Papyrus Australia Ltd
ABN 63 110 868 409
Annual Financial Report
For the Year Ended 30 June 2020
Papyrus Australia Ltd
ABN 63 110 868 409
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
Page
1
2
8
17
18
19
20
21
22
46
47
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 8 to 16. The directors' report is not part of the financial report.
Directors
Mr Edward Byrt (Chairman)
Mr Ramy Azer (Managing Director)
Mr Steve Howe (Appointed 7th September 2020)
Mr Vincent Peter Rigano
Company Secretary
Mr Vincent Peter Rigano
Registered Office
C/‑V P Rigano & Co Pty Ltd
Level 2, 2 Peel Street
ADELAIDE SA 5000
Principal place of business
C/‑V P Rigano & Co Pty Ltd
Level 2, 2 Peel Street
ADELAIDE SA 5000
Share Registry
Computershare Investor Services Pty Ltd
Level 5, 115 Grenfell Street
ADELAIDE SA 5000
Auditors
Grant Thornton Audit Pty Ltd
Level 3
170 Frome Street
ADELAIDE SA 5000
1
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2020
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 February 2019, the ASX Corporate Governance Council released the 4th Edition of its Corporate Governance Principles
and Recommendations (4th 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 4th 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.
2
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2020
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 fulfill 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.
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
-
4
Women
-
-
-
The Group has not disclosed in this Corporate Governance Statement its measureable objectives for achieving gender diversity
and therefore 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
3
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2020
At the date of this statement the Board consists of the following directors:
Mr Edward Byrt, Non-Executive Chairman, Mr Ramy Azer, Managing Director, Mr Steve Howe Non-Executive Director, Mr
Vincent Rigano, Non-Executive Director/Company Secretary.
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 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 judgment.
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
Steve Howe and Mr Vincent Rigano are Non-Executive Directors and have no other material relationships with the
Group other than his directorship. 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 fulfill 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 lawfully, 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
behavior 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.
4
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2020
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.
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 Steve Howe
(Non-Executive Director)and Mr Ramy Azer (Managing Director)
Mr Vincent Rigano is independent member; 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.
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
5
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2020
Principle 6: Respect the rights of security holders
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 dispatch 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 6.3 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.
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.
6
Papyrus Australia Ltd
ABN 63 110 868 409
Corporate Governance Statement
30 June 2020
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 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 is 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.
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.
7
Papyrus Australia Ltd
ABN 63 110 868 409
Directors’ Report
30 June 2020
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 2020.
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 Steve Howe, Non-Executive Director, (Appointed 7 September 2020)
Mr Vincent Peter Rigano, 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 was until March 2017
Presiding Member of the Development Assessment Commission, he is Chairman of the China Cluster, The Australian Advanced
Manufacturing Centre Pty Ltd, Red Chip Photonics Pty Ltd and Arkwright Technologies Pty Ltd, he was until December 2017 a
Director of Treyo Leisure & Entertainment Ltd (ASX listed) and he is 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.
Ted is not (currently or in the previous 3 years) a director of any other listed companies.
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.
Ramy is not (currently or in the previous 3 years) a director of any other listed companies.
Steve Howe, (Non-Executive Director)
Steve Howe has over 50 years’ management experience in commerce, information technology and international business. He is
respected for his innovation, business acumen and achievement record and has consulted to corporate clients such as Elders
Ltd, Coopers Brewery Ltd and Adelaide Brighton Ltd.
Steve has been a director and chairman of a number of companies and is passionate about corporate governance. He
understands business processes from an operational, executive management and board level perspective, in particular their
impact on the bottom line.
Steve is not (currently or in the previous 3 years) a director of any other listed companies.
Vincent Peter 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 to a variety of industry sectors including start-ups.
He is also a member of the Company’s Audit Committee.
Vince is not (currently or in the previous 3 years) a director of any other listed companies.
8
Papyrus Australia Ltd
ABN 63 110 868 409
Directors’ Report
30 June 2020
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 $133,735 (2019: $109,781).
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
25,799,481
48,685,253
183,864
11,830,445
Number of Options
over Ordinary Shares
-
-
-
1,000,000
Mr Edward Byrt
Mr Ramy Azer
Mr Steve Howe
Mr Vincent Peter Rigano
DIVIDENDS
No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has
been made.
OPERATIONS REVIEW
The Company’s essential activities for the financial year 2019/2020 were to support the Egyptian Banana Fibre Company
(EBFC) to develop the banana fibre business being undertaken is Sohag, Egypt.
In addition to the production of banana veneer and banana fibre for subsequent processing and manufacture to produce
saleable products, the Company through the direction of the Managing Director, Ramy Azer has guided and undertaken the
development of a new agricultural product from banana fibre equivalent to “peat” otherwise imported into Egypt for application to
deficient soils.
Mr. Azer has also reported that another new agriculturally beneficial product branded “Musa” is being produced in Sohag. This
product is a nutrient rich liquid fertilizer drawn from the liquid naturally occurring in the banana tree. Acceptance and demand for
the product continues to grow.
The Company maintains its preferred 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, validated
by the successful project in Egypt, but acknowledges that it may be essential to first participate in the establishment of banana
veneering and fibre production facilities to give comfort to prospective participants such as has been required in Egypt.
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 starting with the project in Egypt. The Company acknowledges that it must first
participate collaboratively with others as it is doing in Egypt to get the initial fibre production facilities operational and fully
commissioned to satisfy concerns about the risks believed to be associated with being the first to undertake the manufacture of
banana fibre product.
9
Papyrus Australia Ltd
ABN 63 110 868 409
Directors’ Report
30 June 2020
OPERATIONS REVIEW (Continued)
In line with this plan, the Company in early 2020 in negotiations with EBFC to unwind the exclusive IP license Agreement
entered into in April 2019 (ASX announcement 15 April 2019) and revert back to the original joint venture arrangements. This
would ensure that the Company maintained its 50% equity in the joint venture company (Papyrus Egypt).
