Papyrus Australia Ltd updates regarding the legal proceedings

Papyrus Australia Ltd (ASX: PPY) manufactures paper from banana plant fiber.

The company, today on 19 March 2019, updated that the Allan Branch has issued legal proceedings in the Federal Court against the company, the directors, and Grant Thornton for alleged defamation which is denied and will be defended by the company.

As regards the half year which ended as on 31 December 2018, the company’s Revenues from ordinary activities fell by 100%. The company had suffered a loss from normal activities after tax attributable to the members which came in at AUD 55,110, down by 8%. The company hasn’t paid any dividends for the period, which ended as on 31 December 2018.

During this period, the company was meeting its expenses as and when they fell due, and there were no known unbudgeted expense items. The Directors including the Managing Director had continued to forgo their remuneration.

As per the review report issued by the Company Auditors, Grant Thornton Audit Pty Ltd, the financial statement of the company has been prepared on the basis of a going concern. The financial report displays that the group suffered a net loss of $55,110 and a net cash outflow from operating and investing activities of $58,578 during the HY ended 31 December 2018. The group had a borrowing facility from the Talisker Pty Ltd to draw upon the required funds as and when the same was required. The group continues to be economically reliant on the generation of cash flow from the commercial operations or raising additional money for the continued development of its Banana Ply Project and working capital through the equity or debt route. The group remains to be in discussion with its consultants to assess alternative means of raising extra equity and working capital.

The directors contemplate the consolidated entity to be a going concern and have faith in the fact that that they will be able to meet their debts and obligations as they fall due. The events and conditions recognized above and detailed below give an indication towards a material uncertainty regarding the ability of the company to continue as a going concern. Hence, now the group’s ability to continue as a going concern is heavily depending upon the firm’s ability to generate enough of cash flow from its business or successfully raising additional capital through above-mentioned routes. Hence in such a case, if the adequate cash flow is not produced and/or additional funds are not raised, the going concern assumption may not be suitable enough for the purposes of financial reporting. This may lead to a situation where the group may have to realize its assets and pay back its liabilities, other than in the ordinary course of business and at sums different from those specified in the financial report.

On the price-performance front, the stock has posted returns of 71.43%, & 20% over the past six and three months period respectively. At the time of writing (19 March 2019, AEST 04:00 PM), the stock of the company last traded at a price of $0.005, with a market capitalization of ~$ 2.77 Mn. It had a 52-week high price of $ 0.023, with an average volume of, 110,228 approximately.


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