SYNERGYEQUITIES GROUP LIMITEDABN 44 009 148 529registered...

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 January 2007 ELS031.2007
The Manager
Company Announcements Office
Australian Stock Exchange Limited
Level 4, Exchange Centre
20 Bridge Street
SYDNEY NSW 2000
Via Electronic Lodgement
SYNERGY EQUITIES GROUP LIMITED (“SYNERGY” or “the Company”)
2nd QUARTER ACTIVITIES REPORT & COMMITMENTS TEST ENTITY
for the period ended 31 December 2006

HIGHLIGHTS

�� Data-inCrypt® SMX Registered Mail ready to go!

�� Data-inCrypt®’s profile enhanced through its corporate partnership with Surf Life Saving Australia

�� new version of Data-inCrypt®’s “online data backup” software released

�� PKF appointed as the Company’s auditors
------------------------------------------------------****
�� 25% of Meridian Mining Limited’s forthcoming IPO reserved for SYNERGY’s shareholders
-----------------------------------------------------
�� Meridian Mining Limited shares and options to the value of $250,000 (ex GST) to be issued to SYNERGY

OVERVIEW
The Company’s cash receipts from customers remained static as expected (being $134,590) whilst cash outflow from
operations increased by 4% in this quarter compared to the previous (the ASX announcement of 31 Oct 06 refers).
As at 31 Dec 06, the Company’s cash position stood at $271,400 and trade debtors totalled $54,111.
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 2
2nd Quarter Report for the period ending 31 December 2006
The Company received an amount of $58,515 during the quarter being SYNERGY Australia’s “Research and
Development Tax Offset” for the financial year ended 30 Jun 06 (the ASX announcement of 31 Oct 06 refers).
As at the date of this report, the Company’s cash position stands at $483,890 following a further small share placement
of 30,000,000 Fully Paid Ordinary Shares at an issue price of 1 cent per share to sophisticated and private investors,
raising a total of $300,000 (the ASX announcement of 19 Jan 07 refers).
Data-inCrypt® focussed its energies during the quarter on the impending release of Data-inCrypt® SMX Registered
Mail, in particular the implementation of final production hardware & infrastructure, completion of marketing / product
documentation and in-house staff training prior to the formal launch and anticipated market uptake in the current
quarter.
A new version of Data-inCrypt®’s online data backup & recovery software was released for deployment into customer
organisations. This version includes support for Microsoft SQL Server and Microsoft Exchange server, being
applications commonly used in the top-end SME and corporate markets. Data-inCrypt® remains in the final stages of
negotiations with a major Australian-based healthcare provider for the installation of its online data backup & recovery
service into over 50 sites nationwide.
SYNERGY Australia and Data-inCrypt® continue to engage in ongoing sales and strategic alliance discussions with a
number of national and international organisations in regard to the Company’s Internet technology systems. The
Company looks forward to keeping the market informed.
The Company was advised by the Chairman of Meridian Mining Limited (“Meridian”), Mr Ron Morellini, that
Meridian shares and options to the value of $250,000 (ex GST) would be issued to SYNERGY during the third quarter
of this financial year, ahead of Meridian’s forthcoming Initial Public Offering (IPO) planned to occur before 30 Jun 07
and in accordance with the Deed of Settlement dated 12 Apr 05 relating to the disposal of the Company’s residual
mining assets. The Company looks forward to informing the market when these shares and options have been issued.
Furthermore, resulting from negotiations between the Company and Meridian, the Company can confirm that 25% of
Meridian’s forthcoming IPO has been reserved for SYNERGY’s shareholders. Again, the Company looks forward to
informing the market when the full details of this opportunity for its shareholders have been confirmed by Meridian.
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
2nd Quarter Report for the period ending 31 December 2006
REVIEW OF OPERATIONS:
TECHNOLOGY
Data-inCrypt® SMX Registered Mail ready to go!
Data-inCrypt® focussed its energies during the quarter on the impending release of Data-inCrypt® SMX Registered
Mail, in particular the implementation of final production hardware & infrastructure, completion of marketing / product
documentation and in-house staff training prior to the formal launch and anticipated market uptake in the current
quarter.
Reproduction of Article from events.australia.com
The Company published on its website a copy of an article from Tourism Australia’s “business events” website titled
“Surf Lifesavers Get Professional”. The article mentioned Surf Life Saving Australia's corporate partnership with
Data-inCrypt® and stood Data-inCrypt® alongside Telstra, DHL, Yamaha and Westpac as Surf Life Saving Australia’s
