Papyrus Australia Ltd
ABN 63 110 868 409
Annual Report
For the Year Ended 30 June 2015
Papyrus Australia Ltd
ABN 63 110 868 409
Contents
For the Year Ended 30 June 2015
Consolidated Financial Statements
Corporate Information
Corporate Governance Statement
Directors' Report
Auditors Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Audit Report
ASX Additional Information
Page
1
2
9
18
19
20
21
22
23
53
54
57
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Information
This annual report covers Papyrus Australia Ltd (ABN 63 110 868 409) the consolidated group (‘Group’) comprising
Papyrus Australia Ltd and its subsidiaries. The Group's functional and presentation currency is Australian dollars.
A description of the Group's operations and of its principal activities is included in the review of operations and activities in
the directors' report on pages 9 to 17. The directors' report is not part of the financial report.
Directors
Mr Edward Byrt (Chairman)
Mr Ramy Azer (Managing Director)
Mr Donald Stephens (retired 24 August 2015)
Mr Vincent Rigano
Mr Andrew Ford
Company Secretary
Mr Vincent Rigano (appointed 24 August 2015)
Mr Donald Stephens (retired 24 August 2015)
Registered Office
C/- HLB Mann Judd (SA) Pty Ltd
169 Fullarton Road
DULWICH SA 5065
Principal place of business
C/- HLB Mann Judd (SA) Pty Ltd
169 Fullarton Road
DULWICH SA 5065
Share Registry
Computershare Investor Services Pty Ltd
Level 5, 115 Grenfell Street
ADELAIDE SA 5000
Auditors
Grant Thornton Audit Pty Ltd
Level 1
67 Greenhill Road
WAYVILLE SA 5034
1
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2015
Introduction
Papyrus Australia Limited (the Company) and the Board are committed to achieving and demonstrating the highest
standards of corporate governance. The Board continues to review the framework and practices to ensure they meet the
interests of shareholders. The Company and its controlled entities together are referred to as the Group in this statement.
The Group details below the corporate governance practices in place at the end of the financial year, all of which comply
with the principles and recommendations of the ASX corporate governance council unless otherwise stated. Some of the
charters and policies that form the basis of the corporate governance practices of the Group may be located on the Group’s
website, http://www.papyrusaustralia.com.au/
On 27 March 2014, the ASX Corporate Governance Council released the 3rd Edition of its Corporate Governance Principles
and Recommendations (3rd Edition Recommendations). The Group reviewed its corporate governance and reporting
practices under these principles and the disclosures in this Corporate Governance Statement reflect this. As at the date of
this statement, the Group complies with the 3rd Edition Recommendations (unless otherwise stated).
Principle 1: Lay solid foundations for management and oversight
The relationship between the Board and senior management is critical to the Group’s long-term success. The Directors are
responsible to the shareholders for the performance of the group in both the short and the longer term and seek to balance
objectives in the best interests of the group as a whole. Their focus is to enhance the interests of shareholders and other key
stakeholders and to ensure the Group is properly managed.
The responsibilities of the Board include:
• providing strategic guidance to the Group including contributing to the development of and approving the corporate
•
strategy;
reviewing and approving business plans, the annual budget and financial plans including available resources and
major capital expenditure initiatives;
• overseeing and monitoring the organisational performance and the achievement of the Group’s strategic goals and
objectives;
• monitoring financial performance including approval of the annual and half-year financial reports and liaison with the
Company’s auditors;
• appointment and performance assessment of the Managing Director (MD);
•
ratifying the appointment and/or removal and contributing to the performance assessment for the members of the
senior management team, including the Company Secretary;
• ensuring there are effective management processes in place and approving major corporate initiatives;
• enhancing and protecting the reputation of the organisation;
• overseeing the operation of the Group’s system for compliance and risk management reporting to shareholders; and
• ensuring appropriate resources are available to senior management.
Due to the size of the Company, the day to day management of the Group’s affairs and the implementation of the corporate
strategy and policy initiatives are managed by the Board.
The Board has not publicly disclosed a statement of matters reserved for the Board, or the Board charter. Given the size of
the Company at this time, the Board does not consider the formation of a Board charter necessary.
The Board is presently responsible for evaluating Board candidates and recommending individuals for appointment to the
Board. The Board evaluates prospective candidates against a range of criteria including the skills, experience, expertise and
diversity that will best complement Board effectiveness at the time. The Board undertakes appropriate background and
screening checks prior to nominating a director for election by shareholders, and provides to shareholders all material
information in its possession concerning the director standing for election or re-election in the explanatory notes
accompanying the notice of meeting.
A written agreement has not been executed with each director setting out the terms of their appointment; therefore the
Group does not comply with recommendation 1.3 of the Corporate Governance Principles and Recommendations. The
Company believes that due to their size and nature of operations that this is acceptable, however will ensure written
agreements are executed with future directors and senior executives.
The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper
functioning of the Board. The Company Secretary is responsible for maintaining the information systems and processes that
are appropriate for the Board to fulfil its role and to achieve the objective of the Company. The Company Secretary is also
responsible for ensuring that the Board procedures are complied with and advising the Board on governance matters. All
Directors and Committees have access to the Company Secretary for advice and services. Independent advisory services
are retained by the Company Secretary at the request of the Board or Committees.
2
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2015
The Company does not have a diversity policy, which formally documents the principles and commitment in relation to
maintaining a diverse group of employees within the Company, and therefore has not complied with recommendation 1.5(b)
of the Corporate Governance Principles and Recommendations. However the Board continually assesses the composition of
the Board. The Company believes this to be appropriate at this time, but notes it uses diversity as a driver for staff
recruitment.
The total proportion of men and women on the board, in senior positions (being Key Management Personal and decision
makers of the Company) and across the whole organisation is listed below:
Category
Board
Senior Management
Whole Organisation
Men
4
1
5
Women
-
-
-
The Group has not disclosed in this Corporate Governance Statement its measureable objectives for achieving gender
diversity and therefor has not complied with recommendation 1.5(a) of the Corporate Governance Principles and
Recommendations. Due to the size of the Company and its number of employees, the Board does not consider it
appropriate, at this time, to formally set measurable objectives for gender diversity.
The Board will at least annually evaluate its performance and the performance of its committees and individual directors to
determine whether or not it is functioning effectively by reference to the current best practices. The Board continually
evaluates the composition of the Board, however a formal evaluation of its performance and the performance of its
committees and individual directors is yet to be conducted. Due to the size of the Company, the Board has determined that
this is appropriate at Company’s stage to date, however it does recognise that ongoing performance evaluation is important
to ensure that the Board, committees and individual director’s remain relevant and committed to the Company’s business
operations and changing business requirements. At the date of this report, the Company has not complied with
recommendation 1.6(b) of the Corporate Governance Principles and Recommendations.
The Group currently has no senior executives and therefore has no formal process for evaluating the performance of its
senior executives.
Principle 2: Structure the board to add value
The Board has not established a nomination committee, and thus not complied with recommendation 2.1(a) of the Corporate
Governance Principles and Recommendations. The Directors takes ultimate responsibility in addressing board succession
issues and to ensure the Board has the appropriate balance of skills, knowledge, experience, independence and diversity to
enable it to discharge its duties and responsibilities effectively. The Board closely assesses diversity criteria when
considering Board candidates.
The Group’s desired mix of skills and competence is listed below. The Board considers its current composition adequately
meets these required competencies.
Area
Leadership
Business, Finance and Legal
Sustainability and Stakeholder
Management
Engineering and Technical
Competence
Business Leadership, Public Listed Company Experience
Accounting, Audit, Business Strategy, Competitive Business Analysis, Corporate
Financing, Financial Literacy, Legal, Mergers and Acquisitions, Risk Management,
Tax – International
Community Relations, Corporate Governance, Health & Safety, Human Resources,
Remuneration
Engineering qualifications
At the date of this statement the Board consists of the following directors:
Mr Edward Byrt, Non-Executive Chairman (appointed 02 December 2004)
Mr Ramy Azer, Managing Director (appointed 08 September 2004)
Mr Vincent Rigano, Non-Executive Director/Company Secretary
Mr Andrew Ford, Non-Executive Director (appointed 27 November 2013)
(appointed 27 November 2013)
The Board considers this to be an appropriate composition given the size and development of the Group at the present time
and continually assesses the composition of the Board to ensure its membership maintains a combination of skills and
experience that ensure the Board has the expertise to meet both its responsibilities to stakeholders and its strategic
objectives. The names of directors including details of their qualifications and experience are set out in the Directors’ Report
3
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2015
of the Annual Report and also available on the Company’s website: www.papyrusaustralia.com.au
Independence
The Board is conscious of the need for independence and ensures that where a conflict of interest may arise, the relevant
Director(s) leave the meeting to ensure a full and frank discussion of the matter(s) under consideration by the rest of the
Board. Those Directors who have interests in specific transactions or potential transactions do not receive Board papers
related to those transactions or potential transactions, do not participate in any part of a Directors’ meeting which considers
those transactions or potential transactions, are not involved in the decision making process in respect of those transactions
or potential transactions, and are asked not to discuss those transactions or potential transactions with other Directors.
Directors of the Company are considered to be independent when they are independent of management and free from any
business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere
with, the exercise of their unfettered and independent judgement.
The Board has accepted the following definition of an independent Director:
“An independent director is a director who is not a member of management, is a Non-Executive Director and who:
•
•
•
•
is not, or has not been, employed in an executive capacity by the Group and there has been a period of at least
three years between ceasing such employment and serving on the Board;
is not, or has not within the last three years been, a partner, director or senior employee of a provider of material
professional services to the Group;
is not, or has not within the last three years been, in a material business relationship (eg as a supplier or customer)
with the Group , or an officer or, or otherwise associated with, someone with such a relationship;
is not a substantial security holder of the entity or an officer of , or otherwise associated with, a substantial security
holder of the entity;
• does not have a material contractual relationship with the Group other than as a director; or
• has not been a director of the entity for such a period that his or her independence may have been compromised.”
Mr Vincent Rigano and Mr Andrew Ford are Non-Executive Directors and have no other material relationships with the
Group other than their directorships. The Group therefore has two independent directors during the year as those
relationships are defined.
The Board considers its current structure to be an appropriate composition of the required skills and experience, given the
experience of the individual Directors and the size and development of the Company at the present time. Each individual
member of the Board is satisfied that whilst the Company may not comply with Recommendation 2.4, all Directors bring an
independent judgment to bear on Board decisions.
The Company’s Chairman, Mr Edward Byrt is not an independent director, due to his shareholding, but he does not fulfil the
role of CEO. The Company therefore has not complied with recommendation 2.5 of the Corporate Governance Principles
and Recommendations. The Company believes this to be appropriate at this time given the size and nature of the
Company’s operations, but will continue to consider the composition of the board in the future.
The Company does not maintain a formal program for inducting new Directors, however the Company Secretary ensures all
new directors receive adequate information and documentation on appointment. The Company also ensures that appropriate
professional development opportunities are provided to directors to ensure they develop and maintain the skills and
knowledge needed to perform their role as directors effectively.
Principle 3: Act ethically and responsibly
The Company has developed a Code of conduct (the Code) which has been fully endorsed by the Board and applies to all
directors and employees. The Code is regularly reviewed and updated as necessary to ensure it reflects the highest
standards of behaviour and professionalism and the practices necessary to maintain confidence in the group’s integrity and
to take into account legal obligations and reasonable expectations of the Company’s stakeholders.
In summary, the Code requires that at all times all Company personnel act with the utmost integrity, objectivity and in
compliance with the letter and the spirit of the law and company policies.
