The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this information is considered to be in the public domain.

 

17 September 2021

Tirupati Graphite plc ('Tirupati' or the 'Company')

 

Final Results

 

Tirupati Graphite plc, the fully integrated, revenue generating, specialist graphite producer and graphene and advanced materials developer, is pleased to announce its Final Results for the year ended 31 March 2021.  A copy of the Report and Accounts will be available shortly on the Company's website, www.tirupatigraphite.co.uk.

 

HIGHLIGHTS - DURING & POST PERIOD END

 

Madagascar operations further strengthen value building from primary flake graphite projects

·    Sahamamy 3,000 tpa plant achieves 57% operating margins, up from 48% in the previous year.

·    Vatomina 9,000 tpa plant commissioned in September 2021, production now ramping up to full capacity.

·    Construction activities for second 18,000 tpa module at Sahamamy underway which will uplift production capacity to 30,000 tpa by Q1/Q2 2022, 10x from the previous year that is set to grow to 84,000 tpa by 2024.

·    Buyers for the Company's high-quality flake graphite from Madagascar including large corporates from the US, EU and Asia are lined up with market development activities ongoing in advance of Company's expanding production.

·    Company's transition to renewable energy to substantially meet its energy needs commenced with development of its first hydro power project at Sahamamy, affirming its commitment to green energy and sustainability.

·    Company well positioned to benefit from post pandemic recovery and capture economies of scale as it increases production capacities from its Madagascan projects.

 

Financial Highlights

·    Revenues of £1,123,426 and Operating Profits of £635,342, representing 57% operating margins.

·    Negative EBITDA marginally higher at £(896,239) compared to £(684,872) in 2020, despite extensive corporate and business development and accelerated project development activities post admission.

·    Successfully raised gross proceeds of £6 million at 45p per share at IPO in December 2020 and a further £10 million at 90p per share in April 2021. The Company is now fully funded through to end of 2022 for its stage 1 developments across its portfolio of business units (see RNS dated 16 April 2021).

·    Emphasis remains on controlling CAPEX and OPEX to maintain its demonstrated low-cost advantage, generating early revenues to minimise pre-production investments and maximising margins from operations.

 

Speciality graphite and graphene & technology divisions under TSG continue to evolve

·    1,200 tpa plant at the Patalganga project continued to develop and deliver niche expandable graphite products for a variety of applications, continuing to create new markets and buyers ahead of the large scale speciality graphite project coming into production in 2H 2022.

·    Spheroidization technology evolved in collaboration with a German equipment manufacturer with yields of up to 68% as compared to average c.35% using existing Chinese manufacturing technologies.

·    Company's non-energy intensive, zero hydro-fluoric acid purification technology for its high-purity graphite continues to receive significant interest from buyers for its green and sustainability advantages.

·    First stage development at Tirupati Graphene and Mintech Research Centre ("TGMRC")  the Company's state-of-the-art R&D and technology centre commissioned enabling graphene manufacturing, advanced materials developments and mineral processing technology consultancy activities to advance and come into first revenues.

·    TGMRC developed ground-breaking graphene-aluminium composite ("Al-Gr Composite") and is working with a suite of companies including a FTSE 100 company engaged in the manufacturing of conductors for advanced applications including aerospace, green mobility, sub-sea transmission etc.

 

Highly favourable current and long-term demand profile across business units

·    UBS suggests a 700% growth in demand for flake graphite to 5.9 million tonnes per year by 2030.

·    Graphite designated as a critical raw material by US and EU, making it a key contributor to the green energy transition and electrification of mobility.

·    Diverse applications for graphite including thermal management in electronics, fire safety, metal manufacturing and forming, fuel cells, polymers, composites and in other advanced materials.

·    Graphene is leading the development of 2D and advanced materials and set to fuel the upcoming Advanced Materials Revolution.

 

Continued corporate evolution focussed on the Environment, Sustainability and Governance

·    Admitted to the official list of quoted companies on the main market of the LSE and accredited with the Green Economy Mark for companies who contribute to climate change mitigation and adaptation, waste and pollution reduction, and the circular economy.

·    Active member and regular contributor of the Quoted Companies Alliance; Critical Materials Association; and The Graphene Council.

·    The Company has voluntarily adopted the QCA Code for Corporate Governance as far it is practicable given its size and stage and Corporate Governance Report is included in the Annual Report.

·    The Company has also voluntarily adopted the GRI standards for ESG reporting and will be releasing its maiden Sustainability Report adhering to the GRI standards in the coming weeks.

·    Kept shareholders and markets informed of significant developments of the Company through regular RNS's, road shows, investor meetings, conferences and other investor networking platforms

 

Raised profile as a sustainable, high-quality, technologically advanced ex-China source for flake graphite to global customers

·    Reach registration accorded for Company's suite of expandable graphite products in the EU

·    Marketing MOU signed with Hanwa Co. LTD., a leading Japan-based global trading and investment company and one of the larger traders of battery chemicals and steel products in the Asian region

·    Status as a sustainable supplier of flake graphite continues to develop as buyers start to recognise the Company's proprietary environmentally friendly processes compared to peers, provided critical advantage and access to new markets for its suite of primary and specialty graphite products

 

Focused on enhancing the Company's global resource base and diversifying supply of high-quality graphite

·    Commenced Stage II Exploration and Drilling Programme in Madagascar targeted at upgrading current Mineral Resource Statement, anticipated to complete by end of 2021.

·    Signed agreement to acquire two advanced-stage, high-grade, complementary graphite projects in Mozambique from ASX listed Battery Minerals Ltd, adding c.6x of JORC (2012) Resources and c.12x of contained graphite.  

 

Key appointments made to strengthen and support rapid growth of the Company

·    Appointed additional independent Non-Executive Director, Mr. Lincoln Moore.

·    Appointed several eminent technocrats and scientists specialising in the fields of flake graphite, speciality graphite, graphene and advanced materials and mineral processing technology and over 30 engineers, geologists, and specially trained technicians across all three business units.

 

CHAIRMAN'S STATEMENT

First, may I extend a very warm welcome to the hundreds of new shareholders in our Company, and hundreds of stakeholders too, the Tirupati Graphite ("TG") family has grown from strength to strength in this eventful year. It is also my privilege to present to you the first Annual Report as a quoted company and the fourth since inception. We find ourselves to be fortunate - being in the right space at the right time - contributing to the global cause of mitigating the risks of climate change.

The year gone by was monumental, providing us the opportunity to extend our gratitude to the Financial Conduct Authority ("FCA") and The London Stock Exchange Group ("LSE"), and all of our advisors who helped us complete the process for admission of our ordinary shares on the main board of the LSE. The successful capital raise at our Initial Public Offering ("IPO") paved the way and the oversubscribed follow-on placing completed in April 2021 further strengthened our resolve and conviction to fast-track the development of our three business divisions in Madagascar and India. We stand tall and the Company is proud to be the only fully integrated graphite producer and developer publicly quoted in London.

During the year under review, I am pleased to report that considerable progress was made towards achieving our goal of becoming the pre-eminent supplier of sustainable graphite, graphene and advanced materials. Our focus on graphite and graphene is strategic, based not only on our team's track record of working in the sector for decades, but also on what we believe to be a highly favourable long-term demand profile of a critical material that is a substantial contributor to the global clean energy revolution and therefore, an opportunity for us to become a contributor to the evolution and advancement of new age materials for a greener globe. 

You do not have to look far to see just how ubiquitous and important graphite has become to our everyday lives.  Not only is it central to the green energy transition and electrification of mobility, but it is also increasingly used in the fire safety, thermal management, composites and advanced materials industries amongst many others, helping to reduce emissions, increase energy efficiency and reduce fire hazards. 