In November 2019 a significant new investor in the Company, Union Pacific Equities Pty Ltd (UPE) entered into an agreement to
subscribe for up to 19.9% of the issued equity (ASX Announcement 12 November 2019) Union Pacific Equities Pty Ltd (UPE).
To date UPE has subscribed $390,000 in accordance with the agreement. The funds were applied towards the Company
strategy to strengthen the situation and opportunity in Egypt, and to explore the application of the Company’s patented
technology and ‘”know how” to residual hemp fibre which UPE will bring to the operations of the Company.
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 (SA) Pty Ltd (an entity related to the
Managing Director, Ramy Azer) continuing financial support as previously announced.
The Annual General Meeting of the Company was held on 28 November 2019, where the Chairman gave a comprehensive
review of the Company’s operations and strategic activities.
In summary, the financial year 2019/2020 has been challenging and frustrating but rewarding in regard to the progress made in
Egypt. The significant challenge was to maintain all requisite corporate obligations on a very limited budget for which we thank
some dedicated shareholders.
10
Papyrus Australia Ltd
ABN 63 110 868 409
Directors’ Report
30 June 2020
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 2020.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Company 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 20 August 2020 the Company issued 21,000,000 options exercisable at $0.01 per option, representing the balance of shares
to be acquired by Union Pacific Equities (UPE) to attain its 19.9% interest in the Company.
The Company completed the transaction for the purchase of 15% equity in Egypt Banana Fibre Company for
an aggregates amount of EGP 3,306,055 (ASX Release 31 August 2020) and is awaiting approval
from the Egyptian Government for the issue of the share certificate. EBFC, PPY and Papyrus Egypt are presently progressing
the expansion of PPY’s direct interest in EBFC and its indirect interest in Papyrus Egypt from its present interests. Following the
unwinding of the royalty agreement, regained its 50% equity interest in Papyrus Egypt and through its acquisition of the 15%
interest in EBFC referred to above, has a further 7.5% indirect “interest” in Papyrus Egypt.
The Company on 7 September 2020 appointed Mr Steve Howe as a director, and issued 750,000 options exercisable at $0.05
per option to Mr S Howe as an incentive.
On 17 September 2020 the Company settled the legal claim for alleged defamation instituted by Dr Allan Branch. The terms of
the settlement agreement are to remain confidential between the parties.
On 20 August 2020 the Company has raised $30,000 from United Pacific Equities Pty Ltd and the board reviews its capital
raising activities on a regular basis to meet its cash flow requirements.
There have been no other significant matters subsequent to the end of the financial year.
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
19/12/2017
18/05/2018
24/06/2019
18/12/2019
18/05/2020
24/06/2022
$0.01
$0.01
$0.01
Balance at 1
July 2019
6,213,084
1,000,000
4,000,000
11,213,084
Net Issued /
(Exercised
or expired) during year
(6,213,084)
(1,000,000)
(2,000,000)
(9,213,084)
Balance at 30
June 2020
-
-
2,000,000
2,000,000
Shares issued as a result of the exercise of options
As a result of the exercise of option, 3,500,000 shares were issued on 24 August 2019 and 5,213,084 shares were issued on the
19 December 2019 (5,000,000 options were exercised during 2019 financial year).
Options Expired
500,000 options expired during the year.
New options issued
21,000,000 unlisted options exercisable at $0.01 per option and with a expiry date of 20 December 2020 were issued to
sophisticated investors. 750,000 unlisted options exercisable at $0.05 per option with an expiry date of 7 September 2022 were
issued to Mr Steve Howe as an incentive.
11
Papyrus Australia Ltd
ABN 63 110 868 409
Directors’ Report
30 June 2020
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS (CONTINUED)
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
To the extent permitted by law, the Company has not indemnified (un-insured) each director and the secretary of the Company.
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 wilful 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 2020
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 2020 financial year, Mr Azer has agreed to forgo any remuneration due to the available working capital of the
Company.
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.
It should be noted that the directors have not received any remuneration during the 2020 financial year.
During the financial year, there were no remuneration recommendations made in relation to key management personnel for the
Company by any remuneration consultants.
13
Papyrus Australia Ltd
ABN 63 110 868 409
Directors’ Report
30 June 2020
REMUNERATION REPORT CONTINUED- AUDITED
USE OF REMUNERATION CONSULTANTS
VOTING AND COMMENTS MADE AT THE COMPANY’S 2019 ANNUAL GENERAL MEETING
Papyrus Australia Ltd’s motion in relation to the approval of 2019 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 2020 and 30 June 2019
Primary
Benefit
Salary &
Fees
$
-
-
-
-
-
-
-
-
Mr Ramy Azer
2020
2019
Mr Edward Byrt
2020
2019
Mr Vincent Rigano
Total
2020
2019
2020
2019
Post
Employment
Superannuation
Share-based
Payments
Options
Total
$
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
Table 2: Remuneration of key management personnel for the year ended 30 June 2020 and 30 June 2019
Other than directors, there were no key management personnel engaged during the 2020 financial year or during the previous
financial year.
Options issued as part of remuneration during the year ended 30 June 2020
No options were issued as part of remuneration during the year ended 30 June 2020.
Options holdings of Key Management Personnel
Balance at
1 July 2019
Granted as
remuneration
Other Changes
- Exercised
Other Changes
- Issued
Balance at
30 June 2020
Vested and
Exercisable at
30 June 2020
R Azer
E Byrt
V Rigano
Total
-
3,392,884
3,820,200
7,213,084
-
-
-
-
-
(3,392,884)
(2,820,200)
(6,213,084)
-
-
-
-
-
-
1,000,000
1,000,000
-
-
1,000,000
1,000,000
14
Papyrus Australia Ltd
ABN 63 110 868 409
Directors’ Report
30 June 2020
REMUNERATION REPORT CONTINUED- AUDITED
Key Management Personnel Shareholdings
R Azer***
E Byrt*
V Rigano**
Balance at 1
July 2019
29,203,853
24,049,481
9,010,245
62,263,579
Other Changes
19,481,400
1,750,000
2,820,200
24,051,600
Balance at 30
June 2020
48,685,253
25,779,481
11,830,445
86,315,179
During the year:-
* Mr Byrt was issued 3,392,884 shares as a result of the conversion of options, and disposed of 1,6428,884.
