SDL FY2020 Financial Results & Final Dividend

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Simplifying Business
Annual Report 2020

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Annual
Shareholders
Meeting
2020 Key Points
> Record net profit after tax up
255% to $1.87 million
> Normalised net profit after tax up
211% to $1.64 million
> Dividends per share of 9.0 cents
(prior year 4.0 cents)
> Revenue up 35% to $34.0 million
> International revenue surpasses
NZ revenue
> EBITDA up 88% to $4.4 million
> Net cash on hand $5.0 million
> Further earnings growth expected
in FY2021
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The Annual Meeting of shareholders will
be held at 10:30am on Thursday, 22nd
October 2020, as an online meeting
with details to be provided when the
Company provides the Notice of Meeting
to shareholders.

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2020 Key Points .....................................................................2
Management Discussion and Analysis ..................................................4
Independent Auditor’s Report ........................................................16
Consolidated Financial Statements for the
Year Ended 30 June 2020
Consolidated Statement of Profit or Loss ...............................................19
Consolidated Statement of Comprehensive Income .....................................19
Consolidated Statement of Financial Position ...........................................20
Consolidated Statement of Changes in Equity ..........................................21
Consolidated Statement of Cash Flows ................................................22
Notes to the Consolidated Financial Statements ........................................23
Statement of Corporate Governance ..................................................57
Company Directory .................................................................67
Contents
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Management Discussion
and Analysis
FY2020 Result Overview
Solution Dynamics Limited (“SDL” or “Company”) recorded a net profit after tax of $1.87 million for FY2020, well
ahead of $0.53 million in the prior year. This result includes a net gain of $0.23 million that is one-off in nature
(details in Financial Performance section) so the normalised profit for FY2020 is $1.63 million. The Company
continues to see substantial growth in overall international business driven from its Software & Technology
platforms, with a range of new customer wins contributing progressively over the year. This was partly offset by
COVID-19 revenue and gross margin headwinds which have acted as a drag on results with NZ revenues affected
slightly but UK/EU revenues significantly down. Additionally, SDL continues to add staff resources offshore to
both bring on new customer wins and expand business development activity so Selling, General & Administration
(“SG&A”) expenses continue to trend structurally higher.
Cash flow from operations was $5.77 million (FY2019 $1.30 million) and the net cash position at year end was
$5.01 million (FY2019 $1.18 million). The year-end cash position is abnormally high, reflecting unusually favourable
timing of year-end debtor and creditor cash flows (creditors are also elevated at year end), along with prepayment
receipts of (very low margin) postage by some clients (totalling around $1.5 million).
The directors have declared a final dividend of 6.0 cents per share (FY2019 2.0 cents) fully imputed, making a total
dividend for FY2020 of 9.0 cents per share (FY2019 4.0 cents).
CEO Status
SDL’s CEO, Nelson Siva, is currently receiving medical treatment. He is making good progress and the directors’
current expectation is that he will re-engage in the business over September.
New Accounting Standard Applied in FY2020
SDL’s FY2020 financial statements show a different result for the prior year of FY2019 than the FY2019 annual
report. This is the result of an FY2020 accounting standards change (from NZ IAS 17 to NZ IFRS 16) that alters
how leases are treated. Previously, lease expense was typically either a cost of goods sold item (where it related to
production items such as print equipment) or an administration cost item (e.g. the cost of renting the Company’s
premises) and no liability for operating leases was recorded on the Company’s balance sheet. The new accounting
standard requires leases to be capitalised so that the balance sheet shows a “Right of Use” asset along with a “Right
of Use” liability equivalent to the present value of future lease payments owing (the asset and liability approximately
offset). The Profit or Loss Statement now shows the lease expense in two lines: mainly through depreciation of the
right of use asset, and through an interest charge for an implied cost of funds on the right of use liability.
The net effect on the reported profit is minimal; it is largely a case of moving the lease expense cost into
depreciation and interest costs. This does though have the effect of increasing SDL’s EBITDA (by around $0.9
million in FY2020). The cash flow statement is similarly changed with cash flow from operating activities increasing
and being offset by an increase in the cash outflow from financing activities.
SDL has adopted the fully retrospective approach which means the financial statements from the prior period (i.e.
FY2019) are restated to conform with the new NZ IFRS 16 standard, allowing a like-for-like comparison between
the two years. See Note 2.2.5 to the Financial Statements for details of restatement changes to FY2019 figures.
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Effects of COVID-19
The key outcome of COVID-19 has been SDL’s success to date in ensuring its staff remained safe, after strict health
monitoring and effective work practices were put in place early and rigorously adhered to. The use of segregated
teams, health monitoring, and controlled facility access helped ensure no SDL staff member has been infected by
COVID-19. These measures are expected to remain in place for an extended period or until a vaccine is available.
A range of SDL’s clients are essential services businesses and consequently the Company continued partial onsite
production operations throughout the New Zealand lockdown. The Company’s non-production employees were
able to work successfully from home, including SDL’s international staff. The Company deeply appreciates the
efforts and cooperation by staff in their flexibility, assistance and compliance with health requirements, and thanks
them for perseverance and maintaining morale in difficult operating circumstances.
SDL has seen several financial effects from COVID which are estimated to have had an aggregate moderately
negative impact on the FY2020 result.
Given some of SDL’s customers are essential services, revenue during the New Zealand lockdown period only
declined by around 15%, a better result than had initially been anticipated, but nevertheless causing a drag on New
Zealand profitability over a three month period. SDL claimed the New Zealand government’s wage subsidy on the
basis that revised budgets at the start of lockdown suggested revenue would decline by slightly more than 30%,
however, when this did not eventuate, the wage subsidy was returned.
SDL’s UK volumes were materially affected as large parts of that economy slowed significantly during lockdown,
including one large client whose activity declined around 85%. The UK economy has been slow to recover and, at
the time of this report has seen a slight uplift in activity as the government there is attempting to slowly normalise
conditions. The UK lockdown and economic slowdown tipped SDL’s UK business into loss for the half and this has
distorted the Company’s overall tax rate upwards as that loss is ring fenced for tax purposes so is not able to offset
profits in other jurisdictions.
Some costs savings were made, with travel reducing to near zero and several months of rent relief at SDL’s Albany
premises. However, these were insufficient to offset the decline in gross profit from lower revenues.
The impact from COVID on SDL’s trading outlook is discussed in the FY2021 Outlook section.
One of SDL’s directors, Mr Elmar Toime, has significant experience in the global mail and logistics markets (former
CEO of NZ Post, former Deputy executive Chair of Royal Mail Group, was a Supervisory Board member of
Deutsche Post DHL, and is a non-executive director of Qatar Post). He is providing specialised mail and logistics
consulting advice to the Company during the COVID-19 period along with additional support to SDL’s northern
hemisphere operations during a period when travel from New Zealand has not been possible, along with the
temporary absence of the CEO, Nelson Siva, for medical reasons. These services are being provided on normal
commercial terms (refer Note 29).
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Business Description
SDL operates in the Customer Communications market (essential mail, interactive marketing communications
and on-demand communications) across both the old economy print/mail house business and the new economy
document management business. The Company’s products and services are represented by two revenue streams:
• Services (split into Digital Print & Document Handling, and Outsourced Services); and
• Software & Technology.
Services operates solely in New Zealand. Digital Print & Document Handling revenues are generated from digital
printing and mail house processing for two categories of mail items: transactional mail, such as invoices and
statements; and direct marketing mail such as promotional material. These are then distributed through New
Zealand Post’s (“NZ Post”) mail delivery system. A number of the components included in this service, such as
envelopes and postage, form part of Outsourced Services revenues (which are typically very low margin activities).
Digital printing differs from traditional printing in that each document printed is typically personalised and unique.
Revenue from the Company’s scanning operation, Scantech, is included in Services (for New Zealand scanning
operations), while offshore consulting and software revenues that are related to Scantech’s software technology
are included in the Software & Technology revenue stream.
Software & Technology develops and markets SDL’s own software products which include:
• digital asset management, with communication templates and campaign management;
• document archival;
• document composition;
• desktop mail solutions for “print on demand”;
• consulting and software revenue from scanning and scanning workflow; and,
• international cross-border print-on-demand management software.
The US business, DigitalToPrint (DTP), acquired by SDL in May 2018 is wholly included in Software & Technology.
DTP operates the international cross-border print software, Jupiter, which is presently being more closely
integrated with SDL’s desktop mail print-on-demand solution. Note that for some international clients, SDL
only provides software or related consulting services, but for others it arranges third party printing and logistics
on which it will typically earn a modest margin. This means Software & Technology revenues are a mix of pure
software and software consulting revenues for some clients, while others also include third party printing and
logistics revenues that are generated as a result of SDL’s software.
Transactional mail volumes in New Zealand and internationally are continuing to decline, although anecdotal
evidence suggests direct marketing mail is seeing less erosion and is estimated to be reasonably static. Some
types of communications still remain better suited to print and the usage level of printed versus electronic
communications varies significantly across countries. Technology such as DéjarMail (SDL’s print-on-demand
desktop mail solution) can improve the handling efficiency, management and cost of physical mail. The Company’s
integrated range of print and software technologies means it is able to offer a holistic and distribution channel/
platform-agnostic approach to managing its customers’ communications needs.
The Company has operations in the UK, USA and Albany, Auckland.
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International Expansion
Historically, SDL was predominantly a New Zealand business with some international software revenue. That
position changed in FY2020. SDL’s half year Interim Report noted that international Software & Technology
revenue as a proportion of total revenue had moved from around 26% in 1H FY2019 to around 49% in 1H FY2020.
This trend has continued and for the full FY2020, international Software & Technology revenues as a proportion of
total revenue is now around 65%.
Moving into FY2021, and assuming the software contracts underway deliver as expected, then SDL’s international
activities will increasingly dominate the sales mix and business. Note that international Software & Technology
revenue includes two different business models: in one, SDL is a pure software SaaS provider and earns revenue
solely from the customer utilising the software. In the other, SDL still provides software on a SaaS basis but
also earns revenue directly related to the software platform by acting as the customer’s provider of a total
communications solution service (including third party print, logistics and postage).
The requirement to provide high levels of international customer service for software delivery and support
capability means SDL’s New Zealand technology staff are regularly called upon after hours to support overseas
customers and the Company’s international staff. SDL recognises the stress that international expansion and time
zone differences have placed on staff, both in New Zealand and globally, and is actively increasing the number of
support-related staff in the northern hemisphere.
Description and Review of Revenue Streams
SDL Services
SDL Services predominantly provides mail house operations to high-volume postal mail users in the business-to-
consumer sector. DéjarMail has expanded the market for SDL’s print and post service down to the SME (small
to medium enterprise) sector although the Company sells to this market through channel partners. SDL Services
operates leased, high-speed digital colour and monochrome printers. In addition to digital printing, Services also
provides the ancillary document handling operations such as automated envelope inserting and flowrap.
Services revenue also includes Outsourced Services, which encompasses a variety of outsourced functions or
components such as postage, third party offset printing, freight, paper and envelopes. The Company has an access
agreement with NZ Post which provides wholesale rates and bulk mail discounts off NZ Post’s retail rates, subject
to SDL meeting minimum volumes requirements. The profit margins on many of these outsourced components,
especially postage, are slim.
General mail volumes continue to decline, SDL’s FY2020 mail lodgement volumes dropped 15.8%, a similar rate of
fall to 15.1% the prior year. The decline was exacerbated from late March by COVID-19 restrictions and lockdown.
The Company’s digital print volumes also fell, dropping by 13.0%.
On the digital communications side, SDL’s volume of customer emails rose 7.9%.
Outsourced Services revenue in the following table is a combination of both very low margin postage and the
outsourced printing in the New Zealand operations.
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SDL Services Revenue Breakdown FY2020 FY2019 Percentage
(all figures $000) Change
Change
Digital Printing and Document Handling 4,568 5,561 -17.9%
Outsourced Services 7,450 11,270 -33.9%
Total Services Revenue 12,018 16,831 -28.6%
Note that in FY2019 Outsourced Services also included some UK services (including postage) but this has been
included in Software & Technology for FY2020 as it is derived from the bundled software solution that SDL
provides to those UK clients. This re-allocation represents around two-thirds of the decline in Outsourced Services
seen in FY2020.
SDL Software & Technology
Two trends are driving demand for SDL’s software. First is the digital transformation of communication channels
with the increasing ability for businesses to personalise their customer engagement. Secondly, cost and efficiency
pressures are causing businesses to optimise their communications channels, both digital and print. SDL’s software
platforms provide functionality to deliver on both these trends.
The digital transformation aspect has attracted significant market competition as pure technology organisations
look to help businesses employ more “pull” marketing tactics, drawing people in to their brands with interesting,
informative and engaging content. Communication channels are no longer “one size fits all”; customers now receive
messaging through an omni-channel or multi-media approach. SDL treats every form of communication – whether
a customer email, an invoice or account statement, or a piece of marketing collateral – as a means to enrich and
deepen the personalised relationships that our customers have with their customers.
The second aspect – helping optimise both print and digital communications channels – is one where SDL appears
to have a greater degree of competitive advantage. The Company’s history in mailhouse, digital printing and
fulfilment means it understands the importance of, and requirements for, data accuracy, timely delivery and cost
efficiency. This is not simply a case of generating, printing and mailing a PDF. There are significant complexities
around personalised document creation and production for specialised, high volume print equipment, coupled with
personalised mail inserts, multi-part and multi-lingual documents, global routing for optimised multi-region printing,
and handling and management of mail returns, along with industry knowledge around optimising mail and logistics
costs. In addition, there are increasing data security and privacy regulations, including data integrity and document
management requirements. Delivering solutions in this domain requires a combination of digital document skills
and specialised global print and mail industry knowledge. SDL’s in-house production experience and how the
Company has coupled this with its in-house development (and in some cases acquisition) of software technology
has produced what it believes is effective technology with few global competitors.
SDL Software has six software engines or platforms that are used to develop customer solutions:
1. Déjar
Déjar is a digital archival system that provides the ability to efficiently store and retrieve electronic documents
created from most formatting tools. Déjar allows users to exactly reproduce the original document and access
these via a browser over the local network or via the Internet. The reproduced document can be printed, faxed or
emailed and Déjar’s security and history features ensure every document created and subsequent access event is
recorded by User ID and date/time stamp.
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2. Composer
Composer is SDL’s electronic document creation software. It is flexible and allows customised documents to
be built on the fly, based on information retrieved from databases. Based on templates it automatically creates
templates, documents and letters with dynamic, customised content, formatted to each customer’s requirements.
Composer allows companies to easily standardise corporate documentation formats for all users, including regional
and legal variations. Templates, documents, emails, letters and newsletters created by Composer are automated,
ready to archive, print, publish online, or electronically distribute to customers in one step.
3. Bremy
Bremy is an integrated, multi-channel publishing and distribution solution for businesses across a broad spectrum of
industries. It manages the work flow of digital assets, from document creation and revision, to final email or print-
ready files and distribution through multiple channels, including print, email, web, digital signage and mobile. It
helps streamline and provides integrity to document proofing and integrates with data sources to produce complex
documents such as online or physical catalogues. It also has a Campaign Manager module to assist companies in
creating and managing specific advertising programmes.
4. DéjarMail (POD: Print on Demand)
DéjarMail is a desktop mail management solution which allows customers to route mail correspondence, by file
transfer or web browser portal (Print On Demand), to SDL or any other service provider for printing and delivery via
post or any other medium. This delivers costs savings for smaller businesses and for larger companies’ ad hoc mail.
5. Jupiter
Jupiter, acquired as part of the DTP acquisition, is a global print and mail solution that benefits Postal
Administrators, senders and recipients, all via a “Managed Print and Mail Solution”. Jupiter provides a technology
platform which links together customer communication origin points such as ERP, transactional and marketing
output with production and fulfilment on a globally distributed basis. Closely integrated with over 300 service
providers globally, customers can use a highly flexible web service API to achieve simultaneous concurrent
fulfilment across five continents, all while retaining visibility and control of the process via an intuitive and mobile
friendly, web portal.
The scope for integration of the SDL product set, particularly DéjarMail Print on Demand, with Jupiter’s global
fulfilment network opens the door to expansion of the markets that SDL’s solutions can apply to.
6. Scantech software
Scantech’s suite of software solutions include scanning applications to digitise physical documents, automated
extraction of data from documents (both physical and digital) including workflows for the processing of this data
and the automation of business processes such as accounts payable and accounts receivable. These are also
integrated into SDL products, such as Déjar for archival and retrieval.
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Software & Technology revenue is earned from three sources.
The first is SaaS (Software as a Service) revenue, where customers operate SDL’s software on a pay-as-you-go
model, typically by way of a per-document or per-electronic transaction charge and in many cases with a base
monthly fee. SDL will usually host the software on third party hosting infrastructure (such as Amazon Web Services
or Microsoft Azure) and related data on behalf of the client. The Company has some customers on software license
arrangements (SDL collects an annual maintenance fee) however these are now a minimal contributor to revenue.
Secondly, the company offers bespoke software development services where this is related to a customer using
SDL’s software. An example is a customer requiring a front end, web-based access portal to allow its clients to
access the underlying data being stored or managed by SDL’s software. In general, SDL prefers to provide generic
functionality that covers most customer use situations rather than building customer-bespoke infrastructure, as this
allows better ongoing management of SDL’s software base by mitigating excess complexity.
The third is the provision of programming, consulting, end-customer onboarding, business analysis and design
services that help clients to manage essential and marketing communications both physical and electronic.
Software encompasses all international and New Zealand software revenue. It includes Déjar revenue in New
Zealand for digital document archival and management for SDL Services’ customers.
SDL continues to invest in its software IP and future efforts will focus on both functional development and tighter
integration between products. A number of the Company’s software products have been developed in-house (e.g.
DéjarMail Print-on-Demand) while others such as the Jupiter global distributed print platform have been acquired.
As SDL’s international expansion relies on channel partners, having these products more closely integrated and
easier to use by third parties is an increasing requirement.
In both the UK and USA, FY2020 saw SDL continue to add sales and support personnel to manage business
growth; a further step up from these costs will occur in FY2021. SDL is being assisted in its American growth
initiative by a market development grant from NZ Trade and Enterprise (“NZTE”) that contributes towards the costs
of expansion. The NZTE grant covers 40% of applicable costs and is to a maximum of $0.6 million or for three
years, whichever comes first. On current projections it is likely the grant will be fully utilised during FY2021.
Software & Technology generated revenue of $22.0 million in FY2020, an increase of 164% on the prior year’s
revenue of $8.35 million. This growth was from several sources including a large multinational organisation that
progressively transferred its activity to SDL’s platform over the year (the bulk of the revenue from this client is from
underlying print and logistics activity) plus a large US-based multinational corporation that began utilising SDL’s
Print on Demand and Jupiter platforms during the second half (revenue for this client is currently only for platform
software and software support).
Financial Performance
International expansion has driven SDL’s growth in revenue and earnings, the result of new contract wins as the
Company progressively expanded its US business following the purchase of DTP during FY2018. The New Zealand
business struggled for much of the year, given the ongoing structural decline in volumes, compounded by the
COVID-19 lockdown, although more recently has begun to win modest new business.
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Summary Financial Performance FY2020 FY2019 Percentage
(all figures $000) Restated Change
Total Revenue 34,030 25,176 35.2%
Less: Cost of Goods Sold 20,571 16,682 23.3%
Gross Margin 13,459 8,494 58.5%
Gross Margin (%) 39.6% 33.7%
Less: Selling, General & Admin (SG&A) 9,105 6,174 47.5%
EBITDA 4,354 2,320 87.7%
EBITDA margin (%) 12.8% 9.2%
Depreciation 1,151 1,127 2.1%
Amortisation 330 347 -4.9%
EBIT 2,883 846 239.6%
Net Interest 92 198 -53.5%
Income Tax 915 122 650.0%
Net Profit after Tax 1,866 526 254.8%
Tax rate 32.9% 18.8%
The FY2020 result requires adjustment to understand and better compare a normalised result, by allowing for two
material one-off items during the year.
The first is a mark-to-market unrealised foreign exchange gain on currency hedges of $0.65 million (pre-tax).
SDL has a range of foreign exchange hedges in place to manage currency exposures around revenues and costs
in both US dollars and UK pounds. These unrealised hedge gains cover various maturities in the second half of
calendar 2020 (i.e. they relate to SDL’s FY2021 operations). While these hedges mature in FY2021, under NZ IFRS
accounting standards a full mark-to-market of unrealised positions is required at 30 June balance date and any gain
or loss included in the FY2020 result. This unrealised gain is included in the Company’s reported revenue.
Secondly, SDL has been successful in the last 18 months in winning a range of new contracts internationally. A
number of one-off incentives are now payable in relation to these contract wins and these total approximately
$0.33 million (pre-tax). Approximately half of the payments relate to post-acquisition incentives. The cost of these
incentives is recorded in the SG&A expense for the year.
The net gain to earnings (after tax) from these two items is $0.23 million. Deducting this from reported earnings
produces a normalised profit (note this is a non-GAAP measure) of $1.63 million, which the Directors believe
provides a more accurate picture of how the Company’s underlying operations performed.
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The following table highlights first and second half performance for the last two financial years.
SDL Half Financial Years 2H 2H Percent 1H 1H Percent
(all figures $000. FY19 half years restated) FY2020 FY2019 Change FY2020 FY2019 Change
Total Revenue 18,245 12,450 220.9% 15,785 12,726 92.4%
EBITDA 2,938 1,265 133.5% 1,416 1,055 34.2%
EBITDA margin 16.1% 10.2% 9.0% 8.3%
Tax rate 36.1% 2.7% 21.2% 44.9%

