Interim Report for the Period Ended 31 December 2017

For the six months ended 31 December 2017
Interim Report
Simplifying Business
Simplifying Business

HIGHLIGHTS FOR
SIX MONTHS TO
31 DECEMBER 2017
Net profit after tax lifts 18%
to $832,000
Software & technology
revenues grow 21%

to $2.9 million
EBITDA increases 23%

to $1.32 million
Cash flow from operations
declines $127,000 to
$827,000
Interim dividend of

4.0 cents per share
(up 14.3% on last year)
Growth in DéjarMail
continuing
Expected FY2018 net profit
after tax growth of around 20%
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CONTENTS
Highlights for Six Months to 31 December 2017 . . . . . . . . . . . . . . .2
Chairman’s & Chief Executive Officer’s Report . . . . . . . . . . . . . . . .4
Condensed Consolidated Financial Statements
> Consolidated Statement of Profit or Loss (Unaudited) . . . . . . . . . . .10
> Consolidated Statement of Comprehensive Income (Unaudited) . . .11
> Consolidated Statement of Movements in Equity (Unaudited) . . . . .12
> Consolidated Statement of Financial Position (Unaudited) . . . . . . . .13
> Consolidated Cash Flow Statement (Unaudited) . . . . . . . . . . . . . . .14
> Notes to the Condensed Financial Statements (Unaudited) . . . . . . . .16
Company Directory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

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Result Overview
Solution Dynamics Limited (“SDL” or “Company”) produced an unaudited net
profit after tax of $0 .832 million for the half year (1H FY17 $0 .704 million) . This
represents 18 .2% year-on-year growth . Cash flow from operations was $0 .827
million (1H FY17 $0 .954 million) and the closing net cash position at 31 December
was $2 .41 million (1H FY17 $1 .86 million) . The Directors have declared an interim
dividend of 4 .0 cents per share (1H FY17 3 .5 cents), fully imputed, a payout ratio
of 69% of earnings per share .
Operational Commentary
Operating revenue grew 10 .8% to $11 .3 million . Much of this was from gains in
low margin postage revenue and subcontracted printing in the UK where SDL
earns low margins . NZ domestic print revenue was under some pressure, falling
fractionally year-on-year . The consequence of SDL’s changing revenue mix –
particularly the pressure on higher margin local print and mail volumes, more on
that below – was a slight decline in the Company’s gross margin percentage from
37 .7% to 37 .3% (dollar gross margin increased, up 9 .7% to $4 .21 million) . Costs
continued to be well controlled, with Selling, General & Administration costs rising
4 .6% with much of the increase coming from SDL adding additional resource,
especially in the UK .
Software & Technology revenues showed a pleasing increase of 21 .0% to $2 .93
million (1H FY17: $2 .42 million), as the Company’s UK revenues in particular
continue to build . SDL’s UK channel partners are increasingly gaining sales
traction . Furthermore, this first half revenue growth is despite some drag from the
impact during the prior year of a major New Zealand customer no longer requiring
Déjar to archive its invoices as it began to self store its documents .
SDL was pleased to be recently recognised for its growth in technology with
the Financial Times rating the Company in the top 1,000 Asia-Pacific growth
companies and allocating SDL to the technology sector .
In the traditional digital print and document handling services market, revenue
declined 0 .5% year-on-year to $3 .38 million (1H FY17: $3 .40 million) . While this
is a market which otherwise remains in overall decline, SDL has previously been
able to grow print and mail revenues by picking up market share at a faster pace
CHAIRMAN’S & CHIEF EXECUTIVE
OFFICER’S REPORT

