Tirupati Graphite plc
Annual report and financial statements
for the period ended 31 March 2019
Registered number: 10742540
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
Contents
Company information
Chairman’s Statement
Business review
Strategic report
Directors' and corporate governance report
Independent auditor’s report to the members of Tirupati Graphite plc
Consolidated income statement
Consolidated and Company statement of financial position
Consolidated statement of changes in equity
Company statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
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Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
Company Information
DIRECTORS:
SECRETARY:
REGISTERED OFFICE:
R Kedia (appointed 31 May 2018)
H K Poddar
S K Poddar
C G St. John-Dennis
London Registrars Ltd
Suite A, 6 Honduras Street
London
EC1Y 0TH
49 Berkeley Square
London
W1J 5AZ
COMPANY REGISTRATION NUMBER:
10742540
INDEPENDENT AUDITORS:
FINANCIAL ADVISER AND
CORPORATE BROKER:
BANKERS:
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
Bird & Bird LLP
12 New Fetter Lane
London
EC4A 1JP
ICICI Bank
One Thomas More Square
London
E1W 9HB
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Chairman’s Statement
To the members of Tirupati Graphite Plc
It’s the second time we the members of this company are joining together for the annual general meeting –
which we look at as an opportunity to share with our shareholders, the principles, mission and vision we are
taking forward, sharpening our development step by step. Since our last report, your company has continued to
march on the path of value creation, and enhanced focus on deepening our engagement with all stakeholders
and community.
The year past has seen us progress on all fronts. May I share some of the most important achievements we have
made;
We commissioned our first flake graphite mining & processing plant at the Sahamamay project, which
is generating positive cash from operations;
WASTE TO WEALTH - 50% of Ore feed output as by-product - The technological achievement of having
construction sand as a by-product from the processing has been successfully stabilised and promises to
be a positive contributor to the environment. This new innovative technology was developed along with
our consultants. We do see this as a process adaptable for many other mineral processing flow sheets.
Moving forward on its vision to develop an integrated flake graphite company, the company
commissioned it’s Patalganga Project in India for manufacturing flame retardant grade expandable
graphite for multiple applications and launched it branded as ‘CarboflameX’. This is being marketed and
sold across Asian and European customers.
The contribution we are making to the communities around us has made visible improvement to the
quality of life of the people. It reflects in improved standard of living with consistent flow of earnings,
skill development, health and hygiene, increased sports activities and improved school infrastructure
across both our projects in Madagascar.
Our corporate presence and recognition continue to uplift with dissipation of information on our
progress being picked up by the media, world benchmark flake graphite consumers progressing to
become our primary buyers, our strategies receiving standing ovation in industry conferences and our
shareholders continuing to stand by us.
While a detailed account of our activities and progress is contained in the following reports, we continue to focus
on developing the company step by step to the mission and vision we have set for us. Simultaneously, we are
focussed to further enhance and bring out the environment contribution, social impact and governance
standards your company is delivering. May I share the key points on the ESG side of TG:
Our products are key to reduction of carbon footprint – increasing energy efficiency, catalysing energy
storage, reducing energy consumption and thus reducing emission. We are thus contributing to the
global mission on climate change.
Our operations are environment friendly – waste to wealth with sand as a by-product, minimised dust
generation, contributing to land reclamation and green cover, development of eco-friendly processes
and structures are just a few of our activities.
Progress of our projects has improved the lives of some of the most deprived on the mother earth,
resulted in connectivity of many villages integrating them better, improving skills in the people devoid
of opportunity to learn and helping catalyse education, health and hygiene, availability of drinking water
and sanitation.
Your board and management have maintained the highest set of governance standards, it’s only a
vibrant team that can lead to delivery with checks and balances and at investments which are a fraction
of what others are making in our space.
I can assure you, your management shall take every step and decision to make you proud of being a part of this
company and we shall continue to march towards our corporate goals attaining new heights by the day. With
these words, I now present to you the report and account of what we have done over the year.
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I am inclined to share with you, the words of an award-winning leader & entrepreneur in the global corporate
world:
“Successful companies don’t do different things; they do things differently” – Ratan Tata
We see these golden words very appropriate to describe you company’s journey. We will continue to think out
of the box and progress with “value creation” as we outlined in the first annual report to our members.
Shishir Poddar
Executive Chairman & Managing Director
30 September 2019
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Annual Report and Financial Statements
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The capitalised terms used throughout the U.K. Report and Accounts are defined in the notes to our consolidated
financial statements unless otherwise indicated. In the following text, the terms “we,” “our,” “our/your company”
and “us” may refer, as the context requires, or collectively to Tirupati Graphite PLC (or its predecessor) and its
subsidiaries.
Unless otherwise indicated, convenience translations into U.S. dollars are calculated, and operational data
(including subscriber statistics) are presented, as of 31st March 2019.
The company set out on the path of building an integrated flake graphite to graphene business and in the maiden
Annual Report released last year, the company shared the developments made and further plans for achieving
its business objectives. Flake Graphite is a key material in the energy storage and green energy applications and
Graphene is a single atom layer of flake graphite crystal, a material promising the largest transformation in
extensive applications reducing the global carbon footprint of mother earth. Our primary projects are located
among the lesser privileged communities providing opportunity to uplift the lives of the most deprived.
Governance is what your Board has been additionally focussed on, to provide our management the insight and
guidance to perform while ensuring we remain focussed on value creation in all spheres outlined in our
Chairman’s statement:
❖ Value creation for our planet and for the next generations:
By developing a unique material which has numerous applications contributing towards a more
sustainable and greener planet for future generations to come
❖ Value creation for our employees:
By providing opportunities of learning and 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, their families and providing health care and sport centres for the local
area, we are helping bring communities together and improving their general quality of life.
❖ Value creation for our shareholders:
By our work and determination, we have gone from a humble start of being worth a few thousand
pounds, to growing rapidly into the exciting business and network we have today.
Over the period since our last report, we have continued to progress on the path set, achieving various milestones
across our projects and corporate activities. In this background, we herewith present our detailed annual report
to our members on Company updates.
The Company Board & Management
Development of Human Resources and management are keys to building leaders. Your Board offers a blend of
all ingredients visible in the developments made by the company over the two years of its journey and we have
had no reason to consider a change over the reporting period.
A short reintroduction to your vibrant Board:
SHISHIR KUMAR PODDAR, Executive Chairman & MANAGING DIRECTOR
An entrepreneur, our lead promoter, a strategist in business development, a leader with across the board skills,
and a world recognised specialist in flake graphite, Mr. Poddar continues to lead the company to its goals. With
over 25 years of success behind him, Shishir has developed multidirectional skills, extensive reach and
recognition and continues to lead the Board and Management team.
Shishir has wide contributions in the sphere of industrial policy and development, has delivered keynote
addresses in various forums such as The Parliamentary Committee for Industries, India and as a special invitee of
the National Board for MSME, Government of India, he has extensively contributed to the policies for
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development of the SME sector. With his enterprising approach, Shishir has been the visionary behind the
foundation and development of the Company, developed its business constituents, trained the human resources
for our development, laid the path for the company for its sustainability philosophy, led the inculcation of
Environment & Social values and spearheaded the creation of Governance mechanism in the Company’s
management. He is widely travelled across the globe, has addressed conferences and seminars around the world
on various subjects including flake graphite, sustainable development, sustainable mineral exploitation etc. He
has also been the key influencer for our shareholders and attracted investments into the company even
remaining private, spearheading the proposed listing of the Company.
CHRISTIAN DENNIS, NON-EXECUTIVE DIRECTOR
Based in London, Christian has been in the field of Investment Banking and Broking for more than 30 years and
is connected to a broad set of investors in London, Europe, Australia and Asia. Being CEO and Managing Director
at Optiva Securities Ltd, Christian has steered many start - up resource companies to successfully climb the value
building ladder.
As a co-founder and promoter, since inception of the Company, he has been a key connect in our financial and
corporate affairs. As a NED, he has played a pivotal role in mergers and acquisitions, contributed in various
committees of the Board including the remuneration committee, and provided the gravitas to the Company’s
presence in London corporate world.
HEMANT KUMAR PODDAR, NON-EXECUTIVE DIRECTOR
A co-founder as well, Hemant has 28 years of experience in the flake graphite industry reinforcing the Company’s
vision to be a leading producer of flake graphite. He is extensively travelled and connected to primary users of
the commodity. As a NED on the Board, he has significantly contributed in developing the Company and been
another key driver in its continued progress. He has also contributed extensively to development of trade and
industry with continued involvement in trade bodies and representation in various forums.
RAJESH KEDIA, NON-EXECUTIVE DIRECTOR
A qualified accountant, a financial expert, an investment Banker, Rajesh has extensive and diversified experience
with over 16 years of experience working in finance and investment banking. He has extensive experience in
mergers and acquisitions and capital raising. He has advised many companies on their growth plans and raising
capital on international markets. An ex Morgan Stanley and RBS banker, he is presently engaged as Assistant
Director at UK Government Investments Ltd. His contributions to the company’s strategy, corporate governance,
acquisitions, extensive reach and contribution to various policies and sub-committees of the Board have helped
in various aspects of the Company’s development.
We also take this opportunity to introduce some of the key members of the executive management team,
recognising their tireless efforts to bring the company to its present stage, and I can vouch, each one of them is
a leader contributing extensively to the development of the company and deserve recognition.
UDAY PRATAP SINGH, CEO – MADAGASCAR PROJECTS
Mr. Singh has over 35 years of diversified experience in the resource industry and project management in India,
Africa, Indonesia, Bhutan etc. Well versed with mining codes/regulations of various countries for minerals like
iron ore, copper, graphite, lithium, coal, gold, etc., he has worked on multiple projects in diverse companies. He
is a well learned and experienced geologist. Having worked with Geological Survey of India for about 30 years at
multiple executive levels, he has exceptional geological interpretation skills and a huge record of achievements.
Mr. Singh is also associated with geologist bodies around the world and has published papers in global forums.
Determining resource of diverse minerals and metals, Mr. Singh has been the key man in discovery of the
resource in our projects. Mr. Singh has been providing able leadership in the development of the Company's
projects in Madagascar since the early days and has extensive recognition in the Malagasy Government.
VIJAY BHAGAT, CEO - SPECIALTY GRAPHITE PROJECT
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Mr. Bhagat has 38 years of techno-commercial experience and expertise in processing flake graphite into
specialty products like expandable graphite for hi-tech applications like environment friendly flame retardants
for multiple applications and industries. Alongside his extensive reach in the specialty graphite markets, he is
highly recognised in the industry for his achievements. Mr Bhagat has published research papers on expandable
graphite which he presented in multiple international conferences. With years of experience in establishing and
leading operations in this sector, Mr. Bhagat proves to be a dynamic leader with grip on multiple arenas of the
business.
KIEN HYUNH, GROUP CFO
Kien is a mining industry professional with over 20 years’ experience in global capital markets and mining finance
with senior executive management positions and independent consulting roles for ASX and AIM listed mining
companies as well as unlisted companies. He worked in investment banking and corporate & institutional finance
for ANZ in Melbourne and London for almost 15 years, thereafter joining Standard Chartered Bank as a founding
member of their global Mining & Metals team in London and Singapore. He has worked on a variety of debt and
equity financings for clients across EMEA and Australasia in the base metals, precious metals, bulk commodities,
coal and steel sectors.
NICHOLAS PETIT JEAN, DIRECTOR ADMIN – TRM
An engineer in hydraulics with experience in technical operation of flake graphite, Nicholas is the erstwhile
promoter of Etablissement Rostaing holding the Sahamamy project and post its merger with us, leads the
administration of the Madagascar projects. With his experience of working in Madagascar he proves to be an
added asset for the Company for its Madagascar operations.