Balance Sheet, Liquidity and Debt
SDL closed the year with net cash (i.e. cash net of interest bearing debt) on hand on $5.01 million (FY2019 $1.18
million). Note that this net cash figure excludes Right to Use Liabilities arising from the new Lease Accounting
standard; these liabilities are approximately offset by Right to Use Assets. As previously noted, the year-end cash
position is abnormally high from unusually favourable timing of year-end debtor and creditor (creditors are also
elevated at year end) cash flows, along with prepayment of (very low margin) postage by some clients (totalling
around $1.5 million). Given the increase in global health and macroeconomic risks the Directors intend retaining a
prudent approach to balance sheet management.
The Company maintains an overdraft arrangement from ANZ Bank with a $200,000 limit. This was unused during
FY2020.
Selected Balance Sheet and Cashflow Figures FY2020 FY2019 Change
(all figures $000) Restated
Net Cash/(Debt & Borrowings) 5,012 1,182 3,830
Non-Current Assets 2,310 2,696 (386)
Right of Use Assets 1,406 2,360 (954)
Net Other Assets/(Liabilities) (2,304) 54 (2,358)
Right of Use Liabilities (1,531) (2,502) 971
Net Assets 4,893 3,790 1,103
Cashflow from Trading 2,292 2,182 110
Movement in Working Capital 3,474 (880) 4,354
Cash Inflow from Operations 5,766 1,302 4,464
Cash dividends paid 732 804 (72)
The restated cashflow figures for FY2019 relate to the lease accounting change. Lease payments have been
reclassified by removing them from Trading (or Operating) cashflows; they now appear as Financing cashflows (refer
to Note 2.2.5 for details).
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Capital expenditure for the year was modest at $0.19m, mainly for mail sorting equipment plus IT software and
infrastructure.
The increase in net assets increased over the year to $4.89 million largely stemmed for improved profitability.
This figure includes intangible assets of around $1.60 million of which the bulk ($1.06 million) is goodwill and
subject to an annual impairment test. The balance of intangibles represents software and customer contracts from
acquisitions which are being amortised over three years from acquisition date.
SDL operates with a largely neutral working capital balance. This allows the Company to continue growing
without particular requirement to fund additional working capital needs. However, as international expansion has
occurred, especially from several large contracts, month-to-month and intra-month cash flow movements have
become lumpier and the Directors are conscious of maintaining sufficient liquidity reserves to manage short-term
fluctuations.
Taxation and Dividends
SDL pays full New Zealand tax on locally generated earnings. As a result of COVID-19, the UK business operated
at a loss in the second half of the year; this is ring fenced to the UK for tax purposes. The Company’s US business is
now profitable. A range of new business growth during FY2020 saw the full utilisation of remaining US tax losses. A
portion of amortisation of acquired intangibles (relating to customer contracts and some of the acquired software)
is not tax deductible and this will bias the reported tax rate slightly upwards until these are fully written down.
The Directors reiterate prior year comments that SDL only intends to pay dividends to the extent that it can fully
impute them and also subject to SDL not experiencing any one-off requirements for abnormal capital expenditure
or any significant acquisition or investment activity.
Earnings and Dividends per Share FY2020 FY2019 Change
(all figures $000) Restated
Shares on Issue (‘000) 14,640 14,640 0.0%
Reported Earnings per Share (cents) 12.75 3.59 254.8%
Dividend per Share (cents) 9.0 4.0 125%
Dividend Proportion Imputed 100.0% 100.0%
Dividend Payout ratio 70.6% 111.3%
Dividend Payout ratio on NPATA (Note a) 62.6% 75.5%
(a) SDL’s FY2019 agreement with NZTE for market development funding for North America limits the Company to a maximum dividend payout ratio
of 75% of Net Profit after Tax plus Amortisation (NPATA).
The final dividend of 6.0 cents per share is fully imputed and will be paid on 21 October 2020 (expected ex-date of
8 October 2020).
The number of shares on issue remained flat over the year. The Company operates an employee share option plan
(ESOP) for key staff. At year end there were two staff members in this plan with the right to a total of 160,000
shares. Historically, ESOP rights have only been provided to SDL’s New Zealand staff. As the Company has
expanded, with key staff now located internationally, further ESOP rights are expected to be allocated to certain
international staff in FY2021.
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Risk Factors
SDL expects the physical mail market will continue its volume decline trend, possibly exacerbated by COVID-19
increasing the emphasis towards electronic communications. This is likely to place additional pressure on the
existing excess printing capacity in the New Zealand mail house sector. The Company’s domestic business is
likely to see increasing print margin pressure and higher risk of business loss as competitors marginally price in
attempts to hold production volume levels. While the risk is partly mitigated by SDL’s ability to add value through
its technology offerings, the Company has several key domestic contracts that, if lost, could place material pressure
on local profitability. SDL expects that consolidation in the New Zealand print market is inevitable, and has held
industry rationalisation discussions with other participants in the print sector but, these have been fruitless to date.
SDL’s top five customers (both domestic and international) provided 49.8% of the Company’s revenue in FY2020
with the largest customer accounting for 25.8% of revenue. Loss of one or more of those customers would cause
financial results to differ materially from those outlined in the FY2021 Outlook section below.
The Company’s software provides critical document management, distributed print, and storage functions for its
clients. SDL needs to ensure it continues to maintain appropriate levels of software development quality control
and sufficient, well-trained staff for software delivery and support. SDL also regards IT and data security as a
potential risk area and regularly reviews its IT and data security arrangements.
The Company operates a single site facility for its New Zealand print and mail house production, with an offsite for
data and server backup. The Directors are conscious of the operational risk a single site implies for digital imaging
and mail house operations. SDL has a reciprocal disaster recovery (“DR”) plan with another printer, as well as some
backup capability with Fuji Xerox DMS.
The Company relies on channel partners to market its software products into the UK, Europe and the US. This
means SDL has little or no contact with many of the end user customers of its products. While these channel
partner arrangements are currently stable there is not guarantee these arrangements will continue and SDL needs
to ensure its software continues to adequately meet channel partner requirements. The Company has invested in a
limited number of international sales staff in the UK and more recently in the US.
SDL also reiterates comments from the “Effects of COVID-19” section above. At this time, the Company sees
ongoing underlying structural growth from recent customer and contract wins as sufficient to support future
growth expectations. However, the global environment (both in health and economic terms) remains extremely
uncertain and this could materially affect SDL in unforeseen ways.
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FY2021 Outlook
SDL has previously providing guidance for FY2021 reported net profit in the $2.0 to $2.5 million range. This
excludes the pulled forward unrealised FY2021 foreign exchange hedge gains of around $0.65 million (pre-tax) that
accounting standards have required the Company to mark-to-market at 30 June and bring into the FY2020 result.
Two key factors contribute to SDL’s FY2021 outlook. On the positive side is the ongoing gain from customer
wins over the last twelve months progressively moving onto SDL’s software platforms. While there is always
some onboarding risk along with uncertainty around how quickly these customers move to a fully annualised
contribution, this is largely dependent on the Company ensuring it executes well operationally.
On the negative side, SDL has a number of customers whose operational expectations have been significantly
lowered for FY2021 as a result of COVID-related disruptions. In some cases this is because economies are in
some degree of government mandated lockdown (e.g. the UK) meaning certain sectors are suffering significantly
restricted operations and not needing to engage in communications with their customers. In other cases, some of
the Company’s customers have suspended or significantly curtailed their operations, including communications, in
higher risk countries such as developing markets.
While SDL expects continued growth in FY2021 – the Directors reiterate earnings guidance of $2.0 to $2.5
million – this is an expectation that has been lowered by drags from COVID noted in the prior paragraph. There
is significant volatility possible – both upside and downside – in the range of possible outcomes for FY2021
and the causes are largely beyond the Company’s control. The Directors are monitoring the world health and
macroeconomic outlooks but hold the view that – subject to the Risk Factors section above – strong underlying
international growth prospects are available for SDL’s software platforms. Accordingly, SDL will continue to
investment globally in both in sales channel development and customer support infrastructure to maintain growth
momentum.
| 15 |

| 16 |
Grant Thornton New Zealand
Audit Partnership


L4, Grant Thornton House

152 Fanshawe Street
PO Box 1961
Auckland 1140

T +64 9 308 2570

F +64 9 309 4892
www.grantthornton.co.nz





Chartered Accountants and Business Advisers
Member of Grant Thornton International Ltd











To the Shareholders of Solution Dynamics Limited
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Solution Dynamics Limited (the Group) on pages xx to
yy which comprise the consolidated statement of financial position as at 30 June 2018 and the consolidated
statement of profit or loss, consolidated statement of 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
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financial position of Solution Dynamics Limited and the entities it controlled as at 30 June 2018 and its financial
performance and cash flows for the year then ended in accordance with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS) issued by the New Zealand Accounting Standards
Board.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ))
issued by the New Zealand Audit and Assurance Standards Board. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the consolidated Financial Statements
section of our report. We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance
Standards Board, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Our firm carries out other assignments for Solution Dynamics Limited and the entities it controlled in the area of
taxation returns and advice. The firm has no other interests in the Group.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.



Independent Auditor’s Report

Grant Thornton New Zealand
Audit Partnership


L4, Grant Thornton House

152 Fanshawe Street
PO Box 1961
Auckland 1140

T +64 9 308 2570

F +64 9 309 4892
www.grantthornton.co.nz





Chartered Accountants and Business Advisers
Member of Grant Thornton International Ltd











To the Shareholders of Solution Dynamics Limited
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Solution Dynamics Limited (the Group) on pages xx to
yy which comprise the consolidated statement of financial position as at 30 June 2018 and the consolidated
statement of profit or loss, consolidated statement of 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
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financial position of Solution Dynamics Limited and the entities it controlled as at 30 June 2018 and its financial
performance and cash flows for the year then ended in accordance with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS) issued by the New Zealand Accounting Standards
Board.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ))
issued by the New Zealand Audit and Assurance Standards Board. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the consolidated Financial Statements
section of our report. We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance
Standards Board, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Our firm carries out other assignments for Solution Dynamics Limited and the entities it controlled in the area of
taxation returns and advice. The firm has no other interests in the Group.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.



Independent Auditor’s Report

Grant Thornton New Zealand
Audit Partnership


L4, Grant Thornton House

152 Fanshawe Street
PO Box 1961
Auckland 1140

T +64 9 308 2570

F +64 9 309 4892
www.grantthornton.co.nz





Chartered Accountants and Business Advisers
Member of Grant Thornton International Ltd











To the Shareholders of Solution Dynamics Limited
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Solution Dynamics Limited (the Group) on pages xx to
yy which comprise the consolidated statement of financial position as at 30 June 2018 and the consolidated
statement of profit or loss, consolidated statement of 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
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financial position of Solution Dynamics Limited and the entities it controlled as at 30 June 2018 and its financial
performance and cash flows for the year then ended in accordance with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS) issued by the New Zealand Accounting Standards
Board.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ))
issued by the New Zealand Audit and Assurance Standards Board. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the consolidated Financial Statements
section of our report. We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance
Standards Board, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Our firm carries out other assignments for Solution Dynamics Limited and the entities it controlled in the area of
taxation returns and advice. The firm has no other interests in the Group.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.