** Mr Rigano was issued 2,820,200 shares as a result of the conversion of options.
*** Mr Azer was issued 19,481,400 shares as a result of part conversion of the Talisker (SA) Pty Ltd loan.
Other transactions with key management personnel
The Company has an unsecured loan representing a draw down facility provided by Talisker (SA) Pty Ltd (“Talisker”), 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 2020 is $39,462 (2019: $313,655). During the year, Talisker converted $274,193 of its loan to
equity which had been approved at the 2019 annual general meeting.
The Company has unsecured loans with E Byrt, R Azer and V Rigano. The loans are short-term in nature and no interest is
payable. The balances of the loans are as follows:
R Azer
E Byrt
V Rigano
Balance at 30
June 2020
Balance at 30
June 2019
4,879
90
2,029
4,879
90
1,210
END OF AUDITED REMUNERATION REPORT
15
Papyrus Australia Ltd
ABN 63 110 868 409
Directors’ Report
30 June 2020
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:
Directors' Meetings
Audit Committee
Number
of
meetings
held
Number
of
meetings
attended:
Mr
Edward
Byrt
Mr Ramy
Azer
Mr
Vincent
Rigano
19
2
Number eligible to
attend
Number attended
Number eligible to
attend
Number attended
19
19
19
19
16
19
2
2
2
2
-
2
Members acting on the audit committee of the Board are:
Vincent Rigano
Edward Byrt
Ramy Azer
Non-executive director
Non-executive director
Managing director
PROCEEDINGS ON BEHALF OF THE COMPANY
The claim that had been raised against the Group in 2019 was settled under a confidentiality agreement on 17 September 2020.
The Group was not a party to any other 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 2020 as required under section 307C of the Corporations
Act 2001 has been received and can be found on page 17.
Signed in accordance with a resolution of the directors.
Mr Ramy Azer Managing Director
Dated this 30th day of September 2020
16
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Auditor’s Independence Declaration
To the Members of Papyrus Australia Ltd
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Papyrus
Australia Ltd for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
D Chau
Partner – Audit & Assurance
Adelaide, 30 September 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘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.
Papyrus Australia Ltd
ABN 63 110 868 409
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2020
Other income
Grant income
Depreciation expense
Employee benefits expenses
Loss on settlement of liabilities with entities own equity
Other expenses
Finance Costs
3 (a)
3 (b)
11(a)
3 (c)
Loss before income tax benefit
Income tax benefit
Loss for the period
Consolidated Group
30 June
30 June
2019
2020
$
$
237,779
109,914
(109,914)
(1,890)
(115,436)
(250,612)
(3,576)
-
130,388
(130,388)
(1,080)
-
(100,075)
(8,626)
(133,735)
(109,781)
4
-
-
(133,735)
(109,781)
Loss attributable to members of the parent entity
(133,735)
(109,781)
Other comprehensive income
Total comprehensive income for the year
-
(133,735)
-
(109,781)
Total comprehensive income attributable to members
of the parent entity
(133,735)
(109,781)
Earnings per share:
Basic earnings per share
Diluted earnings per share
5
5
Cents
(0.05)
(0.05)
Cents
(0.05)
(0.05)
The accompanying notes form part of these financial statements.
18
Papyrus Australia Ltd
ABN 63 110 868 409
Consolidated Statement of Financial Position
For the Year Ended 30 June 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayment
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Short-term borrowings
Other current liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Other non-current liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS / (LIABILITIES)
EQUITY
Issued capital
Reserves
Accumulated losses
Consolidated Group
30 June
30 June
2019
2020
$
$
Note
6
7
8
9
28,142
33
260,000
34,072
1,147
-
288,175
35,219
91,034
200,948
91,034
200,948
379,209
236,167
10
11
12
122,843
46,460
-
66,358
319,834
233,180
169,303
619,372
12
88,546
198,460
88,546
198,460
257,849
817,832
121,360
(581,665)
13
14
21,395,581
915,722
(22,189,943)
20,558,821
915,722
(22,056,208)
TOTAL EQUITY / (DEFICIT)
121,360
(581,665)
The accompanying notes form part of these financial statements.
19
Papyrus Australia Ltd
ABN 63 110 868 409
Consolidated Statement of Change in Equity
For the Year Ended 30 June 2020
Issued
Capital
$
Note
Consolidated Group
Retained
Earnings/
Share
(Accumulated Option
Reserve
$
losses)
$
Total
$
20,468,821
(21,946,427)
915,722
(561,884)
Balance at 1 July 2018
Comprehensive income
Loss for the year
Total comprehensive income for the period
transactions with owners, in their capacity as owners, and
other transactions
Shares issued via exercise of options on 16 November 2018
Shares issued via exercise of options on 3 April 2019
Shares issued via private placement on 24 June 2019
Total transactions with owners and other transactions
13
Balance at 30 June 2019
Balance at 1 July 2019
Comprehensive income
Loss for the year
Total comprehensive income for the period
transactions with owners, in their capacity as owners, and
other transactions
Shares Issued via exercise of options on 24 August 2019
Shares issued via private placement on 12 November 2019
Shares issued as a result of 2019 AGM resolution on 12
December 2019
Shares issued via exercise of options on 19 December 2019
Shares issued via private placement on 26 February 2020
Shares issued via private placement on 29 June 2020
Total transactions with owners and other transactions
13
20,558,821
(22,056,208)
915,722
(581,665)
-
-
(109,781)
(109,781)
-
-
-
45,000
5,000
40,000
90,000
20,558,821
-
-
-
-
(22,056,208)
-
-
-
915,722
-
-
(133,735)
(133,735)
35,000
60,000
389,629
52,131
100,000
200,000
836,760
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(109,781)
(109,781)
45,000
5,000
40,000
90,000
(581,665)
(133,735)
(133,735)
35,000
60,000
389,629
52,131
100,000
200,000
836,760
121,360
Balance at 30 June 2020
21,395,581
(22,189,943)
915,722
The accompanying notes form part of these financial statements.
