Tirupati Graphite plc
Annual report and financial statements
for the year ended 31 March 2021
Registered number: 10742540
Tirupati Graphite plc
Table of Contents
Annual Report and Financial Statements
period ended 31 March 2021
E.
F.
G.
H.
I.
A.
B.
C.
D.
Table of Contents
Company Information .................................................................................................................................................................... 4
Chairman’s Statement ................................................................................................................................................................... 5
Business Review ............................................................................................................................................................................... 8
RECAP ................................................................................................................................................................................................ 8
ADDRESSABLE MARKETS ........................................................................................................................................................... 9
CAPITAL MARKETS ENGAGEMENT ....................................................................................................................................... 12
MADAGASCAR PRIMARY GRAPHITE PROJECTS ............................................................................................................... 12
a) Sahamamy operations and development: ....................................................................................................................................... 12
b) Vatomina Development of Unit 1 ........................................................................................................................................................ 15
c) Stage II Exploration Programme ......................................................................................................................................................... 17
d) Renewable energy development ......................................................................................................................................................... 18
e) Rehabilitation and Restoration ............................................................................................................................................................ 18
f) Snapshot of Consolidated Income Statement ................................................................................................................................ 19
TIRUPATI SPECIALITY GRAPHITE PVT LTD ...................................................................................................................... 19
a) Development of specialty graphite products and projects ...................................................................................................... 21
b) Tirupati Graphene & Mintech Research Centre (‘TGMRC’) ..................................................................................................... 21
HUMAN CAPITAL ........................................................................................................................................................................ 22
FINANCE & CORPORATE FINANCE ........................................................................................................................................ 22
a) Ensuring capital adequacy ..................................................................................................................................................................... 23
b) Extending reach to investors and optimising capital raise costs .......................................................................................... 23
c) Prudency in controlling CAPEX and OPEX cost advantages .................................................................................................... 24
INORGANIC GROWTH OPPORTUNITIES ............................................................................................................................. 24
IMPACT OF COVID 19 PANDEMIC .......................................................................................................................................... 25
Strategic Report ............................................................................................................................................................................ 27
Principal activities ................................................................................................................................................................................... 27
Events since the year end ...................................................................................................................................................................... 27
Results for the year ended 31 March 2021 ...................................................................................................................................... 27
Key performance indicators ................................................................................................................................................................. 27
DIRECTORS’ STATEMENT UNDER SECTION 172 (1) OF THE COMPANIES ACT 2006 ......................................................... 27
Outlook towards Shareholders ............................................................................................................................................................ 32
Outlook towards its Employees ........................................................................................................................................................... 32
Developing relationships with the community and other stakeholders ............................................................................... 32
Conclusion .................................................................................................................................................................................................. 32
Principal risks and uncertainties ....................................................................................................................................................... 32
Principal risks and uncertainties to the Group .............................................................................................................................. 33
Corporate and social responsibility ................................................................................................................................................... 36
Greenhouse Gas Emissions ................................................................................................................................................................... 36
Ratio of men to women ........................................................................................................................................................................... 36
Going concern basis ................................................................................................................................................................................. 36
Directors’ Report .......................................................................................................................................................................... 38
Incorporation & admission to trading .............................................................................................................................................. 38
Results and dividends ............................................................................................................................................................................. 38
Financial instruments ............................................................................................................................................................................. 38
Future developments .............................................................................................................................................................................. 38
Share capital ............................................................................................................................................................................................... 38
Memorandum and Articles of Association ....................................................................................................................................... 39
Liability of members limited ................................................................................................................................................................ 39
Issue of shares ........................................................................................................................................................................................... 39
Directors and directors’ interests ...................................................................................................................................................... 39
Directors’ Remuneration ....................................................................................................................................................................... 40
Substantial shareholdings ..................................................................................................................................................................... 42
Statement of Directors’ responsibilities ........................................................................................................................................... 42
Tirupati Graphite plc
Table of Contents
Annual Report and Financial Statements
period ended 31 March 2021
Responsibility statement of the Directors in respect of the Annual Report ........................................................................ 43
Charitable and political donations ..................................................................................................................................................... 43
Health and safety ...................................................................................................................................................................................... 43
Statement of disclosure to independent auditors ......................................................................................................................... 44
Independent auditor ............................................................................................................................................................................... 44
Resolutions proposed at the Annual General Meeting ................................................................................................................ 44
Corporate Governance Report ................................................................................................................................................. 45
Chairman’s Statement on Corporate Governance ......................................................................................................................... 45
Board objectives and operation .......................................................................................................................................................... 48
Meetings of the Board of Directors ..................................................................................................................................................... 49
Insurance cover ........................................................................................................................................................................................ 49
Nominations Committee ........................................................................................................................................................................ 49
Audit Committee ....................................................................................................................................................................................... 50
Remuneration Committee ..................................................................................................................................................................... 50
Internal controls ....................................................................................................................................................................................... 50
Dialogue with major shareholders ..................................................................................................................................................... 51
Independent Auditor’s Report to the Members of Tirupati Graphite plc .................................................................. 52
Opinion ........................................................................................................................................................................................................ 52
Basis for opinion ....................................................................................................................................................................................... 52
Conclusions relating to going concern .............................................................................................................................................. 52
Our application of materiality ............................................................................................................................................................. 53
Our approach to the audit ..................................................................................................................................................................... 53
Key audit matters ..................................................................................................................................................................................... 53
Other information .................................................................................................................................................................................... 55
Opinions on other matters prescribed by the Companies Act 2006 ....................................................................................... 55
Matters on which we are required to report by exception ........................................................................................................ 56
Responsibilities of directors ................................................................................................................................................................ 56
Auditor’s responsibilities for the audit of the financial statements ....................................................................................... 56
Other matters which we are required to address ......................................................................................................................... 57
Use of our report ....................................................................................................................................................................................... 58
Consolidated Statement of Comprehensive Income ......................................................................................................... 59
Consolidated and Company Statement of Financial Position ....................................................................................... 60
Consolidated Statement of Changes in Equity .................................................................................................................... 62
Company Statement of Changes in Equity ........................................................................................................................... 63
Consolidated Statement of Cash Flows .................................................................................................................................. 64
Company Statement of Cash Flows ......................................................................................................................................... 65
Notes to the Financial Statements .......................................................................................................................................... 66
Tirupati Graphite plc
Company Information
Annual Report and Financial Statements
period ended 31 March 2021
Company Information
DIRECTORS:
COMPANY SECRETARY:
REGISTRARS:
REGISTERED OFFICE:
CORPORATE BROKERS &
FINANCIAL ADVISORS:
COMPANY REGISTRATION NUMBER:
INDEPENDENT AUDITORS:
LEGAL COUNSEL:
BANKERS:
PUBLIC RELATIONS:
S K Poddar
C G St. John-Dennis
H K Poddar
R Kedia
L J Moore
London Registrars Ltd
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Optiva Securities Ltd
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Tirupati Graphite plc
Chairman’s Statement
Annual Report and Financial Statements
period ended 31 March 2021
Chairman’s Statement
First, may I extend a very warm welcome to the hundreds of new shareholders in our Company, and hundreds of
stakeholders too, the Tirupati Graphite (“TG”) family has grown from strength to strength in this eventful year. It is
also my privilege to present to you the first Annual Report as a quoted company and the fourth since inception. We
find ourselves to be fortunate – being in the right space at the right time – contributing to the global cause of mitigating
the risks of climate change.
The year gone by was monumental, providing us the opportunity to extend our gratitude to the Financial Conduct
Authority (“FCA”) and The London Stock Exchange Group (“LSE”), and all of our advisors who helped us complete the
process for admission of our ordinary shares on the main board of the LSE. The successful capital raise at our Initial
Public Offering (“IPO”) paved the way and the oversubscribed follow-on placing completed in April 2021 further
strengthened our resolve and conviction to fast-track the development of our three business divisions in Madagascar
and India. We stand tall and the Company is proud to be the only fully integrated graphite producer and developer
publicly quoted in London.
During the year under review, I am pleased to report that considerable progress was made towards achieving our goal
of becoming the pre-eminent supplier of sustainable graphite, graphene and advanced materials. Our focus on
graphite and graphene is strategic, based not only on our team’s track record of working in the sector for decades,
but also on what we believe to be a highly favourable long-term demand profile of a critical material that is a
substantial contributor to the global clean energy revolution and therefore, an opportunity for us to become a
contributor to the evolution and advancement of new age materials for a greener globe.
You do not have to look far to see just how ubiquitous and important graphite has become to our everyday lives. Not
only is it central to the green energy transition and electrification of mobility, but it is also increasingly used in the fire
safety, thermal management, composites and advanced materials industries amongst many others, helping to reduce
emissions, increase energy efficiency and reduce fire hazards.
According to a report by Battery Metals Review, most commentators are forecasting electric vehicles (‘EV’) sales to be
in the range between 30-40 million per year by 2030, from the circa 2 million EVs sold in 2019 resulting in an 1100%
increase in current flake demand for batteries to c.3.1 million tonnes per year by 2030. And that is for usage in
batteries alone. Factoring other industries into the equation and the figure is likely to be substantially higher with the
likes of UBS suggesting a 7x growth in demand to 5.9 million tonnes per year by 2030.
Notably in our opinion, not all graphite projects currently in production produce sustainable high-quality flake
graphite. Much of the current volumes used in electric vehicles reaching the market comes from mines in China which
tend to use significant amounts of hydrofluoric acid in their processing methods to produce high purity grades of
graphite, a practice which we believe is counter to global sustainability goals in the long term.
As we have successfully demonstrated at our two Madagascan projects, Sahamamy and Vatomina, the Company is
able to produce large flake, high-quality graphite using unique and importantly sustainable processing techniques
which not only means that our graphite is greener, but that we can deliver it at very high margins. With our first 9,000
tpa module at Vatomina now commissioned at the upgraded capacity, and having raised additional funds in April 2021,
we are accelerating our development plans and anticipate total capacity across both projects to reach 30,000 tpa by
Q1/Q2 2022. This will represent a ten-fold increase since becoming a listed company in December 2020.
Concurrently, we have been pushing ahead with the redevelopment of the existing hydro power facilities in
Madagascar which is targeted to meet most of the power requirements for the current Sahamamy operations. We
have also initiated the studies on the use of renewable energy which is aimed at substantially powering our projects
in Madagascar when we reach the 30,000 tpa capacity build out under our medium-term development plan (“MTDP”).
In addition to our significant achievements under our existing development plans, the icing on the cake for us was
entering into a conditional acquisition agreement for the Montepuez and Balama Central projects from ASX listed
Battery Minerals Ltd. The acquisition requires approval from shareholders of Battery Minerals Ltd as well as approval
by the Ministry of Mineral Resources and Energy in Mozambique. The Montepuez Project is a construction ready
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Tirupati Graphite plc
Chairman’s Statement
Annual Report and Financial Statements
period ended 31 March 2021
project with substantial reserves and resources, while the Balama Central Project is an advanced feasibility stage
project with a combined JORC Code (2012) resources of c. 152 million tonnes @ 8.5% TGC. Post completion of the
acquisition, the projects will provide us with additional resources to expand and diversify our supply of high-quality
graphite as the markets evolve driven by growing demand from EV and other segments. The other advantages of the
acquisition for us include diversification of our country risks; access to higher grade deposits; and a complementary
type of graphite (i.e. more of the smaller flake variety) which is demanded by the EV sector. The acquisition
demonstrates our team’s ability to achieve our stated strategic objectives both operationally and corporately. The
team are now working with the vendors side to complete the acquisition and have already began re-working the
development plans for Montepuez using our in-house expertise and experience; it is our intention to advance into
construction and first production in the shortest available time to take advantage of the favourable tailwinds of the
graphite markets. We will continue to update the market on the progress of the acquisition and developments as they
advance.
Our Patalganga project continues to evolve at a good pace. We continue to create new markets for our range of
expandable graphite products and provide the backbone for the creation of markets for our larger downstream
specialty graphite project which is under construction. The integrated, multi-product speciality graphite project will
provide throughput of all variants required for high-tech graphite applications, thus making us one of the very few
companies globally, which can boast the capabilities of providing ‘any type of graphite’ required to our customers. We
have continuously differentiated and evolved our processing technologies for these niche products, distinguishing our
manufacturing processes from the conventional processes used by most of the current Chinese sources of specialty
graphite, minimising our footprint on the environment and ensuring our projects are sustainable.
In tandem with the growing expectations on sustainable supply chains and the opportunities this presents, we see
ourselves evolving as a frontrunner in the energy storage arena, alongside fire safety and thermal management and
composites and advanced materials applications of speciality graphite products.
Lastly, but not least, our Graphene and Mintech Research Centre which is our state-of-the-art R&D and technology
centre designed to house our manufacturing facilities of graphene and other advanced materials, has completed the
first stage development; this is a commendable achievement that truly sets us apart from any other company in the
UK and possibly the world. This division of the Company has been making huge strides forward including the creation
of manufacturing capabilities for Graphene Oxide (“GO”) and Reduced Graphene Oxide (“rGO”) at a significant and
commercially viable kilogram per day scale; taken on a number of consultancy engagements for process development
projects; and has made its first significant in-roads into the new world of metals and 2D composite materials.
The successful development of our ground-breaking aluminium graphene composite (“Al-Gr Composite”), which has
the potential to replace copper in many weight-sensitive applications, puts us into the category of other advanced
materials technology companies which is an achievement that every stakeholder should take pride in. It is also
testimony to the leading efforts and capabilities of the Company in the world of advanced materials. Not surprisingly,
we have been receiving a lot of interest for our Al-Gr Composite product and we are now working with a suite of
companies to develop it further and pave the way to commercialisation.
To conclude, I again share our principles of value creation, which we have adopted since inception of our Company,
and which continue to remain our guiding principles:
● Value creation for the planet and for future generations:
By developing unique materials which have many ‘green’ applications contributing towards a more
sustainable and greener planet for future generations and developing technologies and processes to
minimise emission and waste generation.
● Value creation for our employees:
By providing opportunities for performance and learning, achieving corporate goals and personal
development, to inspire quality delivery on the objectives and values we strive for.
● Value creation for the local communities we operate in:
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Tirupati Graphite plc
Chairman’s Statement
Annual Report and Financial Statements
period ended 31 March 2021
By looking after our employees and their families and providing healthcare, education and recreational
facilities and support for local communities, helping bring communities together and improving their general
quality of life.
● Value creation for our shareholders:
Through well considered and crafted business strategies and plans, implemented with persistence and
determination, and adopting a culture of cost prudence, hard work, and delivering on targets.
You will observe that in our journey to date, we have performed on each of the four pillars of value creation we set
for ourselves at the outset:
1) Providing materials for the green economy and developing novel new age materials;
2) Nurturing human capital and developing a team that delivers;
3)
4) Delivering on a prudent business plan and creating values for our shareholders reflected in our share price
Improving the quality of life of thousands of people in the communities around us; and
growth.
We are proud of our long history of innovation, our reputation as a respected, well-governed and safe place to work,
and the role our products play in the green revolution. At the heart of this success is our team spirit of ‘together we
can and will achieve our goals’. As the Company continues to grow at a monumental pace, we look forward to
maintaining this ethos and upholding our sustainable values to deliver measurable success on every level be it
economic, social, or environmental.
Shishir Poddar
Executive Chairman & Managing Director
17 September 2021
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Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2021
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 2021.
A. RECAP
Tirupati Graphite Plc is a diversified company specialising in flake graphite and graphene materials, which significantly
contribute to the green economy and the world of advanced materials. The Company has remained focused on
furthering its three business divisions, continuing on the road map laid under its medium-term development plan
(“MTDP”), and progressing towards its strategic targets. The products and services being developed by the Company
contribute to reducing greenhouse gas emissions, generating green and clean energy, energy efficiency, e-mobility,
improved resource utilisation and many others. Following the anticipated completion of the acquisition of Tirupati
Speciality Graphite Pvt Ltd (“TSG”), the Company will have three business divisions which will be comprised of:
● Primary graphite mining and processing division encompassing the Sahamamy and Vatomina Projects in
Madagascar which produce high-quality jumbo, large and small natural flake graphite and provide an ex-
China source for this critical material;
● Speciality Graphite Projects in India, which make up the Company’s downstream processing division where it
is developing capabilities to produce the entire gamut of specialty graphite products including high-purity,
expandable, micronised and spheroidised graphite for use in various hi-tech applications. The operating
division is currently delivering a suite of expandable graphite products from the Patalganga Project and
concurrently the larger scale multi-product facility is in its next phase of development; and
● Tirupati Graphene and Mintech Research Centre (“TGMRC”), which is a state-of-the-art research and
development (“R&D”) centre, also located in India. Designed as the Company's ‘tech-centre’, this is focussed
on manufacturing graphene; developing applications and advanced materials using graphene, and providing
environmentally friendly technologies and professional consultancy services for mineral processing.
The primary graphite mining and processing facilities are held by two subsidiaries of the Company in Madagascar. The
Specialty graphite and graphene and technology centre are held by Tirupati Speciality Graphite Pvt Ltd (“TSG”), an
Indian private company promoted by the founders of the Company and with whom the Company has an agreement
for acquisition and development, which is in the process of meeting regulatory requirements for completion.
The Company utilises proprietary environmentally friendly processes and scalable technologies to deliver affordable
products and services to its global customers. During 2019, the Company successfully commissioned its initial 3,000
tpa primary graphite production unit at the Sahamamy Project and the 1,200 tpa speciality graphite plant at
Patalganga. The two operations established the Company's ‘proof of concepts’ with the core objective of de-risking
the execution, financing and technology risks for the larger follow-on investments to be made as well as facilitating
the development of end-user markets for its suite of graphite products and services. Having successfully proven the
concepts, the Company is now embarking on the larger scale developments of its projects under its MTDP to grow
and expand its production capacities and product offerings in a staged manner. With a successful IPO and admission
to the standard segment of the main markets of London Stock Exchange (“LSE”) providing the access to capital
markets, the Company was able to continue progress with its development plans set under the MTDP.
As at writing of this report, the first incremental 9,000 tpa primary production unit at Vatomina has been
commissioned and construction for the 18,000 tpa third production unit/module under the Primary Graphite division
has also been initiated with a target completion during Q1/Q2 2022, which will uplift the total production capacity of
primary graphite in Madagascar up to 30,000 tpa. On the projects under development by TSG, stage 1 of TGMRC was
commissioned in July 2021 enabling start of revenue generation by the unit which remains under further development
on an ongoing basis. The Patalganga project in the meantime continues to operate and its expansion and construction
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Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2021
of the first of the two 15,000 tpa production units of the Speciality Graphite Project are being initiated, estimated to
complete during Q2/Q3 2022.
The Company's modular development strategy under its MTDP is designed with the flexibility for further expansion of
its operating divisions based on the evolution of the global flake graphite and graphene markets and their derivative
products. The strategy takes into consideration the following key objectives:
a. Minimise initial and overall investment capital and accelerate production by deriving early-stage earnings
from all of the divisions;
b. Reduce equity dilution and cost of equity by staging capital raises with development and growth and
minimising the reliance on external equity capital by leveraging its early stage earnings;
c. Mitigate project development risks through a modularisation strategy, systematically developing markets
focussed on engagement with the end-user industry which tracks the growth of the graphite and graphene
markets and related developments and technological advances;
d. Lower gestation periods for project development to optimise return on investments;
e.
Integrate across the value chain of graphite and organic market development, serving multifarious markets
and diverse applications of specialised as well as conventional graphite types;
f. Optimise technologies and operations to ensure lowest quartile costs, optimising production output and
maintaining high operating margins to shield the Company from market volatility; and
g. Ensure sustainability is in all spheres including environmental, social and value creation.
The Company continues to develop its businesses under these principles and the year under review saw multifaceted
achievements made which were monumental and transformative for the Company, its shareholders and stakeholders.
B. ADDRESSABLE MARKETS
The diverse and unique set of properties of graphite provides an extensive sectoral diversity for the markets for
primary and speciality graphite. The long-term demand profile of graphite is highly favourable, including its key role
in green mobility being the largest material constituent of lithium ion (“L-ion”) batteries. Additionally, graphite has
diverse applications in thermal management in electronics, fire safety, metal manufacturing and forming, fuel cells,
polymers, composites and in other advanced materials.