Independent Auditor’s Report

Grant Thornton New Zealand
Audit Partnership


L4, Grant Thornton House

152 Fanshawe Street
PO Box 1961
Auckland 1140

T +64 9 308 2570

F +64 9 309 4892
www.grantthornton.co.nz





Chartered Accountants and Business Advisers
Member of Grant Thornton International Ltd











To the Shareholders of Solution Dynamics Limited
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Solution Dynamics Limited (the Group) on pages xx to
yy which comprise the consolidated statement of financial position as at 30 June 2018 and the consolidated
statement of profit or loss, consolidated statement of 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
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financial position of Solution Dynamics Limited and the entities it controlled as at 30 June 2018 and its financial
performance and cash flows for the year then ended in accordance with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS) issued by the New Zealand Accounting Standards
Board.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ))
issued by the New Zealand Audit and Assurance Standards Board. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the consolidated Financial Statements
section of our report. We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance
Standards Board, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Our firm carries out other assignments for Solution Dynamics Limited and the entities it controlled in the area of
taxation returns and advice. The firm has no other interests in the Group.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.



Independent Auditor’s Report

To the Shareholders of Solution Dynamics Limited
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Solution Dynamics Limited (the Group) on pages 19
to 56 which comprise the consolidated statement of financial position as at 30 June 2020, and the consolidated
statement of profit or loss, consolidated statement of other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financial position of Solution Dynamics Limited (the Group) as at 30 June 2020 and its financial performance
and cash flows for the year then ended in accordance with New Zealand Equivalents to International Financial
Reporting Standards (NZ IFRS) issued by the New Zealand Accounting Standards Board.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ)) issued
by the New Zealand Auditing and Assurance Standards Board. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section
of our report. We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board,
and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our firm carries out other assignments for Solution Dynamics Limited and the entities it controlled in the area of
taxation advice and services. The firm has no other interest in the Group.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements of the current period. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key audit mattersOur procedures to address the key audit matter
Carrying Value of Goodwill
The Group has significant goodwill of $1,061,000
arising from historical acquisitions of businesses.
Goodwill is allocated across its software cash
generating units. Any risk of downturn in the
macroeconomic environment could result in
impairment of goodwill. The inherent uncertainty
involved in forecasting and discounting future
cash flows is one of the key judgement areas
that our audit has focused on. The uncertainty is
affected by a number of factors including general
market trends, current environment and economic
factors such as the COVID19 global pandemic,
the number of new customers for technology
solutions and expectation of future growth in
demand for the software solutions, which form
the basis for the assessment of recoverability.
In this area our audit procedures included an assessment
of the Group’s forecast and budgeting procedures as a
basis for value in use calculations. We also compared
the Group’s historical budget to actual performance
and its future projections compared to prior year actual
and tested the reasonableness of forecast assumptions.
In addition, we performed our own assessments in
relation to key inputs such as projected revenue growth,
projected cost and overheads and discount rates.
We based our work on work completed by our own
valuation specialist who evaluated the key assumptions
and methodologies used by the Group to derive a
discount rate, when there have been changes to inputs,
methodology or assumptions from the prior year. We
also assessed whether the Group’s disclosures about the
sensitivity in key assumptions fairly reflected the risks
inherent in the valuation of goodwill.

| 17 |
Accuracy of revenue
The Group recognised revenue of $32.1 million
(2019: $24.9 million) for the year ended 30 June
2020 comprising sale of goods and rendering
of services under contract. The principal risk
associated with commercial income relates to
recognition and recoverability. There are a
number of factors that could affect this balance
including:
• Delivery may not have occurred before year
end which would allow the goods to be
recorded as a sale in line with the revenue
recognition policy.
• Revenues recognised from contract sales
of products and services may be at a point
in time or over time with reference to
the various performance obligations with
customers. Revenue may include estimates
and judgements that impact the amount of
revenue recognised.
In this area our audit procedures included evaluating
the Group’s recognition of revenue by assessing the
procedures and controls that the Group has in place
and that appropriate revenue recognition policies have
been applied. In relation to sales cut-off, we performed
detailed substantive testing on sales recognised or
adjusted either side of year end to substantiate that the
appropriate terms of the relevant contracts had been
satisfied in line with contract performance obligations.
Our audit work included assessing performance
obligations of any significant projects or contracts
including the delivery of the goods to ensure appropriate
revenue recognition.
For contracts recognised at a point in time we inspected
a sample of delivery notes, invoices raised and cash
receipts.
For contracts recognised over time we reperformed the
calculation of any material revenue to be recognised
at year end and agreed the assumptions used in
determining the various performance obligations to
supporting documentation.

Other Information
The directors are responsible for all other information included in the Group’s Annual Report. The other information
comprises 2020 key points, Management Discussion and Analysis, Statement of Corporate Governance and the
Company Directory, included in the annual report, but does not include the consolidated financial statements and
our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of audit opinion or assurance conclusion thereon
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements 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.
Directors’ responsibilities for the Consolidated Financial Statements
The Directors are responsible on behalf of the Group for the preparation and fair presentation of the consolidated
financial statements in accordance with New Zealand equivalents to International Financial Reporting Standards
issued by the New Zealand Accounting Standards Board, and for such internal control as the Directors determine is
necessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible on behalf of the Group 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.

| 18 |
Chartered Accountants
Member of Grant Thornton International Ltd



An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates, as well as evaluating the overall presentation of the
consolidated financial statements.
Our firm carries out other assignments for Solution Dynamics Limited and the entities it
controlled in the area of taxation advice. The firm has no other interest in Solution
Dynamics Limited and the entities it controlled.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Opinion
In our opinion, the accompanying consolidated financial statements on pages 15 to 45
present fairly, in all material respects, the financial position of Solution Dynamics Limited
and the entities it controlled as at 30 June 2016 and their financial performance and cash
flows for the year then ended in accordance with New Zealand Equivalents to International
Financial Reporting Standards.

Restriction on use of our report
This report is made solely to the Company’s shareholders, as a body. Our audit work has
been undertaken so that we might state to the Company’s shareholders, as a body those
matters which we are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinion we have formed.

Grant Thornton New Zealand Audit Partnership
Auckland, New Zealand
19 September 2016
Grant Thornton New Zealand
Audit Partnership


L4, Grant Thornton House

152 Fanshawe Street
PO Box 1961
Auckland 1140

T +64 9 308 2570

F +64 9 309 4892
www.grantthornton.co.nz





Chartered Accountants and Business Advisers
Member of Grant Thornton International Ltd











To the Shareholders of Solution Dynamics Limited
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Solution Dynamics Limited (the Group) on pages xx to
yy which comprise the consolidated statement of financial position as at 30 June 2018 and the consolidated
statement of profit or loss, consolidated statement of 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
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financial position of Solution Dynamics Limited and the entities it controlled as at 30 June 2018 and its financial
performance and cash flows for the year then ended in accordance with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS) issued by the New Zealand Accounting Standards
Board.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ))
issued by the New Zealand Audit and Assurance Standards Board. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the consolidated Financial Statements
section of our report. We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance
Standards Board, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Our firm carries out other assignments for Solution Dynamics Limited and the entities it controlled in the area of
taxation returns and advice. The firm has no other interests in the Group.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.



Independent Auditor’s Report

| 18 |
Grant Thornton New Zealand
Audit Partnership


L4, Grant Thornton House

152 Fanshawe Street
PO Box 1961
Auckland 1140

T +64 9 308 2570

F +64 9 309 4892
www.grantthornton.co.nz





Chartered Accountants and Business Advisers
Member of Grant Thornton International Ltd











To the Shareholders of Solution Dynamics Limited
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Solution Dynamics Limited (the Group) on pages xx to
yy which comprise the consolidated statement of financial position as at 30 June 2018 and the consolidated
statement of profit or loss, consolidated statement of 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
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financial position of Solution Dynamics Limited and the entities it controlled as at 30 June 2018 and its financial
performance and cash flows for the year then ended in accordance with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS) issued by the New Zealand Accounting Standards
Board.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ))
issued by the New Zealand Audit and Assurance Standards Board. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the consolidated Financial Statements
section of our report. We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance
Standards Board, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Our firm carries out other assignments for Solution Dynamics Limited and the entities it controlled in the area of
taxation returns and advice. The firm has no other interests in the Group.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.



Independent Auditor’s Report

Auditor’s responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are 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 ISAs (NZ) 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 these consolidated financial statements.
A further description of the auditor’s responsibilities for the audit of the consolidated financial statements is
located on the External Reporting Board’s website at https://www.xrb.govt.nz/assurance-standards/auditors-
responsibilities/audit-report-1/
Restriction on use of our report
This report is made solely to the Company’s shareholders, as a body. Our audit work has been undertaken so that
we might state to the Company’s shareholders, as a body those matters which we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and its shareholders, as a body, for our audit work, for this report
or for the opinion we have formed.
Grant Thornton New Zealand Audit Partnership
K T Price
Partner
Auckland
27 August 2020

| 19 |
Consolidated Statement of
Profit or Loss
For the year ended 30 June 2020
Consolidated Statement of
Comprehensive Income
For the year ended 30 June 2020
Net profit after income tax 1,866 526
Items that may be reclassified subsequently to profit and loss:
Exchange gain on translation of foreign operations (53) (7)
Other comprehensive (loss) / income net of tax (53) (7)
Total comprehensive income for the year 1,813 519
2020
$000Note
2020
$000
Restated
(1)
2019
$000
Restated
(1)
2019
$000
Revenue 4 32,140 24,879
Other income 4 1,890 297
Total revenue 34,030 25,176
Expenses 5 29,676 22,856
Earnings before interest, tax, depreciation & amortisation (EBITDA) 4,354 2,320
Depreciation 17 1,151 1,127
Amortisation of intangible assets (software) 19 330 347
Net interest (income) 7 92 198
Profit before income tax 2,781 648
Income tax 8 915 122
Net profit after income tax 1,866 526
Cents Cents
Basic earnings per share 9 12.7 3.6
Diluted earnings per share 9 12.6 3.6

| 20 |
Consolidated Statement of
Financial Position
As at 30 June 2020
Current Assets
Cash and cash equivalents 10 5,012 1,182 1,956
Trade & other receivables 12 4,838 3,300 2,902
Inventories and work in progress 11 267 359 183
Prepayments 200 128 131
Total Current Assets 10,317 4,969 5,172
Current Liabilities
Trade creditors 2,511 1,708 1,871
Other current liabilities 13 4,131 1,094 838
Other non-financial liabilities 14 72 439 851
Deferred tax liability 8 229 8 24
Lease liability - current 16 802 802 745
Employee benefit liabilities 15 666 484 472
Total Current Liabilities 8,411 4,535 4,801
Working Capital 1,906 434 371
Non-Current Assets
Capital works in progress 188 146 61
Property, plant & equipment 17 525 629 594
Right of use assets 18 1,406 2,360 3,245
Intangible assets 19 536 860 1,179
Goodwill 20 1,061 1,061 1,061
Total Non-Current Assets 3,716 5,056 6,140
Non-Current Liabilities
Lease liability 16 729 1,700 2,500
Total Non-Current Liabilities 729 1,700 2,500
Net Assets 4,893 3,790 4,011
Equity
Share capital 21 5,413 5,413 5,357
Employee share option plan 30 29 7 28
Foreign currency translation reserve (68) (15) (8)
Accumulated losses 22 (481) (1,615) (1,366)
Total Equity 4,893 3,790 4,011
For and on behalf of the Board who approved these financial statements for issue on 27 August 2020.
John McMahon – Director Andy Preece – Director
(Chairman) (Chairman Audit & Risk Management Committee)
2020
$000
Restated
(1)
2018
$000
Restated
(1)
2019
$000
See accompanying notes to the accounts.
(1)
Restated for the impact of adoption of NZ IFRS 16, see note 2.2.5
Note

| 21 |
Consolidated Statement of
Changes in Equity
For the year ended 30 June 2020
Balance 30 June 2018 5,357 28 (8) (1,366) 4,011
Exercise of employee share options 56 (29) - 29 56
Issue of shares to employees - 8 - - 8
Transactions with owners 56 (21) - 29 64
Profit for the year after tax - - - 526 526
Dividend paid - - - (804) (804)
Other comprehensive (loss) - - (7) - (7)
Total comprehensive income - - (7) (278) (285)
Balance 30 June 2019 (Restated) 5,413 7 (15) (1,615) 3,790
Exercise of employee share options - - - - -
Issue of shares to employees - 22 - - 22
Transactions with owners - 22 - - 22
Profit for the year after tax - - - 1,866 1,866
Dividend paid - - - (732) (732)
Other comprehensive (loss) - - (53) - (53)
Total comprehensive income - - (53) 1,134 1,081
Balance 30 June 2020 5,413 29 (68) (481) 4,893
Accumulated
Losses
$000
Share
Capital
$000
Employee
Share Plan
$000
Total
Equity
$000
Currency
Translation
Reserve
$000
The accompanying notes on pages 23 - 56 form part of the consolidated financial statements.

| 22 |
Consolidated Statement of
Cash Flows
For the year ended 30 June 2020
Cash Flow from Operating Activities
Cash was provided from:
Receipts from sales 35,296 28,280
Other revenue 1,890 286
37,186 28,566
Cash was applied to:
Payments to suppliers 21,560 18,260
Payments to employees 8,730 7,759
GST paid to Inland Revenue 1,130 1,245
31,420 27,264
Net Cash Inflow from Operating Activities 24 5,766 1,302
Cash Flow from Investing Activities
Cash was applied to:
Purchase of property, plant and equipment & capital works in progress 216 358
Purchase of software & intangible assets 6 28
222 386
Net Cash Outflow from Investing Activities (222) (386)
Cash Flow from Financing Activities
Cash was provided from:
Exercise of employee share options - 56
- 56
Cash was applied to:
Payment of dividends 732 804
Interest paid 124 172
Finance lease liabilities 858 770
1,714 1,746
Net (Outflow) From Financing Activities (1,714) (1,746)
Net change in cash and cash equivalents 3,830 (774)
Add cash and cash equivalents held at beginning of year 1,182 1,956
Cash and cash equivalents at end of year 10 5,012 1,182
2020
$000
Restated
(1)
2019
$000
See accompanying notes to the accounts.
(1)
Restated for the impact of adoption of NZ IFRS 16, see note 2.2.5
Note

| 23 |
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
1. CORPORATE INFORMATION
The consolidated financial statements of Solution Dynamics Limited (SDL or Company) and its subsidiaries,
Solution Dynamics International Limited, Solution Dynamics Incorporated and Déjar International Limited
(collectively the Group) for the year ended 30 June 2020 were authorised for issue in accordance with a
resolution of directors on 27 August 2020.
Solution Dynamics Limited is a public company incorporated and domiciled in New Zealand and is listed
with the New Zealand Stock Exchange on the NZX. The registered office is located at 18 Canaveral Drive,
Albany in Auckland.
The Group offers a range of integrated solutions encompassing data management, electronic digital
printing, document distribution, web presentment and archiving, fulfilment, traditional print services,
scanning, data entry and document management.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Statement of Compliance
The consolidated financial statements of the Group comply with New Zealand Equivalents to International
Financial Reporting Standards (NZ IFRS) and International Financial Reporting Standards (IFRS) as
appropriate for a profit orientated entity.
2.2 Basis of Preparation
2.2.1 Basis of Preparation
The consolidated financial statements have been prepared on the historical cost basis but modified, where
applicable, by the measurement of fair value of selected financial assets and financial liabilities. Accounting
policies are selected and applied in a manner which ensures that the resulting financial information
satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying
transactions or other events is reported. The principal accounting policies are set out below.
2.2.2 Basis of Consolidation
The consolidated financial statements have been prepared in compliance with generally accepted
accounting practice in New Zealand (NZ GAAP), the requirements set out in Part 7 of the Financial
Markets Conduct Act 2013 as a reporting entity, the Main Board Listing Rules of the NZX, the Companies
Act 1993, and other authoritative pronouncements issued by the New Zealand Accounting Standards
Board (NZ ASB).For the purposes of complying with NZ GAAP the Group is a for-profit entity that has
followed the Tier 1 for – profit reporting requirements set out by the External Reporting Board, in its
“Accounting Standards Framework.”
All subsidiaries have a 30 June reporting date and consistent accounting policies are applied.
The acquisition method is used to prepare the consolidated financial statements, which involves adding
together like items of assets, liabilities, income and expenses on a line-by-line basis. All transactions and
balances between Group companies are eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies.
The consolidated financial statements have been prepared under the assumption that the Group operates
as a going concern.

