Notes to the Condensed Financial Statements

Tirupati Graphite plc (the "Company") is incorporated in England and Wales, under the Companies Act 2006 and domiciled in the United Kingdom. The registered office is Eastcastle House, 27/28 Eastcastle Street, London W1W 8DH.

The Company is a public company, limited by shares. The ordinary shares of the Company are listed under the equity companies Transition Category of the FCA listing rules and admitted to trading on the main market of the London Stock Exchange, although currently suspended.

The principal activities of the Company and its subsidiaries (the "Group") graphite mining and related activities. The Company is the parent company of the Group.

These condensed 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.     Significant Accounting Policies and Basis of Preparation

The condensed financial statements for the six-month period ended 30 September 2025 have been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting as adopted by UK and the requirements of the Disclosure and Transparency Rules (DTR) of the Financial Conduct Authority (FCA) in the United Kingdom as applicable to interim financial reporting.

The condensed financial statements represent a 'condensed set of financial statements' as referred to in the DTR issued by the FCA. Accordingly, they do not include all the information required for a full annual financial report and are to be read in conjunction with the Group's financial statements for the year ended 31 March 2025, which were prepared in accordance with UK-adopted international accounting standards (IAS) and in conformity with the requirements of the Companies Act 2006. The condensed financial statements are unaudited and do not constitute statutory accounts as defined in the Companies Act 2006. Financial information included herein for the year ended 31 March 2025 does not constitute statutory accounts as defined in the Companies Act 2006 and was derived from the statutory accounts for that year, a copy of which has been delivered to Companies House. The Independent Auditor's report on those accounts was qualified in respect of certain specific matters, and also included an emphasis of matter and a material uncertainty with respect to going concern.

The significant accounting policies adopted in the 2025 half-year financial statements are the same as those adopted in the Group's financial statements as at 31 March 2025. The following Standard and Interpretations were in issue and effective for the first time in the period beginning 1 April 2025:  Lack of Exchangeability - Amendments to IAS 21. This does not have a material impact on the Group.

Going Concern

The condensed financial statements are prepared on a going concern basis of accounting, which the Board considers reasonable taking account of key factors and uncertainties described in this Note. The Directors have prepared cash flow projections for the period to 31 May 2027 which show that the Company and the Group can meet their ongoing liabilities as they fall due.

Through 2024 and early 2025, the Group experienced an extended period of financial distress during which production and therefore revenues were intermittent and the Group was late in settling various creditors. From January 2025, a new Board was in place and new financing has been raised, with amendments agreed to the maturity and terms of existing financing and payment plans agreed with several larger creditors. As at the date of approval of this annual report, 16 March 2026,  the Group had £0.1 million available cash but expects but expects to receive the net proceeds of the £2.4 million conditional Placing described in Note 20 once the related Prospectus has been approved and the placing shares can be admitted to trading on the LSE.

Following the steps implemented in 2025, the remaining material uncertainties to continuing as a going concern are now considered to be the closing of the conditional share Placing undertaken in December 2025 and the conversion of the 2019 and 2025 Series 1,2 and 3 Convertible loan notes ("CLNs") to equity before their final maturity dates. These CLN instruments have a final maturity date (as amended in certain cases) of 31 March 2026.  See Note 20 regarding events since 30 September 2025 including the issue of 2025 Series 3 CLNs, the conditional Placing, shareholder approvals and CLN amendments completed so far, which satisfy certain of the conditions to closing of the Placing and conversion of the CLNs.  The remaining conditions to be satisfied for closing the conditional Placing and for the Company to be able to issue the conversion notices for the 2019 and 2025 Series 1,2 and 3 CLNs to ordinary shares of the Company comprise (i) the Company's ordinary shares resuming trading on the LSE, which will require the Company to be become compliant with its obligations for financial reporting,  requiring the filing of these delayed unaudited half year statements to 30 September 2025; and (ii) the approval by the FCA of a prospectus for the issue of the new conversion and Placing shares. To that end, a draft Prospectus has been submitted to the FCA for review, but cannot be completed until these interim financial statements have been filed.  The long stop date for satisfaction of the conditions under the Placing Agreement is currently 31 March 2026. There may also be a risk that certain investors default under their obligations under binding placing letters they entered into with the placing agent.