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Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2021
Over 70% of the primary processed graphite is produced in China and over 90% of the downstream processed specialty
graphite is produced in China. Thus, diversification of source is essential given the growing demand and importance
of flake graphite as a critical mineral. Being a key component in green applications and with extensive dependence on
a single dominant source in China, flake graphite has been classified as a critical material by the US, the EU and other
major economies. Increasingly, policy initiatives are being announced by governments around the world to secure this
and other critical materials which contribute to the Company’s advantage of being an alternative, ex-Chinese source
of this critical material.
Fig.: World Production of Natural Graphite (in ktpa, by Roskill)
Flake graphite has multiple growing applications with highest demand growth expected from the use of flake graphite
in anode of L-ion batteries, which contain three times more graphite than lithium.
Fig.: Graphite Demand Forecast for Lithium-ion Batteries (by Roskill)
UBS projects a 7x growth in natural flake graphite demand growth majorly from the EV penetration by 2030 to a
5.9million tons market:
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Business Review
Annual Report and Financial Statements
period ended 31 March 2021
The World Bank further estimates that up to 500% increase in production of graphite may be required for batteries
alone, while Fast Markets forecast a 32% CAGR for the natural graphite demand growth from batteries and multiple
car manufacturers have disclosed their plans and targets of shifting to EVs from ICE engines over the next 5 - 10 years.
Additionally, conventional applications of graphite have also shown an increased consumption in a few developing
nations with companies focussing on diversifying sources from China.
Furthermore, graphite is being used in other hi-tech applications, forming the core in various new and advance
materials and technologies such as expandable graphite is used in gaskets and sheets, fuel cells, flame retardant
materials, insulation and more. The demand of natural flake graphite from these applications is also expected to have
a significant impact on the consumption of flake graphite over the next few years with a 7% CAGR forecasted by Fast
Markets.
Fig.: Expandable Graphite Demand Forecast by Roskill
As mentioned, high purity graphite is an essential product in producing battery grade graphite. Currently, the world
uses environmentally damaging processes such as hydrofluoric acid treatment method or an energy intensive method
for making this product. Over 90% of this material is produced in China. The zero-HF, zero-waste process developed
by the group has received a lot of interest and demand from customers across USA, EU and East Asia. Use of micronised
graphite in composites, paints and recarburization is also expected to grow over the next few years.
Graphene is equally extraordinary; its amazing strength and conductivity amongst other properties, is set to
revolutionise the world of advanced materials with vast amounts of technological developments happening across a
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Business Review
Annual Report and Financial Statements
period ended 31 March 2021
range of sectors and applications including fast-charging and foldable phones, consumer wearables, supercapacitors,
energy storage, aerospace, automotive, defence, medical, high-end sensors, desalination, and filtration to name a
few. Through its extensive work with a number of these industry players, it is the Company’s belief that a number of
these technologies being researched are on the cusp of mass commercialisation. Therefore, Tirupati is preparing to
address the key cost bottleneck for the industry having won over one of the key technological barriers by developing
its unique zero-chemical manufacturing technology to manufacture its graphene using the top-down method with
high purity flake graphite as the input material.
C. CAPITAL MARKETS ENGAGEMENT
During the year, the Company delivered on its objective of becoming a listed company after obtaining FCA approval
for the admission of its ordinary shares for trading on the main board of the LSE under the standard segment with
effect from 14 December 2020. The successful IPO concluded with a capital raising for gross proceeds of GBP 6 million
at an issue price of 45p per share, resulting in the issue of 13,333,334 new ordinary shares in the capital of the
Company. The capital raise was completed using the Company’s sole brokers, Optiva Securities Ltd (“Optiva”) targeting
institutional, sophisticated and high-net worth investors which was complemented by a retail investor offering
through PrimaryBid. The IPO capital raise price represented an increase of almost 30% over the previous pre-IPO
equity raised by the Company at 35p per share.
Due to favourable graphite market dynamics driven by the EV revolution, the Company initiated a follow-on placing
with institutional investors raising gross proceeds of GBP 10 million through Optiva, which successfully closed
oversubscribed in April 2021 at an issue price of 90p per share, representing a 100% premium over the IPO price per
ordinary share.
Since its listing, the Company has kept its shareholders and markets informed of its activities and significant progress
by regular dissipation of information through the Regulatory News Service (“RNS”). Between the date of admission
and close of the reporting period the Company made 11 announcements to update its shareholders on its activities
and significant progress across its business divisions. Additionally, it provides information to the markets through its
website, active social media engagements and via interviews of its CEO and corporate management team members,
interaction with the press and online media, podcasts and other prominent IR mediums.
The Company also secured memberships with a range of reputable corporate and industry bodies including with ‘The
Quoted Companies Alliance’, ‘The Graphene Council’ and ‘The Critical Minerals Association’ and its executives
participated in several industry conferences, events and investor meetings organised through these organisations. The
Company was awarded the coveted CFI ‘2021 Global Award for Best Value Creation Strategy’ which was covered by
online and print media platforms including the CFI magazine. These activities contributed to raising the Company’s
corporate profile, visibility and reach to the investment community and its customers.
D. MADAGASCAR PRIMARY GRAPHITE PROJECTS
The Company commissioned its first 3,000 tpa flake graphite mining and processing facilities at the Sahamamy Project
in Madagascar as a ‘proof of concept’ for its planned developments across its two projects in Madagascar. Commercial
production was announced at the Sahamamy Project in January 2020. However, soon after, the year under reporting
which began on 1 April 2020 saw the spread of the COVID 19 pandemic leading to ongoing restrictions including
lockdowns, restrictions in movement of people across borders, constraints in availability and movement of goods and
related logistics delays and other associated challenges to operations. The Vatomina Project was under construction
for its first 6,000 tpa module with extensive preparatory works completed for the construction of this module with
the developments commencing immediately following the successful capital raise and IPO of the Company on 14
December 2020.
Despite the challenges impacting availability and movements of goods and deployment of some of its expat human
resources, the Company implemented the necessary protocols and was able to continue progressing with its
operations and development across the two projects as further detailed below:
a) Sahamamy operations and development:
The salient features of the Sahamamy Project:
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Business Review
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period ended 31 March 2021
● Project was acquired by the Company in Q4 2017
● 7.8125 sq km (781.25 hectares) Mining License area
● Three additional mining permit applications awaiting to be granted which will add a further 8.98 km2
(898 hectares) of Mining License area
JORC (2012) Resources of 7.1Mt @ 4.2% TGC
●
● 3,000 tpa capacity, proof of concept plant into commercial production since January 2021
● Second 18,000 tpa module to take capacity to 21,000 tpa in development
● Stage two exploration programme in progress to increase and enhance resource definition at
●
Sahamamy
Logistics limitations overcome with the construction of new interconnecting road linking Sahamamy
with the Vatomina Project and direct access to the national highway (NH2) to Toamasina export port
● Extensive internal infrastructure development in progress for the larger plant in construction
The Sahamamy Project started production of sellable graphite from April 2020 at the 3,000 tpa unit
incorporating the Company's novel technology of sand separation at the first stage of the process. This
resulted in a comparatively lean process flow sheet developed by the Company based on metallurgical tests
using its in-house expertise and experience in graphite processing. Within the challenges of its remote
location, it then being reachable by a boat ride, the Sahamamy operations were de-bottlenecked, the
processes further streamlined and production ramped up to full capacity resulting in commercial production
being announced in January 2020.
The table below provides the key operating results for Sahamamy for the period between April 2020 to March
2021:
Units
YoY Change
FY 2020-21
Particulars
Mining & Processing costs
Human Resources costs
Logistics utilities & plant admin costs
(Increase) / Decrease in inventory of inputs
Total Costs of Production
Total Production
Cost per MT of Production
Total Sales Volume
Total Revenues
£
£
£
£
£
MT
£
MT
£
+10%
+41%
-20%
+6%
+ 30%
+54%
+42%
-8%
+66%
+9%
304,975
228,731
52,784
(98,407)
488,083
1,718
284
1,857
1,123,426
801 / 605
635,342
57%
66%
Average Selling price per MT of Production
US$ / £ per MT
Gross Profit
Gross Margin on Sales
Increase in Gross Profit for the year
£
%
%
The key outcomes from the operating results are highlighted below:
● Within Inventories, there was a significant increase in inputs, stores and spares (+50% y-o-y), as the
Company increased its inventories of inputs, stores and spares to mitigate against the longer
procurement and logistics timeframes due to the impacts of the pandemic;
● Total Production during the year increased by 30% and Total Sales Volume increased by 54% over
the previous year;
● Total Revenues increased by 42% over the previous year;
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● Realised Average Selling price per MT of graphite sold showed slight reduction which was
attributable to reduced market prices in the first three quarters (i.e. April 2020-December 2020) due
to impacts of the pandemic, and strengthening of sterling against the US$ during the year from
c.US$1.24 to c.US$1.37;
● Notably, Gross Margin on Sales increased by 9% from 48% the previous year to 57%, in line with the
Company’s expectations as production continues to increase.
During the last quarter of the reporting year (quarter ending 31 March 2021), the Company took the strategic
decision to expedite the development of the planned second module of 18,000 tpa at Sahamamy to take
advantage of favourable graphite market dynamics. It completed a successful equity placing to raise capital
and is fully funded to completion and commissioning for the second plant which is expected to commence
production during Q1/Q2 2022.
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period ended 31 March 2021
b) Vatomina Development of Unit 1
Following its IPO and the successful capital raise, the Company was able to fast track the expansion of its first
primary graphite production unit at Vatomina which has defined JORC (2012) Resources of 18.4Mt @ 4.6%
TGC. Construction activities which commenced at Vatomina included amongst others:
site preparations for the process plant and related infrastructure;
strengthening and extension of internal road network;
●
●
● acquisition of additional land surface rights to expand the existing land bank in the Vatomina Permit
area for defined extensions of mineralised zones;
● procurement of earthmoving equipment and the balance of processing plant equipment;
● hiring and training of additional human resources;
●
● preparations for the next phase of exploration activities to upgrade and expand the existing mineral
construction of the new road connecting the Vatomina and Sahamamy Projects; and
resource inventory across both projects.
Due to increased demand and reverse enquiries received, the strategic decision was taken by the Company
in February 2021 to upscale Vatomina's first module by 50% from the planned 6,000 tpa capacity to 9,000
tpa, with an associated incremental CAPEX cost of around 30%. The higher capacity of the first module at
Vatomina will boost near-term cash flow generation and enable the Company to capitalise on rising demand
and prices for its Madagascan primary flake graphite.
On 21 April 2021, the Company announced the opening of the Vatomina mine which marked the start of
excavation of overburden and first ore mined for the upcoming 9,000 tpa module at Vatomina. Stockpiling of
the ore mined commenced and was used as the feedstock for the commissioning of the project through to
commercial production.
On 6 September 2021 the Company announced successful completion of commissioning of the 9,000 tpa
module and commencement of sellable production which was being stockpiled awaiting shipment to fulfil
pre-orders received by the Company from customers in Europe, USA and Asia.
The following table summarizes the total investments made in both projects up to end of August 2021,
including investment in exploration and evaluation since the inception of the Company:
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period ended 31 March 2021
Vatomina Project
Head of CAPEX
Investment (£)
Up to 31.03.2020
Investment (£)
During 01.04.2020
to 31.03.2021
Investment (£)
During 01.04.2021
to 31.08.2021
Total Investment
(£)
As at 31.08.2021
Land Lease payments
37,767
(5,335)
Earthmoving & Drilling
328,178
236,949
(352)
-
32,080
565,127
equipment procured
Processing Plant &
utilities construction
168,093
475,822
645,991
1,289,906
Infrastructure
31,556
36,330
325,966
393,852
development & Admin
Assets
Evaluation & Engineering
738,830
331,530
375,160
1,290,271
Total Investment
1,304,424
1,075,296
1,346,765
3,571,236
Sahamamy Project
Head of CAPEX
Investment (£)
Investment (£)
Up to 31.03.2020
During 01.04.2020
Investment (£)
During 01.04.2021
Total Investment
(£)
to 31.03.2021
to 31.08.2021
As at 31.08.2021
Earthmoving Equipment
240,357
Processing Plant
520,634
Infra & Admin Assets
39,858
39,024
23,157
6,776
-
279,381
44,174
587,965
127,421
337,757
Exploration Evaluation &
163,702
103,639
77,377
344,718
Engineering
Total Investment
964,551
172,596
248,972
1,549,821
(Note: the figures for the period 1 April 2021 to 31 August 2021 are unaudited figures for the current year and
derived from the books of accounts of the Company for the period.)
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c) Stage II Exploration Programme
As part of its preparations for listing and forming part of the Company’s prospectus, SRK Mining Services
(India) Private Limited (“SRK”) was engaged to produce a Competent Persons Report (“CPR”) to present a
summary of the geology and exploration undertaken by the Company on its Madagascan projects including
presenting a Mineral Resource statement in accordance with the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves, (“JORC Code (2012)”) dated 1st June 2020 and to
review the Company’s strategic development plans for Sahamamy and Vatomina.
In its CPR, SRK opined that both Vatomina and Sahamamy remained open to the strike extension as well as
down-dip extensions which could enhance the resource of the deposits. Furthermore, there may be potential
for additional mineralised zones beneath the current known area indicated by the results of the deeper holes
drilled by the Company. Further geological mapping added good potential for further extensions to the
known deposit areas and the potential mineralisation extensions to the north and east were a priority for
future exploration drilling, including infill drilling in the known area to upgrade confidence in the defined
resources.
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period ended 31 March 2021
In response to the recommendations under the CPR, in February 2021 the Company announced the
commencement of its Stage II exploration and drilling programme (“Stage II Programme”) across its primary
flake graphite projects in Madagascar. SRK’s engagement was extended to oversee the Stage II Programme
and to update and upgrade the Company’s Mineral Resource Statement (“MRS”) for the Vatomina and
Sahamamy Projects.
The Stage II Programme, which is anticipated to take around 6-9 months, will target enhancing the Company's
global resource base by:
●
Increasing geological confidence in areas currently categorised as Indicated and Inferred Mineral
Resources;
● Establishing additional Mineral Resources in areas previously identified by SRK as Exploration
Targets and open extensions; and
● Completing drilling and trenching programmes:
o
o
o
c.10,000 metres of auger drilling;
c.1,000 metres of trenching; and
c.5,000 metres of diamond core drilling.
d) Renewable energy development
In accordance with its stated principles on sustainability, the Company intends to maximise the use of
renewable energy to meet the power needs for its processing operations in Madagascar. Historically, the
Sahamamy Project had been powered by a 50Kw hydro power generation facility which was subsequently
decommissioned by the previous owners c.15 years prior to our acquisition of the project. Additionally,
studies were conducted by the Company to determine additional hydro power prospects across the two
projects.
During the year, the Company took the strategic decision to re-establish the dormant hydro power facility at
Sahamamy, optimising the generation capacity up to 100 Kw and to further progress the hydro power studies
for the previously identified prospects. The rebuild of the 100 Kw facility was initiated during the year with
the appointment of relevant advisors and consultants to support the construction activities for the hydro
power facility which is planned to be completed and brought into use around the end of 2021.
In addition, the Company has started investigating other renewable energy options for the projects including
the use of wind and solar energy to meet its power requirements for the operations at both projects.
e) Rehabilitation and Restoration
The project areas in Madagascar are located within a moderately undulating area and the Company’s mine
planning takes this into consideration to take advantage of the topography. The nature of the deposit and pit
design is such that rehabilitation and restoration of mining areas is an ongoing and concurrent activity
undertaken by the Company with the:
● Mining overburden being used to reclaim land in swamps and wasteland areas located near to the
mining pits, which would otherwise remain as unproductive land areas;
● Ore feedstock which is constituted by c.50% in the form of sand being extracted as a construction
quality sand by-product of ore processing, which is currently being re-purposed and used by the
Company in its ongoing construction and infrastructure building activities at project sites, thereby
achieving the waste-to-wealth objectives of the Company; and
● Ongoing re-vegetation programme working in conjunction with the local communities to harvest
new tree plantation areas across the local communes to ensure any green vegetation areas which
are impacted by the Company’s operations are replaced by new trees and vegetation.
The Company is conscious of the environmental impacts of its mining activities and has designed its processes
to ensure the Company conducts its activities in a way that it shall comply with the obligations under its
environmental license and the mining code of Madagascar. Additionally, the Company also fulfils its
corporate social responsibility toward the people and communities in its area of operations through various
activities as detailed under the Community Engagement section below and in its Sustainability Report.
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period ended 31 March 2021
f)
Snapshot of Consolidated Income Statement
Summary of the Group’s consolidated income statement for the year ended 31 March 2021 is as follows:
2021
GBP
2020
YOY Change
Commentary
GBP
%
Revenues
1,123,426
793,577
42%
Cost of Sales
(488,083)
(411,899)
18%
Revenues grew by 42% due to increased
production and sales, see details in next slide
Cost of Sales grew by only 18%,
demonstrating increasing profitability
Gross Profit
635,342
381,678
Less Administrative Expenses
(1,481,954)
(1,066,551)
66%
39%
Resulted in Gross Profit increase of 66%
Admin expenses increased due to costs
associated with listing
Less Share based payments
(49,627)
-
-
EBITDA
(896,239)
(684,872)
31%
Less Depreciation
(205,723)
(127,100)
62%
Fair value of the warrants issued as per IFRS
2
Resulted in an increase in negative EBITDA
by 31%
Increase in line with growth in depreciable
assets
EBIT
(1,101,962)
(811,972)
36%
Negative EBIT increased by 36%
Less Finance Cost
(147,151)
(46,003)
220%
Finance Costs increased due to increase in
funding activities, see details in next slide
EBT
Less Taxes
(1,249,113)
(857,975)
46%
Resulted in increase in negative EBT by 46%
(27,827)
(54,767)
(49%)
Deferred tax provision has reduced as only
ER currently providing for deferred tax assets
EAT
(1,276,940)
(912,742)
Loss per share (Basic)
2.61 pence
1.53 pence
40%
71%
EAT loss increased by 40%
Basic Loss per share increased by 71%
Loss per share (Diluted)
2.37 pence
1.53 pence
55%
Diluted Loss per share increased by 55%
E. TIRUPATI SPECIALITY GRAPHITE PVT LTD
Tirupati Speciality Graphite Pvt Ltd (“TSG”) is a private Indian company promoted by the founders of Tirupati Graphite
Plc. TSG is engaged in downstream processing of flake graphite, development of graphene and advanced materials
and mineral processing technology development.
The Company refers to downstream processed flake graphite products which are manufactured by the Company
through TSG as specialty graphite products. Specialty graphite is a term used by the Company whereby primary flake
graphite (primarily from its Madagascar operations), undergoes further processing to upgrade the purity of the flake
graphite material from c.94%-96% Total Graphitic Carbon (“TGC”) to >99% TGC and is subjected to other treatments
to make it appropriate for use in various hi-tech applications including energy storage, flame retardants, thermal
management, composites, lubricants and various others. Volumetrically, hi-tech applications currently constitute
approximately 30% of the global flake graphite consumption, although value wise, its market size could well exceed
that of primary flake graphite owing to the value added in downstream processing. High-tech applications of graphite
also contribute extensively to the green economy thus, graphite represents a critical material in global efforts of
reducing GHG emissions.
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Graphene is the first two-dimensional material discovered and deciphered by mankind and exhibits properties
hitherto unseen in any other material. Since its discovery in 2004, extensive research has been undertaken globally
into the development of processes and applications of graphene.
On 10 October 2018, the Company entered into a conditional agreement for the acquisition of 100% of the existing
issued share capital of TSG as a forward integration prospect and on the background of its ability to provide
development capital for TSG plans. The consideration for the acquisition was £2,000,000 based on the valuation of
TSG determined at the time in accordance with the related regulatory framework in India for such an acquisition. The
consideration was agreed to be satisfied by the issue of 10,000,000 Ordinary Shares in the Company at an issue price
of £0.20 per share, being the price at which the Company raised equity capital at that time as an unlisted company.
The completion of the acquisition of TSG by the Company remains subject to regulatory approvals which could only
be progressed once the Company demonstrated the expectations as is further described below:
● The Central Government of India formulated an act to encourage external payments and across the border
trades in India known as the Foreign Exchange Management Act (“FEMA”), which is regulated by the Reserve
Bank of India (“RBI”).
● An investment made by an Indian entity outside of India is defined as Overseas Direct Investment (“ODI”)
under FEMA under which the Company is considered to be an ODI given its Indian founders.
● An investment made by an ODI in India is defined as Foreign Direct Investments (“FDI”) and the transaction
and any further investment by the Company into TSG are therefore considered as FDI under FEMA owing to
the Company being registered in England and Wales.