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CHAIRMAN’S & CHIEF EXECUTIVE
OFFICER’S REPORT
than customers have been switching to electronic communications channels . A
key feature of the Company’s first half was a noticeable increase in the rate at
which customers switched to electronic communications . Historically, SDL has
observed the annual rate of switching at around 5-7%, but the first half saw this
increase to a rate of around 15% . We largely put this increased switching rate to
some of SDL’s customers becoming more cost focussed, as the Company also
noticed a drop off in the level of ad hoc print/mail and development work against
historic levels . The dollar gross margins SDL earns on electronic communications
are lower than print and consequently this increase in switching is acting as a
drag on the Company’s earnings .
Outside of the switch to electronic, the Company is seeing print and mail growth
from a range of industry sectors including financial services, debt collection, retail,
freight and distribution, and charities . SDL’s web based, hybrid mail software
offering – DéjarMail – has been instrumental in the capture of most of the new
opportunities within our existing customers and securing a broadening range of
new customers .
The Company is seeing increasing interest in its software technology in the UK
and Europe, particularly DéjarMail . Mail resellers are attracted to DéjarMail as a
means of capturing desktop mail volumes . SDL now has two large mail resellers
in the UK and is seeing solidly growing volumes through these channels .
SDL has also recently extended its multi-channel communications offering and
added SMS, text to voice (TTV) and e-fax to its Omni Channel Portal .
Financial Performance
Earnings before interest, tax, depreciation and amortisation (EBITDA) improved by
$0 .25 million (+22 .8%) to $1 .32 million (1H HY17: $1 .08 million) on sales revenue
that rose 10 .8% .

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CHAIRMAN’S & CHIEF EXECUTIVE OFFICER’S REPORT CONTINUED
Summary Financial Performance Yr-on-Yr Yr-on-Yr
(all figures $000)
1H FY18 1H FY17 $ Change % Change
Total Revenue 11,292 10,187 1,105 10.8%
Cost of Goods Sold 7,080 6,348 732 11 .5%
Gross Margin 4,212 3,839 373 9 .7%
Gross Margin (%) 37 .3% 37 .7%
Selling, General & Admin Costs 2,888 2,761 127 4 .6%
EBITDA 1,324 1,078 246 22.8%
EBITDA Margin (%) 11.7% 10.6%
Depreciation 102 107 (5) -4 .7%
Amortisation 53 32 21 65 .6%
EBIT 1,169 939 230 24.5%
Net Interest (2) 2 (4) n .a .
Net Profit before Tax 1,171 937 234 25.0%
Taxation 339 233 106 45 .5%
Net Profit after Tax 832 704 128 18.2%
The EBITDA result gain is partly the benefit of higher gross margin in Software &
Technology, plus underlying Selling, General & Admin (SG&A) costs remaining well
managed .
SDL’s taxation rate in 1H FY2018 was 29 .0% versus 24 .9% in the prior period . This
higher rate partly represents a one-off adjustment that lowered the taxation rate in
1H FY2017 taxation as well as the lack of UK tax losses which were fully utilised in
FY2017 . Going forward, the Company expects to be paying tax at the full rate on both
New Zealand and UK earnings .
Revenue Analysis
Yr-on-Yr Yr-on-Yr
(all figures $000)
1H FY18 1H FY17 $ Change % Change
Software & Technology 2,933 2,424 509 21 .0%
Digital Print & Document Handling 3,381 3,398 (17) -0 .5%
Outsourced Services 4,978 4,365 613 14 .0%
Total Revenue 11,292 10,187 1,105 10.8%