major corporate sponsors.
The original article can be read at http://events.australia.com/2318.htm
New version of Data-inCrypt®’s “online data backup” software released
This significant Data-inCrypt® upgrade represents a further milestone in the continuing evolution of Data-inCrypt®’s
“online data backup and recovery” service.
Data-inCrypt® now includes support for Microsoft SQL Server (“SQL”) and Microsoft Exchange Server (“Exchange”),
being applications commonly used in the top-end SME and corporate markets. SQL and Exchange are typically
associated with large volumes of data which in turn translates to increased data storage revenues for the Company.
CORPORATE
Suspension from Official Quotation
ASX announced that the Company’s securities had been suspended from quotation owing to the Company’s failure to
lodge its full year accounts for the year ended 30 Jun 06 (the ASX announcement of 02 Oct 06 refers).
Full Year Accounts / Suspension
The Company announced that it was in the process of finalising its full year accounts for the year ended 30 Jun 06.
Despite the directors and the auditor working on the accounts over the weekend the auditor was not in a position to sign
off on the final accounts prior to ASX trading commencing on Monday, 2 October 2006 which was a public holiday in
Perth. (the ASX announcement of 03 Oct 06 refers).
Full Year Accounts / ASIC Annual Audited Accounts for the year ended 30 June 2006
The Company released its full year accounts for the year ended 30 Jun 06 (the ASX announcement of 04 Oct 06 refers).
Reinstatement to Official Quotation
ASX announced that the suspension of trading in the Company’s securities had been lifted following the release of its
full year accounts for the year ended 30 Jun 06 (the ASX announcement of 05 Oct 06 refers).
Results of Extraordinary General Meeting
Pursuant to ASX Listing Rule 3.13.2, the Company announced that all resolutions considered at the Extraordinary
General Meeting held on 26 Oct 06 were passed on a show of hands (the ASX announcements of 25 Sep 06 and 26 Oct
06 refer).
Top 20 Shareholders
The Company announced the names of the top 20 largest holders of its quoted equity securities (the ASX announcement
of 30 Oct 06 refers).
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 4
2nd Quarter Report for the period ending 31 December 2006
2006 Annual Report
The Company released its 2006 Annual Report (the ASX announcement of 30 Oct 06 refers).
Notice of 2006 Annual General Meeting
The Company released its Notice of 2006 Annual General Meeting including Proxy Form (the ASX announcement of
30 Oct 06 refers).
1st Quarter Activities Report & Commitments Test Entity
The Company released its 1st Quarter Activities Report & Commitments Test Entity for the period ended 30 Sep 06
(the ASX announcement of 31 Oct 06 refers).
Share Placement
The Company announced that it had placed a total of 44,000,000 Fully Paid Ordinary Shares at an issue price of 0.4
cents per share to sophisticated and private investors, raising a total of AUD$176,000. The placement represented 5.7%
of the company’s enlarged share capital and ranked pari passu in all respects with the existing ordinary shares.
The capital raised pursuant to the placement was used to fund the corporate and administrative activities of the
Company, as well as provide working capital for the sales & marketing and ongoing development of the Company's
suite of Internet technology products (the ASX announcements of 03 and 17 Nov 06 refer).
Lapsing of Employee / Consultant Option Incentive Scheme Options
The Company advised the lapsing of 2,000,000 Employee Option Incentive Scheme Options (the ASX announcement
of 30 Nov 06 refers).
Results of 2006 Annual General Meeting
The Company released the results from its 2006 Annual General Meeting (the ASX announcement of 30 Nov 06 refers).
DISPOSAL OF RESIDUAL MINING ASSETS
As part of the Company’s Deed of Settlement dated 12 Apr 05 with Mr Ron Morellini, SYNERGY is still to receive the
equivalent of $250,000 (ex GST) in shares and options in Meridian Mining Limited prior to its listing on the ASX,
planned to occur before 30 Jun 07.
REVIEW OF OPERATIONS: MATTERS SUBSEQUENT TO 31 DECEMBER 2006
TECHNOLOGY
No matters subsequent.
CORPORATE
Form 603 – Notice of Initial Substantial Holder
The Company announced that it had received a Form 603 – Notice of Initial Substantial Holder form from Mr Joseph
Nardizzi (the ASX announcement of 10 Jan 07 refers).
Reproduction of article from The Sunday Times
The Company published on its website a copy of an article including a comment by Gary Lebas (Adviser, Hogan and
Partners) that appeared in the Business News section of The Sunday Times on 14 January 2007, titled “Hot Stocks”
(page 66), an extract of which follows overleaf:
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 5
2nd Quarter Report for the period ending 31 December 2006
