Tirupati Graphite plc
Annual report and financial statements
for the year ended 31 March 2022
Registered number: 10742540
Tirupati Graphite plc
Table of Contents
Annual Report and Financial Statements
period ended 31 March 2022
Table of Contents
Company Information ..................................................................................................................................................................... 4
Chairman’s Statement .................................................................................................................................................................... 5
Business Review ............................................................................................................................................................................... 7
A.
B.
C.
D.
E.
F.
RECAP ..................................................................................................................................................................................................... 7
ADDRESSABLE MARKETS .................................................................................................................................................................... 8
CAPITAL MARKETS ENGAGEMENT ................................................................................................................................................. 11
MADAGASCAR PRIMARY GRAPHITE PROJECTS ........................................................................................................................... 14
1. Sahamamy operations and development: .............................................................................................................................................. 15
2. Vatomina Operations & Development ..................................................................................................................................................... 16
3. Other developments across the projects in Madagascar.................................................................................................................. 18
4. Rehabilitation and Restoration.................................................................................................................................................................... 18
5. Snapshot of Consolidated Income Statement ....................................................................................................................................... 19
TIRUPATI SPECIALITY GRAPHITE PVT TD & DOWNSTREAM PROCESSING.............................................................................. 20
LONGER TERM TARGETS AND INORGANIC GROWTH OPPORTUNITIES .................................................................................. 20
Strategic Report ............................................................................................................................................................................ 23
Principal activities............................................................................................................................................................................................. 23
Events since the year end ............................................................................................................................................................................... 23
Results for the year ended 31 March 2022 ................................................................................................................................................. 23
Key performance indicators ........................................................................................................................................................................... 23
DIRECTORS’ STATEMENT UNDER SECTION 172 (1) OF THE COMPANIES ACT 2006 ............................................................................ 23
Outlook towards Shareholders ...................................................................................................................................................................... 25
Outlook towards its Employees ..................................................................................................................................................................... 26
Developing relationships with the community and other stakeholders ............................................................................................... 26
Conclusion .......................................................................................................................................................................................................... 26
Principal risks and uncertainties .................................................................................................................................................................... 26
Principal risks and uncertainties to the Group ........................................................................................................................................... 27
Corporate and social responsibility .............................................................................................................................................................. 30
Greenhouse Gas Emissions ............................................................................................................................................................................. 30
Diversity and Inclusion .................................................................................................................................................................................... 31
Going concern basis ......................................................................................................................................................................................... 31
Directors’ Report ........................................................................................................................................................................... 32
Incorporation & admission to trading .......................................................................................................................................................... 32
Results and dividends ...................................................................................................................................................................................... 32
Financial instruments....................................................................................................................................................................................... 32
Future developments ....................................................................................................................................................................................... 32
Share capital ...................................................................................................................................................................................................... 32
Memorandum and Articles of Association .................................................................................................................................................. 33
Liability of members limited .......................................................................................................................................................................... 33
Issue of shares ................................................................................................................................................................................................... 33
Directors and directors’ interests .................................................................................................................................................................. 33
Directors’ Remuneration ................................................................................................................................................................................. 34
Tirupati Graphite plc
Table of Contents
Annual Report and Financial Statements
period ended 31 March 2022
Substantial shareholdings ............................................................................................................................................................................... 36
Statement of Directors’ responsibilities ...................................................................................................................................................... 36
Responsibility statement of the Directors in respect of the Annual Report ........................................................................................ 37
Charitable and political donations ................................................................................................................................................................ 37
Health and safety .............................................................................................................................................................................................. 37
Statement of disclosure to independent auditors ..................................................................................................................................... 38
Independent auditor ........................................................................................................................................................................................ 38
Resolutions proposed at the Annual General Meeting ............................................................................................................................ 38
Corporate Governance Report ................................................................................................................................................... 39
Chairman’s Statement on Corporate Governance ..................................................................................................................................... 39
Board objectives and operation .................................................................................................................................................................... 42
Meetings of the Board of Directors .............................................................................................................................................................. 43
Insurance cover ................................................................................................................................................................................................. 43
Nominations Committee ................................................................................................................................................................................. 43
Audit Committee .............................................................................................................................................................................................. 44
Remuneration Committee .............................................................................................................................................................................. 44
Internal controls ............................................................................................................................................................................................... 45
Dialogue with major shareholders ................................................................................................................................................................ 45
Independent Auditor’s Report to the Members of Tirupati Graphite PLC ......................................................................... 46
Consolidated Statement of Comprehensive Income ........................................................................................................ 53
Consolidated and Company Statement of Financial Position ...................................................................................... 54
Consolidated Statement of Changes in Equity .................................................................................................................. 56
Company Statement of Changes in Equity ......................................................................................................................... 58
Consolidated Statement of Cash Flows ............................................................................................................................... 60
Company Statement of Cash Flows ....................................................................................................................................... 62
Notes to the Financial Statements ........................................................................................................................................ 64
Tirupati Graphite plc
Company Information
Annual Report and Financial Statements
period ended 31 March 2022
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 (Resigned 23 May 2022)
London Registrars Ltd
Suite A, 6 Honduras Street
London
EC1Y 0TH
Share Registrars Ltd.