20
Papyrus Australia Ltd
ABN 63 110 868 409
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2020
Consolidated Group
30 June
30 June
2019
2020
$
$
Note
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
4,599
(219,964)
-
(100,019)
NET CASH USED IN OPERATING ACTIVITIES
15
(215,365)
(100,019)
CASH FLOWS FROM INVESTING ACTIVITIES
Prepayment for investment
(260,000)
NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES
(260,000)
-
-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from borrowings
447,131
22,304
90,000
1,091
NET CASH PROVIDED BY FINANCING ACTIVITIES
469,435
91,091
Net (decrease)/increase in cash and cash equivalents
Cash at the beginning of the financial year
(5,930)
34,072
(8,928)
43,000
CASH AT THE END OF THE FINANCIAL YEAR
6(a)
28,142
34,072
The accompanying notes form part of these financial statements.
21
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
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 2020.
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.
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 cash flows 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.
22
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
1 Summary of Significant Accounting Policies (continued)
(c)
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 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.
(d)
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.
(e)
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.
(f)
Trade and other receivables
For trade receivables, the Group applies a simplified approach in calculating Expected Credit Losses (‘ECLs’) as
allowed in accordance with AASB 9 Financial /Instruments.
Therefore the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime
ECLs at each reporting date.
23
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
1 Summary of Significant Accounting Policies (continued)
(g)
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 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.
24
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
1 Summary of Significant Accounting Policies (continued)
(g)
Income Tax (continued)
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.
Tax consolidation legislation
Papyrus Australia Ltd and its wholly-owned Australian subsidiaries have formed an income tax consolidated group.
Each entity in the tax consolidated group accounts for their own current and deferred tax amounts. These tax
amounts are measured using the ‘stand-alone taxpayer’ approach to allocation.
Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the
subsidiaries are immediately transferred to the parent entity.
(h)
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.
(i)
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.
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.
25
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
1 Summary of Significant Accounting Policies (continued)
(i)
Plant and Equipment
The estimated useful lives used for each class of depreciable asset are shown below:
Fixed asset class
Plant and Equipment
Useful life
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.
(j)
Financial instruments
Initial recognition and measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
(i) Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through
other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to
give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding.
This assessment is referred to as the SPPI test and is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual cash
flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or
convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group
commits to purchase or sell the asset.
Subsequent measurement of financial assets at amortised cost
The Group measures financial assets at amortised cost if both of the following conditions are met:
• The financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows; and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest method and are subject to
impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
26
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
1 Summary of Significant Accounting Policies (continued)
(j)
Financial instruments (continued)
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:
•
•
The rights to receive cash flows from the asset have expired; or
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and
either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has
neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of
the asset
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the
asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that
case, the Group also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of
the original carrying amount of the asset and the maximum amount of consideration that the Group could be
required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in
certain cases, the Group may also consider a financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account
any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation
of recovering the contractual cash flows.
(ii) Financial liabilities
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless
the Group designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are
measured at amortised cost using the effective interest method except for derivatives and financial liabilities
designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss
(other than derivative financial instruments that are designated and effective as hedging instruments).
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of the new liability. The difference in the respective carrying
amounts is recognised in the statement of profit or loss.
27
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
1 Summary of Significant Accounting Policies (continued)
(k)
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.
(l)
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.
(m)
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.
(n)
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.
28
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
1 Summary of Significant Accounting Policies (continued)
(o)
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.
(p)
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 2020 and 2019.
(q)
Going concern
The financial report has been prepared on the basis of a going concern. The Group incurred a net loss of
$133,735 and a net cash outflow from operating and investment activities of $475,365 during the year ended 30
June 2020, and as of that date, the Group’s cash balance was $28,142. The Group continues to be economically
dependent on the unsecured loan facility provided by an entity associated with the Managing Director (Note 21(a)),
generation of cash flow 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 Directors believe the entity is a going
concern because it has the ongoing support of its financier, Talisker (SA) Pty Ltd (an entity associated with the
Managing Director Ramy Azer), and the potential of positive cash flows from the Banana Ply Project as revenue
increase will make contributions to the Group.
The Group’s ability to continue as a going concern is contingent upon the above matters. Consequently a material
uncertainty exists as to the consolidated entity’s ability to continue as a going concern. 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.
(r)
Critical accounting estimates and judgments
The preparation of financial reports requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Except as described below, in preparing this report, the significant judgements made by management in applying the
Group’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the
consolidated financial report for the year ended 30 June 2019.
Key estimates ‑ Impairment of assets
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead
to an impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined.
29
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
1 Summary of Significant Accounting Policies (continued)
Key estimates ‑ Estimates of useful lives and residual value of assets
The Group determine the estimated useful lives, residual values and related depreciation charges for its property,
plant and equipment. The useful life and residual values could change significantly as a result of technical
innovations or some other events. The depreciation charge will increase where the useful lives are less than
previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be
written off or written down.
Key judgement - Coronavirus (COVID-19) Pandemic
Judgement has been exercised in considering the impacts that the COVID-19 pandemic has had, or may have, on
the Group based on known information. Other than those addressed in specific notes, there does not currently
appear to be either any significant impact upon the financial statements or any significant uncertainties with respect
to events or conditions which may impact the consolidated entity unfavourably as at the reporting date or
subsequently as a result of the COVID-19 pandemic.
(s)
New Accounting Standards and Interpretations
Significant Accounting Policies
AASB 16 Leases and Interpretation 23 Uncertainty over Income Tax became effective for periods beginning on or
after 1 July 2019. Accordingly, the Group applied AASB 16 and Interpretation 23 for the first time for the year ended
30 June 2020. Changes to the Group’s accounting policies arising from these standards are summarised below:
New Standards adopted as at 1 July 2019
AASB 16 Leases
AASB 16 supersedes AASB 117 “Leases” and Interpretation 4 “Determining whether an Arrangement contains a
Lease” and became effective for reporting periods beginning on or after 1 July 2019. The standard sets out the
principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account
for all leases under a single on-balance sheet model. Accordingly the Group applied AASB 16 for the first time for the
period ended 30 June 2020.