PURUVI PODDAR, GROUP MANAGER – BUSINESS & PROJECT DEVELOPMENT
Puruvi graduated from the University of Manchester with a BSc in Material Science and Engineering. She has
experience in and understanding of the graphite industry and processing with exposure to the sector and has
done pre-feasibility studies on graphite projects. She has deep understanding of the graphite applications and
markets. Puruvi has worked on graphene composites, processing and applications and is further working with
the company for its specialty graphite & graphene projects too. An able leader, at this early stage she has
presented on behalf of the Company in global industry conferences and is extensively involved in marketing.
MEENAKSHI POTDAR, CHIEF CORPORATE AND LEGAL OFFICER
A qualified Company Secretary with 11 years of experience, Ms. Meenakshi adds corporate strength to the
company. She is well versed with statutory advisory on various matters applying to the countries we operate in.
Ms. Meenakshi provides valuable insight for various corporate decisions and documentation. With her deep
understanding and communication skills, she is a key coordinator for Corporate and Legal activities.
AMEYA GOGATE, GROUP HEAD OF FINANCE AND ACCOUNTS
A qualified chartered accountant, IFRS qualified, Ameya has worked on various aspects of corporate finance,
capital markets, forecasts and valuations and in the short span with the company, has extensively contributed to
the companies finance and corporate finance activities.
We would also like to acknowledge the hard work done by the next layer of the management team who have
played instrumental roles in helping the company achieve its goals on the ground.
BHOLA RAM, PROJECT HEAD SAHAMAMY PROJECT
A mechanical engineer with very deep understanding of graphite, its processing, control mechanisms, quality
control and operations, Mr Bhola has been the lead at the Sahamamy project since we acquired it and is
accredited to bring it to production.
RAHUL JHA, PROJECT HEAD VATOMINA PROJECT
Mr Rahul is a mechanical engineer with expertise in project planning designing and execution. He further
possesses deep understanding and knowledge about various aspects of graphite processing. He has been in the
graphite processing industry for over 4 years and is leading successfully the ground team at the Vatomina Project.
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HRIDAY OJHA, ADMIN & FINANCE HEAD – MADAGASCAR PROJECTS
A master’s in finance and administration, Mr Hriday possess excellent management & communication skills. The
in-country admin head for us, his skill set is versatile helping him effectively lead administration and finance
activities on ground in Madagascar.
Group Structure
Tirupati Graphite
Plc, UK
Tirupati Specialty
Graphite Pvt Ltd,
India (Acquisition in
process)
Tirupati Resources
Mauritius Ltd,
Mauritius
Patalganga Project-
1200 TPA Fire
Retardants plant
TGMRC
Bhubneswar
Graphene cum
Research centre
Gujarat Project
Integrated Specialty
Graphite processing
Tirupati Madagascar
Ventures Ltd
Establissement
Rostaing Ltd
Vatomina Project –
Primary Flake
Graphite 60,000
TPA
Sahamamy Project –
Primary Flake
Graphite 21,000
TPA
Strategic Planning & Targets
Over the year, we have progressed on our journey of developing the Company’s stated objective of being a
leading flake graphite to graphene company, fully integrated in the sector and providing goods and services in
the entire value chain. Alongside, the company has also seized the opportunity of utilising its expertise in
developing the Graphene and Research centre integrating it with Mineral Processing and Extractive Metallurgy
technology development providing the centre with another revenue stream.
The key strategic considerations in the Company’s development plans include:
a. Modular development approach providing opportunity for low initial investment and early stage cash
flows, de-risking future investments from execution risk.
b. Focused on low investment high return – we minimise investment by prudent spending and due to our
in-house expertise on various aspects like specialised graphite processing equipment designing and
manufacture, exploration, internal infrastructure development etc.
c. Staged market development and reduced technological risks acquire additional
insight for
improvements in follow-on modules for even more productive optimisation.
d. Focused engagement on environment management across projects & providing key material input in
the form of the Company’s products for applications in reduction of carbon footprint.
e. Continued engagement with the communities for
improving health, education, connectivity,
employment and earnings, skillsets and overall the quality of life of the people around us.
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f. Prudent equity raises, leveraging cashflow based funding for follow on stages of the medium-term
development plans.
g. Low gestation period start of operations and positive cash flows, optimised return on investment.
h. Developing into a big corporate company by means of integration across the value chain
With these strategic considerations, the company has progressed its development across its projects, corporate
activities, market development etc., over the year. Key highlights of our development since the last annual report
are highlighted below:
Madagascar Projects - Vatomina and Sahamamy
The first 3,000 tpa primary flake graphite mining operations and processing plant module was
commissioned at Sahamamy Project, Madagascar in March 2019
Target of having construction sand as a by-product from primary flake processing has been achieved.
Sahamamy operations are generating approximately 50% of the feed as high-quality construction sand,
the WASTE TO WEALTH strategy of the company taking shape. The sand generated is being used inhouse
for construction and road building activities at present.
Ramping up of production at the plant has been completed with most of the key plant parameters
achieved.
The total capital expenditure spend at the Sahamamy project including improvement of infrastructure
has remained within budgets. We continue the development and further improvement for the project,
setting its base for next stage development.
Product sales were initiated from May 2019 with shipments made to key buyers and across three
continents.
Post completion of land development at the Vatomina project, construction of the 6,000 tpa first plant
at Vatomina project in Madagascar was initiated from Q1 2019 and we are progressing to complete the
plant during Q4 2019.
SRK Consultants have been commissioned for an updated joint CPR for both primary flake graphite
mining and processing projects in Madagascar
Community Engagement & Welfare program – Shakuntalam – has been initiated focusing on the various
basic problems faced by the locals like health, hygiene, education, skill development etc.
Downstream & Graphene cum Technology Centre Projects - India
In July 2019, commissioning of Patalganga Flame Retardant Graphite Project in India has been
completed with 1,200 tpa flame retardant expandable graphite, and 1,500 tpa flake graphite finishing
facilities.
Flame-retardant flake graphite product under brand name ‘CarboflameX’ has been launched in
European and Indian markets
First sales and shipments of the key downstream product have been made and is prepared for market
growth with repeat orders executed.
100% target customers approached to date have given product qualification.
For the downstream specialty graphite & Technology and Graphene centre projects in India, detailed
feasibility studies have been completed.
The company has developed a unique process for manufacturing high purity graphite without using
Hydrofluoric acid or extensive heat treatment. The process also follows waste to wealth properties.
Land allocation by the State Government is in progress for both the projects.
UPDATE ON PROJECTS DEVELOPMENT
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Annual Report and Financial Statements
period ended 31 March 2019
In the previous annual report, a detailed account of the development plans and status for each of the
company’s project was provided and is available on the company’s website. We therefore provide an update of
the progress made since the last report for each of the projects.
THE VATOMINA FLAKE GRAPHITE PROJECT
The Vatomina Project covers a 25 km2 graphite mining permit located in eastern Madagascar, approximately 70
km south of Tamatave, the main port city of Madagascar and straddling the National Highway NH-2 that links the
Tomasina port to the capital city of Madagascar, Antananarivo. It is planned to be developed to a capacity of
60,000 tpa primary flake graphite production in four modular plants, first of 6,000 tpa capacity followed by 3 X
18,000 tpa modules. Our activities have been focussed to minimise pre cashflow investments in the project while
conduct multi arena activities to minimise time to completion of the first modular plant. In this background, an
update on the activities since the last report is as below.
Update of exploration phase 1
The objective of exploration phase 1, now concluded, have been as below:
Establish enough resources by detailed exploration of targeted 2 sq km to indicated level for providing
comfort for mineral deposits for first two modular plants with > 15 years mine life.
Provide reasonable comfort for further resources availability to define additional resource potential for
follow on modules.
Develop targeted operational raw material mining plan for phase one mine development for the first
modular plant.
Identify lateral continuity be continues mapping in all open directions of the mineralised zones.
The phase concluded with execution of 66 holes diamond Core drills to varying depths aggregating to 3128M
305 holes Augur drilling aggregating to 2738M, 8 Trenches of 6M depth aggregating to 280M length and 43 test
pits of approximately 6M depth aggregating to 233M. Logging of the drill cores, sampling and assays were also
performed under the guidance of the Competent Person and 777 samples were sent for analysis to accredited
laboratories in India and South Africa. In addition to the drilling campaign, exploratory mining activities were
also conducted to generate bulk samples which were used for pilot scale beneficiation studies and metallurgical
tests.
With the conclusion of above activities, we have sufficient inputs for progressing the resource assessments based
on the objectives above. SRK Consultants are in the process of completing their Competent Persons Report
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including the exploration completed and will be released shortly. In a nutshell, the further detailed exploration
prospects to be pursued alongside modular expansion include:
Geologically open lateral areas along North – East – South of the currently explored areas
Continuity beyond 50M of vertical depth by deeper drilling in second phase.
Initiation of exploration in the western half of the Permit area which remains unexplored till date.
The activities at Vatomina are now prepared to shift gears to mining and the second phase of exploration shall
be conducted in 2020 post commissioning of the first plant operation. A recap of some glimpses from the
resource and explorations are following:
Fig.: Company owned diamond core drilling machine in operation during exploration 2018-19
Fig.: Drilling Cores from various boreholes
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Fig.: Open Pit faces depicting resource and graphite near surface
Internal Project Infrastructure development
Facilitating project development, internal infrastructure development was started immediately after we took
control of the project in the financial year 2017-18. Step by step with prudent balancing of costs, we continued
to upgrade our project internal infrastructure as we have progressed. The significant progress made since the
last report include:
Strengthening and widening of about 5 kilometres of internal roads with drains construction for
forthcoming increased movement with operations due to start.
Upgrading of base camp for drinking water, dining facilities, recreation and increased capacity.
Land development by way of area grading for the various utilities for the upcoming first modular plant.
Establishment of the fabrication and engineering centre for manufacture of various on-site plant
structures, silos etc.
Establishment of other utilities for woodwork, cement brick manufacturing and similar to support the
construction activities.
Fig. 13: Self constructed 11m long bridge, internal roads
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Fig.: Stores, Engineering Centre and Fabrication Activities
Project development to production – construction of 6,000 tpa facilities
The Vatomina project is planned to be developed to a capacity of 60,000 tpa flake graphite production with four
modular plants to be established, first 6,000 tpa followed by three 18,000 tpa modules. The planned schedule
for these modules’ development are as below:
Vatomina Capacity Development Timeline
)
A
P
T
n
i
(
y
t
i
c
a
p
a
C
70000
60000
50000
40000
30000
20000
10000
0
Q1 2020
Q2 2021
Q3 2022
Q1 2023
Time (in year)
Fig. 14: Timeline planned for capacity development in Vatomina to 60,000 TPA
Development of land for the construction of the first 6,000 tpa module was initiated Q3 2018 and construction
started Q1 2019. The development stands well advanced with higher time-consuming activities like foundations,
feed platform, concrete guard walls and utility centres having been completed. We are in the process to raise
the balance capital requirements for completion with a target to commence production Q1 2020. Recent pictures
of various construction activities ongoing are following:
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Fig.: 6000TPA plant under construction
The company has considerable flexibility in advancing or retarding the schedule without any significant impact
on created capacities, depending on various factors providing further advantage from the modular development
concept.
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THE SAHAMAMY PROJECT
Since our last report, Sahamamy project has seen its transformation from an obsolete very small flake graphite
operation to a modern international standard mining & processing facility producing high quality flake graphite
and shipping to the highest end consumers in three continents. Commissioning of the first 3,000 tpa module at
Sahamamy was completed in March 2019. Stabilising operations and ramping up production alongside marketing
and sales have seen the project to becoming revenue positive over the past two quarter having shipped about
500 MT flake graphite to three continents, building inventory for both finished products and various inputs
required to efficiently run the operations. Key achievements in the development follow.