According to a report by Battery Metals Review, most commentators are forecasting electric vehicles ('EV') sales to be in the range between 30-40 million per year by 2030, from the circa 2 million EVs sold in 2019 resulting in an 1100% increase in current flake demand for batteries to c.3.1 million tonnes per year by 2030.  And that is for usage in batteries alone.  Factoring other industries into the equation and the figure is likely to be substantially higher with the likes of UBS suggesting a 7x growth in demand to 5.9 million tonnes per year by 2030. 

Notably in our opinion, not all graphite projects currently in production produce sustainable high-quality flake graphite. Much of the current volumes used in electric vehicles reaching the market comes from mines in China which tend to use significant amounts of hydrofluoric acid in their processing methods to produce high purity grades of graphite, a practice which we believe is counter to global sustainability goals in the long term. 

As we have successfully demonstrated at our two Madagascan projects, Sahamamy and Vatomina, the Company is able to produce large flake, high-quality graphite using unique and importantly sustainable processing techniques which not only means that our graphite is greener, but that we can deliver it at very high margins. With our first 9,000 tpa module at Vatomina now commissioned at the upgraded capacity, and having raised additional funds in April 2021, we are accelerating our development plans and anticipate total capacity across both projects to reach 30,000 tpa by Q1/Q2 2022. This will represent a ten-fold increase since becoming a listed company in December 2020. 

Concurrently, we have been pushing ahead with the redevelopment of the existing hydro power facilities in Madagascar which is targeted to meet most of the power requirements for the current Sahamamy operations. We have also initiated the studies on the use of renewable energy which is aimed at substantially powering our projects in Madagascar when we reach the 30,000 tpa capacity build out under our medium-term development plan ("MTDP").

In addition to our significant achievements under our existing development plans, the icing on the cake for us was entering into a conditional acquisition agreement for the Montepuez and Balama Central projects from ASX listed Battery Minerals Ltd. The acquisition requires approval from shareholders of Battery Minerals Ltd as well as approval by the Ministry of Mineral Resources and Energy in Mozambique. The Montepuez Project is a construction ready project with substantial reserves and resources, while the Balama Central Project is an advanced feasibility stage project with a combined JORC Code (2012) resources of c. 152 million tonnes @ 8.5% TGC. Post completion of the acquisition, the projects will provide us with additional resources to expand and diversify our supply of high-quality graphite as the markets evolve driven by growing demand from EV and other segments. The other advantages of the acquisition for us include diversification of our country risks; access to higher grade deposits; and a complementary type of graphite (i.e. more of the smaller flake variety) which is demanded by the EV sector. The acquisition demonstrates our team's ability to achieve our stated strategic objectives both operationally and corporately. The team are now working with the vendors side to complete the acquisition and have already began re-working the development plans for Montepuez using our in-house expertise and experience; it is our intention to advance into construction and first production in the shortest available time to take advantage of the favourable tailwinds of the graphite markets. We will continue to update the market on the progress of the acquisition and developments as they advance.

Our Patalganga project continues to evolve at a good pace. We continue to create new markets for our range of expandable graphite products and provide the backbone for the creation of markets for our larger downstream specialty graphite project which is under construction. The integrated, multi-product speciality graphite project will provide throughput of all variants required for high-tech graphite applications, thus making us one of the very few companies globally, which can boast the capabilities of providing 'any type of graphite' required to our customers. We have continuously differentiated and evolved our processing technologies for these niche products, distinguishing our manufacturing processes from the conventional processes used by most of the current Chinese sources of specialty graphite, minimising our footprint on the environment and ensuring our projects are sustainable.

In tandem with the growing expectations on sustainable supply chains and the opportunities this presents, we see ourselves evolving as a frontrunner in the energy storage arena, alongside fire safety and thermal management and composites and advanced materials applications of speciality graphite products.

Lastly, but not least, our Graphene and Mintech Research Centre which is our state-of-the-art R&D and technology centre designed to house our manufacturing facilities of graphene and other advanced materials, has completed the first stage development; this is a commendable achievement that truly sets us apart from any other company in the UK and possibly the world. This division of the Company has been making huge strides forward including the creation of manufacturing capabilities for Graphene Oxide ("GO") and Reduced Graphene Oxide ("rGO") at a significant and commercially viable kilogram per day scale; taken on a number of consultancy engagements for process development projects; and has made its first significant in-roads into the new world of metals and 2D composite materials.

The successful development of our ground-breaking aluminium graphene composite ("Al-Gr Composite"), which has the potential to replace copper in many weight-sensitive applications, puts us into the category of other advanced materials technology companies which is an achievement that every stakeholder should take pride in. It is also testimony to the leading efforts and capabilities of the Company in the world of advanced materials.  Not surprisingly, we have been receiving a lot of interest for our Al-Gr Composite product and we are now working with a suite of companies to develop it further and pave the way to commercialisation. 

To conclude, I again share our principles of value creation, which we have adopted since inception of our Company, and which continue to remain our guiding principles:

●     Value creation for the planet and for future generations:

By developing unique materials which have many 'green' applications contributing towards a more sustainable and greener planet for future generations and developing technologies and processes to minimise emission and waste generation.

●     Value creation for our employees:

By providing opportunities for performance and learning, achieving corporate goals and personal development, to inspire quality delivery on the objectives and values we strive for.

●     Value creation for the local communities we operate in:

By looking after our employees and their families and providing healthcare, education and recreational facilities and support for local communities, helping bring communities together and improving their general quality of life. 

●     Value creation for our shareholders:

Through well considered and crafted business strategies and plans, implemented with persistence and determination, and adopting a culture of cost prudence, hard work, and delivering on targets.

You will observe that in our journey to date, we have performed on each of the four pillars of value creation we set for ourselves at the outset:

1)    Providing materials for the green economy and developing novel new age materials;

2)    Nurturing human capital and developing a team that delivers;

3)    Improving the quality of life of thousands of people in the communities around us; and

4)    Delivering on a prudent business plan and creating values for our shareholders reflected in our share price growth.

We are proud of our long history of innovation, our reputation as a respected, well-governed and safe place to work, and the role our products play in the green revolution.  At the heart of this success is our team spirit of 'together we can and will achieve our goals'.  As the Company continues to grow at a monumental pace, we look forward to maintaining this ethos and upholding our sustainable values to deliver measurable success on every level be it economic, social, or environmental.

 

Shishir Poddar

Executive Chairman & Managing Director

17 September 2021

 

 

Consolidated Statement of Comprehensive Income

For the year ended 31 March 2021

		2021	2020
		£	£
	Notes
Continuing operations
Revenue	6	1,123,426	793,577
Cost of Sales		(488,083)	(411,899)
Gross profit		635,343	381,678
Administrative expenses	7	(1,737,304)	(1,193,650)
Operating loss		(1,101,961)	(811,972)
Finance costs	9	(147,151)	(46,003)
Loss before income tax		(1,249,112)	(857,975)
Income tax	10	(27,827)	(54,767)
Loss for the year attributable to owners of the Company		(1,276,939)	(912,742)
Other comprehensive income: Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations		(417,693)	(1,382)
Total comprehensive loss for the year attributable to the Group		(1,694,632)	(914,124)
Earnings per share attributable to owners of the Company		Pence per share	Pence per share
From continuing operations:
Basic	11	(2.61)	(1.53)
Diluted	11	(2.37)	(1.53)

                                                                                                                               

The accompanying accounting policies and notes are an integral part of these financial statements