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2.2.3 Rounding of Amounts
Amounts in the consolidated financial statements have been rounded off to the nearest $000 unless
otherwise specified.
2.2.4 Changes in Accounting Policies and Disclosures
Except as described below, the accounting policies and disclosures are consistent with those of the
previous year.
The Group adopted the standards detailed below from 1 July 2019. This has given rise to a requirement to
restate comparative information.
2.2.5 NZ IFRS 16 - Leases
NZ IFRS 16 replaces NZ IAS 17 Leases along with three Interpretations (IFRIC 4 ‘Determining whether an
Arrangement contains a Lease’, SIC 15 ‘Operating Lease Incentives’ and SIC 27 ‘Evaluating the Substance
of Transactions Involving the Legal Form of a Lease’) and removes the distinction between operating and
finance leases for lessees. NZ IFRS 16 requires SDL to recognise most leases, where SDL is a lessee, on
the statement of financial position. This has resulted in the recognition of ‘right-of-use’ assets and related
lease liability balances. Rental payments for leases previously classified as operating leases – including
property and plant & equipment leases – have moved from being included in operating expenses, to
depreciation and finance expenses. The impact on net earnings before income tax of an individual lease
over its term remains the same, however, the new standard results in a higher interest expense in the early
years of a lease and lower in the later years, compared with the previous straight-line expense profile of an
operating lease.
SDL has elected to transition to NZ IFRS 16 using the full retrospective method, subject to the following
practical expedients and exemptions:
1. The recognition exemption for short-term leases (leases with a lease term of up to one year) and
leases of low-value assets where appropriate. For these assets, SDL continued to account for the
lease expense on a straight line basis over the remaining lease term; and
2. The practical expedient that states that an entity is not required to reassess whether a contract is,
or contains, a lease at the date of initial application. This practical expedient is applied to all of SDL’s
contracts entered into before the date of initial application.
The Group also has elected not to include the initial direct costs in the measurement of the right-of-use
asset for operating leases in existence at the date of initial application of NZ IFRS 16, being 1 July 2018.
At this date, the Group has also elected to measure the right-of-use assets at an amount equal to the lease
liability.
On transition to IFRS 16 the incremental borrowing rate applied to lease liabilities recognised under NZ
IFRS 16 was 4.5% for property and 8.5% on plant & equipment.
The Group has benefited from the use of hindsight for determining the lease term when considering
options to extend and terminate leases.
A summary of the impact of the new standard on SDL’s financial statements is included below.
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020

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Consolidated Statement of Profit or Loss
Previously Adoption of
For the year ended 30 June 2019 reported IFRS 16 Restated
$000 $000 $000
Total Revenue 25,176 25,176
Expenses 23,803 -947 22,856
Earnings before interest, tax, depreciation & amortisation (EBITDA) 1,373 947 2,320
Depreciation 238 889 1,127
Amortisation of intangible assets (software) 347 347
Net interest (income) -4 202 198
Profit before income tax 792 -144 648
Income tax 122 122
Net profit after income tax 670 -144 526
Retrospective application of NZ IFRS 16
All comparative information in these financial statements has been prepared as if NZ IFRS 16 had been in effect
since 1 July 2018. The accounting policies set out in the notes have been applied in preparing the financial
statements for the year ended 30 June 2020, the comparative information presented in the financial statements for
the year ended 30 June 2019 and for the opening statement of financial position as at 1 July 2018.
The impact of the adoption of NZ IFRS 16 on the statement of cash flows for the year ended 30 June 2019 is set
out below:
Consolidated Statement of Cash Flows
Previously
reported Adoption of Restated
2019 IFRS 16 2019
$000 $000 $000
Cash Flow from Operating Activities
Cash was provided from:
Receipts from sales 28,280 - 28,280
Other revenue 286 - 286
28,566 - 28,566
Cash was applied to:
Payments to suppliers 19,206 946 18,260
Payments to employees 7,759 - 7,759
GST paid to Inland Revenue 1,245 - 1,245
28,210 946 27,264
Net Cash Inflow from Operating Activities 356 946 1,302
Net Cash Outflow from Investing Activities (386) - (386)

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Consolidated Statement of Cash Flows continued
Previously
reported Adoption of Restated
2019 IFRS 16 2019
$000 $000 $000
Cash Flow from Financing Activities
Cash was provided from:
Exercise of employee share options 56 - 56
56 - 56
Cash was applied to:
Payment of dividends 804 - 804
Interest paid / (received) (4) (176) 172
Finance lease liabilities - (770) 770
800 (946) 1,746
Net Cash (Outflow) from Financing Activities (744) (946) (1,690)
Net change in cash and cash equivalents (774) - (774)
Add cash and cash equivalents held at beginning of year 1,956 - 1,956
Cash and cash equivalents at end of year 1,182 - 1,182
Impact of adoption of NZ IFRS 16
The adoption of NZ IFRS 16 has had no net impact on SDL’s statement of cash flows; however it has resulted
in the reclassification of cash flows from lease arrangements. Payments for operating leases under NZ IAS 17
were included within ‘payments to suppliers’ in operating cash flows. Payments for leases are now split between
payments for interest, and payments that reduce the principal balance of a lease liability, both included in financing
cash flows.
The impact of the adoption of NZ IFRS 16 on the opening statement of financial position as at 1 July 2018 is set
out below:
Statement of Financial Position
As at 30 Adoption of Restated
June 2018 NZ IFRS 16 1 July
$000 $000 $000
Total Current Assets 5,172 - 5,172
Current Liabilities
Trade creditors 1,871 - 1,871
Other current liabilities 838 - 838
Other non-financial liabilities 851 - 851
Deferred tax liability 24 - 24
Lease liability right of use assets - current - 745 745
Employee benefit liabilities 472 - 472
Total Current Liabilities 4,056 745 4,801
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020

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Statement of Financial Position continued
As at 30 Adoption of Restated
June 2018 NZ IFRS 16 1 July
$000 $000 $000
Working Capital 1,116 (745) 371
Non-Current Assets
Capital works in progress 61 - 61
Property, plant & equipment 594 - 594
Right of use assets - 3,245 3,245
Intangible assets 1,179 - 1,179
Goodwill 1,061 - 1,061
Total Non-Current Assets 2,895 3,245 6,140
Non-Current Liabilities
Lease liability - 2,500 2,500
Total Non-Current Liabilities - 2,500 2,500
Net Assets 4,011 - 4,011
Total Equity 4,011 - 4,011
SPECIFIC ACCOUNTING POLICIES
The following specific accounting policies, which significantly affect the measurement of financial performance,
financial position and cash flows, have been applied.
2.3 Foreign Currency
2.3.1 Functional and Presentation Currency
Items included in the consolidated financial statements are measured using the currency of the primary
economic environment in which the entity operates (the ‘functional currency’). The consolidated financial
statements are presented in New Zealand dollars, which is the Group’s functional and presentational
currency and expressed in $000’s.
2.3.2 Transaction and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies at the reporting date are retranslated to the functional currency at the exchange rate at that
date. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation of period end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the Consolidated Statement of Profit or Loss.
2.4 Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for
estimated customer returns, rebates and other similar allowances.

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2.4.1 Sale of Goods
To determine whether to recognise revenue at a point in time or over time, an assessment has been
undertaken using the 5-step process set out in NZ IFRS 15:
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
5. Recognising revenue when and as its performance obligation(s) are satisfied.
The Group often enters into transactions involving a range of the Group’s products and services, for
example the delivery of mailing services involves a blend of physical material (paper stock and envelopes)
along with the provision of data and other services to process and deliver the finished job for lodgement
to NZ Post. In all cases, the total transaction price for a contract is allocated amongst the various stages of
the project based on their relative stand-alone selling prices. The transaction price for a contract excludes
any amounts collected on behalf of third parties. However, these constitute one performance obligation
due to them being highly integrated and non-distinct.
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.
To depict the progress by which SDL transfers control of the products and services to the customer, and
to establish when and to what extent revenue can be recognised, SDL measures its progress towards
complete satisfaction of the performance obligation by measuring outputs completed to date. This basis
provides the most faithful depiction of the transfer of goods and services to each customer due to SDL’s
ability to accurately measure the units produced and delivered to the customer.
Items where revenue is recognised as arising at the time of delivery include the sale of goods, usually
envelopes and paper, and the sale of right to use licences. In both cases title and the risks and rewards
of ownership have been transferred to the customer. No revenue is recognised if there are significant
uncertainties regarding recovery of the consideration due, associated costs or the possible return of
goods, or where there is continuing management involvement with the goods when the performance
obligation has been satisfied.
2.4.2 Interest Revenue
Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective
interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset’s net carrying amount.
2.4.3 Government Grants
Government grants are recognised as revenue when the conditions attached to the grant have been met.
Where there are unfilled conditions attaching to the grant, the amount relating to the unfilled condition is
recognised as a liability and released to revenue as the conditions are met.
2.5 Leases
The Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of
a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for
consideration’.
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020

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To apply this definition the Group assesses whether the contract meets three key evaluations which are
whether:
• the contract contains an identified asset, which is either explicitly identified in the contract or
implicitly specified by being identified at the time the asset is made available to the Group
• the Group has the right to obtain substantially all of the economic benefits from use of the identified
asset throughout the period of use, considering its rights within the defined scope of the contract
• the Group has the right to direct the use of the identified asset throughout the period of use.
The Group assess whether it has the right to direct ‘how and for what purpose’ the asset is used
throughout the period of use.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the
statement of financial position. The right-of-use asset is measured at cost, which is made up of the initial
measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs
to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the
lease commencement date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date
to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group
also assesses the right-of-use asset for impairment when such indicators exist.
Lease payments included in the measurement of the lease liability are made up of fixed payments
(including in substance fixed), variable payments based on an index or rate, amounts expected to be
payable under a residual value guarantee and payments arising from options reasonably certain to be
exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for
interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-
substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset,
or profit and loss if the right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value assets using the practical
expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to
these are recognised as an expense in profit or loss on a straight-line basis over the lease term. The Group
currently has no short-term or low value leases.
On the statement of financial position, right-of-use assets have been included in a separate asset class.
2.6 Employment Benefits
The Group recognises liabilities for benefits accruing to employees in respect of wages and salaries, annual
leave, long service leave and sick leave when it is probable that settlement will be required, and they are
capable of being measured reliably.
Provisions made in respect of employee benefits expected to be settled within 12-months of each
reporting date are measured at their nominal values using the remuneration rate expected to apply at the
time of settlement.

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Provisions made in respect of employee benefits which are not expected to be settled within 12-months
of each reporting date are measured as the present value of the estimated future cash outflows to be
made by the Group in respect of services provided by employees up to the reporting date.
2.7 Share-based Payments
Equity-settled share-based payments to employees are measured at the fair value of the equity
instruments at the grant date. Details regarding equity settled share-based transactions is set out in note
30.
The fair value determined at the grant date of the equity settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will
eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments
expected to vest.
The impact of the revision of the original estimates, if any, is recognised in the Consolidated Statement of
Profit or Loss over the remaining period, with a corresponding adjustment to the equity-settled employee
benefits reserve.
2.8 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
2.8.1 Current Tax
The tax currently payable is based on the taxable profit for each reporting period. The taxable income
or loss differs from the amount as reported in the Consolidated Statement of Profit or Loss because it
excludes items of income or expense that are taxable or deductible in other years and it further excludes
items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the financial year end, and any adjustment to tax
payable in respect of previous years.
2.8.2 Deferred Tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit and is
accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable
temporary differences, and deferred tax assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which those
deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the
temporary difference arises from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments
in subsidiaries and associates, except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary differences associated with such investments and
interests are only recognised to the extent that it is probable that there will be sufficient taxable profits
against which to utilise the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020

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Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in
which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted
or substantively enacted at each reporting date. The measurement of deferred tax liabilities and assets
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 when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and liabilities on a net basis.
2.8.3 Current and Deferred Tax for Each Reporting Period
Current and deferred tax are recognised as income or an expense within the Consolidated Statement
of Profit or Loss, except when they relate to items credited or debited directly to equity, in which case
the tax is also recognised directly in equity, or where they arise from the initial accounting for a business
combination. In the case of a business combination, the tax effect is taken into account in calculating
goodwill or in determining the excess of the acquirer’s interest in the net fair value of the acquiree’s
identifiable assets, liabilities and contingent liabilities over the cost of the business combination.
2.9 Goods and Services Tax (GST)
Revenue, expenses, assets and liabilities are recognised net of the amount of goods and service tax (GST),
except:
• where the amount of GST incurred is not recovered from the taxation authority, it is recognised as
part of the cost of acquisition of an asset or as part of an item of expense; or
• for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, Inland Revenue is included as part of receivables
or payables.
2.10 Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses, if any. Cost includes all expenditure that is directly attributable to the acquisition of the
asset. Software that is integral to the functionality of the related equipment is capitalised as part of the
asset.
Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the
straight-line method. The estimated useful lives, residual values and depreciation method are reviewed
at the end of each reporting period, with the effect of any changes in estimate accounted for on a
prospective basis.
The principal depreciation rates used in the reporting periods are:
• Leasehold Improvements 6.5 – 7.8%
• Furniture and Fittings 8.5 – 39.6%
• Plant and Machinery 7.0 - 30.0%
• Computer Equipment 20.0 – 36.0%
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is
determined as the difference between the sales proceeds and the carrying amount of the asset and is
recognised in the Consolidated Statement of Profit or Loss.

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2.11 Intangible Assets
2.11.1 Intangible Assets Acquired with a Finite Life
Intangible assets with a finite life, acquired separately are reported at cost less accumulated amortisation
and accumulated impairment losses. Amortisation is charged on a straight-line basis over their estimated
useful lives. The estimated useful life and amortisation method are reviewed at the end of each annual
reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
2.11.2 Internally Generated Intangible Assets with a Finite Life
Expenditure on research activities is recognised as an expense in the Consolidated Statement of Profit or
Loss in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of an
internal project) is recognised if, and only if, all of the following have been demonstrated:
• the technical feasibility of completing the intangible asset so that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future economic benefits;
• the availability of adequate technical, financial and other resources to complete the development and to
use or sell the intangible asset; and
• the ability to measure reliably the expenditure attributable to the intangible asset during its
development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure
incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no
internally generated intangible asset can be recognised, development expenditure is charged as an expense
to the Consolidated Statement of Profit or Loss in the period in which it is incurred.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets
acquired separately.
Amortisation is charged on a straight-line basis over the estimated useful lives of internally generated
intangible assets. The estimated useful life and amortisation method are reviewed at the end of each annual
reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
2.11.3 Subsequent Measurement
All intangible assets, including capitalised internally developed software, are accounted for using the cost
model whereby capitalised costs are amortised on a straight-line basis over their estimated useful lives, as
these assets are considered finite. Residual values and useful lives are reviewed at each reporting date. In
addition, they are subject to impairment testing as described in Note 2.13. The following useful lives are
applied:
• Software 3-5 years.
2.11.4 Intangible Assets Acquired in Business Combination
Intangible assets acquired in a business combination are identified and recognised separately from goodwill
where they satisfy the definition of an intangible asset, are identifiable and their fair values can be measured
reliably. The cost of such intangible assets is their fair value at the acquisition date.
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020

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Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost
less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets
acquired separately.
• Customer contracts 3–4 years.
2.12 Goodwill
Goodwill arising on the acquisition of a “business” as defined in NZ IFRS 3 Business Combinations
represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the
identifiable assets and liabilities of the business recognised at the date of acquisition. Goodwill is initially
recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment
losses.
2.13 Impairment of Assets
At each reporting date, the Group reviews the carrying amounts of its tangible and finite life intangible
assets to determine whether there is any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an
individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the
asset belongs.
Intangible assets with indefinite useful lives, goodwill and intangible assets not yet available for use are
tested for impairment annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are 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 for
which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised immediately as an expense within the Consolidated Statement of Profit
or Loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating
unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years. Any impairment loss associated with
goodwill will not be reversed in a subsequent reporting period.
2.14 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.
2.15 Inventories
Inventories are stated at the lower of cost and net realisable value. Costs are assigned to inventories by
the method most appropriate to the particular class of inventory, with the majority being valued on a
first-in-first-out basis. Net realisable value represents the estimated selling price for inventories less all
estimated costs of completion and costs necessary to make the sale.