Mining Operations development
The historical mining operations had lacked use of appropriate mining equipment, proper stripping and over
burden removal, development of mineral and waste benches and in manner that lead to multiple handling of
mine waste and accumulation of waste in operating mining faces. A full new set of earth moving equipment with
team of management human resources was deployed at the mine from Q1 2019 with a capacity to handle more
or less 1000 MT earth work per day and extensive mine development activities initiated. As an impact, the project
is now at a stage that it has a well-developed mine with capacity to mine more than twice the ore requirement
for the current processing plant. Raw material stock of mined ore is also maintained for insulating production
from climate risk. The mining capabilities have further been enhanced to be able to perform mining at night. The
internal roads have been developed and strengthened and mining well developed. Nonmineralized waste land
area is being used for systematic overburden disposal leading to land reclamation, which shall be used further
for social and environment welfare. The ore being saprolite in nature, free dig mining is being performed further
reducing environmental impact and carbon footprint.
Fig.: The mine and mining operations
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Processing plant development
The development of 3,000 tpa flake graphite processing plant construction was completed Q1 2019 in a span of
8 months from start of construction, and commissioning was completed March 2019. The plant incorporates a
lean process and has established the commercialisation of technological innovation developed in the form of
“Self-Attrition Graphite Separator” (“SAGE”), first use of a technology eliminating the sand in feed ore prior to
flotation. This is a hugely valuable development for the company in view of the following:
1. The load on the flotation circuit is reduced by about 50% with pre flotation removal of >50% of the
2.
impurities leading to cost efficient and lean process.
It has reducing wear and tear in the process with preliminary elimination of abrasive sand prior to
flotation circuit.
3. Construction grade sand is achieved as a process by-product, which is currently being extensively used
in construction and infrastructure development activities at the projects. This has led to greener
operations and conversion of waste to wealth. It has further reduced infrastructure development costs.
The operations of the processing plant are now fully stabilised. Several challenges were faced in early stages of
the ramp up of production and the company has successfully addressed and overcome these over the past two
quarters. Some of the key challenges faced and their redressal include:
1. Operations of SAGE: This being a totally new equipment for use in commercial scale, various operational
challenges and optimisation issues were faced and overcome. The primary challenges included loss of
graphite in sand, sand separation not being up to expected limits. With various design and operational
parameters optimisation, the loss of graphite into sand is brought to negligible and sand separation
quantum targets achieved.
2. Optimising Head feed & Milling Capacity: The plant was designed for a head feed of more or less 10MT
ore feed per hour. Initially in the first quarter of operations ramp up, it was stabilised at 5-6 tons per
hour and progressively the target head feed rate achieved in August 2019.
3. Human Resource Training and Adaptation to the New Plant: Apart from a set of 4 senior operations
management team, the entire operations are handled by local employees, about half of who have been
erstwhile employees of the project. Most of the workers are uneducated, have language barriers and
with years of legacy operational concepts causing resistance in adapting to change. Over the last two
quarters we have progressively continued training and adaptation programs for the workforce. While
the process will continue as ongoing, the minimum level of adaptation to the operations required for
efficient operations has been achieved. Skill development on use of automated technologies,
equipment operations, quality control mechanisms, computational skills etc., have been enhanced
massively.
4.
Internal infrastructure and climatic adaptation: The region where the project is located receives
substantial rainfall and in the current year, the rains extended beyond the usual April-May cessation to
June-July. With minimised precommissioning spend on infrastructure, the company has continuously
upgraded internal infrastructure at the project and the approach road, and extensively used the sand
generated from the processing operations to make the roads usable in all the seasons. Various other
utilities and facilities buildings, which shall serve both the current operations and the next expansion
with the second module, are under continued upgradation.
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period ended 31 March 2019
The operations having stabilised, we share the achievements made on various parameters in comparison to the
targets set in the following table
Operating Parameter
Target at Steady State
Achievement during Ramp up
Product Grade
Flake Size Distribution (Basket)
Up to 94% C
35% Jumbo (+50 MESH)
35% Large (+80 MESH)
30% Small (-80 MESH)
Achieved >95% C
>50% Jumbo (+50 MESH)
>30% Large (+80 MESH)
<20% Small (-80 MESH)
Recovery
Head Feed Rate
Head Feed Grade
>85%
9.25 MT/hr
TGC 5.5%
Achieved
Achieved
Averaging c 4.5% currently. Target
expected to be achieved over Q4
2019.
Production Rate
250 MT/Month
Up to 75% achieved currently.
Target expected to be achieved over
Q4 2019
Mining Fleet
1000 MT/operating day
>100% of target achieved.
Capacity
total earthworks
Fig.: 3000 TPA Processing Plant
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Annual Report and Financial Statements
period ended 31 March 2019
Marketing and Sales
Fig.: Processing Operations at the Plant
In line with the Company’s marketing policy, we have selectively engaged with the higher stature end users in
diversified segments spanning across the United States, Europe and Asia. For catering to the smaller users, we
have also engaged industry recognised benchmark intermediaries and processors. The sales from the operations
are nearing 500 MT with an average basket price realisation exceeding the target US$ 980/- per MT from the
ramp up phase with bulk product qualitative approvals achieved from each of the shipments made, repeat orders
received and further progressing and targets well achieved. Any information on the company’s buyers are
considered commercially confidential, and thus not included.
The marketing activities have been focussed not only for the sales of current Sahamamy production but to create
stable markets for the imminent additional production from Vatomina. The sum total consumption of the
presently engaged buyers far exceeds the forthcoming short-term capacity creation in progress i.e., 9,000 tpa.
Cost parameters CAPEX & OPEX
The company is glad to share that the CAPEX incurred for setting up of the 3,000 tpa Sahamamy facilities have
remained in line with the budget. To the best of our information further and as per information available from
independent analysts, this puts the company in the unique position of being the lowest capital cost flake graphite
project developing company and provides comfort for further capacity creation budgets outlined by the
company. It also leverages the in-depth expertise of the management team to prospective increased returns to
shareholders.
The operating costs for Sahamamy operations have also remained within budgets and monthly cost forecasts
under various cost heads remaining within targets. The C2 per ton costs are thus falling in line with the forecast
targets as the production rates are nearing the planned capacity.
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Annual Report and Financial Statements
period ended 31 March 2019
Environment Management & shift to renewable energy
It is the paramount focus of the Company to minimise impact to environment caused by our operations, engage
in measures aimed at environmental sustainability to mitigate the impact and overall positively contribute to the
environment. The company has taken various measures for minimising impact to environment, including:
1. Drainage management: the area being undulating terrain with reasonably high rainfall. We have
undertaken a program for channelizing rain water drainage minimising erosion. The program shall be
executed over the next 3-4 quarters, expected to be completed by Q2 2020.
2. Waste land reclamation: Extensive areas around the project are non-mineralised waste land with
minimal green cover and extensive swamp areas. A program for waste land reclamation using mining
overburden and redeveloping these into productive areas for plantations is in progress.
3. A detailed study is planned to be carried out for identification of plantation species with productive
output which will be followed by extensive plantation. This will not only provide valuable output, but
shall also enlarge and improve the vegetation in non-mineral bearing areas. It will also provide
additional jobs and skill development for farmers in the region.
4. A combination of waste vegetation with concrete has been developed for low cost housing development
for the local population reducing dependence on wood thereby reducing wood cutting. We are
formulating a program for its use by training and implementing in the development of residential areas
for local employees.
5. The company has adopted a zero-dust policy in its operations which is achieved by multiple activities to
control dust emission in mining & processing activities. All internal roads have been covered with sand
and quartz mix generally eliminating dust from vehicular movement. The plant operations are dust free
and most modern flash drying system is used with natural gas as fuel minimising emission and
generation of dust.
Use of renewable sources of energy is a key priority for the company. With undulating terrain in Sahamamy
Sahasoa area, the topography and drainage provide opportunities for hydro power generation.
The Project has an old existing small hydro power generation setup (‘SHPP’) established a few decades ago with
water reservoir and a turbine house connected by a pipeline and having an installed capacity to generate 75KW
power. The SHPP is inoperable at present and requires a complete rebuild and overhaul. There is further scope
for additional capacity creation for hydro power generation. A prefeasibility study was conducted for
rehabilitating the old SHPP which established the ability for the power plant to be reinstated. Since the last
report, we commissioned the services of a SHPP specialist for a detailed feasibility study for reconditioning the
existing facilities and possibilities for creation of additional hydro power generation capacity. The company
intends to progress the reconditioning of the existing facilities and create further capacity along side further
project capacity development.
Fig.: Reservoir and equipment at Hydro power plant
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Annual Report and Financial Statements
period ended 31 March 2019
Development of Connecting Road between Sahamamy & Vatomina Projects:
With the ongoing development of the two projects, and to improve connectivity of Sahamamy to the National
Highway RN2, the company is developing a 12 km of new road. This connectivity shall extensively help in
integrating the ongoing senior management reach across the projects and improve the present logistic
arrangements for the Sahamamy project paving the way for its larger development. A detailed survey for the
same has been executed. The completion of various statutory approvals has been in process, and it is expected
that these will conclude soon and road connectivity could be established as early as Q1 2020.
Development of further processing facilities
With the current developments bringing Sahamamy to a stage of modern operations with positive revenues and
cash flows from operations, the Company intends to continue on the path of next stage development of the
Sahamamy project by completing preparations for the second module with capacity 18,000 TPA. This shall
include various activities like further drilling and detailed exploration, development of connectivity for the
northern deposit areas, area development for setting up of the new plant, resettlement of the workers quarters
to a new location, re-development of the existing hydro power set up and preparation for the development of
larger prospective hydropower generation facility etc, we are multitasking to continue these developments.
Social engagements – Madagascar Projects
In pursuit of contributing to the upliftment of the communities we work in, the Company has undertaken various
activities under “Shakuntalam” its social engagement program. The activities performed include:
Sahamamy School rebuilding: The primary school at Sahamamy houses about 200 students from the local
communes. The school building is in dilapidated condition. We are building a new school building in the campus
with five classrooms. Additionally, stationery and sports materials have been provided to the students.
Health Centre: At our Sahamamy project, a renewed dispensary with a full time medical practitioner have been
set up with extensive inventory of key and emergency medication. The centre is providing free medical facilities
and medicines to the local residents in the area.
Sahavalaina School road: The primary school near the Vatomina project was located on a hillock with no approach
road or walkway. We have built a road to the school which is motorable and this has brought recognisable change
to the school, its students and their parents.
Various other activities like vocational training, providing drinking water facilities, providing logistic facilities to
the local people have been conducted on an ongoing basis and we shall continue to develop the program as
envisioned. Needless to say that the projects of the company has become the source of livelihood for no less
than 500 families in the areas of its location and changed the economy and well-being of the regions we are
located in.
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Annual Report and Financial Statements
period ended 31 March 2019
Fig.: Shakuntalam Program Initiated for social welfare in various aspects
TIRUPATI SPECIALTY GRAPHITE (P) LTD (“TSGPL”)
The downstream processing of primary flake graphite for hi-tech applications in energy storage, flame retardants,
thermal management, composites, lubricants and various other applications is the second key value addition
arena, also providing the opportunity to extensively contribute to the green tech arena. The company has
entered into a binding agreement for acquisition of 100% equity of Tirupati Specialty Graphite (P) Ltd., subject
only to statutory approvals, an Indian company developing a comprehensive downstream flake graphite project
alongside a Graphene and Technology centre. While the completion of acquisition is expected post listing of the
company, its projects are under continued progress. The status of its three projects are as detailed below:
The Patalganga Project
The Patalganga project has been set up by TSGPL as a precursor to the larger downstream processed flake
graphite project for manufacture of flame retardant expandable graphite composites and as a centre of finishing
and marketing of the company’s Madagascar products in India. The project was commissioned with commercial
production to manufacture 1,200 TPA flame retardant expandable graphite and 1500 tpa flake graphite finishing
facilities by way of screening and blending to accurately produce tailor made products for Indian markets,
providing an opportunity for the Company to develop end user-based markets for its production from its
Madagascan operations for the smaller consumers in Indian market.