There are currently no leases held by the Group. As a result of this the impact of this standard has had no impact on
the Group.
30
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
1 Summary of Significant Accounting Policies (continued)
(t)
New Accounting Standards and Interpretations (continued)
Significant Accounting Policies
Interpretation 23 Uncertainty over Income Tax
The Group has adopted Interpretation 23 from 1 July 2019. The interpretation clarifies how to apply the recognition
and measurement requirements of AASB 112 ‘Income Taxes’ in circumstances where uncertain tax treatments
exists. The interpretation requires: the Group to determine whether each uncertain tax treatment should be treated
separately or together, based on which approach better predicts the resolution of the uncertainty; the Group to
consider whether it is probable that a taxation authority will accept an uncertain tax treatment; and if the Group
concludes that it is not probable that the taxation authority will accept an uncertain tax treatment, it shall reflect the
effect of uncertainty in determining the related taxable profit (tax loss), tax bases, unused tax losses, unused tax
credits or tax rates, measuring the tax uncertainty based on either the most likely amount or the expected value. In
making the assessment it is assumed that a taxation authority will examine amounts it has a right to examine and
have full knowledge of all related information when making those examinations. Interpretation 23 was adopted using
the modified retrospective approach and as such comparatives have not been restated. There was no impact of
adoption on opening accumulated losses as at 1 July 2019.
New Accounting Standards issued but not yet effective and not been adopted early by the Group
At the date of authorisation of these financial statements, several new, but not yet effective, Standards and
amendments to existing Standards, and Interpretations have been published by the AASB. None of these Standards
or amendments to existing Standards have been adopted early by the Group.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the
effective date of the pronouncement. New Standards, amendments and Interpretations not adopted in the current
year have not been disclosed as they are not expected to have a material impact on the Group’s financial statements.
31
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
3 REVENUE AND EXPENSES
REVENUE
(a) Other income
Other income
Royalties
EXPENSES
(b) Depreciation of non-current assets
Plant and equipment
Total depreciation
(c) Other expenses
Audit fees
Legal fees
Professional services
Travel and accommodation
Governance and secretarial costs
Rent
Communications expense
Share registry and ASX expenses
Other expenses
Note
12(a)
Consolidated Group
30 June
2020
$
30 June
2019
$
233,180
4,599
237,779
-
-
-
109,914
109,914
130,388
130,388
40,260
117,847
6,430
10,000
6,300
-
590
52,352
16,833
250,612
31,294
15,275
1,815
-
5,487
336
526
44,792
550
100,075
32
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
4
Income Tax Expense
The major components of tax expense (income) comprise:
Income tax expense
Consolidated Group
30 June
2020
$
-
30 June
2019
$
-
A reconciliation between tax expense and the product of accounting Loss before income tax multiplied by the Group’s
applicable income tax
Loss before income tax
(133,735)
(109,781)
At the Group's income tax rate of 27.5% (2019: 27.5%)
Expenditure not allowable for income tax purposes
Tax losses not recognised due to not meeting recognition criteria
(36,777)
-
36,777
-
(30,190)
5
30,185
-
The Group has tax losses arising in Australia of $12,715,227 (2019: $12,581,492).
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.
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 2020 or 2019.
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
(133,735)
(109,781)
Consolidated Group
2019
2020
$
$
33
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
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
2020
2019
258,842,410
235,149,515
-
-
258,842,410
235,149,515
6 Cash and cash equivalents
Cash at bank and in hand
Note
6(a)
Consolidated Group
2020
2019
34,072
28,142
34,072
28,142
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 at bank and in hand
28,142
28,142
34,072
34,072
7
Trade and other receivables
CURRENT
GST recoverable
8 Prepayments
Prepayment for the investment in equity in
Egypt Banana Fibre Company
Note
8(a)
(a) Prepayments
Consolidated Group
2019
2020
$
$
33
1,147
Consolidated Group
2019
2020
$
$
260,000
260,000
-
-
Prepayments represent a deposit equivalent to EGP2,716,111 paid to Egypt Banana Fibre Company (“EBFC”)
which accounts for part of the purchase consideration totalling EGP3,306,055 for 15% equity interest in EBFC. The
remaining consideration of EGP589,944 has been settled subsequently in August 2020 (Note 24).
34
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
9 Plant and equipment
PLANT AND EQUIPMENT
Plant and equipment at cost
Accumulated depreciation and impairment
(a) Movements in carrying amounts of plant
and equipment
Consolidated Group
2019
2020
$
$
1,961,166
(1,870,132)
91,034
1,961,166
(1,760,218)
200,948
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 2019
Balance at the beginning of year
Depreciation expense
Balance at the end of the year
Consolidated
Year ended 30 June 2020
Balance at the beginning of year
Depreciation expense
Balance at the end of the year
10 Trade and other payables
CURRENT
Trade payables
Sundry payables and accrued expenses
Note
10 (a)
10 (b)
Plant and Equipment
$
331,335
(130,387)
200,948
Plant and Equipment
$
200,948
(109,914)
91,034
Consolidated Group
2019
2020
$
$
15,699
10,021
107,144
56,337
122,843
66,358
(a) Trade payables
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.
(b) Sundry payables and accrued expenses
Within Sundry payables and accrued expenses, $61,700 relates to accrued interest on the loan provided by Talisker
(SA) Pty Ltd (an entity associated with the Managing Director Ramy Azer) repayable from future revenues or
proceeds from future equity raisings, subject to not materially prejudicing the ability of the Company to repay its
creditors (Note 11(a)).