Consolidated and Company Statement of Financial Position

As at 31 March 2021

		Group		Company
		2021	2020	2021	2020
		£	£	£	£
	Notes
Non-current assets
Investments in subsidiaries	13	-	-	3,539,448	3,539,448
Property, plant and equipment	14	3,020,142	1,980,635	201,725	544,209
Deferred tax		21,182	49,422	-	-
Deposits		1,872	2,121	-	-
Intangible assets	12	3,682,354	3,691,243	40,970	153,001
Total non-current assets		6,725,550	5,723,421	3,782,143	4,236,658
Current assets
Inventory	16	461,093	150,105	212,581	-
Trade and other receivables	15	1,102,868	409,309	5,547,806	2,709,828
Cash and cash equivalents		1,644,189	46,640	1,491,454	34,955
Total current assets		3,208,150	606,054	7,251,841	2,744,783
Current liabilities
Trade and other payables	17	445,273	427,871	219,780	433,355
Total current liabilities		445,273	427,871	219,780	433,355
Net current assets		2,762,877	178,183	7,032,061	2,311,428
Non-current liabilities
Borrowings	19	1,283,000	810,000	1,283,000	810,000
Other payables	17	23,864	817,388	-	779,621
Total non-current liabilities		1,306,864	1,627,388	1,283,000	1,589,621
NET ASSETS		8,181,563	4,274,216	9,531,204	4,958,465
Equity
Share capital	20	1,871,084	1,498,132	1,871,084	1,498,132
Share premium account		10,426,988	5,328,517	10,426,988	5,328,518
Warrant reserve	21	130,557	-	130,557	-
Foreign exchange reserve		(414,546)	3,147	-	-
Retained losses		(3,832,520)	(2,555,580)	(2,897,425)	(1,868,185)
Equity attributable to owners of the Company		8,181,563	4,274,216	9,531,204	4,958,465
TOTAL EQUITY		8,181,563	4,274,216	9,531,204	4,958,465

 

The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent company statement of comprehensive income.

 

The loss for the parent company for the year was £1,029,240 (2020: £634,880).

 

The accompanying accounting policies and notes are an integral part of these financial statements.

The financial statements were approved by the Board of Directors on 17 September 2021 and signed on its behalf by:

 

Mr Shishir Poddar                                 

Executive Chairman and Managing Director

 

Company registration number: 10742540

 

Consolidated Statement of Changes in Equity

For the year ended 31 March 2021

	Share capital	Share premium	Foreign exchange reserve	Share warrants reserve	Retained losses	TOTAL EQUITY
	£	£	£	£	£	£
Balance at 1 April 2019	1,470,275	5,024,524	4,714	-	(1,642,839)	4,856,674
Total comprehensive income:
Loss for the period	-	-	-	-	(912,742)	(912,742)
Forex exchange loss	-	-	(1,567)	-	-	(1,567)
Transactions with owners:
Shares issued	27,857	353,994	-	-	-	381,851
Share application money	-	(50,000)	-	-	-	(50,000)
Balance at 31 March 2020	1,498,132	5,328,518	3,147	-	(2,555,581)	4,274,215
Total comprehensive income:
Loss for the period	-	-	-	-	(1,276,940)	(1,276,940)
Forex exchange loss	-	-	(417,693)	-	-	(417,693)
Transactions with Equity owners:
Shares issued	372,952	5,098,470	-	-	-	5,471,422
Warrant charge	-	-	-	130,557	-	130,557
Balance at 31 March 2021	1,871,084	10,426,988	(414,546)	130,557	(3,832,521)	8,181,563

 

The accompanying accounting policies and notes are an integral part of these financial statements.

Share capital - Represents the nominal value of the issued share capital.

 

Share premium account - Represents amounts received in excess of the nominal value on the issue of share capital less any costs associated with the issue of shares.

 

Retained earnings - Represents accumulated comprehensive income for the year and prior periods.

Foreign exchange reserve - Represents exchange differences arising from the translation of the financial statements of foreign subsidiaries and the retranslation of monetary items forming part of the net investment in those subsidiaries.

Share warrant reserve - Represents reserve for equity component of warrants issued as per IFRS 2 share-based payments.

Company Statement of Changes in Equity

For the year ended 31 March 2021

	Share capital	Share premium	Share warrants reserve	Retained losses	TOTAL EQUITY
	£	£	£	£	£
Balance at 1 April 2019	1,470,275	4,974,524	-	(1,233,304)	5,211,495
Total comprehensive income:
Loss for the period	-	-	-	(634,881)	(634,881)
Transactions with owners:
Shares issued	27,857	353,994	-	-	381,851
Balance at 31 March 2020	1,498,132	5,328,518	-	(1,868,185)	4,958,465
Total comprehensive income:
Loss for the period	-	-	-	(1,029,240)	(1,029,240)
Transactions with Equity owners:
Shares issued	372,952	5,098,470	-	-	5,471,422
Warrant charge	-	-	130,557	-	130,557
Balance at 31 March 2021	1,871,084	10,426,988	130,557	(2,897,425)	9,531,204

 

The accompanying accounting policies and notes are an integral part of these financial statements.

Share capital - Represents the nominal value of the issued share capital.

 

Share premium account - Represents amounts received in excess of the nominal value on the issue of share capital less any costs associated with the issue of shares.

 

Retained earnings - Represents accumulated comprehensive income for the year and prior periods.

Share warrant reserve - Represents reserve for equity component of warrants issued as per IFRS 2 share-based payments.

 

 

 

 

 

 

Consolidated Statement of Cash Flows

For the year ended 31 March 2021

		2021	2020
		£	£
Cash used in operating activities
Loss for the year		(1,276,940)	(912,742)
Adjustment for:
Depreciation		205,723	127,100
Convertible loan note costs ("CLN")		21,910	56,700
Share based payments expense		49,627	-
Finance costs		147,151	46,003
Income tax		(27,827)	(54,767)
Working capital changes:
Increase in inventories		(310,987)	(93,604)
(Increase)/Decrease in receivables		(693,559)	21,935
Increase/(Decrease) in payables		17,402	(274,112)
Net cash used in operating activities		(1,867,500)	(1,083,487)
Cash flows from investing activities:
Purchase of tangible assets		(1,039,507)	(846,229)
Purchase of other assets		28,489	(18,045)
Net advances given		(586,700)	137,091
Net cash from investing activities		(1,597,718)	(727,183)
Cash flows from financing activities
Proceeds from Shares issued (net of costs)		5,552,352	331,851
Proceeds from issue of Convertible loan notes		473,000	810,000
Cost of issue of Convertible loan notes		(21,910)	(56,700)
Finance cost		(147,151)	(46,003)
Increase / (decrease) in long term liabilities		(793,524)	773,481
Net cash from financing activities		5,062,767	1,812,629
Net increase in cash and cash equivalents		1,597,549	1,959
Cash and cash equivalents at beginning of period		46,640	44,681
Cash and cash equivalents at end of period		1,644,189	46,640

 

The accompanying accounting policies and notes are an integral part of these financial statements.

Net advances - Represents the net advances given to the suppliers of machinery for supply of equipment for Madagascar projects of the Company

 

Company Statement of Cash Flows

For the year ended 31 March 2021

		2021	2020
		£	£
Loss for the year		(1,029,240)	(634,880)
Adjustment for:
Increase in inventories		(212,580)	-
Foreign exchange loss		-	9,621
Share based payments		49,627	-
CLN issuance cost		21,910	-
Finance costs		147,151	46,003
Working capital changes:
Increase in receivables		(2,837,978)	(616,060)
(decrease)/Increase in payables		(213,576)	456,799
Net cash used in operating activities		(4,074,686)	(738,517)
Cash flows from investing activities:
(Purchase)/sale of tangible assets		342,484	(333,809)
(Purchase)/sale of intangible assets		112,031	(36,159)
Net cash from investing activities		454,515	(369,968)
Cash flows from financing activities
Shares issued		5,552,352	381,851
Proceeds from issue of convertible loan notes		473,000	810,000
CLN issue cost		(21,910)	(56,700)
(decrease) in long term liabilities		(779,621)	-
Finance costs		(147,151)	-
Net cash from financing activities		5,076,670	1,135,151
Net increase in cash and cash equivalents		1,456,499	26,666
Cash and cash equivalents brought forward		34,955	8,289
Cash and cash equivalents carried forward		1,491,454	34,955

 

The accompanying accounting policies and notes are an integral part of these financial statements.