Expandable graphite based flame retardants are a niche area with slow penetration for market development.
The company has launched its brand “CarboflameX” with a range of products for use in an array of flame
retardant applications including manufacture of Poly Urethane foam, rubber latex Foam, coatings on textiles,
wood, metals, intumescent tapes, bitumen roofing, door & window fire seals etc, used in various applications in
construction, transport and aerospace etc.
Thus, the Patalanga project provides the Company with the opportunity of gaining early entry into the specialised
niche flake graphite flame retardants market ahead of the establishment of its larger scale integrated specialty
graphite production plant, providing ready markets for the larger plant. This synergises with the company’s
concept of starting smaller facilities to establish itself prior to the larger investments, substantially de-risking its
development and growth.
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Annual Report and Financial Statements
period ended 31 March 2019
Fig.: 1,200 TPA pilot flame retardants facility commissioned
Over the past two quarters, market development for flame retardant flake graphite has been undertaken by the
company and first and follow on shipments made to five end users. In addition, product qualification has been
received from more than 4 other users and extensive marketing efforts are ongoing. The company’s products
have gained approval from every end user we have contacted till date, a depiction of the technological
capabilities of the company.
Fig.: CarboflameX supplied for flame retardant applications like in PU Foam
Given the success demonstrated at the Patalganga project and a visible high demand for Tirupati’s value added
products, the company is comprehending on expanding the Patalganga unit to add capacities of high purity
graphite and other value-added graphite materials at a scale smaller than the integrated Speciality Graphite
Project. The development of the Integrated Project in Gujarat shall continue simultaneously as per the
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Annual Report and Financial Statements
period ended 31 March 2019
projected timelines. As the gestation period for adding capacity in Patalganga is short and at similar per ton
costs, the company may consider expanding Patalganga operation to achieve faster roads to markets with
lesser investments.
Integrated Specialty Graphite Project
There are extensive hi-tech applications of flake graphite in an array of industrial and material applications. These
applications have extensive contribution to green technologies, energy storage and mobile energy, resource
longevity and energy efficiency. On the commercial side, ‘specialty graphite’ or specially processed flake graphite
is a niche area with substantial value add over primary flake graphite concentrate. It is estimated that presently,
more or less 25% of the total world consumption of flake graphite is in such hi-tech applications. The growth
applications like in green energy and energy storage, flame retardants and foils and gaskets, composites like
conductive polymers and insulation materials require specially processed flake graphite. The technologies for
such processes are very complex and not commonly known. Being in the graphite industry for a long time, the
company’s team has been working on these for years and developed commercially feasible green processes for
each such specialised processing. As a precursor for most of these applications, the primary concentrate requires
purification up to 99.95% and follow on processing.
The company has completed a comprehensive detailed feasibility study for setting up a downstream specialty
graphite processing plant in India and the project is planned for development to a 20,000 TPA capacity in two
modules of 10,000 TPA each over a three-year span with further phases development aligned with markets of
specific applications. The current status update for the project is as below:
Application for allotment of 20,000 sqm land for the project in Syakha Industrial Area was filed with The
Gujarat Industrial Area Development Authority, an institution of The Government of Gujarat engaged in
developing industrial areas across the state and the application is in process of consideration.
Under the Department of Industrial Promotion and Policy of Government of India, Industrial
Entrepreneurs Memorandum no. IEM264185 has been registered by the Company, registering the
project for Government support under relevant policies.
Extensive background preparations are ongoing for detailed engineering and design development,
equipment sourcing, product markets development and further team building preparations to fast track
the development upon land allocation.
Since availability of land in the area applied cannot be taken for granted for paucity of land viz a viz
applicants for it, the company is simultaneously working on other locations for alternatives.
Upon conclusion of allocation of land, the Company shall further progress the project. The acquisition of land is
expected to be completed within 2019 and this shall be followed by applications for various approvals. The
construction of the first module is expected to be completed in 4-5 quarters from the completion of the
preconstruction activities including funding.
The second module will then follow on completion of development of the first, estimated to commence
construction 4 quarters after commissioning of the first and completing to commissioning within 4 quarters from
start of construction.
Tirupati Graphene & Mintech Research Centre ("TGMRC")
The Company believes that scientific research is the creation of new knowledge, creating in turn the expanded
capabilities that enable development of novel technologies, skilled jobs and new processes and products.
Scientific advances and technological change are important drivers of economic performance. Advances in
research are driving technological changes faster which will have high economic, social and environmental values
and these are the guiding principles of TGMRC, a project to be established in Bhubaneswar, India under TSGPL.
TGMRC is planned to have state of the art research facilities of international standards focusing on development
of cost effective and environmentally friendly technology for specialty graphite and graphene manufacture,
development of graphene applications and mineral processing technology. The centre will provide the
technological support for the Company and its long-term growth while being self-sustaining and revenue
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period ended 31 March 2019
generating. It will be composed of centres of excellence in each area of its activities, some of which are as
detailed below.
Application for allotment of 20,000 sqm land for the project in Gothpatna Industrial Area in Bhubaneswar city of
Odisha state in India, dedicated to research and educational institutions, was filed with the Government of
Odisha and in principle approval of the Government to support the project was received. The allotment of land
is under active consideration of the Government and is expected to conclude in 2019. While awaiting completion
of allotment of land for the project, the company has further progressed various activities which include:
Extensive background preparations are ongoing for detailed engineering and design development,
equipment sourcing, markets development and further team building preparations.
A comprehensive and extensive detailed feasibility study was complete for the project.
Development of a unique technology for manufacture of Graphene Oxide & Graphene has been
developed by the company’s team. The technology is unique in as much as it manufactures graphene
from flake graphite as the base material without use of any chemical exfoliation thus being a process
using zero toxic chemicals of any form, unlike any other known processes.
The development process has resulted in standardisation of process and product. The process is highly
cost efficient further boosting the company’s goal to catalyse graphene commercialisation.
The company selectively released its specifications for standardised graphene and provided samples for
assessment at various research centres.
We are working with various target application industries and product research and development for
use of graphene in various application areas across industries are ongoing.
The mineral processing team of experts have assisted the operations in Madagascar in the optimisation
process and findings from the first plant have helped create enough insight for fast ramp up of new
modules we shall set up.
Detailed engineering for development of “column flotation” has been completed for three capacities, a
new flotation technique the company shall adopt in its Madagascar operations and downstream
purification.
The team has also provided technological assistance in the preparation of the detailed feasibility study
for the Specialty Graphite Project. The green process of manufacturing high purity graphite without HF
has been developed by the team.
Various other activities are ongoing for establishing the business of the proposed research and
technology centre and support to the other developments of the company on an ongoing basis.
The company is at an advanced stage for starting graphene and high purity graphite production at the
project. On completion of land allocation, the company shall start production of the two materials as a first
step in the planned Phase 1 of developing this technology and research centre.
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Fig. 29: Layout plan of TGMRC
The company has therefore continued to progress on all fronts on the development of its businesses and projects
realising its goals on a steady basis.
UPDATE ON CORPORATE ACTIVITIES AND CAPITAL RAISE
The company continued its activities on corporate development and engagement with financial markets and
we are pleased to report the following activities:
Since our last report, the Company raised a sum of c. £ 720,000/- in pre-IPO equity at an issue price of
£ 0.35 per ordinary share reflecting a premium of 75% over the previous equity raise by the company.
The company has also initiated raising capital by way of an unsecured Convertible Bond with a 12%
coupon, convertible at the IPO pricing and having a life of three years with the company retaining right
to buy back after one year from IPO. We have raised a sum of £390,000 Under the Bond issue and
expect to raise some further funds prior to an IPO under the Bonds.
Participation in various conferences and trade shows continued targeted at developing markets for the
company’s products and for active engagement with the investment community.
Fast Markets invited us as a panellist in the opening panel for their dedicated annual industry
conference Graphite 2019 held in Berlin. Ms Puruvi Poddar represented the company on the panel and
made a presentation with overwhelming appreciations. Mr. Christian Dennis also attended the event.
Active engagement on public relations and social media to dissipate extensive activities and
developments performed by the company have been put in place with appointment of specialist
service providers.
With our Brokers Optiva Securities Ltd., we continued our active engagement with the investor
community with activities including investor evening reception, non-deal road shows and one to one
meeting with various investors.
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period ended 31 March 2019
Ms Puruvi Poddar B. Eng ( Materials ) from University of Manchester was appointed at the Corporate
level as Development Officer and has moved on the become the lead for Marketing & Business
Development. Her contribution to the company’s affairs spans across various activity areas.
Mr. Kien Hyunh was appointed as CFO with effect from 29th of October 2018. An experienced Banker
specialising in mining structured finance, he brings in skill sets to lead the Finance team while
extensively contributing.
The management team for admin, corporate and financial activities was further enhanced to cater to
the group’s activities.
The expat specialist management team in Madagascar was strengthened with addition of specialist in
Mining, Processing and Civil Engineering.
Strengthening of human resources was also undertaken at the Indian operations.
PKF Little John were appointed as the auditors for the Company. Their team visited the Madagascar
operations as a part of their audit process.
St Brides Partners have been appointed for Public Relations and Visitz for social media engagements.
We can therefore say that the company has made extensive all-round progress in developing its business,
actively worked on all spheres of its business and is well placed to continue its efforts to achieve its vision and
mission.
This report was approved by the board of directors on September 30, 2019 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
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Tirupati Graphite plc
Strategic Report
Annual Report and Financial Statements
period ended 31 March 2019
Pursuant to the requirements of the Companies Act, this document includes our Strategic Report, Directors’
Report and required financial information (including our statutory accounts and statutory Auditors’ Report for
the year ended 31 March 2019), and forms part of our UK Annual Report and accounts for the year 31 March
2019 (the UK Report and Accounts), as required by English law.
Principal activities
The principal activities of the Group are described in detail in the business review.
Events since the year end
There are no events to report subsequent to 31 March 2019.
Results for the year ended 31 March 2019
A summary of key financial results is set out in the table below. The Group and Company primary financial
statements are found on pages 41 - 64.
In summary:
The net interest cost for the Group for the period was £2,827.
Administrative expenses from continuing operations £1,139,320.
Group loss after tax from continuing operations was £1,113,708.
Basic and diluted loss per share from continuing operations was 1.93p.
As at 31 March 2019, the Group had cash and cash equivalents of £44,681.
The shares issued during the year, since incorporation of the Company, are detailed in note 18.
Key performance indicators
The key performance indicators of the Group are set out below:
Revenue
Cash and cash equivalents
Gross assets
Earnings per share
2018-19
£
145,207
44,681
2017-18
28,001
504,122
5,602,564
4,384,190
(1.93p)
(1.68p)
Principal risks and uncertainties
The Company management have been conscious about the risk factors that can affect the Company’s
performance and are aware that they must be always alert and on their toes to be proactive in dealing with the
same. They carry a robust assessment of the principal risks facing the Group, including those that would threaten
its business model, future performance, solvency or liquidity.
The Group has exposure to the following risks from its use of financial instruments, which are presented in note
19 to the financial statements:
● Capital risk management
● Market risk
● Credit risk
●
Liquidity risk
● Currency risk
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period ended 31 March 2019
We understand that the risk management framework must revolve around some core factors so that the material
business risks throughout the Group can be identified, assessed and effectively managed. These factors cover
the following elements:
Identify
Risk mapping and listing is conducted on periodic basis to identify emerging issues.