The Board also recognises that the amended final maturity date of the 2022 convertible loan note, of £1.92 million plus accrued interest, falls shortly after the next 12 months, on 31 March 2027, which will require redemption in cash unless noteholders have served notice to convert their holding to ordinary shares of the Company prior to that date. To the extent that conversion has not been elected by the noteholders, and redemption in cash at final maturity by the Company is required, the Directors may seek to re-finance such outstanding notes or, if only required in part, redeem out of forecast available cash resources. The Directors consider that re-financing that amount, to the extent required after conversion elections made, would be reasonable to assume, noting that the Company has raised or received financing commitments for £7.9 million in 2025.

At the date of approval of these interim financial statements, the Directors consider that it is reasonable to assume satisfactory outcomes to each of the above milestones. Were the Company unable to close the Placing and require conversion to equity of the 2019 and 2025 CLNs prior to their 31 March 2026 final maturity dates, it would be unlikely to be able to meet its cash flow needs from revenue. Therefore, if the Company was unable to raise additional finance and / or make alternative arrangements with the relevant providers of finance it would likely become insolvent.

The Company notes that even though the above assumptions are considered reasonable, there are material uncertainties as to whether the Company can achieve the milestones described above and, in particular, the Prospectus approval requirement is not within the full control of the Directors.

Overall, taking into account the comments above, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future.  For these reasons, the Directors continue to adopt the going concern basis in preparing the financial statements.

The preparation of financial statements in conformity with UK-adopted IAS requires the use of estimates and judgements 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. The critical estimates and judgements for these interim financial statements  are considered to be the same as for the Group's financial statements for the year ended 31 March 2025.

The Group & the Company derives revenue from external customers from the transfer of goods at a point in time in the following major geographical regions:

The following customers constituted more than 10% of the revenue, their respective share of revenue is mentioned below:

Finance expense for 2025 includes broker commissions for the CLN issue in the period, as the notes had an original maturity, if not converted, in 2025.

Basic and diluted

Loss 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.

The dilutive instruments comprising all the warrants and convertible loan notes issued by the Company have an anti-dilutive effect on loss per share.

Intangible assets comprise allocations of purchase consideration to rights under mining concessions and licences, including rights to explore, principally the Sahamamy concession.

VAT receivables include £1.0 million in respect of recoverable Madagascar VAT and £0.85 million in respect of recoverable Mozambique VAT (the latter measured at fair value at acquisition; face value £1.5 million). The timing of recovery of these balances is uncertain, but there is no track record of material disallowances.

Trade receivables are amounts due from customers for goods sold in the ordinary course of business. They are generally due for settlement within 30-60 days and therefore are all classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method. All sales of the company are in USD.

Trade receivables are provided for when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual payments for a period of greater than 120 days past due.

Restricted cash comprises bank deposits held as security for bank guarantees issued in Mozambique against licence work obligations. The bank deposits are available at short notice to the Group but not included as available cash equivalents because in practice they are being used as security, so do not represent available liquidity.

Current:

Non-current:

There were no significant capital commitments as at 30 September 2025 or 2024.

During the six months to 30 September 2025, the Company issued £4.5 million of 12% convertible loan notes ("2025 Series 1 CLN") with an original final maturity date 31 December 2025. Out of the £4.5 million proceeds, £1.6 million had been received prior to 31 March 2025 as advances.  The 2025 Series 1 CLN is convertible to Ordinary Shares of the Company by the holders and conditionally by the Company; the principal conditions being that the conversion shares can be issued and admitted to trading. 