 

Notes to the Financial Statements

1.    General information

Tirupati Graphite plc (the "Company") is incorporated in England and Wales, under the Companies Act 2006. The registered office address is given on Company Information page.

The Company is a public company, limited by shares. On 14 December 2021 the ordinary shares of the Company were admitted on the official list of the FCA and to trading on the main market of the London stock exchange through standard listing.

The principal activities of the Company and its subsidiaries (the "Group") and the nature of the Group's operations are set out in the Strategic Report.

These consolidated financial statements are presented in pounds sterling since that is the currency of the primary economic environment in which the Group and Company operates. 

2.    Adoption of new and revised International Financial Reporting Standards (IFRSs)

New standards

The Group and Company have adopted all recognition, measurement, and disclosure requirements of IFRS, including any new and revised standards and Interpretations of IFRS, in effect for annual periods commencing on or after 1 April 2020. The adoption of these standards and amendments did not have any material impact on the financial result of position of the Group and Company.

Standards which are in issue but not yet effective:

At the date of authorisation of these financial statements, the following Standards and Interpretation, which have not yet been applied in these financial statements, were in issue but not yet effective.

Standard or interpretation	Description	Effective date
IAS 1	Amendments - Classification of Liabilities as Current or Non-Current	1 January 2023
IAS 16	Amendments - Property, Plant and Equipment	1 January 2022
IAS 8	Amendments - Definition of Accounting Estimates	1 January 2023
IAS 1	Amendments - Disclosure of Accounting Policies	1 January 2023
IFRS	Annual improvements to IFRS Standards 2018-2020	1 January 2022

 

The Group and Company have not early adopted any of the above standards and intends to adopt them when they become effective.

3.    Significant accounting policies

Basis of preparation

These consolidated financial statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with the requirements of the Companies Act 2006.

The financial statements have been prepared on the historical cost basis, except for financial instruments that are measured at the fair values at the end of the reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 4.

The principal accounting policies adopted are set out on the following pages.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Business Review and Strategic Report Sections. The financial position of the Group and the Company, their cash flows and liquidity positions are contained in the financial statements. The expected evolution of the business and significant post year end events are also described in the business review and strategic reports. In addition, the Annual Report discloses the Group's objectives, policies and processes for managing its business and capital; its financial risk management objectives; details of its financial instruments; and its exposure to credit and liquidity risk.

At the beginning of the year under reporting, the Company was a private entity with a small operation developing its business as described in the business review section, and was incurring nett losses at the Group level. It was in the process to seek admission on the standard segment of the London Stock Exchange and during the year, the Company achieved success in its efforts with a successful IPO raising gross proceeds of £6,000,000 to pursue further investments and creation of additional capacities to grow its business. Post year end, the Company further raised gross proceeds of £10,000,000 to meet its investments and working capital needs. Post its IPO, the Group progressed development of 3X additional flake graphite production capacity which was fully commissioned in early September 2021 post year end, enhancing its installed capacity from the previous 3,000 tpa to 12,000 tpa. It further remains funded for its investment needs for the next additional capacity under construction being 18,000 tpa which is expected to complete and commission in Q1/Q2 2022. From the operations of the 3,000 tpa capacity existing in the year under review, the Company generated gross Profits of £635,342 in spite of lower capacity utilisation, which it expects to improve further with the impacts of the pandemic expected to recede and additionally, for the second half of the current year, additional capacity of 9,000 tpa shall be operational. 

Taking in to account the comments above, the Directors have, at the time of approving the financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, given its current cash resources, installed capacities and operations which now have broken the threshold for the Company to meet all its non-investment cash needs from revenues and additional capacities being built by the Company for which it remains fully funded and which when completed, are expected to add further additional operating cash flows.

Should the Company not be unable to meet its investment needs from the internal accruals coupled with its current cash resources and not raise additional funds in the foreseeable future for its investment plans, the Directors would implement delays in investment for additional capacities and / or cost and cash saving measures and continue to generate revenues in order to meet its liabilities as they fall due. Therefore, they continue to adopt the going concern basis of accounting in preparing the financial statements.

Notwithstanding the loss incurred during the year under review, the Directors have prepared and reviewed a cash flow forecast including consideration of the impact of COVID-19. The forecast contains certain assumptions about the level of future sales and margins achievable. The Directors have considered various future scenarios in their forecasting to enable them to adequately consider whether the Group has adequate resources to continue in operational existence and remain of the view that the Company has adequate cash resources, business prospects and access to capital markets to remain a going concern.

Basis of consolidation

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group 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 over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

The Group consists of Tirupati Graphite plc and its wholly owned subsidiaries Tirupati Resources Mauritius, Tirupati Madagascar Ventures and Establissements Rostaing.

In the parent company financial statements, investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

The consolidated financial statements incorporate those of Tirupati Graphite plc and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 31 March 2021. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances, and unrealised gains on transactions between Group companies are eliminated on consolidation.

Segment reporting

An operating segment is a component of the Group that engages in business activity from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with the Group's other components. All operating segments' operating results, for which discrete financial information is available, are reviewed regularly by the Group's Board to make decisions about resources to be allocated to the segment and assess its performance. The Group reports on a three-segment basis - Holding Companies Expenses, Mining Exploration and Development and Graphite Mining Extraction.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods or services supplied in course of ordinary business, stated net of discounts, returns and value added taxes. The Group recognises revenue in accordance with IFRS 15 at either a point in time of over time, depending on the nature of the goods or services and existence of acceptance clauses.

Revenue from the sale of goods is recognised when delivery has taken place and the performance obligation of delivering the goods has taken place. The performance obligation of products sold are transferred according to the specific delivery terms that have been formally agreed with the customer, generally upon delivery when the bill of lading is signed as evidence that they have accepted the product delivered to them.

Foreign currencies

For the purposes of the consolidated financial statements, the results and financial position of each Group company are presented in pounds sterling, which is the functional currency of the Company. At balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Income and expense items are translated at the average exchange rates for the period.

Taxation

Income tax represents the sum of current tax and deferred tax.

Current tax

 

Current tax is based on taxable profit or loss for the year. Taxable profit or loss differs from net profit or loss as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

A provision is recognised for those matters for which the tax determination is uncertain, but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. The assessment is based on the judgement of tax professionals within the Company supported by previous experience in respect of such activities and in certain cases based on specialist independent tax advice.

Deferred tax

 

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised based on tax laws and rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

 

Current tax and deferred tax for the year

 

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

 

Assets Under Construction

All expenditure on the construction, installation or completion of infrastructure facilities is capitalised as construction in progress within "Assets Under Construction". Once production starts, all assets included in "Assets Under Construction" will be transferred into "Property, Plant and Equipment". It is at this point that depreciation/amortisation commences over its useful economic life. 

 

Assets Under Construction are stated at cost. The initial cost comprises transferred Mining Exploration and Evaluation assets, construction costs, infrastructure facilities, any costs directly attributable to bringing the asset into operation, the initial estimate of the rehabilitation obligation, and, for qualifying assets and borrowing costs. Costs are capitalised and categorised as construction in progress.

 

 

 

 

Property, Plant and Equipment

Property, Plant and Equipment in the course of construction for production, supply or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment loss. Costs includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group's accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

 

Fixtures and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method, on the following bases:

 

Plant and machinery                                                                           10%-25% per annum

Infrastructure and fixtures                                                                 10%-25% per annum                                          

 

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

An item of Property, Plant and Equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or scrappage of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.