Assess
The likelihood of risk occurrence is determined with evaluating their potential impact.
Mitigate
Appropriate measures and actions are put in place to ensure control.
Monitor
Efficiency and effectiveness of the measures and actions are periodically monitored for better
control.
Principal risks and uncertainties to the Group
The following table, whilst not an exhaustive list as other risks may arise or existing risks may materially
increase in the future, sets out the risks and uncertainties to the continuing Group.
Issue
Financial
Strategy
Risk/Uncertainty
1. The Company’s first phase of project
development and
implementation has
been dependent on the capital raise from
investors and any delay
in the said
arrangement may impact delay in the
project
and
implementation.
development
2. Investor support may be negatively
impacted if there are delays in achieving
our strategy’s intended goals.
Mitigation
1. Company has managed to mitigate this
risk as the first phase of the project is
substantially
and
implemented to generate the cashflow
further
and proceeded with
development.
completed
the
2. Setting example by demonstrated
higher achievements than projected.
Principal risks and uncertainties to the Group (continued)
Issue
Competition
risk
Risk/Uncertainty
Mitigation
threats
from
There can be potential
innovative market players with competitive
products, making them equally or more
beneficial and qualitative than the Group’s
current products.
These competitive market players may bring
new age
their
advantage.
technology
leading
to
products
investment
Our Group has been putting in a substantial
amount of
in research and
development, which continuously enhances
our innovative process to ensure higher
consistent
quality
competitive edge. Additionally, the Group
has been in this field for a substantial period
of time and is very well connected with the
end users (consumers) and the intermediary
suppliers into the primary and specialised
graphite industry.
and
a
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period ended 31 March 2019
Company's
Management’s
Performance
and Efficiency
Attraction and
retention of
key employees
Brand,
reputation and
trust
level could
During the phases where the Company is
expected by the Board to experience rapid
growth, it is essential to effectively manage
such growth. While the Board is fully
implement the Company's
equipped to
of project
strategy, mismanagement
operations at any
lead the
business to suffer, which may impact the
Company's performance and profitability.
The responsibility to manage multiple
projects across different jurisdictions at the
same pace while ensuring quality and
sustainability sits with the Board and the
Company's management team. Continuous
growth in sales and profits largely depends
on the Company's management team's
ability to expand its operations and manage
the procedures,
financial controls and
information systems effectively.
It is essential for the Group to maintain the
continued service and performance received
from the key officers and employees.
Even
the
though arrangements with
respective employees are in place to secure
their services, retention of these services
cannot be guaranteed.
The loss of the services of any of the key
officers or employees could delay the
Group’s operations.
Further, the ability to attract and hire new
sufficiently skilled employees cannot be
guaranteed.
Our brand will suffer if we lose trust and
transparency in our business. If we cannot
be firm in the face of ethical, legal, moral or
operational challenges, our reputation may
be damaged.
Ongoing development of the management
team as we progress is a part of the
company’s activities and is thus dynamic. In
fact, on the other side we have established
that the Company’s management team has
the ability to deliver on all fronts and see this
as a strength for the company. The cost to
achievement ratio
is a
depiction of the same.
in record time
The Group is actively involved in human
resource management. The process includes
policy framing of appropriate incentives and
appreciation methodology, which ensures
that people with key skill-sets are retained.
Creation of systems to mitigate individual
talent hunt and
influence, continued
alternative
resource
human
development and training are ongoing
activities.
key
Our Group's processes and policies set out
how we can make the right decisions for our
suppliers,
colleagues,
customers,
communities and investors.
We have developed communication and
engagement programmes to listen to our
internal and external stakeholders and
reflect their needs in our plans.
We maximise the value and impact of our
brand with the advice of specialist external
agencies and in-house expertise.
As our business grow and develop, we will
remain strongly focused on protecting the
strength of our Group’s reputation through
leadership
open
cultivating
and
relationships with all stakeholders.
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period ended 31 March 2019
Data security
and privacy
increasing
With
risks of cyber-attacks
threatening the data security, we must
ensure that we understand the types of data
that we hold and secure it adequately to
manage the risk of data breaches.
We have active monitoring processes to
identify and resolve IT security breaches,
and also to investigate and mitigate any
possible threats.
A platform with a high-end security system
is under development.
Performance
our
strategy
or
effectively
If
communicated
our
business may underperform against our
planned objectives.
is
implemented,
not
Our Board, executive management and
operational units meet regularly to review
performance risks.
An ongoing communication process informs
our colleagues about the long-term strategy
and ensures that they understand their part
in it. The company is also implementing a
customised ERP system to further instruct,
monitor and analyse performances.
There are clear guidelines, detailed timelines
and policies set out to ensure that there is an
appropriate focus on balance between short
term and longer-term delivery.
Operational
Risks
The current operations of the Company
generally
include exploration mining,
processing, and production, any of which
may be impacted by a factors which are
outside of the Company’s control.
The Company has adopted a modular
development strategy to mitigate the risks
on various operations and financial fronts.
With the First plant commissioned and
technology,
risks
selling, various
operational, mining, financial – cash flow
and
appropriately
addressed with lower investment at the
start.
revenue
like
are
etc
of
Volatility
Commodity
and
Prices
Equity
The Prices and demand for the Group’s
products may remain volatile/ uncertain and
could be influenced by global economic
conditions. Volatility in commodity prices
and demand may adversely affect our
earnings, cash flow and reserves.
As the group is very well diversified in its
upstream and downstream projects, the
management can mitigate this risk by
low-cost production, allowing
pursuing
profitable
the
commodity price cycle and balance the price
volatility/uncertainty.
throughout
supply
Geopolitical,
Regulatory
and Sovereign
Risk
The primary flake graphite Projects are
located in Madagascar and downstream
and technology Projects in India and are
therefore subject to the risks associated
with operating in a foreign jurisdiction.
Madagascar has a mining code providing
tenure of 40 years and renewable – does not
have history of any disruptions to operations
by any previous governments and is well
connected to the international community
As a mitigation, the company further may
consider adding primary activity at one more
location.
29 | P a g e
Tirupati Graphite plc
Strategic Report
Annual Report and Financial Statements
period ended 31 March 2019
India is a the fastest growing major economy
and investment seeking and friendly.
Additionally, the Company monitors political
development and will seek to mitigate
emerging risks wherever possible. The
Group and its business divisions monitor
regulatory developments on an ongoing
basis.
Technology
If we do not invest enough or efficiently or
invest in the wrong areas, we may not be
able to deliver our customer proposition
which could impact our competitiveness.
There is a clear programme of investment to
maintain the integrity and efficiency of our
technology innovation infrastructure and its
security.
As we develop new technologies, we must
maintain the controls over existing
platforms or it may impact systems
availability and security.
We are heavily inclined towards technology
and innovation and work rigorously on
continued improvements.
Environmental
and Health and
Safety Risk
The Graphite Projects, including ore mining
and production plants, are expected to have
an impact on the environment, particularly
in cases of advanced exploration or mine
development proceeds, production sites
and plants. Its activities are or will be subject
to in-country national and local laws and
regulations
environmental
hazards.
regarding
the
We have obtained Environment clearance
for the first phase for both projects in terms
of
in place. Further
extensions will be applied for and obtained
prior to start of construction of the next
phases.
regulations
The company has also developed and
adopted environment friendly technologies
to minimise impact and will continue to
strive
improving
steps
environment and mitigating damage if any.
take
for
to
Corporate and social responsibility
The Group remains committed to our corporate and social responsibility projects.
Ratio of men to women
The Board is satisfied that it has the appropriate balance of skills, experience and expertise necessary, and will
give due regard to diversity in the event of further changes to both its own membership and/or the membership
of the senior management team.
Going concern basis
The Group’s business activities, together with the factors likely to affect its future development, performance
and position are discussed throughout the strategic report. The financial position of the group, its cash flows,
liquidity position etc., are also discussed above. The report additionally also includes the Group’s objectives,
policies and processes to address risks arising from the Group’s use of financial instruments, in particular its
exposure to market, credit and liquidity risks.
The Group has considerable financial resources together with well-established relationships with many clients
and suppliers across different geographic areas. As a consequence, the Board believes that the Group is well
placed to manage its business risks successfully.
30 | P a g e
Tirupati Graphite plc
Strategic Report
Annual Report and Financial Statements
period ended 31 March 2019
After making enquiries and following a review of its profit and cash flow forecasts, the Board has a reasonable
expectation that the Group has adequate resources to continue in operational existence for the foreseeable
future. Accordingly, the Board continues to adopt the going concern basis in preparing these financial
statements.
This report was approved by the board of directors on September 30, 2019 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
31 | P a g e
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2019
The Directors present their annual report on the affairs of the group, together with the financial statements and
auditor’s report, for the year ended 31 March 2019.
The Corporate Governance Statement forms part of this report.
Results and dividends
The audited financial statements for the year for the Group and Company are set out on pages 41 - 64.
No dividends will be distributed for the period ended 31 March 2019.
Financial instruments
Information about the use of financial instruments is given in note 19 to the financial statements.
Incorporation
The Company is incorporated in England and Wales on the 26 April 2017 as a public Company.
Future prospects
A commentary on the Group’s future prospects and a description of principal risks and uncertainties are set out
in the Chief Executive Officer’s statement and business review.
Share capital
Details of the authorised and issued share capital, together with details of the movements in the Company’s
issued share capital during the year are shown in note 18.
As on date of this report, the Company has issued 59,925,243 class of ordinary shares. Each share carries the
right to vote at general meetings of the Company, dividend and capital distribution (including on winding up)
rights but do not confer any rights of redemption.
There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed
by the general provisions of the Articles of Association and prevailing legislation. The Directors are not aware of
any agreements between holders of the Company’s shares that may result in restrictions on the transfer of
securities or on voting rights. No person has any special rights of control over the Company’s share capital and
all issued shares are fully paid.
Memorandum and Articles of Association
The Company’s Articles of Association (the Articles) give the Board the power to appoint Directors but require
Directors to retire and submit themselves for election at the first AGM following their appointment.
The Board of Directors may exercise all the powers of the Company subject to the provisions of relevant statutes,
the Company’s Memorandum of Association and the Articles. The Articles, for instance, contain specific
provisions and restrictions regarding the Company’s power to borrow money. Powers relating to the issuing and
buying back of shares are also included in the Articles and such authorities shall be renewed by shareholders
each year at the AGM.
Liability of members limited
The Company is registered as a public limited company and members liability is limited to the extent of their
respective subscription to shares.
Articles
Issue of shares
Subject to the provisions of Company law and the pre-emption rights described below, the Directors are generally
authorised to allot or otherwise dispose of shares in the Company as they think fit (including the grant of options
over and warrants in respect of, shares).
The Company shall not allot any shares unless they are first offered to members (on the same or more favourable
terms as the proposed allotment) in proportion to their existing shareholdings. Such an offer must state a period
32 | P a g e
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2019
of not less than 21 days during which it may be accepted. These pre-emption rights shall not apply where shares
are paid otherwise than in cash or if they are allotted or issued pursuant to an employee share scheme.
Notwithstanding these pre-emption rights, the Directors may be given by special resolution (passed by a majority
of not less than two-thirds of the members who vote at a general meeting) the power to allot shares either
generally or specifically so that the pre-emption provisions do not apply or apply with such modifications as the
Directors may determine.
Accordingly, the Directors are authorised by the Company shareholders by way of special resolution dated 15
June 2017 to allot shares to the extent of £30,000,000 shares.
