Tirupati Graphite plc
Annual report and financial statements
for the year ended 31 March 2020
Registered number: 10742540
Tirupati Graphite plc
Annual Report and Financial Statements
year ended 31 March 2020
Contents
Company information
Chairman’s Statement
Business review
Strategic report
Sustainability Report
Directors' and corporate governance report
Independent auditor’s report to the members of Tirupati Graphite plc
Consolidated statement of comprehensive income
Consolidated and Company statement of financial position
Consolidated statement of changes in equity
Company statement of changes in equity
Consolidated statement of cash flows
Company statement of cash flows
Notes to the financial statements
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Tirupati Graphite plc
Company Information
Annual Report and Financial Statements
period ended 31 March 2018
Company Information
DIRECTORS:
COMPANY SECRETARY:
REGISTRARS:
REGISTERED OFFICE:
CORPORATE BROKERS &
FINANCIAL ADVISORS:
R Kedia
H K Poddar
S K Poddar
C G St. John-Dennis
L Moore
London Registrars Ltd
Suite A, 6 Honduras Street
London
EC1Y 0TH
Share Registrars Ltd.
The Courtyard 17 West Street
Farnham Surrey
GU9 7DR
49 Berkeley Square
London
W1J 5AZ
Optiva Securities Ltd
49 Berkeley Square
London
W1J 5AZ
COMPANY REGISTRATION NUMBER:
10742540
INDEPENDENT AUDITORS:
LEGAL COUNSEL:
BANKERS:
PUBLIC RELATIONS:
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
St Brides Partners Ltd.
51 Eastcheap,
London
EC3M 1JP
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Tirupati Graphite plc
Company Information
Annual Report and Financial Statements
period ended 31 March 2018
Chairman’s Statement
I am delighted to present before you, the third annual report of your company, summarising the progress we
have made in our journey of value creation. We are fortunate to be specialist in an arena that promises to be an
important constituent of the “Green Economy”. Over the year, we have furthered our vision, sharpened our
skills, and achieved milestones that help us progress in our mission. We are now transformed to a “specialty
materials” business, and even so, retain and leverage our core strengths of basic resource activity as a key
component, providing us the launch pad for the advanced materials world, contributing to a greener planet.
We spelled out our principles of value creation in our first report, shared achievements on our path of progressing
it in the second, and today I am happy to share accomplishments in the year passed by, which affirm the strengths
which pave the way for our progression;
❖ The first 3000 tpa primary flake graphite module at the Sahamamy project, established at an industry
lowest capital intensity, has completed a year of operations, establishing a c.50% operating margin.
❖ Our products are now in used in a range of applications including the fast growing hi-tech applications.
❖ Extensive operations training has led to skill development amongst the in-country employees.
❖ With reduced waste generation, the technical assessments of by-product sand has established its
suitability for global markets. It has been used in house since we started our operations.
❖ The experience gained from the plant set up in Madagascar has further sharpened our abilities,
providing commercial scale operational inputs enabling us to adopt to techno commercial data
generated for follow on facilities.
❖ The process has not been without challenges, each one addressed to success.
❖ The niche area of expandable graphite is coming our own brand, as we are establishing “CarboflameX”
in the global markets.
❖ Commissioning of the Patalganga plant has again helped us in sharpening our edge to take bigger leaps
in the world of specialty graphite.
❖ The knowledge gained has led us to add an expansion plan to Patalganga project, pre creating a smaller
version of our integrated large-scale plant modules.
❖ On the materials technology side, our upmarket team continues to improve our “graphene” and work
on target applications.
❖ We have furthered possible collaborations with industry and research centres and connect extensively
for adding to our brain pool.
As I write this statement, your management team is tirelessly working to meet all the requirements to enable us
launch on one of the most enviable stock exchanges of the globe, and possibly when I stand before you, we
would have added many more members to our family. Corporate development has progressed hand in hand with
our business development. We will take off on our flight to scale new heights by the day though step by step, an
approach that truly differentiates us in the world of corporates.
With these few words, I present before you an account of our progress in the year passed by. We can see us
moving ahead in our journey, and build values, as is restated in our Business review. I am again reminded of
these golden words from a leader who has won honours from none other than Her Majesty.
“Successful companies don’t do different things; they do things differently” – Ratan Tata
Together we can and we will achieve our goals of building a company that will set new benchmarks and be
exemplary, with such a conviction, I feel proud leading a team composed of five nationalities at a young age of
three.
Shishir Poddar
Executive Chairman & Managing Director
4 October 2020
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Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2020
Business Review
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 2020.
Since its inception in 2017, Tirupati Graphite Plc (the “Company”) has set out on the path of building an integrated
Flake Graphite to Graphene business and in its maiden and subsequent Annual Reports for periods ending 31st
March 2018 and 31st March 2019 respectively, the Company shared the progress of its project developments and
outlined its plans for achieving its business objectives.
Flake Graphite is a key material in the energy storage and green energy applications among others and Graphene,
being a single atom layer of a flake graphite crystal, is a material which is widely touted to become one of the
largest transformational advanced materials that could be used extensively in applications which could
potentially reduce the global carbon footprint.
The Company’s primary projects are located among the lesser privileged communities of Madagascar which
provides it with the opportunity, through the development of its projects, to uplift the lives of the local and
regional communities in which it operates.
The Board is focused on continuing to develop the Company’s business and enhance the Company’s community
and social impact, framing business plans, policies and practices providing management with the insight and
guidance to perform and deliver on the Company’s business objectives whilst ensuring ongoing focus on value
creation in all spheres outlined in our Chairman’s statement on Value creation:
❖ Value creation for the planet and for future generations:
By developing a unique material which has numerous ‘green’ applications contributing towards a more
sustainable and greener planet for future generations and developing technologies and processes to
minimise emission and waste generation.
❖ Value creation for our employees:
By providing opportunities for performance and learning, achieving corporate goals and personal
development, to inspire quality delivery on the objectives and values we strive for.
❖ Value creation for the local communities we operate in:
By looking after our employees and their families and providing health care, education and recreational
facilities and support for local communities, helping bring communities together and improving their
general quality of life.
❖ Value creation for our shareholders:
Through well considered and crafted business strategies and plans, implemented with persistence and
determination, and adopting a culture of cost prudence, hard work, and delivering on targets.
Over the period since the previous Annual Report for 2019, the Company has continued to progress with its
development plans and successfully achieved various development and operational milestones across its
projects and on its corporate activities. Against this background, the Company is pleased to present its detailed
Annual Report for year ending 31st March 2020 to its shareholders and members which contains details of the
Company achievements throughout the past 12 months.
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Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2020
The Company Board & Management
The Company’s Board of Directors offers a diverse and complimentary blend of skills and experience. The Board
has continued to demonstrate effective leadership reflecting in the Company’s performance. During the
reporting period, the Company appointed and additional independent non-executive Director to the Board and
the engagement was completed in July 2020.
The Company’s executive management team has been built with qualities and capabilities required to deliver
on the Company’s business objectives which puts the Company in good stead. Further development of
management human resources shall continue as the Company progresses.
An introduction to the existing and new Board and senior executive team members is as follows:
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 29 years of success behind him, Shishir has developed multidirectional skills, extensive reach and
recognition and continues to lead the Board and Management team.
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 mechanisms 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 whilst spearheading the proposed listing of the
Company.
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
development of the SME sector.
LINCOLN JOHN MOORE, NON-EXECUTIVE DIRECTOR
A new member on our Board, Mr. Moore has been actively involved in establishing and raising finance for African
based mining and agriculture projects and currently serves as an executive director of West African based AIM
listed Dekel Agri-Vision for the past 12 years, with primary responsibilities for the corporate finance activities of
the organisation including equity and debt capital raises. Since his appointment to Dekel in 2013, he has led a
number of debt and equity transactions with London, African and international government backed financial
institutions. In addition, he currently serves as a non-executive director of Firering Holdings Ltd, a private Cote
d’Voire based Tantalum near term mining production project. Mr Moore is a Chartered Accountant and former
senior manager in the restructuring division of Deloitte London.
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 renumeration committee, and provided the gravitas to the Company’s
presence in London’s corporate world.
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Business Review
Annual Report and Financial Statements
period ended 31 March 2020
HEMANT KUMAR PODDAR, NON-EXECUTIVE DIRECTOR
A co-founder, Hemant has over 30 years of experience in the flake graphite industry. He is extensively travelled
and connected to primary users of the commodity and provides insight for development of the Company. 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, 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, and contribution to various
policies and sub-committees of the Board are recognisable.
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 deserves recognition.
PURUVI PODDAR : GROUP HEAD – CORPORATE & BUSINESS DEVELOPMENT
Puruvi graduated from the University of Manchester with a BSc in Material Science and Engineering. She
spearheads activities of investor & public relations, corporate development activities, feasibility studies on the
company’s projects and development of markets. She has deep understanding of the graphite applications and
markets, has worked on graphene composites, processing and applications and is further working extensively on
development of our specialty graphite & graphene projects. An able leader, at this early stage she has presented
on behalf of the Company in global industry conferences, investor meetings, annual general meetings and is
extensively involved in corporate and business development activities.
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, he has worked on
multiple projects in diverse companies. 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 geologists 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
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. 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
a grip on multiple arenas of the business.
KIEN HUYNH : 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
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Annual Report and Financial Statements
period ended 31 March 2020
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.
AMEYA GOGATE : CONTROLLER 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 time span with the company, has extensively
contributed to the company’s finance and corporate finance activities.
NICHOLAS PETIT JEAN : DIRECTOR ADMIN (MADAGASCAR OPERATIONS)
An engineer in hydraulics with experience in 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.
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 with bringing it into production, ramping it up and continuing the activities of its development to the
next stage.
RAHUL JHA : PROJECT HEAD VATOMINA PROJECT
Mr Rahul is a mechanical engineer with expertise in project planning, designing and execution. He has a deep
understanding and knowledge about various aspects of graphite processing. He has been in the graphite
processing industry for over 5 years and is successfully leading the ground team at the Vatomina Project.
HRIDAY OJHA : ADMIN & FINANCE HEAD – MADAGASCAR PROJECTS
With a master’s in finance and administration, Mr Hriday possess excellent management administration &
communication skills. The in-country admin head for us, his skill set is versatile helping him effectively lead
administration and finance activities on the ground in Madagascar.
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Business Review
Annual Report and Financial Statements
period ended 31 March 2020
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
The Company is being built on the basis of the following strategies - tailor made considering the dynamics of the
graphite industry and the motive to create values:
1. minimise initial and overall investment capital and accelerate production by deriving early stage cash
flows for all of the Projects; reduce equity dilution by minimising the need to access the equity
markets and maximise shareholder returns;
2. mitigate project development risks through a modularisation strategy, tracking the growth of the
graphite and graphene markets and related developments and technological advances;
3. aim for low gestation periods for project development to optimise return on investments;
4.
integration across the value chain and organic market development – serving multifarious markets and
diverse applications of specialised as well as conventional type;
5. optimising technologies and operations to ensure low costs, higher output and higher margins; and
6. sustainability in all spheres – environment, social and value creation.
Over the past year, the Company has continued progress on its journey of developing into a leading flake graphite
to graphene company. With the initial upstream operations at Sahamamy in Madagascar and downstream
processing facilities at Patalganga both being completed and commissioned during the period, the Company’s
operating base was set for a gradual ramp up in production towards the objective of stabilising its operations
and achieving full production capacity which was successfully delivered during the period.
With all operational hurdles having been met during the commissioning and ramp-up phase of the initial
production facilities, the Company is now ready to move into the next phase of its development which will see a
3-4 fold increase in its production capabilities across both its upstream and downstream operations, as well as
the development of its initial graphene production capabilities which introduces the third pillar of its business
and delivers on its objective of becoming a fully integrated company in the sector through its upstream,
downstream and graphene operations.
Alongside achieving on its development objectives in accordance with its strategic consideration it had set for
itself, the Company also made significant advancements on its market development aspirations of continuing to
develop and expand its reach and commercial relationships with quality buyers and consumers for its products
during the period.
And finally, over a year marked by challenging market conditions with extreme volatility, the Company was
successful in significantly advancing its corporate objectives of becoming a listed company on the London Stock
Exchange, paving the way to larger scale developments.
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Business Review
Annual Report and Financial Statements
period ended 31 March 2020
Medium-Term Development Plan
Over the period, the Company further refined its development plans tagging it as its Medium-Term Development
Plan (”MTDP”) depicting the development of each of the business verticals split into distinct development phases
out to 2024.
The development of each phase is economically independent, implying that a single phase developed, shall not
be dependent for its operations on any subsequent operating modules across any of its business verticals. This
gives the Company a high degree of flexibility in determining the most economical development path considering
optimising return on its investments.
The table below outlines the specifics components which make-up the Company’s MTDP with regards to a)
estimated timing of the developments, b) target commissioning dates of each production module, c) CAPEX
budget, d) investment status; and e) notes to explain the expected impact that each production module may
have on the Company’s business performance and financial position as they are commissioned.
Tirupati Graphite Plc
Components of the Medium-Term Development Plan and their impact
Module
Code
Description
MP1
MD1
3000 tpa primary flake Graphite at
Sahamamy Project
Patalganga 1200 tpa Flame
Retardant Expandable Graphite
Actual /
Estimated
commissioning
Date
CAPEX (£)
Budget
Estimate
Investment
Status
Apr-19
£895,000
Incurred
Jul-19
£62,000
Incurred
MP2
6000 tpa primary flake Graphite at
Vatomina Project
Apr-21
£1,432,000
MD2
Patalganga Expansion 4800 tpa
integrated Downstream
Oct-21
£2,464,000
MG1
Graphene & Technology Centre
Stage 1
Oct-21
£1,304,000
Total CAPEX across the three Verticles for next modules part of
IPO proceeds utilisation
£5,200,000
From IPO
Proceeds
From IPO
Proceeds
From IPO
Proceeds
From IPO
Proceeds
Impact
Company demonstrated > 50% Operating
margins, GBP 663 basket price realisation
Started generating Operating margins
within the Ramp up period
Combined 9,000 tpa primary capacity,
>50% operating margin & £ 663 bassket
price demonstrated by MP1 module
The project once commissioned provides
prospects of additional revenues and step
forward for specialty graphite business
The project once commissioned provides
prospects of additional revenues and step
forward to graphene and advanced
materials business
The balance of IPO fund raise meets
working capital requirements for each
project and leaves buffer
Note
MP3
MG2
MD3
MP4
The completion of above modules can position the company to operate irrespective of whether further modules are added or not,
these modules continue to operate.