Development costs

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if all of the following conditions have been demonstrated:

●     the technical feasibility of completing the intangible asset so that it will be available for use or sale;

●     the intention to complete the intangible asset and use or sell it;

●     the ability to use or sell the intangible asset;

●     how the intangible asset will generate probable future economic benefits;

●     the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

●     the ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Mining Exploration and Evaluation

Mining Exploration and Evaluation costs are carried forward in respect of areas of interest where the consolidated entity's rights to tenure are current, and where these costs are expected to be recouped through successful development into production from the area of interest or by sale or disposal of the project.  Alternatively, these costs are carried forward while active and significant exploration and evaluation costs are continuing in relation to the areas of interest and it is too early to make reasonable assessment of the existence or otherwise of economical production from the area of interest.  When the area of interest is abandoned, exploration and evaluation costs previously capitalised pertaining to the area of interest are impaired. 

Costs incurred by the Company on behalf of its subsidiaries and associated with exploration and evaluation activities are capitalised on a project-by-project basis pending commencement of production from the project.  Costs incurred include appropriate technical and administrative expenses but not general overheads. If the exploration and evaluation activities lead to economic production from the project, the related expenditures will be written-off over the estimated life (useful economic life) of the project on a unit of production basis. Impairment reviews are carried out regularly by the Directors of the Company. Where a project is abandoned, or is considered to be of no further commercial value, the related costs will be written off to the Statement of Comprehensive Income. 

The recoverability of these costs is dependent upon the exploration and evaluation activities successfully transitioning into production from the project, the ability of the Group to obtain necessary financing to complete the development of the project and derive future profitable production or proceeds from the sale or disposal of the project. 

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Derecognition of intangible assets

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Investments

Investments in subsidiaries are held at cost less any impairment.

Financial instruments

Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

Initial recognition and measurement

The Group applies IFRS 9 "Financial Instruments" and elected the simplified approach method.

The Group classifies its financial assets in the following categories: loans and receivables and fair value through profit and loss. The classification depends on the nature of the assets and the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition and this designation at every reporting date.

Loans and receivables

Loans and receivables are non‑derivative financial assets with fixed or determinable payments that are not quoted in an active market. The principal financial assets of the Company are loans and receivables, which arise principally through the provision of goods and services to customers (e.g. trade receivables) but also incorporate other types of contractual monetary assets. They are included in current assets, except for maturities greater than twelve months after the balance sheet date. These are classified as non-current assets.

The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the Consolidated Statement of Financial Position.

Financial assets are measured upon initial recognition at fair value plus transaction costs directly attributable to the acquisition of the financial assets, except for financial assets measured at fair value through profit or loss in respect of which transaction costs are recorded in profit or loss. Other financial assets are classified into the following specified categories: financial assets as "at fair value through profit and loss" and "loans and receivables". The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. 

The fair value of the liability portion of a convertible bond is determined using a market rate of interest rate for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders' equity, net of income tax effects.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents in the consolidated cash flow statement.

Financial assets - impairment

The Group assesses on a forward-looking basis the expected credit losses associated with its instruments carried at amortized cost and Fair Value Through Profit or Loss ("FVTPL"). The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Non-financial assets - impairment

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets, including Goodwill, to determine whether there is any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Provision is made for any impairment and immediately expensed in the period.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Financial liabilities and equity instruments issued by the Group

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issued costs.

Trade payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised costs, using the effective interest rate method.

Borrowings

These financial liabilities are all non-interest bearing and are initially recognised at amortised costs and include the transaction costs directly related to the issuance. The transaction costs are amortised using the effective interest rate method over the life of the liability.

Financial liabilities at Fair Value Through Profit or Loss ("FVTPL")

Financial liabilities at FVTPL comprise of the Company's convertible loan notes payable. Financial liabilities are classified as at FVTPL when the financial liability is (i) contingent consideration that may be paid by an acquirer as part of a business combination to which IFRS 3 applies, (ii) held for trading, or (iii) it is designated as at FVTPL.

A financial liability is classified as held for trading if:

●     it has been incurred principally for the purpose of repurchasing it in the near term; or

●     on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or

●     it is a derivative that is not designated and effective as a hedging instrument.

A financial liability other than a financial liability held for trading or contingent consideration that may be paid by an acquirer as part of a business combination may be designated as at FVTPL upon initial recognition if:

●     such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

●     the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

●     it forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the 'other gains and losses' line item in the income statement.

Other financial liabilities

Other financial liabilities are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, as set out above, with interest expense recognised on an effective yield basis.

Share based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and condition of equity settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cancellations or settlements are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

As a result of the increase in share price and the impact of the estimation of share-based payments the Group has now recognised an expense for the outstanding share options and warrants.

4.    Critical accounting estimates and judgements

The preparation of financial statements in conformity with adopted IFRSs requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or action, actual results ultimately may differ from those estimates.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below. 

a)     Impairment of assets

The Company is required to test, on an annual basis, whether its non-current assets have suffered any impairment. Determining whether these assets are impaired requires an estimation of the value in use of the cash-generating units to which the assets have been allocated. The value in use calculation requires the Directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate to calculate the present value. Subsequent changes to the cash generating unit allocation or to the timing of cash flows could impact on the carrying value of the respective assets.

The Company assessed the recoverability of intragroup receivables, and it does not require any impairment adjustment in current financial year. 

 

5.    Segmental analysis

The Management believes, under IFRS 8 - "Segmental Information", the Group operated in three primary business segments in 2021, being Holding Companies Expenses, Mining Exploration and Development and Graphite Mining Extraction.

Segmentation by continuing businesses

Segment results

	2021	2020
	£	£
Revenue to external customers
Graphite Mining Extraction	1,123,426	793,577
(Loss) before income tax
Holding Companies Expenses	(1,002,218)	(609,868)
Mining Exploration and Development	(239,555)	(193,042)
Graphite Mining Extraction	(14,957)	(55,065)
Net assets/(liabilities)
Holding Company Expenses	9,120,707	5,440,186
Mining Exploration and Development	(698,823)	(193,749)
Graphite Mining Extraction	(237,415)	(573,146)

Segmentation by geographical area:

	2021	2020
	£	£
Revenue to external customers
UK	1,123,019	793,577
Mauritius	-	-
Madagascar	407	-
(Loss) before income tax
UK	(1,036,857)	(634,881)
Mauritius	785	(20,079)
Madagascar	(220,658)	(261,079)
Net assets
UK	9,534,110	5,593,346
Mauritius	159,159	189,322
Madagascar	(1,508,800)	(530,416)

 

6.    Revenue from contracts with customers

The Group derives revenue from the transfer of goods at a point in time in the following major product lines and geographical regions:

2021	USA	Europe	India	Total
Revenue from external customers	19,565	211,584	892,277	1,123,426
Timing of recognition:
At a point in time	19,565	211,584	892,277	1,123,426

 

2020	USA	Europe	India	Total
Revenue from external customers	41,022	122,408	630,147	793,577
Timing of recognition:
At a point in time	41,022	122,408	630,147	793,577

 

 

7.    Expenses by nature

	2021	2020
	£	£
The following items have been included in arriving at operating loss
Depreciation	205,723	127,100
Net foreign exchange loss	(22,058)	1,382
PR/IR Expenses	119,181	65,881
Professional Fees	55,421	90,910
Auditor's remuneration has been included in arriving at operating loss as follows:
Fees payable to the Company's auditor and their associates for the audit of the Parent Company and consolidated financial statements	45,000	33,209
Fees payable to the Company's auditor and its associates for other services:
Corporate finance services	50,000	-

 

8.    Employee information

The average monthly number of employees (including Executive Directors) was:

 

	2021	2020
Number of employees for the year:	203	150
	£	£
Wages & salaries (for the above employees)	930,707	380,892
Social security costs	12,521	7,122
Share based payments	68,739	-
	1,011,967	388,014

 

Directors' remuneration and transactions

	2021	2020
	£	£
Directors' remuneration
Emoluments and fees	634,849	324,000
	£	£
Remuneration of the highest paid director:
Emoluments and fees	240,000	180,000
Payment in lieu of retirement benefits	24,000	-
Bonus	198,000	-
Share based payments	20,507	-

 

Refer to Directors Remuneration Report for further information in respect of Directors' remuneration.