4
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2015
Principle 4: Safeguard integrity in corporate reporting
Audit Committee (the Committee)
The Committee consists of the following directors:
Mr Vincent Rigano (Committee Chair) (Non-Executive Director)
Mr Edward Byrt (Non-Executive Chairman)
Mr Andrew Ford (Non-Executive Director)
Ramy Azer (Managing Director)
Mr Vincent Rigano and Mrs Andrew Ford are independent members; the chair of the Committee is not the chair of the Board;
however, the independent members do not comprise the majority of the Committee, therefore the Group does not comply
with recommendation 4.1(a)(1) of the Corporate Governance Principles and Recommendations. As all four Directors are also
members of the audit committee, and given the size of the Company, the Board deems the composition of the Committee
appropriate at this time.
The relevant qualifications and experience of each of the members of the Committee can be found in the director profiles
contained within the Company’s Annual Report and on the Company’s website at: www.papyrusaustralia.com.au. All
members of the Audit Committee are financially literate and have an appropriate understanding of the industries in which the
group operates.
The number of times the Committee met throughout the period and the individual attendance of the members at those
meetings are outlined within the Annual Report.
The Audit Committee does not have a formal charter and has therefore not complied with recommendation 4.1(3) of the
Corporate Governance Principles and Recommendations. The Board believes this is appropriate given the size of the
Company and the composition of the Committee.
The Audit Committee has authority, within the scope of its responsibilities, to seek any information it requires from any
employee or external party.
The Chairman and Company Secretary have certified to the Board that the financial statements are founded on a sound
system of risk management and internal control and that the system is operating efficiently and effectively in all material
respects. This declaration is provided to the Board before it approves the Company’s financial statements for a financial
period, and declares that in their opinion, the financial records of the Company have been properly maintained and that the
financial statements comply with the appropriate accounting standards and give and true and fair view of the financial
position and performance of the entity.
External auditors
The Company and Board Policy, is to appoint external auditors who clearly demonstrate quality and independence. The
performance of the external auditor is reviewed annually and applications for tender of external audit services are requested
as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs. Grant
Thornton Audit Pty Ltd (‘Grant Thornton’) was appointed as the external auditor at the Company’s AGM in 2012. It is Grant
Thornton’s policy to rotate audit engagement partners on listed companies in accordance with the requirements of the
Corporations Act 2001, which is generally after five years, subject to certain exceptions.
The amount of fees paid to the external auditors is provided in a note to the financial statements. It is the policy of the
external auditors to provide an annual declaration of their independence to the Committee.
The external auditor will attend the Annual General Meeting and be available to answer shareholder questions about the
conduct of the audit and the preparation and content of the audit report.
Principle 5: Make timely and balanced disclosure
Continuous disclosure
The Company has a policy that all the Company Shareholders and investors have equal access to the Company’s
information. The Board will ensure that all price sensitive information is disclosed to the ASX in accordance with the
continuous disclosure requirements of the Corporations Act and the ASX Listing Rules.
5
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2015
The Company has not publicly disclosed a formal disclosure policy and therefore has not complied with recommendation 5.1
(a)&(b) of the Corporate Governance Principles and Recommendations. Given the size of the Company, the Board does not
consider public disclosure to be appropriate. The Board takes ultimate responsibility for these matters.
The Company Secretary has been nominated as the person responsible for communications with the Australian Securities
Exchange (ASX). This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the
ASX Listing Rules and overseeing and co-ordinating information disclosure to the ASX, shareholders, the media and the
public.
Principle 6: Respect the rights of security holders
The Board strives to ensure that security holders are provided with sufficient information to assess the performance of the
Group and its Directors and to made well-informed investment decisions. The Company provides all information about itself
and its corporate governance via its website at: www.papyrusaustralia.com.au
Investors relations and member participation
The Company does not have a formal shareholder communication policy which is not in compliance with recommendation
6.2 of the Corporate Governance Principles and Recommendations.
Shareholders are encouraged to participate at all Annual General Meetings and other General Meetings of the Company.
Upon the despatch of any notice of meeting to Shareholders, the Company Secretary shall send out material with that notice
of meeting stating that all Shareholders are encouraged to participate at the meeting. The meetings shall also be conducted
to allow questions and feedback to the Board and management of the Company.
The Company aims to promote effective communication to and from shareholders. At this time Members of the Company
cannot register to receive email notifications when an announcement is made by the Company to the ASX, which is a
departure from recommendation 6.4 of the Corporate Governance Principles and Recommendations; however Members are
encouraged to contact the company via their website or directly to the registered office. Members are also encouraged to
register with the Company’s share register to communicate electronically.
Principle 7: Recognise and manage risk
The Board has identified the significant areas of potential business and legal risk of the Company.
The identification, monitoring and, where appropriate, the reduction of significant risk to the Company is the responsibility of
the Board. The Board has also established an Audit, Risk and Compliance Committee which addresses the risks to the
Company.
The Board will review and monitor the parameters under which such risks will be managed. Management accounts will be
prepared and reviewed at Board meetings. Budgets will be prepared and compared against actual results.
The Board is responsible for satisfying itself annually, or more frequently as required, that management has developed and
implemented a sound system of risk management and internal control, a review took place during the reporting period.
The Company does not have an internal audit function due to the size and nature of the Group, however the Audit, Business
Risk and Compliance Committee is responsible for ensuring there are adequate policies in relation to risk management,
compliance and internal control systems. They monitor the Company’s risk management by overseeing management’s
actions in the evaluation, management, monitoring and reporting of material operational, financial, compliance and strategic
risks. In providing this oversight, the Audit Committee and the Board:
•
•
•
•
•
reviews the framework and methodology for risk identification, the degree of risk the Company is willing to accept, the
management of risk and the processes for auditing and evaluating the Company’s risk management system;
reviews group-wide objectives in the context of the abovementioned categories of corporate risk;
reviews and, where necessary, approves guidelines and policies governing the identification, assessment and
management of the Company’s exposure to risk;
reviews and approves the delegations of financial authorities and addresses any need to update these authorities on an
annual basis, and
reviews compliance with agreed policies.
The Committee recommends any actions it deems appropriate to the board for its consideration.
6
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2015
Management is responsible for designing, implementing and reporting on the adequacy of the Company’s risk management
and internal control system and has to report to the Board on the effectiveness of:
•
•
the risk management and internal control system during the year, and
the company’s management of its material business risks.
Securities Trading Policy
The Company has established a policy concerning trading in the Company’s shares by the Company’s officers, employees
and contractors and consultants to the Company while engaged in work for the Company (“Representatives”).
This policy provides that it is the responsibility of each Representative to ensure they do not breach the insider trading
prohibition in the Corporations Act. Breaches of the insider trading prohibition will result in disciplinary action being taken by
the Company.
Representatives must also obtain written consent from the Chairman (or, in the case of the Chairman, from the Board) prior
to trading in the Company’s securities.
Subject to these restrictions, the policy provides that Directors, the Company Secretary and employees of, or contractors to,
the Company that have access to the Company’s financial information or drilling results are permitted to trade in the
Company’s securities throughout the year except during the following periods:
a)
the period between the end of the March and September quarters and the release of the Company’s
quarterly report to ASX for so long as the Company is required by the Listing Rules to lodge quarterly
reports;
b)
the period between the end of the June quarter and the release of the Company’s annual report to ASX; and
c)
the period between the end of the December quarter and the release of the Company’s half year report to
ASX.
In exceptional circumstances the Board may waive the requirements of the Share Trading Policy to allow Representatives to
trade in the shares of the Company, provided to do so would not be illegal.
Directors must advise the Company Secretary of changes to their shareholdings in the Company within two business days of
the change.
The Securities Trading Policy can be viewed on the ASX announcements tab at www.asx.com.au.
Exposure to material economic, environmental and social sustainability risk
The Company’s policy it to identify and manage potential or apparent business, economic, environmental and social
sustainability risks (if appropriate). The Company at present has not identified specific material risk exposure in these
categories. Review of the Company’s risk management policy is conducted at least annually and reports are continually
created by management on the efficiency and effectiveness of the Company’s risk management framework and associated
internal compliance and control procedures.
Principle 8: Remunerate fairly and responsibly
The Chairman and the Directors are entitled to draw Directors fees and receive reimbursement of reasonable expenses for
attendance at meetings. The Company is required to disclose in its annual report details of remuneration to Directors. The
maximum aggregate annual remuneration which may be paid to Non-Executive Directors is $300,000. This amount cannot
be increased without Shareholder approval.
The Board has not established a Remuneration Committee, as given the size of the Group and number of employees, it is
not considered that this is required at this time. The Board therefore fulfils the duties of the committee.
Every employee of the Group signs a formal employment contract at the time of their appointment covering a range of
matters including their duties, rights, responsibilities and any entitlements on termination. The standard contract refers to a
specific formal job description. This job description is reviewed by the remuneration committee on an annual basis and,
where necessary, is revised in consultation with the relevant employee.
7
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2015
Further information on directors’ and executives’ remuneration, including principles used to determine remuneration, is set
out in the directors’ report under the heading ‘Remuneration report’ included within the Annual Report. In accordance with
Group policy, participants in equity-based remuneration plans are not permitted to enter into any transactions that would limit
the economic risk of options or other unvested entitlements.
8
Papyrus Australia Ltd
ABN 63 110 868 409
Directors' Report
30 June 2015
The Directors present their report, together with the financial statements of the Group, being Papyrus Australia Ltd (the
Group) and its controlled entities, for the financial year ended 30 June 2015.
DIRECTORS
The names and details of the company’s directors in office during the financial year and until the date of this report are as
follows. Directors were in office for this entire period unless otherwise stated.
Mr Edward Byrt, Chairman
Mr Ramy Azer, Managing Director
Mr Donald Stephens, Non-Executive Director (retired 24 August 2015)
Mr Vince Rigano, Non-Executive Director
Mr Andrew Ford, Non-Executive Director
Edward Byrt, LLB (Non-Executive Chariman)
Ted Byrt is a company director with over 30 years experience in commerce, corporate governance and international
business. He is a specialist strategic advisor for major development and infrastructure projects within Australia and
offshore.
Ted is a business advisor and Board member of several leading organisations in South Australia. He is Presiding Member
of the Development Assessment Commission, Chairman of the China Cluster, The Australian Advanced Manufacturing
Centre Pty Ltd and SMAC Technologies Pty Ltd, a Director of Treyo Leisure & Entertainment Ltd (ASX listed) and a Board
member of the Aboriginal Foundation of South Australia Inc. He is also a member of the Company’s Audit committee and
has been a Director of Papyrus since 2004.
Ramy Azer, MSTC, MSc (Eng), Grad Dip Bus, Bachelor of Engineering (Mechanical), (Managing Director)
Ramy Azer is the founder and developed the Company's technology. He has been a regular guest lecturer and speaker on
issues including sustainable business development and innovation. Ramy has been Managing Director since 2005 and
prior to that had 10 years experience with Papyrus Technology Pty Ltd.
Mr Vincent Rigano, BA Accounting, CPA (Non-Executive Director and Company Secretary)
Vince is a CPA with over 25 years experience in corporate accounting, management consulting and company secretarial.
Vince was company secretary for a number of years for Papyrus.
Vince provides management accounting and consulting services and to a variety of industry sectors including start-ups.
He is also a member of the Company’s Audit Committee.
Mr Andrew Ford, B Arch (Non-Executive Director)
Andy Ford, retired Woods Bagot Director, is one of the leading design principals in Australia. His proven creative, technical
and professional abilities in architecture and interior design are matched by an understanding and appreciation of
commercial realties: he is both designer and manager, professional and businessman.
Recognised as a skilled leader and manager of multi-disciplinary teams, Andy’s strategic expertise was utilized on major
and special projects in Australia, Asia, Middle East, North America and Europe.
Andy has been a director of the South Australian Motor Sport Board since September 2001 and was appointed Chairman
in October 2011. He is also a member of the Company’s Audit Committee.
Donald Stephens, BA(Acc), FCA (Non-Executive Director/Company Secretary- retired 24 August 2015)
Mr Stephens is a Chartered Accountant and corporate advisor with over 25 years’ experience in the accounting, mining
and services industries, including 14 years as a partner of HLB Mann Judd (SA), a firm of Chartered Accountants.