● As the acquisition constitutes a share swap arrangement, approval by the RBI must be obtained for the
acquisition transaction of TSG under FEMA regulations.
● All transactions under FEMA that are required to be reported to, or approvals sought from the RBI must be
made through “Authorised Dealers” of Foreign Exchange under FEMA. TSG's banker, ICICI Bank India, is
considered to be the Authorised Dealer.
● Having consulted its legal counsel and the Authorised Dealer, it has been determined that the transaction is
of an unusual nature from a FEMA perspective and to ensure success in securing RBI's approval, the Company
and TSG must establish:
● Bona fide purpose of the transaction with the two clinching factors being the integration of both
parties to the transaction and the Company’s ability to provide the capital needs for development
of the projects planned by TSG;
● There is ‘no round tripping’ (i.e. the outflow of Foreign Exchange from India as an ODI and return of
the funds back to India as FDI); and
● The Company is registered in a well-regulated jurisdiction, which is demonstrated by its admission
to the official list for trading of its ordinary share on the main markets of the LSE which is regulated
by the FCA.
●
It was therefore determined that the application to the RBI for approval of the acquisition transaction should
be made following the Company’s IPO and listing on the main markets of the LSE and the Company having
raised sufficient capital which demonstrates that:
● The Company has sufficient funds to deploy as initial investment into TSG and that is has ongoing
access to further capital for development of the business of TSG;
● The number and diversity of the shareholder base of the Company including the fact that the capital
it has raised is primarily from the London capital markets which establishes that the funds available
to the Company are not investments that have emanated from India, and therefore there is no round
tripping of funds.
● Admission, whilst not a condition under the FEMA regulations, further demonstrates that the
Company operates under a well-regulated and advanced jurisdiction.
Following the Company’s IPO, the Company was advised by its legal adviser that it has a Concert Party for the purposes
of the Rule 9 of the Takeover Code comprising TCCPL, Shishir Poddar and his family and Hemant Poddar and his family.
The fact that the holdings by the Concert Parties in the Company had dropped below 50% following the IPO, there
were restrictions on issue of new shares in the Company to the founders who constitute the Concert Party which
necessitated a whitewash process for the issuance of the consideration shares for the pending acquisition. The
Company and its advisors, Bird & Bird and Optiva Securities Ltd, have made preparations for a whitewash and a
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Annual Report and Financial Statements
period ended 31 March 2021
meeting of the independent shareholders of the Company has been convened for late October 2021. Post approval of
the whitewash, the process for approval of the RBI for the acquisition is expected to be recommenced.
In the interim, the Board of the Company in its meeting held on 17 January 2021 approved investment in the equity
of TSG by way of fresh equity subscription as may be permissible under FEMA and the Chairman was authorised to
take all necessary steps for the purpose. Consultations were made by TSG for the purpose, and it was determined that
such equity infusion shall also require the approval of RBI and a current valuation of TSG shall be required from a
Category 1 Merchant Banker in India for progressing the new equity subscription by way of FDI. Thus, no equity
infusion was made in TSG during the reporting period by the Company and a process for seeking the ability for such
infusion is being undertaken.
Although the acquisition of TSG is not yet complete, the Company continues to work in close coordination with TSG
and an account of the activities of TSG during the reporting period is provided below:
a) Development of specialty graphite products and projects
In July 2019, TSG commissioned the Patalganga project for the manufacturing of expandable graphite
composites for use in flame retardant and thermal management applications amongst others, and to act as
a precursor to establish end-user markets and further de-risk development and execution risks ahead of start
of construction of its planned larger scale, integrated speciality graphite projects.
Through the reporting period the Patalganga project continued its expandable graphite composites
manufacturing operations and also served as a support centre for sales of the Company’s Madagascan flake
graphite to smaller consumers in the Indian market. Concurrently, the Patalganga project was used as a
showcase to larger prospective customers and to develop direct shipments channels to larger consumers for
the Company’s Madagascar flake graphite.
TSG is further engaged in developing expandable graphite based advanced materials and during the reporting
period, successfully developed a launched a composite flame retardant product for use in manufacturing
Polyurethane Foam meeting the standards of EU, EN45545 at Hazard Level 3, which is the standards adopted
by Indian Railways for use in the manufacture of foams for railway sleeper coaches. It further achieved REACH
Certification of its expandable graphite products for sales within the European Economic Zone and since, has
been engaged in progressing qualification and commercial sales to various companies in Europe alongside
other markets it is serving.
On its further development path, TSG is progressing:
● Relocation of its existing facilities in Patalganga from currently leased premises to owned premises
acquired from the Maharashtra Industrial Development Corporation;
● Extending the capabilities of the Patalganga facility to add high purity graphite and potentially a
small commercial scale spherical graphite facility; and
● Development of a larger scale, integrated speciality graphite project with a capacity of 30,000tpa to
be developed in two equal phases.
b) Tirupati Graphene & Mintech Research Centre (‘TGMRC’)
Scientific advances and technological change are important drivers of economic performance and scientific
research results in the creation of new knowledge, creating expanded capabilities that enable development
of novel technologies and new processes and products. Advances in research are driving technological
changes faster which will have high economic, social and environmental values. Advancements in new age
materials have the potential to extensively contribute to the goals of sustainability, which forms the guiding
principles of TGMRC, a project established and being developed by TSG in Bhubaneswar, India.
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 primary and specialty
graphite processing and technological support to the Company and its customers. TGMRC has also developed
a unique process for the manufacture of graphene at a commercial scale and is engaged in development of
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period ended 31 March 2021
graphene based advanced materials. It is also working on developing other applications of graphene in its
own right as well as in association with industrial and research houses in target application areas.
In addition, TGMRC is leveraging its expertise in 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 through
fee income from its complimentary industry consulting service operations which it has established.
The first stage of facilities at TGMRC include startup facilities for the manufacture of graphene and kilograms
scale of a novel aluminium graphene composite (‘Al-Gr Composite’) which was developed and commissioned
in July 2021. The facility is being further developed to expand capacities and capabilities over the next three
years in accordance with the Company’s MTDP. TSG and the Company have engaged with various prospective
users of both graphene and its Al-Gr Composite with a view to develop commercial applications of these new
age materials.
The regulatory limitations in providing equity capital to TSG shall remain a bottleneck until completion of the
acquisition, although the Company continues to engage with TSG within the limitations to overcome the regulatory
hurdles.
F. HUMAN CAPITAL
The key contributor of the Company’s core competencies, and those that are the key drivers of its value creation
efforts are derived from its human capital. The Company was created by a combination of entrepreneurial expertise
in the flake graphite and graphene space from its principal founder Mr. Shishir Poddar, serving as the Executive
Chairman & CEO since inception, combining the support of co-founders and NED’s Mr Christian G St. John-Dennis,
providing the link to the London capital markets, and Mr Hemant Poddar, brother of the Executive Chairman.
The Board of the Company, which constituted the three founders since inception, has been strengthened by the
addition of two independent Non-Executive Directors, Mr. Rajesh Kedia in 2018 and Mr. Lincoln John Moore in the
year under reporting.
The executive management team of the Company, headed by the Executive Chairman & CEO, is constituted by leaders
in the areas of corporate and financial affairs, marketing and business development working alongside operations
teams and project heads appointed by the Company to manage the subsidiary business units within TSG and TGMRC.
The members of the executive management team and its business unit heads are appropriately qualified and
experienced in their respective areas of activities to carry out the roles and responsibilities required to deliver on the
Company’s MTDP and to effectively manage the operational and corporate affairs of the Company.
The ‘Key appointments to strengthen and support rapid growth of the Company across all divisions’ section of the
Strategic Report provides further details of appointments made by the Company during the reporting period.
Brief bios of the members on the Company’s Board and senior management can be seen on its website
https://tirupatigraphite.co.uk/management/
The Company believes that its human capital is vital to the techno commercial advantages leading to its low CAPEX
intensity, lowest quartile OPEX intensity, in house design and EPC capabilities, exploration and evaluation expertise,
product and capital markets engagement and other areas which are required to continue creating value to
shareholders. Therefore, the Company remains conscious of suitably rewarding its human resources in line with its
continuing successes.
G. FINANCE & CORPORATE FINANCE
The Company considers it vital for its ongoing success and competitiveness that it:
●
●
●
has adequate financial resources to meet its ongoing investment and working capital needs;
prudent in the use of its financial resources which is also embedded in its ecosystem; and
is able to maintain its low CAPEX and OPEX advantages as one of its key competitive advantages.
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period ended 31 March 2021
a) Ensuring capital adequacy
Since inception, the Company has indulged in extensive outreach to investors through its Broker and has
participated in various events to make information about its projects and development plans available. In the
lead up to its IPO, the Company conducted road shows for institutional investors, held one to one and group
meetings with professional investors and undertook a successful retail offering through PrimaryBid providing
all classes of potential investors with the investment opportunity at its IPO which saw it successfully raising
gross proceeds of £6 million. Following IPO in December 2020, the Company undertook a follow-on placing
which completed in April 2021 raising gross proceeds of £10 million at an issue price of 90p per ordinary share
which was oversubscribed. The funds raised through the follow-on placing provides the Company with the
ability to expedite its expansion plans across its businesses as well as providing a cushion for its capital
planning and investment activities.
b) Extending reach to investors and optimising capital raise costs
The reach and visibility of the investment opportunities in the Company and therefore, its ability to raise
capital was limited as an unlisted company. Whilst it was successful in raising capital pre-IPO, the continued
to prepare itself for life as a listed entity. The successful admission to trading of the Company’s ordinary
shares on the LSE transformed the Company’s visibility and reach to prospective investors. Post year end, the
Company further initiated the process of listing for trading of its ordinary shares in the New York based equity
trading platform OTCQX that promises to further extend its reach to investors in North America, which is
expected to complete in due course.
It is worthwhile to note that the listing of the Company’s ordinary shares has led to the ability to raise capital
at a significantly lower cost as compared to the pre-IPO and IPO costs for raising capital.
Prudent use of financial resources
The Company continues to take a prudent approach in the use of its capital resources which is demonstrated
by its development and funding plans which target early-stage revenues; maximising the use of in-house
capabilities and expertise; focus on controlling of its exploration expenditures and project development
investments prior to first revenues from operations; and ongoing optimisation to reduce its operating costs
and improving margins.
During the year, post its IPO, the Company prioritised development of its Vatomina project upscaling the
output capacity of the first module by 150% of the originally planned capacity, which was designed to
capitalise on its outstanding operating margins achieved from the first 3,000 tpa module at Sahamamy.
Simultaneously, the Company implemented the re-establishment of the hydro power plant at Sahamamy
which is aimed at reducing use of fossil fuels as well as a reduction in operation costs and further improving
its already healthy operating margins.
To further enhance its capacities across its projects, the Company targets to reach the following production
capacities and product capabilities upon completion of the first phase of its MTDP which is expected to be
completed by mid of 2022:
● 30,000 tpa of primary graphite mining and processing in Madagascar across the Sahamamy and
Vatomina Projects;
c. 16,000 tpa of downstream speciality graphite in India under development by TSG;
●
● First stage of its Graphene and Technology centre with industrial scale graphene manufacturing
capabilities, advanced materials development and mineral processing technology consultancy to
capitalise on near-term revenue and commercialisation opportunities.
Operations at its Sahamamy project are ongoing and generating positive operating margins as outlined above
under “Sahamamy operations and development”. With operations and production from the first 9,000 tpa
module at Vatomina coming on-stream, the Company expects to be able to improve on the gross operating
margins which it has already achieved at Sahamamy as Vatomina is targeted to yield even lower costs of
production as the 9,000 tpa module is three times higher than the 3,000 tpa module in operation at
Sahamamy.
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period ended 31 March 2021
c) Prudency in controlling CAPEX and OPEX cost advantages
One of the Company’s key advantages over its peers in its primary mining division is its proven ability to
execute and deliver its projects bringing on new capacities at industry lowest capital intensity (“CI”) per unit
of production capacity and lowest quartile operating costs.
Some of the factors that contribute to the Company’s advantage in terms of its CI include:
● Use of in-house expertise of the Executive Chairman & CEO and senior management team members
who collectively have decades of experience in design and development of graphite processing
facilities;
● Technological advantages of having a lean process design and custom material handling equipment;
● Proven in-house EPC capabilities including plant design construction and fabrication, infrastructure
development and installations with self-owned fleet of equipment;
● Sourcing of core processing plant equipment such as milling and flotation equipment which are
custom built for the Company from the equipment manufacturing facilities of the founders which
have been used for flake graphite processing an evolved over decades; and
● Sourcing of other equipment such as dehydration and drying systems, and finishing and screening
systems from approved suppliers which have evolved over years as tailor made to suit flake graphite
processing with proven track record; and
● Engineering facilities created by the Company at the project site which enables it to manufacture
●
bunkers and silos, conveyors and similar components of the processing plant; and
In house capabilities to design and set up ancillary facilities like power supply systems, water supply
lines and tailing management facilities.
Regarding OPEX, the Company’s demonstrated lowest cost quartile achievements are the result of a number
of factors, some of which are as follows:
● Nature of the deposits being saprolite, allows for free dig mining using smaller sized fleet of
earthmoving equipment and avoids the need for blasting;
● Favourable flake size coupled with saprolite ore reducing milling requirements resulting in a leaner
process;
● Proprietary process technology including SAGE which separates the sand in the first phase of the
process and reduces the volume of ore through the beneficiation plant reducing wear and tear and
energy requirements;
● Optimised use of attrition and milling techniques minimising the operating costs and energy
consumption in the process; and
Locational advantages and short distance connectivity to shipping ports.
●
The Company recognises that its core cost advantages are derived from its internal expertise inherited from
the principal founder and experienced Human Capital. As the Company continues to grow its businesses and
expand its human capital, the existing human capital provides the know-how for the new personnel to
undergo on-the-job training and development of skills and expertise necessary to complement and enhance
the strength of the teams within each business unit of the Company. Training and development, vocational
and operations training are also provided to the in-country local workforce of the Company to give them the
necessary skills and expertise required by the Company for its operations which will help it maintain its cost
and other advantages.
H. INORGANIC GROWTH OPPORTUNITIES
The Company’s management are active and cognisant of opportunities for inorganic growth through acquisitions, joint
ventures, partnerships and/or collaborations in the graphite and graphene sector and have identified a number of
priority targets which it actively monitors.
On 17 August 2021, the Company announced that it had entered into a binding acquisition agreement for the
acquisition of the entire issued share capital of Suni Resources SA ("Suni Resources") (the "Acquisition"). Suni
Resources holds the Mozambique portfolio of graphite assets of ASX listed Battery Minerals Limited ("Battery
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Annual Report and Financial Statements
period ended 31 March 2021
Minerals"), which includes the construction initiated Montepuez Graphite Project ('Montepuez" or the "Montepuez
Project") and the advanced feasibility study stage Balama Central Graphite Project ("Balama Central" or the "Balama
Central Project"). The Acquisition includes all associated assets, infrastructure, permits, licenses, and intellectual
property on both projects for a total consideration of AU$12.5 million (circa £6.6 million) in a cash and shares deal.
The Acquisition is subject, amongst other things, to the mandatory shareholder approval of Battery Minerals and
approval of the transaction by the Ministry of Mineral Resources and Energy in Mozambique.
Mozambique is home to commercially significant deposits of graphite and a key determinant of mining opportunities
in Mozambique is the global energy transition, which has driven demand for certain minerals needed to fuel electric
vehicles and vehicles that rely on hydrogen fuel cells. Mozambique is well-positioned to take advantage of this market
boom, with mining operations already expanding across Cabo Delgado where the projects are located as well as Gaza,
Manica, Maputo, Nampula, Niassa, Tete and Zambezia.
The Acquisition is in line with the Company's stated strategy of diversifying its resource base and mitigating country
risk. The two complementary world-class graphite deposits, spread over a combined 18,500 hectares permit area
would add mineral resources of over 152 million tonnes at 8.5% TGC upon successful completion of the acquisition,
which would significantly increase the Company's JORC Code (2012) mineral resource base and at the same time,
complement the Company’s existing mix of predominantly jumbo and large flake graphite products from its
Madagascan projects.
Extensive pre-development work and a Definitive Feasibility Study ("DFS") has been conducted by Battery Minerals on
the Montepuez project and construction was initiated for a first stage of the projects development with a c. 100 person
base camp, plant area grading and tailings dam construction completed or substantially completed and certain long
lead equipment items, including a primary crusher unit on order with Battery Minerals having already spent over
AU$13 million towards construction activities to date.
Upon completion of the Acquisition, the Company intends to further optimise the project development plans
leveraging application of its extensive and proven expertise in developing graphite projects to minimise investment
and optimise operating costs while looking to retain the plans to develop an up 100,000 tpa operations in modules,
owing to visible and growing market opportunities in the green economy.
The Acquisition will further solidify the Company's divisional structure of primary mining and processing projects in
Madagascar, Sahamamy and Vatomina, and speciality graphite and graphene processing businesses in India.
I.
IMPACT OF COVID 19 PANDEMIC
The reporting period continued to be under the impacts of the pandemic. Some of the effects of the restrictive
measures on the Company’s operations during the reporting period are as below:
●
In Madagascar, the Company was fortunate in that its operations, being a permitted industrial activity,
managed to avoid much of the lockdown orders that were issued by the Government of Madagascar from
mid-March 2020 and thus, was allowed to continue its operations.
● However, restricted movement of required inputs such as spares and fuels became an impediment to its
operations which resulted in bottlenecks in the Company’s operations from time to time.
● Movement of finished goods from the plant to the port was affected from time to time and the Company
managed the movement with support from the local Government.
● Travel of senior management team members was restricted thus requiring prolonged periods of deputation
and limited the extent of time at site of some key senior management team members.
● A temporary reduction in consumption of graphite was reported earlier during the year and temporary
closures were inevitably announced by some buyers and competitors with the situation only beginning to
normalise towards the latter part of the year as global trade started to recover from pandemic levels.
● The reduced consumption resulted in a moderate softening of graphite prices over the first 3 quarters of the
year which, as reported, has started to recover over recent quarters into 2021 as global markets and demand
started to recover to pre-pandemic levels.
● The Company is pleased to confirm that it did not have any reports of any of its employees at the project sites
testing positive for COVID-19 to date.
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● The development of the first 9,000 tpa module at Vatomina was completed in early September 2021 which
was slightly delayed due to increased timeframes required for procurement of equipment and delayed transit
times of shipping and other logistics.
● Global sentiments for diversifying supply sources away from China have led to increased approaches from
buyers in Europe and other consuming locations for the Company’s graphite.
While the global Pandemic has not caused any material or significant negative impacts on the Company’s operations
to date, except to the extent described above, it has opened opportunities for the Company as well. The Company
adapted its operations accordingly by implementing appropriate safety and testing protocols at all its locations and
taking necessary steps to minimise the risk to its operations and its human capital. It also promoted vaccination
amongst its team members and believes that it is now better equipped and prepared. Not only was it able to continue
its operations throughout the pandemic but was able to register growth in its businesses by successfully completing
building additional operating capacities and successfully continued to expand markets for its products. With the global
recovery from the pandemic picking up, the Company expects to continue its progress on all fronts, unless we see a
global surge related to a pandemic or health emergency with severity higher than what was seen in the period.
This report was approved by the Board of Directors on 17 September 2021 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
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Annual Report and Financial Statements
period ended 31 March 2021
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 2021), and forms part of our UK Annual Report and Accounts for the year ended 31 March 2021 (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 continues to progress development of its business, adequate financial resource mobilisation and other
corporate activities. The significant events since the end of the year include:
●
●
completion of an oversubscribed placing to raise gross proceeds of £10,000,000 completed in April 2021;
signing of a binding agreement subject to certain conditions for completion for acquisition of the portfolio of
graphite assets in Mozambique held by ASX listed Battery Minerals Ltd.;
● Commissioning and start of sellable production from the new 9,000tpa flake graphite facility set up at the
Company’s Vatomina project in Madagascar;
● Start of development of 18,000 tpa flake graphite facility at the Company’s Sahamamy project in Madagascar
Results for the year ended 31 March 2021
A summary of key financial results is set out in the table below. The Group and Company’s primary financial statements
are found on pages 60 onwards.
In summary:
● The net interest cost for the Group for the period was £147,151
● Administrative expenses from continuing operations £1,737,304
● Group loss after tax from continuing operations was £1,276,940
● Basic and diluted loss per share from continuing operations was 2.61 pence & 2.31 pence respectively
● As at 31 March 2021, the Group had cash and cash equivalents of £1,644,189
The shares issued during the year, are detailed in note 20.