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CHAIRMAN’S & CHIEF EXECUTIVE OFFICER’S REPORT CONTINUED
The 21 .0% growth rate for Software & Technology revenue streams in the first half
was ahead of expectations . SDL’s pipeline of opportunities and sales efforts in the
UK and European markets are likely to ensure Software & Technology has a number
of years of revenue growth ahead . The Company is still overly reliant on direct sales
efforts by a couple of key staff, and a small number of large customers in the UK .
We reiterate previous comments that SDL’s small size and geographic distance
from what is presently our most important growth market continues to present
ongoing difficulties but the Company is nevertheless pleased with the expansion
being achieved .
Digital print growth in 1H FY2018 was problematic as a result of the increased rate of
switching to electronic communications noted above . While this trend will continue,
the variability in the rate of change is less certain and difficult to predict . The industry
has excess digital print capacity and rationalisation will inevitably occur .
Balance Sheet, Liquidity and Debt
SDL closed the half year with net cash on hand of $2 .41 million . A bank overdraft
facility of $0 .2 million remains in placed but is unused . The main capital expenditure
in the half was in upgrading some of SDL’s production-related software .
Selected Balance Sheet and Cashflow Figures
Yr-on-Yr Yr-on-Yr
(all figures $000)
1H FY18 1H FY17 $ Change % Change
Net Cash on Hand (net of debt) 2,408 1,858 550 29 .6%
Non-current Assets 1,959 2,105 (146) -6 .9%
Net Other Liabilities (398) (570) 172 -30 .2%
Net Assets 3,969 3,393 576 17.0%
Cashflow from Trading 968 893 75 8 .4%
Movement in Working Capital (141) 61 (202) -331 .1%
Cash Inflow from Operations 827 954 (127) -13.3%
Book value (net assets) has increased by 17 .0% to $3 .97 million . Working capital
continues to be well managed . SDL made capital expenditure additions during the
half of $0 .115 million, the majority of which, as noted above, was for software .
The seasonality in SDL’s business, especially New Zealand print and mail, means
sales and earnings are higher in 1H compared to 2H and accordingly the movement
in working capital is negative in 1H, and positive in 2H . As SDL’s software

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revenue, especially in the northern hemisphere, continues to grow, the extent of this
seasonality is beginning to reduce .
The Company examined (and is still examining in some cases) a number of potential
acquisition opportunities during the first half but retains its cautious approach to
acquisitions and strong preference for organic growth . Nevertheless there may
be “bolt on” opportunities where removal of duplicated costs means the effective
acquisition multiple is low, or product extension opportunities where the acquisition
fills a gap in SDL’s software portfolio plus SDL has the opportunity to sell its software
into the acquired company’s customer base .
In early 2014 SDL introduced an Employee Share Option Plan (“ESOP”) . That ESOP
has issued options over 580,000 shares and 500,000 of these options became
exercisable in March 2017 (the remaining 80,000 become exercisable in March 2018) .
During the first half of FY2018, staff exercised options over 190,000 of these shares
which increased SDL’s shares on issue by 1 .4% to 14 .25 million shares .
Dividend
SDL is declaring an interim dividend of 4 .0 cents per share, an increase of 0 .5 cent
per share or 14 .3% on the prior year .
Earnings and Dividend per Share
Yr-on-Yr Yr-on-Yr

1H FY18 1H FY17 Change % Change
Shares on issue (000) 14,249 .8 14,059 .8 190 .0 1 .4%
Earnings per share (cents) 5.84 5.01 0.83 16.6%
Dividend per share (cents) 4.00 3.50 0.50 14.3%
Dividend proportion Imputed 100 .0% 100 .0% n .a . n .a .
Payout ratio 68 .5% 69 .9% n .a . n .a .
The dividend is fully imputed and the amount represents a payout ratio of 69% of
earnings per share . An arrangement with NZ Trade and Enterprise (“NZTE”) in relation
to helping fund UK market development requires the Company to cap the dividend
payout ratio at less than 75% for the duration of the agreement . The NZTE funding
agreement expires at the end of the current financial year and SDL thanks NZTE
for its assistance, which has been very beneficial in helping the Company produce
strong, positive results from its UK growth initiatives .
CHAIRMAN’S & CHIEF EXECUTIVE OFFICER’S REPORT CONTINUED