35
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
11 Borrowings
CURRENT
Unsecured liabilities
Other loans
Total unsecured liabilities
(a) Unsecured loan
11(a)
46,460
46,460
319,834
319,834
Talisker (SA) Pty Ltd (“Talisker”) an entity associated with the Company’s Managing Director, Mr Ramy Azer in 2012
entered into an agreement with the Company to provide a draw down facility of $250,000. The unsecured loan
during the year represents the draw down from the facility as at 30 June 2020: $39,462 (2019: $313,655). 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 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 unsecured loan amount of $274,193 provided by Talisker was settled by the issue of 19,481,400 ordinary
shares issued by the Company on 12 December 2019. The fair value of these options amounted to $389,629 (Note
13). A loss of $115,436 has been recognised in the profit and loss upon the settlement.
In addition, the Company has unsecured loans as at 30 June 2020: $90 (2019: $90) with E Byrt, $2,029 (2019:
$1,210) with V Rigano and with R Azer $4,879 (2019: $4,879).
12 Other liabilities
CURRENT
Deferred income
Total current other liabilities
NON-CURRENT
Consolidated Group
2019
$
2020
$
12(a)
-
-
233,180
233,180
Government grants received In advance
12(b)
88,546
198,460
Total non-current other liabilities
88,546
198,460
(a) Deferred income
The Company has brought to revenue 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 2020. 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 2020, $109,914 has
been released (2019: $130,388).
36
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
13 Issued capital
299,343,999 fully paid ordinary shares (2019: 235,149,515)
21,280,145 20,558,821
Total issued capital
(a) Ordinary shares
At the beginning of the reporting period
Shares issued pursuant to option conversion
24 August 2019
Shares issued pursuant to 2019 AGM
Resolutions 12 December 2019 (Note 11(a))
Shares issued pursuant to private placement
12 December 2019
Shares issued pursuant to option conversion
12 December 2019
Shares issued pursuant to private placement
26 February 2020
Shares issued pursuant to private placement
29 June 2020
At the end of the reporting period
21,280,145
20,558,821
2020
Number
235,149,515
Consolidated
2020
$
20,558,821
2019
Number
226,149,515 20,468,821
2019
$
3,500,000
35,000
5,000,000
50,000
19,481,400
389,629
-
-
6,000,000
60,000
4,000,000
40,000
5,213,084
52,131
10,000,000
100,000
-
-
-
-
20,000,000
299,343,999
200,000
21,395,581
-
235,149,515 20,558,821
-
On 24 August 2019, the Company announced that it had raised $35,000 by way of a conversion of 3,500,000 options to
ordinary fully paid shares at a price of $0.01 per new share. On the 16 November 2019, the Company announced the
conversion was completed.
On 19 December 2019, the Company announced that it had raised $52,131 by way of a conversion of 5,213,084 options to
ordinary fully paid shares at a price of $0.01 per new share. On the 19 December 2019, the Company announced the
conversion was completed.
On 12 November 2019, the Company announced that it had entered into agreements with new and certain existing
shareholders to raise $60,000 by way of a placement of 6,000,000 ordinary fully paid shares at a price of $0.01 per new
share. On the 12 December 2019, the Company announced the placement was completed.
On 12 December 2019, the Company announced that in accordance with the resolution adopted at the AGM held on 28
November 2019, Talisker (SA) Pty Ltd converted $274,193 of its loan facility to equity, resulting in the placement of
19,481,400 ordinary fully paid shares. On the 12 December 2019, the Company announced the placement was completed
On 26 February 2020, 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 26 February 2020, the Company announced the placement was completed.
On 29 June 2020, the Company announced that it had entered into agreements with new and certain existing shareholders
to raise $200,000 by way of a placement of 20,000,000 ordinary fully paid shares at a price of $0.01 per new share. On the
29 June 2020, the Company announced the placement was completed.
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.
37
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
13 Issued capital (continued)
(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.
Proceeds from share issues are used to maintain and expand the Group’s research and development activities and
fund operating costs.
14 Reserves
Share Option Reserve
Balance at beginning of financial year
Share based payments
Balance at end of the year
(a) Share option reserve
Note
14(a)
Consolidated Group
2020
$
2019
$
915,722
-
915,722
915,722
-
915,722
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. No share based options were issued to employees
or directors during the current year.
15 Reconciliation of net loss after tax to net cash flows from operations
Net loss
Non-cash flow in loss:
- Depreciation
- Loss on settlement of liabilities with entities own equity
Changes in assets and liabilities
- Decrease/(Increase) in trade and other receivables
- Decrease/(Increase) in trade and other payables
- Increase/(Decrease) in other current liabilities
- Increase/(Decrease) in other non-current liabilities
Consolidated Group
2020
$
(133,735)
2019
$
(109,781)
109,914
115,436
130,388
-
1,114
35,000
(233,180)
(109,914)
516
9,246
-
(130,388)
Net cash (used in)/provided by operating activities
(215,365)
(100,019)
16 Share based payments
(i) Employee Share Option Plan
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.
38
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
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 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:
2020
Exercise
price
WAEP
0.01
2019
Exercise
Price
WAEP
0.05
0.01
0.01
Start of the
year
No.
11,213,084
11,213,084
Start of the
year
No.
1,500,000
2,700,000
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.
-
-
(8,713,084)
(8,713,084)
(500,000)
(500,000)
2,000,000
2,000,000
2,000,000
2,000,000
Granted
during the
year
No.
-
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.
(2,700,000)
(2,300,000)
(5,000,000)
No.
(1,500,000)
-
(2,700,000)
(4,200,000)
No.
No.
-
-
-
-
11,213,084
11,213,084
11,213,084
11,213,084
12,213,084
4,000,000
16,413,084
4,000,000
The weighted average remaining contractual life of options outstanding at year end was 1.98 years (2019: 1.41 years).
The range of weighted average exercise prices for options outstanding at the end of the year was $0.01 (2019: $0.01 ‑
$0.05).
39
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
17 Contingencies
In the opinion of the Directors, the Group did not have any contingencies at 30 June 2020.