18000 tpa primary flake Graphite
at Vatomina Project
Graphene & Technology Centre
Stage 2
Specialty Graphite project Phase 1
18000 tpa primary flake Graphite
at Sahamamy Project
Jan-22
£5,168,000
Apr-22
£4,925,000
Jul-22
£8,419,000
Oct-22
£4,648,000
The company
shall consider
options for
raising capital
for these
modules at
appropriate time
These relate to modules for which
investments need to start from April 2021
The company has flexibility to plan
timings of each of these modules. Each
module being independent, the previously
installed operations are not impacted.
Note
The completion of above modules signify completion of the second phase of development under the medium term development plan
MP5
MD4
MG3
MP6
18000 tpa primary flake Graphite
at Vatomina Project
Specialty Graphite project Phase 1
Graphene & Technology Centre
Stage 3
18000 tpa primary flake Graphite
at Vatomina Project
Jul-23
£4,076,000
Apr-24
£5,731,000
Apr-24
£7,075,000
Jul-24
£4,076,000
The company
has flexibility to
alter schedules
advancing more
profitable
modules. These
are expected to
be internally
funded.
Completion to these will mean
completion of the Medium Term
Development Plan. The company has the
opportunity to further expand any of its
three business units based on commercial
considerations.
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Annual Report and Financial Statements
period ended 31 March 2020
While the budgets, timing and impacts are forward looking estimates, the progress of these plans will depend on
various factors both internal and external. This progressive, modular development strategy was developed by
the Company’s leadership team and included extensive in-house planning, design, engineering and proven
processes stemming from years of experience in its areas of business. While the planned timings are indicative
and subject to various factors that may impact them, one of the main advantages of the Company’s modular
development strategy is the significant flexibility it has in determining the timing of implementing its subsequent
capex plans to expand its production capacities at all three of its business verticals which enables the Company
to prioritise its development to achieve the best commercial outcomes. Depending upon prevailing market and
financial conditions, the Company can choose to decelerate its capacity build and reduce its capex to meet
cashflow requirements, or should it find it prudent to accelerate its developments ahead of plan due to
favourable market conditions, it will be able to adjust its development plans at the opportune time and maximise
shareholder value.
Key Highlights over the period
The Company made a number of significant achievements during the period and advanced development across
all of its businesses since the last annual report, as highlighted below:
Madagascar Projects - Vatomina and Sahamamy
• Having completed commissioning of the first 3,000 tpa primary flake graphite mining operations and
processing plant module at the Sahamamy Project in Madagascar (“Sahamamy Project”) in March 2019,
production was progressively ramped-up and operations stabilised during the period.
• During the ramp-up period, all key production and operational targets were largely met or exceeded
•
•
•
and commercial production was declared by the Company in January 2020.
Product sales were initiated from May 2019 with shipments made to key buyers and across three
continents. A basket price of £658/MT was achieved for FY20 with gross operational margins of 48%
Sand, produced as a by-product from a novel process developed and successfully implemented by the
Company at its operations has undergone initial tests to confirm suitability for construction purposes.
Post completion of land development at the Vatomina Project in Madagascar (“Vatomina Project”),
construction of the 6,000 tpa first plant at the Vatomina Project was initiated during Q1 2019.
•
•
• Ground and site preparations for the 6,000 tpa first plant was substantially completed and made ready
for erection of the super structure and installation of the process plant equipment. The ancillary facilities
at this project were commissioned and are being used for exploration and construction support.
• At the start of the period, the Company engaged the services of highly regarded, global industry
consultants, SRK Consultants (“SRK”) to develop a joint CPR for both primary flake graphite mining and
processing projects in Madagascar.
SRK’s work materially concluded during Q1 2020 and delivered a JORC (2012) Mineral Resource estimate
which showed Vatomina containing 18.4Mt @ 4.6%GC and Sahamamy containing a further 7.1Mt @
4.2%GC, with additional potential to be realised with next stage of exploration.
The CPR also contained various recommendations to the Company for ongoing exploration and mine
planning activities which the Company plans to undertake in the coming period post IPO and work on
an updated CPR over the next few quarters to further enhance its exploration assets.
Environment clearance for building of a road connecting the Sahamamy and Vatomina Projects was also
obtained and a survey cum feasibility study for its construction was completed by a local government
authorised surveyor
Environment clearance for a second module of 18,000tpa at the Sahamamy Project was also obtained.
The Company is now directly employing around 120 people in-country in Madagascar and extensive
work has been done for skill development and team building.
Community Engagement & Welfare program under the Company’s Shakuntalam initiative, which is
focused on helping the communities tackle and improve on various issues such as health, hygiene,
education, skill development etc. has been a continuing focus for the Company during the period.
•
•
•
•
Downstream & Graphene cum Technology Centre Projects - India
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period ended 31 March 2020
•
•
•
•
In July 2019, commissioning of Patalganga Flame Retardant Graphite Project in India was completed
with 1,200 tpa flame retardant expandable graphite, and 1,500 tpa flake graphite finishing facilities
commencing operations.
Flame-retardant flake graphite product under brand name ‘CarboflameX®’ was launched in the
European and Indian markets with first sales and shipments of the key downstream product being made
to strategic buyers in the market.
The Company continued to develop customers for its products and obtaining product acceptance status
with various buyers with 100% of the target customers it approached to date, given product
qualification status to the Company’s products.
Patalganga Project stage II expansion plans were developed during the period to build on the Company’s
strategy of modular growth aligned with market penetration and to add to the product basket of
Patalganga Project ahead of building the larger Specialty Graphite projects, in line with the Company’s
strategy.
The stage II expansion at Patalganga will see production capacity increased to 4,800 tpa and will
introduce high purity graphite and micronized graphite as well as additional expandable graphite
production capabilities for the Company.
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.
• During the period, detailed feasibility studies were completed for both the downstream specialty
•
•
•
•
•
•
graphite & Technology and Graphene centre projects in India.
Samples of high purity graphite, made from the pilot tests of the novel zero-hydrofluoric acid developed
by the Company, were also tested and approved by various prospective customers globally.
Trials for spherical graphite production have also begun with targeted high efficiency equipment
manufacturers.
The standardised specifications of the graphene products were released and application development
with target industries and universities was initiated.
Land allocation by the State Government in preferred industrial zones is in progress for both the
projects.
UPDATE ON PROJECTS DEVELOPMENT
A detailed account of the Company’s development plans and status for each of the Company’s project was
outlined in the previous annual reports and is available on the Company’s website. We provide below an
update of the progress made since the last report for each of the projects.
PRIMARY FLAKE GRAPHITE PROJECTS
Since the last annual report, material development activities at Vatomina to establish the initial 6,000 tpa module
was constrained generally due to a lack of funding. Despite this, all pre-construction activities at site and ground
preparations including laying the foundations for the process plant were completed and is in a construction ready
state for the superstructure and installation of process plant equipment.
The Company chose instead to focus its resources on further delineation and enhancement of its geological
database by extending its drilling campaign. Additionally, the Company worked with SRK to enhance its mine
planning and expand its mineral resources which was presented in SKR’s Competent Persons Report (“CPR”)
published in June 2020.
A summary of the ongoing exploration activities, mine planning and key results from the CPR is as follows:
Exploration activities
The Company’s drilling programme to date concluded with the execution of:
•
•
•
66 holes of diamond core drilling to varying depths aggregating to 3,128 drilled meters;
648 holes (549 at Vatomina and 99 at Sahamamy) of augur drilling with average 8-9 meters depth
aggregating to 5,611 drilled meters (4,879 at Vatomina and 732 at Sahamamy);
16 trenches and channel sampling of 6 meters depth aggregating to 45 drilled meters; and
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•
43 test pits of approximately 6 meters depth aggregating to 225 meters.
Logging of the drill cores, sampling and assays were also performed under the guidance of the CP 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, sufficient data was obtained allowing progress of the resource
assessments based on the Company’s objectives of i) defining long term Mineral Resources availability in
accordance with JORC (2012) for the first two modular plants of combined 9000 tpa flake graphite output and
targeting >[10] years mine life for the full scale planned capacity build to 81,000 tpa flake graphite output; and
ii) developing an operational raw material mining plan for the initial operations at both projects.
Figure 01: Map showing the location of the pits in Vatomina
Figure 02: Map showing the borehole locations in Vatomina Project
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Figure 03: Map showing locations of auger drilling in Sahamamy
3D Geological Modelling
The 3D topographic digital elevation model was constructed using Leapfrog Geo software, based on the
topographic survey data, generated by Tirupati using Total Station survey equipment. SRK imported the elevation
grid model into Leapfrog Geo software and created the 3D topographic surface with a resolution of 25m x 25m.
SRK undertook 3D geological modelling at both Vatomina and Sahamamy which generated the following images
of the deposit areas explored to date by the Company, which is only around 30% of the mineralised zones
identified. The geological mapping has assisted with the Company mine planning for production as well as
defining priority exploration targets for the next phase of drilling which the Company will be implementing
immediately post listing.
Figure 04: 3D View of the Vatomina Geological Model (Looking Northwest)
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Figure 05: Example Cross Section Reflecting Different Estimation Domains in Vatomina
Figure 06: 3D View of the Modelled Graphitic Gneiss distributed in Saprolite and Bed Rock in Vatomina
(Looking North)
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Figure 07: 3D View of the Sahamamy Geological Model (Looking Northwest)
Figure 08: Example Cross Section Reflecting Different Estimation Domains in Sahamamy
Mineral Resource Classification
Another key area of the exploration program was to upgrade the mineral resources classification following the
definitions and guidelines of the JORC Code (2012). In determining this, the following factors were considered by
SRK:
•
•
•
the quality, distribution and quantity of data used in the estimation;
the geological knowledge and understanding, focusing on geological and grade continuity; and
the quality of the geostatistics and quality of the estimation.
Considering the above, SRK classified the Mineral Resources at Vatomina using the following criteria:
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•
•
Indicated Resource – part of domain 110, 120, 130, 140 and 150 that occurs within the saprolitic horizon,
where the drilling data are broadly distributed at 100m interval and dominantly consisting of auger
holes, the quality of the estimate is defined;
Inferred Mineral Resource – the remaining part of the above domains and all other domains that falls
within the saprolitic zone.
Figure 09: Area of Inferred category resources (Blue) for Vatomina Graphite Project
Using the same considerations for classification, SRK classified the Mineral Resources at Sahamamy using the
following criteria:
•
•
Indicated Resource – part of domain 100, 300 and 400, where the distribution of the drilling data is
within 100m interval and the quality of the estimate is defined;
Inferred Mineral Resource – the remaining part of the above domains and all other domains to the
extent of the geological model.
Figure 10: Mineral Resource Classification of Sahamamy.
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Mineral Resource Statement
The CPR delivered a JORC (2012) Mineral Resource estimate which showed Vatomina containing 18.4Mt @
4.6%GC and Sahamamy containing a further 7.1Mt @ 4.2%GC.
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Resource Category Zone Quantity Grade (Mt) (GC%) Measured 110 - 0.0 111 - 0.0 112 - 0.0 120 - 0.0 130 - 0.0 140 - 0.0 150 - 0.0 160 - 0.0 161 - 0.0 170 - 0.0 180 - 0.0 Sub-total Measured - 0.0 Indicated 110 0.9 4.2 111 - 0.0 112 - 0.0 120 0.8 4.9 130 0.4 3.7 140 0.7 4.1 150 0.4 4.6 160 - 0.0 161 - 0.0 170 - 0.0 180 - 0.0 Sub-total Indicated 3.2 4.3 Inferred 110 3.3 4.8 111 0.2 9.1 112 0,1 3.6 120 1.5 4.3 130 2.0 4.2 140 1.9 4.1 150 3.2 5.6 160 0.4 3.8 161 - 5.6 170 1.9 4.1 180 0.5 4.1 Sub-total Inferred 15.2 4.7 Total Mineral Resource 18.4 4.6
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Notes:
(1) All reported quantities are rounded to the nearest 100,000 tonnes and the GC grades are rounded to the
nearest one decimal point to reflect the relative accuracy of the estimates.
(2) The Mineral Resource Estimate was constrained by the lithological wireframes, a marginal cut-offs of 1.8%
GC and a conceptual pit shell defined by the following assumptions: Graphite Concentrate price of US$ 950/t;
overall slope angles of 30º; a mining recovery of 95%; a mining dilution of 5%; a base case mining cost of US$
1.5/t of ore; dry processing cost US$ 6.6/t of ore, and 5% mass yield; without considering revenues from other
elements.
SRK Mineral Resource Statement Sahamamy Graphite Project, Madagascar, in accordance with the JORC
Code (2012) as of 1st June 2020
Notes:
(1) All reported quantities are rounded to the nearest 100,000 tonnes and the GC grades are rounded to the
nearest one decimal point to reflect the relative accuracy of the estimates.
(2) The Mineral Resource Estimate was constrained by the lithological wireframes, marginal cut-offs of 1.8% GC
and a conceptual pit shell defined by the following assumptions: Graphite Concentrate price of US$ 950/t; overall
slope angles of 30º; a mining recovery of 95%; a mining dilution of 5%; a base case mining cost of US$ 1.5/t of
ore; dry processing cost US$ 6.6/t of ore, and 5% mass yield; without considering revenues from other elements.
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Resource Category Zone Quantity Grade (Mt) (GC%) Measured 100 - 0.00 200 - 0.00 300 - 0.00 400 - 0.00 500 - 0.00 600 - 0.00 Sub-total Measured - 0.00 Indicated 100 0.2 5.20 200 - 0.00 300 1.0 3.40 400 0.2 6.40 500 - 0.00 600 - 0.00 Sub-total Indicated 1.4 4.10 Inferred 100 1.4 5.30 200 1.3 2.50 300 1.4 3.60 400 1.3 5.50 500 0.3 4.10 600 - 0.00 Sub-total Inferred 5.7 4.20 Total Mineral Resource 7.1 4.20
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Exploration Target
In addition to the Mineral Resources reported by SRK in the CPR, SRK was further of the opinion that Vatomina
consists of about 8-10 Mt of mineralised materials with the average grade containing about 3-4%GC as
Exploration Target, as the term is defined in the JORC Code (2012), within the area that has been explored by the
Company as at the date of the CPR.