Mr Stephens is a Director of Mithril Resources Limited, Crest Minerals Limited and Petratherm Limited. Additionally he is
Company Secretary of Highfield Resources Limited, Mithril Resources Limited, Minotaur Exploration Limited and various
other listed public companies.
Other directorships held in listed companies in the past three years are: Reproductive Health Science Ltd (from July 2013
to August 2015) and TW Holdings Ltd (from September 2011 to December 2012).
9
Papyrus Australia Ltd
ABN 63 110 868 409
Directors' Report
30 June 2015
PRINCIPAL ACTIVITIES AND SIGNIFICANT CHANGES IN NATURE OF ACTIVITIES
The Group’s commercialisation strategy remains focused on being a technology licensing Group assisting suitable
entities to establish banana veneering and panel production factories in locations worldwide where bananas are
grown.
There have been no significant changes in the nature of those activities during the year.
OPERATING RESULTS
The loss of the consolidated group after providing for income tax amounted to $261,792 (2014: $692,150).
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE
As at the date of this report, the interests of the directors in the shares and options of Papyrus Australia Ltd were:
Number of
Ordinary Shares
16,796,597
29,203,853
4,490,045
1,046,090
Number of Options
over Ordinary Shares
2,000,000
3,000,000
-
-
Mr Edward Byrt
Mr Ramy Azer
Mr Rigano
Mr Andrew Ford
DIVIDENDS
No dividends were paid or declared since the start of the financial year. No recommendation for payment of
dividends has been made.
CORPORATE GOVERNANCE STATEMENT
The Company’s corporate governance statement can be found on the Company’s website at
www.papyrusaustralia.com.au
OPERATIONS REVIEW
Corporate
The Company’s activities for financial year 2015 were primarily focused on managing its scarce working capital,
consolidating the intellectual property portfolio, working with MAP Capital Advisors Pty Ltd (MAP Capital) in
advancing a manufacturing facility in Far North Queensland, and progressing opportunities in Egypt.
The Company maintains its commercialisation strategy to be a technology licensing company assisting suitable
entities to establish banana veneering and fibre production factories in locations worldwide where bananas are
grown. The plan is that the Company’s revenue will be generated from technology licensing fees, machinery
sales, support services and dividends from any joint venture undertaken. The Company believes that by
partnering with others to demonstrate the technology and its applications is the most prudent way forward initially.
The Company continued to reduce its operating costs as required to preserve working capital. The Company has
met all of its expenses and there are no known unbudgeted expense items. The Directors, including the Managing
Director, continued to forego their remuneration during the year. The Company is also indebted to Talisker Pty Ltd
continuing financial support as previously announced.
The Company continued to review its Patent portfolio and maintains Patents as required and as announced
during the year.
The Annual General Meeting of the Company was held on 25 November 2014 where the Chairman gave a
comprehensive review of the Company’s operations and strategic activities.
10
Papyrus Australia Ltd
ABN 63 110 868 409
Directors' Report
30 June 2015
In summary, the financial year 2015 has been challenging, frustrating and eventually rewarding in a small way.
The challenge was to maintain all requisite activities on a very limited budget for which we thank the Chief
Executive - Geoff Whitbread.
The frustration was the inability to consummate the banana fibre product manufacturing project planned for Far
North Queensland although the key “off-take” party remains contractually committed to the project.
The small reward came in early 2015 with a change in the political and economic circumstances in Egypt where
our partner Egypt Banana Fibre Company (EBFC) has advanced its financial and project prospects with additional
shareholder support and the offer of financial support from the National Bank of Egypt, for which we thank our
Managing Director – Ramy Azer – who has spent considerable time in Egypt negotiating on our behalf and
supporting EBFC to progress the Papyrus Egypt project.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the Company during the year ended 30 June
2015.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group continues to investigate new opportunities for approval by the Company’s shareholders and the ASX if
required. The outcome of these investigations cannot be predicted at this time. The Group may require further
capital to sustain its activities.
ENVIRONMENTAL REGULATION
The Group’s operations are not subject to any significant environmental regulations under either Commonwealth
or State legislation. The Group however believes that it has adequate systems in place for the management of
any future environmental regulations.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
On the 11 September 2015, the Company issued 10,000,000 (ten million) Ordinary Fully Paid Shares at $0.01 per
share, raising $100,000. Funds raised will be used to fund working capital requirements.
Subsequent to the end of the financial year, the Director and Company Secretary, Donald Stephens, has resigned
as announced on 24 August 2015. Mr Vincent Rigano will fulfil the role as Company Secretary.
The Managing Director – Ramy Azer – has recently returned to Egypt to direct the commissioning of the banana
veneering and fibre production machinery at the factory in Sohag which to be operated in joint venture by EBFC
and the Company through Papyrus Egypt.
There have been no other significant matters subsequent to the end of the financial year.
11
Papyrus Australia Ltd
ABN 63 110 868 409
Directors' Report
30 June 2015
Shares under option
At the date of this report, the following options to acquire ordinary shares in the Company were on issue:
Issue Date
Expiry Date
Exercise
Price
Balance at 1
July 2014
Net Issued/
(Exercised or
expired) during
year
Balance at
30 June
2015
01/07/2011
30/06/2016
16/12/2013
16/12/2016
16/12/2013
16/12/2016
$0.12
$0.035
$0.05
750,000
5,100,000
4,100,000
9,950,000
-
-
-
-
750,000
5,100,000
4,100,000
9,950,000
Shares issued as a result of the exercise of options
No shares were issued during the year as a result of an exercise of options.
New options issued
No new options were issued during the period.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
To the extent permitted by law, the Company has indemnified (fully insured) each director and the secretary of the
Company for a premium of $19,510 (2014: $17,030). The liabilities insured include costs and expenses that may
be incurred in defending civil or criminal proceedings (that may be brought) against the officers in their capacity as
officers of the Company or a related body, and any other payments arising from liabilities incurred by the officers
in connection with such proceedings, other than where such liabilities arise out of conduct involving a willful
breach of duty by the officers or the improper use by the officers of their position or of information to gain
advantage for themselves or someone else or to cause detriment to the Company.
12
Papyrus Australia Ltd
ABN 63 110 868 409
Directors' Report
30 June 2015
REMUNERATION REPORT - AUDITED
This report outlines the remuneration arrangements in place for key management personnel of Papyrus Australia
Ltd.
Remuneration philosophy
The Board is responsible for determining remuneration policies applicable to Directors and senior executives of
the entity. The broad policy is to ensure that remuneration properly reflects the individuals' duties and
responsibilities and that remuneration is competitive in attracting, retaining and motivating people with appropriate
skills and experience. At the time of determining remuneration, consideration is given by the Board to the Group's
financial performance.
Employment contracts
The employment conditions of the Managing Director, Mr Ramy Azer, are formalised in a services contract
between his related entity Talisker (SA) Pty Ltd and Papyrus Australia Ltd and his fee is $300,000 per annum
(exclusive of GST). The Company may terminate the services contract without cause by providing one (1)
month’s written notice or making payment in lieu of notice, based on the annual fee. Termination payments are
generally not payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct
the Company can terminate employment at any time. It is however noted that during the 2015 financial year, Mr
Azer has agreed to forgo any remuneration due to the available working capital of the Company.
The employment conditions of the Chief Executive Mr Geoff Whitbread, were formalised in a services contract
dated 5 July 2010. The contract provided for a daily fee rate of $900 (exclusive of GST). Mr Whitbread was
responsible for the non-engineering aspects of the Company’s operation and reports to Company’s Board of
Directors. The Company may terminate the services contract without cause by providing one (1) month’s written
notice or making payment in lieu of notice, being calculated as 20 days at the daily rate. Termination payments
are generally not payable on resignation or dismissal for serious misconduct. In the instance of serious
misconduct the Company could terminate employment at any time.
Mr Whitbread is currently on a leave of absence and is not fulfilling his role as the CEO of the Company. He will
remain on leave until such a time when the Company has sufficient funding to reinstate his employment.
Key management personnel remuneration and equity holdings
The Board currently determines the nature and amount of remuneration for key management personnel of the
Group. The policy is to align key management personnel objectives with shareholder and business objectives by
providing a fixed remuneration component and offering specific long-term incentives.
The non-executive directors and other executives receive a superannuation guarantee contribution required by
the government, which is currently 9.5%, and do not receive any other retirement benefits. Some individuals,
however, may choose to sacrifice part of their salary to increase payments towards superannuation. All
remuneration paid to key management personnel is expensed as incurred. Executives are also entitled to
participate in the Group share option scheme. Options are valued using the Black-Scholes methodology.
The Board policy is to remunerate non-executive Directors at market rates based on comparable companies for
time, commitment and responsibilities. The Board determines payments to non-executive directors and reviews
their remuneration annually, based on market practice, duties and accountability. Independent external advice is
sought when required.
Non-executive Directors’ fees are determined within an aggregate director’s fee pool limit, which is periodically
recommended for approval by shareholders. The pool does not include the remuneration payable to the Managing
Director Mr Ramy Azer. The maximum currently stands at $300,000 per annum and was approved by
shareholders prior to the Company listing in April 2005.
13
Papyrus Australia Ltd
ABN 63 110 868 409
Directors' Report
30 June 2015
REMUNERATION REPORT CONTINUED- AUDITED
USE OF REMUNERATION CONSULTANTS
During the financial year, there were no remuneration recommendations made in relation to key management
personnel for the Company by any remuneration consultants.
VOTING AND COMMENTS MADE AT THE COMPANY’S 2014 ANNUAL GENERAL MEETING
Papyrus Australia Ltd’s motion in relation to the approval of 2014 remuneration report passed with a vote total of
more than 95%. The Company did not receive any specific feedback at the AGM on its remuneration report.
Table 1: Director remuneration for the year ended 30 June 2015 and 30 June 2014
Primary
Benefits
Post
Employment
Share-based
Payments
Total
Salary & Fees
Superannuation
Options
Mr Edward Byrt
2015
2014
Mr Ramy Azer
2015
2014
Mr Vincent Rigano
2015
2014
Mr Donald Stephens*
2015
2014
Mr Andrew Ford
2015
2014
Mr Colin Dunsford**
Total
2015
2014
2015
2014
* Resigned 24 August 2015
** Resigned 27 November 2013
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
$
-
24,200
24,200
-
36,300
-
-
18,150
-
-
-
12,800
-
91,450
-
36,300
-
-
-
18,150
-
-
-
12,800
-
91,450
HLB Mann Judd (SA) Pty Ltd has received professional fees for accounting, taxation and secretarial services
provided during the year amounting to $32,720 (2014: $40,082). The amount owing to HLB Mann Judd (SA) Pty Ltd
as at 30 June 2015 was $12,165 (2014: $6,854). Mr Donald Stephens, Non-Executive Director and Company
Secretary, is a consultant to HLB Mann Judd (SA) Pty Ltd.
The Company has an unsecured loan representing a draw down facility provided by Talisker Pty Ltd, an entity
associated with the Company’s Managing Director, Mr Ramy Azer. The loan is unsecured and repayable from
future revenues or proceeds from future equity raisings, subject to not materially prejudicing the ability of the
Company to repay its creditors. The balance of the loan at 30 June 2015 is $300,157 (2014: $142,540). No interest
has been paid on the loan during the 2014 and 2015 years.
14
Papyrus Australia Ltd
ABN 63 110 868 409
Directors' Report
30 June 2015
REMUNERATION REPORT CONTINUED- AUDITED
Table 2: Remuneration of key management personnel for the year ended 30 June 2015 and 30 June 2014
Primary
Benefits
Post
Employment
Share-based
Payments
Total
Salary & Fees
Superannuation
Options
$
Mr Geoff Whitbread
Total
2015
2014
2015
2014
$
52,650
78,028
52,650
78,028
$
-
-
-
-
$
-
18,150
-
18,150
52,650
96,178
52,650
96,178
Options issued as part of remuneration during the year ended 30 June 2015
No options were issued as part of remuneration during the year ended 30 June 2015.