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CHAIRMAN’S & CHIEF EXECUTIVE OFFICER’S REPORT CONTINUED
FY 2018 Outlook
The two trends that affected the first half – increased rate in transition of domestic
physical volumes to electronic, offset by better software growth in UK and Europe
– are expected to continue through the second half . How the relative magnitude of
these two trends play out over the remainder of the year is difficult to forecast at
this stage, and the timing of software deals in Europe will also affect the full year
profit outturn .
SDL continues to examine potential acquisition opportunities and has a strong
pipeline of new customer opportunities in the UK and Europe . This includes
expanding the Company’s multi-channel distribution software to include SMS .
SDL has previously provided FY2018 guidance for earnings growth of around 15% .
Following the first half result, and considering the strong software pipeline, the
Directors are upgrading the full year earnings growth outlook to around 20%, with
the caveat that some of the software pipeline may require additional upfront costs .
John McMahon Nelson Siva
Chairman Director & Chief Executive Officer
+61-410-411 806 +64-21-415027

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CONSOLIDATED STATEMENT
OF PROFIT OR LOSS (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
(NZ$ in thousands, except per share amounts)
Operating revenue 11,095 10,110 19,788
Grant income 162 41 131
Property rental 35 36 72
Total income 11,292 10,187 19,991
Expenses
Employee costs 2,711 2,547 5,226
Rental and operating lease expenses 352 341 692
Research & development 170 140 334
Directors fees & salaries 300 303 523
Print & other outsource expenses 4,469 3,548 6,892
Other expenses 1,966 2,230 4,237
Total Expenses 9,968 9,109 17,904
Earnings before interest, tax,
depreciation & amortisation (EBITDA) 1,324 1,078 2,087
Depreciation 102 107 208
Amortisation of intangible assets (software) 53 32 78
Net Interest (income) (2) 2 (1)
Profit before income tax 1,171 937 1,802
Income tax 339 233 492
Net profit after income tax 832 704 1,310
Cents Cents Cents
Basic earnings per share 5 .8 5 .0 9 .3
Diluted earnings per share 5 .7 4 .8 8 .9
6 MONTHS
ENDED
31 DEC
2017
6 MONTHS
ENDED
31 DEC
2016
AUDITED
YEAR ENDED
30 JUN
2017

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CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
(NZ$ in thousands, except per share amounts)
Net operating profit after income tax 832 704 1,310
Exchange differences on translation
of foreign operations (5) 7 1
Other comprehensive income for the period,
net of tax (5) 7 1
Total comprehensive income for the year 827 711 1,311
6 MONTHS
ENDED
31 DEC
2017
6 MONTHS
ENDED
31 DEC
2016
AUDITED
YEAR ENDED
30 JUN
2017

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(NZ$ in thousands)
CONSOLIDATED STATEMENT OF
MOVEMENTS IN EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
Balance 1 July 2016 5,169 77 - (2,266) 2,980
Issue of shares to employees - 18 - - 18
Dividend - - - (316) (316)
Transactions with owners - 18 - (316) (298)
Profit for the year after tax - - - 704 704
Other comprehensive income - - 7 - 7
Balance 31 December 2016 5,169 95 7 (1,878) 3,393
Issue of shares to employees - 18 - - 18
Dividends - - - (492) (492)
Transactions with owners - 18 - (492) (474)
Profit for the year after tax - - - 606 606
Other comprehensive loss - - (6) - (6)
Balance 30 June 2017 (Audited) 5,169 113 1 (1,764) 3,519

Issue of shares to employees - 9 - 9
Exercise of employee options 71 (36) - 36 71
Dividend - - - (457) (457)
Transactions with owners 71 (27) - (421) (377)
Profit for the year after tax - - 832 832
Other comprehensive income - - (5) - (5)
Balance 31 December 2016 5,240 86 (4) (1,353) 3,969
SHARE
CAPITAL
EMPLOYEE