Directors
The Directors, who served throughout the year except as noted, were as follows:
Shishir Poddar
- Chairman and Managing Director
Hemant Poddar - Non-Executive Director
Christian Dennis - Non-Executive Director
Rajesh Kedia
- Non-Executive Director (appointed 31 May 2018)
Biographical details of the Directors are given on page 4.
The interests of the Directors in the shares of the company at 31 March 2018 are as follows:
Director
Shishir Poddar
Hemant Poddar
Christian St John-Dennis
Rajesh Kedia
Number of ordinary
shares
1,171,429
765,000
974,131
282,608
Charitable and political donations
The Company did not make any political or charitable donations during the financial period except the investment
in community development programme as detailed in the Corporate Social responsibility section of this report.
Employees
The Company’s policy is to provide equal opportunities to all present and potential employees, including, where
practical, those who are disabled.
The Group believes in respecting individuals and their rights in the workplace. With this in mind, specific policies
are in place covering harassment and bullying, whistleblowing, equal opportunities and data protection.
Health and safety
The Group is committed to providing a safe place of work for employees. Group policies are reviewed on a regular
basis to ensure that policies regarding training, risk assessment, safe working and accident management are
appropriate. There are designated officers responsible for health and safety and issues are reported at each
board and executive meeting.
Substantial shareholdings
As at September 30, 2019, other than the Directors’ holdings, the Company has been advised of the following
interests in 3% or more of its issued share capital:
33 | P a g e
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2019
Shareholder
Number of ordinary
shares
Percentage of issued
share capital
Tirupati Carbons and Chemicals Pvt Limited
29,565,778
Nicolas Petitjean
Huntress (Ci) Nominees Limited
Momentous Investments Limited
Optiva Securities Ltd
Momentum Trading Limited
4,615,300
2,888,852
2,500,000
2,621,179
2,299,999
49.34%
7.70%
4.82%
4.17%
4.37%
3.84%
Statement of Directors’ responsibilities
The directors are responsible for preparing the annual report and the Group financial statements in accordance
with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have prepared the Group and Company financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union, and United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable law). In preparing the Group financial
statements, the directors have also elected to comply with IFRSs, issued by the International Accounting
Standards Board (IASB). Under company law, the directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the loss
of the Group and Company for that period. In preparing the financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
state whether applicable IFRSs have been followed, subject to any material departures disclosed and
explained in the financial statements;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Group and Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Group and Company’s transactions and disclose with reasonable accuracy at any time the financial position
of the Group and Company and enable them to ensure that the financial statements comply with the Companies
Act 2006.
The directors are also responsible for safeguarding the assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
Statement of disclosure to independent auditors
Each of the persons who is a director at the date of approval of the annual report confirms that:
So far as the director is aware, there is no relevant audit information of which the Group and
Company’s auditor is unaware; and
The director has taken all the steps that he ought to have taken as a director in order to make himself
aware of any relevant audit information and to establish that the Group and Company’s auditor is
aware of that information.
Independent auditor
A resolution to re-appoint PKF Littlejohn LLP (new entity into which the Company’s Auditor Welbeck Associates
got merged into) as auditor of the Company will be proposed at the AGM.
34 | P a g e
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2019
Annual general meeting
The Directors consider that all the resolutions to be put to the AGM to be held in November 2019 are in the best
interests of the Company and its shareholders. The Board will be voting in favour of them and unanimously
recommends that shareholders do also.
Responsibility statement of the Directors in respect of the annual financial report
We confirm that to the best of our knowledge:
(i)
(ii)
the financial statements, prepared in accordance with the applicable set of accounting standards,
give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company
and the undertakings included in the consolidation taken as a whole; and
the Directors’ report includes a fair review of the development and performance of the business and
the position of the issuer and the undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and uncertainties that they face.
This report was approved by the board of directors on 30 September 2019 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
35 | P a g e
Tirupati Graphite plc
Corporate Governance Report
to the members of Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
As at year end 31 March 2019, Tirupati Graphite Plc was not listed on any UK exchange and is thus not required
to comply with the requirements of the 2016 U.K. Corporate Governance Code (“the Code”) as issued by the
Financial Reporting Council. However, the Directors recognise the value of complying with the Code and present
the corporate governance code below.
The Directors are committed to ensuring the highest standards of corporate governance, and complies with,
subject to a small number of exceptions listed below, the supporting principles and provisions set out in the
Code.
Meetings of the Board of Directors
The Directors meet regularly and are responsible for formulating, reviewing and approving the Group’s strategy,
budgets, performance, major capital expenditure and corporate actions. All Directors have access to advice from
independent professionals at the Company’s expense. Training is available for new and existing Directors as
necessary.
Matters which would normally be referred to other than the appointed committees are dealt with by the Board
as a whole.
Three Board meetings were held during the year. The Directors’ attendance record during the year are as follows:
Director
Shishir Poddar
Hemant Poddar
Christian St John-Dennis
Rajesh Kedia
Number of meetings
attended
4
1
4
3
Board objectives and operation
The key objectives of the Board are as follows:
The agreement of strategy.
The agreement of the detailed set of objectives and policies that facilitate the achievement of strategy.
Monitoring the performance of executive management in the delivery of objectives and strategy.
Monitoring and safeguarding the financial position of the Company and Group to ensure that
objectives and strategy can be delivered.
Approval of major capital expenditure and other expenditure that is not part of the defined objectives
or strategic plan.
Approving corporate transactions.
Delegating clear levels of authority to the Executive management team. This is represented by the
defined system of internal controls which is reviewed by the Audit Committee.
Providing the appropriate framework of support and remuneration structures to encourage and
enable Executive management to deliver the objectives and strategies of the Company.
Monitoring the risks being entered into by the Company and ensuring that all of these are properly
evaluated.
Approval of all external announcements.
A schedule is maintained of matters reserved to the Board for decision.
Insurance cover
The Company maintains insurance with a limit of £5 million to cover its Directors and officers against the cost of
defending themselves against civil legal proceedings taken against them. To the extent permitted by law the
36 | P a g e
Tirupati Graphite plc
Corporate Governance Report
to the members of Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
Company also indemnifies its Directors and officers. Neither protection applies in the event of fraud or
dishonesty.
Nominations Committee
The committee consists of Mr Shishir Kumar Poddar and Mr Christian Dennis. The committee meets as required
to fulfil its duties of reviewing the Board structure and composition and identifying and nominating candidates
to fill Board vacancies as they arise.
No formal induction process exists for new Directors, but the Chairman ensures that each individual is given a
tailored introduction to the Company and fully understands the requirements of the role.
Appraisal of Executive Directors
The CEO shall be carrying out an annual formal appraisal of the performance of the Executive Director taking into
account the objectives set in the previous year and the individual’s performance in the fulfilment of these
objectives. All the appraisals of the Executive Directors shall be provided to the Remuneration Committee.
Audit Committee
Formal terms of reference for the committee have been documented and are made available for review at the
AGM.
The terms of reference of the Audit Committee include the following requirements:
To monitor the integrity of financial statements and of any formal announcements relating to the
Company’s financial performance.
To review the Company’s internal controls and risk management systems.
To make recommendations to the Board in relation to internal control matters that require
improvement or modification.
To make recommendations to the Board in relation to the appointment, re-appointment and
removal of the external auditor and to approve remuneration.
To review and monitor the external auditor’s independence and objectivity and the effectiveness
of the audit process.
To establish and monitor whistle blowing procedures.
No internal audit function exists due to the size of the Group. This is reviewed annually by the Audit Committee
which reflects on any increased risk or regulatory changes in the period under review in making their
recommendation to the Board.
The Audit Committee met once during the year and once after the year end. Matters considered at these
meetings included: reviewing and approving the report and financial statements for the period ended 31 March
2019; discussion with the external auditors to confirm their independence and scope for audit work; considering
the reports from external auditors identifying any accounting or judgemental issues requiring the board’s
attention and the auditors’ assessment of internal controls; reviewing the company’s risk register and business
continuity procedures; and considering the adequacy of the whistle-blowing facility, the anti-bribery training and
monitoring and data protection policy and procedures.
The Audit Committee consists of Mr Shishir Kumar Poddar and Mr Rajesh Kedia and is chaired by Shishir Kumar
Poddar.
Internal controls
The Board is responsible for the Group and the Company’s system of internal control and for reviewing its
effectiveness and the same are well documented. The same are in operation which is appropriate for the Group
and Company in its current state.
The Audit Committee shall each year be considering if the current level of internal control is appropriate. On
advice from the Audit Committee, the Board does not consider any additional independent verification of the
37 | P a g e
Tirupati Graphite plc
Corporate Governance Report
to the members of Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
system of internal control to be required, based on the size of the Company and the Group, and the non-complex
nature of both its management systems and financial structure.
Remuneration Committee
The Remuneration Committee currently comprises Mr Shishir Kumar Poddar (Chairman) and Mr Christian Dennis.
The Remuneration Committee reviews the performance of the Executive Directors and makes recommendations
to the Board on matters relating to their remuneration and terms of service. The Remuneration Committee also
makes recommendations to the Board on proposals for the granting of share options and other equity incentives
pursuant to any employee share option scheme or equity incentive plans in operation from time to time. The
Remuneration Committee meets as and when is necessary.
The Remuneration Committee seeks to provide the remuneration packages necessary to attract, retain and
motivate Executive Directors of the quality required to manage the business of the Group and seeks to avoid
paying more than is necessary for this purpose. In establishing the level of remuneration of each director the
committee has regard to packages offered by similar companies.
Consistent with this policy, the benefit packages awarded to Executive Directors comprise a mix of performance
and non-performance elements. During 2019, none of the Executive Directors’ pay was based on the Group
achieving financial targets.
Directors’ emoluments
The following table summarises the emoluments of Directors during the year.
Mr Shishir Kumar Poddar
Mr Christian Dennis
Mr Hemant Kumar Poddar
Mr Rajesh Kedia
TOTAL
Salary
and fees
£
180,000
48,000
48,000
40,000
316,000
Pension
£
Benefits
£
-
-
-
-
-
2019
Total
£
180,000
48,000
48,000
40,000
316,000
-
-
-
-
-
Dialogue with major shareholders
The Board is committed to maintaining effective communication and having constructive dialogue with its
stakeholders. The Company intends to have ongoing relationships with both its private and institutional
shareholders (through meetings and presentations), and for them to have the opportunity to discuss issues and
provide feedback at meetings with the Company. In addition, all shareholders are encouraged to attend the
Company’s Annual General Meeting.
Annual general meeting
At its AGM the Company complies with the provisions of the Code relating to the disclosure of proxy votes, the
separation of resolutions and attendance of Directors, particularly committee chairpersons. The timing of the
despatch of the formal notice of the AGM also complies with the Code.
This report was approved by the Board of Directors on 30 September 2019 and signed on its behalf by:
Mr Shishir Kumar Poddar
Executive Chairman and Managing Director
38 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
Opinion
We have audited the financial statements of Tirupati Graphite plc (the ‘parent company’) and its subsidiaries (the
‘group’) for the year ended 31 March 2019 which comprise the Consolidated Income Statement and Statement
of Comprehensive Income, the Consolidated and Parent Company Statements of Financial Position, the
Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Statement of Cash
Flows and notes to the financial statements, including a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union and as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 31 March 2019 and of the group’s and parent company’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as
adopted by the EU and as applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the group and parent company in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to
report to you where:
the directors’ use of the going concern basis of accounting in the preparation of the financial statements
is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that
may cast significant doubt about the group’s or the parent company’s ability to continue to adopt the
going concern basis of accounting for a period of at least twelve months from the date when the
financial statements are authorised for issue.