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2.16 Financial Instruments
2.16.1 Recognition and Derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset
expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial
liability is derecognised when it is extinguished, discharged, cancelled or expires.
2.16.2 Classification and Initial Measurement of Financial Assets
Except for those trade receivables that do not contain a significant financing component and are measured
at the transaction price in accordance with NZ IFRS 15, all financial assets are initially measured at fair
value adjusted for transaction costs (where applicable).
Financial assets, other than those designated and effective as hedging instruments, are classified into the
following categories:
• amortised cost
• fair value through profit or loss (FVTPL)
• fair value through other comprehensive income (FVOCI).
In the periods presented the corporation does not have any financial assets categorised as FVOCI and
FVTPL.
The classification is determined by both:
• the entity’s business model for managing the financial asset
• the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are presented
within finance costs, finance income or other financial items, except for impairment of trade receivables
which is presented within other expenses.
2.16.3 Subsequent Measurement of Financial Assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not
designated as FVTPL):
• they are held within a business model whose objective is to hold the financial assets and collect its
contractual cash flows
• the contractual terms of the financial assets give rise to cash flows that are solely payments of
principal and interest on the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method.
Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash
equivalents, trade and most other receivables fall into this category of financial instruments as well as
listed bonds that were previously classified as held-to-maturity under NZ IAS 39.
2.16.4 Classification and Measurement of Financial Liabilities
The Group’s financial liabilities include borrowings, trade and other payables and derivative financial
instruments.
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020

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Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs
unless the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method
except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair
value with gains or losses recognised in profit or loss (other than derivative financial instruments that are
designated and effective as hedging instruments). All interest-related charges and, if applicable, changes
in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance
income.
2.16.5 Impairment of Financial Assets
NZ IFRS 9’s impairment requirements use more forward-looking information to recognise expected credit
losses – the ‘expected credit loss (ECL) model’. This replaced NZ IAS 39’s ‘incurred loss model’. Instruments
within the scope of the new requirements included loans and other debt-type financial assets measured
at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under NZ IFRS
15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at
fair value through profit or loss.
Recognition of credit losses is no longer dependent on the Group first identifying a credit loss event.
Instead the Group considers a broader range of information when assessing credit risk and measuring
expected credit losses, including past events, current conditions, reasonable and supportable forecasts
that affect the expected collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
• financial instruments that have not deteriorated significantly in credit quality since initial recognition
or that have low credit risk (‘Stage 1’) and
• financial instruments that have deteriorated significantly in credit quality since initial recognition and
whose credit risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit
losses’ are recognised for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit
losses over the expected life of the financial instrument.
2.17 Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction from the proceeds, net of tax.
2.18 Trade Payables and Other Current Liabilities
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
annual reporting period which are unpaid. The amounts are unsecured and are usually paid within 60
days of recognition. These are measured initially at fair value net of transaction costs, subsequently at
amortised cost using the effective interest rate method.

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Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020
2.19 Statement of Cash Flows
The following terms are used in the Statement of Cash Flows:
Operating activities: are the principal revenue producing activities of the Group and other activities that
are not investing or financing activities.
Investing activities: are the acquisition and disposal of long-term assets and other investments not
included in cash equivalents.
Financing activities: are activities that result in changes in the size and composition of the contributed
equity and borrowings of the entity.
Non-cash financing and investing activities: There were no transactions which have had a material effect
on assets and liabilities that did not involve cash flows and are disclosed in the statement of cash flows.
2.20 New IFRS standards and interpretations issued but not yet adopted
At the date of authorisation of these financial statements, several new , but not yet effective standards
and interpretations to existing standards had been published by the IASB and XRB. None of these
Standards or amendments to existing Standards have been adopted early by the Group.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning
on or after the effective date of the pronouncement. New Standards, amendments and Interpretations not
adopted in the current year have not been disclosed as they are not expected to have a material impact on
the Group’s financial statements.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF
ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, which are described in Note 2, the Directors are
required to make judgements, estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates and associated assumptions are
based on historical experience and other factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods.
3.1 Annual Goodwill Impairment Testing
Determining whether goodwill is impaired requires an estimation of the value in use of the Electronic
Content Management cash-generating unit which is also known as SDL Software. The value in use
calculation requires the Directors to estimate the future cash flows expected to arise from this cash
generating unit and a suitable discount rate in order to calculate present value.
The carrying value of goodwill at each reporting date was $1,061,000 (2019: $1,061,000).

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The recoverable amount of $938,000 of goodwill associated with the acquisition of the Déjar and Bremy
businesses has been determined based on a value in use model applying the budget, approved by the
Directors covering the reporting period to 30 June 2020, and forecast sales based on assessments of the
current market opportunities through existing distribution channels net of forecast costs, through to the
end of 2025, at a post-tax discount rate of 10.2% (2019: 10.2%). Cash flows beyond 2025 have been
taken into account by the calculation of a terminal value.
The revenue assumptions used for the forecast period are based on management expectations supported
by existing prospects for the budget period and allow for growth of 2.5% (2019: 2.5%) per annum over
the balance of the forecast period. The assumptions are subject to fundamental uncertainties, particularly
those surrounding future license sales which comprise a substantial portion of projected revenues and
hence only inflationary growth rates have been applied. Gross margin is forecast to be consistent through
the budget and forecast period.
In determining whether there was any impairment of goodwill associated with the SDL Software
operations, forecasts were prepared based on estimates for all the products sold in each market.
Goodwill of $123,000 is associated with the acquisition of the Scantech and DTP business (2019:
$123,000). This has similarly been tested for impairment through a review of revenue and earnings
forecasts for the financial year ended 30 June 2020. Refer to note 20 for Directors judgements and
estimates.
3.2 Right-of-use assets
At inception of a contract, SDL uses judgement in assessing whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for
a period of time in exchange for consideration. To assess whether a contract conveys the right to control
the use of an identified asset, SDL assesses whether:
• The contract involves the use of an identified asset;
• SDL has the right to obtain substantially all of the economic benefits from use of the asset throughout
the period of use; and
• SDL has the right to direct the use of the asset.
At inception or on reassessment of a contract that contains a lease component, SDL allocates the
consideration in the contract to each lease component on the basis of their relative stand-alone prices.
SDL recognises a right-of-use asset at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.
In assessing the lease liability an incremental borrowing rate is applied to lease liabilities recognised under
NZ IFRS 16. This is 4.5% for property and 8.5% on plant & equipment.

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Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the
lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of
property and equipment. In addition, the right-of-use asset is periodically assessed for impairment losses
and adjusted for certain remeasurements of the lease liability.
4. REVENUE & OTHER INCOME
2020 2019
$000 $000
Revenue recognised over time 30,651 23,204
Revenue recognised at a point in time 1,489 1,675
Revenue 32,140 24,879
Government grant revenue 534 265
Gain on foreign exchange – realised 708 21
Gain on foreign exchange - unrealised 648 -
Rent - 11
Other Income 1,890 297
5. EXPENSES
Note 2020 2019
$000 $000
Acquisition related costs - (283)
Auditor’s remuneration 6 67 57
Bad debts 27 22
Freight, postage & external print 6,179 10,090
Directors remuneration - directors fees 29 570 477
Research & development 1,077 681
Salaries 7,621 6,240
Superannuation (KiwiSaver) 321 273
Employee entitlements – share based payments 22 9
Donations 1 1
Other expenses 13,791 5,289
Total Operating Expenses 29,676 22,856
6. AUDITOR’S REMUNERATION
2020 2019
$000 $000
Audit fees – statutory audit 67 57
Tax compliance and advisory services 32 13
Total auditors’ remuneration 99 70

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7. INTEREST
2020 2019
$000 $000
Interest on financing of right of use assets 92 198
Net interest paid 92 198
8. INCOME TAX EXPENSE
8.1 Current Tax
2020 2019
$000 $000
Income tax expense comprises:
Current tax expense 1,136 138
Deferred tax expense relating to the origination and
reversal of temporary differences 221 (16)
Total tax expense 915 122
The total charge for the reporting period can be reconciled to the accounting loss as follows:
Net profit before income tax 2,781 648
Income tax at company tax rate
(1)
778 181
Permanent differences 14 (60)
Under / over provision in prior years (31) (22)
Benefit of tax losses not recognised 103 -
Other 60 26
Utilisation of previously unrecognised tax losses (9) (3)
Income tax expense 915 122
(1)
The Group tax rate of 28% (2019: 28%) has been used. This is the tax rate applicable to the territory where Solution Dynamics Limited, the
primary tax paying entity, is domiciled.
At 30 June 2020 there are imputation credits available of $713,000 (2019: $770,000) for use in
subsequent reporting periods.
8.2 Deferred Tax Liability
2020 2019
$000 $000
Temporary differences
Depreciable and amortisable assets 192 130
Accruals and provisions 37 (122)
Deferred tax recognised 229 8
Deferred tax assets arising from deductible temporary differences are only recognised to the extent that
it is probable that taxable profits will be available against which the deductible temporary differences can
be utilised.

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2020 2019
$000 $000
Deferred tax liability movement
Balance at beginning of period 8 24
Current year movement through profit or loss 221 (16)
Balance at end of period 229 8
9. EARNINGS PER SHARE (EPS)
2020 2019
$000 $000
Net profit for the year attributable to ordinary shareholders 1,866 526
Basic
Weighted average number of ordinary shares (000’s) 14,640 14,586
Cents Cents
Basic earnings per share 12.7 3.6
Basic earnings per share is calculated by dividing the net profit after tax attributable to equity holders of
the Company by the weighted average number of ordinary shares outstanding during the reporting period,
adjusted for bonus elements in ordinary shares issued during the reporting period.
Diluted
Weighted average number of ordinary shares (000’s) 14,640 14,600
Adjustment for share options 160 160
Weighted average 14,800 14,760
Cents Cents
Diluted earnings per share 12.7 3.6
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all potentially dilutive ordinary shares. Options are convertible into
the Company’s shares and are therefore considered dilutive securities for diluted earnings per share.
10. CASH AND CASH EQUIVALENTS
2020 2019
$000 $000
Cash and cash equivalents 5,012 1,182
Total 5,012 1,182
Solution Dynamics has an overdraft facility in place with the ANZ Bank at an interest rate of 6.95% p.a.
(2019: 8.1%). This facility is to support the operational requirements of the Group, is interest only and is
secured by 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
Group maintains a $200,000 overdraft facility that was unused at the reporting date (2019: $200,000).
The Group now holds a net cash position with no bank debt (2019: $Nil).
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 202019

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At the end of the reporting period the Bank provided commercial guarantees totalling $65,000 (2019:
$65,000) to the Group’s suppliers.
11. INVENTORIES AND WORK IN PROGRESS
2020 2019
$000 $000
Work in Progress 190 278
Inventory 77 81
Total Inventories and Work in Progress 267 359

12. TRADE & OTHER RECEIVABLES
2020 2019
$000 $000
Trade receivables 3,666 3,055
Credit loss allowance (40) (22)
3,626 3,033
Allowance for credit notes (6) (7)
Total trade receivables 3,620 3,026
Forward foreign exchange contract receivable 648 -
Sundry debtors 570 274
Total Trade & Other Receivables 4,838 3,300
Trading terms & aging of past due trade receivables
The Group’s trading terms require settlement by the 20th of the month following the date of invoice. At
the reporting date the Group had past due debtors of $718,000 (2019: $374,000) for which an allowance
of $40,246 (2019: $21,795) was made. There has not been a significant change in credit quality therefore
the amounts are considered recoverable. The Group does not hold any collateral over these balances.
2020 2019
$000 $000
30 – 60 days 278 206
60 – 90 days 258 54
90 – 120 days 182 114
Total overdue trade receivables 718 374
Movement in allowance for credit losses
2020 2019
$000 $000
Balance at the beginning of the reporting period 22 -
Accounts written off as uncollectable 18 22
Total allowance for credit losses 40 22

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In assessing the recoverability of trade receivables, the Group considers any change in the quality of
the trade receivables from the date that the credit was initially granted up to the reporting date. The
concentration of credit risk is limited with the largest customer comprising 26% (2019: 13%) of the gross
trade receivable balance, of which all was current. 88% of the outstanding balance is less than 60 days
old (2019: 95%). Accordingly, the directors believe that no further adjustments for credit are required in
excess of the allowance for credit losses.
For the reporting period there are no provisions against third parties (2019: $Nil).
The directors do not consider there to be any expected credit loss in addition to the credit losses recorded
above.
Forward foreign exchange contract receivable
As at 30 June 2020 the Group held forward foreign exchange contracts maturing in the next 90-180 days
selling USD3.73 million and purchasing GBP and NZD.
13. OTHER CURRENT LIABILITIES
2020 2019
$000 $000
Sundry creditors 1,062 465
Payroll accruals 682 57
Provision for tax 672 (134)
Provision for deferred income 1,654 593
Provision for earnout - 52
Audit fees accrued 61 61
Total Other Current Liabilities 4,131 1,094
14. OTHER NON-FINANCIAL LIABILITIES
2020 2019
$000 $000
PAYE 162 134
GST (90) 305
Total Non-Financial Liabilities 72 439
15. EMPLOYEE BENEFIT LIABILITIES
2020 2019
$000 $000
Provision for sick pay 2 4
Provision for long service leave 114 96
Provision for holiday pay 550 384
Total Employee Benefit Liabilities 666 484
Provisions for sick and long service leave are based on the Group’s estimate of the present value of future
costs assuming payroll inflation rate of 2.0%.
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020

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16. LEASES
2020 2019
$000 $000
Current 802 802
Non-current 729 1,700
1,531 2,502
The Group has property leases for its Canaveral Drive office and production facility, an IT infrastructure
disaster recovery site also in Auckland and a sales office in North America and the UK. In addition to
property leases the Group has two leases for its production imaging equipment in Auckland.
The table below describes the nature of the Groups leasing activities by right of use asset type recognised
on the balance sheet.
Right of use (ROU) assets No of ROU Range of Average
assets leased remaining term remaining term
Property 4 1 – 3 years 2-years
Plant & equipment 2 0 – 3 years 1-year
There is one property with a right of early termination on the payment of a break penalty. No agreements
have a right to purchase or have extension options.
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 30
June 2020 were as follows:
Right of use (ROU) assets Within
1 Year 1 - 2 years 2 - 5 years After 5 years Total
$000 $000 $000 $000 $000
30 June 2020
Lease payments 802 650 160 - 1,612
Finance charges 41 31 9 - 81
Net present values 761 619 151 - 1,531
30 June 2019
Lease payments 1,036 857 846 - 2,739
Finance charges 57 79 101 - 237
Net present values 979 778 745 - 2,502
There are no short term leases (leases with a term of 12-months or less) or for leases of low value assets
that the Group has not recognised as right of use assets.
At 30 June 2020 the Group had not committed to any leases that were yet to commence.

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17. PROPERTY, PLANT AND EQUIPMENT

Plant & Furniture Leasehold
Machinery & Fittings Improvements Total
$000 $000 $000 $000
Cost
Balance 1 July 2018 2,324 151 619 3,094
Additions 240 6 27 273
Disposals - - - -
Balance 30 June 2019 2,564 157 646 3,367
Additions 165 2 12 179
Disposals - - - -
Balance 30 June 2020 2,729 159 658 3,546
Accumulated depreciation
Balance 1 July 2018 1,975 139 386 2,500
Depreciation expense 161 4 73 238
Disposals - - - -
Balance 30 June 2019 2,136 143 459 2,738
Depreciation expense 200 4 79 283
Disposals - - - -
Balance 30 June 2020 2,336 147 538 3,021
Carrying amount
Balance 1 July 2018 349 12 233 594
Balance 30 June 2019 428 14 187 629
Balance 30 June 2020 393 12 120 525
18. RIGHT OF USE ASSETS
Right of Use Right of Use
Assets Property Assets Plant Total
$000 $000 $000
Cost
Balance 1 July 2018 2,438 807 3,245
Balance 30 June 2019 2,438 807 3,245
Balance 30 June 2020 2,438 807 3,245
Accumulated depreciation
Balance 1 July 2018 - - -
Depreciation expense 582 303 885
Balance 30 June 2019 582 303 885
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020

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Right of Use Right of Use
Assets Property Assets Plant Total
$000 $000 $000
Depreciation expense 651 303 954
Balance 30 June 2020 1,233 606 1,839
Carrying amount
Balance 1 July 2018 2,438 807 3,245
Balance 30 June 2019 1,856 504 2,360
Balance 30 June 2020 1,205 201 1,406
19. IDENTIFIABLE INTANGIBLES, FINITE LIFE
Software Software Customer
- Dejar - Bremy Software Contracts Total
$000 $000 $000 $000 $000
Cost
Balance 1 July 2018 2,090 110 1,704 441 4,345
Transfers - - - - -
Additions - purchased - - 28 - 28
Balance 30 June 2019 2,090 110 1,732 441 4,373
Transfers - - - - -
Additions - purchased - - 6 - 6
Balance 30 June 2020 2,090 110 1,738 441 4,379
Accumulated amortisation
Balance 1 July 2018 2,090 110 940 26 3,166
Transfers - - - - -
Amortisation expense - - 224 123 347
Balance 30 June 2019 2,090 110 1,164 149 3,513
Transfers - - - - -
Amortisation expense - - 207 123 330
Balance 30 June 2020 2,090 110 1,371 272 3,843
Carrying amount
Balance 1 July 2018 - - 764 415 1,179
Balance 30 June 2019 - - 568 292 860
Balance 30 June 2020 - - 367 169 536
(i)
Déjar software (intellectual property) includes software costs of $1,400,000 purchased from Efactor and Déjar Holdings.
(ii)
Addition as acquired through business combinations arose from the Scantech and DTP acquisitions.