Options holdings of Key Management Personnel
R Azer
E Byrt
D Stephens
V Rigano
A Ford
G Whitbread
Balance at 1 July
2014
3,000,000
2,000,000
1,500,000
-
-
2,250,000
8,750,000
Total
Granted as
remuneration
Exercisable at 30
June 2015
Balance at 30
June 2015
- 3,000,000 3,000,000
2,000,000 2,000,000
1,500,000 1,500,000
- -
- -
2,250,000 2,250,000
8,750,000
8,750,000
-
-
-
-
-
-
15
Papyrus Australia Ltd
ABN 63 110 868 409
Directors' Report
30 June 2015
REMUNERATION REPORT CONTINUED- AUDITED
Key Management Personnel Shareholdings
R Azer*
E Byrt*
D Stephens
V Rigano*
A Ford*
Balance at 1 July
2014
34,203,853
14,796,597
975,630
2,490,045
46,090
52,512,215
Net Change
Balance at 30
June 2015
(5,000,000) 29,203,853
2,000,000 16,796,597
- 975,630
2,000,000 4,490,045
1,000,000 1,046,090
52,512,215
-
Total
* During the year Mr Azer transferred 5,000,000 to Messer’s Byrt, Rigano and Ford via an off market transfer for
$50,000.
END OF AUDITED REMUNERATION REPORT
DIRECTORS’ MEETINGS
The number of meetings of directors (including meetings of committees of directors) held during the year and the
number of meetings attended by each director were as follows:
Number of meetings held
16
2
Directors' Meetings
Audit Committee
Number of meetings
attended:
Number eligible to
attend
Number attended
Number eligible to
attend
Number
attended
Mr Edward Byrt
Mr Ramy Azer
Mr Donald Stephens
Mr Vincent Rigano
Mr Andrew Ford
16
16
16
16
16
16
15
3
15
14
2
2
-
2
2
2
2
-
2
1
Members acting on the audit committee of the Board are:
Vincent Rigano
Andrew Ford
Edward Byrt
Ramy Azer
Non-executive director
Non-executive director
Non-executive director
Managing director
16
Papyrus Australia Ltd
ABN 63 110 868 409
Directors' Report
30 June 2015
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for
all or any part of those proceedings.
The Group was not a party to any such proceedings during the year.
NON AUDIT SERVICES
Grant Thornton Audit Pty Ltd, in its capacity as auditor for Papyrus Australia Ltd, has not provided any non-audit
services throughout the reporting period.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2015 as required under section 307C of the
Corporations Act 2001 has been received and can be found on page 18.
Signed in accordance with a resolution of the directors.
Mr Ramy Azer
Director
30 September 2015
17
Level 1,
67 Greenhill Rd
Wayville SA 5034
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T 61 8 8372 6666
F 61 8 8372 6677
E info.sa@au.gt.com
W www.grantthornton.com.au
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF PAPYRUS AUSTRALIA LIMITED
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
auditor for the audit of Papyrus Australia Limited for the year ended 30 June 2015, I declare
that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the
audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
S K Edwards
Partner – Audit & Assurance
Adelaide, 30 September 2015
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
Papyrus Australia Ltd
ABN 63 110 868 409
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
For the Year Ended 30 June 2015
3 (a)
3 (b)
3 (c)
3 (d)
3 (e)
Revenue from operating activities
Other income/(expenses)
Depreciation expense
Employee benefits expenses
Other expenses
Impairment expense
Loss before income tax benefit
Income tax benefit
Loss for the year
Loss attributable to members of the parent
entity
Other comprehensive income
Total comprehensive income for the year
Total comprehensive income attributable to
members of the parent entity
Consolidated Group
30 June
2015
$
30 June
2014
$
-
174,026
(88,326)
(143,191)
(204,301)
-
158
1,390,258
(201,322)
(293,381)
(419,601)
(1,168,262)
(261,792)
(692,150)
-
-
(261,792)
(692,150)
(261,792)
(692,150)
-
(261,792)
-
(692,150)
(261,792)
(692,150)
Earnings per share:
Basic earnings per share
Diluted earnings per share
5
5
Cents
(0.14)
(0.14)
Cents
(0.44)
(0.44)
The accompanying notes form part of these financial statements.
19
Papyrus Australia Ltd
ABN 63 110 868 409
Consolidated Statement of Financial Position
As At 30 June 2015
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Other current liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Other non-current liabilities
Consolidated Group
30 June
2015
$
30 June
2014
$
Note
6
7
8
9
10
11
3,589
7,451
16,360
2,020
11,040
18,380
542,091
542,091
630,417
630,417
553,131
648,797
96,098
300,157
150,000
77,534
149,269
150,000
546,255
376,803
11
521,416
609,742
TOTAL NON-CURRENT LIABILITIES
521,416
609,742
TOTAL LIABILITIES
NET LIABILITIES
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
1,067,671
986,545
(514,540)
(337,748)
12
13
14
20,069,691
907,666
(21,491,897)
19,984,691
907,666
(21,230,105)
(514,540)
(337,748)
The accompanying notes form part of these financial statements.
20
Papyrus Australia Ltd
ABN 63 110 868 409
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2015
Issued
Capital
$
Note
Consolidated Group
Share
Option
Reserve
$
(Accumulated
losses)
$
Total
$
19,459,231 (20,537,955)
-
-
-
(692,150)
-
(692,150)
Balance at 1 July 2013
Comprehensive income
Loss for the year
Other comprehensive income/(expense)
Total comprehensive income for the period
Transactions with owners, in their capacity as owners, and other transfers
Shares issued via private placement on 4 October
2013
Fair value of shares issued, in lieu of cash for
services rendered
Shares issued pursuant to resolutions passed at
the Company's AGM 2013
Shares issued to satisfy a loan in accordance with
a resolution passed at the Company's 2013 AGM
Fair value of share-based payments - options
Shares issued to sophisicated investors on 6 May
2014
Total transactions with owners and other
transfers
12
13
12
12
12
12
170,000
48,000
200,000
57,460
50,000
525,460
Balance at 1 July 2014
Comprehensive income
Loss for the year
Other comprehensive income/(expense)
Total comprehensive income for the period
Transactions with owners, in their capacity as owners, and other transfers
Shares issued via private placement on 9 October
2014
12
30,000
19,984,691 (21,230,105)
-
-
-
(261,792)
-
(261,792)
Shares issued via private placement on 17
November 2014
Shares issued via private placement on 24 March
2015
Total transactions with owners and other
transfers
Balance at 30 June 2015
12
12
30,000
25,000
795,646
(283,078)
-
-
-
-
-
-
112,020
(692,150)
-
(692,150)
170,000
48,000
200,000
57,460
112,020
-
50,000
112,020
637,480
907,666
(337,748)
-
-
-
-
-
-
(261,792)
-
(261,792)
30,000
30,000
25,000
-
-
-
-
-
-
-
-
-
-
85,000
-
20,069,691 (21,491,897)
-
907,666
85,000
(514,540)
Balance at 30 June 2014
19,984,691 (21,230,105)
907,666
(337,748)
The accompanying notes form part of these financial statements.
21
Papyrus Australia Ltd
ABN 63 110 868 409
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Consolidated Group
30 June
2015
$
30 June
2014
$
(333,471)
-
(541,196)
158
NET CASH USED IN OPERATING ACTIVITIES
6 (a)
(333,471)
(541,038)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and
equipment
85,700
NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES
85,700
-
-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
85,000
157,618
(7,618)
420,000
-
(13,713)
NET CASH PROVIDED BY FINANCING ACTIVITIES
235,000
406,287
Net (decrease)/increase in cash and cash
equivalents
Cash at the beginning of the financial year
(12,771)
16,360
(134,751)
151,111
CASH AT THE END OF THE FINANCIAL YEAR
6
3,589
16,360
The accompanying notes form part of these financial statements.
22
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
This financial report covers the consolidated financial statements and notes of Papyrus Australia Ltd ('the Company') as an
individual entity and the consolidated Group comprising Papyrus Australia Ltd and it’s Controlled Entities ('the Group').
Papyrus Australia Ltd is a for-profit Group limited by shares, incorporated and domiciled in Australia, whose shares are
publicly traded on the Australian Securities Exchange. The financial statements were authorised for issue by the Board of
Directors on 30 September 2015.
Each of the entities within the Group prepare their financial statements based on the currency of the primary economic
environment in which the entity operates (functional currency). The consolidated financial statements are presented in
Australian dollars which is the parent entity’s functional and presentation currency.
The separate financial statements and notes of the parent entity, Papyrus Australia Ltd, have not been presented within this
financial report as permitted by amendments made to the Corporations Act 2001. Parent entity summary is included in note
24.
1
Summary of Significant Accounting Policies
(a)
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of
the Australian Accounting Standards Board and the Corporations Act 2001. The Group is a for-profit entity for
financial reporting purposes under Australian Accounting Standards.
These financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The significant accounting policies used in the preparation and presentation of these financial statements are
provided below and are consistent with prior reporting periods unless otherwise stated.
Except for the cash flow information, the financial statements are prepared on an accruals basis and are based
on historical costs, except for the measurement at fair value of selected non-current assets, financial assets and
financial liabilities.
(b)
Principles of Consolidation
The consolidated financial statements include the financial position and performance of controlled entities from
the date on which control is obtained until the date that control is lost.
Intragroup assets, liabilities, equity, income, expenses and cashflows relating to transactions between entities in
the consolidated entity have been eliminated in full for the purpose of these financial statements.
Appropriate adjustments have been made to a controlled entity’s financial position, performance and cash flows
where the accounting policies used by that entity were different from those adopted by the consolidated entity.
All controlled entities have a June financial year end.
A list of controlled entities is contained in Note 19 to the financial statements.
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the parent has control. Control is
established when the parent is exposed to, or has rights to variable returns from its involvement with the entity
and has the ability to affect those returns through its power to direct the relevant activities of the entity.
23
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
1
Summary of Significant Accounting Policies (continued)
(c)
Business combinations
Business combinations are accounted for by applying the acquisition method which requires an acquiring entity
to be identified in all cases. The acquisition date under this method is the date that the acquiring entity obtains
control over the acquired entity.
The fair value of identifiable assets and liabilities acquired are recognised in the consolidated financial
statements at the acquisition date.
Goodwill or a gain on bargain purchase may arise on the acquisition date, this is calculated by comparing the
consideration transferred and the amount of non-controlling interest in the acquiree with the fair value of the net
identifiable assets acquired. Where consideration is greater than the assets, the excess is recorded as
goodwill. Where the net assets acquired are greater than the consideration, the measurement basis of the net
assets are reassessed and then a gain from bargain purchase recognised in profit or loss.
All acquisition-related costs are recognised as expenses in the periods in which the costs are incurred except for
costs to issue debt or equity securities.
Any contingent consideration which forms part of the combination is recognised at fair value at the acquisition
date. If the contingent consideration is classified as equity then it is not remeasured and the settlement is
accounted for within equity. Otherwise subsequent changes in the value of the contingent consideration liability
are measured through profit or loss.
(d)
Revenue and other income
Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that economic
benefits associated with the transaction will flow to the entity and specific criteria relating to the type of revenue
as noted below, has been satisfied.
Revenue is measured at the fair value of the consideration received or receivable and is presented net of
returns, discounts and rebates.
All revenue is stated net of the amount of goods and services tax (GST).
Sale of goods
Revenue is recognised on transfer of goods to the customer as this is deemed to be the point in time when risks
and rewards are transferred and there is no longer any ownership or effective control over the goods.
Interest revenue
Interest is recognised using the effective interest method.
