Papyrus Australia : ASX Announcement - Extended Reporting and Lodgement Deadline – Half Year Accounts to 31 December 2020

ASX ANNOUNCEMENT 26 February 2021

Extended Reporting and Lodgment Deadline - Half Year Accounts to 31 December 2020

Papyrus Australia Ltd ("PPY"/"Company"/"Papyrus") a world leading "agricultural waste fibre technology company" advises that:-

In accordance with the class waiver from listing rule 4.2B to permit an entity to give its audited half year accounts and the other documents required to be lodged with ASIC under section 320 of the Corporations Act to ASX by the earlier:

• • The date the audited half year accounts are ready to be given to the ASX; and

• • The date the audited half year accounts must be given to ASIC under the Amended Relief,

Subject to the following conditions:

• 1 PPY is not a mining entity or an oil and gas exploration entity, and the appended information set out in Appendix 4D of the listing rules and its unaudited half year accounts have been provided within two months from the end of the relevant accounting period being 31 December 2020.

• 2 In addition, the following information is provided to the market:

  • 2.1 PPY is relying on the Amended ASIC Relief to extend the lodgment date for its audited half year accounts and other documents to be lodged with ASIC under section 320 of the Corporations Act.

  • 2.2 PPY will immediately make a further announcement to the market if it becomes aware that there will be a material difference between the unaudited half year accounts and its audited half year accounts.

On behalf of the Board

Yours sincerely

Vince Rigano

Company Secretary

Attached: Appendix 4D

Papyrus Australia Ltd

ABN 63 110 868 409

Half Year Report

for the half year ended 31 December 2020

Appendix 4D Requirements

Results for announcement to the market

31 December

2020

31 December 2019

Percentage

$A

$A

change

Revenues from ordinary activities

197,899

4,599

up 4,203%Profit/(loss) from ordinary activities after tax attributable to the members

195,535

(116,412) up 267%Profit/(loss) for the period attributable to members

195,535

(116,412) up 267%

Dividends (distributions)

No dividend has been paid during the period ended 31 December 2020.

The directors have not proposed a dividend for the period ended 31 December 2020.

Net Tangible Assets Per Security - cents

31 December 31 December 2020 2019 0.011 0.001

The Group gained control of Papyrus Egypt and did not lose control of any entities during the reporting period ended 31 December 2020.

All other requirements are contained within the attached financial statements and notes.

Review of Operations

1. In the six months to 31 December 2020 the Company has supported Papyrus Egypt ("PPYEg") to consolidate the developing banana fibre business being undertaken in Sohag, Egypt as previously reported.

2.

The Company completed the transaction for the purchase of 15% equity in Egypt Banana Fibre Company (EBFC) for an aggregate 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 13.614% interest in EBFC referred to above, has a further 6.8% indirect "interest" in Papyrus Egypt.

Directors' Report (cont.)

For the Period ended 31 December 2020

Review of Operations (cont.)

• 3. EBFC advised that the moulded fibre product trials carried out by a toll manufacturer under the supervision of EBFC were successful (ASX announcement: 31 August 2020).

• 4. PPY commissioned a full Due Diligence of PPYEg which was concluded in December 2020. The full legal, financial and operational review was necessary before increasing our investment and ownership in PPYEg.

• 5. The demand for our natural organic agricultural products namely: Musa (natural fertilizer), Cairo Peat, and Bokashi produced at the Sohag factory continue to out- strip supply. With product sales for the reporting period amounting to EGP2.26 million and a net tax profit of 44%. The Company has provided funding to Papyrus Egypt to enable the purchase and installation of new production equipment in the first quarter of 2021. This equipment is expected to increase current production levels substantially to meet the current and future levels of demand.

• 6. Research continued to prepare for the production of moulded fibre products. Deposit to purchase new fibre refining equipment was paid. Moulded product testing at commercial facilities in the North of Egypt continued producing samples for our potential customers in China and the USA.

• 7. Planning commenced to expand the product line at the Sohag factory, to include moulded tableware and food packaging products.

• 8. In the longer term and beyond in Egypt and elsewhere, the Company believes the best commercial position for it is to be the developer and licensor of its patented and confidential Intellectual Property (IP). However, the Company has experienced many frustrating challenges in bringing that strategy to a beneficial commercial outcome save for the Egypt project and the recently announced MOA to go into China in 2022. The Company is confident that the future opportunities do exist to exploit the IP elsewhere especially given the economic climate and opportunity in several banana growing countries, notwithstanding the risk averse nature of potential participants in a new business venture with new technology, several of whom are in dialogue with our Company about a future opportunity once the Egypt project has reached completion and demonstrates substantive profitability.

• 9. TheCompanyacknowledgesthat forcommercialreasons itmust initially participatecollaboratively with others, as it is doing in Egypt, to get the banana fibre production facilities commercially 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 products. That is also recognition that the Company and our MD Ramy Azer are world leaders in the knowledge about the innovative application of the PPY technology.

• 10. The Company continues to operate on an absolute minimum cost basis to preserve working capital.

• 11. In accordance with the agreement entered into with Union Pacific Equities Pty Ltd ("UPE") (ASX announcement: 11 November 2019), in August 2020, a further 3,000,000 fully paid shares in the capital of the Company were issued to UPE. The $30,000 raised funded working capital requirements (ASX Announcement 20 August 2020). In addition, a further 21,000,000 unlisted options were issued to UPE.