The estimation of such Exploration Target was derived from the available mapping data and the geological logs
of the auger boreholes and such Exploration Targets include:
• Along the strike of the already identified mineralised bodies; and
• Along the dip direction of the identified mineralised bodies.
Figure 11: Map defining areas needing further exploration
SRK noted that the strike wise extension of the already identified mineralised zones is still open and falls within
the northern and eastern boundary of the license area. SRK also noted that the exploration undertaken in
Vatomina was restricted to about 25% of the license area. Considering the significant portion of the license area
consists of the similar geological unit that has potential to host graphite bearing layers within the gneissic rock,
SRK recommended the Company to undertake a preliminary mapping programme to confirm the presence of the
graphitic bands in the remaining 75% of the license area that occurs west of the areas previously explored.
At Sahamamy, SRK is of the opinion that the Sahamamy Project has potential to host about 5-7 Million Tonnes
of Exploration Target with expected grade of 4-5% GC and such Exploration Targets were identified in the
following areas within the leasehold:
• Along the strike of the already identified mineralised bodies;
• Along the dip direction of the identified mineralised bodies; and
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•
In the central part of the leasehold area, where occurrences of the parallel mineralised zones are
reasonable geological expectation.
Figure 12: Distribution of the Exploration Targets in Sahamamy
SRK is of the opinion that such areas should be drilled with diamond core drill holes in order to confirm the
geometry and shape of the mineralised bodies and evaluate the results during the future exploration
programmes.
Mine Planning
Mine planning for Vatomina is ongoing and will be enhanced during the next phase of exploration post listing. At
Sahamamy, the mining operation comprise of historically mined open-pits as well the current open-pit
operations. Based on 6-month results to 1st June 2020, a total of 116,483 t of material has been moved, of which
36,846 t had been ore material. The operating stripping ratio is about 2:1 (t:t).
A conceptual mine plan for Sahamamy has been developed by the Company in which five different areas for
mining (A to E) as illustrated in Figure 13, has been identified with present mining activity happening in pit areas
A and B.
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Future Exploration Programme
Figure 13: Layout of Mining pits in Sahamamy
The CPR also contained various recommendations to the Company for ongoing exploration and mine planning
activities and operational improvements which the Company plans to undertake in the coming periods post IPO.
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 to date.
Development of primary flake graphite projects
The activities at Vatomina are now prepared to shift gears to mining and processing to produce high quality flake
graphite alongside the second phase of exploration to enhance its resource base. Upon completion of the
fundraising and listing of the Company’s equity on the London Stock Exchange, these developments shall be
commenced.
The planned capacity build up of the primary projects remains to 81,000 tpa, 60,000 tpa in Vatomina and 21,000
tpa in Sahamamy, with the updated estimated timelines being as below:
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Development of land for the construction of the first 6,000 tpa module in Vatomina 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. The Company had
been in the process of raising the capital required for completion of Vatomina but due to challenges of raising
funds as an unlisted company, decided to progress the development further post listing. The remaining works is
the erection of the super structure and installation of equipment, which are expected to be completed within 4-
5 months following the Company’s IPO. The pictures below shows completed foundations and flooring of the
main plant building and other utility centres having been completed.
Figure 14: 6000TPA plant under construction
Since our last report, the Sahamamy Project has operated as a modern international standard mining and
processing facility producing high quality flake graphite and shipping to high end consumers in three continents.
Commissioning of the first 3,000 tpa module at Sahamamy was completed in March 2019, followed by a period
of production ramp-up and stabilisation of operations alongside marketing and sales activities.
During the year under reporting, being the first 12 months period post commissioning, and including the
debottlenecking, technology establishment, ramp up and plant stabilisation period to 31 March 2020, the
Sahamamy Project delivered the following key operations results:
Cost Head / Particulars
Cost Incurred (£) / Outputs (MT)
Total Cost of production
Quantity Produced (MT)
Cost per ton produced (per MT)
Quantity Sold (MT)
Revenue Generated
Average Selling price (per MT)
Gross Sales Margins (per MT)
Gross Sales Margin (%)
£411,899
1,318 MT
£313/MT
1,206 MT
£793,577
£658/MT
£345/MT
52.43%
We are happy to report that the results establish beyond doubt the following contentions of the Company with
respect to its primary flake graphite projects and capabilities:
•
The Company has established its ability to set up mining and processing facilities for flake graphite at
industry lowest CAPEX as compared to listed peers, whose feasibility studies suggest multiple times
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•
•
•
CAPEX of US$317 (£240) per ton of annual capacity created incurred by the Company and in line with
its estimates for follow on developments.
The total C1 operating cost (OPEX) of US$391 (£313) per ton of production in the initial first year,
establishes the Company’s contention that its operating cost structure is in the lowest quartile in spite
of the fact that the resource grade is not in the highest quartile as compared to listed peers.
The project incorporates a lean process and its success has been established at commercial scale.
The technological innovation developed by the Company, called Self-Attrition Graphite Extractor
(“SAGE”), a first time use of a new processing technology that eliminates sand as a by-product from the
feed ore prior to the flotation circuit. This unique processing technology represents a hugely valuable
development for the Company in view of the following:
➢ The load on the flotation circuit is reduced by about 50% with pre flotation removal of >50% of
➢
the impurities leading to a cost efficient and lean process.
It reduces wear and tear in the process with preliminary elimination of abrasive sand prior to
flotation circuit.
➢ Construction grade sand is achieved as a process by-product, which is currently being
extensively used by the Company in construction and infrastructure development activities at
the Projects reducing infrastructure development costs.
➢ This also leads to the Company realising its objective of having greener operations as well as
meeting its waste to wealth aspirations.
The operations of the processing plant were stabilised during the ramp-up phase and commercial production
was declared by the Company in January 2020.
Figure 15: 3000 tpa plant at Sahamamy in production
Marketing and Sales
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. The approach is not only to sell current
production but to pre create markets for the upcoming additional capacities. For catering to the smaller users,
we have also engaged industry recognised benchmark intermediaries and processors with similar policy and
approach.
The sales from the operations for the period totalled 1,206 MT (total produced was 1,318 MT), with an average
basket price realisation of US$ 835/MT. Commercial supply qualitative approvals have been achieved with target
buyers and the Company has received a number of repeat orders from some buyers and further progress is being
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made with each product consignment made by the Company. The Company has established its brand name
further in the industry, for various applications and in multiple countries. As specific information on buyers is
considered commercially confidential, they have not been included.
Environment Management & shift to renewable energy
Our Environment management strategy is driven to minimise the impact on the 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 the impact
on the environment, including:
1. The generation of sand as by-product has reduced process tailings by half.
2. Tailing solids are settled and used for land filling and as clay for local use by the community.
3. Progressive build-up of drainage management taking benefits from the undulating terrain has helped
reduce erosion.
4. Non-mineralised waste land and swamp areas are being developed by reclamation using mining
overburden redeveloping these into productive areas for plantations.
5. 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.
6. 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. Our by-product sand and quartz mix laid on
roads has helped eliminating dust from vehicular movement. The plant operations are dust free and
most modern flash drying system using with natural gas as fuel helps minimise emission and dust.
Use of renewable sources of energy is a key priority for the company. With undulating terrain in Sahamamy area,
the topography and drainage provide opportunities for hydro power generation. Initial studies for reconditioning
the existing small hydro power generation setup (‘SHPP’) established a few decades ago with water reservoir and
a turbine house connected by a pipeline have been completed. The SHPP is inoperable at present and requires a
complete rebuild and overhaul. Further scope for additional capacity creation for hydro power generation have
been established through a feasibility study. The company intends to progress the reconditioning of the existing
facilities and create further capacity alongside further project capacity development in its next phase.
Development of Connecting Road between Sahamamy & Vatomina Projects:
We are happy to report that via a decree dated 6 April 2020, we have received authorisation from environment
and forest departments for building and developing 12 km of new road connecting the Sahamamy project to the
National Highway RN2 and the Vatomina project and to add 18000 tons of additional capacity at Sahamamy
project. The process encompassed extensive liaison with all stakeholders including various communities,
Department of Forest, administrative bodies of the Government and the Department of Environment and we are
happy to report that we received support from extended communities outside our Permit areas. This connectivity
shall extensively help our in-country management and catalyse the improvement in quality of life of a very large
area devoid of road connectivity, benefitting the local people and catalysing economic growth of the region. We
are engaged in advancing the build-up of the road and this shall be fast tracked post the completion of the fund
raise activity in process via the IPO.
Development of further processing facilities
With the establishment and profitable operations of the first 3,000 tpa module at Sahamamy and advancement
of the second 6,000 tpa module at Vatomina, while immediately prioritising the completion of the Vatomina
module upon locking in the funding requirements, the Company intends to progress on the path of next stage
development of both its projects by completing preparations for the next module with capacity 18,000 TPA each.
This shall include various activities like further drilling and detailed exploration to enhance the resource
categorisation and quantities, development of next stage of infrastructure, re-development of the existing hydro
power set up and preparation for the development of larger prospective hydropower generation facility at
Sahamamy, and all other activities to progress the developments as per timelines. Appropriate budgets for these
activities are earmarked in the company’s forecasts and the IPO fund raise plans factors these into the use of
funds.
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Social engagements – Madagascar Projects.
We are happy to report that the company has further continuously remained engaged with the communities it
is working with, under its community development program “Shakuntalam”. The program currently focusses on
four areas of activities as detailed below:
Continuing our report to members in the previous annual report, we are happy to confirm that the Sahamamy
School rebuild is complete in all respect and first classes in the new building shall commence as soon as it
reopens. The rehabilitation of inhouse labourers and their families in an area distant from plant operations was
also completed.
Additionally, the company continues to deliver on the current focus areas for the community development which
includes the Sahamamy Health Centre, Vocational training, providing drinking water facilities, providing logistic
facilities to the local people and supporting sports and education on an ongoing basis. The employment
generated by the company’s projects has brought smiles to many in this region where livelihood has remained a
challenge bringing prosperity to the people around our projects.
More details or the social engagement is covered under the Sustainability Report covered under the section
Strategic Report.
TIRUPATI SPECIALTY GRAPHITE (P) LTD (Downstream & Graphene)
Specialty graphite currently constitutes approximately 25-30% of the global flake graphite markets
volumetrically, though value wise its market size could well exceed primary flake graphite. Applications in energy
storage, flame retardants, thermal management, composites, lubricants and various others provide key value
added areas for the Company which also provides the opportunity to extensively contribute to the green
technology arena. The Company has entered into a binding agreement for the acquisition of 100% of the equity
of Tirupati Specialty Graphite (P) Ltd. (“TSGPL”), a private Indian registered company which houses operations
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and comprehensive plans to set up to and develop an integrated downstream flake graphite project as well as a
world class Graphene and Technology centre, thus completing the Company’s objectives of becoming a fully
integrated graphite to graphene company. We are happy to report that pending completion of the acquisition of
TSG, which is subject only to statutory approvals which is expected post listing of the Company, it has been
continually progressing its projects in close coordination with the company.
As previously stated, specially processed flake graphite which the Company refers to as ‘specialty graphite’, is a
niche area with substantial value add over primary flake graphite concentrate produced in Madagascar at the
Company’s upstream operations. The Company estimates the high growth applications like in green energy and
energy storage, flame retardants and foils and gaskets, composites like conductive polymers and insulation
materials, which require specially processed flake graphite will progressively increase the volumetric market
share of specialty graphite. China is estimated to account for 90% of global supply at present, providing the
company the opportunity to develop an ex China source for these.
With the acquisition of TSG, the Company has inherited commercially feasible, scalable and green processes for
downstream processing of primary flake graphite into the various forms of specialty graphite. As a precursor for
most of these applications, the primary concentrate requires purification up to 99.95% and is then subjected to
follow on processing and shaping to produce specialty products such as expandable, micronized and spherodised
graphite.
The updated status of these projects is as detailed below:
The Patalganga Project
The Patalganga project was set up by TSGPL to act as a precursor project to establish markets and further de-risk
the Company’s developments ahead of construction of the larger downstream processed flake graphite projects
under the Company’s medium-term development plans (“MTDP”). The first stage of the Patalganga project
commenced commissioning in July 2019 and achieved commercial production within the next quarter. It has
manufacturing capabilities for 1,200 tpa of flame-retardant expandable graphite and 1,500 tpa of flake graphite
finishing facilities by way of screening and blending to produce customised products for buyers which also
provided the Company with the ability to develop smaller end user-based markets in India for its primary flake
graphite products coming from its Madagascan operations.
As expandable graphite-based flame retardants are a relatively niche area it requires a progressive marketing
strategy starting with product testing and acceptance from buyers in order to penetrate these markets for larger
volumes. The Company launched its own trademarked “CarboflameX” brand of products for use in an array of
flame retardant applications including manufacture of poly urethane (“PU”) foam, rubber latex foam, coatings
on textiles, wood, metals, intumescent tapes, bitumen roofing, sealants for doors and windows, graphite sheets,
gaskets and seals and other products used in various end-user applications in construction, transport and
aerospace industries.
Figure 16: CarboflameX supplied for flame retardant applications like in PU Foam
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Figure 17: Part of 1,200 TPA Patalgangas facility
Since commissioning Patalganga, we have extensively worked on market development, both in Asia and Europe
and recently initiated development in the United States. We are now regular suppliers to more than 10 users,
are in various stages of product and source approvals with additional more than ten, and have identified targets
for further market developments. TSG is also progressing the obtaining of REACH registration for the European
markets, which will facilitate faster progress of developments.
Following the IPO, the Company will implement the second stage of the Patalganga project which is to expand
the production capacity from 1,200 tpa up to 4,800 tpa and also compliment the product capabilities to include
high purity graphite, micronized graphite as well as further expandable graphite production capacity. This shall
formulate the base for the larger scale integrated Specialty Graphite Project. The stage 2 expansion of the
Patalganga project is expected to be completed within 4 quarters from commencement post IPO.