9.    Finance cost

	2021	2020
	£	£
Interest Expense	147,151	46,003

 

10.  Income tax

	2021	2020
	£	£
Total current tax	-	-
Deferred tax charged to the income statement	27,827	54,767
Total	27,827	54,767
The tax assessed for the period is different from the standard rate of income tax, as explained below:
Loss before tax on continuing operations	(1,249,113)	(857,975)
Loss before tax multiplied by the standard rate of income tax of 20%	(249,823)	(171,595)
Tax losses carried forward	221,996	116,828
Adjustments to tax charge in respect of prior periods	-	-
Tax (credit)/charge for period	27,827	54,767
Total tax losses carried forward on which no DTA has been recognized	2,660,796	1,175,112

 

The Group has tax losses available to be carried forward and used against trading profits arising in future periods of £2,660,796 (2020: £1,175,112). A deferred tax asset of £532,159 (2020: £235,022) calculated at a weighted average rate of 20% has not been recognised in respect of the tax losses carried forward on the basis that there is insufficient certainty over the level of future profits to utilise against this amount.

11.  Earnings per share

Basic and diluted

Earnings per share is calculated by dividing the loss attributable to the equity holders of the Company by the weighted average number of Ordinary shares in issue during the period.

	2021	2020
Continuing operations:
Loss attributable to equity holders of the Company (£)	(1,694,632)	(912,742)
Weighted average number of ordinary shares in issue	64,883,546	59,756,437
Loss per share (pence)	(2.61)	(1.53)

 

	2021	2020
Diluted number of ordinary shares in issue	71,357,375	59,756,437

 

Given the loss for the year, the diluted earnings per share was the same as basic earnings per share as this would otherwise be dilutive.

12.  Intangible Assets

Group		Exploration assets
Cost		£
At 1 April 2019		3,902,234
Additions		135,766
Impairment		(346,756)
At 1 April 2020		3,691,243
Additions		-
Forex Change		8,889
At 31 March 2021		3,682,354

 

Accumulated amortisation
At 1 April 2019		-
Charge for the year		-
At 1 April 2020		-
Charge for the year		-
At 31 March 2021		-
Net book value
At 1 April 2019		3,902,234
At 1 April 2020		3,691,243
At 31 March 2021		3,682,354

 

Intangible assets comprise exploration and evaluation costs. Exploration and evaluation assets are all internally generated, except for those acquired at fair value as part of a business combination.

Exploration and evaluation assets have no useful economic life per IFRS 6 and are tested for impairment annually.

13.  Investments

Company		Shares in group undertaking
Cost		£
At 1 April 2019		3,539,448
At 1 April 2020		3,539,448
At 31 March 2021		3,539,448
Net book value
At 1 April 2019		3,539,448
At 1 April 2020		3,539,448
At 31 March 2021		3,539,448

 

The Company's investments at the Statement of Financial Position date in the share capital of companies include the following:

Subsidiaries

Tirupati Resources Mauritius
Registered: C/o Alliance Financial Services Ltd, Level 2, Standard Chartered Tower, Cybercity, Ebene, Republic of Mauritius
Nature of business: Holding and administrative entity
	%
Class of share	Holding
Ordinary shares	100*

*Tirupati Resources Mauritius is liquidated on 28^th May 2021 and the shares are transferred to Tirupati Graphite Plc

 

Tirupati Madagascar Ventures
Registered: Mining Business Center, Box No - 5, Lot K 7, Mamory, Ivato, Antananarivo 105, Madagascar
Nature of business:  Evaluation and exploration of mining operations
	%
Class of share	Holding
Ordinary shares	98*

*indirectly through Tirupati Resources Mauritius. Tirupati Resources Mauritius was liquidated on 28^th May 2021 and the shares have been transferred to Tirupati Graphite Plc

 

Establissements Rostaing
Registered: Lot II N 95  SB BIS E, Ambatobe, Antananarivo 103, Madagascar
Nature of business:  Graphite mining extraction
	%
Class of share	Holding
Ordinary shares	100*

* 95% held indirectly by Tirupati Resources Mauritius. Tirupati Resources Mauritius is liquidated on 28^th May 2021 and the shares are transferred to Tirupati Graphite Plc

 

 

14.  Property, plant and equipment

Group	Plant and Machinery	Infrastructure & Fixtures	Assets under construction	Development costs	Total
	£	£	£		£
Cost
At 1 April 2019	773,167	82,518	219,561	220,400	1,295,646
Additions	476,457	34,301	138,762	323,809	973,329
At 1 April 2020	1,249,624	116,819	358,323	544,209	2,268,975
Additions	735,950	294,976	217,210	-	1,248,136
Reclassification	-	-	544,209	(544,209)	-
At 31 March 2021	1,985,574	411,795	1,119,742	-	3,517,111
Accumulated depreciation and impairment
At 1 April 2019	151,263	9,977	-	-	161,240
Depreciation	103,098	24,002	-	-	127,100
At 1 April 2020	254,361	33,979	-	-	288,340
Depreciation	146,893	58,830	-	-	205,723
At 31 March 2021	401,254	92,809	-	-	494,063
Carrying amount
As at 1 April 2020	995,263	82,840	358,323	544,209	1,980,635
As at 31 March 2021	1,584,320	318,986	1,119,742	-	3,023,048
Company				Assets under construction £	Total   £
Cost				£
At 1 April 2019				220,400	220,400
Additions				323,809	323,809
At 1 April 2020				544,209	544,209
Transfer to Subsidiary				(339,578)	(339,578)
At 31 March 2021				204,631	204,631
At 1 April 2019				-	-
Depreciation				-	-
At 1 April 2020				-	-
Depreciation				-	-
At 31 March 2021				-	-
				-
Carrying amount
As at 1 April 2020				544,209	544,209
As at 31 March 202!				204,631	204,631

 

15.  Trade and other receivables

	Group		Company
	2021	2020	2021	2020
	£	£	£	£
Trade receivables	721,534	208,476	566,646	208,476
Other debtors	381,334	217,693	87,846	103,764
Amounts owed by group undertakings	-	-	4,893,314	2,397,588
Prepayments	-	7,887	-	-
	1,102,868	409,309	5,547,806	2,709,828

 

In the Directors' opinion, the carrying amounts of receivables is considered a reasonable approximation of fair value. The Group monitors on a monthly basis the receivable balance and makes impairment provisions when debt reaches a certain age. There are no significant known risks as at 31 March 2021.

16.  Inventories

	Group
	2021	2020
Cost and net book value	£	£
Raw materials and consumables	222,352	57,600
Finished and semi-finished goods	26,160	92,505
Goods in Transit	212,580	-
	461,092	150,105

 

17.  Trade and other payables

Current:

	Group		Company
	2021	2020	2021	2020
	£	£	£	£
Trade payables	403,361	272,407	146,213	135,362
Social security and other taxes	3,422	25,044	-	25,044
Other payables	-	11,229	-	5,770
Amounts due from group	-	-	35,077	163,566
Accruals	38,490	119,191	38,490	103,613
	445,273	427,871	219,780	433,355

 

In the Directors' opinion, the carrying amount of payable is considered a reasonable approximation of fair value.