Grant revenue
Government grants are recognised at fair value where there is reasonable assurance that the grant will be
received and all grant conditions will be met. Grants relating to expense items are recognised as income over
the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are
credited to deferred income at fair value and are credited to income over the expected useful life of the asset on
a straight-line basis.
24
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
1
Summary of Significant Accounting Policies (continued)
(e)
Finance costs
Finance costs directly attributable to the acquisition, construction or production of assets that necessarily take a
substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until
such time as the assets are substantially ready for their intended use or sale.
All other finance costs are recognised in income in the period in which they are incurred.
(f)
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but
not the legal ownership that are transferred to entities in the Group, are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair
value of the leased property or the present value of the minimum lease payments, including any guaranteed
residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest
expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the
lease term.
Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are
charged as expenses on a straight-line basis over the life of the lease term.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over
the life of the lease term.
(g)
Cash and cash equivalents
Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are
readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
Bank overdrafts also form part of cash equivalents for the purpose of the consolidated statement of cash flows
and are presented within current liabilities on the consolidated statement of financial position.
(h)
Trade and other receivables
All receivables are recognised at cost less provision for doubtful debts, which in practice will equal the amounts
receivable upon settlement. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are
known to be uncollectible are written off. A provision for doubtful receivables is established when there is
objective evidence that the Group will not be able to collect on all amounts due according to the original terms of
receivables. The amount of the provision is recognised in the consolidated statement of profit or loss and other
comprehensive income.
(i)
Income Tax
The tax expense recognised in the consolidated statement of profit or loss and other comprehensive income
relates to current income tax expense plus deferred tax expense (being the movement in deferred tax assets
and liabilities and unused tax losses during the year).
Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for the
25
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
1
Summary of Significant Accounting Policies (continued)
(i)
Income Tax (continued)
year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the
tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is provided on temporary differences which are determined by comparing the carrying amounts of
tax bases of assets and liabilities to the carrying amounts in the financial statements.
Deferred tax is not provided for the following:
•
•
•
The initial recognition of an asset or liability in a transaction that is not a business combination and at the
time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
Taxable temporary differences arising on the initial recognition of goodwill.
Temporary differences related to investment in subsidiaries, associates and jointly controlled entities to
the extent that the Company is able to control the timing of the reversal of the temporary differences and
it is probable that they will not reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax consequences relating to a non-monetary asset carried at fair value are determined using the
assumption that the carrying amount of the asset will be recovered through sale.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent
that it is probable that taxable profit will be available against which the deductible temporary differences and
losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utlised.
Unrecognised deferred income tax assets are reassessed a each reporting date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Current tax assets and liabilities are offset where there is a legally enforceable right to set off the recognised
amounts and there is an intention either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
Deferred tax assets and liabilities are offset where there is a legal right to set off current tax assets against
current tax liabilities and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by
the same taxation authority on either the same taxable entity or different taxable entities which intend either to
settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities
simultaneously in each future period in which significant amounts of deferred tax liabilities or assets are
expected to be settled or recovered.
Current and deferred tax is recognised as income or an expense and included in profit or loss for the period
except where the tax arises from a transaction which is recognised in other comprehensive income or equity, in
which case the tax is recognised in other comprehensive income or equity respectively.
26
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
1
Summary of Significant Accounting Policies (continued)
(j)
Goods and Services Tax (GST)
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except
where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payable are stated inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables
in the consolidated statement of financial position.
Cash flows in the consolidated statement of cash flows are included on a gross basis and the GST component of
cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation
authority is classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(k)
Plant and Equipment
Each class of plant and equipment are measured using the cost model as specified below.
Where the cost model is used, the asset is carried at its cost less any accumulated depreciation and any
impairment losses. Costs include purchase price, other directly attributable costs and the initial estimate of the
costs of dismantling and restoring the asset, where applicable.
27
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
1
Summary of Significant Accounting Policies (continued)
(k)
Plant and Equipment (continued)
Depreciation
The depreciable amount of all plant and equipment is depreciated on a straight-line and diminishing value basis
from the date that management determine that the asset is available for use.
Assets held under a finance lease and leasehold improvements are depreciated over the shorter of the term of
the lease and the assets useful life.
The estimated useful lives used for each class of depreciable asset are shown below:
Fixed asset class
Useful life
Plant and Equipment
2.5 - 10 years
At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset
is reviewed. Any revisions are accounted for prospectively as a change in estimate.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in the statement of profit or loss and other comprehensive income.
(l)
Intangible Assets
Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an
intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial
recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated
impairment losses. Internally generated intangible assets, excluding capitalised development costs, are
expensed against profits in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite
lives are amortised over the useful life and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset
with a finite useful life is reviewed at least at each financial year-end. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits embodied in the asset are accounted for by
changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The
amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category
consistent with the function of the intangible asset.
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the
cash-generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an
indefinite life is reviewed each reporting period to determine whether indefinite life assessment continues to be
supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for as a change
in an accounting estimate and is thus accounted for on a prospective basis.
(m)
Financial instruments
Initial recognition and measurement
Financial instruments are recognised initially using trade date accounting, i.e. on the date that Group becomes
party to the contractual provisions of the instrument.
On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for
instruments measured at fair value through profit or loss where transaction costs are expensed as incurred).
28
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
1
Summary of Significant Accounting Policies (continued)
(m)
Financial instruments (continued)
Classification and subsequent measurement
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are stated at amortised cost using the effective interest rate method.
Loans and receivables are included in current assets, except those which are not expected to mature within 12
months after the end of the reporting period (All other loans and receivables are classified as non-current
assets).
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal
payments and amortisation.
Impairment of financial assets
At the end of the reporting period the Group assesses whether there is any objective evidence that a financial
asset or group of financial assets is impaired.
Financial assets at amortised cost
If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been
incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the
present value of the estimated future cash flows discounted at the financial assets original effective interest rate.
Impairment on loans and receivables is reduced through the use of an allowance accounts, all other impairment
losses on financial assets at amortised cost are taken directly to the asset.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised, the previously recognised impairment
loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the
impairment is reversed does not exceed what the amortised cost would have been had the impairment not been
recognised.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the risks
and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are
either discharged, cancelled or expire. The difference between the carrying value of the financial liability,
extinguished or transferred to another party and the fair value of consideration paid, including the transfer of
non-cash assets or liabilities assumed is recognised in profit or loss.
29
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
1
Summary of Significant Accounting Policies (continued)
(n)
Impairment of non-financial assets
At the end of each reporting period, the Group determines whether there is an evidence of an impairment
indicator for non-financial assets.
Where this indicator exists and regardless for goodwill, indefinite life intangible assets and intangible assets not
yet available for use, the recoverable amount of the assets is estimated.
Where assets do not operate independently of other assets, the recoverable amount of the relevant
cash-generating unit (CGU) is estimated.
The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in
use. Value in use is the present value of the future cash flows expected to be derived from an asset or
cash-generating unit.
Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or
loss.
Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss,
except for goodwill.
(o)
Trade and other payables
Trade and other payables are carried at amortised costs and represent liabilities for goods and services provided
to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to
make future payments in respect of the purchase of these goods and services.
(p)
Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly
attributable transaction costs.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost.
(q)
Employee benefits
Provision is made for the Group's liability for employee benefits arising from services rendered by employees to
the end of the reporting period. Employee benefits that are expected to be settled within one year have been
measured at the amounts expected to be paid when the liability is settled, plus related on-costs.
Employee benefits expected to be settled more than twelve months after the end of the reporting period have
been measured at the present value of the estimated future cash outflows to be made for those benefits. In
determining the liability, consideration is given to employee wage increases and the probability that the
employee may satisfy vesting requirements. Cashflows are discounted using market yields on national
government bonds with terms to maturity that match the expected timing of cashflows. Changes in the
measurement of the liability are recognised in profit or loss.
Employee benefits are presented as current liabilities in the consolidated statement of financial position if the
Group does not have an unconditional right to defer settlement of the liability for at least 12 months after the
reporting date regardless of the classification of the liability for measurement purposes under AASB 119.
30
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
1
Summary of Significant Accounting Policies (continued)
(r)
Equity-settled compensation
The Group provides benefits to employees of the Group in the form of share-based payments, whereby
employees receive options incentives (equity-settled transactions).
There is currently one plan in place to provide these benefits, the Employee Share Option Plan (ESOP) which
provides benefits to employees.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the
date at which they were granted. The fair value is determined using the Black-Scholes option pricing model.
The cost of equity-settled transactions is recognised as an expense in the consolidated statement of profit or
loss and other comprehensive income, together with a corresponding increase in the share option reserve, when
the options are issued. However, where options have vesting terms attached, the cost of the transaction is
amortised over the vesting period.
Upon the exercise of options, the balance of share based payments reserve relating to those options is
transferred to issued capital.
(s)
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares
and share options which vest immediately are recognised as a deduction from equity, net of any tax effects.
(t)
Earnings per share
The Group presents basic and diluted earnings per share information for its ordinary shares.
Basic earnings per share is calculated by dividing the profit attributable to members of the Group by the
weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share adjusts the basic earnings per share to take into account the after income tax effect
of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive
potential ordinary shares.
In accordance with AASB 133 ‘Earnings per Share’, as potential ordinary shares may only result in a situation
where their conversion results in an increase in loss per share or decrease in profit per share from continuing
operations, no dilutive effect has been taken into account in 2015 and 2014.
(u)
Comparative Amounts
Comparatives are consistent with prior years, unless otherwise stated.
Where a change in comparatives has also affected the opening retained earnings previously presented in a
comparative period, an opening consolidated statement of financial position at the earliest date of the
comparative period has been presented.
31
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2015
1
Summary of Significant Accounting Policies (continued)
(v)
Going concern
The financial report has been prepared on the basis of a going concern. The financial report shows the Group
incurred a net loss of $261,792 (2014: $692,150) and a net cash outflow from operating and investing activities
of $247,771 (2014: $541,038) during the year ended 30 June 2015. The Group continues to be economically
dependent on the unsecured loan facility provided by an entity associated with the Managing Director,
generation of cashflow from the business and/ or raising additional capital for the continued development of its
Banana Ply Project and working capital. The Group continues to be in consultation with its advisers and
potential partners to evaluate alternative means of raising additional capital.
The Group’s ability to continue as a going concern is contingent upon the above matters. If sufficient funds are
not available under the loan facility, cash flow is not generated and/or additional funds are not raised, the going
concern basis may not be appropriate, with the result that the Group may have to realise its assets and
extinguish its liabilities, other than in the ordinary course of business and at amounts different from those stated
in the financial report. No allowance for such circumstances has been made in the financial report.
(w) Critical accounting estimates and judgments
The directors evaluate estimates and judgments incorporated into the financial statements based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
and are based on current trends and economic data, obtained both externally and within the Group.
These estimates and judgements are based on the best information available at the time of preparing the
financial statements, however as additional information is known then the actual results may differ from the
estimates.
Key estimates - impairment
The Group assesses impairment at the end of each reporting year by evaluating conditions specific to the Group
that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using
value-in-use calculations which incorporate various key assumptions.
Key estimates - development cost
The Group has capitalised the development costs in relation to the development of the Banana Ply Technology.
The recoverability of the asset is dependent on the successful commercialisation of the technology. As 30 June
2015, the commercialisation was not complete.
(x)
Adoption of new and revised accounting standards
The Group has adopted the following revisions and amendments to AASB’s issued by the Australian Accounting
Standards Board and IFRS issued by the International Accounting Standards Board, which are relevant to and
effective for the Group's financial statements for the annual period beginning 1 July 2014:
• AASB 2012-3: Amendments to Australian Accounting Standards – Offsetting Financial Assets and
Financial Liabilities
• AASB 2012-3: AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets; and
• AASB 2014-1: Amendments to Australian Accounting Standards (Part A: Annual Improvements
2010-2012 and 2011-2013 Cycles).