Integrated Specialty Graphite Project
The company has completed a comprehensive detailed feasibility study for its Specialty Graphite project in India
(“TSG Project”). The TSG Project is planned as a 24,000 tpa capacity plant to be developed in two modules of
12,000 tpa each, over a three-year span, which is aligned with markets of specialty graphite for specific
applications. As an update to our previous annual report, we are happy to further report that the application for
allotment of 20,000 sqm land for the project in Syakha Industrial Area, which was filed with The Gujarat Industrial
Area Development Authority, an institution of The Government of Gujarat engaged in developing industrial areas
across the state, has progressed recently with an invitation for project presentation having been completed.
While the company will progress to secure land for the project as approvals are received, the development of
the project shall be initiated post completion of Patalganga expansion.
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
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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 designed to provide technological support through its state of the art research facilities focused on the
development of cost effective and environmentally friendly technologies for specialty graphite applications to
the Company and its customers. It will also house the Company’s capabilities to manufacture graphene at a
commercial scale and facilitate the development of graphene based applications and other industrial mineral
processing technologies on a consultative basis to other companies in the sector in India and globally. The centre
is intended to be a self-sustaining operation with revenues generated through the sale of its graphene and ultra-
high purity graphite products and fee income from its complimentary industry consulting service operations.
We are happy to update that the 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 approved by the Government of Odisha in May 2020. Throughout the reporting period whilst awaiting the
land allotment decision from the Government, the Company continued to progress on various activities which
include:
• Updating of the detailed feasibility study for the TGMRC project which included detailed engineering
and design development, equipment sourcing, markets development as well as further team building
preparations.
•
• Development of a unique technology for the manufacturing of Graphene Oxide & Graphene from flake
graphite as the base material without use of any chemical exfoliation and thus, being a process using
zero toxic chemicals of any form, unlike any other known processes.
The development process has resulted in standardisation of the manufacturing process and the
graphene product we are able to produce which is a significant achievement in the commercialisation
of graphene in industrial scale applications.
The Company selectively released its specifications for standardised graphene and provided samples for
assessment at various research centres.
In addition, the graphene manufacturing process developed by the Company is cost efficient which
further boosts its goal of catalysing graphene commercialisation.
The Company is continuing to work with various target application industries and product research and
development institutions on graphene based applications areas across various industries.
•
•
•
• 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.
On completion of land allocation following the proposed IPO, the Company will accelerate production
capabilities of its graphene products as a first step in the planned Phase 1 of developing this technology and
research centre.
Impact of Covid 19 Pandemic
In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and
is continuing to spread throughout the world. On January 30, 2020, the World Health Organization declared the
outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern” and on
March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”. To control the
spread of the disease, various countries announced measures of lockdowns and other restrictions with certain
liberties, which have been relaxed in different degrees subsequently.
The effects of the restrictive measures on the company’s operations during 2020 have been as below:
•
In Madagascar, the company’s operations survived lockdown orders issued mid-March, being a
permitted industrial activity. Thus, operations of the company’s projects have continued.
• Movement of inputs like spares & fuels were temporarily impacted causing time to time bottlenecks in
operations. The company estimates its output to have reduced more or less 20% in the period of
restrictions.
• Movement of finished goods from the plant to the port were affected temporarily and normalized with
support from the local Government.
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• Receipts of dues from customers have been delayed by 30 – 45 days from the due dates.
•
Shipments have continued with some customers requesting delays, whereas orders were received from
buyers in pipeline.
Travel of senior management team members was impacted though this has not caused any significant
effect on the operations of the company.
The Indian operations of TSG were under complete lockdown from 24 March 2020 and resumed
operations from May 12 2020.
Sales of goods have recommenced after restart of operations duly adopting SOP’s and best practices for
prevention.
•
•
•
• A temporary reduction in consumption is reported and so is a drop in output by graphite producers in
•
China. Temporary closure was announced by two new Africa based producers listed on ASX.
There has been no significant softening of prices of graphite caused by the Pandemic. The prices of
larger flake graphite, the primary product range of the company, are reported to have marginally
increased. (source : fast markets)
• No employee of the company has been reported infected with the corona virus till date.
•
Post IPO the company intends to fast track development of its Vatomina project, expansion of
Patalganga project and development of stage one of its proposed Graphene center.
• Global sentiments for diversifying supply source from China have led to increased approach to the
•
company from buyers in Europe and other consuming locations.
The company sees an opportunity in fast tracking its development to seize this enhanced opportunity
for both its Madagascar and Indian projects.
• Additionally, fast track development of its Graphene center will enable the company to collaborate and
develop use of graphene in personal protective equipment and for medical applications.
The senior management team of the company has continued to ‘work from home’ and have access to
all required corporate data and records which are available online through cloud-based systems.
While the Pandemic has not caused any significant negative impact on the company’s operations till date, except
to the extent described above, it has opened opportunities for the company. However, severe lockdowns
prohibiting movement of goods and people extensively and more stringent than that was implemented to date,
extending for longer durations, spread of the disease extensively among the company’s management and
employees or any other unforeseen circumstances related to a pandemic or health emergency with severity
higher than what was seen in the period, can affect the continuity of the company’s current operations or lead
to impacts related to its markets.
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 the last annual report, the Company made significant progress on its IPO plans with the completion
of its Prospectus and Registration Documents approved by the FCA in September 2020.
•
• During the reporting period, the Company raised a sum of c. £390,000 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 also raised further capital by way of unsecured Convertible Loan Notes (“CLN”) with three
years life convertible at the price of IPO equity issue and accruing a coupon of 12% per annum till
conversion or maturity. The Company retains the right to buy back all outstanding CLN’s from one year
after the IPO. The Company raised a total sum of £810,000 under the CLN offering during the reporting
year.
• During the period, the Company ramped up its active engagement with the investor community with
activities including one-on-one investor meetings, non-deal and pre-IPO road shows with select
investors.
• Additionally, the Company appointed Primary Bids as an intermediary on the IPO to provide it with
access to the UK retail investor base.
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•
•
•
Participation in various conferences and trade shows was ongoing, targeted at continuing to develop
markets and customers for the Company’s products and also to continue developing the Company’s
profile with the investment community.
The Company has adopted a customised MIS system at its operational and management activities for
recording data and providing analytics and improve efficiencies.
The Company proactively engaged on public relations and social media through its appointed specialist
service provider for the ongoing dissipation of activities and developments performed by the Company.
The Company intends to ramp up its IR, PR and social media activities further post listing.
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 4 October 2020 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
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Strategic Report
Annual Report and Financial Statements
period ended 31 March 2020
Strategic Report
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 2020), and forms part of our UK Annual Report and accounts for the year 31 March
2020 (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
The Company has substantially progressed its efforts to list on the main market of The London Stock Exchange
and published its “Registration Document” on 28 September 2020. It has also raised a further sum of £513,000
under CLN issue to meet its ongoing working capital requirements. The Company has appointed Mr. Lincoln John
Moore as a Director with effect from 1 August 2020. Mr. Lincoln is considered as an Independent Non-Executive
Director.
Results for the year ended 31 March 2020
A summary of key financial results is set out in the table below. The Group and Company primary financial
statements are found on pages 58 - 64.
The net interest cost for the Group for the period was £46,003
In summary:
•
• Administrative expenses from continuing operations £1,193,651
• Group loss after tax from continuing operations was £912,742
• Basic and diluted loss per share from continuing operations was 1.53 pence
• As at 31 March 2019, the Group had cash and cash equivalents of £46,640
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
2019-20
£
793,577
46,640
2018-19
£
145,207
44,681
6,329,475
5,602,564
(1.53p)
(1.93p)
DIRECTORS’ STATEMENT UNDER SECTION 172 (1) OF THE COMPANIES ACT 2006
Section 172 (1) of the Companies Act obliges the Directors to promote the success of the Company for the benefit
of the Company’s members as a whole.
This section specifies that the Directors must act in good faith when promoting the success of the Company and
in doing so, have regard (amongst other things) to:
a.
b.
c.
the likely consequences of any decision in the long term,
the interests of the Company’s employees,
the need to foster the Company’s business relationship with suppliers, customers and others,
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period ended 31 March 2020
d.
e.
f.
the impact of the Company’s operations on the community and environment,
the desirability of the Company maintaining a reputation for high standards of business conduct, and
the need to act fairly as between members of the Company.
The Board of Directors is collectively responsible for formulating the Company’s strategy, which is to become a
multi-asset, multi-jurisdictional, fully integrated producer and developer of high-grade natural flake graphite and
graphene company, as outlined in detail in the strategic report. The strategy developed by the company has
resulted in achieving value creation and derisking of its development plans adopting the step by step approach.
Some key decisions taken by the Board during the year under review and significant outcomes achieved aimed
to deliver on this strategy. These included:
• Refinement of the Company’s strategic Medium-Term Development Plan
Having successfully brought the Sahamamy Project and Patalganga Project Phase 1 into production at
the start of the period, the Company refined its strategic development plans to encompass learnings
from its development activities at its start-up operations in Madagascar and India. Implementation
schedules and costings were updated to account for actual development costs and operating metrics
from the Sahamamy Project which further enhanced accuracy of budgeted costs. Development and
operating experience gained from the 1,200 tpa Patalganga Project allowed the modify its development
strategy for its downstream business to include an expansion of the Patalganga Project to 4,800 tpa as
the next development step, which will enable the Company to continue pre-development and marketing
activities to break into niche specialty graphite markets and further de-risk the subsequent larger-scale
developments at its Speciality Graphite Project. The refined MTDP is outlined in table on page 8.
• Capital raise by Equity and Convertible Loan Note and progressing to list on the main markets of LSE
Having established its first operations, while progressing as an early stage producer, and recognising the
challenges in raising capital remaining unlisted, despite the poor market conditions, the Company raised
a further £390,000 in equity during the period and to minimise pre IPO equity dilution, launched a
Convertible Loan Note issue Q3 2019under which the company raised a total of £810,000 during the
year. The equity and CLN funds raised during the period provided the Company with working capital to
continue mine development and ramping-up production and stabilise the operations at Sahamamy,
covered costs which were critical to continue advancing with the Company’s listing process and other
corporate development activities, development of markets for its new production, and setting the base
for the next stage of execution of the MTDP. The company first filed a draft Prospectus with the FCA for
listing on the main markets of LSE in December 2019 and an updated version, as directed, in end of
February 2020. The process has substantially advanced since then and the Company released a
Registration Document on 28 September 2020 progressing to completing the process.
•
Focus on preparing the company for larger investments and life as a listed company
With limited available funds and competing priorities, the Board of Directors prioritised use of the
available capital to meet the capital requirements of the Sahamamy project and provide working capital
for completing the ramp up and stabilisation of operations the new facilities, complete necessary
ground preparation works at Vatomina to bring the project up to construction-ready status for erection
of the super structure and installation of process plant equipment, enhancing the Company’s
exploration activities and geological database sufficient for SRK to complete their CPR and issue a JORC
(2012) Mineral Resources Statement which successfully estimated a mine life in excess of 10 years at
the full planned capacity under the Company’s MTDP. In addition, through the work undertaken by SRK
on the CPR, the Company also acquired updated geological models and statistical data which allowed it
to enhance its mine planning for production as well as identify priority drill targets which it will explore
for maximum yield during its upcoming further exploration and drilling campaign post IPO. The
meticulous planning and use of scarce financial resources helped progressing the company’s objectives
and enhancing its outlook for the proposed listing.
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The Directors believe these key strategic decisions will generate value for our shareholders in the long term
through maximising the Company’s future profitability while continuing to de-risk the Company’s strategic
development plans. In executing the Company’s strategy, the Directors remain focused on responsible and
ethical business practices, and the Company strives to be a responsible corporate citizen in all its territories of
operation. This includes strict adherence to the laws of the land.
Outlook towards Shareholders:
The Board places equal importance on all shareholders and strives for transparent and effective external
communications, within the regulatory confines of public UK registered company. Despite not yet being a listed
company, the Company provides shareholders with disclosures generally as a listed company is required
including periodical communications with project updates and reporting material developments and operational
achievements by direct email communications as well as via the Company’s website. To assist with external
communications, the Company has engaged with a reputable UK Investor Relations firm as well as a group who
are specialists in managing corporate social media accounts to engage with the public on behalf of the Company.
As the Company transitions into a listed company, the primary communication tool for regulatory matters and
matters of material substance will be through the Regulatory News Service, (“RNS”). The Company’s website will
also continue to be updated regularly and provide further details on the business as well as links to helpful
content such as our latest investor presentations.
The Board further believes that it collectively and every member on the Board individually is responsible to every
shareholder of the company and does not accord any of its members representing any group or section of its
shareholders. It strives to take every decision in protecting the interests of the company and its shareholders
while balancing the interests of its employees and the community it works in.
Outlook towards its Employees:
The Board believes that our employees are the primary assets of the company and are critical to the success of
the Company. It is recognised that in the early stages of the company which have been challenging, its executive
management team has demonstrated its dedication to the company’s success and within the limitations the
company has had, delivered results in creating the foundations for the success of the company such that are
unparalleled in the area of business of the company. The Board believes that its employees are the source of it
having been an outperformer and shall continue to be so and deserve to be rewarded commensurate with the
company’s success.
Developing relationships with the community and other stakeholders
The company has continuously engaged with the communities around it with the policy of improving the quality
of life of the communities it works in. In implementation, a dedicated program for community development
“Shakuntalam” has been designed and the activities conducted there under are described in the Sustainability
Report.
The company continuously engaged with other stakeholders including but not limited to prospective customers,
suppliers and service providers in implementation of its business plan developing long term relationships on a
win – win basis. The company will continue to engage for the purpose.
Conclusion
The Directors believe that to the best of their wisdom and abilities, they have acted in the way they consider
prudent to promote the success of the Company for the benefit of its members as a whole, in the true spirit of
the provisions of Section 172 (1) of the Companies Act 2006.
Principal risks and uncertainties
The Company management are conscious of the risk factors that can affect the Company’s performance and are
aware that they must be always alert and be proactive in dealing with the same. They carry out a robust
assessment of the principal risks facing the Group, including those that would threaten its business model, future
performance, solvency or liquidity.
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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
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 a periodic basis to identify emerging issues.
Assess
The likelihood of risk occurrence is determined by 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
funding
investors and any delay
arrangements may delay the project
development and implementation.
in
2. Investor support may be negatively
impacted if there are delays in achieving
our strategy’s intended goals.
Mitigation
1. The
first phase of the company’s
projects are operational and generating
operational cashflows. The company is
progressing to completing an IPO to
secure access
to extended capital
markets.
2. Setting example by demonstrated
higher achievements than projected.