Non-current:

	Group		Company
	2021	2020	2021	2020
	£	£	£	£
Director's remuneration	-	632,015*	-	632,015
Management Salary Payable	-	147,606	-	147,606
Lease liability	23,864	37,767	-	-
	23,864	817,388	-	779,621

*In 2020 it was considered as Non-Current as payment was deferred till successful capital raise through public issue. Due to the uncertain nature of this activity the company thought it was prudent to treat it as Non-current.

 

 

 

18.  Provisions

No provisions have existed within the financial year or persist at year end.

19.  Borrowings

During this financial year the Company raised further £513k through a convertible loan note instrument ("CLN"). In the year ended 31^st March 2021, CLNs £40k were converted in the equity. Interest on the CLN is chargeable at 12%.

	2021	2020
Within one year	-	-
Between 2 and 5 years	1,283,000	810,000
	1,283,000	810,000

 

The loan notes shall be redeemed by the Company, at any time after the first anniversary of an Initial Public Offering up to the Maturity Date or by the Noteholder or the Company, on the Maturity Date being the 31 May 2022.

 

Conversion can be made 15 Business Days after the date of completion of a successful Initial Public Offering to convert all of the Notes outstanding into fully paid Ordinary Shares at a price equal to the price per Share paid by investors participating in the Initial Public Offering.

 

20.  Share capital

	2021	2021	2020	2020
	Number	£	Number	£
Allotted, called up and fully paid
Ordinary shares of 2.5p each	74,843,323	1,871,084	59,925,243	1,498,131

 

Shares were issued during the year as follows:

	Cost of issue (£)	Number of shares issued
Shares issued from a placing on 15 July 2020	-	995,757
Shares issued from a placing on 04 August 2020	-	500,100
Shares issued from a placing on 14 December 2020	967,103	13,333,334
Shares issued from a placing on 26 January 2021	-	88,889
	967,103	14,918,080

 

21.  Share based payments & warrant reserve

During the first two years after incorporation of the Company, with the consent of its Board and senior management team, the Company adopted a minimal approach to incentives and provided no bonuses to the executive management team or the Board. However, to show the appreciation of the Company, the Board was provided with an annual incentive package in the form of warrants to subscribe for equity shares of the Company at a premium to the prices at which Ordinary Shares have been subscribed when the Company raised equity in the relevant period. The Company has also provided broker warrants to Optiva, on a success basis, for the fundraising activities executed by it prior to Admission. In addition to this, the Company has also issued warrants to some CLN subscribers for funds raised before admission of the Company to the LSE.

 

All warrants are equity-settled, in accordance with IFRS 2, by award of warrants to acquire ordinary shares or award of ordinary shares. The fair value of these awards has been calculated at the date of grant of the award. The fair value of the warrants granted was calculated using a Black-Scholes model. Changes in the assumptions can affect the fair value estimate of a Black-Scholes model.

 

Following are the key assumptions used to estimate the fair value of the warrants issued:

a)     Expected Volatility: 20%

b)    Contractual Life of the warrant: 3 years

c)     Risk free interest rate: 0.38% p.a.

 

Following warrants over ordinary shares have been granted by the Company and are outstanding as on 31 March 2021:

Grant Date	Expiry Date	Exercise Price (£)	Number of warrants exercisable and outstanding
31 December 2017	30 June 2021	0.300	1,000,000
13 September 2018	13 November 2021	0.200	376,509
31 December 2018	31 December 2021	0.400	1,520,000
31 March 2019	31 March 2022	0.400	480,000
31 December 2019	31 December 2022	0.400	1,620,000
26 February 2020	26 February 2023	0.675	36,000
31 March 2020	31 March 2023	0.400	960,000
15 June 2020	15 June 2023	0.675	222,222
15 June 2020	15 June 2023	0.900	222,222
30 June 2020	30 June 2023	0.675	22,800
16 July 2020	12 August 2022	0.525	41,143
14 December 2020	14 December 2023	0.450	170,329
14 December 2020	14 December 2023	0.675	113,553
Total			6,784,778

 

Though the Company had committed to provide these warrants to the parties mentioned in the table below since financial year 2017-18, the warrant instrument under which these warrants are approved was finalized and formally approved by the board in the current financial year the warrant reserve was created first time in the current financial year, as the charge relating to previous periods was immaterial to the Company.

Warrants issued to	Number of warrants outstanding	Warrant reserve £
Brokers	760,334	16,457
Members of the Board & executive management	5,580,000	68,739
CLN Investors	444,444	45,361
Total	6,784,778	130,557

 

22.  Financial instruments

Financial risk management

The Group has exposure to the following risks from its use of financial instruments:

 

●     Capital risk management

●     Market risk

●     Credit risk

●     Liquidity risk

●     Currency risk

 

This note presents information about the Group's exposure to each of the above risks, the Group's management of capital, and the Group's objectives, policies and procedures for measuring and managing risk.

The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities.

The Group Audit Committee oversees how management monitors compliance with the Group's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

Capital risk 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 as well as sustaining the future development of the business. In order to maintain or adjust the capital structure, the Group may adjust dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The capital structure of the Group consists of net debt, which includes loans, cash and cash equivalents, and equity attributable to equity holders of the parent, comprising issued capital and retained earnings.

Fair value of financial assets and liabilities

	Valuation,	Book value	Fair value	Book value	Fair value
	Methodology	2021	2021	2020	2020
	and hierarchy	£	£	£	£
Financial assets
Cash and cash equivalents	(a)	1,644,189	1,644,189	46,640	46,640
Loans and receivables, net of impairment	(a)	720,628	720,628	409,309	409,309
Total at amortised cost		2,364,817	2,364,817	455,949	455,949
Financial liabilities
Trade and other payables	(a)	448,633	448,633	1,245,259	1,245,259
Borrowings and provisions	(a)	1,283,000	1,283,000	810,000	810,000
Lease Liabilities	(a)	23,864	23,864
Total at amortised cost		1,755,497	1,755,497	2,055,259	2,055,259

 

Valuation, methodology and hierarchy

(a)  The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables and deferred income, and Borrowings are all stated at book value. All have the same fair value due to their short-term nature.

 

Market risk

Market price risk arises from uncertainty about the future valuations of financial instruments held in accordance with the Group's investment objectives.  These future valuations are determined by many factors but include the operational and financial performance of the underlying investee companies, as well as market perceptions of the future of the economy and its impact upon the economic environment in which these companies operate. 

 

Credit risk

Credit risk is the risk that counterparties to financial instruments do not perform their obligations according to the terms of the contract or instrument. The Group is exposed to counterparty credit risk when dealing with its customers and certain financing activities.

The immediate credit exposure of financial instruments is represented by those financial instruments that have a net positive fair value by counterparty at 31 March 2021. The Group considers its maximum exposure to be:

	2021	2020
	£	£
Financial assets
Cash and cash equivalents	1,644,189	46,640
Loans and receivables, net of impairment	1,102,868	409,309
	2,747,058	455,949

 

All cash balances are held with an investment grade bank who is our principal banker. Although the Group has seen no direct evidence of changes to the credit risk of its counterparties, the current focus on financial liquidity in all markets has introduced increased financial volatility. The Group continues to monitor the changes to its counterparties' credit risk.

Liquidity risk

Liquidity risk is the risk the Group will encounter difficulty in meeting its obligations associated with financial liabilities as they fall due. The Board are jointly responsible for monitoring and managing liquidity and ensures that the Group has sufficient liquid resources to meet unforeseen and abnormal requirements. The current forecast suggests that the Group has sufficient liquid resources.

Available liquid resources and cash requirements are monitored using detailed cash flow and profit forecasts these are reviewed at least quarterly, or more often as required. The Directors decision to prepare these accounts on a going concern basis is based on assumptions which are discussed in the going concern note above.