SHARE
PLAN
CURRENCY

TRANSLATION
RESERVE
ACCUM-

ULATED
LOSSES
TOTAL
EQUITY

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CONSOLIDATED STATEMENT OF
FINANCIAL POSITION (UNAUDITED)
AS AT 31 DECEMBER 2017
Current Assets
Cash and bank balances 2,408 1,858 2,080
Trade & other receivables 2,214 1,841 2,366
Inventories and work in progress 156 149 152
Prepayments 182 120 96
Total Current Assets 4,960 3,968 4,694
Current Liabilities
Trade creditors 1,517 1,398 1,428
Other current liabilities 625 539 903
Other non-financial liabilities 388 312 405
Employee benefit Liabilities 420 431 447
Borrowings - - -
Total Current Liabilities 2,950 2,680 3,183
Working Capital 2,010 1,288 1,511
Non-Current Assets
Deferred tax asset 99 76 108
Capital works in progress 4 152 73
Property, plant & equipment 603 681 595
Intangible assets 315 258 294
Goodwill 938 938 938
Total Non-Current Assets 1,959 2,105 2,008
Net Assets 3,969 3,393 3,519
Equity
Share capital 5,240 5,169 5,169
Employee share option plan 86 95 113
Foreign currency translation reserve (4) 7 1
Accumulated losses (1,353) (1,878) (1,764)
Total Equity 3,969 3,393 3,519
For and on behalf of the Board who approved these financial statements for issue .
John McMahon – Director (Chairman) Nelson Siva – Director
Date: 3 April 2018
AS AT
31 DEC
2017
AS AT
31 DEC
2016
AUDITED
AS AT
30 JUN
2017
(NZ$ in thousands)

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6 MONTHS
TO 31 DEC
2016
AUDITED
YEAR TO
30 JUN
2017
CONSOLIDATED CASH FLOW STATEMENT
(UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
Cash Flow from Operating Activities
Cash was provided from:
Receipts from sales 12,766 11,526 22,339
Other revenue 162 41 131
12,928 11,567 22,470
Cash was applied to:
Payments to suppliers 8,254 6,783 13,543
Payments to employees 3,212 3,192 6,091
GST paid to Inland Revenue 635 638 1,155
12,101 10,613 20,789
Net Cash Inflow from Operating Activities 827 954 1,681
Cash Flow from Investing Activities
Cash was applied to:
Purchase of property, plant & equipment
& capital works in progress 41 178 112
Purchase of software 74 12 94
115 190 206
Net Cash (Outflow) from Investing Activities (115) (190) (206)
Cash Flow from Financing Activities
Cash was provided from:
Interest received 2 - 6
Issue of shares through employee option plan 71 - -
73 - 6
Cash was applied to:
Payment of dividends 457 316 808
Interest paid - 2 5
Repayments for term loan & finance lease
liabilities secured on equipment - 10 10
457 328 823
Net Cash (Outflow) from Financing Activities (384) (328) (817)
Net change in cash and cash equivalents 328 436 658
Add cash & cash equivalents held at
beginning of year 2,080 1,422 1,422
Finance Facility and Cash Balance at End of Year 2,408 1,858 2,080
(NZ$ in thousands)
6 MONTHS
TO 31 DEC
2017

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6 MONTHS
TO 31 DEC
2016
AUDITED
YEAR TO
30 JUN
2017
CONSOLIDATED CASH FLOW STATEMENT
CONTINUED (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
Reconciliation of net deficit after income tax
or the year with net cash inflow/ (outflow)
from operating activities
Net (deficit)/surplus after income tax 832 704 1,310
Interest expense (reclassified as financing activity) - 2 -
Interest income (reclassified as financing activity) (2) - (1)
Add non-cash items:
Depreciation & amortisation of assets 155 139 286
(Gain) / Loss on foreign exchange (30) 14 (10)
Other non-cash items 13 34 14
Cash Flow from Trading 968 893 1,599
Add movements in Working Capital (141) 61 82
Net Cash Inflow from Operating Activities 827 954 1,681
(NZ$ in thousands)
6 MONTHS
TO 31 DEC
2017