Competition
risk
threats
There can be potential
from
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 technology
leading to their advantage.
products
investment
Our Group has been putting in a substantial
in research and
amount of
development, which continuously enhances
our innovative process to ensure higher
quality
consistent
the
competitive
management 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.
a
Additionally,
edge.
and
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period ended 31 March 2020
Company's
Management
Performance
and Efficiency
Attraction and
retention of
key employees
Brand,
reputation and
trust
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
project
strategy, mismanagement of
operations at any
lead the
level could
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, we have established
the
Company’s management team has the
ability to deliver on all fronts and see this as
a strength for the company.
that
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
resource
human
alternative
development and training are ongoing
activities.
key
Our Group's processes and policies set out
how we can make the right decisions for our
customers,
suppliers,
colleagues,
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 grows and develops, 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 2020
Data security
and privacy
increasing
With
risks of cyber-attacks
threatening 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
If
effectively
our
communicated
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 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
selling, various
technology,
risks
operational, mining, financial – cash flow
appropriately
and
addressed with stringent review on the
investment made in early stages.
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 is renewable – with
no 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.
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period ended 31 March 2020
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 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.
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period ended 31 March 2020
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 4 October 2020 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
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Sustainability Report
Annual Report and Financial Statements
period ended 31 March 2018
Sustainability Report
The Company believes in sustainability in all spheres – social, environment and value creation. With this aim, the
Company has adopted and implemented various mechanisms, programs and taken multiple steps to improve the lives
of people around its operations and also become a green Company.
The Company has historically provided commentary on its Corporate Social Responsibility (CSR) initiatives and Green
initiatives its Annual Report, corporate presentations and media interviews since its inception. This section of the Annual
Report represents the Company’s first standalone Sustainability Report. It shall provide deeper insight on the various
mechanisms and the steps taken by the Company to improve the lives of people in some of the of the most deprived
regions and its workplaces, reduce environmental impacts and to have environment friendly operations. The report also
highlights the goals and targets set by the Company for the longer-term.
With operations across two distinct jurisdictions, the Company’s CSR activities are mainly focused on its operations in
Madagascar, where the needs of the communities and society are greatest and where the Company’s efforts are most
impactful.
Being the Company’s inaugural Sustainability Report, it encompasses activities undertaken since the Company’s
inception up to 31 March 2020, in line with the Company’s financial year end. Going forward, the Company plans to
adopt an annual reporting cycle for its CSR and Environmental reporting. All financial figures are quoted in GBP unless
otherwise noted.
This report forms part of and should be read in conjunction with the Company’s Annual Report 2020.
Social Development – Shakuntalam
Overview
The Company is strongly committed with its Corporate Social Responsibility and has adopted a social development
program, called Shakuntalam (symbolising motherhood). At the outset, the Company engaged with the local
communities near its projects and developed a deep understanding of their needs. The most relevant goals are the
efforts devoted to job creation, local development and diversification of the area. Accordingly, it carved its social care
and engagement program with defined objectives below:
Enhance Earnings: Through direct and indirect employment
Catalyse Education: Improve infrastructure, provide materials and support teaching staff
Improve Health: By various measures and promoting family planning
Catalyse Happiness: Promote sports, hand holding for land rights, engage, facilitate.
These determine a strong will for high performance in the way the Company´s operations positively contribute to the
lives of people, the environment and the society. These goals are incorporated to the Company´s responsibility plans,
which are implemented in Madagascar through its Shakuntalam Programme, which is led by the Company’s corporate
and in-country senior management team alongside community representatives. While having drawn a long term
strategy to achieve these goals, the Company is continuously taking measures to improve the lives and standard of living
of the people. To date as an unlisted company, TG has invested approximately £40,000 in these activities, not including
investments in shared infrastructure which is commonly used by both the Company and the community.
Our Communities
The Company is dedicated to being a responsible corporate citizen and is aware of its responsibilities as the most
relevant productive player in its area within Madagascar. Though well connected to external infrastructure, the projects
of the company are located in a region that reflect the poverty of the people around it and provide an opportunity to
improve the state of earning potential and quality of life of the people. The Company looks at this as an opportunity
alongside developing world class projects contributing to the progress of the country and the deprived communities.
Madagascar has been named as one of the poorest nations by the United Nations and the communities are some of the
most deprived in the world. This circumstance highlights the importance of a well-tuned channel of communication
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period ended 31 March 2018
with its stakeholders, in order to add value to its operations in accordance with the expectations and needs
of its communities.
The Company´s strategy to support the establishment of sustainable, long-standing operations is strongly attached to
dealing with the environmental and social impact of its activities in a conscientious, thoughtful and systematic manner.
This is achieved through ensuring that relations with governments, regional or local authorities, media, workforce,
contractors and providers, and the society in general, are led by transparency and mutual trust, and an appropriate
degree of interaction is undertaken and encouraged alongside improving lives of the people.
The community’s response, level of engagement and active feedback from the ongoing dialogue established with the
Company’s stakeholders regarding the economic, social and environmental impact of the Company’s operations in
Madagascar has been consistently very positive. Notwithstanding this, it is the Company´s responsible approach to align
with the goals and aspirations of its communities.
Executed Activities
Employment & Infrastructure
With ground activities ongoing at its project sites, the Company’s operations are a source of new and regular
employment for the local population. Approximately 120 people have direct and regular employment and a further 50-
100 people are indirectly employed through the project. These activities have provided new employment opportunities
and improved the livelihood of the local commune and has also led to development of skills in various arenas including
driving, drilling, other exploration activities, construction, welding, equipment fabrication, operation monitoring and
control, testing and analysis, heavy equipment operations (i.e. excavators and loaders) and other technical skills. With
the onset of the creation of the fabrication centre at the project site, there has been further opportunity for the local
population to gain technical skills which positively contributes to empowerment and increasing the pool of semi-skilled
labour available to the Company. Over 95% of the employees in Madagascar are locals.
The Company’s mining activities generates overburden which consists of topsoil cover. The fertile overburden is being
used for land filling in barren and non-mineralized areas which promotes horticulture and farming in the region and will
further be provided to the Company’s employees for housing purpose. The Company has also made drinking water
arrangements for nearby settlements.
Employment generation & Redevelopment of Housing for Employees
The Company has built internal access roads which have connected interior and remote villages to developed areas
giving the local community better access to schools, markets and improving the lifestyle of the villagers, their overall
quality of life and created new commerce opportunities for the local communities.
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The Company also rehabilitated the local marketplace in collaboration with NGOs to offer locals a central area to buy
and sell their products.
Internal Roads built by the Company
Market Place for Locals
In the Vatomina Project, the Company commissioned a survey by a government authorised surveyor and formed a
committee constituting members from the local community, company representatives and the mayor. A uniform
methodology for land settlement was structured and executed. Further, the surface occupants who were devoid of
official registration and recognition of their land rights were hand held and formal issue of documentation catalysed
bringing extensive happiness and smiles.
Health, Hygiene & Safety
Land Certification for the Locals
The health, safety and wellbeing of our employees, contractors and visitors is at the forefront of everything we do across
all aspects of our operations. We implement the highest standards to mitigate risks. The Company has also adopted a
policy for health, safety and environment, striving for a zero-harm workplace which is everyone’s responsibility
regardless of job title or role.
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In the last year, the activities occurring on site at the Company’s Madagascar projects included drilling and
exploration, mine development, construction activities, plant commissioning and operations, packaging and
transportation along with ongoing environmental monitoring (energy consumption, CO2 emissions, water
management, waste generation and updating the environmental database).
To carry out these activities, the Company has geologists, mining technicians, engineers, field assistants and labourers
who have the appropriate training and education to perform their functions and carry out activities with oversight by
the Company's sustainability personnel, ensuring compliance with safety principles and environmental legislation.
The Company ensured a safe working environment for its employees and contractors. In the last three years no worker
has acquired any occupational illness or suffered any accident that would prevent them from carrying out their activities.
Company policy requires that health and safety measures are complied with at all its operations. The Company provides
its workers with work clothes and PPE including safety shoes, socks, safety helmets and other safety equipment. In
addition, the Company organises regular health and safety camps for educating and training of its workers as well as
locals to adopt and comply with health and safety measures in and around the Company’s sites.
Training Camps and Health & Safety Camps Organised Regularly
There have been zero incidents that lead to loss of productive work in the form of absenteeism (LTI), and zero fatalities
throughout the Company's operation time. Furthermore, there have been no incidents which resulted in material
damage.
The Company built a dedicated Community Health Centre at Sahamamy which is stocked with general medicines and
manned full-time by a qualified medical practitioner. The Centre is open to the community year-round, 24 hours a day,
7 days a week offering immediate care unit for emergency First Aid and primary health care, health care services to
expecting mothers of workers and villagers in mine area, free distribution of supplements and nutrients and also
arranges transfers to local hospitals when required. The centre also facilitates arrangements for the provision of clean
drinking water to the communities in the area. All of these facilities are provided free of cost to the community by the
Company.
Health Care Centre
Happy Employees
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For protecting our employees from Covid-19 across all operations of the Company, masks have been
provided to all employees and operational guidelines have been set and implemented to comply with preventive
measures and guidelines set by the government. Further, equipment including thermal scanner, oximeter, sanitizers
have also been provided at both Madagascar and Indian operations of the Company.
Education & Sport
The Sahamamy School building was old and dilapidated and generally, not fit for use. The Company decided to replace
this with a brand-new school building with individual five classrooms which has significantly increased the capacity and
functionality of the school giving more children in the area the opportunity to be educated. Additionally, the
connectivity to the school was vastly improved by the Company with the redevelopment of an approach road which
made the school more accessible to the community.
The Sahamamy School Old (Left) and New (right) Building
The Vatomina School is located on a hillock which did not have a dedicated approach road which meant that the
students and teachers had to scale up and down the hill each day on rudimentary pathways through the brush. The
Company constructed new, dedicated all-weather road leading up to the school to make it more accessible to the
community which provided more incentive to attend and reduced risk of accidents and injury from the daily commute
to the school, especially during times of wet weather.
Vatomina School Road Development
The Company organises games and participates in regional and local festivals on independence days each year and
awards lanterns, sports shirts, balls and cups to the young people and the community. It also organises regular sporting
events in the local school promoting sports including football, volleyball and badminton as well as improving the health
and fitness among the students and the wider community.
In addition to fitness and sports programmes, the Company regularly distributed healthy foods to the schools to
promote healthier eating and nutrition for the children and the community. The Company also provided stationary and
other study materials to the schools for the benefit of the students and teachers.
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Organised football matches
Distribution of stationary, books, food items in local school
Vocational Training & Skill Development
The Company has 95% local employment in Madagascar including all in-country employees. Various activities such as
admin, finance and accounting, mining, operation of mining fleet, processing, fabrication of engineered
equipments/spares, analytical testing and laboratory works, road development, construction, shipment, packing etc are
performed at the various locations of operations in the country. The Company has provided training for people
interested in gaining new skills to help them develop capabilities which will benefit them in a long term.
Other Community Engagement Activities
As a part of our efforts to improve the life of the local community, the Company also believes in engaging with the
community deeply. It participates in the national festivals/celebrations in Madagascar, for e.g., Independence day
parade and celebrations, Christmas and Diwali celebrations etc. and enjoys high repute and regards amongst the local
people.
The Company’s investment and revenues are also contributing to the GDP of the country and as its operations grow, is
expected to represent a meaningful and welcome contribution to the nation’s economy.
2021 Workstreams & Long-Term Goals
Shakuntalam symbolizes motherhood. The Company have been consciously aware of its social responsibility and
believes in conducting business ethically as well as are sensitive towards the social, cultural, economic and
environmental issues. Our Madagascan mines are located in an underdeveloped state having substantially poor living
conditions of people with lacking infrastructure, poor or no healthcare facilities, no means of securing life necessities
etc. The Company takes it as their social responsibility to improve the quality of lives of people surrounding the project
area alongside the development of the Company. This has led to a stream of philanthropic activities wherein a
Community development centre is to be set up at the project sites dedicatedly working on the following aspects on
community development.
Health & Hygiene improvement in the locality
• Health and Hygiene Centre where a full-time primary doctor will be appointed by the Company with
•
•
sufficient supply of free medication distribution.
Immediate care unit for emergency First Aid and primary health care.
Primary health care to expecting mothers of workers and villagers in mine area, free distribution of
supplements and nutrients etc.
• Arrangements of clean drinking water in the entire community around us.
•
Conduct regular meetings involving employees’ representatives to discuss aspects of safety improvement
conditions for employees to improve operational standards and KPIs
Increased training for all employees in preparation for expansion of operations
•
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Sports Development Centre, Catalysing Education and other
•
• A Sports Development Centre shall be developed with a view to encourage and promote various sports in the
surrounding area with Football & Volleyball grounds development for workers and surrounding people, a
Badminton court development and allied facilities of different indoor and outdoor games.
Catalysing education shall be the primary activity for child development and the education programme which
shall include providing transport to schools, education inputs, study materials etc and improving school
infrastructure to support local schools for improvement of child attendance and overall promote educational
awareness and importance.
The vocational training centre shall include an agriculture and horticulture training
centre, Dairy products development centre and artificial insemination for improvement of cattle breed. The
centre shall simultaneously host training for skill development in various other vocations like fabrication
related activities and basic technical skills development for both internal employees and externally for people
looking for providing services in the sectors as entrepreneurs.
•
•
Long Term
• Develop local investment strategy to ensure appropriate investment decisions
• Become a partner to local government to aid economic development of the region
• Adopt an international standard for occupational health and safety (e.g. OHSAS 18001, ISO 45001, BSI) or
•
equivalent
Extend “at work” safety measures to support health and wellbeing of employees and their dependents by
performing regular medical examinations for all employees to ensure they are fit and healthy for their role
Environmental Sustainability
With the aim to develop a unique one-stop solution benchmark company for graphite, the company also aimed at
developing advanced technologies to promote sustainable development. The Company has taken various steps at all its
projects to make them environment friendly and sustainable.
At Tirupati Graphite, our primary objective is to minimize potential environmental impacts by implementing
environmental management controls and procedures that will be tailored to meet the individual needs of our
operations in their unique environmental settings. It also aims to contribute to reducing the global carbon footprint by
providing green materials and solutions across industries through its products.