Key performance indicators
The key performance indicators of the Group are set out below:
Revenue
Cash and cash equivalents
Gross assets
Earnings per share
2020-21
£
1,123,426
1,644,189
9,933,700
(2.61p)
2019-20
£
793,577
46,640
6,329,475
(1.53p)
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)
the likely consequences of any decision in the long term;
the interests of the Company’s employees;
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c)
d)
e)
f)
the need to foster the Company’s business relationship with suppliers, customers and others;
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
and advanced materials company, as outlined in detail in the Strategic Report.
The strategies developed and executed by the Company has resulted in achieving value creation and de-risking of its
development plans adopting the step-by-step approach under the leadership and guidance of the Board of Directors.
Some of the key decisions taken by the Directors during the year under review and the significant outcomes achieved
by the Company aimed at delivering on its strategies included:
• Maintaining full focus and commitment on becoming a listed entity
Since its inception, the Company’s strategy was to become a listed entity on an international exchange of
which it chose the standard segment of the main market of the LSE. As expected, the Company’s path to
becoming a listed entity faced various headwinds along the way but throughout, the Board’s focus was
unwavering and during 2019 and going into the 2020 reporting period, the Board resolved to remain fully
committed to completing the IPO process and listing the Company as soon as practicable.
The Company had been in a good position to achieve its IPO during Q2 of 2020 when the global pandemic
started to grip the world and invariably this had a significant impact on global markets and specifically on the
capital markets in London and the landscape for new IPO’s.
After the initial shock of the lockdown measures imposed by the government in the UK and around the world
and as people and businesses adapted to the new ‘norm’, the Company ramped up its efforts to achieve its
IPO as was mandated by the Board and on the 14th December 2020, the Company’s shares were admitted
to trading on the LSE marking the start of the Company’s life as a listed entity.
The successful listing of the Company on the LSE fulfils the Directors obligations under Section 172 (1) of the
Companies Act to promote the success of the Company for the benefit of the Company’s members.
• Appointment of Mr Lincoln John Moore as an independent NED to further enhance the depth and
experience of the Board
The Company had always intended that prior to becoming a listed entity it would be advantageous to
Company and for the benefit of its shareholders to expand the Board representation to a complement of five
members who shall possess a wide and diverse range of skills and experiences which would bolster the
strength and independence of the Board. With this objective in mind, the Company appointed Mr Lincoln
John Moore as a Director on 1 August 2020. Mr Moore is an experienced company director who has held
various executive and non-executive positions with LSE listed companies. With his background as a chartered
accountant, he compliments the Company’s financial governance and is a member of the Audit Committee
of the Company as well as providing valuable support and guidance to the Company on corporate financing
and strategic activities utilising his extensive networks across London and Africa in particular.
The successful expansion and strengthening of the Company’s Board fulfils the Directors obligations under
Section 172 (1) of the Companies Act to promote the success of the Company for the benefit of the Company’s
members.
• Upscaling of Vatomina Project’s capacity in response to market demand
In response to continued increased demand for its high-quality flake graphite from Madagascar, the Company
took a strategic decision to upscale the capacity of the first module at its Vatomina Project by 50% to 9,000
tpa, which would result in an increase to near-term cash flows from operations.
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Tirupati’s modular development approach, coupled with its internal expertise, provided the Company with
flexibility to respond to evolving graphite market conditions. The modular approach contributed to the
Company’s strategic decision to increase the capacity of Vatomina’s first module, which was already at an
advanced development stage, from 6,000 tpa to 9,000 tpa, representing a 50% increase in installed
production capacity and would be done at an estimated 30% increase in CAPEX. The increased capacity is
expected to boost near-term cash flow generation from Vatomina, enabling the Company to capitalise on
rising demand and prices for its Madagascan primary flake graphite.
The additional installed capacity at Vatomina directly contributes to an increase in the overall production
capacity from the Company’s Madagascan primary flake graphite projects under its modular medium-term
development plan (‘MTDP’) from the originally planned 81,000tpa to 84,000tpa by 2024.
The strategic decision to increase the capacity of Vatomina’s first module fulfils the Directors obligations
under Section 172 (1) of the Companies Act to promote the success of the Company for the benefit of the
Company’s members.
•
Stage II Exploration and Drilling Programmes at Vatomina and Sahamamy Projects
In February 2021, the Company announced the commencement of its Stage II exploration and drilling
programme (“Stage II Programme”) across its primary flake graphite projects in Madagascar. It appointed
SRK Mining Services (India) Private Limited (“SRK”), a consulting practice of international mining consultants
SRK Consulting, to oversee the Stage II Programme and update and upgrade its current Mineral Resource
Statement (“MRS”) for the Vatomina and Sahamamy Projects in Madagascar under the current Competent
Person's Report, which was contained in the Company's listing prospectus.
The Stage II Programme, which is anticipated to complete by end of 2021, will target enhancing the
Company's global resource base by:
●
increasing geological confidence in areas currently categorised as Indicated and Inferred Mineral
Resources;
● establishing additional Mineral Resources in areas previously identified by SRK as Exploration
●
Targets and open extensions; and
Include:
o
o
o
c.10,000 metres of auger drilling;
c.1,000 metres of trenching; and
c.5,000 metres of diamond core drilling.
Investing in the Stage II Programme to update and upgrade its MRS fulfils the Directors obligations under
Section 172 (1) of the Companies Act to promote the success of the Company for the benefit of the Company’s
members.
• Key appointments to strengthen and support rapid growth of the Company across all divisions
Despite its relatively short existence as a listed entity, the Company through its founders has an extensive
history established from decades of experience in the graphite space. Over these years, key relationships
were forged by the founders with industry leaders and top-end specialists in their respective fields around
the world. Following the Company’s listing, in order to strengthen and support its rapid growth plans the
Company was able to up tier and formalise its relationships by making a number of strategic appointments
across all of its business divisions which notably included:
1) Dr Matthieu Gresil (Ph.D), a leading researcher and renowned expert on polymers and composites,
as adviser and consultant to the Company for market research and development of graphene
products.
2) Dr S. K. Biswal (Ph.D), an eminent scientist and technocrat specialising in the fields of graphene and
mineral processing technology, as head of the TGMRC.
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3) Dr S. K Sathpathy (Ph.D), a former Executive Director of National Aluminium Company Ltd.
(“NALCO”)1, as an advisor to the Company, focussed on application of graphene in aluminium
manufacturing smelters and graphene aluminium composites development.
4) Dr P. Dash (Ph.D), who is also focused on graphene engineering science and was awarded a PhD
under the guidance of Dr S. K. Biswal.
5) Over 30 engineers, geologists, technologists, and specially trained technicians across all three
business units.
Continuing to invest in its human capital in line with is business development fulfils the Directors obligations
under Section 172 (1) of the Companies Act to promote the success of the Company for the benefit of the
Company’s members.
• Placing with institutional and other investors to raise £10m to fast-track development
The global pandemic had a devastating impact on the lives and livelihoods of everyone around the world and
changed the way people live, travel and do business with each other which has set what is often referred to
as the ‘new norm’ in our societies.
Governments and policy makers are now focussing on recovering their nations from the impacts of the
pandemic and almost every major economy and trading block are seizing on the opportunity to go greener,
becoming more digital, more electric, building more social and economic resilient and overall reducing
reliance on other nations and economies by shoring up their supply chains.
The pandemic recovery efforts of nations around the world have led to renewed focus on securing critical
raw materials required to power the electric revolution and on sustainable supply chains as well as moves by
governments and industries to reduce reliance on Chinese sources of supply particularly of critical raw
materials.
Since listing, the Company made significant progress across all three business divisions under its MTDP.
Demand for its graphite products continued to rise across each of its three divisions and as a result of the
increased demand for flake graphite on the back of EV and flame retardant applications, the Company
decided on expediting the development of its next modules by initiating a placing with institutional and other
investors (the ‘Placing’) at a price of £0.90 per share (the ‘Placing Price’) to raise gross amount of £10 million.
The net proceeds of the Placing which was oversubscribed and closed in April 2020, was primarily used to
expedite the Company’s MTDP to take advantage of the strong market demand for its products and to:
● Accelerate development of the next 18,000 tpa module at the Sahamamy primary flake graphite
project in Madagascar (‘Sahamamy’) which has all requisite approvals in place. Total capacity across
both Madagascan projects is anticipated to be 30,000 tpa by Q1 2022, a ten-fold increase since the
Company’s admission to the Official List in December 2020.
● Redevelop hydro power facilities at Sahamamy to meet the power requirements of current
operations through renewable energy and carry out a feasibility study for c.900-kilowatt of
additional hydro power facilities to meet most of the power requirements for the anticipated 30,000
tpa capacity.
Increase capacity of the Company’s downstream specialty graphite projects through TSG from 1,200
tpa to 16,200 tpa by H1 2022 with the setup of an integrated, multi-product 15,000 tpa Speciality
Graphite Project with throughput and product capabilities consisting of:
●
o 3,000 tpa expandable/intercalated graphite products;
o 3,000 tpa spherical graphite for L-ion batteries;
o 3,000 tpa micronized graphite for high-tech specialty applications including lubrication,
polymers, and composites; and
1 NALCO, is a government company having integrated and diversified operations in mining, metal and power under the ownership of Ministry of
Mines, Government of India. It is one of the largest integrated Bauxite-Alumina-Aluminium-Power Complex in the country encompassing bauxite
mining, alumina refining, aluminium smelting and casting, power generation, rail and port operations.
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o 6,000 tpa high purity flake graphite for graphene and other high purity graphite
applications.
● Enable fast-track installation of industrial scale graphene manufacturing capabilities at the Graphene
& Technology Centre to capitalise on near-term commercialisation opportunities; and
● For general working capital purposes.
Identifying and seizing on opportunities to expedite its project developments in line with market conditions
fulfils the Directors obligations under Section 172 (1) of the Companies Act to promote the success of the
Company for the benefit of the Company’s members.
• Development of Ground-Breaking Graphene-Aluminium Composite
In May 2021, the Company announced the development of a ground-breaking graphene-aluminium
composite (‘Al-Gr Composite’ or ‘the Composite’), which retains aluminium’s key properties including its
lightweight, whilst adding properties from graphene including increased thermal conductivity, electrical
conductivity, and improved mechanical properties; the properties that generally make copper a preferred
material in electrical and thermal conductivity-based applications. Notably, the Al-Gr Composite has shown
superior thermal conductivity and >95% of copper’s electrical conductivity to date, which the Company
anticipates can be increased with further optimisation of the material.
The Al-Gr Composite developed by TGMRC, with its high conductivity properties and improved mechanical
strength, has strong potential to substitute or displace the use of copper across various high-tech, weight
sensitive, electrical and thermal conductivity applications, including in wires and cables in motors for electric
vehicles, aerospace, space and satellite technologies, and in heat exchangers, heat sinks and similar thermal
conductivity applications such as solar water heaters.
Importantly, the proprietary manufacturing process which has been developed by Tirupati is commercially
scalable, tested and has already been used to manufacture batches of over two hundred grams of the
pioneering Al-Gr Composite. The table below depicts the best achieved results obtained during the
optimisation phase as measured by TGMRC:
PROPERTIES/MATERIAL
CHARACTERISTICS ASSESSED
COPPER
ALUMINIUM
TG AL-GR COMPOSITE
Thermal Conductivity (W/mK)
Electrical Conductivity (106 S/m)
Density (g/cm3)
Micro-Hardness (VHN)
Scalability of Process
Chemical Composition
402
59.6
8.96
100 ± 10
Yes
Cu
205
36.9
2.7
45 ± 5
Yes
>100% of copper
>90% of copper
2.79
150 ± 10
Yes
Negligible Aluminium Carbide
Al
& Oxidation
Significant achievements and material properties of the Al-Gr Composite are as follows:
● Micro-hardness increased >300% over aluminium, which is 50% higher than copper
● Thermal conductivity increased to >200% over aluminium, which is better than copper values
● Electrical conductivity increased to >150% over aluminium, which is >95% that of copper; the
Company aims to increase this with further optimisation
● The composite is almost free from oxidation and carbide forms of aluminium, a critical achievement
breaking the key technological barrier in development of the Composite
Continuing to invest in its R&D and making technological achievements such as the Al-Gr Composite fulfils
the Directors obligations under Section 172 (1) of the Companies Act to promote the success of the Company
for the benefit of the Company’s members.
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The Directors believe these, and other key strategic decisions taken will generate value for our shareholders in the
long term through maximising the Company’s future profitability while continuing to de-risk its 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, employing environmentally friendly and sustainable practices, proactively
engaging with the local communities, and continuing to maintain good governance practices and procedures across
all its business divisions.
In doing the above, the Directors believe they are fulfilling their obligations under Section 172 (1) of the Companies
Act to promote the success of the Company for the benefit of the Company’s members.
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 and listed companies. In its listing prospectus
the Company provided extensive information about its business development and since being listed, the Company has
proactively provided shareholders with information on the Company’s developments and progress. Additionally,
periodical communications with project updates and reporting material developments and operational achievements
by direct email communications as well as via the Company’s website continue to be provided to shareholders and
markets in general. 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.
The Board further believes that 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 the Company’s human capital is the primary asset of the Company and is 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 human capital is 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 is conscious of the risk factors that can affect the Company’s performance and are aware
that they must always be 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 22 to
the financial statements:
● Capital risk management
● Market risk
● Credit risk
●
Liquidity risk
● Currency risk
The Company understands 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.
Risk/Uncertainty
Mitigation
Issue
Financial
Strategy
first phase of project
The Company’s
development and implementation has been
dependent on the capital raise from investors
and any delay in funding arrangements may
and
delay
implementation.
development
project
the
Investor support may be negatively impacted if
there are delays in achieving its strategy’s
intended goals.
Competition
risk
There can be potential threats 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.
The first phase of the Company’s projects are
operational and generating operational cash
flows with the first unit of Vatomina coming
on stream from 3Q 2021. The Company
completed its IPO in December 2020 and with
its listing it secured its ongoing access to
extended capital markets.
The proceeds of the Placing provided the
Company with the capital required to
complete the first phase of its development
plans which will bring it to 30,000tpa of
primary capacity in Madagascar, 16,200tpa of
specialty graphite capacity and commercial
scale production of graphene which provides
a solid base for the follow-on development
under its MTDP.
Setting an example by demonstrating higher
achievements than projected.
R&D continues to be a core pillar of the
investments and focus which
Company’s
continuously enhances our innovative process
to ensure higher quality products and a
consistent competitive edge is maintained by
its competitors. The
the Company over
management has a long and deep heritage in
the field and are well connected with the end
intermediary
users (consumers) and the
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Company's
Management
Performance
and Efficiency
Attraction and
retention of
key employees
Brand,
reputation, and
trust
implement
the Company's
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 equipped
strategy,
to
mismanagement of project operations at any
level could lead the business to suffer, which
may impact the Company's performance and
profitability. The responsibility to manage
multiple projects across different jurisdictions
at the same pace while ensuring quality and
sustainability sits with the Board and the
Company's management team. Continuous
growth in sales and profits largely depends on
the Company's management team's ability to
expand
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.
its operations and manage
Even though arrangements with the respective
employees are in place to secure their services,
these services cannot be
retention of
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.
The Company’s brand will suffer if it loses trust
and transparency in its business. If it cannot be
firm in the face of ethical, legal, moral or
operational challenges, its reputation may be
damaged.
suppliers into the primary and specialised
graphite industry.
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 that the Company’s
management team has the ability to deliver
on all fronts and see this as a strength for the
Company.
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
influence, continued talent hunt and
alternative key human resource development
and training are ongoing activities.
The Group's processes and policies set out
how it can make the right decisions for its
customers,
suppliers,
colleagues,
communities, and investors.
It has developed
communication and
engagement programmes to listen to its
internal and external stakeholders and reflect
their needs in its plans.
The Company maximises the value and impact
of its brand with the advice of specialist
external agencies and in-house expertise.
As its business grows and develops, it will
remain strongly focused on protecting the
strength of its Group’s reputation through
leadership and cultivating open relationships
with all stakeholders.
34 | Page
Tirupati Graphite plc
Strategic Report
Annual Report and Financial Statements
period ended 31 March 2021
Data security
and privacy
risks of
increasing
With
cyber-attacks
threatening data security, the Company must
ensure that it understands the types of data
that it holds and secure it adequately to
manage the risk of data breaches.
Performance
If the Company’s strategy is not effectively
communicated or implemented, its business
may underperform against
its planned
objectives.
Operational
Risks
include
The current operations of the Company
generally
exploration mining,
processing, and production, any of which may
be impacted by factors which are outside of the
Company’s control.
Volatility of
Commodity
and Equity
Prices
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.
Geopolitical,
Regulatory and
Sovereign Risk
The primary flake graphite Projects are located
and
and
in Madagascar
technology Projects in India and are therefore
subject to the risks associated with operating in
a foreign jurisdiction.
downstream
The Company has active monitoring processes
to identify and resolve IT security breaches,
and to investigate and mitigate any possible
threats.
A platform with a high-end security system is
under development.
The
executive
Company’s
management and operational units meet
regularly to review performance risks.
Board,
An ongoing communication process informs
its 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.
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 risks like technology, operational,
mining, financial – cash flow and revenue etc
are appropriately addressed with stringent
review on the investment made in early
stages.
As the Group is very well diversified in its
upstream and downstream projects, the
management can mitigate this risk by
pursuing
low-cost production, allowing
profitable supply throughout the commodity
price
the price
volatility/uncertainty.
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.
cycle, and balancing
As a mitigation, the Company further may
consider adding primary activity at one more
location.
India is the fastest growing major economy
and is 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
35 | Page
Tirupati Graphite plc
Strategic Report
Annual Report and Financial Statements
period ended 31 March 2021
Technology
Environmental
and Health and
Safety Risk
If the Company does not invest enough or
efficiently or invest in the wrong areas, it may
not be able to deliver its customer proposition
which could impact its competitiveness.
As it develops new technologies, the Company
must maintain the controls over existing
platforms, or it may impact systems availability
and security.
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
regarding environmental hazards.
developments on an ongoing basis.
There is a clear programme of investment to
maintain the integrity and efficiency of its
technology innovation infrastructure and its
security.
The Company is heavily inclined towards
technology and
innovation and work
rigorously on continued improvements.
The Company has obtained Environment
clearance for the first phase for both projects
in terms of the regulations in place. Further
extensions will be applied for and obtained
prior to start of construction of the next
phases.
The Company has also developed and
adopted environment friendly technologies to
minimise impact and will continue to strive to
take steps for improving the environment and
mitigating damage if any.
Corporate and social responsibility
The Group believes in extensive stakeholder engagement and remains committed to our corporate and social
responsibility projects. Details of activities performed by the group are contained in the Sustainability Report.
Greenhouse Gas Emissions
Greenhouse gas emissions, energy consumption and energy efficiency disclosures have not been provided in the
Annual Report because the Company has consumed less than 40,000 kWh of energy during the period.
However, historically the Company has voluntarily provided commentary on its CSR and environmental initiatives and
in the previous year’s annual report, it released its first Sustainability Report which gave an insight into some of the
activities and initiatives undertaken by the Company.
For this year, the Company will be publishing its second Sustainability Report as a standalone report which shall be
formulated against the Global Reporting Initiative (GRI) Index, one of leading industry benchmarks which has been
adopted by the Company.
The Sustainability Report will provide deeper insights on the various mechanisms and steps taken by the Company to
improve the lives of people in some of the most deprived regions and its workplaces, reduce environmental impacts
and to have environment friendly operations across the various legs of its business. The Sustainability Report will also
highlight the goals and targets set by the Company for the longer-term and the green technologies developed by the
Company. Shortly following the publication of our Annual Report each year, we intend to publish the Company’s
annual Sustainability Report.
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.,
36 | Page
Tirupati Graphite plc
Strategic Report
Annual Report and Financial Statements
period ended 31 March 2021
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. Consequently, the Board believes that the Group is well placed to manage
its business risks successfully.
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 17 September 2021 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
37 | Page
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2021
Directors’ Report
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 2021.
The Directors’ Report forms part of this Report.
Incorporation & admission to trading
The Company was incorporated in England and Wales on 26 April 2017 as a public Company and received
admission of its ordinary shares for trading by the FCA on the main board of the LSE under the standard segment
with effect from 14 December 2020.
