Your school assessment mark isn’t used directly, but rather NESA performs a process called moderation to find your moderated school-based assessment mark, based on your rankings, the mark differences between rankings and your cohort’s performance in the hsc. For example, if you’re ranked first you’ll get the highest mark in your cohort for your school assessment mark, and if you’re ranked last you’ll get the lowest mark in your cohort for your school assessment mark, and if you’re ranked somewhere near the middle you’ll get a school assessment mark around half way between the other two.
This moderated school assessment mark is then averaged with your aligned exam mark to determine your HSC mark for a subject, which means that yes, a high exam mark will drag your overal HSC mark up.