32
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2015
1
Summary of Significant Accounting Policies (continued)
Management has reviewed the requirements of the above standards and has concluded that there was no effect
on the classification or presentation of balances.
(y)
New Accounting Standards and Interpretations
The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory
application dates for future reporting periods. The Group has decided not to early adopt these Standards. The
following table summarises those future requirements and their impact on the Group where the standard is
relevant:
Standard Name
Effective
date for
Group
Requirements
Impact
AASB 9 Financial Instruments
AASB 2010-7 Amendments to Australian
Accounting Standards arising from AASB 9
(December 2009)
AASB 2012-6 Amendments to Australian
Accounting Standards – Mandatory Effective Date
of AASB 9 and Transitional Disclosures
AASB 2013-9 Amendments to Australian
Accounting Standards – Conceptual Framework,
Materiality and Financial Instruments
AASB 2014-1 Amendments to Australian
Accounting Standards
AASB 2014–7 Amendments to Australian
Accounting Standards arising from AASB 9
AASB 2014-8 Amendments to Australian
Accounting Standards arising from AASB 9
30 June
2019
AASB 2014-4 Amendments to Australian
Accounting Standards – Clarification of
Acceptable Methods of Depreciation and
Amortisation
30 June
2017
Significant revisions to the classification and
measurement of financial assets, reducing the
number of categories and simplifying the
measurement choices, including the removal of
impairment testing of assets measured at fair value.
The amortised cost model is available for debt
assets meeting both business model and cash flow
characteristics tests. All investments in equity
instruments using IFRS 9 are to be measured at fair
value.
Amends measurement rules for financial liabilities
that the entity elects to measure at fair value through
profit and loss. Changes in fair value attributable to
changes in the entity’s own credit risk are presented
in other comprehensive income.
Impairment of assets is now based on expected
losses in IFRS 9 which requires entities to measure:
- the 12-month expected credit losses (expected
credit losses that result from those default events on
the financial instrument that are possible within 12
months after the reporting date); or
- full lifetime expected credit losses (expected credit
losses that result from all possible default events
over the life of the financial instrument.
This standard amends AASB 116 Property, Plant
and Equipment and AASB 138 Intangible Assets to:
a. establish the principle for the basis of depreciation
and amortisation as being the expected pattern of
consumption of the future economic benefits of an
asset;
b. clarify that the use of revenue-based methods to
calculate the depreciation of an asset is not
appropriate because revenue generated by an
activity that includes the use of an asset generally
reflects factors other than the consumption of the
economic benefits embodied in the asset; and
c. clarify that revenue is generally presumed to be
an inappropriate basis for measuring the
consumption of the economic benefits embodied in
an intangible asset. This presumption, however, can
be rebutted in certain limited circumstances.
The impact of AASB 9
has not yet been
determined.
As the Group does not
currently use revenue
based methods of
depreciation or
amortisation, there is no
impact from this
standard.
33
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
1
Summary of Significant Accounting Policies (continued)
(y)
New Accounting Standards and Interpretations (continued)
AASB 2014 – 10 Sale or contribution of Assets
between an Investor and its Associate or Joint
Venture
30 June
2017
AASB 2015-3 Amendments to Australian
Accounting Standards arising from the
Withdrawal of AASB 1031 Materiality
30 June
2016
AASB 2015 – 1 Annual improvements (2012 –
2014 cycle)
30 June
2017
AASB 2014-9 Equity method in separate financial
statements (Amendments to AASB 127)
30 June
2017
AASB 2015-2 Disclosure Initiative – Amendment
to AASB 101
30 June
2017
As there has not been a
sale or contribution of
assets between the
parent entity and its
associates or joint
ventures, it is not
expected that these
changes will have any
impact on the Group.
There is not expected to
be any changes to the
reported financial
position, performance or
cash flows of the Group.
It is not expected that
these changes will have
material impact on the
Group.
As the Group has not
chosen to measure its
interests in subsidiaries,
joint ventures or
associates using the
equity method, there is
no change to the
reporting of subsidiaries,
joint ventures or
associates in the
separate financial
statements.
No impact on reported
financial position or
performance is expected,
however the Group may
use this clarification to
streamline or simplify
some of the notes in the
financial statements.
The amendments address an acknowledged
inconsistency between the requirements in AASB 10
and those in AASB 128 (2011), in dealing with the
sale or contribution of assets between an investor
and its associate or joint venture.
The main consequence of the amendments is that a
full gain or loss is recognised when a transaction
involves a business (whether it is housed in a
subsidiary or not). A partial gain or loss is
recognised when a transaction involves assets that
do not constitute a business, even if these assets
are housed in a subsidiary.
AASB 2015-3 makes amendments to particular
Australian Accounting Standards to delete their
references to AASB 1031 Materiality as each
standard is amended for another purpose.
The following amendments / clarifications are made:
- AASB 5 – reclassification from held for sale to held
for distribution to owners or from held for distribution
to owners to held for sale is considered to the
continuation of the original plan of disposal;
- AASB 7 – adds basis of conclusion to clarify
disclosure requirements for transferred financial
assets and offsetting arrangements;
- AASB 119 – confirms that high quality corporate
bonds or national government bonds used to
determine discount rates must be in the same
currency as the benefits paid to the employee;
- AASB 134 – clarifies information about cross
references in the interim financial report.
This standard will allow entities to use the equity
method to account for its interest in subsidiaries,
joint venture and associates in separate financial
statements.
There are no changes to accounting policies
covered by this standard, however this amendment
provide clarification regarding the disclosure
requirements in AASB 101.
Specifically, the Standard proposes narrow-focus
amendments to address some of the concerns
expressed about existing presentation and
disclosure requirements and to ensure entities are
able to use judgement when applying a Standard in
determining what information to disclose in their
financial statements.
This Standard also makes an editorial correction to
AASB 101. In addition, as a result of the
amendments to AASB 101, this Standard makes
consequential amendments to AASB 7, AASB 134
and AASB 1049.
34
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
2 Operating Segments
Segment information
The directors have considered the requirements of AASB 8 Operating Segments and the internal reports that are
reviewed by the chief operating decision maker (the Board) in allocating resources and have concluded at this time that
there are no separately identifiable segments.
The Group’s commercialisation strategy remains focused on being a technology licensing Group assisting suitable
entities to establish banana veneering and panel production factories in locations worldwide where bananas are grown.
3 Revenue and expenses
REVENUE
(a) Revenue from operating activities
Interest received from other parties
(b ) Other income
Net profit on disposal of property, plant and equipment
Grant revenue
Consolidated Group
30 June
2015
$
30 June
2014
$
-
-
158
158
85,700
88,326
174,026
-
1,390,258
1,390,258
35
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
3 Revenue and expenses - continued
EXPENSES
(c) Depreciation of non-current assets
Plant and equipment
Total depreciation
(d) Employee b enefits expense
Wages, salaries and other remuneration expenses
Superannuation expense
Share based payments expense
Total employee benefits expense
(e) Other expenses
Audit fees
Legal fees
Professional services
Travel and accomodation
Company secretarial
Rent
Communications expense
Share registry and ASX expenses
Motor vehicle costs
Factory operating costs
Net loss on disposal of plant and equipment
Other expenses
Consolidated Group
30 June
2015
$
30 June
2014
$
88,326
88,326
100,636
100,636
136,560
6,631
-
143,191
25,143
1,636
20,533
11,457
22,832
1,555
6,556
60,981
11,344
-
-
42,264
204,301
174,987
6,374
112,020
293,381
24,250
6,930
70,991
57,779
9,930
10,037
11,530
53,932
17,772
22,127
(535)
134,858
419,601
36
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
4
Income Tax Expense
The major components of tax expense (income) comprise:
Consolidated Group
2015
2014
$
$
A reconciliation between tax expense and the
product of accounting loss before income tax
multiplied by the Group's applicable income tax rate
is as follows:
Loss before income tax
(261,792)
(692,150)
At the Group's statutory income tax rate of 30%
(2014: 30%)
Expenditure not allowable for income tax
purposes
Tax losses not recognised due to not meeting
recognition criteria
(78,538)
(207,645)
26,498
380,684
52,040
-
(173,039)
-
The Group has tax losses arising in Australia of $12,199,760 (2014: $11,937,968) that are available indefinitely for
offset against future taxable profits of the companies in which the losses arose.
No deferred tax asset has been recognised because it is not likely future assessable income is derived of a nature and
of an amount sufficient to enable the benefit to be realised.
5
Earnings per Share
Basic earnings per share amounts are calculated by dividing net loss for the year attributable to ordinary equity holders
of the Group by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net loss attributable to ordinary equity holders of the
Group by the weighted average number of ordinary shares outstanding during the year plus the weighted average
number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into
ordinary shares.
The following reflects the income and share data used in the basic and diluted earnings per share computations:
(a) Reconciliation of earnings to profit or loss from continuing operations
Net loss attributable to ordinary equity holders of the parent
(261,792)
(638,094)
Consolidated Group
2015
2014
$
$
37
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
5
Earnings per Share (continued)
(b) Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS
Weighted average number of ordinary shares for basic earnings per share
Effect of dilution
Share options
Weighted average number of ordinary shares adjusted for the
effect of dilution
2015
2014
182,426,842 158,435,358
-
-
182,426,842 158,435,358
In accordance with AASB 133 ‘Earnings per Share’, as potential ordinary shares may only result in a situation where
their conversion results in an increase in loss per share or decrease in profit per share from continuing operations, no
dilutive effect has been taken into account in 2015 or 2014. The number of options over ordinary shares at the balance
date was 9,950,000 (2014: 9,950,000).
On 24 August 2015, the Company announced that it had entered into agreements with new and certain existing
shareholders to raise $100,000 by way of a placement of 10,000,000 ordinary fully paid shares at a price of $0.01 per
new share. On the 11 September 2015, the Company announced the placement was completed.
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting
date and the date of completion of these financial statements.
6 Cash and cash equivalents
Cash at bank and in hand
Total cash and cash equivalents
6(a)
3,589
3,589
16,360
16,360
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and six months, depending on the immediate
cash requirements of the Group, and earn interest at the respective short-term deposit rates.
(a)
Reconciliation of cash
Cash and Cash equivalents reported in the consolidated statement of cash flows are reconciled to the equivalent
items in the consolidated statement of financial position as follows:
Cash and cash equivalents
16,360
3,589
6
Balance as per consolidated statement of cash flows
3,589
16,360
38
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
7
Trade and other receivables
CURRENT
Trade receivables
GST receivable
Total current trade and other receivables
(a)
Trade receivables
Note
7(a)
Consolidated
2015
$
2014
$
540
6,911
7,451
1,531
489
2,020
Information regarding the credit risk of current receivables is set out in Note 20.
8
Plant and equipment
PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation and impairment
Total plant and equipment
1,979,351
(1,437,260)
1,778,029
(1,147,612)
542,091
630,417
(a) Movements in carrying amounts of plant and equipment
Movement in the carrying amounts for each class of plant and equipment between the beginning and the end of
the current and previous financial years:
Consolidated
Year ended 30 June 2015
Balance at the beginning of year
Depreciation expense
Impairment of assets
Balance at the end of the year
Plant and
Equipment
$
630,417
(88,326)
-
542,091
39
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
8
Plant and equipment (continued)
(a)
Reconciliation Detailed Table (continued)
Consolidated
Year ended 30 June 2014
Balance at the beginning of year
Disposals - written down value
Depreciation expense
Balance at the end of the year
Plant and
Equipment
$
1,170,737
(201,321)
(338,999)
630,417
(b)
Impairment and depreciation of plant and equipment
No impairment loss was recognised for the year ended 30 June 2015 with respect to plant and equipment (2014:
$339,048).