On 15 September 2025 the Company created a new 2025 series 2 12% convertible loan note ("2025 Series 2 CLN") of which £0.1 million had been issued by 30 September 2025 and a further £0.16 was issued subsequent to the period end. The terms of the 2025 Series 2 CLN are the same as for the 2025 Series 1 CLN.

The Company has previously issued three other series of convertible loan notes and the terms of two of those issues were amended in the period by resolutions of the required majority of noteholders. The principal terms of the 2019, 2022 and 2025 Series 1 and 2  CLNs as at 30 September 2025 are described in the table below. The See also Note 20 regarding subsequent further amendments  to the CLN terms.

The Company also has in issue £50,000 of convertible loan notes issued in the six months ended 30 September 2024, ("2024 CLN") with maturity dates in the period 1 February 2027 to 1 April 2027. The 2024 CLN is convertible to Ordinary Shares in the Company at the option of the noteholders at a share price of 3.75 pence per share. Interest is payable at 12% per annum, half yearly. The Company may elect to pay any interest or principal amount due in Ordinary Shares at a 10% discount to the recent trading price. The loan notes can be redeemed by the Company, at any time up to the Maturity Date.

Summary and Maturities:

Other Loans:

During April to December 2024, the Company received £238 thousand in loans and advances from certain of its then Directors to provide working capital. The loans carry interest at 12%.  The amounts concerned and original maturity dates are as follows:

The following table shows movements in total borrowings:

The Group takes note of the regulations set out by the government requirements and the environmental conditions within the mining permits in the countries in which it operates in respect of the Group's obligations for restoration and rehabilitation. The provision for mine restoration and related costs in Madagascar of £0.2 million is based on initial estimates of the existing obligations for remediation of tailings facilities, re-planting at the mine sites and similar, the timing of which will depend on future life of mine plans.  The Board expects to undertake a more extensive review and quantification of potential restoration obligations in respect of the Madagascar and Mozambique mine sites.

As at 30 September 2025, the Company had in issue 138,561,420 ordinary shares with par value 2.5 pence each (2024: 129,508,310).  In the six months ended 30 September 2025, the Company issued no ordinary shares.

The Company granted a right in connection with the 2025 CLN issue to 40,000 warrants to brokers, with an exercise price of 0.0375 pence per share and an expiry date of August 2027. The Company had not accounted for the issue of those warrants in 2025 as they have not yet been issued.

PranaGraf Materials and Technologies Private Limited ("Pranagraf", formerly known as Tirupati Speciality Graphite Private Limited) is an entity incorporated in India. Pranagraf was previously connected to the Company in that both Shishir Poddar and Hemant Poddar were directors and shareholders of Pranagraf during the periods covered by this Report, Shishir Poddar was formerly the Company's CEO and director and Hemant Poddar is also a former non executive director of the Company. Ms. P Poddar is also understood to be a director of Pranagraf and is a former Director of the Company. Pranagraf was formerly used by Mr. S Poddar as a channel for provision of services and procurement, including accountancy and IT services, and materials to the Group. Mr S Poddar and Pranagraf have, since January 2025, denied access to the Group to its previous accounting systems and data which were administered by Mr. Poddar and Pranagraf, following the termination of Mr. S Poddar's employment with the Company.  See Note 19 regarding claims from Parangraf.

During the six months ended 30 September 2025, sales to PranaGraf by the Company were Nil (2024:  £0.4 million) and the Group purchased no equipment and spares  from PranaGraf.