Results and dividends
During the year, the Company and the Group progressed development of its corporate and business affairs which
is detailed in the Business Review section of this report. The audited financial statements for the year for
Company and the Group are set out from page 60 onwards. The key results from the activities of the Company
can be summarised below:
● The operations of its Sahamamy 3,000 tpa project which was set up as a ‘proof of concept’ continued
throughout the year and yielded a gross profit of £635,342 representing a gross margin on Sales of 57%
● The Group EBITDA was £(896,239) and Net loss of £(684,872) for the year
● Construction for the uprated 9,000 tpa Vatomina first plant continued to progress and by the time of
writing of this report, sellable production commenced, increasing the capacity in Madagascar
operations from 3,000 to 12,000 tpa.
No dividends will be distributed for the period ended 31 March 2021.
Financial instruments
In consultation with its financial and legal advisors, the Company approved a Warrant Instrument dated 15 July
2020 as a standard instrument for incentives primarily to its management team and service providers. Warrant
certificates issued under the instrument, also covering previously approved incentives to the Board and
Management were disclosed in the listing prospectus dated 14 December 2020 approved by the FCA. Further
information about the use of financial instruments is detailed in note 22 to the financial statements.
Future developments
A commentary on the Group’s future prospects and a description of principal risks and uncertainties are set out
in the Business Review and Strategic Report sections.
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 20.
As on the date of this report, the Company has issued 86,207,767 class of ordinary shares. Each share carries the
right to vote at general meetings of the Company, dividends, 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.
38 | Page
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2021
Memorandum and Articles of Association
The Company’s Articles of Association (the Articles) give the Board the power to appoint Directors but require
Directors to retire and submit themselves for election at the first AGM following their appointment.
The Board of Directors may exercise all the powers of the Company subject to the provisions of relevant statutes,
the Company’s Memorandum of Association and the Articles. The Articles, for instance, contain specific
provisions and restrictions regarding the Company’s power to borrow money. Powers relating to the issuing and
buying back of shares are also included in the Articles and such authorities shall be renewed by shareholders
each year at the AGM.
Liability of members limited
The Company is registered as a public limited company and members liability is limited to the extent of their
respective subscription to shares.
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’s shareholders by way of special resolution dated 23
December 2020 to allot shares of Nominal Value of £0.025 each to the extent of aggregate Nominal Value of
£373,732.
Directors and directors’ interests
The Board is responsible for the Company’s objectives and business strategy and its overall supervision.
Acquisition, divestment, and other strategic decisions will all be considered and determined by the Board
including, when circumstances permit, whether the payment of dividends, issue or buy back of shares is
appropriate. The Directors, who served throughout the year except as noted, were as follows:
Director
Position
Appointment/resignation date
Mr Shishir Kumar Poddar
Mr Christian G St. John-Dennis
Mr Hemant Kumar Poddar
Mr Rajesh Kedia
Mr Lincoln John Moore*
Executive Chairman and Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
26 April 2017
26 April 2017
26 April 2017
31 May 2018
1 August 2020
Biographical details of the Directors are available on the Company’s website:
https://tirupatigraphite.co.uk/management/
The Board will provide leadership within a framework of appropriate and effective controls. The Board will set
up, operate and monitor the corporate governance values of the Company, and will have overall responsibility
for setting the Company’s strategic aims, defining the business objective, managing the financial and operational
resources of the Company and reviewing the performance of the officers and management of the Company’s
business.
39 | Page
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2021
All Directors are subject to re-election/re-appointment every three years on appointment, at the first AGM after
appointment.
Further details on the functions of the Board can be found in the Corporate Governance Report section of this
report.
The direct interests of the Directors in the shares of the Company as of 31 March 2021 are as follows:
Director
Mr Shishir Kumar Poddar
Mr Christian G St. John-Dennis
Mr Hemant Kumar Poddar
Mr Rajesh Kedia
Mr Lincoln John Moore
Directors’ Remuneration
Number of
ordinary shares
1,789,250
1,248,099
1,248,099
419,116
22,222
Number of
Share Warrants
2,400,000
680,000
680,000
380,000
0
This section constitutes a remuneration report which forms part of the Directors’ Report which sets out the
Group’s principles and policies on the remuneration of Executive and Non-Executive Directors, together with
details of Directors' remuneration packages for the financial year ended 31 March 2021, and key points from the
service contracts of the Directors. The Remuneration Committee is responsible for fixation of the remuneration
of the of Directors on the Board of the Company. The Remuneration Committee was first formed in 2017 (year
of incorporation of the Company) and is responsible for fixation of the remuneration of the of Directors on the
Board of the Company. Further details on the Remuneration Committee is contained in the Corporate
Governance Report.
Annual Statement
The Remuneration Committee recognises that the year is expected to be eventful in the development of the
Company with extensive evolution of strategies, businesses, and developments, requiring devotion of time and
efforts from the Board and Executive Management taking into consideration time zone variances across its
locations and that such efforts deserve recognition and for individuals to be fairly rewarded for contributions to
the Company’s performance.
Guiding Principles for fixation of Directors Renumeration and Benefits
The principles and policies guiding the for fixation of remuneration and benefits for the Directors include:
● align renumeration with the stage of development of the Company and its growth and performance;
●
recognising experience and expertise for development of its strategies and business and cost savings
resultant thereupon;
● aim to reward fairly according to the nature of role and performance;
●
●
correlate with remuneration packages offered by comparable companies; and
the need to align the interests of shareholders as a whole with the long-term growth of the Group.
Elements for Directors Remuneration and Benefits
Element
Purpose
Operation
Base Salary
Available to Executive Directors only
Fixed on an annual basis, paid monthly in arrears or
quarterly mid time.
Directors Fees
Available to all sitting Directors
Fixed on an annual basis, paid monthly in arrears
Bonus
Available to Executive Directors only
Applicable for Executive Directors only, capped to 100%
of annual salary based on growth and progress of the
Company and contribution by the Director.
40 | Page
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2021
Pension
Available to Executive Directors only
Share Warrants
Available to Executive Directors based on
performance.
Available to Non-Executive Directors as special
incentive.
Statement of Implementation
Directors' Remuneration (audited)
The Bonus shall be considered annually in any year for
the performance parameters of the Company in the
previous year.
Non-UK tax residents shall be provided with payment
in lieu of Pension where applicable.
Performance based on growth and value creation.
Share Warrants shall be considered in any year based
on performance parameters of the Company in the
previous year.
Details of Directors’ Remuneration during the year ended 31 March 2021 is as follows:
Salary and fees
Pension
Bonus
Share based
payments
2021 Total
£
£
£
£
£
Mr Shishir Kumar Poddar
240,000
24,000
198,000
20,507
482,507
Mr Christian G St. John-Dennis
38,000
Mr Hemant Kumar Poddar
Mr Rajesh Kedia
Mr Lincoln John Moore
38,000
38,000
24,000
-
-
-
-
-
-
-
-
5,470
5,470
5,402
-
43,470
43,470
43,402
24,000
TOTAL
378,000
24,000
198,000
36,849
612,849
Salary and fees
Pension
Bonus
Share based
payments
2020 Total
£
Mr Shishir Kumar Poddar
180,000
Mr Christian G St. John-Dennis
48,000
Mr Hemant Kumar Poddar
Mr Rajesh Kedia
TOTAL
48,000
48,000
324,000
£
-
-
-
-
-
£
-
-
-
-
-
£
-
-
-
-
-
£
180,000
48,000
48,000
48,000
324,000
Further information about the Share based payments are detailed in note 3 to the financial statements.
Total pension entitlements (audited)
The Company does currently not have any pension plans for any Executive Director as currently the only
Executive Director is a non-UK tax resident and as such, receives payment in lieu of Pension in relation to their
remuneration.
Payments to past directors (audited)
The Company has not paid any compensation to past Directors.
41 | Page
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2021
Performance Graph
The following graph compares the total shareholder return of an ordinary share in Tirupati Graphite plc against
the total shareholder return of the FTSE All-share index for the period between 1 January 2021 and the date of
this report (YTD).
Data source: uk.finance.yahoo.com
The Company listed in December 2020 under the ticker TGR.L at an IPO price of 45 pence per ordinary. Since
listing, TGR’s share price peaked at 160 pence, an increase of 400%. As at the date of this report, TGR shares are
trading at around 104 pence, 230% above the IPO price.
Between 1 January 2021 until the date of this report (YTD), total shareholder return of an ordinary share in TGR
plc was 116%. Over the same period between the total shareholder return of the FTSE All-share index was 15%.
Consideration of employment conditions elsewhere in the Group
The committee has not consulted with employees about executive pay but considers that the current
remuneration of Executive Directors is appropriate and commensurate with pay and employment benefits across
the wider Group.
Substantial shareholdings
As at 17 September 2021, 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
Premier Miton Group plc
Optiva Securities Ltd
Statement of Directors’ responsibilities
Number of
Ordinary Shares
29,565,778
4,315,300
4,301,947
3,982,315
Percentage of
issued share capital
34.30
5.01
4.99
4.62
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
42 | Page
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2021
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
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.
Responsibility statement of the Directors in respect of the Annual Report
We confirm that to the best of our knowledge:
1)
2)
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 2021, Tirupati Graphite Plc was a listed company on the standard segment of the main
board of the London Stock Exchange and is not mandated to comply with the requirements of the 2018 U.K.
Corporate Governance Code (“the Code”) as issued by the Financial Reporting Council or any other code.
However, the Company recognises the value of good governance practices and has voluntarily adopted the QCA
Code so far is practicable given the Company's size and nature. The Corporate Governance section provides an
extensive overview of the application of the code by the Company, given the Company's size and nature.
Charitable and political donations
The Company did not make any political or charitable donations during the financial period. In line with its
sustainability initiatives, the Company engaged in various activities under its community development
programme in and around the areas of its projects. The Sustainability Report section provides detailed insight on
the activities conducted by the Company and the Company considers this as community investment leading to
the ability of development of its projects with community support and as its obligation towards improving the
quality of life of the people in the communities around it.
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
appropriate board or executive team meetings.
43 | Page
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2021
The year under reporting was an extraordinary one in terms of the concerns on health caused by the pandemic
and the Company is happy to report that it implemented appropriate testing protocols for its employees and
other health and safety measures across all its locations and that there were no incidences of spread of the
coronavirus reported at any of its locations. The Company further supported the local health infrastructure by
providing temperature and oxygen level measuring equipment and sourcing oxygen generators from global
supply chains which was sent to the project area to be used as standby equipment during the height of the
second wave which saw a global crisis in sourcing and securing medical oxygen equipment.
Statement of disclosure to independent auditors
Each of the persons who is a Director of the Company 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.
Resolutions proposed at the Annual General Meeting
The Directors consider that all the resolutions to be put forward at the Annual General Meeting (“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.
This report was approved by the Board of Directors on 17 September 2021 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
44 | Page
Tirupati Graphite plc
Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2021
Corporate Governance Report
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 2021.
The Corporate Governance Report forms part of this report.
Chairman’s Statement on Corporate Governance
Alongside Environment and Sustainability, Corporate Governance holds a vital role in the evolution of corporate
entities. We have voluntarily decided to adapt the Quoted Companies Alliance Corporate Governance Code
(“QCA Code”) as the guiding principle for Corporate Governance so far is practicable given the Company’s size
and nature. We Tirupati Graphite Plc (“TG”) are a Company in a specialist and niche area and derive much of our
strengths from the extensive expertise and experience of the principal founder and Executive Chairman, who is
the visionary, architect, strategist, and leader for much of the strengths we have gained bestowing in us the many
successes since incorporation. Alongside him, the leadership team that drives the Company, including its Board
and Management, emanate from decades of co-working and relationship building inherited by us, and are
bestowed in TG with dedication to achieve its goals. Recognising this core strength of the Company, we shall
adopt the core commandments and related principles of the QCA Code, as far as practicable, with documented
variances.
Earning Trust, while building the business of the Company on its corporate journey, shall remain our core ethic
and every member of the Company’s Board and Management, shall remain dedicated to this core ethic. Our
endeavours to earning trust shall span across our ecosystem and, though not limited to, includes:
● earning trust of our shareholders by effectively communicating with them;
● earning trust of regulators by remaining compliant and demonstrating an ethical corporate culture;
● earning trust of the communities by improving the quality of their lives;
● earning trust of our human capital by providing opportunities to deliver, proactively meeting their
reasonable expectations, and rewarding performance and recognisable services to the Company.
We shall evolve our business by developing sound strategies, prudent business plans and striving to execute
them to achieve value creation for our shareholders, the communities where we operate, our human capital and
other stakeholders thus, delivering growth of the Company and all those that are associated with it.
To achieve the objectives of earning trust and delivering growth, we shall maintain a dynamic management
framework guided by the principles of good governance under the QCA Code and evolve our team to meet the
principles of:
‘teamwork works’ at all levels of the corporate and business unit management;
●
● promoting entrepreneurship, acquire and develop skill sets required for achieving the Company’s
business objectives;
● evaluating performance of the Board, its members and the executive management;
● evolving and promoting a culture of understanding, responsibility and ethical working; and
● maintaining a management structure that supports prompt and effective decision making with effective
communication and coordination.
In line with the principles set above and derived from the QCA Code, it is applied across the Company’s
management and guides our decision-making processes. A commentary of the application of the ten principles
of the QCA Code is appended below.
Principle One: Establish a strategy and business model which promotes long-term value for shareholders
The Company is engaged in developing an integrated flake graphite and graphene and advanced materials
business. Towards this business purpose the Company has evolved a well-documented medium term
development plan which encompasses the strategies adopted by the Company that is carefully crafted to align
with the market dynamics of the materials it is engaged in working on. The plan has undergone rigorous and
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Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2021
extensive analysis within the lead management team and the Board and is supported by appropriate
independent market assessments which are conducted on an ongoing basis by subscription to independent
market research and extensive internal market analytics. Additionally, the Company has evolved its strategy for
diversification of its resource base to further strengthen its basket of flake graphite resources, mitigate against
risks of relying on one source and jurisdiction for its base resource supply, and prepare itself with increased
resources for future opportunities. One of the agenda items at all board meetings, except those which are for
specific corporate activities, is the review of business development and the Board is constantly engaged on the
progress in the evolution of the plan.
Principle Two: Seek to understand and meet shareholder needs and expectations
Prior to its admission on the LSE, the Company actively interacted with its shareholders both individually and in
groups and continued to coordinate with its sole brokers for both dissipation of information and receiving
feedback from its shareholders. The prospectus dated 14 December 2020 provided extensive information about
the Company’s resources for development of its business, the plans under which the Company intended to
develop its business, its performance from existing operations, the risks associated and measures for mitigating
them. Post its admission the Company has constantly informed shareholders of its progress through RNS, emails
sent to shareholders and prospective investors through its brokers and directly and extensively dissipated
information on social media. The Company maintains a dedicated email id for any shareholders to connect to the
Company and has a team of officials and advisors whom any shareholder may contact by telephone. The
Executive Chairman and management team members have held both one to one meetings with major
shareholders and group meetings through video conferencing providing information on the Company’s activities
through a presentation and answering every question received as far as practicable and permissible within the
bounds of confidentiality. The Board members joined the management team members on such events including
at the annual general meeting for first-hand interaction with shareholders. Thus, the Company has maintained a
robust ecosystem for ongoing dialogue with its shareholders.
Principle Three: Take into account wider stakeholder and social responsibilities and their implications for long-
term success
The Company has adopted a win-win approach of earning trust and extensive support of all stakeholders in the
growth and prosperity of the Company. It is focussed to develop extensive support of its customers and
prospective customers by building sustainable relationships providing comfort of source diversity and adapting
to the expectations, evolving its operations to meet them. It maintains extensive support earning priority and
preferential cost from its suppliers of goods and services, developing long lasting relationships. It maintains deep
engagement with its leadership team, to ensure their happiness and thus earning dedication to the services of
the Company working extended hours by choice and with a sense of responsibility. The extensive engagement is
visible in the outcomes of the business development in as much as the Company continues to receive repeated
orders from its current buyer and support of the prospective buyers for its products and services, delivered
stringent timelines in building its projects with support of its suppliers and dedicate efforts of its human capital
in spite of limitations caused by the pandemic and continues to grow its business.
The Company formulated its community connect program “Shakuntalam” symbolising motherhood for its
community engagement in Madagascar for its primary flake graphite projects and has extensively engaged with
the local community understanding their needs and formulating programs for improving the quality of their lives.
Extensive support has been provided by the Company for health, education, vocational training and skill
development and infrastructure access, more fully described in its Sustainability Report, resulting in a community
licence for development of its projects gaining support from the community. It also has extensively engaged with
the local & regional Governments providing support for their basic needs, and extensively engaged with
Governmental authorities providing extensive information on its activities and while remaining compliant,
earning support for its development.
Principle Four: Embed effective risk management, considering both opportunities and threats, throughout the
organization
While remaining conscious and identifying opportunities thus building its business remain an ongoing activity for
the Board and management of the Company, the evaluation, mitigation and management of risks alo remain an
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Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2021
ongoing activity in the Company’s activities. The Board and management review and extensively engage for the
purpose, and collectively work to mitigate any negative impacts of potential risks. An in-depth and extensive
exercise of risk mapping was undertaken prior to the admission in the Prospectus document and under the
leadership of the chair and in consultation with the Company’s advisors, the Company continues to actively
assess, mitigate and manage its potential risks. The potential acquisition of primary graphite projects in
Mozambique to diversify and enhance its resource base and extensive management team development activities
to expand its team are some of the visible actions by the Company since the publishing of its prospectus.
Principle Five: Maintain the Board as a well-functioning, balanced team led by the Chair
The Board of the Company is composed of five members led by the Executive Chairman with four Non-Executive
Members. The balance of the members on the Board in relation to the concert party as recognised by the
Takeover Panel is maintained with a majority of members being outside the concert party. With the three
founding Directors continuing on the Board, the Company appointed its fourth Director in mid of 2018 and a fifth
in August 2020. The Executive Chairman, being the mentor of the Company, continues to provide effective
leadership to the Board shaping the Company and visible in its growth. The Company and its Board have severally
recognised that the Executive Chairman has provided effective leadership to the Board and the Company as a
whole, is the only member on the Board who meets all the criteria set for the role of the chair and his leadership
is key to the success of the development of the Company’s business. Hence any moderate variances from the
guidance of the QCA code is considered appropriate for nature of the Company and its objectives.
The Board of the Company provides effective collective leadership to the Company and are constantly engaged
in overlooking the development of the Company’s business. The Board is scheduled to have a minimum of four
formal meetings every year. During the year under reporting, seven meetings of the Board were held and
appropriate decisions taken. Three Board committees have been established which include the Nomination,
Audit and Remuneration committee with appropriate terms of reference and the committees hold at least one
meeting annually to execute their respective area of business. Majority of members in the committees are Non-
Executive members. A detailed note of the activities of the Board and its committees and identification of
independent directors is provided in further below in this report.
Principle Six: Ensure that between them, the directors have the necessary up-to-date experience, skills and
capabilities
The Board and the Nomination committee have evaluated the mix of experience and skill sets within the
members of the Board and on the basis that:
●
●
●
●
●
three members on the Board have previous executive and/or Non-Executive board position on listed
company boards; and
collectively, the board possesses decades of experience in the area of business of the Company; and
two members on the board are qualified accountants; and
collectively the members on the board have more than five decades of financial markets experience;
and
collectively the board possesses all the skill sets that it considers necessary for the conduct and
evaluation of the Company’s business.
As the Company is growing, the nomination committee and the board are conscious that it may need to review
and take appropriate decisions in due course for expansion of the board.
Principle Seven: Evaluate Board performance based on clear and relevant objectives, seeking continuous
improvement
Internal evaluation of the members of the Board, is undertaken on an ongoing basis by the Executive Chairman.
to determine the effectiveness and performance as well as the Directors' continued independence. As a part of
the appraisal the appropriateness and opportunity for continuing professional development whether formal or
informal is assessed. The evaluation of performance of the Executive Chairman is undertaken on an ongoing basis
by the Board collectively and recorded in the minutes where and as appropriate.
Principle Eight: Promote a corporate culture that is based on ethical values and behaviours
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Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2021
The Company has constantly evolved a corporate culture of prudence, ethical working and behaviour at all levels
of management. The positive experience of the new Non-Executive Director who joined the Board in August
2020, has acknowledged the ethical working of the Company, which is a testiment to the Company’s positive and
constructive culture.