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20. GOODWILL
Scantech DTP Déjar Bremy Total
$000 $000 $000 $000 $000
Balance at beginning of year 66 57 215 723 1,061
Net carrying amount 66 57 215 723 1,061
Goodwill has arisen on the acquisition of businesses previously controlled by Déjar Holdings Limited,
Bremy Limited, Scantech Limited and DigitalToPrint. For impairment testing purposes, goodwill is
determined to be associated with the SDL Software cash generating unit.
No accumulated impairment losses have been recognised against the goodwill.
The carrying value of goodwill relating to the Déjar and Bremy acquisitions is tested on an annual basis
through assessment of the value-in-use of the SDL Software cash generating unit. The cash flows used
in the value-in-use calculations are based firstly on the management budget for the 2021 year followed
by management forecasts over a further four-year period. Cash flows after 2025 have been taken into
account through a terminal value calculation. Management has projected growth in sales for the Déjar
and Bremy products at 2.5% per annum for the 2022-2025 forecast period because it reflects inflation.
Growth above inflation has not been projected due to there being uncertainty around this.
The pre-tax discount rate used in the impairment calculation is 13.2% (2019: 13.8%). The equivalent post-
tax nominal rate for the forecast cash flows is 10.2% (2019: 10.2%). In the Directors’ view this represents
the rate that the market would expect on an investment of equivalent risk. There has been no impairment
in the reporting period (2019: $Nil).
Goodwill of $123,000 has arisen from deferred tax on business combinations associated with the
Scantech Limited and DigitalToPrint acquisitions. Following a review of forecast cash flows for the 2021
budget period the Directors’ judgement is that there are no indicators of impairment at reporting date.
20.1 Sensitivity to Changes in Assumptions
As at 30 June 2020, the date of the Group’s annual impairment test, the estimated recoverable amount of
the Déjar and Bremy indefinite life intangible assets exceeded their carrying amount by $4,874,000 (2019:
$7,200,000).
It is the judgement of Directors that reasonable changes in the foreseeable future to growth rates and
discount rates (sensitivity analysis) does not result in an impairment loss for these assets.
21. SHARE CAPITAL
2020 2019
$000 $000
Ordinary Shares
Balance at beginning of year 5,413 5,357
Exercise of employee share options - 56
Share Capital at End of Year 5,413 5,413
The Company had 14,639,810 (2019: 14,639,810) ordinary shares on issue as at 30 June 2020. All
ordinary shares ranked equally with one vote attached to each fully paid ordinary share and share equally
in dividends and surplus on winding up.
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020

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22. ACCUMULATED LOSSES
2020 2019
$000 $000
Balance at beginning of reporting period (1,615) (1,366)
Net operating profit after income tax 1,866 526
Exercise of employee share options - 29
Payment of dividends (732) (804)
Accumulated Losses at end of reporting period (481) (1,615)
23. EMPLOYEE REMUNERATION
Remuneration includes salaries, bonuses and other benefits including non-cash benefits. The number of
employees with total remuneration exceeding $100,000 in each of the following bands was:
2020 2019
$000 $000
$100,000 to $109,999 5 3
$110,000 to $119,999 4 1
$120,000 to $129,999 - 2
$130,000 to $139,999 1 -
$140,000 to $149,999 - 1
$150,000 to $159,999 1 2
$160,000 to $169,999 1 1
$170,000 to $179,999 2 -
$180,000 to $189,999 3 2
$200,000 to $209,999 2 -
$250,000 to $259,999 - 1
$260,000 to $269,999 1 -
$270,000 to $279,999 1 -
$340,000 to $349,999 1 -
$390,000 to $399,999 - 1
$430,000 to $439,999 1 -
Total staff with remuneration exceeding $100,000 23 14
24. RECONCILIATION OF NET LOSS AFTER INCOME TAX FOR
YEAR WITH NET CASH INFLOW FROM OPERATING ACTIVITIES
2020 2019
$000 $000
Net profit / (loss) after income tax 1,866 526
Adjustments:
Depreciation and amortisation of assets 1,481 1,474
(Gain) on foreign exchange (1,356 ) (21)
Bad and doubtful debts 19 21
Interest expense (reclassified as financing activity) 92 197
Other non-cash items 190 (15)
Cash flow from trading 2,292 2,182

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2020 2019
$000 $000
Add movements in working capital:
(Increase) in trade & other receivables (1,541) (419)
Decrease / (Increase) in inventories and work in progress 143 (176)
(Increase) / decrease in prepayments (139) 3
Increase in other current liabilities 3,769 36
(Decrease) in other non-financial liabilities (368) (4)
Increase / (decrease) in trade creditors 803 (165)
Increase / (decrease) in employee benefit liabilities 807 (155)
3,474 (880)
Net Cash Flows from Operating Activities 5,766 1,302
25. SEGMENT INFORMATION
The Group operates in one business segment, the supply of customer communication solutions. These
include a range of integrated document management products and services separated into three streams;
outsource services, technology & development services, intelligent imaging and output services. Specific
elements of these streams are as follows:
• Software & Technology, Solution Dynamics owns the intellectual property in five 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.
»Jupiter is a hybrid mail application that was acquired through the purchase of the DigitalToPrint
business. The application routes data received from clients for international distribution of
communications to the destination country for print production and lodgement as local mail.
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.
Grant income (NZTE / R&D) and foreign exchange gains / (losses) are related to the software business
segment and included in this revenue group.
• 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.
• 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.
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020

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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, the CEO Nelson Siva, being compiled using the same standards and accounting
policies as those used to prepare the financial statements.
Segment Consolidated Statement of Profit or Loss
2020 2019
$000 % $000 %
Software & Technology 22,012 65% 8,345 33%
Digital Printing & Document Handling Services 4,568 13% 5,561 22%
Outsourced services 7,450 22% 11,270 45%
Total revenue 34,030 100% 25,176 100%
Less cost of sales 20,571 60% 16,682 66%
Gross margin 13,459 40% 8,494 34%
Selling, general & administration 9,105 27% 6,174 25%
Earnings before interest, tax,depreciation & amortisation 4,354 13% 2,320 9%
Less:
Depreciation 1,151 4% 1,127 4%
Amortisation 330 1% 347 2%
Interest 92 0% 198 1%
Tax 915 2% 122 0%
Operating profit 1,866 6% 526 2%
Segment Assets
Assets are not segmented between service streams.
Information about Major Customers
Included in revenues for the Group of $34.03 million (2019: $25.2 million) are revenues of $8.28 million
(2019: $3.15 million) which arose from sales to the Group’s largest customer.
Geographical Information
The Group has customers in New Zealand, Australia, United States of America and Europe.
Revenue from Non-current
external customers assets
2020 2019 2020 2019
$000 $000 $000 $000
New Zealand 16,687 16,493 3,613 4,921
Australia 484 519 - -
United States of America 12,625 3,033 50 76
Europe 4,234 5,131 53 59
Total 34,030 25,176 3,716 5,056

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26. CONTINGENT LIABILITIES
There were no contingent liabilities at reporting date for the Group (2019: $Nil).
27. CAPITAL COMMITMENTS
The Group had no capital commitments at the reporting date (2019: $Nil).
28. FINANCIAL INSTRUMENTS
28.1 Credit Risk
Financial instruments that potentially subject the Group to concentrations of credit risk consist principally
of trade & other receivables. The maximum credit risk is the carrying value of these financial instruments;
however, the Group does not consider the risk of non-recovery of these accounts to be material.
In the normal course of its business the Group incurs credit risk from trade receivables and transactions
with financial institutions. The Group has a credit policy, which is used to manage this exposure to credit
risk. As part of this policy, credit evaluations are performed on all customers requiring credit. The Group
does not have any significant concentrations of credit risk, excluding the single largest customer referred
to in Note 12. This customer is not viewed as a credit risk due to trading and payment history. The Group
does not require any collateral or security to support financial instruments as it only deposits with, or loans
to banks and other financial institutions with credit ratings of no less than AA-. It does not expect the non-
performance of any obligations that are not provided for at reporting date.
28.2 Categories of Financial Instruments
2020 2019
$000 $000
Financial Financial
Assets & Assets &
liabilities at liabilities at
amortised cost amortised cost
Assets
Cash & cash equivalents (Note 10) 5,012 1,182
Trade & other receivables (Note 12) 4,838 3,300
Total Financial Assets 9,850 4,482
Total non-financial assets 4,183 5,543
Total Assets 14,033 10,025
2020 2019
$000 $000
Financial Financial
Assets & Assets &
liabilities at liabilities at
amortised cost amortised cost
Finance Liabilities
Trade creditors 2,511 1,708
Other current liabilities (Note 13) 4,131 1,094
Total Financial Liabilities 6,642 2,802
Lease liability - right of use assets 1,531 2,502
Total non-financial liabilities 967 931
Total Liabilities 9,140 6,235
The carrying values of the financial instruments above are equivalent to their fair values.
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020

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28.3 Maturity Date of Financial Instruments
Weighted
average Gross
effective Less than 1 - 3 3 months 1 - 5 Nominal Carrying
interest rate 1 month months to 1 year years outflow Value
($000) ($000) ($000) ($000) ($000) ($000)
2020
Non-interest bearing n/a 3,791 2,098 753 - 6,642 6,642
3,791 2,098 753 - 6,642 6,642
2019
Non-interest bearing n/a 1,946 933 (79) - 2,800 2,775
1,946 933 (79) - 2,800 2,775
28.4 Interest Rates
The following table details the Group’s weighted average effective interest rates for financial liabilities at
reporting date.
2020 2019
Financial Liabilities:
Finance facility (overdraft rate) 6.95% 8.1%
28.5 Foreign Currency Risk Management
Hosting and license sales linked to SDL Software operations are denominated in foreign currency and sold
under standard terms and conditions. Any variation in exchange rate between the date of sale and the
date cash is received is accounted for as a foreign exchange gain/loss in the period in which it occurs. For
material individual transactions in foreign currencies the Group has a policy of taking forward exchange.
At 30 June 2020 of total trade receivables of $3,666,000 (2019: $3,055,000) a total of $2,085,000 (2019:
$1,384,000) was in foreign currencies. $235,000 (2019: $1,076,000) of the foreign currency receivables
were denominated in European currencies, $1,761,000 (2019: $177,000) in US $ with the remainder of
the balance in AUD $.
In addition to the trade receivables of $2,085,000 (2019: $1,384,000) held in foreign currencies at the end
of the reporting period, a further $4,143,000 (2019: $700,000) in cash was also held in foreign currencies,
a total of $6,228,000 (2019: $2,084,000). Adjusted for offsetting payables balances of $3,976,000
(2019: 1,243,000), a movement in the exchange rate of 10% would give rise to an exchange fluctuation of
$225,000 (2019: $78,700).
Trading operations for the UK and Europe are largely undertaken through SDL’s UK subsidiary Solution
Dynamics International Limited (SDIL). For North America, operations are undertaken through Solution
Dynamics Incorporated. At period end the net assets for SDIL and SD Inc., comprising largely working
capital, was a credit balance of NZ$153,000 (2019: NZ$225,000) with cash and receivable balances as
noted above.
At 30 June 2020, the reporting date forward exchange contracts were held to sell USD totalling
NZ$5,785,000 (2019: $Nil), on which an unrealised gain of $648,000 is recognised at the reporting date.
The forward exchange contracts are for the purchase of NZD and GBP. A movement in the exchange rate
of 10% would give rise to a fluctuation of $578,000 on these contracts.

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Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020
The realised foreign exchange gains disclosed in Note 4 relate to USD forward exchange contracts to
purchase NZD and GBP totalling USD$5,500,000 closed between April and June end on trade and other
receivables through the 12-months ending 30 June 2020.
28.6 Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built
an appropriate liquidity risk management framework for the management of the Group’s short, medium
and long-term funding and liquidity management requirements. The Group manages liquidity risk by
maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously
monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and
liabilities. With positive cash inflows the Group’s liquidity risk is considered by the Directors to be low.
28.7 Interest Rate Sensitivity Analysis
At 30 June 2020 the interest rate on the overdraft facility was 6.95% (2019: 8.1%). With a net cash
position of $5.01 million (2019: $1.18 million) at the end of the reporting period a material change in the
interest expense is not expected.
28.8 Capital Management
The Group manages its capital to ensure that the Group will be able to continue as a going concern while
maximising the return to shareholders through the optimisation of the debt and equity balances.
Earnings in the Group has improved on the prior year. The Group is in a net cash position of $5.01 million
(2019: $1.18 million) and a net cash inflow from operations of $5.77 million (2019: $0.36 million). There
was an operating profit of $1.87 million in the current year (2019: $0.53 million). A material improvement
in financial performance is forecast for the 2021 year. The Group has no externally imposed covenants to
manage, the only debt on the balance sheet relates to right of use assets.
2020 2019
$000 $000
Borrowings – Liability right of use assets (2,208) (3,162)
Cash & Finance facility (Note 10) 5,012 1,182
Net cash (debt) 2,804 (1,980)
Equity (all capital and reserves) 4,893 3,790
Net (cash) debt to equity ratio (57%) 52%
During the year the finance facility was subject to certain conditions which are disclosed in Note 10.
29. RELATED PARTIES TRANSACTIONS AND DIRECTORS’ REMUNERATION
Transactions between related parties include transactions with subsidiaries, shareholders, directors and
their companies and senior executives. Transactions with SDL’s subsidiary Solution Dynamics International
Limited are completed under a supplier agreement on similar terms to those previously struck with third
party channel partners.
Related party transactions from 1 July 2019 to 30 June 2020 were as follows:
• Key management were paid $1,485,985 (as employees of Solution Dynamics Limited or its
subsidiaries and including the calculated benefit of the employee share option plan) during the
reporting period (2019: $711,903) and were owed $150,918, including annual leave, at 30 June 2020
(2019: $48,022).