The Courtyard 17 West Street
Farnham Surrey
GU9 7DR
49 Berkeley Square
London
W1J 5AZ
Optiva Securities Ltd
49 Berkeley Square
London
W1J 5AZ
10742540
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
Bird & Bird LLP
12 New Fetter Lane
London
EC4A 1JP
ICICI Bank UK Plc
One Thomas More Square
London
E1W 9HB
FTI Consulting
200 Aldersgate
Aldersgate Street
London EC1A 4HD
4 | Page
Tirupati Graphite plc
Chairman’s Statement
Annual Report and Financial Statements
period ended 31 March 2022
Chairman’s Statement
As always, I extend a very warm welcome to the new members of our company and our dedicated, long-term
stakeholders. Tirupati Graphite (‘TG”) has continued to evolve and expand over the past year, helping to address the
increasing demand for graphite, one of the key critical minerals in the energy transition. Amidst this wider market
demand, value creation remains core to our culture, and we continue to leverage our extensive graphite expertise and
key principles to drive sustainable value across our stakeholder base. We have adopted four key principles of value
creation since our inception, which have evolved with us and continue to guide us:
● Value creation for our shareholders:
Through carefully considered and well-crafted business strategies and plans, and adopting a culture of cost
effectiveness, hard work, and delivering on targets.
● Value creation for the planet and for future generations:
By developing unique materials which have many ‘green’ applications 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 our objectives and values.
● Value creation for the local communities we operate in:
By looking after our employees and their families and providing healthcare, education and recreational
facilities and support for local communities, helping bring communities together and improving their general
quality of life.
This year was the first full year since our ordinary shares were admitted to trading on the standard segment of the
main markets of The London Stock Exchange (“LSE”). While we continued to evolve the development of our projects
in Madagascar, we also sharpened our long term aims, targeting circa 8% of the global flake graphite market or
400,000 tpa by 2030. Flake Graphite and its derivatives are essential materials in technologies for achieving improved
energy efficiency, e-mobility, fire hazard safety, thermal management and evolution of new age materials. We
recognise its importance as a material, its market demand expectations, the economics that create a sound business
model, and the opportunities it brings to us.
During the year under review, I am pleased to report that considerable progress was made towards achieving our first
stage objective of establishing a globally significant flake graphite capacity at our Madagascar operations. Our
leadership and team found innovative solutions for substantially insulating our progress and operations to remain
robust, despite initial headwinds. A more detailed account is contained in the following sections of the report.
Tirupati Graphite has significant differentiators which provide us the key strengths in our endeavour to create value
for our shareholders.
1. We have a strong track record over our five years of operations. Vatomina was a brownfield project at
incipient stage when we acquired it 2017. When we acquired Sahamamy later that year, it was a primitive
and small operation producing 20 tons flake graphite a month. In December 2020, our equity shares were
admitted to trading on the LSE when we were a small 3,000 tpa operation in Sahamamy. Due to the hard
work of our workforce over the last two years we are on the cusp of reaching a globally significant capacity
of 30,000 tons per annum flake graphite production. We have progressed this in spite of headwinds from the
pandemic and materially adverse weather conditions. This comes from the level of commitment of the
company’s leadership and operational teams, as well as our deep expertise in graphite. .