The Board seeks to maintain the highest standards of integrity and probity in the conduct of the Group’s
operations. These values are enshrined in the written policies and working practices adopted by all employees
in the Group. An open culture is encouraged within the Group, with regular communications to the Group’s
workforce regarding progress and feedback regularly sought. The executive leadership team regularly monitors
the Group’s cultural environment and seeks to address any concerns that may arise, escalating these to Board
level as necessary.
The Group is committed to providing a safe environment for its staff and all other parties for which the Group
has a legal or moral responsibility in this area. The Group’s health and safety policies and procedures encompass
all aspects of the Group’s day-to-day operations.
Issues of bribery and corruption are taken seriously. The Company has a zero-tolerance approach to bribery and
corruption and has an anti-bribery and corruption policy in place to protect the Company, its employees and
those third parties to which the business engages with. The policy is provided to staff upon joining the business
and training is provided to ensure that all employees within the business are aware of the importance of
preventing bribery and corruption. Each employment contract specifies that the employee will comply with the
policies.
The Group further participates with the local community for cultural integration across its regions of operation,
participating in events like independence days and other cultural festivities building relations with its
stakeholders and expressing respect for its communities.
There were no issues to note during the financial year 1 April 2020 to 31 March 2021.
Principle Nine: Maintain governance structures and processes that are fit for purpose and support good decision-
making by the Board
The Board functions as a vibrant group, with no hesitation in exchange of thoughts, extensive analytics, and
discussions in terms of the Company’s evolved strategy and business development goals leading to further
evolution of the Company’s business and remains collectively responsible for achieving growth, earning trust and
effective communications with shareholders. The Board committees’ function in terms of their terms of
reference. The relationship of the Company with the founders is governed under a relationship agreement
providing sufficient leverage for independent assessment. The chair provides effective leadership to the board
for the purpose and in terms of the extant principles set out in the memorandum of director’s responsibility, the
Chairman is considered to be independent and effective leader of the Board providing the required leadership
for the growth and development of the Company’s business.
Principle Ten: Communicate how the Group is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
Continued and effective communication with the shareholders and stakeholders remains a high priority and aims
to ensure that all communications concerning the Group’s activities are clear, fair, and accurate. Full details of
how the Company maintains a dialogue with shareholders and other stakeholders is set out in Principle 2 above.
Board objectives and operation
The key objectives of the Board are as follows:
● The agreement of Company strategies.
● The agreement of the detailed set of objectives and policies that facilitate the achievement of the
Company’s strategies.
● Monitoring the performance of executive management in the delivery of objectives and strategies.
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period ended 31 March 2021
● Monitoring and safeguarding the financial position of the Company and Group to ensure that objectives
and strategies are delivered.
● Approval of major capital expenditure and other expenditure that is not part of the defined objectives
or strategic plans of the Company.
● 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 team members 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.
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
independent professionals at the Company’s expense. All Directors have access to the extensive database of the
Quoted Companies Alliance of which the Company is a member. Training is available for new and existing
Directors as necessary.
Seven Board meetings were held during the year. The Directors’ attendance recorded during the year are as
follows:
Director
Mr Shishir Kumar Poddar
Mr Christian G St. John-Dennis
Mr Hemant Kumar Poddar
Mr Rajesh Kedia
Mr Lincoln John Moore*
* Joined the Board after the first Board meeting for the year
Number of meetings
attended
7
7
7
7
6
% of Attendance
100
100
100
100
100
In addition to the members on the Board, invitees to meetings of the Board included, as appropriate, advisors
and corporate management team members of the executive management of the Company.
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 Nominations Committee consists of Mr Shishir Kumar Poddar, Mr Christian G St. John-Dennis and Mr. Rajesh
Kedia. During the year under reporting the Nominations Committee met once and fulfilled its duties of reviewing
the Board structure and composition and identifying and nominating candidates to fill Board vacancies as they
arise.
The Executive Chairman conducts an induction process for a new Director to the board, provides extensive
briefing for a new member to fully understand the Company’s business and the requirements of his roles, makes
introductions with the extended leadership team and provides all guidance for evolving the effective contribution
by a Director to the activities of the Company and the Board.
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Annual Report and Financial Statements
period ended 31 March 2021
Audit Committee
Formal terms of reference for the Audit Committee have been documented and made available to each member
of the committee. The Audit Committee consists of Mr Shishir Kumar Poddar, Mr Lincoln John Moore and Mr.
Rajesh Kedia.
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 the auditor’s 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
2021; 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 members of the executive management leading the finance and corporate team of the Company.
Remuneration Committee
The Remuneration Committee comprises Mr Shishir Kumar Poddar, Mr Christian G St. John-Dennis and Mr.
Rajesh Kedia. The Remuneration Committee reviews the performance of the Board including the Executive
Chairman and any member of the concert party being part of the management team on matters relating to their
remuneration, bonus and their terms of service. The Remuneration Committee also makes recommendations to
the Board on granting of share warrants or other equity-based incentives to the Board and senior management
from time to time. The Remuneration Committee meets at least once a year and as and when it is necessary.
The Remuneration Committee further seeks to provide guidance on remuneration packages to attract, retain
and motivate the leadership management team of the Company and the Group and seeks to avoid paying more
than is necessary for this purpose. It has access to independent advice from the Company’s advisors on all aspects
of remuneration and benefits and terms of service of the Company’s Board and executive management team.
During the year 1 April 2020 to 31 March 2021, the Renumeration Committee met twice for conduct of business
of the committee.
Internal controls
The Board is responsible for the Group and the Company’s system of internal controls 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 controls are appropriate. On
advice from the Audit Committee, the Board does not consider any additional independent verification of the
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Annual Report and Financial Statements
period ended 31 March 2021
system of internal controls 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.
Dialogue with major shareholders
The Board is committed to maintaining effective communication and having constructive dialogue with its
shareholders. During the year 1 April 2020 to 31 March 2021, the Company extensively engaged with both its
current and prospective, 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 AGM.
This report was approved by the Board of Directors on 17 September 2021 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
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Tirupati Graphite plc
Independent Auditor’s Report
Annual Report and Financial Statements
period ended 31 March 2021
Independent Auditor’s Report to the Members of
Tirupati Graphite plc
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 2021 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated and Parent Company Statements of Financial Position, the Consolidated and Parent
Company Statements of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows and
notes to the financial statements, including significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and international accounting standards in conformity
with the requirements of the Companies Act 2006 and as regards the parent company financial statements, as
applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
●
●
●
●
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 31 March 2021 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006;
the parent company financial statements have been properly prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006 and as applied in
accordance with the provisions on the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006; and as regard to the group financial statements, international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the group and parent company in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’
assessment of the group’s and parent company’s ability to continue to adopt the going concern basis of
accounting included; consideration of the company’s objectives, policies and processes in managing its capital as
well as exposure to financial, credit and liquidity risks; inspection of cash flow forecasts for the ensuing twelve
months from the date of approval of these financial statements, reviewing the impact of COVID-19 and
assessment thereof. We have performed sensitivity analysis on the cash flow forecast prepared by management,
and challenged the assumptions included thereto, including the review of the estimated cash flows surrounding
the commissioning of the Vatomina plant. We have also stress tested the forecast provided to a point which the
group would no longer be considered a going concern, and ensured there is sufficient headroom available.
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Annual Report and Financial Statements
period ended 31 March 2021
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group’s or parent company's ability
to continue as a going concern for a period of at least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Our application of materiality
For the purposes of determining whether the financial statements are free from material misstatement, we
define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a
reasonably knowledgeable person, relying on the financial statements, would be changed or influenced. We also
determine a level of performance materiality which we use to assess the extent of testing needed to reduce an
appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds
materiality for the financial statements as a whole.
Materiality for the group financial statements was set at £140,000 (2020: £135,000). This was calculated based
on 2% of gross assets for the year. Using our professional judgement, we have determined this to be the principal
benchmark within the financial statements as it will be most relevant to stakeholders in assessing the financial
performance of the group as they key focus of the group is the value of its producing assets and assets under
construction in Madagascar. This benchmark is key in being able to demonstrate to stakeholders the costs
incurred in bringing these mines to production, and achieving increased revenues in future periods. Materiality
for the parent company financial statements was set at £139,000 (2020: £130,000). This was calculated on the
same basis as group materiality.
Performance materiality for the group financial statements was set at £98,000 (2020: £94,500) and the parent
company was set at £97,300 (2020: £91,000), being 70% of materiality for the financial statements as a whole
respectively. The performance materiality for the trading subsidiaries is calculated on the same basis as group
materiality.
We agreed to report to those charged with governance all corrected and uncorrected misstatements we
identified through our audit with a value in excess of £7,000 (2020: £6,750) and for the parent company a value
in excess of £6,950 (2020: £6,500). We also agreed to report any other audit misstatements below that threshold
that we believe warranted reporting on qualitative grounds.
Our approach to the audit
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative
thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit
procedures.
As part of our planning, we assessed all components of the group for their significance in order to determine the
scope of the work to be performed. Those entities of the group which were considered to be significant
components, being Tirupati Graphite plc, Tirupati Madagascar Ventures (“TMV”) and Establissements Rostaing
(“ER”), were subject to full scope audit procedures by PKF Littlejohn LLP. Procedures were then performed to
address the risks identified and for the most significant assessed risks of material misstatement, the procedures
performed are outlined below in the key audit matters section of this report.
Tirupati Resources Mauritius is a holding company and trivial to the consolidated financial statements, and
therefore group analytical procedures only have been performed in respect of this entity.
We did not rely on the work of any component auditors.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the
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Independent Auditor’s Report
Annual Report and Financial Statements
period ended 31 March 2021
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our scope addressed this matter
Carrying value of fixed assets – Note 13
There is a risk that the assets capitalised in respect of
the Sahamamy project could be overstated and
depreciation understated. The mine which drives a
major part of the business operations (from which
the costs of the Sahamamy project are incurred) is
operating at full capacity.
Classification and valuation of exploration assets
and assets under construction – Note 11 and 13
We performed the following procedures:
● Confirmed the company held good title to
the license area;
● A review of managements considerations of
impairment in respect of the Sahamamy
project,
including challenge of the key
assumptions made;
● A review of the competent person report
prepared by a third party expert and
challenging the inputs made thereto;
● We obtained an understanding of the
internal control environment in operation
surrounding the impairment review of fixed
assets; and
● We reviewed the assets for any evidence of
breach of the impairment indicators.
Key observations:
We concluded that the carrying value of fixed assets
are complete and accurate. We have assessed the
accounting
treatment applied and confirmed
appropriate and assessed the impairment review
under IAS 36 and confirmed the impairment criteria
are not met.
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period ended 31 March 2021
There is a risk that the assets capitalised in respect of
the Vatomina project do not meet the criteria for
capitalisation and the asset is not economic and the
value of the asset is overstated.
The audit procedures performed to address the risk
included:
● Ensuring appropriate classification of assets
by reference to nature and underlying
agreements;
● Discussing with management the current
stage of development of the assets held and
future plans;
● Vouching a sample of fixed asset additions to
supporting documentation and confirming
appropriate classification thereto; and
● A review of the competent person report
prepared by a third party expert and
challenging the inputs made thereto;
Key observations:
We concluded that the classification of assets under
construction to be appropriate and the valuation of
said assets to be accurate. We have assessed the
classification of additions and the asset as a whole
and confirmed appropriate. We have also assessed
the impairment review under IAS 36 and confirmed
the impairment criteria are not met.
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 contained
within the annual report. 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. Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the course of 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 this gives rise to a
material misstatement in the financial statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
●
●
the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
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Independent Auditor’s Report
Annual Report and Financial Statements
period ended 31 March 2021
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
● adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
●
●
the parent company financial statements and the part of the directors’ remuneration report to be
audited are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
● we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the
preparation of the group and parent company financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the
group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the directors either intend to liquidate
the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
● We obtained an understanding of the group and parent company and the sector in which they operate
to identify laws and regulations that could reasonably be expected to have a direct effect on the financial
statements. We obtained our understanding in this regard through discussions with management,
industry research, application of cumulative audit knowledge and experience of the sector.
● We determined the principal laws and regulations relevant to the group and parent company in this
regard to be those arising from Financial Conduct Authority Rules, UK Companies Act 2006 and IFRS, LSE
Listing Requirements, Disclosure Guidance, Transparency rules as well Import, Export and Customs
Powers (Defence) Act 1939 and local tax laws and regulations.
● We designed our audit procedures to ensure the audit team considered whether there were any
indications of non-compliance by the group and parent company with those laws and regulations. These
procedures included, but were not limited to:
56 | Page
Tirupati Graphite plc
Independent Auditor’s Report
Annual Report and Financial Statements
period ended 31 March 2021
o enquiries of management,
o
o
review of minutes,
review of legal / regulatory correspondence,
o assessment of policies and procedure in:
▪
▪
▪
identifying all applicable laws and regulations relevant to it;
ensuring compliance with the aforementioned; and
identifying, evaluating and accounting for litigation claims.
● We also identified the risks of material misstatement of the financial statements due to fraud. We
considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management
override of controls, revenue recognition, inappropriate application of the going concern assessment in
the financial statements and management bias in determining accounting estimates (decommissioning
provision, impairment of fixed assets).
● The above risks were addressed by performing journal testing and detailed testing for material sections
including revenue, evaluating management's method to assess the entity's ability to continue as a going
concern and lastly, challenging the assumptions and judgements made by management when auditing
significant accounting estimates.
●
In relation to compliance with laws and regulations for the Group as a whole, we assessed whether the
policies and procedures address all the applicable laws and regulations through inquiry of management
inquiry as well as appointed legal advisors and inspection of minutes.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with regulation. This
risk increases the more that compliance with a law or regulation is removed from the events and transactions
reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation.
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.
Other matters which we are required to address
We were appointed by Companies Act 2006 of the United Kingdom on 26 May 2021 to audit the financial
statements for the period ending 31 March 2021 and subsequent financial periods. Our total uninterrupted
period of engagement is 3 years, covering the period ending 31 March 2018 to 31 March 2021.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent
company and we remain independent of the group and the parent company in conducting our audit.
As permitted by the Standard mentioned above, the only non-audit service provided pertains to us taking the
position as Reporting Accountant where a fee of £50,000 was payable. This may pose our self-interest threat to
our integrity, objectivity and independence. To reduce this threat to a significantly low level, the safeguard
applied was having an independent second partner review for the audit work pertaining to the 2021 period.
Our audit opinion is consistent with the additional report to the audit committee.
57 | Page
Tirupati Graphite plc
Independent Auditor’s Report
Annual Report and Financial Statements
period ended 31 March 2021
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.
Mr. Zahir Khaki (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
2021
15 Westferry Circus
Canary Wharf
London E14 4HD
58 | Page
Tirupati Graphite plc
Consolidated Statement of Comprehensive Income
Annual Report and Financial Statements
period ended 31 March 2021
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2021
Notes
6
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
2021
£
2020
£
1,123,426
(488,083)
635,343
793,577
(411,899)
381,678
(1,737,304)
(1,193,650)
(1,101,961)
(147,151)
(1,249,112)
(27,827)
(811,972)
(46,003)
(857,975)
(54,767)
(1,276,939)
(912,742)
(417,693)
(1,382)
(1,694,632)
(914,124)
Earnings per share attributable to owners of the
Company
From continuing operations:
Basic
Diluted
Pence per share
Pence per share
11
11
(2.61)
(1.53)
(2.37) (1.53)
The accompanying accounting policies and notes are an integral part of these financial statements
59 | Page
Tirupati Graphite plc
Consolidated and Company Statement of Financial Position
Annual Report and Financial Statements
period ended 31 March 2021
Consolidated and Company Statement of Financial Position
As at 31 March 2021
Group
2021
£
2020
£
Company
2021
£
2020
£
Notes
Non-current assets
Investments in subsidiaries
Property, plant and
equipment
Deferred tax
Deposits
Intangible assets
Total non-current assets
Current assets
Inventory
Trade and other receivables
Cash and cash equivalents
Total current assets
Current liabilities
Trade and other payables
Total current liabilities
Net current assets
Non-current liabilities
Borrowings
Other payables
Total non-current liabilities
NET ASSETS
Equity
Share capital
Share premium account
Warrant reserve
Foreign exchange reserve
Retained losses
Equity attributable to
owners of the Company
13
14
12
16
15
17
19
17
20
21
-
3,020,142
21,182
1,872
3,682,354
6,725,550
461,093
1,102,868
1,644,189
3,208,150
-
1,980,635
3,539,448
201,725
3,539,448
544,209
49,422
2,121
3,691,243
5,723,421
-
-
40,970
-
-
153,001
3,782,143
4,236,658
150,105
409,309
46,640
606,054
212,581
5,547,806
1,491,454
7,251,841
-
2,709,828
34,955
2,744,783
445,273
445,273
427,871
427,871
219,780
219,780
433,355
433,355
2,762,877
178,183
7,032,061
2,311,428
1,283,000
23,864
1,306,864
810,000
817,388
1,283,000
-
810,000
779,621
1,627,388
1,283,000
1,589,621
8,181,563
4,274,216
9,531,204
4,958,465
1,871,084
10,426,988
130,557
(414,546)
(3,832,520)
1,498,132
5,328,517
-
3,147
(2,555,580)
1,871,084
10,426,988
130,557
-
(2,897,425)
1,498,132
5,328,518
-
-
(1,868,185)
8,181,563
4,274,216
9,531,204
4,958,465
TOTAL EQUITY
8,181,563
4,274,216
9,531,204
4,958,465
60 | Page
Tirupati Graphite plc
Consolidated and Company Statement of Financial Position
Annual Report and Financial Statements
period ended 31 March 2021
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present
the parent company statement of comprehensive income.
The loss for the parent company for the year was £1,029,240 (2020: £634,880).
The accompanying accounting policies and notes are an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 17 September 2021 and signed on its behalf
by:
Mr Shishir Poddar
Executive Chairman and Managing Director
Company registration number: 10742540
61 | Page
Tirupati Graphite plc
Consolidated and Company Statement of Changes in Equity
Annual Report and Financial Statements
period ended 31 March 2021
Consolidated Statement of Changes in Equity
For the year ended 31 March 2021
Share
capital
£
Share
premium
£
Foreign
exchange
reserve
£
Share
warrants
reserve
£
Retained
losses
£
TOTAL
EQUITY
£
1,470,275
5,024,524
4,714
-
-
-
-
-
(1,567)
27,857
353,994
-
(50,000)
-
-
1,498,132
5,328,518
3,147
-
-
-
-
-
(417,693)
372,952
5,098,470
-
-
-
-
-
-
-
-
-
-
-
-
-
130,557
(1,642,839)
4,856,674
(912,742)
(912,742)
-
-
-
(1,567)
381,851
(50,000)
(2,555,581)
4,274,215
(1,276,940)
(1,276,940)
-
-
-
(417,693)
5,471,422
130,557
1,871,084
10,426,988
(414,546)
130,557
(3,832,521)
8,181,563
Balance at 1 April
2019
Total comprehensive
income:
Loss for the period
Forex exchange loss
Transactions with
owners:
Shares issued
Share application
money
Balance at 31 March
2020
Total comprehensive
income:
Loss for the period
Forex exchange loss
Transactions with
Equity owners:
Shares issued
Warrant charge
Balance at 31 March
2021
The accompanying accounting policies and notes are an integral part of these financial statements.
Share capital – Represents the nominal value of the issued share capital.
Share premium account – Represents amounts received in excess of the nominal value on the issue of share capital less any
costs associated with the issue of shares.
Retained earnings – Represents accumulated comprehensive income for the year and prior periods.
Foreign exchange reserve – Represents exchange differences arising from the translation of the financial statements of
foreign subsidiaries and the retranslation of monetary items forming part of the net investment in those subsidiaries.
Share warrant reserve – Represents reserve for equity component of warrants issued as per IFRS 2 share-based payments.
62 | Page
Tirupati Graphite plc
Consolidated and Company Statement of Changes in Equity
Annual Report and Financial Statements
period ended 31 March 2021
Company Statement of Changes in Equity
For the year ended 31 March 2021
Share
capital
£
Share
premium
£
1,470,275
4,974,524
-
-
27,857
353,994
1,498,132
5,328,518
-
-
372,952
5,098,470
Balance at 1 April 2019
Total comprehensive
income:
Loss for the period
Transactions with owners:
Shares issued
Balance at 31 March 2020
Total comprehensive
income:
Loss for the period
Transactions with Equity
owners:
Shares issued
Share
warrants
reserve
£
Retained losses
£
TOTAL
EQUITY
£
-
-
-
-
-
-
(1,233,304)
5,211,495
(634,881)
(634,881)
-
381,851
(1,868,185)
4,958,465
(1,029,240)
(1,029,240)
-
-
5,471,422
130,557
Warrant charge
-
-
130,557
Balance at 31 March 2021
1,871,084
10,426,988
130,557
(2,897,425)
9,531,204
The accompanying accounting policies and notes are an integral part of these financial statements.