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NOTES TO THE CONDENSED INTERIM
FINANCIAL STATEMENTS
For the six months ended 31 December 2017
1. GENERAL INFORMATION AND BASIS OF PREPARATION
The condensed interim consolidated financial statements (the interim financial statements)
are for the six months ended 31 December 2017 and are presented in NZ$, which is the
functional currency of the parent company . They have been prepared in accordance with
New Zealand generally accepted accounting practice and comply with New Zealand
Equivalent to International Accounting Standard 34 (NZIAS34) and IAS 34 “Interim
Financial Reporting” (IAS34) . They do not include all of the information required in annual
financial statements in accordance with IFRS’s, and should be read in conjunction with the
consolidated financial statements for the year ended 30 June 2017 .
Solution Dynamics Limited is the Group’s ultimate parent company . It is a limited
liability public company incorporated and domiciled in New Zealand and is listed with
the New Zealand Stock Exchange on the NZAX . The address of its registered office and
principal place of business is 18 Canaveral Drive, Auckland, New Zealand .
The Group comprises Solution Dynamics Limited and its wholly owned subsidiaries
Solution Dynamics (International) Limited, based in the United Kingdom and Déjar
International Limited . Déjar International Limited was incorporated on 13 November
2012 and is non-trading .
The Group offers a range of integrated solutions encompassing data management,
electronic digital printing, web presentment and archiving, fulfilment, traditional print
services, scanning, data entry and document management .
The interim financial statements for the six months ended 31 December 2017 and the
related comparative interim period, are unaudited . Due to seasonal variability financial
information from the audited financial statements for the immediate preceding financial
year ending 30 June 2017 have also been included .
2. SIGNIFICANT ACCOUNTING POLICIES
These interim financial statements have been prepared in accordance with the
accounting policies adopted in the Group’s most recent annual financial statements for
the year ended 30 June 2017 .
3. ESTIMATES
When preparing the interim financial statements, management undertakes a number of
judgements, estimates and assumptions about recognition and measurement of assets,
liabilities, income and expenses . The actual results may differ from the judgements,
estimates and assumptions made by management, and will seldom equal the estimated
results .

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NOTES TO THE CONDENSED INTERIM
FINANCIAL STATEMENTS
For the six months ended 31 December 2017
The judgements, estimates and assumptions applied in the interim financial
statements, including the key sources of estimation uncertainty were the same
as those applied in the Group’s last annual financial statements for the year
ended 30 June 2017 . The only exception is the estimate of the provision for
income taxes which is determined in the interim financial statements using
the estimated average annual effective income tax rate applied to the pre-tax
income of the interim period .
4. SEGMENT INFORMATION
The Group supplies customer communication solutions . These include a range
of integrated document management products and services separated into
three streams; software & technology services, digital printing & document
handling services and outsourced services . Specific elements of these streams
are as follows:
• Software & Technology, Solution Dynamics owns the intellectual property in
four products;
»Déjar, an online digital archival and retrieval system sold stand-alone
under licence agreements and also as a hosted service in New Zealand
and Internationally .
»Bremy, Digital asset management, workflow and multichannel publishing
software sold as a licenced product and also as a hosted service in New
Zealand, Australia and the UK .
»Composer, “On-Demand” content creation software .
»DéjarMail, is a web browser-based desktop mail management solution
which allows customers to route mail correspondence to SDL or any
other service provider for printing and delivery .
In addition to owning the intellectual property for the above products, Solution
Dynamics provides programming, consulting and design services that help
clients to distribute marketing and essential communications by mail and
electronically . The provision of these services is covered under this category .
• Digital Printing & Document Handling Services, the printing of client’s
information digitally using high speed laser printers followed by the
lodgement and distribution of those documents using a variety of machine
and other processes .