During the year ended 30 June 2019, a claim had been raised against the Group. This claim has been settled subsequent
to 30 June 2020 (Refer to Note 24).
18 Remuneration of Auditors
Remuneration of the auditor of the company,
Grant Thornton Audit Pty Ltd, for:
Fee for the audit and review of the financial report
Total remuneration of auditors
No non‑audit services have been provided.
19 Interest in Controlled Entities and Joint Ventures
Consolidated Group
2020
$
40,260
40,260
2019
$
31,294
31,294
Name of entity
Parent entity
Papyrus Australia Ltd (a)
Principal place of
business / country
of incorporation
Ownership Interest
2020
%
2019
%
Australia
Subsidiaries
Papyrus Technology Pty Ltd (b)
PPY Manufacturing Pty Ltd (b)
Australian Advanced Manufacturing Centre Pty Ltd (b)
Pulp Fiction Manufacturing Pty Ltd (c)
Yellow Pallet B.V.
Australia
Australia
Australia
Australia
The Netherlands
100
100
100
0
50
100
100
100
100
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. This company was deregistered on 3 November 2019.
40
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
20 Financial Risk Management
Categories of financial instruments
The totals for each category of financial instruments, measured in accordance with the Accounting Standards as detailed in
the accounting policies to these financial statements, are as follows:
Financial assets
Cash and cash equivalents
Total financial assets
Financial Liabilities
Financial liabilities at amortised cost
- Trade and other payables
- Borrowings
Total financial liabilities
Credit risk
Note
6
10
11
Consolidated Group
2019
2020
$
$
28,142
28,142
34,072
34,072
122,843
46,460
169,303
66,358
319,834
386,192
Credit risk refers to the risk that a counter party 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.
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.
41
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
20 Financial Risk Management (continued)
(i) 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
Maturing within 1 year
Non-interest bearing
Total
2020
%
2019
%
2020
$
2019
$
2020
$
2019
$
2020
$
2019
$
Financial
Liabilities:
Borrowings
3.00
3.30
39,462
313,655
6,998
5,087
46,460
319,834
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.
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:
Talisker (SA) Pty Ltd (“Talisker”) an entity associated with the Company’s Managing Director, Mr Ramy Azer in 2012
entered into an agreement with the Company to provide a draw down facility of $250,000. The unsecured loan
during the year represents the draw down from the facility as at 2020: $39,462 (2019: $313,655). 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 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 unsecured loan amount of $274,193 provided by Talisker was settled by the issue of 19,481,400 ordinary
shares issued by the Company on 12 December 2019. The fair value of these options amounted to $389,629 (Note
13). A loss of $115,436 has been recognised in the profit and loss upon the settlement.
In addition, the Company has unsecured loans as at 30 June 2020: $90 (2019: $90) with E Byrt, $2,029 (2019:
$1,210) with V Rigano and with R Azer $4,879 (2019: $4,879).
42
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
21 Related Parties (continued)
(a)
Transactions with related parties (continued)
•
•
•
The Company has an unsecured loan provided by E Byrt. The loan is unsecured and is interest free. The balance of
the loan at 30 June 2020 is $90 (2019: $90).
The Company has an unsecured loan provided by V Rigano. The loan is unsecured and is interest free. The balance of
the loan at 30 June 2020 is $2,029 (2019: $1,210).
The Company has an unsecured loan provided by R Azer. The loan is unsecured and is interest free. The balance of
the loan at 30 June 2020 is $4,879 (2019: $4,879).
(b)
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.
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 Vincent Peter Rigano ‑Non-Executive Director and Company Secretary
43
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
22 Key Management Personnel Disclosures (continued)
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
Total remuneration paid to key management personnel
2020
$
2019
$
-
-
-
-
-
-
-
-
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 2020.
Other key management personnel transactions
For details of other transactions with key management personnel, refer to Note 21: Related Parties.
23 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 recognized 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 (deficit)
Statement of Profit or Loss and
other Comprehensive Income
Total loss for the year
Other comprehensive loss
Total comprehensive loss
2020
$
2019
$
288,175
-
288,175
166,815
-
166,815
35,219
-
35,219
616,884
-
616,884
21,395,581
(22,189,943)
915,722
121,360
20,558,821
(22,056,208)
915,722
(581,665)
(133,735)
-
(133,735)
(109,781)
-
(109,781)
44
Papyrus Australia Ltd
ABN 63 110 868 409
Notes to the Financial Statements
For the Year Ended 30 June 2020
23 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
There are no contractual commitments of the parent entity at 30 June 2020 (30 June 2019: nil).
24 Matters subsequent to the end of the Financial year
On 20 August 2020 the Company issued 21,000,000 options exercisable at $0.01 per option, representing the balance of
shares to be acquired by Union Pacific Equities (UPE) to attain it’s 19.9% interest in the Company.
The Company completed the transaction for the purchase of 15% equity in Egypt Banana Fibre
Company for an aggregates amount of EGP 3,306,055 (ASX Release 31 August 2020) and is
awaiting approval from the Egyptian Government for the issue of the share certificate. EBFC, PPY and Papyrus Egypt are
presently progressing the expansion of PPY’s direct interest in EBFC and its indirect interest in Papyrus Egypt from its
present interests. Following the unwinding of the royalty agreement, regained its 50% equity interest in Papyrus Egypt and
through its acquisition of the 15% interest in EBFC referred to above, has a further 7.5% indirect “interest” in Papyrus
Egypt.
The Company on 7 September 2020 appointed Mr Steve Howe as a director, and issued 750,000 options exercisable at
$0.05 per option to Mr S Howe as an incentive.
On 17 September 2020 the Company settled the legal claim for alleged defamation instituted by Dr Allan Branch. The
terms of the settlement agreement are to remain confidential between the parties.
On 20 August 2020 the Company has raised $30,000 from United Pacific Equities Pty Ltd and the board reviews its capital
raising activities on a regular basis to meet its cash flow requirements.
There have been no other significant matters subsequent to the end of the financial year.
45
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 2020 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.