We aim to achieve this through effective use of environmental impact assessments to identify, quantify, and eliminate
or mitigate impacts; integration of environmental controls within our operations, with monitoring to evaluate their
reliability and effectiveness, and to identify potential opportunities for improvement; employment of industry standard
risk assessment and management techniques to minimize the potential for unforeseen environmental impacts or
incidents; and routine checking and continuous improvement through the annual environmental audit processes.
2020 marked first year of operations for the Company and we are in the process of implementing our environmental
management plans which primarily entailed baseline data collection and determination of key risk factors and relevant
statistics which will be used as the benchmark for ongoing improvements in our management and active monitoring
processes as the Company’s operations expand.
Over the course of the year we have been collecting energy consumption, monitoring air quality through sampling,
refining our water usage, noise monitoring and continuous particulate monitoring and management of mining and non-
mining waste.
The key activities steps and impact areas and measured results which form the baseline data going forward are as
follows:
1. Madagascar Projects:
Energy consumption:
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Intensity Ratio
CO2 emission
GHG Emission Scopes
CO2 emission (Ton)
(Kg/MT of Prod)
Scope 1
Scope 2
Scope 3
631/Ton
0/Ton
31/Ton
0.478
0.000
0.024
The Company has reduced its energy requirements across its processing requirements by the following activities:
• By choosing a resource that is saprolitic in nature. This has led to:
-
-
-
Zero Blasting Requirements
Reduced Mining Fleet Requirement
Reduced processing circuit by 2 steps – 1 more milling and 1 crushing
• Development of a new process which extracts sand at first stage of processing. This has led to:
-
Reduced circuit load, hence reducing capacity of each equipment by 20-50%, varying between equipments
and hence total energy requirement of processing
It has reduced the number of additional steps required in processing by 3 steps –2 additional floatation
cells and 1 additional screening process.
• Development of Renewable Energy Source:
-
-
-
-
The Company has completed a definitive feasibility study for establishment of a hydropower generation
plant
The Company plans to establish this in 2021-2022 and shall meet all its energy requirements from the
same.
The company has also installed solar power generation units for meeting its energy requirements for
admin/residential facilities at the project sites
•
The Company uses high efficiency equipments, motors etc to improve its energy efficiency across its
operations.
Waste management
•
•
From Processing:
-
The Company has reduced its processing waste by 45-50% by using its newly developed processing
technology, extracting sand as a by-product
A tailing reconditioning dam has been set up which helps in management of waste from processing
The remaining solid waste from processing constitutes mainly clay. The Company is using this for social
development activities and plans to provide skill development for manufacturing bricks using this.
-
-
From Mining:
- Mining generates two kinds of materials – ore and overburden, the mining strip ratio achieved is 2:1
-
-
-
(Overburden:Ore)
From the ore which is 30% of mined materials, the Company has achieved >85% recovery of the
constituent graphite. Remaining waste from ore have been utilised as mentioned above.
The topography of the region is hilly. The remaining 70% is the mined overburden which the Company is
using for land filling in non-mineralised regions which shall be used for CSR activities like settlements,
horticulture etc.
The green cover in the mining areas is not very dense. The loss in greenery is compensated by plantations
across the projects and alongside government initiatives
Water Management:
•
•
The water required for processing are sourced from natural sources available across the Company’s projects
80-90% of the water in the circuit is recycled, remaining 10-20% water is lost in drying.
Air quality:
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period ended 31 March 2018
•
•
•
The DG sets used for producing energy are installed with high quality air filters which are regularly
maintained and changed, filtering gases produced.
The Company has incorporated a natural gas based drying system massively reducing emissions from
processing and improving the quality of air.
The Company follows a zero-dust policy under which it has installed dust collection mechanisms in operations
and uses automated and closed finishing technologies reducing generation of dust.
Sustainable Construction:
•
•
•
The Company uses naturally available materials and its by-product sand to develop the internal infrastructure
like residential & admin blocks, roads etc. Further, traditional and environment friendly materials used for
construction.
The Company has used geotextiles in construction to ensure sustainable and long-lasting structures.
The Company also uses local breeds of plants to control soil erosion on slopes.
Other Activities:
•
The Company also participates in plantation activities organised by NGOs and the government.
2.
Indian Projects:
•
•
•
The company has developed unique proprietary green processes for manufacturing hi-tech graphite products
like high purity graphite:
Currently, two processes are used across the globe for manufacturing high purity graphite - by use of Hydro
Fluoric acid (HF) or by intensive heat treatment. The company has developed a Zero-HF, non-heat intensive
process for purification achieving 99.95% plus purity levels. This makes it highly environment friendly and
also reduces carbon footprint of the material.
The high purity process developed has Zero waste generation. All inputs in the process are achieved as
products or by-products.
The company’s projects are all incorporated with plans to have large green belts of plantations. Plantations
have also been done at the Patalganga Project.
• Dust control systems mechanisms are installed at the Patalganga Project.
•
Energy is sourced from the grid at the Patalganga Project which constitutes a mix of electricity generated
from hydropower and conventional sources.
The water required in processing of the specialty graphite products shall be recycled and reused.
The graphene manufacturing process is also a zero-chemical process developed by the company, making it
highly environment friendly compared to other processes like Hummer’s Process.
•
•
Targets for 2020:
The Company intends to continue its focus on reducing its carbon footprint by implementing its strategy of using
sustainable energy sources. It has completed a feasibility study on the use of hydro power at Sahamamy and will
commence the approvals process to commence the transition.
Long Term
Undertake full feasibility study on the use of sustainable energy at Vatomina.
This report was approved by the board of directors on 4 October 2020 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
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Directors’ & Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2020
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 2020.
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 59 – 84.
No dividends will be distributed for the period ended 31 March 2020.
Financial instruments
Information about the use of financial instruments is given in note 22 to the financial statements.
Incorporation
The Company was incorporated in England and Wales on 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 21.
As on date of this report, the Company has issued 61,421,100 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.
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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
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
Lincoln John Moore
- Non-Executive Director (appointed 1 August 2020)
Biographical details of the Directors are given on page 3.
The interests of the Directors in the shares of the company at 31 March 2020 are as follows:
Director
Shishir Poddar
Hemant Poddar
Christian St John-Dennis
Rajesh Kedia
Charitable and political donations
Number of ordinary
shares
1,171,429
765,000
974,131
282,608
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.
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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 22 September 2020, other than the Directors’ holdings, the Company has been advised of the following
interests in 3% or more of its issued share capital:
Shareholder
Tirupati Carbons and Chemicals Pvt Limited
Nicolas Petitjean
Mrs & Mr S G W Bruschini
Momentous Investments Limited
Optiva Securities Ltd
Statement of Directors’ responsibilities
Number of ordinary
shares
Percentage of issued
share capital
29,565,778
4,615,300
3,560,869
2,360,000
3,562,644
48.14
7.51
5.80
3.84
5.80
The directors are responsible for preparing the annual report and the 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 have also chosen to prepare the parent
company financial statements under IFRS as adopted by the European Union. 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 profit or 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
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period ended 31 March 2020
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 as auditor of the Company will be proposed at the AGM.
Annual general meeting
The Directors consider that all the resolutions to be put to the AGM 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.
As at year end 31 March 2020, Tirupati Graphite Plc was not listed on any UK exchange and is not required to
comply with the requirements of the 2016 U.K. Corporate Governance Code (“the Code”) as issued by the
Financial Reporting Council. Recognising the value of good governance practices, the Company has opted to
comply with the QCA Code, so far is practicable given the Company's size and nature and present the corporate
governance code below.
The Directors are committed to ensuring the highest standards of corporate governance as defined under the
QCA Code, so far is practicable, given the Company's size and nature, and complies with, subject to exceptions
listed below, the supporting principles and provisions set out in the QCA 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, both in formal Board meetings and
otherwise to ensure development of the company’s business. All Directors have access to advice from
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period ended 31 March 2020
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
Board objectives and operation
The key objectives of the Board are as follows:
Number of meetings
attended
3
1
3
3
•
•
•
•
•
•
•
•
•
•
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
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.
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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
2020; 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 currently consists of Mr Shishir Kumar Poddar, Mr Rajesh Kedia and Mr. Lincoln John Moore
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
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), Mr Christian Dennis
and Mr. Rajesh Kedia.
52 | P a g e
Tirupati Graphite plc
Directors’ & Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2020
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 or warrants 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 the period, 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
Dialogue with major shareholders
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
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 4 October 2020 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
53 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2020
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TIRUPATI GRPAHITE LIMITED
Qualified 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 2020 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated and Company Statement of Financial Position, the Consolidated and Company
Statement of Changes in Equity, the Consolidated and Company 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, except for the effects of the matter described in the Basis for Qualified Opinion section of our
report, 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
2020 and of the group’s and parent company’s loss for the year then ended;
have been properly prepared in accordance with IFRSs as adopted by the European Union;
the parent company 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
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
The group’s inventories are carried in the Statement of Financial Position at £150,105. As a result of the travel
restrictions in place throughout the COVID-19 pandemic, it has not been possible to attend a physical inventory
count and thus no assurance over the existence of inventory has been obtained. Consequently, we were unable
to determine whether any adjustment to this amount was necessary.
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 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
qualified 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
54 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2020
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.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves
concerning the inventory quantities of £105,105 held at 31 March 2020. We have concluded that where the other
information refers to the inventory balance or related balances such as cost of sales, it may be materially
misstated for the same reason.
Opinion on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, 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
Except for the matter described in the basis for qualified opinion section of our report, in 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.
Arising solely from the limitation on the scope of our work relating to inventory, referred to above:
• we have not obtained all the information and explanations that we considered necessary for the
purpose of our audit; and
• we were unable to determine whether adequate accounting records have been kept.
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:
•
•
•
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 return;
or
certain disclosures of directors’ remuneration specified by law are not made.
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.
55 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2020
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.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the
company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Jonathan Bradley-Hoare (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
5 October 2020
15 Westferry Circus
Canary Wharf
London E14 4HD
56 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2020
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2020
Notes
6
7
7
9
10
Continuing operations
Revenue
Cost of Sales
Gross profit
Administrative expenses
Operating loss
Finance costs
Loss before income tax
Income tax
Loss for the year attributable to owners of the
Company
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign
operations
Total comprehensive loss for the year
attributable to the Group
2020
£
2019
£
793,577
(411,899)
381,678
145,207
(150,325)
(5,118)
(1,193,650)
(1,139,320)
(811,972)
(46,003)
(857,975)
(54,767)
(1,144,438)
(2,827)
(1,147,265)
33,557
(912,742)
(1,113,708)
(1,382)
4,714
(914,309)
(1,108,994)
Loss per share attributable to owners of the
Company
From continuing operations:
Basic & diluted
Pence per share
Pence per share
11
1.53p
1.93p
The accompanying accounting policies and notes are an integral part of these financial statements
57 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2020
Consolidated and Company Statement of Financial Position
As at 31 March 2020
Group
2020
£
2019
£
Company
2020
£
2019
£
Notes
12
13
11
14
15
16
19
16
20
Non-current assets
Investments in subsidiaries
Property, plant and
equipment
Deferred tax
Deposits
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
Borrowings
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
-
1,980,635
49,422
2,121
3,691,243
5,723,421
409,309
150,105
46,640
606,054
-
1,134,406
3,539,448
544,209
3,539,448
220,400
33,498
-
3,902,234
5,070,138
-
-
153,001
-
-
116,842
4,236,658
3,876,690
431,244
56,501
44,681
532,426
2,709,828
-
34,955
2,744,783
2,095,413
-
8,289
2,103,702
427,871
427,871
701,983
701,983
433,355
433,355
768,897
768,897
178,183
(169,557)
2,311,428
1,334,805
810,000
817,388
1,627,388
-
43,907
43,907
810,000
779,621
1,589,621
-
-
-
4,274,216
4,856,674
4,958,465
5,221,495
1,498,132
5,328,517
3,147
(2,555,580)
1,470,275
5,024,524
4,714
(1,642,839)
1,498,132
5,328,518
-
(1,868,185)
1,470,275
4,974,524
-
(1,233,304)
4,274,216
4,856,674
4,958,465
5,211,495
TOTAL EQUITY
4,274,216
4,856,674
4,958,465
5,221,495
58 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2020
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present
the parent company statement of comprehensive income.
The loss for the parent company for the year was £634,881 (2019: £920,150).
The accompanying accounting policies and notes are an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 2 October 2020 and signed on its behalf
by:
Mr Shishir Poddar
Director
Company registration number: 10742540
Mr Christian St. John-Denis
Director
59 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2020
Consolidated Statement of Changes in Equity
For the year ended 31 March 2020
Share capital
Share
premium
£
£
Foreign
exchange
reserve
£
Retained
losses
£
1,125,065
3,025,166
-
(529,131)
TOTAL
EQUITY
£
3,621,100
-
-
-
-
-
4,714
(1,113,708)
-
(1,113,708)
4,714
345,210
-
-
2,024,358
(75,000)
-
-
-
-
2,369,568
(75,000)
-
1,470,275
50,000
5,024,524
-
4,714
-
(1,642,839)
50,000
4,856,674
-
-
-
-
-
(1,567)
(912,742)
-
(912,742)
(1,567)
27,857
-
-
1,498,132
362,144
(8,150)
(50,000)
5,328,518
-
-
-
3,147
-
-
-
(2,555,581)
390,001
(8,150)
(50,000)
4,274,215
Balance at 1 April 2018
Total comprehensive
income:
Loss for the period
Forex exchange gain/loss
Transactions with owners:
Shares issued
Cost of shares issued
Share subscription
received pending
allotment
Balance at 31 March 2019
Total comprehensive
income:
Loss for the period
Forex exchange gain/loss
Transactions with owners:
Shares issued
Cost of shares issued
Share application money
Balance at 31 March 2020
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.
60 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2020
Company Statement of Changes in Equity
For the year ended 31 March 2020
Balance at 1 April 2018
Total comprehensive income:
Loss for the period
Transactions with owners:
Shares issued
Cost of shares issued
Balance at 31 March 2019
Total comprehensive income:
Loss for the period
Transactions with owners:
Shares issued
Cost of shares issued
Balance at 31 March 2020
Share capital
Share premium
Retained losses
£
£
1,125,065
3,025,166
£
(313,154)
TOTAL
EQUITY
£
3,837,077
-
-
(920,150)
(920,150)
345,210
-
1,470,275
2,024,358
(75,000)
4,974,524
-
-
(1,233,304)
2,369,568
(75,000)
5,211,495
-
-
(634,881)
(634,881)
27,857
-
1,498,132
362,144
(8,150)
5,328,518
-
-
(1,868,185)
390,001
(8,150)
4,958,465
The accompanying accounting policies and notes are an integral part of these financial statements.