Other information
The other information comprises the information included in the annual report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information. Our
opinion on the group and parent company financial statements does not cover the other information and, except
to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon. In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are required to determine whether there
is a material misstatement in the financial statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
39 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns;
or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the
preparation of the group and parent company financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the
group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the directors either intend to liquidate
the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
40 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
Consolidated Income Statement
For the year ended 31 March 2019
Continuing operations
Revenue
Cost of Sales
Gross profit
Administrative expenses
Operating loss
Finance costs
Loss before income tax
Income tax expense
Loss for the year attributable to owners of the
Company
Loss per share attributable to owners of the
Company
From continuing operations:
Basic & diluted
Notes
8
9
2019
£
145,207
(150,325)
(5,118)
2018
£
28,001
(14,293)
13,708
(1,139,320)
(560,483)
(1,144,438)
(2,827)
(1,147,265)
33,557
(546,775)
(114)
(546,889)
17,758
(1,113,708)
(529,131)
Pence per share
Pence per share
10
1.93p
1.68p
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2018
Loss for the period
Forex exchange gain/loss
2019
£
(1,113,708)
4,714
2018
£
(529,131)
-
Total comprehensive loss for the year attributable to the
Group
(1,108,994)
(529,131)
The accompanying accounting policies and notes are an integral part of these financial statements
41 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
Consolidated and Company Statement of Financial Position
As at 31 March 2019
Group
2019
£
2018
£
Company
2019
£
2018
£
Notes
11
13
14
12
15
16
16
18
Non-current assets
Goodwill
Investments in subsidiaries
Property, plant and
equipment
Deferred tax other
Intangible assets
Total non-current assets
Current assets
Trade and other receivables
Inventory
Cash and cash equivalents
Total current assets
Current liabilities
Trade and other payables
Total current liabilities
Net current
assets/(liabilities)
Non-current liabilities
Other payables
Total non-current liabilities
NET ASSETS
Equity
Share capital
Share premium account
Foreign exchange reserve
Retained losses
Equity attributable to
owners of the Company
-
-
1,134,406
33,498
3,902,234
5,070,138
2,900,310
-
312,852
19,794
506
40,970
3,539,448
220,400
-
75,872
-
3,000,000
-
-
-
3,233,462
3,876,690
3,000,000
431,244
56,501
44,681
532,426
644,538
2,158
504,122
1,150,818
2,095,413
-
8,289
2,103,702
1,127,005
-
373,022
1,500,027
701,983
701,983
763,180
763,180
768,897
768,897
662,950
662,950
(169,557)
387,638
1,334,805
837,077
43,907
43,907
-
-
-
-
-
-
4,856,674
3,621,100
5,221,495
3,837,077
1,470,275
5,024,524
4,714
(1,642,839)
1,125,065
3,025,166
-
(529,131)
1,470,275
4,974,524
-
(1,233,304)
1,125,065
3,025,166
-
(313,154)
4,856,674
3,621,100
5,211,495
3,837,077
TOTAL EQUITY
4,856,674
3,621,100
5,221,495
3,837,077
42 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
43 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
Consolidated Statement of Changes in Equity
For the year ended 31 March 2019
Share capital
Share
premium
£
-
-
1,125,065
-
1,125,065
-
345,210
-
-
-
1,470,275
£
-
-
3,075,166
(50,000)
3,025,166
-
2,024,358
(75,000)
50,000
-
5,024,524
Foreign
exchange
reserve
£
Retained
losses
£
-
(529,131)
-
-
(529,131)
(1,113,708)
-
-
TOTAL
EQUITY
£
-
(529,131)
4,200,231
(50,000)
3,621,100
(1,113,708)
2,369,568
(75,000)
-
-
-
-
-
-
-
-
4,714
4,714
-
-
(1,642,839)
50,000
4,714
4,856,674
Balance at 1 April 2017
Loss for the period
Shares issued
Cost of shares issued
Balance at 31 March 2018
Loss for the period
Shares issued
Cost of shares issued
Share subscription
received pending
allotment
Forex exchange gain/loss
Balance at 31 March 2019
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.
44 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
Company Statement of Changes in Equity
For the year ended 31 March 2019
Balance at 1 April 2017
Loss for the period
Shares issued
Cost of shares issued
Balance at 31 March 2018
Loss for the period
Shares issued
Cost of shares issued
Balance at 31 March 2018
Share capital
Share premium
Retained losses
£
-
-
1,125,065
-
1,125,065
-
345,210
-
1,470,275
£
-
-
3,075,166
(50,000)
3,025,166
-
2,024,358
(75,000)
4,974,524
£
-
(313,154)
-
-
(313,154)
(920,150)
-
-
(1,233,304)
TOTAL
EQUITY
£
-
(313,154)
4,200,231
(50,000)
3,837,077
(920,150)
2,369,568
(75,000)
5,211,495
The accompanying accounting policies and notes are an integral part of these financial statements.
45 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2019
Consolidated Statement of Cash Flows
For the year ended 31 March 2019
Operating loss
Adjustment for:
Depreciation
Foreign exchange loss
(Increase) in inventories
(Increase) in receivables
Increase in payables
Finance costs
Income tax
2019
£
2018
£
(1,147,265)
105,645
-
(54,343)
339,23
8,238
2,827
33,557
(546,889)
5,089
14,088
(2,158)
(644,538)
763,180
114
(17,778)
Net cash used in operating activities
(712,108)
(428,892)
Cash flows from investing activities:
Investment in subsidiary
Purchase of tangible assets
Purchase of other assets
Purchase of intangible assets
Net advances received
Net cash from investing activities
Cash flows from financing activities
Shares issued
Share subscription money received
Costs of shares issued
Net cash from financing activities
(801,927)
(821,554)
(152,264)
(415,469)
99,313
(3,000,000)
(121,005)
(191,847)
(506)
96,141
(2,091,901)
(3,217,217)
2,369,568
50,000
(75,000)
4,200,231
-
(50,000)
2,344,568
4,150,231
Net increase/(decrease) in cash and cash equivalents
(459,441)
504,122
Cash and cash equivalents brought forward
Cash and cash equivalents carried forward
504,122
-
44,681
504,122
The accompanying accounting policies and notes are an integral part of these financial statements.
46 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
1. General information
Tirupati Graphite plc (the “Company”) is incorporated in England and Wales, under the Companies Act 2006. The
address of the registered office is given on page 1.
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 on pages 21 – 29.
These consolidated financial statements are presented in pounds sterling since that is the currency of the primary
economic environment in which the Company operates.
2. Adoption of new and revised International Financial Reporting Standards (IFRSs)
New and revised IFRSs in issue but not yet effective
At date of authorisation of these financial statements, the Group has not applied the following new and revised
IFRSs that have been issued but are not yet effective and not early adopted.
IFRS 16
IFRIC 23
Amendments to IFRS 9
Amendments to IAS 28
Annual improvements
to IFRS Standards
2015-2017 cycle
Amendments to IAS 19
Leases
Uncertainty over Income Tax Treatments
Prepayment features with negative compensation
Long-term interests in Associates and Joint Ventures
Annual improvements
Plan Amendment, Curtailment or Settlement
The directors do not expect that the adoption of the Standards listed above will have a material impact on the
financial statements of the Group.
New standards
(i)
IFRS 9
IFRS 9 (2014) “Financial Instruments” supersedes IFRS 9 (2009), IFRS 9 (2010) and IFRS 9 (2013). The finalised
version of IFRS 9 contains accounting requirements for financial instruments, replacing IAS 39 “Financial
Instruments: Recognition and Measurement”. The content of IFRS 9 (2014) includes:
Classification and measurement – financial assets are classified by reference to the business model
within which they are held and their contractual cash flow characteristics. The standard introduces a
fair value through other comprehensive income category for certain debt instruments. Financial
liabilities are classified in a similar manner to that under IAS 39 however there are differences in the
requirements applying to the measurement of an entity’s own risk.
Impairment – The standard introduces an expected credit loss model for the measurement of the
impairment of financial assets so it is no longer necessary for a credit event to have occurred before a
credit loss is recognised
Hedge accounting – The standard introduces a new hedge accounting model that is designed to be more
closely aligned with how entities undertake risk management activities when hedging financial and non-
financial risk exposures.
Derecognition – the requirements for the derecognition of financial assets and liabilities are carried
forward from IAS 39.
(ii)
IFRS 15
IFRS 15 “Revenue from Contracts with Customers” provides a single, principles based five-step model to be
applied to all contracts with customers. The standard includes guidance on the point in which revenue is
recognised, accounting for variable consideration, costs of fulfilling and obtaining a contract and various related
matters. IFRS 15 also introduces new disclosures about revenue.
There is no impact on the financial statements upon adopting IFRS 9 and IFRS 15.
47 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
3. Significant accounting policies
Basis of preparation
These consolidated financial statements have been prepared and approved by the Directors in accordance with
International Financial Reporting Standards (IFRS) and IFRIC interpretations (IFRS IC) as adopted by the European
Union and the Companies Act 2006 applicable to companies reporting under IFRS.
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 group’s
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 these financial statements. The financial position of the Group and the Company, their
cash flows and liquidity positions are described in the business review. In addition, note 19 includes the Group’s
objectives, policies and processes for managing its capital; its financial risk management objectives; details of its
financial instruments; and its exposure to credit risk and liquidity risk. The Group and the Company meet their
day to day working capital requirements through its ability to raise either share capital or borrowings.
Taking in to account the comments above, the Directors have, at the time of approving the financial statements,
a reasonable expectation that the Company and the Group have adequate resources to continue in operational
existence for the foreseeable future. Therefore, they continue to adopt the going concern basis of accounting in
preparing the financial statements.
Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and all its subsidiaries (“the
Group”). Subsidiaries include all entities over which the Company has the power to govern financial and
operating policies. The existence and effect of potential voting rights that are currently exercisable or convertible
are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from
the date on which control commences until the date that control ceases. Intra-group balances and any unrealised
gains and losses on income or expenses arising from intra-group transactions, are eliminated in preparing the
consolidated financial statements.
The acquisition method of accounting is used to account for business combinations. The cost of an acquisition is
measured as the fair value of the assets given, equity instruments issued, and liabilities incurred or assumed at
the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired, and liabilities
and contingent liabilities assumed in a business combination are measured initially at their fair value at the
acquisition date, irrespective of the extent of any minority interest.
Goodwill
Goodwill on acquisition of subsidiaries represents the excess of the cost of acquisition over the fair value of the
Group’s share of the identifiable net assets and contingent liabilities acquired. Identifiable assets are those which
can be sold separately, or which arise from legal rights regardless of whether those rights are separable. Goodwill
on acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised but is tested annually, or
when trigger events occur, for impairment and is carried at cost less accumulated impairment losses.
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 and of 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. As a result of the acquisition during the year, the Group reports on a three-
48 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
segment basis – holding company expenses, mining exploration and development and graphite mining
extraction.
Revenue recognition
Revenue is measures at the fair value of the consideration received or receivable and represents amounts
receivable for goods and services provide in the normal course of business, net of discounts, VAT and other sales-
related taxes.
Sale of goods
Revenue from the sale of goods is recognised when all the following conditions are satisfied:
The Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
The Group retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold;
The amount of revenue can be measured reliably;
It is probable that the economic benefits associated with the transaction will flow to the entity; and
The costs incurred or to be incurred in respect of the transaction can be measured reliably.
Foreign currencies
For the purposes of the consolidated financial statements, the results and financial position of each group
companies 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.
Operating profit
Operating profit is stated after charging restructuring costs and after the share of result of associates but before
investment income and finance costs.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit 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.
49 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
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.
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. Cost 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
Fixtures and fittings
10%-25% per annum
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.
50 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
Internally-generated intangible assets — research and development expenditure
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.
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
Financial assets are initially measured at fair value, net of transaction costs except for those financial assets
classified as fair value through profit or loss which are initially measured at fair value. 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.