5 | Page
Tirupati Graphite plc
Chairman’s Statement
Annual Report and Financial Statements
period ended 31 March 2022
2. Since December 2020, we have raised gross proceeds of GBP 16 million, plus a recent small raise on CLN’s to
meet the gap funding of c. 1 million GBP to complete the above targets. The quantum of capacity created
and other feats like small hydro power plant establishment, project infrastructure development, continued
second phase of exploration, extensive additional human resources development for increasing capacities
and more as reported by the company on a regular basis provide a one to one comparable for peer analysis
on the company’s ability to derive output at lower investments. This remains our strength with strategic
decisions taken by the company as we adapt to the ecosystem of our projects’ locations. This strength creates
value for our shareholders and provides a comparable to our peers.
3. We have demonstrated positive operating margins even from very small operations, and as we grow, we are
confident that we will benefit from economies of scale. We are now reaching the stage of further
demonstration of these economies of scale and will continue our endeavour to remain a low-cost structure
producer.
As the Energy Transition gathers pace, and the demand for graphite increases, we will continue to push ahead with
our ambitious goal to be a global leader supplying graphite to 8% of the market. We look forward to updating
stakeholders in due course as we make the necessary steps towards this target.
Shishir Poddar
Executive Chairman & Managing Director
30 September 2022
6 | Page
Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2022
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 2022.
A. RECAP
Incorporated in April 2017, Tirupati Graphite Plc is a company developing its business as a specialist flake graphite
company and developing advanced materials, which significantly contribute to the green economy being critical to
the energy transition goals and the world of advanced materials. Setting the base for its business development until
it completed its Initial Public Offering and admission to the main markets of the London Stock Exchange on 14
December 2020, The Company has remained focused on furthering the business 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 more.
Through its two subsidiaries in Madagascar, the Company holds c.33 square kilometres flake graphite mining permits
issued for forty years and is engaged in developing these to a target 84,000 tons per annum output capacity.
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. Having successfully proven the concepts, post its
admission and IPO, the Company engaged in larger scale developments, setting up and commissioning a 9,000 tpa
module at the Vatomina Project and starting construction of the next 18,000 tpa plant at Sahamamy.
In October 2018, the Company entered into an agreement to acquire the then issued share capital of Tirupati Speciality
Graphite Private Limited (“TSG”), an Indian private company then engaged in developing downstream processing of
flake graphite and development of graphene and advanced materials. TSG has developed 1,200 tpa intercalated flake
graphite products for flame retardant and other applications. TSG also intended to develop a range of eco-friendly
technologies for manufacture of a gamut of flake graphite used in hi-tech applications including purification,
intercalation, micronisation and spheroidisation. Additionally, TSG intended to develop a technology centre for
graphene manufacture and applications development and mineral processing technology. The agreement was subject
to applicable regulatory approvals.
In August 2021 the company also entered into an agreement for acquisition of Suni Resources SA (‘Suni”), beneficially
owned by Battery Minerals Ltd, an ASX listed Australian company. Suni holds two flake graphite mineral concessions
in Mozambique, the Montepuez and Balama Central projects. Montepuez is an advanced stage construction-initiated
project and Balama Central a BFS level ready for development project. The transaction is awaiting regulatory approvals
refer page 20.
The Company adopted a modular development strategy designed with the flexibility for expansion of its operating
projects based on the evolution of the global flake graphite and graphene markets and their derivative products. The
strategy has brought the Company into early-stage operations at investments lower than its peers and facilitated
systematic user based market development for the Company’s products.
The Company continues to develop its businesses and the year under review saw multifaceted achievements as are
further described.
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Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2022
B. ADDRESSABLE MARKETS
The diverse and unique properties of graphite provide 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 as the largest material constituent of lithium ion (“L-ion”) batteries. Additionally, graphite has diverse
applications in fuel cells, thermal management in electronics, fire safety, metal manufacturing and forming, polymers,
composites and other advanced materials.