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The following fees and salaries were paid to Directors during the reporting period:
2020 2019
$000 $000
John McMahon (Chairman) 55 45
Nelson Siva (CEO) 342 374
Julian Beavis 36 25
Elmar Toime 60 25
Lee Eglinton 36 4
Andy Preece (Chairman Audit & Risk Management Committee) 41 4
Total Directors’ Remuneration 570 477
One of SDL’s directors, Mr Elmar Toime, has significant experience in the global mail and logistics markets
(former CEO of NZ Post, former Deputy executive Chair of Royal Mail Group, was a Supervisory Board
member of Deutsche Post DHL, and is a non-executive director of Qatar Post). He is providing specialised
mail and logistics consulting advice to the Company during the COVID-19 period along with additional
support to SDL’s northern hemisphere operations during a period when travel from New Zealand has not
been possible, along with the temporary absence of the CEO, Nelson Siva, for medical reasons. These
services were provided on normal commercial terms and totalled $24,000 during the year.
30. EMPLOYEE OPTIONS
On 17 February 2014 the board of Solution Dynamics Limited announced the introduction of an equity
settled employee share option plan. The general principles of the scheme were:
• The maximum aggregate number of share options to be granted pursuant to the plan is 5% of the
total number of shares on issue.
• Options of no more than 1% of the total number of SDL’s shares on issue can be granted to an
individual staff member.
• The exercise price will be determined by the Board based on the market price at the time of issue.
• The options may be exercised by the participant (in whole or part) after three years from the date
that they are granted. The key employees have 18-months from the date of eligibility and must be
employed by SDL at the date the option is exercised.
All options from the initial tranches of the scheme were exercised by March 2020. Effective 14 December
2018 the board issued 80,000 share options each to two staff who are key senior members of the
Company’s IT team (with an exercise price of $1.70), one of whom remains as an employee. The issue
of a further 80,000 share options was approved to another key member of the Company’s IT team in
September 2019 (with an exercise price of $1.65).
2020 2019
Number of shares Number of Shares
‘000 ‘000
Unvested shares at 1 July 160 80
Granted 80 160
Lapsed (on resignation of staff member) (80) -
Vested - (80)
Unvested shares at 30 June 160 160
Percentage of total ordinary shares 0.5% 0.5%

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Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020
The fair value of the options granted during the reporting period was $50,445 (2019: $Nil). This cost is
recognised over the vesting period.
Options Share price at Exercise Options Option
Grant Date Issued Grant Date Price Expire Value $
December 2018 80,000 $1.70 $1.70 June 2023 $25,220
September 2019 80,000 $1.65 $1.65 March 2024 $70,160
The fair value was determined using a Black-Scholes option pricing model that takes into account the
exercise price, the term of the option, the share price at grant date and expected price volatility of the
underlying share, the dividend yield and the risk-free interest rate for the term of the option.
In addition to the factors as noted in the table above further inputs for the model included:
• Standard deviation of stock returns 35%. This is based on an analysis of share price movements over
the 12-months prior to the issue of the options.
• Average dividend yield of 3.67%.
• Average annual risk-free rate of 0.83%.
31. SHAREHOLDERS AND SUBSTANTIAL SECURITY HOLDERS
31.1 The 20 largest shareholders as at 31 July 2020 were:
Shareholder % Of Total Shares
ASB Nominees Limited (574233 A/C) 10.93% 1,600,658
Philip Hadfield Hardie Boys (P & K Hardie Boys Family A/C) 7.92% 1,160,000
New Zealand Permanent Trustees Limited - NZCSD (NZPT43) 7.27% 1,064,486
Indrajit Nelson Sivasubramaniam & Tracey Lee Sivasubramaniam
& Comac Trustees Limited 6.08% 890,000
Custodial Services Limited (A/C 4) 5.04% 737,138
Michael Charles Hare 4.82% 705,000
Accident Compensation Corporation - NZCSD (ACCI40) 4.77% 698,238
Colin Glenn Giffney 3.55% 520,000
Kirsten Roberts 2.97% 434,923
Stephen Christopher Montgomery 2.73% 400,000
Deirdre Elizabeth Tallott 2.46% 359,444
Jillian Bernadette Winstanley 2.22% 325,000
Roger Dixon Armstrong 2.06% 301,665
FNZ Custodians Limited (DRP NZ A/C) 2.05% 299,793
Investment Custodial Services Limited (990025995) 1.92% 280,881
Christopher Veale & Penny Veale 1.81% 265,704
Custodial Services Limited (A/C 3) 1.73% 253,785
Don Nominees Limited 1.60% 234,944
Custodial Services Limited (A/C 18) 1.25% 182,595
Investment Custodial Services Limited (990027046) 1.23% 180,000
Grand Total 74.42% 10,894,254
A total of 14,639,810 shares were on issue (2019: 14,639,810).

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31.2 Size of Shareholding as at 22 July 2020
Holdings Shareholders Shares Held % Of Total
1-999 90 18,418 0.13%
1,000-4,999 77 150,492 1.03%
5,000-9,999 38 240,317 1.64%
10,000-49,999 56 1,039,058 7.10%
50,000-99,999 17 1,181,338 8.07%
100,000 and over 29 12,010,187 82.04%
Total 307 14,639,810 100.0%
31.3 Substantial Security Holders
According to notices given under the Financial Markets Conduct Act 2013, the following persons were
substantial shareholders in Solution Dynamics Limited as at 31 July 2020:
Shareholder % Of Total Shares
Meta Capital Limited (John McMahon) 10.93% 1,600,658
New Zealand Permanent Trustees Limited (The Aspiring Fund) 7.27% 1,064,486
Philip Hadfield Hardie Boys (P & K Hardie Boys Family A/C) 7.92% 1,160,000
Indrajit Nelson Sivasubramaniam & Tracey Lee Sivasubramaniam 6.08% 890,000
Michael Charles Hare (& others) 5.05% 740,000
32. COVID-19
The key outcome of COVID-19 has been SDL’s success to date in ensuring its staff remained safe, after
strict health monitoring and effective work practices were put in place early and rigorously adhered to.
The use of segregated teams, health monitoring, and controlled facility access helped ensure no SDL
staff member has been infected by COVID-19. These measures are expected to remain in place for an
extended period or until a vaccine is available. A range of SDL’s clients are essential services businesses
and consequently the Company continued partial onsite production operations throughout the New
Zealand lockdown. The Company’s non-production employees were able to work successfully from home,
including SDL’s international staff. The Company deeply appreciates the efforts and cooperation by staff
in their flexibility, assistance and compliance with health requirements, and thanks them for perseverance
and maintaining morale in difficult operating circumstances.
SDL has seen several financial effects from COVID which are estimated to have had an aggregate
moderately negative impact on the FY2020 result.
Given some of SDL’s customers were essential services, revenue during the New Zealand lockdown period
only declined by around 15%, a better result than had initially been anticipated, but nevertheless causing a
drag on New Zealand profitability over a three-month period. SDL claimed the New Zealand government’s
wage subsidy on the basis that revised budgets at the start of lockdown suggested revenue would decline
by slightly more than 30%, however, when this did not eventuate, the wage subsidy was returned.

SDL’s UK volumes were materially affected as large parts of that economy slowed significantly during
lockdown, including one large client whose activity declined around 85%. The UK economy has been slow
to recover and, at the time of this report has only seen a slight uplift in activity as the government there
is attempting to slowly normalise activity. The UK lockdown and economic slowdown tipped SDL’s UK
business into loss for the half and this has distorted the Company’s overall tax rate upwards as that loss is
ring fenced for tax purposes so is not able to offset profits in other jurisdictions.
Some costs savings were made, with travel reducing to near zero and several months of rent relief at
SDL’s Albany premises. However, these were insufficient to offset the decline in gross margin from lower
revenues.
31. EVENTS AFTER THE REPORTING DATE
On 27 August 2020, the directors approved the payment of a fully imputed dividend of 6.00 cents per
share amounting to $878,000 to be paid on 21 October 2020 (2019: The directors approved the payment
of a fully imputed dividend of 2.00 cents per share, amounting to $293,000).
Notes to the Consolidated Financial Statements CONTINUED
For the year ended 30 June 2020
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Statement of
Corporate Governance
STATEMENT OF CORPORATE GOVERNANCE
The corporate governance processes set out in this statement do not materially differ from the principles set out in
the New Zealand Stock Exchange Corporate Governance Best Practice Code issued on May 2017. The information
in this report is current as at 27 August 2020 and has been approved by the Board.
The Board Charter and key policies which were approved by the board on 2 May 2019 are available on the
Company’s website: www.solutiondynamics.com.
SDL is listed on the NZX’s Main Board and is subject to regulatory control and monitoring by both the NZX and the
Financial Markets Authority (FMA).
PRINCIPLE 1 – CODE OF ETHICAL BEHAVIOUR
Directors should set high standards of ethical behaviour, model this behaviour and hold management to account for
adherence to these standards throughout the organisation.
The Board recognises that high ethical standards and behaviours are central to good corporate governance and it is
committed to the observance of a Code of Business Conduct and Ethics throughout the Group.
The Code of Business Conduct and Ethics, which was approved by the Board as part of the process of migrating
to the NZX Main Board, provides a framework of standards by which the directors, employees and contractors to
SDL and its related companies are expected to conduct themselves. It is intended to facilitate actions and decision-
making that is consistent with SDL’s values, business goals and legal obligations and, thereby, enhance performance
outcomes.
Employees are expected to report any breaches of the Code in line with the processes outlined in the Code of
Business Conduct and Ethics.
A copy of the Code of Business Conduct and Ethics is made available to all employees and is given to all
new employees when they join the Group. Any future changes to the Code of Business Conduct and Ethics
will be communicated to staff. The Code of Business Conduct and Ethics can also be found at http://www.
solutiondynamics.com/wp-content/uploads/2019/05/Code_of_Business_Conduct_and_Ethics.pdf.
SDL has a Share Trading Policy to mitigate the risk of insider trading in SDL’s securities by employees and Directors.
A copy of this Policy can also be found at http://www.solutiondynamics.com/wp-content/uploads/2019/05/Share_
Trading_Policy.pdf. The Policy was updated in May 2019 as a part of the process of migrating to the NZX Main
Board. Additional share trading restrictions apply to Restricted Persons including Directors and certain employees.
Directors’ Share Dealings and Shareholding
Directors’ disclose the following relevant interests in shares in the Group at 30 June 2020 and transactions in
relevant interests in shares during the financial year ended 30 June 2020.
Shareholder Balance Additions Disposals Balance
30 June 2019 30 June 2020
John McMahon 1,545,658 55,000 - 1,600,658
Nelson Siva 970,000 - 80,000 890,000
Andy Preece 0 53,000 0 53,000
Lee Eglinton 0 18,000 0 18,000
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Entries in the Interests Register
In addition to the interests and related party transactions disclosures in Note 29 and the Director remuneration
disclosed under principle 5 below, the following interests were disclosed to the Board and noted in the interests
register during the financial year ended 30 June 2020:
• Indemnification of Officers and Directors: The Company indemnifies Directors and Executive Officers of the
Group against all liabilities which arise out of the performance of their normal duties as Director or Executive
Officer.
• Directors & Officers’ insurance: In parallel with the indemnity coverage, the Group has Directors & Officers’
liability insurance. The total cost of this insurance expensed during the year ended 30 June 2020 was $21,250
(2019 - $21,300).
Conflicts of Interest and Related Parties
All Directors must disclose any general and specific interests that could be in conflict with their obligations to the
Group. Transactions with related parties and balances outstanding relating to the year ended 30 June 2020 are
disclosed in Note 29 of the Notes to the Financial Statements.
PRINCIPLE 2 – BOARD COMPOSITION & PERFORMANCE
To ensure an effective Board, there should be a balance of independence, skills, knowledge, experience and perspectives.
The primary responsibilities of the Board include:
• to establish the vision of the Group
• to establish the long-term goals and strategies of the Group
• to approve annual and half-year financial reports
• to approve annual budgets
• to approve corporate policies
• to ensure the Group has good internal controls and keeps adequate records
• to ensure legislative compliance
• to monitor executive management
• to ensure appropriate communication to stakeholders
Board procedures are governed by the Constitution.
The Board is responsible for setting the strategic direction of the Company, overseeing the financial and
operational controls of the business, putting in place appropriate risk management strategies and policies and
enhancing its value for shareholders in accordance with good corporate governance principles.
In addition to the Code of Business Conduct and Ethics, the Board also operates under a written Board Charter
which sets out the structure of the Board, role and responsibilities of Directors, procedures for the nomination,
resignation and removal of Directors; and identifies procedures to ensure that the Board meets regularly, conducts
its meetings in an efficient and effective manner and that each Director is fully empowered to perform his or her
duties as a Director of the Company and to fully participate in Board meetings.
Statement of Corporate Governance CONTINUED

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The day-to-day management of SDL’s business is undertaken by SDL’s senior management team under the
leadership of the Chief Executive Officer, through a set of delegated authorities which are reviewed annually.
In order to discharge their duties, Directors have direct access to and may rely on financial and other management
information, and advice provided by SDL’s senior management as well as professional advice provided by external
advisers. Directors have the right, with the approval of the Chairman or by resolution of the Board, to seek
independent legal or financial advice at the Company’s expense for the proper performance of their duties.
Board Composition and Appointment
The number of elected Directors and the procedure for their retirement and re-election at Annual Shareholder
Meetings is set out in the Company’s constitution.
SDL considers that the nomination process for new Director appointments is the responsibility of the whole Board
and it does not have a separate Nomination Committee.
The Board takes into consideration tenure, capability, diversity and skills when reviewing Board composition and
new appointments.
At each Annual Meeting, one-third of the current Directors retire by rotation and are eligible for re-election. Any
Directors appointed since the previous Annual Meeting must also retire and are eligible for election.
When a new Director is appointed, SDL will enter into a written appointment letter setting out the terms of their
appointment.
The Board supports the separation of the roles of Chairman and CEO. The Chair of SDL as at 27 August 2020 is
non-executive director, John McMahon, who has (through a related party) a 10.93% shareholding in SDL and is
therefore not considered independent under the NZX Main Board Listing Rules.
The Board currently comprises six Directors, being a non-executive chairman (non-independent), four non-
executive Directors (independent) and the Chief Executive. They are all elected based on the value they bring to
the Board.
In order for a Director to be independent, the Board has determined that he or she must not be an executive of
SDL and must have no ‘Disqualifying Relationships’. In this regard, the Board follows the requirements of the NZX
Listing Rules (and NZX guidance on the application of those requirements). Information on each director can be
found at http://www.solutiondynamics.com/our-team/. Director’s interests are disclosed in Note 29 of the 2020
Annual Report.
The Company encourages all Directors to undertake appropriate training and education so that they may best
perform their duties. This includes attending presentations on changes in governance, legal and regulatory
frameworks; attending technical and professional development courses. ln addition, Directors can receive updates
on relevant industry and Company issues, and briefings from key executives.
The Board aims to regularly consider individual and collective performance, together with the skillsets, training and
development and succession planning required to govern the Group’s business.
Diversity
SDL is committed to a culture that actively supports diversity and inclusiveness and prevents or eliminates
discrimination in any form. As such, SDL firmly believes that diversity and inclusiveness enables SDL to better
respond to the ever changing environment in which we operate and better serve the diverse customer and
stakeholder base to which we are accountable to.