Share capital – Represents the nominal value of the issued share capital.
Share premium account – Represents amounts received in excess of the nominal value on the issue of share capital less any
costs associated with the issue of shares.
Retained earnings – Represents accumulated comprehensive income for the year and prior periods.
Share warrant reserve – Represents reserve for equity component of warrants issued as per IFRS 2 share-based payments.
63 | Page
Tirupati Graphite plc
Consolidated Statement of Cash Flows
Annual Report and Financial Statements
period ended 31 March 2021
Consolidated Statement of Cash Flows
For the year ended 31 March 2021
Cash used in operating activities
Loss for the year
Adjustment for:
Depreciation
Convertible loan note costs (“CLN”)
Share based payments expense
Finance costs
Income tax
Working capital changes:
Increase in inventories
(Increase)/Decrease in receivables
Increase/(Decrease) in payables
2021
£
2020
£
(1,276,940)
(912,742)
205,723
21,910
49,627
147,151
(27,827)
(310,987)
(693,559)
17,402
127,100
56,700
-
46,003
(54,767)
(93,604)
21,935
(274,112)
Net cash used in operating activities
(1,867,500)
(1,083,487)
Cash flows from investing activities:
Purchase of tangible assets
Purchase of other assets
Net advances given
Net cash from investing activities
Cash flows from financing activities
Proceeds from Shares issued (net of costs)
Proceeds from issue of Convertible loan notes
Cost of issue of Convertible loan notes
Finance cost
Increase / (decrease) in long term liabilities
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
(1,039,507)
28,489
(586,700)
(1,597,718)
5,552,352
473,000
(21,910)
(147,151)
(793,524)
5,062,767
1,597,549
46,640
1,644,189
(846,229)
(18,045)
137,091
(727,183)
331,851
810,000
(56,700)
(46,003)
773,481
1,812,629
1,959
44,681
46,640
The accompanying accounting policies and notes are an integral part of these financial statements.
Net advances – Represents the net advances given to the suppliers of machinery for supply of equipment for Madagascar
projects of the Company
64 | Page
2021
£
2020
£
(1,029,240)
(634,880)
Tirupati Graphite plc
Company Statement of Cash Flows
Annual Report and Financial Statements
period ended 31 March 2021
Company Statement of Cash Flows
For the year ended 31 March 2021
Loss for the year
Adjustment for:
Increase in inventories
Foreign exchange loss
Share based payments
CLN issuance cost
Finance costs
Working capital changes:
Increase in receivables
(decrease)/Increase in payables
Net cash used in operating activities
Cash flows from investing activities:
(Purchase)/sale of tangible assets
(Purchase)/sale of intangible assets
Net cash from investing activities
Cash flows from financing activities
Shares issued
Proceeds from issue of convertible loan notes
CLN issue cost
(decrease) in long term liabilities
Finance costs
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents brought forward
Cash and cash equivalents carried forward
(212,580)
-
49,627
21,910
147,151
(2,837,978)
(213,576)
(4,074,686)
342,484
112,031
454,515
5,552,352
473,000
(21,910)
(779,621)
(147,151)
5,076,670
1,456,499
34,955
1,491,454
The accompanying accounting policies and notes are an integral part of these financial statements.
-
9,621
-
-
46,003
(616,060)
456,799
(738,517)
(333,809)
(36,159)
(369,968)
381,851
810,000
(56,700)
-
-
1,135,151
26,666
8,289
34,955
65 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
Notes to the Financial Statements
1. General information
Tirupati Graphite plc (the “Company”) is incorporated in England and Wales, under the Companies Act 2006. The
registered office address is given on Company Information page.
The Company is a public company, limited by shares. On 14 December 2021 the ordinary shares of the Company
were admitted on the official list of the FCA and to trading on the main market of the London stock exchange
through standard listing.
The principal activities of the Company and its subsidiaries (the “Group”) and the nature of the Group’s
operations are set out in the Strategic Report.
These consolidated financial statements are presented in pounds sterling since that is the currency of the primary
economic environment in which the Group and Company operates.
2. Adoption of new and revised International Financial Reporting Standards (IFRSs)
New standards
The Group and Company have adopted all recognition, measurement, and disclosure requirements of IFRS,
including any new and revised standards and Interpretations of IFRS, in effect for annual periods commencing
on or after 1 April 2020. The adoption of these standards and amendments did not have any material impact on
the financial result of position of the Group and Company.
Standards which are in issue but not yet effective:
At the date of authorisation of these financial statements, the following Standards and Interpretation, which
have not yet been applied in these financial statements, were in issue but not yet effective.
Standard or interpretation
IAS 1
IAS 16
IAS 8
IAS 1
IFRS
Description
Amendments – Classification of Liabilities as Current or Non-Current
Amendments – Property, Plant and Equipment
Amendments – Definition of Accounting Estimates
Amendments – Disclosure of Accounting Policies
Annual improvements to IFRS Standards 2018-2020
Effective date
1 January 2023
1 January 2022
1 January 2023
1 January 2023
1 January 2022
The Group and Company have not early adopted any of the above standards and intends to adopt them when
they become effective.
3. Significant accounting policies
Basis of preparation
These consolidated financial statements have been prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006 and in accordance with the
requirements of the Companies Act 2006.
The financial statements have been prepared on the historical cost basis, except for financial instruments that
are measured at the fair values at the end of the reporting period. Historical cost is generally based on the fair
value of the consideration given in exchange for goods and services.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements, are disclosed in Note 4.
The principal accounting policies adopted are set out on the following pages.
66 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance
and position are set out in the Business Review and Strategic Report Sections. The financial position of the Group
and the Company, their cash flows and liquidity positions are contained in the financial statements. The expected
evolution of the business and significant post year end events are also described in the business review and
strategic reports. In addition, the Annual Report discloses the Group’s objectives, policies and processes for
managing its business and capital; its financial risk management objectives; details of its financial instruments;
and its exposure to credit and liquidity risk.
At the beginning of the year under reporting, the Company was a private entity with a small operation developing
its business as described in the business review section, and was incurring nett losses at the Group level. It was
in the process to seek admission on the standard segment of the London Stock Exchange and during the year,
the Company achieved success in its efforts with a successful IPO raising gross proceeds of £6,000,000 to pursue
further investments and creation of additional capacities to grow its business. Post year end, the Company
further raised gross proceeds of £10,000,000 to meet its investments and working capital needs. Post its IPO, the
Group progressed development of 3X additional flake graphite production capacity which was fully
commissioned in early September 2021 post year end, enhancing its installed capacity from the previous 3,000
tpa to 12,000 tpa. It further remains funded for its investment needs for the next additional capacity under
construction being 18,000 tpa which is expected to complete and commission in Q1/Q2 2022. From the
operations of the 3,000 tpa capacity existing in the year under review, the Company generated gross Profits of
£635,342 in spite of lower capacity utilisation, which it expects to improve further with the impacts of the
pandemic expected to recede and additionally, for the second half of the current year, additional capacity of
9,000 tpa shall be operational.
Taking in to account the comments above, the Directors have, at the time of approving the financial statements,
a reasonable expectation that the Group has adequate resources to continue in operational existence for the
foreseeable future, given its current cash resources, installed capacities and operations which now have broken
the threshold for the Company to meet all its non-investment cash needs from revenues and additional capacities
being built by the Company for which it remains fully funded and which when completed, are expected to add
further additional operating cash flows.
Should the Company not be unable to meet its investment needs from the internal accruals coupled with its
current cash resources and not raise additional funds in the foreseeable future for its investment plans, the
Directors would implement delays in investment for additional capacities and / or cost and cash saving measures
and continue to generate revenues in order to meet its liabilities as they fall due. Therefore, they continue to
adopt the going concern basis of accounting in preparing the financial statements.
Notwithstanding the loss incurred during the year under review, the Directors have prepared and reviewed a
cash flow forecast including consideration of the impact of COVID-19. The forecast contains certain assumptions
about the level of future sales and margins achievable. The Directors have considered various future scenarios
in their forecasting to enable them to adequately consider whether the Group has adequate resources to
continue in operational existence and remain of the view that the Company has adequate cash resources,
business prospects and access to capital markets to remain a going concern.
Basis of consolidation
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the Group. They are deconsolidated from the date that control
ceases.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated financial statements from the date the
Group gains control until the date the Group ceases to control the subsidiary.
67 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
The Group consists of Tirupati Graphite plc and its wholly owned subsidiaries Tirupati Resources Mauritius,
Tirupati Madagascar Ventures and Establissements Rostaing.
In the parent company financial statements, investments in subsidiaries, joint ventures and associates are
accounted for at cost less impairment.
The consolidated financial statements incorporate those of Tirupati Graphite plc and all of its subsidiaries (i.e.
entities that the group controls through its power to govern the financial and operating policies so as to obtain
economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their
results are incorporated from the date that control passes.
All financial statements are made up to 31 March 2021. Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used into line with those used by other members of
the group.
All intra-group transactions, balances, and unrealised gains on transactions between Group companies are
eliminated on consolidation.
Segment reporting
An operating segment is a component of the Group that engages in business activity from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with the Group’s other
components. All operating segments’ operating results, for which discrete financial information is available, are
reviewed regularly by the Group’s Board to make decisions about resources to be allocated to the segment and
assess its performance. The Group reports on a three-segment basis – Holding Companies Expenses, Mining
Exploration and Development and Graphite Mining Extraction.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts
receivable for goods or services supplied in course of ordinary business, stated net of discounts, returns and
value added taxes. The Group recognises revenue in accordance with IFRS 15 at either a point in time of over
time, depending on the nature of the goods or services and existence of acceptance clauses.
Revenue from the sale of goods is recognised when delivery has taken place and the performance obligation of
delivering the goods has taken place. The performance obligation of products sold are transferred according to
the specific delivery terms that have been formally agreed with the customer, generally upon delivery when the
bill of lading is signed as evidence that they have accepted the product delivered to them.
Foreign currencies
For the purposes of the consolidated financial statements, the results and financial position of each Group
company are presented in pounds sterling, which is the functional currency of the Company. At balance sheet
date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates
prevailing at that date. Income and expense items are translated at the average exchange rates for the period.
Taxation
Income tax represents the sum of current tax and deferred tax.
Current tax
Current tax is based on taxable profit or loss for the year. Taxable profit or loss differs from net profit or loss as
reported in the income statement because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or deductible. The Group's liability for current
tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
A provision is recognised for those matters for which the tax determination is uncertain, but it is considered
probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best
68 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
estimate of the amount expected to become payable. The assessment is based on the judgement of tax
professionals within the Company supported by previous experience in respect of such activities and in certain
cases based on specialist independent tax advice.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference
arises from the initial recognition of goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or
the asset is realised based on tax laws and rates that have been enacted or substantively enacted at the balance
sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items charged
or credited in other comprehensive income, in which case the deferred tax is also dealt with in other
comprehensive income.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount
of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
Current tax and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in
other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised
in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from
the initial accounting for a business combination, the tax effect is included in the accounting for the business
combination.
Assets Under Construction
All expenditure on the construction, installation or completion of infrastructure facilities is capitalised as
construction in progress within “Assets Under Construction”. Once production starts, all assets included in
“Assets Under Construction” will be transferred into “Property, Plant and Equipment”. It is at this point that
depreciation/amortisation commences over its useful economic life.
Assets Under Construction are stated at cost. The initial cost comprises transferred Mining Exploration and
Evaluation assets, construction costs, infrastructure facilities, any costs directly attributable to bringing the asset
into operation, the initial estimate of the rehabilitation obligation, and, for qualifying assets and borrowing costs.
Costs are capitalised and categorised as construction in progress.
69 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
Property, Plant and Equipment
Property, Plant and Equipment in the course of construction for production, supply or administrative purposes,
or for purposes not yet determined, are carried at cost, less any recognised impairment loss. Costs includes
professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group's
accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when
the assets are ready for their intended use.
Fixtures and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.
Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and
properties under construction) less their residual values over their useful lives, using the straight-line method,
on the following bases:
Plant and machinery
Infrastructure and fixtures
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.
Mining Exploration and Evaluation
Mining Exploration and Evaluation costs are carried forward in respect of areas of interest where the
consolidated entity’s rights to tenure are current, and where these costs are expected to be recouped through
successful development into production from the area of interest or by sale or disposal of the project.
Alternatively, these costs are carried forward while active and significant exploration and evaluation costs are
continuing in relation to the areas of interest and it is too early to make reasonable assessment of the existence
or otherwise of economical production from the area of interest. When the area of interest is abandoned,
exploration and evaluation costs previously capitalised pertaining to the area of interest are impaired.
70 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
Costs incurred by the Company on behalf of its subsidiaries and associated with exploration and evaluation
activities are capitalised on a project-by-project basis pending commencement of production from the project.
Costs incurred include appropriate technical and administrative expenses but not general overheads. If the
exploration and evaluation activities lead to economic production from the project, the related expenditures will
be written-off over the estimated life (useful economic life) of the project on a unit of production basis.
Impairment reviews are carried out regularly by the Directors of the Company. Where a project is abandoned, or
is considered to be of no further commercial value, the related costs will be written off to the Statement of
Comprehensive Income.
The recoverability of these costs is dependent upon the exploration and evaluation activities successfully
transitioning into production from the project, the ability of the Group to obtain necessary financing to complete
the development of the project and derive future profitable production or proceeds from the sale or disposal of
the project.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are initially
recognised at their fair value at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are
acquired separately.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset
is derecognised.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where
applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their
present location and condition. Cost is calculated using the weighted average method. Net realisable value
represents the estimated selling price less all estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
Investments
Investments in subsidiaries are held at cost less any impairment.
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a
party to the contractual provisions of the instrument.
Financial assets
Initial recognition and measurement
The Group applies IFRS 9 “Financial Instruments” and elected the simplified approach method.
The Group classifies its financial assets in the following categories: loans and receivables and fair value through
profit and loss. The classification depends on the nature of the assets and the purpose for which the assets were
acquired. Management determines the classification of its financial assets at initial recognition and this
designation at every reporting date.
71 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. The principal financial assets of the Company are loans and receivables, which arise
principally through the provision of goods and services to customers (e.g. trade receivables) but also incorporate
other types of contractual monetary assets. They are included in current assets, except for maturities greater
than twelve months after the balance sheet date. These are classified as non-current assets.
The Group’s loans and receivables comprise trade and other receivables and cash and cash equivalents in the
Consolidated Statement of Financial Position.
Financial assets are measured upon initial recognition at fair value plus transaction costs directly attributable to
the acquisition of the financial assets, except for financial assets measured at fair value through profit or loss in
respect of which transaction costs are recorded in profit or loss. Other financial assets are classified into the
following specified categories: financial assets as “at fair value through profit and loss” and “loans and
receivables”. The classification depends on the nature and purpose of the financial assets and is determined at
the time of initial recognition.
The fair value of the liability portion of a convertible bond is determined using a market rate of interest rate for
an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until
extinguished on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the
conversion option. This is recognised and included in shareholders’ equity, net of income tax effects.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly
liquid investments with maturities of three months or less. Bank overdrafts that are repayable on demand and
form an integral part of the Group’s cash management are included as a component of cash and cash equivalents
in the consolidated cash flow statement.
Financial assets - impairment
The Group assesses on a forward-looking basis the expected credit losses associated with its instruments carried
at amortized cost and Fair Value Through Profit or Loss (“FVTPL”). The impairment methodology applied depends
on whether there has been a significant increase in credit risk. For trade receivables, the Group applies the
simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial
recognition of the receivables.
Non-financial assets - impairment
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets,
including Goodwill, to determine whether there is any indication that these assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of
the impairment loss (if any). Provision is made for any impairment and immediately expensed in the period.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which
case the impairment loss is treated as a revaluation decrease.
Financial liabilities and equity instruments issued by the Group
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets
72 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the
proceeds received, net of direct issued costs.
Trade payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised costs, using the
effective interest rate method.
Borrowings
These financial liabilities are all non-interest bearing and are initially recognised at amortised costs and include
the transaction costs directly related to the issuance. The transaction costs are amortised using the effective
interest rate method over the life of the liability.
Financial liabilities at Fair Value Through Profit or Loss (“FVTPL”)
Financial liabilities at FVTPL comprise of the Company’s convertible loan notes payable. Financial liabilities are
classified as at FVTPL when the financial liability is (i) contingent consideration that may be paid by an acquirer
as part of a business combination to which IFRS 3 applies, (ii) held for trading, or (iii) it is designated as at FVTPL.
A financial liability is classified as held for trading if:
it has been incurred principally for the purpose of repurchasing it in the near term; or
●
● on initial recognition it is part of a portfolio of identified financial instruments that the Company
manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
●
A financial liability other than a financial liability held for trading or contingent consideration that may be paid
by an acquirer as part of a business combination may be designated as at FVTPL upon initial recognition if:
●
●
●
such designation eliminates or significantly reduces a measurement or recognition inconsistency that
would otherwise arise; or
the financial liability forms part of a group of financial assets or financial liabilities or both, which is
managed and its performance is evaluated on a fair value basis, in accordance with the Company’s
documented risk management or investment strategy, and information about the grouping is provided
internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial
Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to
be designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised
in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial
liability and is included in the ‘other gains and losses’ line item in the income statement.
Other financial liabilities
Other financial liabilities are initially measured at fair value, net of transaction costs. Other financial liabilities are
subsequently measured at amortised cost using the effective interest method, as set out above, with interest
expense recognised on an effective yield basis.
Share based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value
of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is
expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually
vest. A corresponding adjustment is made to equity.
When the terms and condition of equity settled share-based payments at the time they were granted are
subsequently modified, the fair value of the share-based payment under the original terms and conditions and
under the modified terms and conditions are both determined at the date of the modification. Any excess of the
73 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
modified fair value over the original fair value is recognised over the remaining vesting period in addition to the
grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if
the modified fair value is less than the original fair value.
Cancellations or settlements are treated as an acceleration of vesting and the amount that would have been
recognised over the remaining vesting period is recognised immediately.
As a result of the increase in share price and the impact of the estimation of share-based payments the Group
has now recognised an expense for the outstanding share options and warrants.
4. Critical accounting estimates and judgements
The preparation of financial statements in conformity with adopted IFRSs requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and
the reported amounts of sales and expenses during the reporting period. Although these estimates are based on
management’s best knowledge of the amount, event or action, actual results ultimately may differ from those
estimates.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period
are discussed below.
a)
Impairment of assets
The Company is required to test, on an annual basis, whether its non-current assets have suffered any
impairment. Determining whether these assets are impaired requires an estimation of the value in use of the
cash-generating units to which the assets have been allocated. The value in use calculation requires the Directors
to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate to
calculate the present value. Subsequent changes to the cash generating unit allocation or to the timing of cash
flows could impact on the carrying value of the respective assets.
The Company assessed the recoverability of intragroup receivables, and it does not require any impairment
adjustment in current financial year.
5. Segmental analysis
The Management believes, under IFRS 8 – “Segmental Information”, the Group operated in three primary
business segments in 2021, being Holding Companies Expenses, Mining Exploration and Development and
Graphite Mining Extraction.