51 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
Loans and receivables
These assets 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 are recognised and carried at the lower of their original amount less an
of the full amount is no longer
allowance for any doubtful amounts. An allowance is made when collection
considered possible.
The Group’s loans and receivables comprise trade and other receivables and cash and cash equivalents in the
Consolidated Statement of Financial Position.
Cash and cash equivalents
Cash and cash equivalents includes 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
A financial asset is assessed at each reporting date to determine whether there is any evidence that it is impaired.
A financial asset is considered impaired if objective evidence indicates that one or more events have had a
negative effect on the estimated future cash flows of that asset. Individual significant financial assets are tested
for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that
share similar credit risk characteristics. All impairment losses are recognised in the consolidated income
statement.
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.
52 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
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 capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of Ordinary shares
and share options are recognised as a deduction from equity, net of any tax effects.
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. Going concern basis of preparation
The adoption of the going concern basis by the Directors is following a review of the current position of the
Company and the forecasts for the next 18 months from the date of approving these financial statements.
The Group’s continuing activities in 2019 incurred a loss of £1,113,708. In addition, as at 31 March 2019 there
was a cash balance of £44,681.
However, after making enquiries, the Directors have formed a judgement that there is a reasonable expectation
that the Company can secure further adequate resources, to enable it to continue in operational existence for
the foreseeable future. Thus, adequate arrangements will be in place to enable the settlement of their financial
commitments.
For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.
Whilst there are inherent uncertainties in relation to future events, and therefore no certainty over the outcome
of the matters described, the Directors consider that, based upon financial projections and dependent on the
success of their efforts to complete these activities, the Company will be a going concern for the next twelve
months. If it is not possible for the Directors to realise their plans, over which there is significant uncertainty, the
carrying value of the assets of the Company is likely to be impaired.
b. 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.
c. Accounting for provisions
The Directors consider the nature of any outstanding legal or constructive claims on the Group to determine the
accounting treatment required in accordance with note above.
53 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
5. 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:
2019
Revenue from external customers
Timing of recognition:
At a point in time
2018
Revenue from external customers
Timing of recognition:
At a point in time
6. Segmental analysis
UK
-
-
UK
-
-
Europe
-
India
145,172
Total
145,172
-
142,172
142,172
Europe
-
India
28,001
Total
28,001
-
28,001
28,001
The Directors believe, under IAS 14 – “Segmental Information”, the Group operated in three primary business
segments in 2018, being holding company expenses, mining exploration and development and graphite mining
extraction.
Segmentation by continuing businesses
Segment results
Revenue to external customers
Holding Companies
Mining Exploration and Development
Graphite Mining Extraction
Loss before income tax
Holding Companies
Mining Exploration and Development
Graphite Mining Extraction
Net assets
Holding Company
Mining Exploration and Development
Graphite Mining Extraction
2019
£
2018
£
145,172
-
-
28,001
-
28,616
920,150
100,782
126,333
407,053
97,317
11,642
5,336,652
(306,253)
(173,725)
3,897,165
(122,128)
4,528
54 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
Segmentation by geographical area:
Revenue to external customers
UK
Mauritius
Madagascar
Loss before income tax
UK
Mauritius
Madagascar
Net assets
UK
Mauritius
Madagascar
7. Finance costs
Interest payable
8. Operating loss
The following items have been included in arriving at operating loss
Depreciation
Net foreign exchange loss
Auditor’s remuneration has been included in arriving at operating loss
as follows:
2019
£
2018
£
145,207
-
-
28,001
-
28,616
920,150
98,021
129,094
313,154
93,899
108,959
5,158,987
177,664
(479,978)
3,837,077
60,088
(117,599)
2019
£
2,827
2019
£
2018
£
114
2018
£
105,645
143,506
5,089
14,088
Fees payable to the Company’s auditor and their associates for
the audit of the Group’s annual accounts
Total non-audit fees
24,000
-
20,000
-
9. Employee information
The average monthly number of employees (including Executive Directors) was:
Number of employees for the year:
Staff costs (for the above employees)
Wages and salaries
Social security costs
2019
120
£
397,073
75,189
10,118
482,379
2018
63
£
192,000
35,400
9,646
237,046
55 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
Directors’ remuneration and transactions
Directors’ remuneration
Emoluments and fees
Remuneration of the highest paid director:
Emoluments and fees
Benefits and other fees
The highest paid director did not exercise any share options in the year.
9. Income tax expense
Current tax
Total current tax
Deferred tax
Charge to the income statement
Total tax on loss
The tax assessed for the period is different from the standard rate of
income tax, as
explained below:
Loss before tax on continuing operations
Loss before tax multiplied by the standard rate of income tax of 19%
Adjustments to tax in respect of prior periods
Tax (credit)/charge for period
10. Earnings per share
2019
£
2018
£
316,000
192,000
£
£
180,000
-
120,000
-
2019
£
-
-
-
(33,557)
(33,557)
2019
£
2018
£
-
-
20
(17,778)
(17,758)
2018
£
(1,215,701)
(229,426)
-
(546,889)
(103,909)
-
(229,426)
(103,909)
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.
Continuing operations:
Loss attributable to equity holders of the Company (£)
Weighted average number of shares in issue
Loss per share (pence)
2019
2018
(1,113,708)
57,772,841
1.93p
(529,131)
31,470,412
1.68p
There was no dilutive effect from the options outstanding during the period.
56 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
11. Goodwill
Group
Cost
At 1 April 2018
Transferred to Intangible
At 31 March 2019
Net book value
At 1 April 2018
At 31 March 2019
12. Intangible Assets
Group
Cost
At 1 April 2018
Transferred from Goodwill
Additions
At 31 March 2019
Accumulated amortisation
At 1 April 2018
Charge for the year
At 31 March 2019
Net book value
At 1 April 2018
At 31 March 2019
2019
£
2,900,310
(2,900,310)
-
2,900,310
-
2019
£
506
2,900,310
1,001,418
3,902,234
-
-
-
506
3,902,234
The intangible assets arise from the incorporation costs which were capitalised in Tirupati Madagascar Ventures.
13. Investments
Company
Cost
At 1 April 2018
Additions
At 31 March 2019
Net book value
At 1 April 2018
At 31 March 2019
Shares in group undertaking
2019
£
3,000,000
539,448
3,539,448
3,000,000
3,539,448
57 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
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: Mauritius
Nature of business: Holding and administrative entity
Class of share
Ordinary shares
Tirupati Madagascar Ventures
Registered: Madagascar
Nature of business: Evaluation and exploration of mining operations
Class of share
Ordinary shares
Establissements Rostaing
Registered: Madagascar
Nature of business: Graphite mining extraction
Class of share
Ordinary shares
14. Property, plant and equipment
%
Holding
100
%
Holding
100
%
Holding
100
Group
Cost
At 1 April 2017
Additions
At 1 April 2018
Additions
At 31 March 2019
Plant and
Machinery
£
Fixtures and
Fittings
£
Assets under
construction
£
Total
£
-
166,608
166,608
606,559
773,167
-
8,423
8,423
74,095
82,518
-
3,971
3,971
6,006
9,977
-
191,847
191,847
248,114
439,961
-
366,878
366,878
928,768
1,295,646
-
-
-
-
-
-
54,026
54,026
107,214
161,240
Accumulated depreciation and impairment
At 1 April 2018
Depreciation
At 1 April 2018
Depreciation
At 31 March 2019
-
50,055
50,055
101,208
151,263
Carrying amount
As at 1 April 2018
As at 31 March 2019
116,553
621,904
4,452
72,541
191,847
439,961
312,852
1,134,406
58 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
14. Property, plant and equipment (continued)
Company
Cost
At 1 April 2017
Additions
At 1 April 2018
Additions
At 31 March 2019
At 1 April 2018
Depreciation
At 1 April 2018
Depreciation
At 31 March 2019
Carrying amount
As at 1 April 2018
As at 31 March 2019
Assets under
construction
£
Total
£
-
-
-
220,400
220,400
-
-
-
220,400
220,400
-
-
-
-
-
-
-
-
-
-
-
220,400
-
220,400
15. Trade and other receivables
Trade debtors
Other debtors
Advances to directors for expenses
Amounts owed by group
undertakings
Prepayments
Group
2019
£
13,339
415,544
1,311
Company
2018
£
67,413
570,352
1,307
2019
£
13,043
159,715
1,311
-
1,030
431,224
-
5,466
644,538
1,921,345
-
2,095,413
2018
£
28,896
335,454
1,307
761,348
-
1,127,005
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 2019.
59 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
16. Trade and other payables
Current:
Group
Company
2019
£
Trade payables
Social security and other taxes
Other payables
Amounts due from group
Accruals
Advances to directors for expenses
355,222
9,344
50,317
-
287,100
-
701,983
In the Directors’ opinion, the carrying amount of payable is considered a reasonable approximation of fair value.
-
3,842
465,037
-
194,071
-
662,950
2018
£
36,803
3,842
526,824
-
195,711
-
763,180
2019
£
163,707
3,842
50,000
135,779
415,383
186
768,897
2018
£
Non-current:
Current:
Emphyteutic lease
17. Provisions
Group
Company
2019
£
43,907
43,907
2018
£
2019
£
2018
£
-
-
-
-
-
-
There are no provisions in the year or as at year end.
60 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
18. Share capital
2019
Number
2019
£
2018
Number
2018
£
Allotted, called up and fully paid
Ordinary shares of 2.5p each
58,810,955
1,470,274
45,002,609
1,125,065
Ordinary “A” Shares
58,810,955
1,125,065
45,002,609
1,125,065
Shares were issued during the year as follows:
Shares issued from a placing on 31 May 2018
Shares issued from a placing on 5 June 2018
Shares issued from a placing on 19 July 2018
Shares issued from a placing on 14 September 2018
Shares issued from a placing on 19 February 2019
Shares issued from a placing on 24 March 2019
Number of shares issued
5,335,300
2,105,000
2,325,187
3,100,000
500,000
442,859
13,808,346
19. 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.
61 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
19. Financial instruments (continued)
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,
methodology
and
hierarchy
Financial assets
Cash and cash equivalents
Loans and receivables, net
of impairment
Total at amortised cost
Financial liabilities
Trade and other payables
Borrowings and provisions
(a)
(a)
(a)
(a)
Book value
2019
Fair value
2019
Book value
2018
Fair value
2018
£
£
£
£
44,681
44,681
504,122
504,122
431,244
431,244
644,538
644,538
475,925
475,925
1,148,660
1,148,660
701,983
43,907
701,983
43,907
763,180
-
763,180
-
Total at amortised cost
745,890
745,890
763,180
763,180
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 2019. The Group considers its maximum exposure to be:
Financial assets
Cash and cash equivalents
Loans and receivables, net of impairment
2019
£
2018
£
44,681
431,244
475,925
504,122
644,538
1,148,660
62 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
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
amount
£
Contractual
cash flows
£
6 months
or less
£
6 to 12
months
£
1 to 2
years
£
2 to 5
years
£
701,983
43,907
745,890
-
-
-
701,983
-
701,983
-
-
-
-
-
-
-
43,907
43,907
31 March 2019
Non–derivative
financial liabilities
Trade and other
payables
Borrowings
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 currently has minimal exposure to foreign currency and thus does not engage in any hedging activity.
20. Operating Lease commitments
The Group leases various areas of land under non-cancellable operating lease agreements. The lease terms are
between 10 and 40 years.
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Group
No later than 1 year
Later than 1 year and no later than 5 years
Later than 5 years
Total
2019
2018
4,366
17,463
81,922
103,751
-
-
-
63 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2019
21. 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, a net amount was receivable of £Nil (2018 - £125,497) from TCCPL.
22. Events after the reporting period
There are no events to report subsequent to 31 March 2019.
64 | P a g e