The concept of diversity includes (but is not limited to) concepts of gender, race, ethnicity and cultural background
as well as physical capability, age, sexual orientation, and religious or political beliefs.
SDL does not have formal diversity policy. Instead, SDL’s Code of Business Conduct and Ethics notes that SDL
values diversity and has a workforce consisting of many individuals with diverse skills, values, backgrounds,
ethnicity and experience. We attract and retain a diverse workforce and this diversity brings a range of ideals,
skills and innovation to SDL, which assists in achieving our objectives. At the date of this report, the Board is yet
to consider whether it requires management to provide regular reporting and monitoring on diversity within SDL’s
workforce.
As at 30 June 2020, the gender balance of SDL’s directors and people was as follows:
30 June 2020 30 June 2019
Directors
Females 1 1
Males 5 5
Management Team
Females - -
Males 7 9
All Employees
Females 34 32
Males 50 53
The Management team is defined as being the Chief Executive Officer and senior leaders with reporting lines direct
to the Chief Executive Officer.
Board Meetings and Attendance
The Board has 11 scheduled meetings a year.
During the period 1 July 2019 to 30 June 2020 attendance at Board and Committee meetings was:
Board Meetings
(1)
Audit & Risk
Management
(2)
Held Attended Held Attended
John McMahon (Chairman) 11 11 3 2
Julian Beavis 11 10 n/a n/a
Nelson Siva (CEO) 11 11 n/a n/a
Elmar Toime 11 11 n/a n/a
Andy Preece (appointed 2 May 2019) 11 11 3 3
Lee Eglinton (appointed 29 May 2019) 11 10 3 2
(1)
John McMahon is the board chairman
(2)
Andy Preece is the chairman of the audit & risk management committee
Statement of Corporate Governance CONTINUED
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PRINCIPLE 3 - COMMITTEES
The Board should use committees where this will enhance its effectiveness in key areas, while still retaining Board
responsibility.
The Board has constituted one standing Committee being the Audit and Risk Committee. Due to the size of the
Board, matters normally dealt with by remuneration and the nominations committees are dealt with by the full
Board.
Committees allow issues requiring detailed consideration to be dealt with separately by members of the Board with
specialist knowledge and experience, thereby enhancing the efficiency and effectiveness of the Board. However,
the Board retains ultimate responsibility for the functions of its Committees and determines their responsibilities.
The Audit and Risk Committee meets as required and has terms of reference (a Charter). A copy of the Audit and
Risk Committee Charter can be found at: http://www.solutiondynamics.com/wp-content/uploads/2020/05/
Audit_Risk_Charter.pdf.
Minutes of each Committee meeting are forwarded to all members of the Board. The Audit and Risk Committee is
empowered to seek any information it requires from employees in pursuing its duties and to obtain independent
legal or other professional advice.
The membership and performance of the Committee is reviewed annually.
From time to time, special purpose committees may be formed to review and monitor specific projects with senior
management.
As the Board believes that matters of remuneration and nominations are the responsibility of the entire Board, SDL
does not consider it necessary to comply with recommendations 3.3 and 3.11 of the NZX Corporate Governance
Code and accordingly does not have a separate remuneration committee or nomination committee.
The Board will continue to monitor best practice in the governance area and update SDL’s policies to ensure it
maintains the most appropriate standards.
Audit and Risk Committee
The role of the Audit and Risk Committee is to assist the Board in carrying out its responsibilities under the
Companies Act 1993 and the Financial Reporting Act 2013 regarding accountancy practices, policies and controls
relative to the Company’s financial position and make appropriate enquiry into the audits of the Company’s
financial statements. This responsibility includes providing the Board with additional assurance about the quality
and reliability of the financial information issued publicly by the Company. All matters required to be addressed and
for which the Committee has responsibility were addressed during the 2020 financial year.
A written charter outlines the Audit and Risk Committee’s delegated authority, duties, responsibilities and
relationship with the Board. The Charter is available on the Company’s website at: http://www.solutiondynamics.
com/wp-content/uploads/2019/05/Audit_Risk_Charter.pdf
The Committee must be comprised solely of Directors of SDL, have a minimum of three members, two of whom
have a majority of independent Directors and have at least one director with an accounting or financial background.
The makeup of the current members of the Committee complies with this recommendation. The chair of the
Committee cannot be Chair of the Board.
Members as at 30 June 2020 were Andy Preece (Chairman), Lee Eglinton and John McMahon. It met three times
during the financial year.
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Management and employees may only attend meetings at the invitation of the committee and the Committee
routinely has Committee only time with the external and internal auditors without management present.
Takeovers
The Board has yet to establish protocols or procedures to be followed in the event of a takeover. Nonetheless, the
Board understands that any such protocols or procedures would involve SDL forming an independent takeover
committee to oversee disclosure and response and engage expert legal and financial advisors to provide advice on
procedural matters affecting any such takeover.
PRINCIPLE 4 –REPORTING & DISCLOSURE
The Board should demand integrity in financial and non-financial reporting, and in the timeliness and balance of
corporate disclosures.
The Board is committed to keeping shareholders and the market informed of all material information about the
Company and its performance and ensure compliance with legislative requirements and those of the NZX Listing
Rules.
The release of material information is guided by the NZX Listing Rules (and the Listing Rules guidance provided by
NZX).
In addition to all information required by law, SDL also seeks to provide sufficient meaningful information to ensure
stakeholders and investors are well informed, including financial and non-financial information.
Financial Statements
It is the Directors’ responsibility to ensure preparation of financial statements that give a true and fair view of the
financial position of the Group as at the end of the financial year and the results of operations and cash flows for
the year. The external auditors are responsible for expressing an independent opinion on the financial statements.
The consolidated financial statements set out in this report have been prepared by management in accordance with
generally accepted accounting practice in New Zealand. They are based on appropriate accounting policies which
have been consistently applied and which are supported by reasonable judgements and estimates.
For the financial year ended 30 June 2020, the directors believe that proper accounting records have been kept
which enable, with reasonable accuracy, the determination of the financial position of SDL and the Group and
facilitate compliance of the financial statements with the Companies Act 1993 and the Financial Reporting Act
2013.
After reviewing internal management financial reports and budgets the Directors believe that the Group will
continue to be a going concern in the foreseeable future. For this reason, they continue to adopt the going concern
basis in preparing the financial statements.
The Chief Executive and Chief Financial Officer have confirmed in writing to the Board that SDL’s external financial
reports present a true and fair view in all material aspects.
SDL’s full and half year financial statements are available on the Company/s website at: http://www.
solutiondynamics.com/investor-centre/
Statement of Corporate Governance CONTINUED

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Non-financial information
The Board recognises the importance of non-financial disclosure. Given SDL’s size the Board has elected not
to comply with recommendation 4.3 of the NZX Corporate Governance Code and has not adopted a formal
environmental, social and governance (ESG) framework.
SDL discusses its strategic objectives and its progress against these in the Management Discussion and Analysis
section of this annual report and at the Annual Meeting.
SDL is committed to using its resources responsibly and is actively working with its supply chain partners to look
for opportunities to reduce any negative environmental risk or impact from its business operations, products and
services.
The Board encourages diversity and will not knowingly allow SDL to participate in business activities where SDL
could be complicit in human rights and labour standard abuses.
PRINCIPLE 5 –REMUNERATION
The remuneration of Directors and management should be transparent, fair and reasonable.
The Board promotes the alignment of the interests of the directors, the Chief Executive Officer and management
with the long-term interests of shareholders. Remuneration policies and structure are reviewed regularly to ensure
remuneration of management and directors is fair and reasonable in a competitive market for the skills, knowledge
and experience required by the Company.
The Board recognises that it is desirable that management (including that for any executive Director) remuneration
should include an element dependent upon the performance of both the Group and the individual, and should be
clearly differentiated from non-executive Director remuneration.
Details of Directors and management remuneration and entitlements for the 2020 financial year are set out in Note
29 of the annual report.
SDL does not have a Remuneration Committee and matters relating to remuneration are dealt with by the full
Board.
Directors’ Remuneration
The total remuneration pool available for Directors is fixed by shareholders. The Board determines the level of
remuneration paid to Directors from the approved collective pool. Directors also receive reimbursement for
reasonable travelling, accommodation and other expenses incurred in the course of performing their duties.
Directors are paid on a per director rate as follows,
Position Approved Remuneration
Chairman $60,000
Non-executive Director $40,000
Audit & Risk Committee Chair $7,500
Hourly rates for abnormal/particularly time intensive
projects or transactions outside the scope of typical board work $250 /hour
Directors’ remuneration during the year is disclosed in Note 29 of the Notes to the Financial Statements.

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Executives’ Remuneration
Executive remuneration consists of a fixed base salary, incentives and a Share Option Plan. Incentives are paid
against targets agreed with members of the management team at the commencement of the year and are based on
earnings and sales targets.
Executives’ remuneration greater than $100,000 per annum received in their capacity as employees during the year
is disclosed in Note 23 of the Notes to the Consolidated Financial Statements.
Details of the SDL Share Option Plan are detailed in Note 30 to the 2020 Financial Statements.
Chief Executive Officer Remuneration
The review and approval of the Chief Executive Officer’s remuneration is the responsibility of the Board.
The Chief Executive Officer’s remuneration comprises a fixed base salary and bonus paid annually.
The CEO’s remuneration can be summarised as follows:
Description (000’s)
Base salary 247
Incentive based on earnings performance (1) 185
Total on target earnings 432
(1)
This is paid annually in arrears based on Company earnings
PRINCIPLE 6 –RISK MANAGEMENT
Directors should have a sound understanding of the material risks faced by the issuer and how to manage them. The
Board should regularly verify that the issuer has appropriate processes that identify and manage potential and material
risks.
SDL is committed to proactively managing risk. Whilst risk management, and the Group’s system of internal
controls, is the responsibility of the entire Board, the Audit and Risk Committee assists the Board and provides
additional oversight with regard to the risk management framework and monitoring compliance with that
framework.
The Board monitors the operational and financial aspects of the Group and considers recommendations from
external auditors and advisors on the risks that the Group faces.
The Board ensures that recommendations made are assessed and appropriate action is taken where necessary to
ensure risks are managed appropriately.
The Board’s approach to risk management is incorporated into the Audit and Risk Committee Charter, which can be
found at: http://www.solutiondynamics.com/wp-content/uploads/2020/05/Audit_Risk_Charter.pdf
The Board delegates day-to-day management of the risk to the Chief Executive Officer. SDL’s management team
is required to regularly identify the major risks affecting SDL’s business and develop structures, practices and
processes to manage and monitor these risks.
It is the responsibility of the Directors to ensure adequate accounting records are kept. Directors are also
responsible for the Group’s system of internal financial controls.
Internal financial controls have been implemented to minimize the possibility of material misstatement. They can
provide only reasonable assurance and not absolute assurance against material misstatements or loss.
No major breakdowns of internal controls were identified during the year.
Statement of Corporate Governance CONTINUED

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The Board is satisfied that SDL has in place a risk management process to effectively identify, manage and monitor
SDL’s principal risks.
SDL also maintains insurance policies that it considers adequate to meet its insurable risks.
Key financial and non-financial risks are included in Note 28 to the financial statements.
Health and Safety
The Board recognises that effective management of health and safety is essential for the operation of a successful
business, and its intent is to prevent harm and promote wellbeing for SDL’s employees and contractors. The Board
is responsible for ensuring that the systems used to identify and manage health and safety risks are fit for purpose,
being effectively implemented, regularly reviewed and continuously improved.
SDL has a Health and Safety Charter which is monitored by the management team. Health and Safety reports,
including incident reports, for SDL’s business are included in the compliance section of the Board papers.
PRINCIPLE 7 –AUDITORS
The Board should ensure the quality and independence of the external audit process.
The Board’s approach to the appointment and oversight of the external auditor are outlined in SDL’s Audit and Risk
Committee Charter, which can be found at: http://www.solutiondynamics.com/wp-content/uploads/2020/05/
Audit_Risk_Charter.pdf. Amongst other things, the Charter is designed to ensure that audit independence is
maintained, both in fact and appearance, so that SDL’s external financial reporting is viewed as being highly reliable
and credible.
The Audit and Risk Committee provides additional oversight of the external auditor reviews the quality and cost
of the audit undertaken by SDL’s external auditors and provides a formal channel of communication between the
Board, the management team and the external auditors. The Committee also assesses the auditor’s independence
on an annual basis. These requirements are detailed in the Audit and Risk Committee Charter.
For the financial year ended 30 June 2020, Grant Thornton continued in their appointment as the external auditor
for SDL. Grant Thornton has occupied that role since 2009. The last audit partner rotation was in 2016.
All audit work at SDL is fully separated from any non-audit services, to ensure that appropriate independence is
maintained. The amount of fees paid to Grant Thornton for audit and other services is identified in Note 6 of this
annual report.
Grant Thornton has provided the Board with written confirmation that, in their view, they were able to operate
independently during the financial year.
Grant Thornton attends the Annual Meeting, and the lead audit partner is available to answer questions from
shareholders at that meeting. In this capacity, Grant Thornton attended the 2019 annual meeting.
SDL has a number of internal controls overseen by Audit and Risk Committee, including controls for computerised
information system, security, business continuity management, insurance, health and safety, conflicts of interest,
and prevention and identification of fraud. SDL does not have a dedicated Group internal auditor role.
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PRINCIPLE 8 – SHAREHOLDER RIGHTS & RELATIONS
The Board should respect the rights of shareholders and foster constructive relationships with shareholders that
encourage them to engage with the issuer.
The Board is committed to open dialogue and to facilitating engagement with shareholders.
SDL has a calendar of communications for shareholders, including but not limited to:
• Annual and Half-Yearly Reports
• Market announcements
• Annual Meeting
• Access to information through the SDL website www.solutiondynamics.com
SDL Company maintains a comprehensive website which provides access to key corporate governance documents,
copies of all major announcements and Company reports.
Shareholders are encouraged to attend the Annual Meeting and may raise matters for discussion at the meeting. In
accordance with NZX Corporate Governance Code, the Board ensured that the notice of the Annual Meeting was
posted to SDL’s website as soon as possible and at least 28 days prior to the meeting.
Shareholders have the ultimate control in corporate governance by voting Directors on or off the Board. Voting is
by poll, upholding the ‘one share, one vote’ philosophy.
In accordance with the Companies Act 1993, SDL’s constitution and the NZX Listing Rules, SDL refers major
decisions which may change the nature of SDL’s business to shareholders for approval.
All shareholders are given the option to elect to receive electronic communications from SDL. In addition to
shareholders, SDL has a wide range of stakeholders and maintains open channels of communication for all
audiences, including shareholders, brokers and the investing community, as well as our staff, suppliers and
customers.

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Statement of Corporate Governance CONTINUED

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Nature of Business
Data management, electronic digital printing,
document distribution, web presentment and
archiving, fulfilment, print services, scanning,
data entry and document management.
Directors
John McMahon – Non-independent Chairman
Elmar Toime -Independent
Julian Beavis - Independent
Andy Preece - Independent
Lee Eglinton - Independent
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
Level 20, ANZ Centre
23 - 29 Albert Street
AUCKLAND
Legal Representative
Stephen Layburn
Commercial Barrister
Level 3, 175 Queen Street
AUCKLAND
Share Registry
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
Lancaster Court, 8 Barnes Wallis Road,
Fareham, PO15 5TU
Hampshire
UNITED KINGDOM
Tel: +44 1489 668219
Solution Dynamics Incorporated
260 Madison Avenue, 8th floor
New York, New York 10016
UNITED STATES of AMERICA
Tel: +1 (917) 319 5625
Déjar International Limited
18 Canaveral Drive
Albany
AUCKLAND
PO Box 301248
Albany
AUCKLAND 0752
Tel: +64 (9) 970-7700
Company Directory

Head Office:
18 - 24 Canaveral Drive, Rosedale, Auckland 0632, New Zealand
Phone +64 9 970 7700 | PO Box 301248, Albany 0752, New Zealand
info@solutiondynamics.com | www.solutiondynamics.com
New Zealand  United Kingdom  United States of America

---

Distribution Notice

Updated as at 18 December 2019



Please note: all cash amounts in this form should be provided to 8 decimal places

Section 1: Issuer information
Name of issuer Solution Dynamics Limited
Financial product name/description Ordinary shares
NZX ticker code SDL
ISIN (If unknown, check on NZX
website)
NZSDLE0001S8
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year

Special
DRP applies
Record date 9 October 2020
Ex-Date (one business day before the
Record Date)
8 October 2020
Payment date (and allotment date for
DRP)
21 October 2020
Total monies associated with the
distribution
1

$878,388.60 (14,639,810 shares @ $0.060000000 / share)
Source of distribution (for example,
retained earnings)
Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.08333333
Gross taxable amount
3
$0.08333333
Total cash distribution
4
$0.06000000
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount N/A
Section 3: Imputation credits and Resident Withholding Tax
5

Is the distribution imputed Fully imputed


1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.

If fully or partially imputed, please
state imputation rate as % applied
6

28%
Imputation tax credits per financial
product
$0.02333333
Resident Withholding Tax per
financial product
$0.00416667
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
N/A
Start date and end date for
determining market price for DRP
N/A N/A
Date strike price to be announced (if
not available at this time)
N/A
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
N/A
DRP strike price per financial product
N/A
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
N/A
Section 5: Authority for this announcement
Name of person

authorised to make
this announcement
Chris Veale, Chief Financial Officer
Contact person for this
announcement
Chris Veale, Chief Financial Officer
Contact phone number +64 21 855142
Contact email address chrisve@solutiondynamics.com
Date of release through MAP

27 August 2020





6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.

---

Results announcement
(for Equity Security issuer)
Updated as at 17 October 2019


Results for announcement to the market
Name of issuer Solution Dynamics Limited
Reporting Period 12 months to 30 June 2020
Previous Reporting Period 12 months to 30 June 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$34,030 35.2%
Total Revenue $34,030 35.2%
Net profit/(loss) from
continuing operations
$1,866 254.8%
Total net profit/(loss) $1,866 254.8%
Interim/Final Dividend
Amount per Quoted Equity
Security
$ 0.06000000
Imputed amount per Quoted
Equity Security
$ 0.02333333
Record Date 9 October 2020
Dividend Payment Date 21 October 2020
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.22513953 $0.12766559
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer to Management Discussion & Analysis in attached
financial statements.
Authority for this announcement
Name of person

authorised
to make this announcement
Chris Veale
Contact person for this
announcement
Chris Veale
Contact phone number +64 21 855142
Contact email address chrisve@solutiondynamics.com
Date of release through MAP

27 August 2020

Audited financial statements accompany this announcement.