The following are the contractual maturities of financial liabilities:

	Carrying	Contractual	6 months	6 to 12	1 to 2	2 to 5
31 March 2021	amount	cash flows	or less	months	years	years
	£	£	£	£	£	£
Non-derivative financial liabilities
Trade and other payables	445,273	-	445,273	-	-	-
Borrowings	1,283,000	-	-	-	-	1,283,000

 

Cash flow management

The Group produces an annual budget which it updates quarterly with actual results and forecasts for future periods for profit and loss, financial position and cash flows. The Group uses these forecasts to report against and monitor its cash position. If the Group becomes aware of a situation in which it would exceed its current available liquid resources, it would apply mitigating actions involving reduction of its cost base. The Group would also employ working capital management techniques to manage the cash flow in periods of peak usage. 

Currency risk

The Group operates internationally and is exposed to foreign exchange risk. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the functional currency of the relevant Group entity. The Group's primary currency exposure is to US Dollar, which is the currency of all intra-group transactions as well as denomination of selling price of the products. The group also has some exposure to Malagasy ariary due to its operating subsidiaries in Madagascar.

Considering the natural hedge available the Group currently doesn't hedge the currency risk. The Group's and Company's exposure to foreign currency risk at the end of the reporting period is summarised below. All amounts are presented in GBP equivalent.

Group	USD 2021	MGA 2021	USD 2020	MGA 2020
	£	£	£	£
Cash and cash equivalents	90,236	66,118	49,519	2,574
Trade & other receivables	522,400	489,622	354,214	95,255
Trade & other payables	(151,353)	(301,816)	(163,566)	(147,662)
Net Exposure	461,283	253,924	240,167	(49,833)

 

Company	USD 2021	USD 2020
	£	£
Cash and cash equivalents	3,619	28,475
Loans to subsidiaries	4,893,314	2,353,713
Trade & other receivables	522,400	354,214
Trade & other payables	(151,353)	(163,566)
Net Exposure	5,267,980	2,572,836

 

Sensitivity Analysis

As shown in the table above, the Group is primarily exposed to changes in the GBP:USD & GBP:MGA exchange rates. The table below shows the impact in GBP on pre-tax profit and loss of a 10% increase/ decrease in the GBP to USD exchange rate, holding all other variables constant. Also shown is the impact of a 10% increase/decrease in the GBP to MGA exchange rate, being the other primary currency exposure.

2021	Group	Company
	£	£
GBP:USD exchange rate increases by 10%	532	53,071
GBP:USD exchange rate decreases by 10%	(592)	(64,864)

 

GBP:MGA exchange rate increases by 10%	(51,402)	-
GBP:MGA exchange rate decreases by 10%	57,183	-

 

2020	Group	Company
	£	£
GBP:USD exchange rate increases by 10%	934	22,055
GBP:USD exchange rate decreases by 10%	(1,031)	(45,453)

 

GBP:MGA exchange rate increases by 10%	(36,223)	-
GBP:MGA exchange rate decreases by 10%	40,034	-

 

23.  Related party transactions

Tirupati Carbons and Chemical Pvt Limited (TCCPL) is an entity incorporated in India. The Company is connected to TCCPL in that both Shishir Poddar and Hemant Poddar were both directors and shareholders of TCCPL during the year. At year end, included within debtors was an amount of Nil (2020: £135,005) and revenue recorded for the year of £46,090 (2020: £101,659) from TCCPL.

Tirupati Speciality Graphite Private Limited (TSG) is an entity incorporated in India. The Company is connected to TSG in that both Shishir Poddar and Hemant Poddar were both directors and shareholders of TSG during the year. At year end, a net amount was receivable of £250,656 (2020 - £73,723) and revenue of £238,602 (2020 - £291,662) from TSG.

Haritmay Ventures LLP (HV) is an entity incorporated in India and engaged in manufacturing proprietary tailor made flake graphite processing machinery and equipment which the Company uses in its projects. The Company is connected to HV in that Shishir Poddar is partner and shareholder of HV during the year. At year end, a net amount was receivable of £72,552 (2020 - Nil) and revenue of Nil (2020 - Nil) from HV.

Optiva Securities Limited is an entity incorporated in the United Kingdom. The Company is a stock brokerage firm connected to the Company being the sole broker of the Company and Christian Gabriel St.John-Dennis one of the directors of the Company and holding a position with Optiva Securities Limited during the year. At year end, the Company incurred brokerage and consultancy fees, business development fees of £378,402 (2020- £50,894).

24.  Events after the reporting period

In April 2021, the Company completed a placing of 11,111,111 ordinary shares of £0.025 each in the Company at a price of £0.90 per share with institutional and other investors to raise an aggregate gross amount of £10 million (the "Placing"). The net proceeds of the Placing will primarily be used to expedite and accelerate the Company's modular MTDP.

In September 2021 the Company commissioned its second flake graphite mining and processing facility at the Vatomina project increasing its installed capacity from 3,000 tpa to 12,000 tpa. This shall materially change the Company's trading position.

In June 2021, the Group decided to dissolve the intermediary company - Tirupati Resources Mauritius in Mauritius and bring the Madagascan subsidiaries directly under Tirupati Graphite Plc. This will reduce administrative costs and management time the Group needed to spend to keep this holding company floating.

In August 2021, the Company entered into a binding agreement subject to certain conditions precedent, for acquisition of Mozambique based graphite projects from ASX listed Battery Minerals Limited. The consideration payable by the Company on completion is a total sum of AU$ 12.5 million of which AU$ is to be settled in cash and AU$11.5 in ordinary shares of the Company. The Acquisition is subject, amongst other things, to the mandatory shareholder approval of Battery Minerals and approval of the transaction by the Ministry of Mineral Resources and Energy in Mozambique.

 

 

 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

** ENDS **

 

For further information, please visit www.tirupatigraphite.co.uk or contact:

 

Tirupati Graphite Plc Puruvi Poddar	+44 (0) 20 3984 9894
Optiva Securities Limited (Broker) Daniel Ingram	+44 (0) 20 3137 1902
St Brides Partners Ltd (Financial PR) Isabel de Salis / Oonagh Reidy	[email protected]

 

Notes

Tirupati Graphite Plc is a revenue-generating, multi-asset, multi-jurisdictional, fully integrated producer and developer of high-grade natural flake graphite, speciality graphite and graphene and graphene enhanced advanced materials.  With a unique set of properties, graphite has diverse applications with multiple growth streams and graphene forms the new generation of 2D and advanced materials. The Company places a special emphasis on "green" applications, including renewable energy and energy efficiency, energy storage, thermal management, and advanced materials development, and is committed to ensuring its operations are sustainable as well.

 

The Company's operations include primary mining and processing in Madagascar, where the Company operates two key projects, Sahamamy and Vatomina; 12,000 tpa of high-quality flake graphite concentrate with up to 96% purity is the current capacity of these projects and flake graphite being produced is sold to customers globally. The projects are under staged development and total capacity is planned to increase to 84,000 tpa by 2024 as per the Company's modular medium-term development plan.

 

In India, through Tirupati Speciality Graphite Private Limited ('TSG'), with whom the Company has a binding acquisition agreement subject to regulatory approvals, Tirupati is developing a suite of speciality graphite for use in hi-tech applications like lithium-ion batteries, fire retardants, thermal management, and composites. Its current operations include the 1,200 tpa Patalganga Project, focused on manufacturing the Company's trademarked expandable graphite products CARBOFLAMEX® and GrafEN 45545™. TSG is further developing 30,000 tpa specialty graphite project in two equal size modules and has developed unique green processing technologies for manufacturing these advanced materials.

 

TSG is also developing the Tirupati Graphene and Mintech Research Centre ('TGMRC'), a state-of-the-art R&D centre focussed on manufacturing graphene, developing its applications and advanced materials using graphene, and further providing environmentally friendly technologies consultancy for mineral processing.  Commercial operations commenced in July 2021 having completed Stage 1 of the centre's development plan.