61 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2020
Consolidated Statement of Cash Flows
For the year ended 31 March 2020
Operating loss
Adjustment for:
Depreciation
Increase in inventories
Decrease in receivables
Increase in payables
Convertible loan note costs
Finance costs
Income tax
2020
£
2019
£
(912,742)
(1,212,784)
127,100
(93,604)
21,935
(274,112)
56,700
46,003
(54,767)
105,645
(54,343)
404,754
8,238
-
2,827
33,557
Net cash used in operating activities
(1,083,487)
(712,108)
Cash flows from investing activities:
Investment in subsidiary
Purchase of tangible assets
Purchase of other assets
Net movement in intangible assets
Net advances received
Net cash from investing activities
Cash flows from financing activities
Shares issued
Cost of shares issued
Proceeds from issue of Convertible loan notes
Cost of issue of Convertible loan notes
Finance cost
Receipt from long term liabilities
Net cash from financing activities
-
(846,229)
(18,045)
210,990
(73,899)
(801,927)
(821,554)
(152,264)
(415,468)
99,313
(727,183)
(2,091,901)
340,001
(8,150)
810,000
(56,700)
(46,003)
773,481
2,419,568
(75,000)
-
-
-
-
1,812,629
2,344,568
Net increase/(decrease) in cash and cash equivalents
1,959
(459,441)
Cash and cash equivalents brought forward
Cash and cash equivalents carried forward
44,681
504,122
46,640
44,681
The accompanying accounting policies and notes are an integral part of these financial statements.
62 | P a g e
Tirupati Graphite plc
Annual Report and Financial Statements
period ended 31 March 2020
Company Statement of Cash Flows
For the year ended 31 March 2020
Operating loss
Adjustment for:
Foreign exchange loss
(Increase) in receivables
Increase in payables
Finance costs
Net cash used in operating activities
Cash flows from investing activities:
Purchase of tangible assets
Purchase of intangible assets
Net cash from investing activities
Cash flows from financing activities
Shares issued
Cost of shares issued
Proceeds from issue of convertible loan notes
Finance costs
Net cash from financing activities
2020
£
2019
£
(634,880)
(920,150)
9,621
(616,060)
456,799
46,003
-
(968,408)
105,947
2,827
(738,517)
(1,779,784)
(333,809)
(36,159)
(759,848)
(116,842)
(369,968)
(876,690)
390,001
(8,150)
810,000
(56,700)
2,369,568
(75,000)
-
(2,827)
1,135,151
2,344,568
Net increase/(decrease) in cash and cash equivalents
26,666
(364,733)
Cash and cash equivalents brought forward
Cash and cash equivalents carried forward
8,289
373,022
34,955
8,289
The accompanying accounting policies and notes are an integral part of these financial statements.
63 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
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 30 – 37.
These consolidated financial statements are presented in pounds sterling since that is the currency of the primary
economic environment in which the Group and Company operates.
2. Adoption of new and revised International Financial Reporting Standards (IFRSs)
New standards
i)
As of 1 April 2019, the Group adopted, IFRS 16 Leases, which replaced IAS 17. IFRS 16 introduced a
single, on balance sheet accounting model for leases. As a result, the Group, as a lessee, is required to
recognise use-of-right assets representing its right to use the underlying assets and lease liabilities
representing its obligation to make lease payments.
The Group has applied IFRS 16 using the modified retrospective approach, under which the cumulative
effect of initial application is recognised in retained earnings at 1 April 2019. Accordingly, the
comparative information presented for 2019 has not been restated. The details of the changes in
accounting policies are disclosed below. The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is initially measured at cost, being the present
value of minimum lease payments, and subsequently at cost less any accumulated depreciation and
impairment losses.
The Group has applied the exemption not to recognise right-of-use assets and liabilities for leases with
less than 12 months of lease term when applying IFRS 16 to leases previously classified as operating
leases under IAS 17. The result of initially applying IFRS 16 as at 1 April 2019, would not have a material
impact to the balance sheet including retained earnings, and therefore no adjustment as at 1 April 2019
has been made to opening retained earnings.
As of 1 April 2019, the Company adopted IFRS16 Leases, IFRIC 23 Uncertainty over leases, IFRS 9
(Amendments) Prepayment features with negative compensation, IAS 19 (Amendments) Plan
amendment, curtailment or settlements and IAS 28 (Amendments) Long term interests in associates
and joint ventures. Of the other IFRSs and IFRICs, none are expected to have a material effect on future
Company Financial Information.
ii)
New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and
not early adopted.
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.
Standard
IFRS 3 (Amendments)
IAS 1 (Amendments)
IAS 8 (Amendments)
IAS 1
Impact on initial application
Definition of a Business
Definition of material
Definition of material
Classification of Liabilities as Current or Non-Current.
Effective date
*1 January 2020
1 January 2023
1 January 2020
1 January 2022
*Subject to EU endorsement
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.
64 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
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 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, further on in these financial
statements discloses 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 Group and have adequate resources to continue in operational existence for
the foreseeable future. Were the Company be unable to raise additional funds in the foreseeable future, the
directors would implement cost saving measures such as the deferral of management salaries and continue to
generate revenues in order to meet its liabilities as they fall due. Therefore, they continue to adopt the going
concern basis of accounting in preparing the financial statements.
Notwithstanding the loss incurred during the year under review along with the changes made by the Group and
subject to the markets being opened after the Covid-19 is over or contained. The Directors have prepared and
reviewed a cash flow forecast including consideration of the impact of COVID-19. The forecast contains certain
assumptions about the level of future sales and margins achievable. The Directors have considered various future
scenarios in their forecasting to enable them to adequately consider whether the Group has adequate resources
to continue in operational existence.
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
65 | P a g e
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Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
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.
Segment reporting
An operating segment is a component of the Group that engages in business activity from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with the Group’s other
components. All operating segments’ operating results, for which discrete financial information is available, are
reviewed regularly by the Group’s Board to make decisions about resources to be allocated to the segment and
assess its performance. The Group reports on a three-segment basis – holding company expenses, mining
exploration and development and graphite mining extraction.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts
receivable for goods or services supplied in course of ordinary business, stated net of discounts, returns and
value added taxes. The Group recognises revenue in accordance with IFRS 15 at either a point in time of over
time, depending on the nature of the goods or services and existence of acceptance clauses.
Revenue from the sale of goods is recognised when delivery has taken place and the performance obligation of
delivering the goods has taken place. The performance obligation of products sold are transferred according to
the specific delivery terms that have been formally agreed with the customer, generally upon delivery when the
bill of lading is signed as evidence that they have accepted the product delivered to them.
Foreign currencies
For the purposes of the consolidated financial statements, the results and financial position of each group
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.
Taxation
Income tax represents the sum of current tax and deferred tax.
Current tax
Current tax is based on taxable profit or loss for the year. Taxable profit or loss differs from net profit or loss as
reported in the income statement because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or deductible. The group's liability for current
tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
A provision is recognised for those matters for which the tax determination is uncertain, but it is considered
probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best
estimate of the amount expected to become payable. The assessment is based on the judgement of tax
professionals within the Company supported by previous experience in respect of such activities and in certain
cases based on specialist independent tax advice.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference
arises from the initial recognition of goodwill or from the initial recognition (other than in a business
66 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or
the asset is realised based on tax laws and rates that have been enacted or substantively enacted at the balance
sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items charged
or credited in other comprehensive income, in which case the deferred tax is also dealt with in other
comprehensive income.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount
of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
Current tax and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in
other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised
in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from
the initial accounting for a business combination, the tax effect is included in the accounting for the business
combination.
Assets Under Construction
Expenditure is transferred from “Exploration and evaluation” assets to mining rights within “Mines under
construction” once the work completed to date supports the future development of the property and such
development receives the requisite approvals. All subsequent expenditure on technically and commercially
feasible sites is capitalised within mining rights.
All expenditure on the construction, installation or completion of infrastructure facilities is capitalised as
construction in progress within “Mines under construction”. Once production starts, all assets included in “Mines
under construction” will be transferred into “Property, Plant and Equipment” or “Producing Mines”. It is at this
point that depreciation/amortisation commences over its useful economic life.
Mines under construction are stated at cost. The initial cost comprises transferred exploration and evaluation
assets, construction costs, infrastructure facilities, any costs directly attributable to bringing the asset into
operation, the initial estimate of the rehabilitation obligation, and, for qualifying assets, borrowing costs. Costs
are capitalised and categorised between mining rights and construction in progress respectively according to
whether they are intangible or tangible in nature.
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.
67 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
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.
Development costs
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of an
internal project) is recognised if, and only if all of the following conditions have been demonstrated:
•
•
•
•
•
•
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits;
the availability of adequate technical, financial and other resources to complete the development and
to use or sell the intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its
development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred
from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-
generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the
period in which it is incurred.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired
separately.
Exploration and evaluation assets
Exploration and development costs are carried forward in respect of areas of interest where the consolidated
entity’s rights to tenure are current and where these costs are expected to be recouped through successful
development and exploration, or by sale. Alternatively, these costs are carried forward while active and
significant operations are continuing in relation to the areas of interest and it is too early to make reasonable
assessment of the existence or otherwise of economically recoverable reserves. When the area of interest is
abandoned, exploration and evaluation costs previously capitalised are impaired.
Costs incurred by the Company on behalf of its subsidiaries and associated with mining development and
investment are capitalised on a project-by-project basis pending determination of the feasibility of the project.
Costs incurred include appropriate technical and administrative expenses but not general overheads. If a mining
development project is successful, the related expenditures will be written-off over the estimated life (useful
economic life) of the commercial ore reserves on a unit of production basis. Impairment reviews are carried out
regularly by the Directors of the Company. Where a project is abandoned, or is considered to be of no further
commercial value, the related costs will be written off to the Statement of Comprehensive Income.
The recoverability of these costs is dependent upon the discovery of economically recoverable reserves, the
ability of the Group to obtain necessary financing to complete the development of reserves and future profitable
68 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
production or proceeds from the disposal of recoverable reserves.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are initially
recognised at their fair value at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are
acquired separately.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset
is derecognised.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where
applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their
present location and condition. Cost is calculated using the weighted average method. Net realisable value
represents the estimated selling price less all estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
Investments
Investments in subsidiaries are held at cost less any impairment.
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a
party to the contractual provisions of the instrument.
Financial assets
Initial recognition and measurement
The Group applies IFRS 9 “Financial Instruments” and elected the simplified approach method.
The Group classifies its financial assets in the following categories: loans and receivables and fair value through
profit and loss. The classification depends on the nature of the assets and the purpose for which the assets were
acquired. Management determines the classification of its financial assets at initial recognition and this
designation at every reporting date.
Loans and receivables
Loans and receivables are non‑derivative financial assets with fixed or determinable payments that are not
quoted in an active market. The principal financial assets of the Company are loans and receivables, which arise
principally through the provision of goods and services to customers (e.g. trade receivables) but also incorporate
other types of contractual monetary assets. They are included in current assets, except for maturities greater
than twelve months after the balance sheet date. These are classified as non-current assets.
The Group’s loans and receivables comprise trade and other receivables and cash and cash equivalents in the
Consolidated Statement of Financial Position.
69 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
Financial assets are measured upon initial recognition at fair value plus transaction costs directly attributable to
the acquisition of the financial assets, except for financial assets measured at fair value through profit or loss in
respect of which transaction costs are recorded in profit or loss. Other financial assets are classified into the
following specified categories: financial assets as “at fair value through profit and loss” and “loans and
receivables”. The classification depends on the nature and purpose of the financial assets and is determined at
the time of initial recognition.
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
The Group assesses on a forward-looking basis the expected credit losses associated with its instruments carried
at amortized cost and FVPL. The impairment methodology applied depends on whether there has been a
significant increase in credit risk. For trade receivables, the Group applies the simplified approach permitted by
IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Non-financial assets - impairment
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets,
including Goodwill, to determine whether there is any indication that these assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of
the impairment loss (if any). Provision is made for any impairment and immediately expensed in the period.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which
case the impairment loss is treated as a revaluation decrease.
Financial liabilities and equity instruments issued by the group
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets
of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the
proceeds received, net of direct issued costs.
Trade payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised costs, using the
effective interest rate method.
Borrowings
These financial liabilities are all non-interest bearing and are initially recognised at amortised costs and include
the transaction costs directly related to the issuance. The transaction costs are amortised using the effective
interest rate method over the life of the liability.
70 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
Financial liabilities at Fair Value Through Profit or Loss (“FVTPL”)
Financial liabilities at FVTPL comprise of the Company’s convertible loan notes payable. Financial liabilities are
classified as at FVTPL when the financial liability is (i) contingent consideration that may be paid by an acquirer
as part of a business combination to which IFRS 3 applies, (ii) held for trading, or (iii) it is designated as at FVTPL.
A financial liability is classified as held for trading if:
•
•
•
it has been incurred principally for the purpose of repurchasing it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Company
manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading or contingent consideration that may be paid
by an acquirer as part of a business combination may be designated as at FVTPL upon initial recognition if:
•
•
•
such designation eliminates or significantly reduces a measurement or recognition inconsistency that
would otherwise arise; or
the financial liability forms part of a group of financial assets or financial liabilities or both, which is
managed and its performance is evaluated on a fair value basis, in accordance with the Company’s
documented risk management or investment strategy, and information about the grouping is provided
internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and IFRS Financial
Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to
be designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised
in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial
liability and is included in the ‘other gains and losses’ line item in the income statement.
Leases
The Group leases certain plant and equipment. Leases of plant and equipment where the Group has substantially
all the risks and rewards of ownership are classified as finance leases under IFRS 16. Finance leases are capitalised
on the lease’s commencement at the lower of the fair value of the leased assets and the present value of the
minimum lease payments. Other leases are either small in value or cover a period of less than 12 months.
Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations,
net of finance charges, are included in long-term borrowings. The interest element of the finance cost is charged
to the Income Statement over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. Assets obtained under finance leases are depreciated over
their useful lives. The lease liabilities are shown in note 18.
