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2).
Amount available
$A’000
Amount used
$A’000
3.1 Loan facilities - -
3.2 Credit standby arrangements - -
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 11
4th Quarter Report for the period ending 30 June 2007
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the
consolidated statement of cash flows) to the related items in the
accounts is as follows.
Current quarter
$A’000
Previous quarter
$A’000
4.1 Cash on hand and at bank 97 69
4.2 Deposits at call 478 260
4.3 Bank overdraft - -
4.4 Other - -
Total: cash at end of quarter (item 1.23) 575 329
Acquisitions and disposals of business entities
Acquisitions
(Item 1.9(a))
Disposals
(Item 1.10(a))
5.1 Name of entity - -
5.2 Place of incorporation or registration - -
5.3 Consideration for acquisition or disposal - -
5.4 Total net assets - -
5.5 Nature of business - -
Compliance statement
1. This statement has been prepared under accounting policies, which comply with accounting standards as
defined in the Corporations Act (except to the extent that information is not required because of note 2) or
other standards acceptable to ASX.
2. This statement does give a true and fair view of the matters disclosed.
Sign here: Date: 31 July 2007
Company Secretary & CFO
Print name: Mark Popham
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 12
4th Quarter Report for the period ending 30 June 2007
Notes
1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed
for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is
encouraged to do so, in a note or notes attached to this report.
2. The definitions in, and provisions of, AASB 1026: Statement of Cash Flows apply to this report except for the
paragraphs of the Standard set out below.
6.2 reconciliation of cash flows arising from operating activities to operating profit or loss
9.2 itemised disclosure relating to acquisitions
9.4 itemised disclosure relating to disposals
12.1(a) policy for classification of cash items
12.3 disclosure of restrictions on use of cash
13.1 comparative information
3. Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for
foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must
be complied with.