9
Trade and other payables
CURRENT
Unsecured liabilities
Trade payables
Sundry payables and accrued expenses
Total current trade and other payables
(a)
Trade payables
Note
11(a)
Consolidated
2015
$
2014
$
57,670
38,428
48,832
33,702
96,098
77,534
Trade payables are non-interest bearing and normally settled on 60-day terms.
Information regarding the risks associated with current payables is set out in Note 20.
10 Borrowings
CURRENT
Unsecured liabilities:
Other loans
Total unsecured liabilities
Secured liabilities:
Finance lease
Total secured liabilities
Total current borrowings
10(a)
300,157
142,540
300,157
142,540
-
-
6,729
6,729
300,157
149,269
40
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
10 Borrowings (continued)
(a)
Unsecured loan
The unsecured loan during the year represents a draw down facility provided by Talisker Pty Ltd, an entity
associated with the Company’s Managing Director, Mr Ramy Azer. The loan is unsecured and repayable from
future revenues or proceeds from future equity raisings, subject to not materially prejudicing the ability of the
Company to repay its creditors.
11 Other liabilities
CURRENT
Deferred income
Total current other liabilities
NON-CURRENT
Government grants received in advance
Total non-current other liabilities
(a)
Deferred income
Consolidated
2015
$
2014
$
Note
13(a)
150,000
150,000
150,000
150,000
13(b)
521,416
609,742
521,416
609,742
Deferred income of $150,000 represents the initial non-refundable deposit from the Egyptian Fibre Company
("EBFC") for machinery to be built and delivered by the Company.
(b)
Government grants received in advance
The Company has been the recipient of two government grants that contained claw back provisions if certain
performance targets were not met by the Company. The Company has fulfilled its contractual obligations under
the respective Grant Deeds as at 30 June 2015. The Company has also filed all reports required of it pursuant to
the Grant Deeds. In accordance with AASB 120 ‘Accounting for Government Grants and Disclosure of
Government Assistance’, as the grants related to the Company’s plant and equipment and intangibles, they have
been deferred and have been systematically released to the consolidated statement of profit and loss and other
comprehensive income with the depreciation and impairment of the relevant assets. For the year ended 30 June
2015, $88,326 has been released (2014: $1,369,584).
12
Issued Capital
186,236,431 (2014: 177,736,431) fully paid ordinary shares
Total issued capital
20,069,691
19,984,691
20,069,691
19,984,691
41
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
12
Issued Capital (continued)
(a)
Ordinary shares
At the beginning of the reporting period
Shares issued during the year
- shares issued pursuant to private placement
- shares issued pursuant to resolutions passed at 2013
AGM
- shares issued to satisfy a loan in accordance with a
resolution passed at the Company's 2013 AGM
- shares issued in lieu of cash for services rendered
- shares issued to sophisticated investor
Consolidated
2015
No.
177,736,431
2015
$
2014
No.
2014
$
19,459,231 131,144,764 19,459,231
8,500,000
85,000
17,000,000
170,000
-
-
-
-
-
-
-
-
20,000,000
200,000
5,525,000
2,400,000
1,666,667
57,460
48,000
50,000
At the end of the reporting period
186,236,431
20,069,691 177,736,431 19,984,691
The holders of ordinary shares are entitled to participate in dividends (in the event when a dividend is declared)
and the proceeds on winding up of the Group. On a show of hands at meetings of the Group, each holder of
ordinary shares has one vote in person or by proxy, and upon a poll each share is entitled to one vote.
The Group does not have authorised capital or par value in respect of its shares.
In the event of winding up the Company, ordinary shareholders rank after all creditors and are fully entitled to
any net proceeds of liquidation.
(b)
Capital Management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern
while maximising the return to stakeholders.
The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders
of the parent, comprising issued capital, reserves and accumulated losses as disclosed in Notes 12, 13 and 14
respectively.
Proceeds from share issues are used to maintain and expand the Group’s research and development activities
and fund operating costs.
13 Reserves
Share option reserve
Balance at beginning of financial year
Share based payments
Balance at end of the year
Total reserves
Note
13(a)
Consolidated
2015
$
2014
$
907,666
-
795,646
112,020
907,666
907,666
907,666
907,666
42
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
13 Reserves (continued)
(a)
Share option reserve
This reserve is used to record the value of equity benefits provided to employees and directors as part of their
remuneration. Refer to Note 16 for further details of these plans.
14 Accumulated losses
Accumulated losses at the beginning of the financial year
Net loss attributable to members of the parent entity
Accumulated losses at end of the financial year
15 Cash Flow Information
(a)
Reconciliation of result for the year to cashflows from operating activities
Reconciliation of net income to net cash provided by operating activities:
Net loss
Non-cash flows in profit:
- depreciation
- impairment of non-current assets
- net profit from sale of plant and equipment
- share based payments
Changes in assets and liabilities:
- (increase)/decrease in trade and other receivables
- (increase)/decrease in other assets
- increase/(decrease) in income in advance
- increase/(decrease) in trade and other payables
Net cash (used in)/provided by operating activities
16 Share-based Payments
(i) Employee Share Option Plan
Consolidated
2015
$
2014
$
(21,230,105)
(261,792)
(20,537,955)
(692,150)
(21,491,897)
(21,230,105)
(261,792)
(692,150)
88,326
-
(85,700)
-
201,322
1,168,262
-
160,020
(5,430)
-
(88,326)
19,451
7,247
3,508
(1,369,584)
(19,663)
(333,471)
(465,953)
The Group established the Papyrus Australia Ltd Employee Share Option Plan and a summary of the Rules of the Plan
are set out below:
•
•
All employees (full and part time) will be eligible to participate in the Plan.
Options are granted under the Plan at the discretion of the Board and if permitted by the Board, may be issued
to an employee's nominee.
43
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
16 Share-based Payments (continued)
•
•
•
•
•
•
Each option is to subscribe for one fully paid ordinary share in the Company and will expire 5 years from its date
of issue. An option is exercisable at any time from its date of issue (provided all relevant vesting conditions, if
applicable, have been met). Options will be issued free. The exercise price of options will be determined by
the Board. The total number of shares, the subject of options issued under the Plan, when aggregated with
issues during the previous 5 years pursuant to the Plan and any other employee share plan, must not exceed
5% of the Company's issued share capital.
If, prior to the expiry date of options, a person ceases to be an employee of the Group for any reason other than
retirement at age 60 or more (or such earlier age as the Board permits), permanent disability, redundancy or
death, the options held by that person (or that person's nominee) automatically lapse on the first to occur of a)
the expiry of the period of 30 days from the date of such occurrence, and b) the expiry date. If a person dies, the
options held by that person will be exercisable by that person's legal personal representative.
Options can’t be transferred other than to the legal personal representative of a deceased option holder.
The Company will not apply for official quotation of any options issued under the plan.
Shares issued as a result of the exercise of options will rank equally with the Company's previously issued
shares.
Option holders may only participate in new issues of securities by first exercising their options.
The Board may amend the Plan Rules subject to the requirements of the Listing Rules. The expense recognised in the
Consolidated Statement of Profit or Loss and Other Comprehensive Income in relation to share-based payments is
disclosed in Note 3(d).
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) and movements in share
options issued during the year:
A summary of the Group options issued is as follows:
2015
Exercise
price
WAEP
0.50
0.04
2014
Exercise
Price
WAEP
0.50
0.04
Start of the year
No.
Granted
during the
year
No.
Exercised
during the
year
No.
Expired
during the
year
No.
Balance at the
end of the year
No.
Vested and
exercisable at the
end of the year
No.
750,000
9,200,000
9,950,000
-
-
-
-
-
-
-
-
-
750,000
9,200,000
750,000
9,200,000
9,950,000
9,950,000
Start of the year
Granted
during the
year
Exercised
during the
year
Expired
during the
year
Balance at the
end of the year
Vested and
exercisable at the
end of the year
No.
1,000,000
-
No.
-
9,200,000
1,000,000
9,200,000
No.
No.
No.
No.
-
-
-
(250,000)
-
750,000
9,200,000
750,000
9,200,000
(250,000)
9,950,000
9,950,000
44
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
The weighted average remaining contractual life of options outstanding at year end was 1.43 years (2014: 2.43 years).
The range of weighted average exercise prices for options outstanding at the end of the year was $0.04 - $0.50 (2014:
$0.04 - $0.50).
The weighted average fair value of employee options granted during the year was $Nil (2014: $112,020), as no
employee options were issued during 2015.
17 Contingencies
In the opinion of the Directors, the Group did not have any contingencies at 30 June 2015 (30 June 2014:None).
18 Remuneration of Auditors
Remuneration of the auditor of the Company,
Grant Thornton Audit Pty Ltd, for:
- auditing or reviewing the financial report
Total remuneration of auditors
No non-audit services have been provided.
19
Interests in Subsidiaries
25,000
24,250
25,000
24,250
Principal place of
business / Country of
Incorporation
Percentage
Owned (%)*
Percentage
Owned (%)*
2015
2014
Parent entity:
Papyrus Australia Ltd (a)
Subsidiaries:
PPY EU Pty Ltd (b)
Papyrus Technology Pty Ltd (b)
PPY Manufacturing Pty Ltd (b)
Australian Advanced Manufacturing Centre Pty Ltd (b)
Pulp Fiction Manufacturing Pty Ltd (b)
Papyrus Egypt (c)
Yellow Pallet B.V. (c)
Australia
Australia
Australia
Australia
Australia
Australia
Egypt
The Netherlands
100
100
100
100
100
50
50
100
100
100
100
100
50
50
*The percentage of ownership interest held is equivalent to the percentage voting rights for all subsidiaries.
(a)
Papyrus Australia Ltd is the head entity within the tax-consolidated group.
(b)
These companies are members of the tax-consolidated group.
(c)
These entities were non-operating shell companies at 30 June 2015.
45
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
20 Financial Risk Management
Categories of financial instruments
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the
accounting policies to these financial statements, are as follows:
Financial Assets
Cash and cash equivalents
Loans and receivables
Total financial assets
Financial Liabilities
Financial liabilities at amortised cost
- Trade and other payables
- Borrowings
Total financial liabilities
Credit risk
Consolidated
2015
$
2014
$
3,589
7,451
11,040
16,360
2,020
18,380
96,098
300,157
77,534
149,269
396,255
226,803
6
7
10
11
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to
the Group.
The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of
financial loss from activities.
The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties
having similar characteristics. The credit risk on liquid funds is limited because the counterparties are banks with high
credit-ratings assigned by international credit-rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses,
represents the Group’s maximum exposure to credit risk.
46
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
20 Financial Risk Management (continued)
Market risk
(i) Cash flow interest rate sensitivity
The Group is exposed to interest rate risk as it holds some bank deposits at floating rates.
The Group's policy is to minimise interest rate cash flow risk exposures on long-term financing. Longer-term deposits
are therefore usually at fixed rates. At the reporting date, the Group is exposed to changes in market interest rates
through its short term bank deposits, which are subject to variable interest rates.
The following table illustrates the sensitivity of the net result for the year and equity to a reasonably possible change in
interest rates of +0.50% and -0.50% (2014: +0.50%/-0.50%), with effect from the beginning of the year. These changes
are considered to be reasonably possible based on observation of current market conditions.
The calculations are based on the financial instruments held at each reporting date. All other variables are held
constant.