Haritmay Ventures LLP ("Haritmay") is an entity incorporated in India which was engaged in manufacturing graphite processing machinery and equipment, some of which the Group used in its projects. The Company was formerly connected to Haritmay in that former CEO and significant shareholder Shishir Poddar is a controlling shareholder of Haritmay and Ms P Poddar is also a shareholder. As at 30 September 2025, a net amount of £287,039 (2024: £287,039) was receivable from Haritmay. In view of the uncertainty around recovery of that amount, the receivable balance has been fully provided against. In January 2025, the Company issued a legal notice to Haritmay  for the repayment of the £287,039. Haritmay has formally denied liability, asserting that the balance represents advances for machinery ordered by the Group between December 2022 and February 2023 which was partially manufactured and that production was halted at Tirupati's instruction owing to financial constraints. No contract or purchase order has been provided to support these claims. Haritmay claims to maintain possession of the unfinished machinery and reports ongoing storage costs. The Group has no requirement for any machinery which Haritmay purports was ordered and partly manufactured.

Optiva Securities Limited ("Optiva") is a United Kingdom stock brokerage firm that has provided broking services to the Company.  Optiva is connected to the Company as Mr Christian St.John-Dennis is a director of the Company and a director of Optiva. For the six months ended 30 September 2025, Optiva was due £0.132 million in respect of retainers, commissions and advisory fees (2024: nil).

19.   Contingent Liabilities

a) See Note 18 regarding the previous relationship with Pranagraf, an entity incorporated in India previously used as a channel for provision of services and procurement, including accountancy and IT services, and materials to the Group by former directors of the Company  Mr S Poddar and Ms P Poddar, who are connected with it.  Since January 2025, Pranagraf has denied access to the Group to its previous accounting systems and data which were administered by Mr. Poddar and Pranagraf, following the termination of Mr. S Poddar's employment with the Company.

Pranagraf linked the systems access to outstanding payments which the Company disputes and are also subject to verification due to conflicts of interest involving the former common directors. Pranagraf has denied all allegations and claimed that the Company owes it US$662,090 for services rendered, goods supplied, and business expenses. The Company has counter-claimed that (i) Pranagraf owes monies in respect of unpaid graphite sales; (ii) a significant component of the services purportedly provided during 2024 were not, in fact, provided by Pranagraf and (iii) Prangraf is in breach of the service agreement by withholding data and systems access belonging to the Company.  The parties have exchanged legal notices and replies, and the dispute remains ongoing, with potential proceedings under consideration. 

At 30 September 2025, the Company has made provision for certain claims invoiced by Pranagraf representing an estimate of those amounts it expects could ultimately be payable. The position takes into account a receivable for graphite sales in 2024 which forms part of the disputed overall balance with Parangraf, where there may also be differences in the application of payments to items on that account. The precise net amounts owing as at 31 March 2025, are disputed, and/or require further investigation as to the validity of charges invoiced, including further assessment of whether certain services were actually performed or may have been provided at inflated prices.

b) The Company has received correspondence in late 2025 seeking to recover sums totalling £923,843 plus interest in respect of alleged monies due in respect of unpaid directors' fees and remuneration from Mr S Poddar and Ms P Poddar. The Company has not accepted those claims, and has responded accordingly. The Company also has counter claims.  The Company has provided in the financial statements for a best estimate of an amount which may ultimately be settled in respect of such claims.

c.     Convertible loan note amendments: terms of the existing 2019 and 2022 CLNs were further amended by resolutions approved by the required majority of holders of both series of Notes in January 2026.

The terms of the 2019 issue of £909,000 convertible loan notes  have been amended as follows:

1.     Conversion price amended to 2.5 pence per Ordinary Share;

2.     Final Maturity Date amended to 31 March 2026;

3.     Conversion at the option of the noteholder or the Company. Issue of a conversion notice by the Company is subject to the conversion shares being able to be admitted to trading and approval of a Prospectus on the same basis as described above for the 2025 CLN. Holders of the 2019 CLN have agreed to the issue of conversion shares by way of an exchange of the CLN for redeemable shares of TGF Limited which in turn will be exchanged for ordinary shares in the Company;

4.     Interest amended to 16% per annum with backdated effect from 1 July 2024. Interest is to be rolled up in the principal amount due at conversion or redemption. At the election of the Company, that interest may be paid in Ordinary Shares at conversion or redemption, calculated at 3.75 pence per Ordinary Share to 30 June 20225 and 2.5 pence thereafter.

