Argent Minerals Limited (ASX: ARD) on 8 January 2019 was found guilty by AusIndustry regarding R&D claim made by the company in FY2016 and FY2017. As per the findings of AusIndustry, the R&D claims were negative, and against this, the company might need to repay an amount up to $1,402,997 in the form of penalty and interest.
As per the law, the company has rights to go for the multi-stage review and enter into dispute resolution process. It may also be possible that the company may opt for an independent investigation from another state branch. Based on its results, it has rights to further appeal to the Tribunal and after that the Federal Court.
The company states that the R&D claims made following the legislation, and it also holds right for an independent review under Division 5 of the IR&D Act. Based on this, AusIndustry has asked ARD to raise its request within 28 days’ time frame.
The official listing of ARD on ASX is 3 April 2008, where the performance of the company is -54.40%. In 5 years, the performance of ARD remains -61.60%. Its YTD performance is 20%.
For the financial year 2018, which ended on 30 June 2018, ARD made a net loss of $1,712,330. The balance sheet of ARD looks healthy with a net asset base of $1,937,089 and a debt to equity ratio of 0.112. It means that the company is in a position to manage its long-term obligation efficiently. A lower debt to equity ratio symbolizes that the company uses its resources to meet any financial requirement instead of approaching any external financial sources. Its total current asset is worth $1,672,731 which is ahead of its total current liabilities of $217,113 which creates an impression that the company would be able to manage its working capital requirements and will also be able to clear the short-term debt. However, an increase in accumulated losses in FY2018 might create a negative impact on the shareholders. The cash and cash equivalent as on 30 June 2018 with ARD was $1,649,466.
The claims on ARD from AusIndustry comes as a shock to the investors where the impact is on the share price of the company. With the market open on 8 January 2019, the share price of ARD tumbled by 33.33% which is 0.006 points lower than its previous trading day’s closing price. It is also the 52 weeks lowest price. At present, the market price of the share is A$0.012 (AEST: 1:44 pm, 8 January 2019) with the stock holding a market capitalization of A$9.1 million.
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