Mr Ramy Azer Managing Director
Dated this 30th day of September 2020
46
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Independent Auditor’s Report
To the Members of Papyrus Australia Ltd
Report on the audit of the financial report
Opinion
We have audited the financial report of Papyrus Australia Ltd (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1(q) in the financial statements, which indicates that the Group incurred a net loss of $133,735 and
a net cash outflow from operating and investing activities of $475,365 during the year ended 30 June 2020, and as of that
date, the Group’s cash balance was $28,142. As stated in Note 1(q), these events or conditions, along with other matters as
set forth in Note 1(q), indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a
going concern. Our opinion is not modified in respect of this matter.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘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.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period.
Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there
are no other key audit matters to communicate in our report.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors 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 and for 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.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/auditors_responsibilites/ar1_2020.pdf. This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report of the Directors’ report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Papyrus Australia Limited, for the year ended 30 June 2020 complies with
section 300A of the Corporations Act 2001.
Responsibilities
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.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
D Chau
Partner – Audit & Assurance
Adelaide, 30 September 2020
ASX Additional Information
Additional information required by the Australian Stock Exchange Limited and not shown
elsewhere in the report follows. The information is current as at 1 October 2020.
Distribution of equity securities
Ordinary share capital
•
302,343,999 Fully paid ordinary shares are held by 1,292 individual shareholders.
All issued ordinary shares carry one vote per shares.
Options
• 23,000,000 Options are held by 6 individual option holders.
The number of shareholders, by size of holding, in each class are:
1-1,000
1,001 - 5000
5,000 – 10,000
10,001 – 100,000
100,001 and over
Holding less than a marketable parcel
Substantial shareholders
Fully Paid Unquoted Options
89
268
176
577
182
1,292
870
0
0
0
0
6
6
0
Ordinary shareholders
BIJO (SA) PTY LTD
RONDELLE PTY LTD
UNION PACIFIC EQUITIES PTY LTD
MR RAMY AZER
STROUD NOMINEES PTY LTD
Fully paid
Number
30,756,400
25,562,497
23,000,000
17,637,489
16,456,061
72,738,550
Percentage
10.17
8.45
7.61
5.83
5.44
30.93%
50
ASX Additional Information
Twenty largest holders of quoted equity securities
BIJO (SA) PTY LTD
RONDELLE PTY LTD
UNION PACIFIC EQUITIES PTY LTD
MR RAMY AZER
STROUD NOMINEES PTY LTD
MRS MARGARET FAY FULLER
MR KARIM MOHAMED HAMDOUH ABBAS
UNION PACIFIC EQUITIES PTY LTD
V P RIGANO & CO PTY LTD
MR STEVO HINIC
STROUD NOMINEES PTY LTD
MR PAUL LAPERE
MR EHAB AMIR NAKHLA HENNES
MR DAVID ROBERT WOODWARD
MR CON TSAKALIS
MRS MARGARET THORPE WOODWARD
HAHA INVESTMENTS (SA) PTY LTD
BEYOND V1 PTY LTD
REANIPA PTY LTD
MR MARIO ALDO ZANDEL + MISS BLOOMFIELD DEIRDRIE ANNE
Fully Paid Ordinary Shares
Number Percentage
10.17
8.45
7.61
30,756,400
25,562,497
23,000,000
17,637,489
16,456,061
12,000,000
11,125,000
11,000,000
10,625,445
9,001,000
8,785,768
5,784,751
5,314,973
5,248,000
3,700,000
3,100,000
3,041,364
2,650,000
2,300,000
2,128,910
5.83
5.44
3.97
3.68
3.64
3.51
2.98
2.91
1.91
1.76
1.74
1.22
1.03
1.01
0.88
0.76
0.70
209,217,658
69.20
51
ASX Additional Information
Explanation of variances between the 2020 Preliminary Report (ASX: release 25
August 2020) and the Full Year Statutory Accounts (ASX: release 20 September 2020)
Changes in Assets and Liabilities
Subsequent to the lodgement of the unaudited preliminary final report for year ended 30 June 2020
on 28 August 2020, and during the audit, some matters came to light that required to be included in
the audited statutory accounts for year ended 30 June 2020 that was released to the market on 30
September 2020.
The resultant changes improved the overall position of the Company and the items effected in the
Consolidated statement of profit or loss and other comprehensive income, and the Consolidated
statement of financial position are detailed below:
Consolidated statement of profit or loss
and other Comprehensive income
Note
Other income
Loss on settlement of liabilities with entities
own equity
Other expenses
Nett Effect
Reported profit or (loss)
plus Nett effect of changes
Profit or (loss)
Consolidated statement of financial
position
Assets
Total current assets
Total non-current assets
Liabilities
Trade and other payables
Other current liabilities
Nett effect
Nett Assets
plus Nett effect of changes
Nett Assets
1
2
3
4
4
3
1
Audited
accounts
$
237,779
Unaudited
accounts
$
Variance
$
4,599
233,180
(115,436)
(250,612)
-
(215,612)
(133,735)
-
(133,735)
(216,479)
82,744
(133,735)
(115,436)
(35,000)
82,744
288,175
91,034
122,843
-
-
121,360
-
121,360
28,175
351,034
260,000
(260,000)
35,000
(233,130)
(198,180)
87,843
233,180
-
(76,820)
198,180
121,360
Note 1
The $233,180 related to monies received from Egypt Banana Fibre Company (EBFC) as a deposit for
the purchase of equipment for the Egypt factory determined to be non-refundable, resulting in the
funds received being recoginised to revenue.
52
ASX Additional Information
Note 2
Approved at the 2019 AGM, Talisker (SA) Pty Ltd part converted its loan facility provided to the
Company. The result of this transaction was that the Company incurred a non cash loss on valuation
of the shares issued.
Note 3
Increase in Other Expenses was the result of legal costs, which the Company was not aware of at the
time of the release of the Preliminary Final ASX Report.
Note 4
Reclassification of the $260,000 associated with the prepayment for the purchase of a 15% equity in
EBFC.
53