The terms of the 2022 issue of £1,862,500 convertible loan notes have been amended as follows:

5.     Conversion price amended to 3.75 pence per ordinary share;

6.     Final Maturity Date amended to 31 March 2027;

7.     Interest amended to 16% per annum with backdated effect from July 2024 to 26 July 2025 and to 15% per annum from 27 July 2025 onwards. Interest is to be rolled up in the principal amount due at conversion or redemption. At the election of the Company, interest to 26 July 2025 may be paid in Ordinary Shares at conversion or redemption, calculated at 3.75 pence per Ordinary Share.  Interest for the periods subsequent to 26 July 2025 will be paid in cash.

e.     2025 Series 3 Convertible Loan Note issue ("2025 Series 3 CLN"): the Company completed the issue of £0.74 million of 2025 Series 3 CLN in December 2025.  The principal terms of the Series 3 2025 CLN are as follows: 

1.     Final maturity 31 March 2026;

2.     Conversion price 1.5p per ordinary share;

3.     Interest at 10% per month payable in ordinary shares at conversion;

4.     For each conversion share issued, the noteholder will also receive 1 warrant to subscribe for an ordinary share at 3.75 pence;

5.     Conversion at the option of the noteholder and at the election of the Company subject to the same conditions as for the 2025 Series 1 CLN noted above, with the same arrangement for conversion involving TGF Limited having been agreed.

f.      Share Sub-division: at a General Meeting in January 2026 shareholders approved a resolution to reduce the nominal value of the ordinary shares of the Company by way of a sub division of the issued share capital such that each ordinary share is sub-divided into one new ordinary share of 1.0 pence par value and one deferred share of 1.5 pence par value.  The deferred shares have no significant rights attached to them and carry no right to vote or participate in a distribution of surplus assets and will not be admitted to listing or trading.

g.     Share Placing ("Placing"): the Company received commitments in December 2026 for £2.4 million by way of a conditional placing of new ordinary shares issued at 1.5 pence per share. The Placing is conditional on: the Sub-division and authorising resolution for the share issue being approved by shareholders, which approval were obtained at the aforementioned General Meeting in January 2026; on the amendments to the 2019 and 2025 Series 1 and 2 CLNs described above  having been approved by the requisite majority of noteholders, which has also been satisfied, and on the Placing shares being able to be admitted to trading which requires satisfaction of the same conditions as for the prospectus and resumption of trading as noted for conversion of the 2025 Series 1 and 2 CLNs described above.

h.     Warrants: the Company has obligations to issue 9.582 million warrants to brokers under fee arrangements for the financing transactions completed after the 31 March 2025 year end, all exercisable at 3.75 pence per share and with a three year duration. Out of that total, 5.464 warrants are due to Optiva Securities Limited. Rights to additional broker warrants exercisable at 1.5 pence per share will be triggered by the completion of the Placing referred to above.

i.      Director loans: £0.05 million of loans from directors have been exchanged for additional 2022 CLNs.

h.     Potential legal proceedings: the Company has received correspondence in late 2025 seeking to recover sums totalling £923,843 plus interest in respect of alleged monies due in respect of unpaid directors' fees and remuneration from S Poddar and P Poddar. The Company has not accepted those claims, and has  responded accordingly. The Company also has counter claims.  The Company has provided in the accounts for a best estimate of an amount which may ultimately be settled in respect of such claims.

i.      Cyclone: A cyclone in February 2026 affected the region of the Group's mines in Madagascar. While no significant damage was caused to facilities or equipment at the mines, some damage to access roads did occur as well as damage at Toamasina, the port used for export of graphite, which has caused some short term interruptions to shipments and damage to rented warehouse facilities, for which alternatives are expected to be available. It is not expected that the cyclone impact will have any significant lasting impact.