Cash and cash equivalents
Net results
Equity
2015
2014
+0.50%
$
179
179
-0.50%
$
(179)
(179)
+0.50%
$
1,042
1,042
-0.50%
$
(1,042)
(1,042)
47
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
20 Financial Risk Management (continued)
(ii) Financial instrument composition and maturity analysis
The Group's exposure to interest rate risk, which is the risk that a financial instruments value will fluctuate as a result of changes in market interest rates and the effective weighted
average interest rates on classes of financial assets and financial liabilities, is as follows:
Weighted Average
Effective Interest
Rate
Floating Interest Rate
Maturing within 1 Year
Non-interest Bearing
Total
Financial Assets:
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Financial Liabilities:
Trade and other payables
Borrowings
Hire purchase liabilities
Total Financial Liabilities
-
-
-
-
-
-
-
-
-
6.38
-
-
-
-
-
2015
2014
%
%
2015
$
2014
$
2015
2014
2015
2014
$
-
-
-
$
-
-
-
$
-
$
-
7,451
7,451
2,020
2,020
2015
$
2014
$
3,589
7,451
16,360
2,020
11,040
18,380
3,589
16,360
-
3,589
16,360
-
-
-
-
-
300,157
-
-
142,540
6,729
96,098
77,534
-
-
96,098
300,157
-
77,534
149,269
300,157
149,269
77,534
77,534
396,255
226,803
The Company is not materially exposed to any effects on changes in interest rates.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and principal repayments on its debt instruments. It is the risk that the Group will
encounter difficulty in meeting its financial obligations as they fall due.
Ultimate responsibility for liquidity risk management rests with the Board of Directors, whom have 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.
48
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
21 Related Parties
(a)
Transactions with related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
•
•
•
HLB Mann Judd (SA) Pty Ltd has received professional fees for accounting, taxation and secretarial
services provided during the year amounting to $32,720 (2014: $40,082). The amount owing to HLB
Mann Judd (SA) Pty Ltd as at 30 June 2015 was $12,165 (2014: $6,854). Mr Donald Stephens,
Non-Executive Director and Company Secretary, is a consultant to HLB Mann Judd (SA) Pty Ltd.
Einstein's Cafe has received payments in relation to meals and refreshments made available to the staff
of Papyrus. Mr Ramy Azer is a director of Einstein's Cafe. Papyrus has made no payments (2014: $78)
during the financial year. No amount was owed to the entity at 30 June 2015 (2014: $Nil).
The Company has an unsecured loan representing a draw down facility provided by Talisker Pty Ltd, an
entity associated with the Company’s Managing Director, Mr Ramy Azer. The loan is unsecured and
repayable from future revenues or proceeds from future equity raisings, subject to not materially
prejudicing the ability of the Company to repay its creditors. The loan is interest bearing at the rate of
interest payable by the National Australia Bank Limited on ‘Usaver savings accounts’ or, ’12 month term
deposits’ (whichever is greater) plus one percent (1%) and is considered payable at the time the loan is
repaid. The balance of the loan at 30 June 2015 is $300,157 (2014: $142,540). No interest has been
paid on the loan during the 2014 and 2015 years.
(b) Wholly owned group transactions
Loans
The wholly owned Group consists of those entities listed in Note 19. Transactions between Papyrus Australia Ltd
and other entities in the wholly owned Group during the year consisted of loans advanced by Papyrus Australia
Ltd to fund research and development activities.
(c)
Interests of Key Management Personnel (KMP)
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity,
directly or indirectly, including any director (whether executive or otherwise) of that entity are considered key
management personnel.
For details of Key Management Personnel’s interests in shares and options of the Company, refer to Key
Management Personnel disclosures in the Remuneration Report contained in the Directors' Report.
49
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
22 Key Management Personnel Disclosures
Key Management Personnel
The following individuals are classified as key management personnel in accordance with AASB 124 'Related Party
Disclosures'.
Mr Edward Byrt - Chairman
Mr Ramy Azer - Managing Director
Mr Donald Stephens - Non-Executive Director and Company Secretary (retired 24 August 2015)
Mr Vincent Rigano - Non-Executive Director and Company Secretary
Mr Andrew Ford - Non-Executive Director
Totals of remuneration paid
Key management personnel remuneration included within employee expenses for the year is shown below:
Short-term employee benefits
Post-employment benefits
Share based payments
2015
$
52,650
-
-
2014
$
78,028
-
109,600
Total remuneration paid to key management personnel
52,650
96,178
The audited remuneration report contained in the Directors' Report contains details of the remuneration paid or payable
to each member of the Group's key management personnel for the year ended 30 June 2015.
Other key management personnel transactions
For details of other transactions with key management personnel, refer to Note 21: Related Party Transactions.
50
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
24 Parent entity
The following information has been extracted from the books and records of the parent, Papyrus Australia Ltd and has
been prepared in accordance with Accounting Standards.
The financial information for the parent entity, Papyrus Australia Ltd has been prepared on the same basis as the
consolidated financial statements except as disclosed below.
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of
the parent entity. Dividends received from associates are recognised in the parent entity profit or loss, rather than being
deducted from the carrying amount of these investments.
Statement of Financial Position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Equity
Issued capital
Accumulated losses
Reserves
Total Equity
Statement of Profit or Loss and Other Comprehensive Income
Total loss for the year
Other comprehensive loss
Total comprehensive loss
2015
$
2014
$
6,976
595,201
8,670
640,127
602,177
648,797
595,301
521,416
376,803
609,742
1,116,717
986,545
20,069,691
19,984,691
(21,491,897) (21,230,105)
907,666
907,666
(514,540)
(337,748)
261,792
-
547,457
-
261,792
547,457
51
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2015
24 Parent entity (continued)
Contingent liabilities
Contingent liabilities of the parent entity have been incorporated into the Group information in Note 17. The contingent
liabilities of the parent are consistent with that of the Group.
Contractual commitments
Contractual commitments of the parent entity have been incorporated into the Group information in Note 17. The
contractual commitments of the parent are consistent with that of the Group.
25 Events Occurring After the Reporting Date
On the 11 September 2015, the Company issued 10,000,000 (ten million) Ordinary Fully Paid Shares at $0.01 per
share, raising $100,000. Funds raised will be used to fund working capital requirements.
Subsequent to the end of the financial year, the Director and Company Secretary, Donald Stephens, has resigned as
announced on 24 August 2015. Mr Vincent Rigano will fulfil the role as Company Secretary.
The Managing Director – Ramy Azer – has recently returned to Egypt to direct the commissioning of the banana
veneering and fibre production machinery at the factory in Sohag which to be operated in joint venture by EBFC and
the Company through Papyrus Egypt.
There have been no other significant matters subsequent to the end of the financial year.
52
Papyrus Australia Ltd
ABN 63 110 868 409
Directors' Declaration
The directors of the Group declare that:
1.
the financial statements and notes for the year ended 30 June 2015 are in accordance with the Corporations Act 2001
and:
a.
comply with Australian Accounting Standards, which, as stated in accounting policy note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards
(IFRS); and
b. give a true and fair view of the financial position and performance of the consolidated group;
2.
the Managing Director and Company Secretary have given the declarations required by Section 295A that:
a.
the financial records of the Group for the financial year have been properly maintained in accordance with section
286 of the Corporations Act 2001;
b.
the financial statements and notes for the financial year comply with the Accounting Standards; and
c.
the financial statements and notes for the financial year give a true and fair view.
3.
In the directors opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and
when they become due and payable with the continuing support of creditors.
This declaration is made in accordance with a resolution of the Board of Directors.
Director
Mr Ramy Azer
Managing Director
Dated this 30th day of September 2015
53
Level 1,
67 Greenhill Rd
Wayville SA 5034
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T 61 8 8372 6666
F 61 8 8372 6677
E info.sa@au.gt.com
W www.grantthornton.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF PAPYRUS AUSTRALIA LIMITED
Report on the financial report
We have audited the accompanying financial report of Papyrus Australia Limited (the
“Company”), which comprises the statement of financial position as at 30 June 2015, the
statement of profit or loss and other comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information and the directors’
declaration of the consolidated entity comprising the Company and the entities it controlled
at the year’s end or from time to time during the financial year.
Directors’ responsibility for the financial report
The Directors of the Company are responsible for the preparation of the financial report
that gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001. The Directors’ responsibility also includes such internal control as
the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error. The Directors also state, in the notes to the financial report, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
statements comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
require us to comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance whether the financial report is
free from material misstatement.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the
Company’s preparation of the financial report that gives a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the
overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
Auditor’s opinion
In our opinion:
a
b
the financial report of Papyrus Australia Limited is in accordance with the
Corporations Act 2001, including:
i
ii
giving a true and fair view of the consolidated entity’s financial position as at 30
June 2015 and of the performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001; and
the financial report also complies with International Financial Reporting Standards as
disclosed in the notes to the financial statements.
Material uncertainty regarding going concern
The consolidated entity incurred a net loss after tax of $261,792 during the year ended 30
June 2015, and had a net cash outflow of $247,771 from operating and investing activities.
The consolidated entity continues to be reliant upon completion of capital raising for
continued operations and the provision of working capital.
Without qualifying our audit opinion attention is drawn to Note 1(v) Going Concern in the
financial report. These conditions indicate the existence of a material uncertainty which may
cast significant doubt about the consolidated entity’s ability to continue as a going concern
and therefore the consolidated entity may be unable to realise its assets and discharge its
liabilities in the normal course of business and at amounts stated in the financial report.
Report on the remuneration report
We have audited the remuneration report included in the directors’ report for the year
ended 30 June 2015. The Directors of the Company are responsible for the preparation and
presentation of the remuneration report in accordance with section 300A of the
Corporations Act 2001. Our responsibility is to express an opinion on the remuneration
report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of Papyrus Australia Ltd for the year ended 30 June
2015, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
S K Edwards
Partner – Audit & Assurance
Adelaide, 30 September 2015
ASX Additional Information
Additional information required by the Australian Stock Exchange Limited and not shown elsewhere in this
report is as follows. The information is current as at 30 September 2015.
Distribution of equity securities
Ordinary share capital
•
196,236,431 fully paid ordinary shares are held by 1,464 individual shareholders.
All issued ordinary shares carry one vote per share.
Options
•
9,950,000 options are held by 7 individual option holders.
The number of shareholders, by size of holding, in each class are:
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Fully paid
85
299
224
675
181
1,464
Unquoted Options
0
0
0
0
7
7
Holding less than a marketable parcel
1180
0
Substantial shareholders
Ordinary shareholders
Fully paid
MR RAMY AZER
STROUD NOMINEES PTY LTD
BIJO (SA) PTY LTD
MR KARIM MOHAMED HAMDOUH ABBAS
MRS MARGARET FAY FULLER
Number
19,637,489
16,456,061
11,275,000
11,125,000
10,000,000
68,493,550
Percentage
10.01%
8.39%
5.75%
5.67%
5.10%
34.92%
57
ASX Additional Information
Twenty largest holders of quoted equity securities
MR RAMY AZER
STROUD NOMINEES PTY LTD
BIJO (SA) PTY LTD
MR KARIM MOHAMED HAMDOUH ABBAS
MRS MARGARET FAY FULLER
RONDELLE PTY LTD
MR STEVO HINIC
MRS MARCELLE FAWZY BOCTOR
MRS MARCELLE BOCTOR
MR BENJAMIN LUKE THOMAS MIELS
HAHA INVESTMENTS (SA) PTY LTD
MR PAUL LAPERE
MR LABIB OTHMAN + MRS LAYLA IBRAHIM
MR CON TSAKALIS
VIKEYE PTY LTD
PHILLIPS CONTRACT ENGINEERING SERVICE PTY LTD
HAHA INVESTMENTS (SA) PTY LTD
MR DAVID NEHME
MR COSSIMO RUSSO + MRS SUSAN RUSSO
MRS PAMELA PETRILLI
Fully Paid Ordinary Shares
Number
19,637,489
16,456,061
11,275,000
11,125,000
10,000,000
7,645,000
5,001,000
5,000,000
4,000,000
3,500,000
3,026,364
2,513,030
2,000,000
2,000,000
2,000,000
1,700,000
1,666,667
1,500,000
1,382,463
1,300,000
Percentage
10.01%
8.39%
5.75%
5.67%
5.10%
3.90%
2.55%
2.55%
2.04%
1.78%
1.54%
1.28%
1.02%
1.02%
1.02%
0.87%
0.85%
0.76%
0.70%
0.66%
112,728,074
57.46%
58