Segmentation by continuing businesses
Segment results
Revenue to external customers
Graphite Mining Extraction
(Loss) before income tax
Holding Companies Expenses
Mining Exploration and Development
Graphite Mining Extraction
2021
£
2020
£
1,123,426
793,577
(1,002,218)
(239,555)
(14,957)
(609,868)
(193,042)
(55,065)
74 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
Net assets/(liabilities)
Holding Company Expenses
Mining Exploration and 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
9,120,707
(698,823)
(237,415)
5,440,186
(193,749)
(573,146)
2021
£
1,123,019
-
407
2020
£
793,577
-
-
(1,036,857)
785
(220,658)
(634,881)
(20,079)
(261,079)
9,534,110
159,159
(1,508,800)
5,593,346
189,322
(530,416)
6. Revenue from contracts with customers
The Group derives revenue from the transfer of goods at a point in time in the following major product lines and
geographical regions:
2021
Revenue from external customers
Timing of recognition:
At a point in time
2020
Revenue from external customers
Timing of recognition:
At a point in time
7. Expenses by nature
USA
19,565
Europe
211,584
India
892,277
Total
1,123,426
19,565
211,584
892,277
1,123,426
USA
41,022
Europe
122,408
India
630,147
Total
793,577
41,022
122,408
630,147
793,577
The following items have been included in arriving at operating loss
Depreciation
Net foreign exchange loss
PR/IR Expenses
Professional Fees
Auditor’s remuneration has been included in arriving at operating loss
as follows:
2021
£
2020
£
205,723
(22,058)
119,181
55,421
127,100
1,382
65,881
90,910
75 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
Fees payable to the Company’s auditor and their associates for
the audit of the Parent Company and consolidated financial
statements
Fees payable to the Company’s auditor and its associates for
other services:
Corporate finance services
45,000
33,209
50,000
-
8. Employee information
The average monthly number of employees (including Executive Directors) was:
Number of employees for the year:
Wages & salaries (for the above employees)
Social security costs
Share based payments
Directors’ remuneration and transactions
Directors’ remuneration
Emoluments and fees
Remuneration of the highest paid director:
Emoluments and fees
Payment in lieu of retirement benefits
Bonus
Share based payments
2021
203
£
930,707
12,521
68,739
1,011,967
2020
150
£
380,892
7,122
-
388,014
2021
£
2020
£
634,849
324,000
£
£
240,000
24,000
198,000
20,507
180,000
-
-
-
Refer to Directors Remuneration Report for further information in respect of Directors’ remuneration.
9. Finance cost
Interest Expense
10. Income tax
Total current tax
Deferred tax charged to the income statement
Total
The tax assessed for the period is different from the standard rate of
income tax, as explained below:
2021
£
2020
£
147,151
46,003
2021
£
-
27,827
27,827
2020
£
-
54,767
54,767
76 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
Loss before tax on continuing operations
Loss before tax multiplied by the standard rate of income tax of 20%
Tax losses carried forward
Adjustments to tax charge in respect of prior periods
(1,249,113)
(857,975)
(249,823)
221,996
-
(171,595)
116,828
-
Tax (credit)/charge for period
Total tax losses carried forward on which no DTA has been recognized
27,827
2,660,796
54,767
1,175,112
The Group has tax losses available to be carried forward and used against trading profits arising in future periods
of £2,660,796 (2020: £1,175,112). A deferred tax asset of £532,159 (2020: £235,022) calculated at a weighted
average rate of 20% has not been recognised in respect of the tax losses carried forward on the basis that there
is insufficient certainty over the level of future profits to utilise against this amount.
11. Earnings per share
Basic and diluted
Earnings per share is calculated by dividing the loss attributable to the equity holders of the Company by the
weighted average number of Ordinary shares in issue during the period.
Continuing operations:
Loss attributable to equity holders of the Company (£)
Weighted average number of ordinary shares in issue
Loss per share (pence)
Diluted number of ordinary shares in issue
2021
2020
(1,694,632)
64,883,546
(2.61)
(912,742)
59,756,437
(1.53)
2021
71,357,375
2020
59,756,437
Given the loss for the year, the diluted earnings per share was the same as basic earnings per share as this would
otherwise be dilutive.
12. Intangible Assets
Group
Cost
At 1 April 2019
Additions
Impairment
At 1 April 2020
Additions
Forex Change
At 31 March 2021
Accumulated amortisation
At 1 April 2019
Charge for the year
At 1 April 2020
Charge for the year
At 31 March 2021
Net book value
At 1 April 2019
At 1 April 2020
At 31 March 2021
Exploration assets
£
3,902,234
135,766
(346,756)
3,691,243
-
8,889
3,682,354
-
-
-
-
-
3,902,234
3,691,243
3,682,354
77 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
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 1 April 2020
At 31 March 2021
Net book value
At 1 April 2019
At 1 April 2020
At 31 March 2021
Shares in group undertaking
£
3,539,448
3,539,448
3,539,448
3,539,448
3,539,448
3,539,448
The Company’s investments at the Statement of Financial Position date in the share capital of companies include
the following:
Subsidiaries
Tirupati Resources Mauritius
Registered: C/o Alliance Financial Services Ltd, Level 2, Standard Chartered Tower, Cybercity, Ebene,
Republic of Mauritius
Nature of business: Holding and administrative entity
Class of share
Ordinary shares
*Tirupati Resources Mauritius is liquidated on 28th May 2021 and the shares are transferred to Tirupati Graphite Plc
%
Holding
100*
Tirupati Madagascar Ventures
Registered: Mining Business Center, Box No – 5, Lot K 7, Mamory, Ivato, Antananarivo 105, Madagascar
Nature of business: Evaluation and exploration of mining operations
%
Holding
Class of share
98*
Ordinary shares
*indirectly through Tirupati Resources Mauritius. Tirupati Resources Mauritius was liquidated on 28th May 2021 and the shares have been
transferred to Tirupati Graphite Plc
Establissements Rostaing
Registered: Lot II N 95 SB BIS E, Ambatobe, Antananarivo 103, Madagascar
Nature of business: Graphite mining extraction
%
Class of share
Holding
100*
Ordinary shares
* 95% held indirectly by Tirupati Resources Mauritius. Tirupati Resources Mauritius is liquidated on 28th May 2021 and the shares are
transferred to Tirupati Graphite Plc
14. Property, plant and equipment
78 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
Group
Cost
At 1 April 2019
Additions
At 1 April 2020
Additions
Reclassification
At 31 March 2021
Plant and
Machinery
£
Infrastructure
& Fixtures
£
Assets under
construction
£
Development
costs
Total
£
773,167
476,457
1,249,624
735,950
-
1,985,574
82,518
34,301
116,819
294,976
-
411,795
219,561
138,762
358,323
217,210
544,209
1,119,742
220,400
323,809
544,209
-
(544,209)
-
1,295,646
973,329
2,268,975
1,248,136
-
3,517,111
151,263
Accumulated depreciation and impairment
At 1 April 2019
Depreciation
At 1 April 2020
Depreciation
At 31 March 2021
103,098
254,361
146,893
401,254
9,977
24,002
33,979
58,830
92,809
-
-
-
-
-
-
-
-
-
-
161,240
127,100
288,340
205,723
494,063
995,263
1,584,320
82,840
318,986
358,323
1,119,742
544,209
-
1,980,635
3,023,048
Assets under
construction
£
Total
£
Carrying amount
As at 1 April 2020
As at 31 March 2021
Company
Cost
At 1 April 2019
Additions
At 1 April 2020
Transfer to Subsidiary
At 31 March 2021
At 1 April 2019
Depreciation
At 1 April 2020
Depreciation
At 31 March 2021
Carrying amount
As at 1 April 2020
As at 31 March 202!
15. Trade and other receivables
£
220,400
323,809
544,209
(339,578)
204,631
220,400
323,809
544,209
(339,578)
204,631
-
-
-
-
- -
- -
- -
-
544,209
204,631
544,209
204,631
79 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
Trade receivables
Other debtors
Amounts owed by group undertakings
Prepayments
Group
Company
2021
2020
2021
2020
£
721,534
381,334
-
-
1,102,868
£
208,476
217,693
-
7,887
409,309
£
566,646
87,846
4,893,314
-
5,547,806
£
208,476
103,764
2,397,588
-
2,709,828
In the Directors’ opinion, the carrying amounts of receivables is considered a reasonable approximation of fair
value. The Group monitors on a monthly basis the receivable balance and makes impairment provisions when
debt reaches a certain age. There are no significant known risks as at 31 March 2021.
16. Inventories
Cost and net book value
Raw materials and consumables
Finished and semi-finished goods
Goods in Transit
17. Trade and other payables
Current:
Trade payables
Social security and other taxes
Other payables
Amounts due from group
Accruals
Group
2021
£
222,352
26,160
212,580
461,092
2020
£
57,600
92,505
-
150,105
Group
Company
2021
£
403,361
3,422
-
-
38,490
445,273
2020
£
272,407
25,044
11,229
-
119,191
427,871
2021
£
146,213
-
-
35,077
38,490
219,780
2020
£
135,362
25,044
5,770
163,566
103,613
433,355
In the Directors’ opinion, the carrying amount of payable is considered a reasonable approximation of fair value.
Non-current:
Group
Company
2021
£
2020
£
2021
£
Director’s remuneration
Management Salary Payable
Lease liability
-
-
23,864
23,864
*In 2020 it was considered as Non-Current as payment was deferred till successful capital raise through public issue. Due to the uncertain
nature of this activity the company thought it was prudent to treat it as Non-current.
632,015*
147,606
37,767
817,388
-
-
-
-
2020
£
632,015
147,606
-
779,621
18. Provisions
80 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
No provisions have existed within the financial year or persist at year end.
19. Borrowings
During this financial year the Company raised further £513k through a convertible loan note instrument (“CLN”).
In the year ended 31st March 2021, CLNs £40k were converted in the equity. Interest on the CLN is chargeable at
12%.
Within one year
Between 2 and 5 years
2021
-
1,283,000
1,283,000
2020
-
810,000
810,000
The loan notes shall be redeemed by the Company, at any time after the first anniversary of an Initial Public
Offering up to the Maturity Date or by the Noteholder or the Company, on the Maturity Date being the 31 May
2022.
Conversion can be made 15 Business Days after the date of completion of a successful Initial Public Offering to
convert all of the Notes outstanding into fully paid Ordinary Shares at a price equal to the price per Share paid
by investors participating in the Initial Public Offering.
20. Share capital
2021
Number
2021
£
2020
Number
2020
£
Allotted, called up and fully paid
Ordinary shares of 2.5p each
74,843,323
1,871,084
59,925,243
1,498,131
Shares were issued during the year as follows:
Shares issued from a placing on 15 July 2020
Shares issued from a placing on 04 August 2020
Cost of issue (£)
Number of shares
issued
-
-
995,757
500,100
Shares issued from a placing on 14 December 2020
967,103
13,333,334
Shares issued from a placing on 26 January 2021
-
88,889
967,103
14,918,080
21. Share based payments & warrant reserve
During the first two years after incorporation of the Company, with the consent of its Board and senior
management team, the Company adopted a minimal approach to incentives and provided no bonuses to the
executive management team or the Board. However, to show the appreciation of the Company, the Board was
provided with an annual incentive package in the form of warrants to subscribe for equity shares of the Company
at a premium to the prices at which Ordinary Shares have been subscribed when the Company raised equity in
the relevant period. The Company has also provided broker warrants to Optiva, on a success basis, for the
fundraising activities executed by it prior to Admission. In addition to this, the Company has also issued warrants
to some CLN subscribers for funds raised before admission of the Company to the LSE.
81 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
All warrants are equity-settled, in accordance with IFRS 2, by award of warrants to acquire ordinary shares or
award of ordinary shares. The fair value of these awards has been calculated at the date of grant of the award.
The fair value of the warrants granted was calculated using a Black-Scholes model. Changes in the assumptions
can affect the fair value estimate of a Black-Scholes model.
Following are the key assumptions used to estimate the fair value of the warrants issued:
a) Expected Volatility: 20%
b) Contractual Life of the warrant: 3 years
c) Risk free interest rate: 0.38% p.a.
Following warrants over ordinary shares have been granted by the Company and are outstanding as on 31 March
2021:
Grant Date
Expiry Date
Exercise Price (£)
Number of warrants
exercisable and
outstanding
31 December 2017
13 September 2018
31 December 2018
31 March 2019
31 December 2019
26 February 2020
31 March 2020
15 June 2020
15 June 2020
30 June 2020
16 July 2020
14 December 2020
14 December 2020
30 June 2021
13 November 2021
31 December 2021
31 March 2022
31 December 2022
26 February 2023
31 March 2023
15 June 2023
15 June 2023
30 June 2023
12 August 2022
14 December 2023
14 December 2023
0.300
0.200
0.400
0.400
0.400
0.675
0.400
0.675
0.900
0.675
0.525
0.450
0.675
Total
1,000,000
376,509
1,520,000
480,000
1,620,000
36,000
960,000
222,222
222,222
22,800
41,143
170,329
113,553
6,784,778
Though the Company had committed to provide these warrants to the parties mentioned in the table below
since financial year 2017-18, the warrant instrument under which these warrants are approved was finalized and
formally approved by the board in the current financial year the warrant reserve was created first time in the
current financial year, as the charge relating to previous periods was immaterial to the Company.
Warrants issued to
Brokers
Members of the Board & executive management
CLN Investors
Total
22. Financial instruments
Number of
warrants
outstanding
760,334
5,580,000
444,444
6,784,778
Warrant
reserve
£
16,457
68,739
45,361
130,557
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
82 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
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
2021
£
Fair value
2021
£
Book value
2020
£
Fair value
2020
£
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
Lease Liabilities
(a)
(a)
(a)
(a)
(a)
1,644,189
1,644,189
46,640
46,640
720,628
720,628
409,309
409,309
2,364,817
2,364,817
455,949
455,949
448,633
448,633
1,245,259
1,245,259
1,283,000
1,283,000
810,000
810,000
23,864
23,864
Total at amortised cost
1,755,497
1,755,497
2,055,259
2,055,259
Valuation, methodology and hierarchy
(a) The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables
and deferred income, and Borrowings are all stated at book value. All have the same fair value due to their
short-term nature.
Market risk
Market price risk arises from uncertainty about the future valuations of financial instruments held in accordance
with the Group's investment objectives. These future valuations are determined by many factors but include the
83 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
operational and financial performance of the underlying investee companies, as well as market perceptions of
the future of the economy and its impact upon the economic environment in which these companies operate.
Credit risk
Credit risk is the risk that counterparties to financial instruments do not perform their obligations according to
the terms of the contract or instrument. The Group is exposed to counterparty credit risk when dealing with its
customers and certain financing activities.
The immediate credit exposure of financial instruments is represented by those financial instruments that have
a net positive fair value by counterparty at 31 March 2021. The Group considers its maximum exposure to be:
Financial assets
Cash and cash equivalents
Loans and receivables, net of impairment
2021
£
2020
£
1,644,189
1,102,868
2,747,058
46,640
409,309
455,949
All cash balances are held with an investment grade bank who is our principal banker. Although the Group has
seen no direct evidence of changes to the credit risk of its counterparties, the current focus on financial liquidity
in all markets has introduced increased financial volatility. The Group continues to monitor the changes to its
counterparties’ credit risk.
Liquidity risk
Liquidity risk is the risk the Group will encounter difficulty in meeting its obligations associated with financial
liabilities as they fall due. The Board are jointly responsible for monitoring and managing liquidity and ensures
that the Group has sufficient liquid resources to meet unforeseen and abnormal requirements. The current
forecast suggests that the Group has sufficient liquid resources.
Available liquid resources and cash requirements are monitored using detailed cash flow and profit forecasts
these are reviewed at least quarterly, or more often as required. The Directors decision to prepare these accounts
on a going concern basis is based on assumptions which are discussed in the going concern note above.
The following are the contractual maturities of financial liabilities:
31 March 2021
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
£
445,273
1,283,000
-
-
445,273
-
-
-
-
-
-
1,283,000
Cash flow management
The Group produces an annual budget which it updates quarterly with actual results and forecasts for future
periods for profit and loss, financial position and cash flows. The Group uses these forecasts to report against
and monitor its cash position. If the Group becomes aware of a situation in which it would exceed its current
available liquid resources, it would apply mitigating actions involving reduction of its cost base. The Group would
also employ working capital management techniques to manage the cash flow in periods of peak usage.
84 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
Currency risk
The Group operates internationally and is exposed to foreign exchange risk. Foreign exchange risk arises from
future commercial transactions and recognised assets and liabilities denominated in a currency that is not the
functional currency of the relevant Group entity. The Group’s primary currency exposure is to US Dollar, which
is the currency of all intra-group transactions as well as denomination of selling price of the products. The group
also has some exposure to Malagasy ariary due to its operating subsidiaries in Madagascar.
Considering the natural hedge available the Group currently doesn’t hedge the currency risk. The Group’s and
Company’s exposure to foreign currency risk at the end of the reporting period is summarised below. All amounts
are presented in GBP equivalent.
Group
Cash and cash equivalents
Trade & other receivables
Trade & other payables
Net Exposure
Company
Cash and cash equivalents
Loans to subsidiaries
Trade & other receivables
Trade & other payables
Net Exposure
USD
2021
£
90,236
522,400
(151,353)
461,283
MGA
2021
£
USD
2020
£
MGA
2020
£
66,118
489,622
(301,816)
253,924
49,519
354,214
(163,566)
240,167
2,574
95,255
(147,662)
(49,833)
USD
2021
£
3,619
4,893,314
522,400
(151,353)
5,267,980
USD
2020
£
28,475
2,353,713
354,214
(163,566)
2,572,836
Sensitivity Analysis
As shown in the table above, the Group is primarily exposed to changes in the GBP:USD & GBP:MGA exchange
rates. The table below shows the impact in GBP on pre-tax profit and loss of a 10% increase/ decrease in the GBP
to USD exchange rate, holding all other variables constant. Also shown is the impact of a 10% increase/decrease
in the GBP to MGA exchange rate, being the other primary currency exposure.
2021
GBP:USD exchange rate increases by 10%
GBP:USD exchange rate decreases by 10%
GBP:MGA exchange rate increases by 10%
GBP:MGA exchange rate decreases by 10%
2020
GBP:USD exchange rate increases by 10%
GBP:USD exchange rate decreases by 10%
Group
£
532
(592)
Company
£
53,071
(64,864)
(51,402)
57,183
-
-
Group
£
934
(1,031)
Company
£
22,055
(45,453)
GBP:MGA exchange rate increases by 10% (36,223) -
GBP:MGA exchange rate decreases by 10% 40,034 -
85 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2021
23. Related party transactions
Tirupati Carbons and Chemical Pvt Limited (TCCPL) is an entity incorporated in India. The Company is connected
to TCCPL in that both Shishir Poddar and Hemant Poddar were both directors and shareholders of TCCPL during
the year. At year end, included within debtors was an amount of Nil (2020: £135,005) and revenue recorded for
the year of £46,090 (2020: £101,659) from TCCPL.
Tirupati Speciality Graphite Private Limited (TSG) is an entity incorporated in India. The Company is connected to
TSG in that both Shishir Poddar and Hemant Poddar were both directors and shareholders of TSG during the
year. At year end, a net amount was receivable of £250,656 (2020 - £73,723) and revenue of £238,602 (2020 -
£291,662) from TSG.
Haritmay Ventures LLP (HV) is an entity incorporated in India and engaged in manufacturing proprietary tailor
made flake graphite processing machinery and equipment which the Company uses in its projects. The Company
is connected to HV in that Shishir Poddar is partner and shareholder of HV during the year. At year end, a net
amount was receivable of £72,552 (2020 - Nil) and revenue of Nil (2020 - Nil) from HV.
Optiva Securities Limited is an entity incorporated in the United Kingdom. The Company is a stock brokerage firm
connected to the Company being the sole broker of the Company and Christian Gabriel St.John-Dennis one of
the directors of the Company and holding a position with Optiva Securities Limited during the year. At year end,
the Company incurred brokerage and consultancy fees, business development fees of £378,402 (2020- £50,894).
24. Events after the reporting period
In April 2021, the Company completed a placing of 11,111,111 ordinary shares of £0.025 each in the Company
at a price of £0.90 per share with institutional and other investors to raise an aggregate gross amount of £10
million (the “Placing”). The net proceeds of the Placing will primarily be used to expedite and accelerate the
Company's modular MTDP.
In September 2021 the Company commissioned its second flake graphite mining and processing facility at the
Vatomina project increasing its installed capacity from 3,000 tpa to 12,000 tpa. This shall materially change the
Company’s trading position.
In June 2021, the Group decided to dissolve the intermediary company – Tirupati Resources Mauritius in
Mauritius and bring the Madagascan subsidiaries directly under Tirupati Graphite Plc. This will reduce
administrative costs and management time the Group needed to spend to keep this holding company floating.
In August 2021, the Company entered into a binding agreement subject to certain conditions precedent, for
acquisition of Mozambique based graphite projects from ASX listed Battery Minerals Limited. The consideration
payable by the Company on completion is a total sum of AU$ 12.5 million of which AU$ is to be settled in cash
and AU$11.5 in ordinary shares of the Company. The Acquisition is subject, amongst other things, to the
mandatory shareholder approval of Battery Minerals and approval of the transaction by the Ministry of Mineral
Resources and Energy in Mozambique.
86 | Page