“Speculative
Synergy Equities (SYG)
Prospects for Internet technology service provider SYG appear to be turning the corner. Through a wholly
owned subsidiary, it is preparing to roll out its "Data-inCrypt® SMX" secure email service. Data-inCrypt®
allows users to send and receive secure emails, as well as to store critical data offsite. Initial targets are
the legal, stockbroking and medical sectors. Significant cash flow is expected to be generated.”
Response to ASX Price and Volume Query
The Company responded to an ASX Price and Volume query which resulted from an increase in the price of the
Company’s securities from 0.9 cents per share on 08 Jan 07 to 1.7 cents per share on 19 Jan 07, and an increase in the
volume of trading in the Company’s securities over this period.
As part of its response the Company announced a small share placement of 30,000,000 Fully Paid Ordinary Shares at an
issue price of 1 cent per share to sophisticated and private investors, raising a total of $300,000. The placement
represents 3.7% of the Company’s enlarged share capital and ranks pari passu in all respects with the existing ordinary
shares (the ASX announcements of 19 Jan 07 refer).
Market Re-rating
The Company notes that the market has re-rated its securities during the month of Jan 07 and as of yesterday’s date the
Company’s market capitalisation stood at $12 million.
SYNERGY National Roadshow
With the release of Data-inCrypt® SMX Registered Mail imminent, the time is right for SYNERGY to communicate its
success to the Australian-based technology media and investment community, thus positioning itself as one of the
leaders in online data backup and secure email in Australia.
The Company confirms that arrangements are now well advanced with regard to its forthcoming SYNERGY national
roadshow, planned for the current quarter, where SYNERGY will present to key media, selected IT analysts & brokers
and shareholders in Sydney, Melbourne, Brisbane, Adelaide and Perth.
DISPOSAL OF RESIDUAL MINING ASSETS
No matters subsequent.
Dated this 31st day of January 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 6
2nd Quarter Report for the period ending 31 December 2006
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 31 December 2006
Consolidated statement of cash flows
Cash flows related to operating activities
Current
quarter
$A’000
Year to date
(6 months)
$A’000
1.1 Receipts from customers 135 271
1.2 Payments for (a) staff costs
(b) advertising and marketing
(c) research and development
(d) leased assets
(e) other working capital
(160)
(1)
-
-
(123)
(308)
(4)
-
-
(246)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature received 1 3
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Other – research & development tax off-set 58 58
Net operating cash flows (90) (226)
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 7
2nd Quarter Report for the period ending 31 December 2006
Current
quarter
$A’000
Year to date
(6 months)
$A’000
1.8 Net operating cash flows (carried forward) (90) (226)
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
-
-
-
-
-
-
-
-
-
-
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
-
-
-
-
-
-
-
-
-
-
1.11 Loans to other entities - -
1.12 Loans repaid by other entities - -
1.13 Other (provide details if material) - -
Net investing cash flows - -
1.14 Total operating and investing cash flows (90) (226)
Cash flows related to financing activities
1.15 Proceeds from issues of shares, options, etc. 176 376
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 (4) (7)
Net financing cash flows 172 369
Net increase (decrease) in cash held 82 143
1.21 Cash at beginning of quarter/year to date 189 128
1.22 Exchange rate adjustments to item 1.20 - -
1.23 Cash at end of quarter 271 271
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 8
2nd Quarter Report for the period ending 31 December 2006
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 1.2 105,088
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 $60,688 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 October 2006 to 31 December 2006.
Gross salary totalling $24,700 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 October
2006 to 31 December 2006.
Gross salary totalling $19,700 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 October 2006 to 31 December 2006.
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 9
2nd Quarter Report for the period ending 31 December 2006
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 175 52
4.2 Deposits at call 96 137
4.3 Bank overdraft - -
4.4 Other - -
Total: cash at end of quarter (item 1.23) 271 189
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 January 2007
Company Secretary & CFO
Print name: Mark Popham
SYNERGY EQUITIES GROUP LIMITED & its Controlled Entities 10
2nd Quarter Report for the period ending 31 December 2006
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.