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NOTES TO THE CONDENSED INTERIM FINANCIAL
STATEMENTS CONTINUED
(UNAUDITED)
For the six months ended 31 December 2017
4. SEGMENT INFORMATION (CONTINUED)
• Outsourced Services, not all components of Solution Dynamics’ solutions
are produced internally . External elements such as post, freight, paper and
envelopes are sourced from external suppliers and included in this service
stream . Solution Dynamics has long term arrangements with a number of
key suppliers such as NZ Post for the provision of these services .
An overhead structure including sales, marketing and administration
departments provides services for all of the above revenue streams .
There are no reconciling items in this note due to the management information
provided to the Chief Operating Decision Maker being compiled using the
same standards and accounting policies as those used to prepare the financial
statements .

6 months to 6 months to Year to
(NZ$ in thousands) December 2017 December 2016 June 2017
Software & Technology 2,933 26% 2,424 24% 5,066 25%
Digital Printing & Document
Handling Services 3,381 30% 3,398 33% 6,712 34%
Outsourced services 4,978 44% 4,365 43% 8,213 41%
Total income 11,292 100% 10,187 100% 19,991 100%
Less cost of sales 7,080 63% 6,348 62% 12,274 61%
Gross margin 4,212 37% 3,839 38% 7,717 39%
Selling, general &
administration 2,888 26% 2,761 27% 5,630 28%
Earnings before interest,
tax, depreciation &
amortisation 1,324 11% 1,078 11% 2,087 11%
Depreciation 102 1% 107 1% 208 1%
Amortisation 53 0% 32 0% 78 0%
Interest (2) 0% 2 0% (1) 0%
Income tax 339 3% 233 3% 492 3%
Operating Profit
after income tax 832 7% 704 7% 1,310 7%

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NOTES TO THE CONDENSED INTERIM FINANCIAL
STATEMENTS CONTINUED
(UNAUDITED)
For the six months ended 31 December 2017
Segment Assets
Assets are not segmented between service streams
Information about Major Customers
Included in revenues for Solution Dynamics of $11 .292 million (2016: $10 .187
million) are services revenues of $1 .255 million (2016: $0 .981 million) which arose
from sales to the Company’s largest customer .
Geographical Information
The Group has customers in New Zealand, Australia and Europe .
Revenue from external customers Non-current assets
6 months 6 months Year to As at As at As at
to 31 Dec to 31 Dec 30 June 31 Dec 31 Dec 30 June
(NZ$ in thousands) 2017 2016 2017 2017 2016 2017
New Zealand 9,331 8,747 16,658 1,959 2,105 2,008
Australia 218 183 380 - - -
Europe 1,743 1,257 2,953 - - -
Total 11,292 10,187 19,991 1,959 2,105 2,008
5. CASH & CASH EQUIVALENTS
As at As at As at
31 Dec 31 Dec 30 Jun
(NZ$ in thousands) 2017 2016 2017
Cash and cash equivalents 2,408 1,858 2,080
Total Finance Facility and Cash 2,408 1,858 2,080
Solution Dynamics has a finance facility in place with the ANZ Bank . This facility
is to support the operational requirements of the Group and includes an overdraft
facility of $200,000 that is unused at the reporting date . The Group now holds a
net cash position with no bank debt (2015: $Nil) . The facilities are secured by a first
ranking debenture over the assets of the Group .
At period end the ANZ Bank has imposed no financial covenants to secure the
existing facilities . The Bank provides commercial guarantees totalling $65,000
(2016: $65,000) to the Group’s suppliers .