Rent payable under operating leases on which the short term exemption has been taken, less any lease incentives
received, is charged to the income statement on a straight line basis over the term of the relevant lease except
where another more systematic basis is more representative of the time pattern in which economic benefits
from the lease asset are consumed.
On 1 April 2019, the Group adopted all of the requirements of IFRS 16 – Leases. IFRS 16 Leases was issued in
January 2016 and provides a single lessee accounting model, requiring lessees to recognise assets and liabilities
for all leases unless the lease term is 12 months or less or the underlying asset has a low value.
In the Statement of Financial Position the right-of-use asset is recorded in Noncurrent assets and the lease
liability is split between Current liabilities for the portion due within 12 months and Noncurrent liabilities for the
remainder.
71 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
To determine the split between principal and interest in the lease the incremental borrowing rate of the Group
was applied. This method was adopted as the Group was not able to ascertain the implied interest rate in each
lease.
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. 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.
5. Segmental analysis
The Chief Decision Maker believes, under IFRS 8 – “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
Graphite Mining Extraction
2020
£
2019
£
793,577
145,172
72 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
Loss before income tax
Holding Companies
Mining Development
Graphite Mining Extraction
Net assets/(liabilities)
Holding Company
Mining Development
Graphite Mining Extraction
Segmentation by geographical area:
Revenue to external customers
UK
Mauritius
Madagascar
Loss before income tax
UK
Mauritius
Madagascar
Net assets
UK
Mauritius
Madagascar
(609,868)
(193,042)
(55,065)
(920,150)
(100,782)
(126,333)
5,440,186
(193,749)
(573,146)
5,336,652
(306,253)
(173,725)
2020
£
793,577
-
-
634,881
20,079
261,079
2019
£
145,207
-
-
920,150
98,021
129,094
5,593,346
189,322
(530,416)
5,158,987
177,664
(479,978)
6. Revenue from contracts with customers
The group derives revenue from the transfer of goods at a point in time in the following major product lines and
geographical regions:
2020
Revenue from external customers
Timing of recognition:
At a point in time
2019
Revenue from external customers
Timing of recognition:
At a point in time
7. Expenses by nature
USA
41,022
Europe
122,408
India
630,147
Total
793,577
41,022
122,408
630,147
793,577
USA
-
-
Europe
-
India
145,172
Total
145,172
-
142,172
142,172
The following items have been included in arriving at operating loss
Depreciation
Net foreign exchange loss
2020
£
2019
£
127,100
1,382
105,645
143,506
73 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
Auditor’s remuneration has been included in arriving at operating loss
as follows:
Fees payable to the Company’s auditor and their associates for
the audit of the Group’s annual accounts
Total non-audit fees
33,209
24,000
-
-
8. Employee information
The average monthly number of employees (including Executive Directors) was:
Number of employees for the year:
Staff costs (for the above employees)
Social security costs
Directors’ remuneration and transactions
Directors’ remuneration
Emoluments and fees
Remuneration of the highest paid director:
Emoluments and fees
Benefits and other fees
9. Finance cost
Interest payable
10. Income tax
Total current tax
Deferred tax charged to the income statement
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
20%
2020
150
£
380,892
-
2019
120
£
472,262
10,117
380,892
482,379
2020
£
2019
£
324,000
316,000
£
£
180,000
-
180,000
-
2020
£
46,003
2020
£
-
54,767
54,767
2019
£
2,827
2019
£
-
(33,557)
(33,557)
(857,975)
(1,215,701)
(171,595)
(229,426)
74 | P a g e
Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
Tax losses carried forward
Adjustments to tax charge in respect of prior periods
Tax (credit)/charge for period
11. Earnings per share
116,828
-
54,767
262,983
(33,557)
-
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)
2020
2019
(912,742)
59,756,437
1.53p
(1,113,708)
57,772,841
1.93p
There was no dilutive effect from the options outstanding during the period.
12. Intangible Assets
Group
Cost
At 1 April 2019
Additions
Impairment
At 31 March 2020
Accumulated amortisation
At 1 April 2019
Charge for the year
At 31 March 2020
Net book value
At 1 April 2019
At 31 March 2020
Exploration assets
£
3,902,234
135,766
(346,756)
3,691,244
-
-
-
3,902,234
3,691,244
Intangible assets comprise exploration and evaluation costs. Exploration and evaluation assets are all internally
generated, except for those acquired at fair value as part of a business combination.
Exploration and evaluation assets have no useful economic life per IFRS 6 and are tested for impairment annually.
13. Investments
Company
Cost
At 1 April 2019
At 31 March 2020
Net book value
At 1 April 2019
At 31 March 2020
Shares in group undertaking
£
3,539,448
3,539,448
3,539,448
3,539,448
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Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
The Company’s investments at the Statement of Financial Position date in the share capital of companies include
the following:
Subsidiaries
Tirupati Resources Mauritius
Registered: C/o Alliance Financial Services Ltd, Level 2, Standard Chartered Tower, Cybercity, Ebene,
Republic of Mauritius
Nature of business: Holding and administrative entity
Class of share
Ordinary shares
Tirupati Madagascar Ventures
%
Holding
100
Registered: Mining Business Center, Box No – 5, Lot K 7, Mamory, Ivato, Antananarivo 105, Madagascar
Nature of business: Evaluation and exploration of mining operations
Class of share
Ordinary shares
*indirectly through Tirupati Resources Mauritius
Establissements Rostaing
Registered: Lot II N 95 SB BIS E, Ambatobe, Antananarivo 103, Madagascar
Nature of business: Graphite mining extraction
Class of share
Ordinary shares
* 95% held indirectly by Tirupati Resources Mauritius
14. Property, plant and equipment
%
Holding
100*
%
Holding
100*
Group
Cost
At 1 April 2018
Additions
At 1 April 2019
Additions
At 31 March 2020
Plant and
Machinery
£
Fixtures and
Fittings
£
Assets under
construction
£
Development
costs
Total
£
166,608
606,559
773,167
476,457
1,249,624
8,423
74,095
82,518
34,301
116,819
191,847
37,714
219,561
138,762
358,323
-
220,400
220,400
323,809
544,209
366,878
928,768
1,295,646
973,329
2,268,975
Accumulated depreciation and impairment
At 1 April 2018
Depreciation
At 1 April 2019
Depreciation
At 31 March 2020
50,055
101,208
151,263
103,098
254,361
3,971
6,006
9,977
24,002
33,979
-
-
-
-
-
-
-
-
-
-
54,026
107,214
161,240
127,100
288,340
Carrying amount
As at 1 April 2019
As at 31 March 2020
621,904
995,263
72,541
82,840
219,561
358,323
220,400
544,209
1,134,406
1,980,635
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Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
Company
Cost
At 1 April 2018
Additions
At 1 April 2019
Additions
At 31 March 2020
At 1 April 2018
Depreciation
At 1 April 2019
Depreciation
At 31 March 2020
Carrying amount
As at 1 April 2019
As at 31 March 2020
15. Trade and other receivables
2020
£
Development
costs
£
£
Total
£
-
220,400
220,400
323,809
544,209
-
-
-
-
-
220,400
220,400
323,809
544,209
-
-
-
-
-
220,400
544,209
220,400
544,209
Group
Company
2019
2020
2019
Trade receivables
Other debtors
Advances to directors for expenses
Amounts owed by group
undertakings
Prepayments
208,476
217,693
-
-
7,887
409,309
£
13,339
415,544
1,311
-
1,030
431,224
£
208,476
103,764
-
2,397,588
£
13,043
159,715
1,311
1,921,345
-
2,709,828
-
2,095,413
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 2020.
16. Inventories
Cost and net book value
Raw materials and consumables
Finished and semi-finished goods
As at 31st March 2020, the Company held no inventory.
The value of inventories recognised in cost of sales was £406,621 (2019: £150,325).
2020
£
57,600
92,505
150,105
Group
2019
£
25,725
30,776
56,501
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Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
17. Trade and other payables
Current:
Trade payables
Social security and other taxes
Other payables
Amounts due from group
Accruals
Advances to directors for expenses
Group
Company
2020
£
272,407
25,044
11,229
-
119,191
-
427,871
2019
£
355,222
9,344
50,317
-
287,100
-
701,983
2020
£
135,362
25,044
5,770
163,566
103,613
-
433,355
2019
£
163,707
3,842
50,000
135,779
415,383
186
768,897
In the Directors’ opinion, the carrying amount of payable is considered a reasonable approximation of fair value.
Non-current:
Director’s remuneration
Management Salary Payable
Lease liability
18. Provisions
Group
Company
2020
£
632,015
147,606
37,767
817,388
2019
£
-
-
43,907
43,907
2020
£
632,015
147,606
-
779,621
2019
£
-
-
-
-
No provisions have existed within the financial year or persist at year end.
19. Leases
The Group holds leases that it accounts for under IFRS 16 – Leases. Other leases are either small in value or
cover a period of less than 12 months.
To determine the split between principal and interest in the lease, the incremental cost of borrowing for the
Group has been applied, at 10%. This method was adopted as the Group was unable to ascertain the implicit
rate in each lease agreement.
For the year
Cashflow
Depreciation charge
Interest charge
At 31 March 2020
Right-of-use asset
At 1 April 2019
Additions
Depreciation
Foreign exchange
At 31 March 2020
Total lease liability
2020
4,404
1,774
3,753
37,015
-
(1,774)
353
35,594
37,013
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Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
Lease liabilities are included in trade and other payables as shown in note 17.
Rent payable under operating leases, less any lease incentives received, is charged to Administrative expenses
on a straight-line basis over the term of the relevant lease except where another more systematic basis is more
representative of the time pattern in which economic benefits from the lease assets are consumed.
20. Borrowings
On 13th June 2019 the Company raised an initial £200k through a convertible loan note instrument (“CLN”).
Between issue date and 31st March 2020, a further £610k has been raised under this agreement. Interest on
the CLN is chargeable at 12%, and the Company have the capacity to raise £3m through this vehicle.
Within one year
Between 2 and 5 years
2020
-
810,000
810,000
2019
-
-
The loan notes shall be redeemed by the Company, at any time after the first anniversary of an Initial Public
Offering up to the Maturity Date or by the Noteholder or the Company, on the Maturity Date being the 31 May
2022.
Conversion can be made 15 Business Days after the date of completion of a successful Initial Public Offering to
convert all of the Notes outstanding into fully paid Ordinary Shares at a price equal to the price per Share paid
by investors participating in the Initial Public Offering.
21. Share capital
2020
Number
2020
£
2019
Number
2019
£
Allotted, called up and fully paid
Ordinary shares of 2.5p each
59,925,243
1,498,131
58,810,955
1,470,274
Ordinary “A” Shares
59,925,243
1,125,065
58,810,955
1,125,065
Shares were issued during the year as follows:
Shares issued from a placing on 2 April 2019
Shares issued from a placing on 18 April 2019
Shares issued from a placing on 15 May 2019
Shares issued from a placing on 13 August 2019
Number of shares issued
185,715
428,572
142,858
357,143
1,114,288
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Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
22. Financial instruments
Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
● Capital risk management
● Market risk
● Credit risk
●
Liquidity risk
● Currency risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s management
of capital, and the Group’s objectives, policies and procedures for measuring and managing risk.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The Group Audit Committee oversees how management monitors compliance with the Group’s risk management
policies and procedures and reviews the adequacy of the risk management framework in relation to the risks
faced by the Group.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern
while maximising the return to stakeholders as well as sustaining the future development of the business. In
order to maintain or adjust the capital structure, the Group may adjust dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
The capital structure of the Group consists of net debt, which includes loans, cash and cash equivalents, and
equity attributable to equity holders of the parent, comprising issued capital and retained earnings.
Fair value of financial assets and liabilities
Valuation,
methodology
and hierarchy
Book value
2020
£
Fair value
2020
£
Book
value
2019
£
Fair value
2019
£
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)
46,640
46,640
44,681
44,681
401,422
401,422
431,244
431,244
448,062
448,062
475,925
475,925
1,220,215
1,220,215
701,983
701,983
810,000
810,000
43,907
43,907
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Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
Total at amortised
cost
2,030,215
2,030,215
745,890
745,890
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
2020
£
2019
£
46,640
409,309
455,949
44,681
431,244
475,925
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:
31 March 2020
Non–derivative
financial liabilities
Trade and other
payables
Borrowings
Carrying
amount
£
Contractual
cash flows
£
6 months
or less
£
6 to 12
months
£
1 to 2
years
£
2 to 5
years
£
1,220,215
810,000
-
-
402,827
-
-
-
779,621
37,767
-
810,000
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Tirupati Graphite plc
Notes to the financial statements (continued)
Annual Report and Financial Statements
period ended 31 March 2020
2,055,259
-
402,827
-
779,621
847,767
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.
The Group liquidated its overseas subsidiaries during 2010 and therefore has no exposure to foreign exchange
gains or losses.
23. Related party transactions
Tirupati Carbons and Chemical Pvt Limited (TCCPL) is an entity incorporated in India. The Company is connected
to TCCPL in that both Shishir Poddar and Hemant Poddar were both directors and shareholders of TCCPL during
the year. At year end, included within debtors was an amount of £80,790 (2019: £135,005) and revenue recorded
for the year of £101,659 (2019: £131,714) from TCCPL.
Tirupati Speciality Graphite Private Limited (TSG) is an entity incorporated in India. The Company is connected to
TSG in that both Shishir Poddar and Hemant Poddar were both directors and shareholders of TSG during the
year. At year end, a net amount was receivable of £73,723 (2019 - £13,043) and revenue of £291,662 (2019 -
£13,457) from TSG.
Optiva Securities Limited is an entity incorporated in the United Kingdom. The Company is a stockbroker
connected to TCCPL as it being the nominated broker of the Company and Christian Gabriel St.John-Dennis one
of the directors of the Company holding a position to Optiva Securities Limited during the year. At year end, the
Company incurred brokerage and consultancy fees, business development fees and equity subscription premium
of £50,894 (2019- £nil) with an outstanding liability of £14,000 (2019- £nil), entered into a 12% Convertible loan
subscription amounting to £810,000 during the year which is outstanding as at year-end and share subscription
amounting to £290,000 (2019 - £961,000) from Optiva Securities Limited.
24. Events after the reporting period
There are no events to report subsequent to 31 March 2020.
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