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6. SHARE CAPITAL & SHARE-BASED PAYMENTS
Solution Dynamics Limited has 14,249,810 ordinary shares (2016 14,059,810
ordinary shares) each fully paid .
The Group operates equity-settled, share-based compensation plans, under
which employees provide services in exchange for non-transferable options .
The value of the employee services rendered for the grant of non-transferable
options is recognised as an expense over the vesting period, and the amount
is determined by reference to the fair value of the options granted .
Number of Shares As at As at As at
31 Dec 31 Dec 30 Jun
(
Shares in $000’s) 2017 2016 2017
Shares Issued and Fully Paid:
- Beginning of the Period 14,060 14,060 14,060
- Share Issue (exercise of options) 190 - -
Shares Issued and Fully Paid 14,250 14,060 14,060
Employee Share Option Plan:
- Beginning of the Period 580 580 580
- Options issued - - -
- Options exercised (190) - -
- Options forfeited - - -
Shares Authorised for Share-based Payments 390 580 580
Total Shares Authorised at the end of the Period 14,640 14,640 14,640
The 390,000 options issued (2016: 580,000) were at a weighted average exercise
price of $0 .44 (2016: $0 .42) . 310,000 options are eligible to be exercised now with
an expiry date of September 2018, the balance are eligible to be exercised from
March 2018 .
NOTES TO THE CONDENSED INTERIM FINANCIAL
STATEMENTS CONTINUED
(UNAUDITED)
For the six months ended 31 December 2017

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7. RELATED PARTIES
Transactions between related parties include payments to shareholders,
directors and their companies and senior executives, also being shareholders .
Related party transactions from 1 July 2017 to 31 December 2017 were as
follows:
• Key management were paid $421,228 (as employees of Solution
Dynamics Limited) during the period (2016: $551,975) and were owed
$46,301, including annual leave, at 31 December 2017 (2016: $113,060) .
• Salaries paid to directors are disclosed in the Consolidated Statement of
Comprehensive Income .
8. EVENTS AFTER THE BALANCE DATE
At the board meeting of 23 February 2018, the directors resolved to pay a fully
imputed interim dividend of 4 .0 cents per share, amounting to $569,992 (2016:
the directors approved the payment of a fully imputed interim dividend of 3 .5
cents per share, amounting to $492,093) .
At a board meeting on 27 March 2018, the directors approved the acquisition
of the business assets and intellectual property of Auckland-based scanning
services and technology provider Scantech Limited . The acquisition has
an initial cost of $570,000, with additional earn out payments subject to
achievement of sales targets over the twelve-months following acquisition . The
target acquisition closing date is 2 April 2018 .
There were no other significant events after balance date .
NOTES TO THE CONDENSED INTERIM FINANCIAL
STATEMENTS CONTINUED
(UNAUDITED)
For the six months ended 31 December 2017

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COMPANY DIRECTORY
Directors
John McMahon - Chairman
Julian Beavis
Elmar Toime
Indrajit Nelson Sivasubramaniam
(Nelson Siva)
– Chief Executive Officer
Auditors
Grant Thornton New Zealand Audit
Partnership
Grant Thornton House
152 Fanshawe Street
AUCKLAND
Bankers
ANZ National Bank Limited
9-11 Corinthian Drive
Albany
AUCKLAND 0632
Lawyer
Stephen Layburn
Commercial Barrister
Level 3, 175 Queen Street
AUCKLAND
Share Registrar
Computershare Investor Services
Level 2, 159 Hurstmere Rd
Takapuna
AUCKLAND
Private Bag 92119
Auckland Mail Centre
AUCKLAND 1142
Registered Office and address
for service
18 Canaveral Drive
Albany
AUCKLAND
PO Box 301248
Albany
AUCKLAND 0752
Tel +64 9 970 7700
Solution Dynamics
(International) Limited
C/- Liz Butterworth & Associates
7 Clarendon Road
Borehamwood
Herts WD6 1BD
UNITED KINGDOM
Tel +44 (20) 8953-2835
Déjar International Limited
18 Canaveral Drive
Albany
AUCKLAND
PO Box 301248
Albany
AUCKLAND 0752

COMPANY DIRECTORY
Stock Exchange
The Company’s shares trade on the
New Zealand Stock Exchange
Alternative Market (NZAX) .
NZAX Trading Code: SDL
SOLUTION DYNAMICS
ON THE WEB
www.solutiondynamics.com
www.dejar.com
www.bremy.com