Over 70% of the primary processed graphite is produced in China, and over 85% of the downstream processed
specialty graphite is produced in China. 100% of commercial anode material capacity rests in East Asia today. Thus,
diversification of source is essential given the growing demand and importance of flake graphite as a classified critical
material in the energy transition economy.
Source: IEA, FT©
8 | Page
Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2022
Natural graphite is in fact the only major battery mineral where the entire supply chain is currently dominated by a
single nation. Being a key component in the energy transition and with extensive dependence on a single dominant
source being China, flake graphite has been classified as a critical material by the US, the EU and most recently by the
UK under its critical minerals policy. 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.
Flake graphite has multiple growing applications with highest demand growth expected from the use in anode of L-
ion batteries, graphite being the largest constituent of the battery. It is estimated that about 50 kilograms of graphite
are used in an electric vehicle, the market of which expanded by more than 100% in 2021 as compared to 2020. The
primary sources of natural graphite are very limited outside China. Benchmark forecasts extensive primary capacity
development required to meet expected natural graphite demand:
Fig.: Benchmark Forecast of Mine Development required by 2035 for Battery Minerals
UBS projects a 7x growth in natural flake graphite demand growth, primarily from EV penetration, by 2030 to a 5.9
million tons market:
Fig.: Supply Growth Required in Battery Minerals by 2030 as a multiple of Current Demand
9 | Page
Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2022
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. Multiple car
manufacturers have disclosed their plans and targets of shifting to EVs from ICE engines over the next 5 - 10 years.
Europe has come forward to become the second largest in planned battery capacity region. Similarly, other nations
like USA, UK, India and more have seen multiple companies announcing cell manufacturing plans. As the sales of EVs
continues to grow strongly even through tough times, the forthcoming demand for its critical components like graphite
seem inevitable.
Fig.: Planned Gigafactories across EU & UK (Source: Battery-news.de)
Additionally, conventional applications of graphite have also shown an increased consumption in a few developing
nations, with companies focussing on diversifying sources from China. The changing geopolitical landscape in the globe
is seeing increasing policy measures from the developed world for localisation of sources and for promoting resource
projects of their companies in other friendly jurisdictions.
Furthermore, graphite is being used in other hi-tech applications, forming the core in various new and advanced
materials and technologies. For example, 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.
As mentioned, high purity graphite is an essential product in producing battery grade graphite. Currently, most
Chinese manufacturers use environmentally damaging processes such as hydrofluoric acid treatment methods, and
others globally use an energy intensive ash fusion method for making this product. Over 90% of this material is
produced in China. The zero-HF, zero-waste process developed by TSG has received a lot of interest and demand from
customers across the 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
range of sectors and applications. These include fast-charging and foldable phones, consumer wearables,
supercapacitors, energy storage, aerospace, automotive, defence, medical, high-end sensors, desalination, and
filtration. Through its extensive work with a number of these industry players, it is the Company’s belief that many of
these technologies being researched are on the cusp of mass commercialisation.
In conclusion, being the critical material it is, flake graphite and its downstream speciality graphite markets are poised
to grow multiple times.
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Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2022
C. CAPITAL MARKETS ENGAGEMENT
The year under review was the first full year of the Company following its IPO and admission to trading on the standard
segment of the main markets of London Stock Exchange. The company adopted a policy of proactive communication
with the capital markets, appraising current and prospective investors of the Company’s activities on a regular basis
through the Regulatory News Service, social media and emails. It also closely coordinated with its advisors, including
its brokers and financial advisors, and IR and PR advisors, while maintaining high quality of communications. A
summary of the material news flow released via RNS during 1 April 2021 to 31 March 2022 is tabulated below:
Sl No
Date
RNS No
Summary
1
09/04/2021
9550U
Q1 2021 Sahamamy primary graphite operations achieve
record production and sales
Update on construction of the uprated Vatomina module
enhanced to 9,000tpa from 6,000tpa
2
3
4
5
16/04/2021
7094V
issuing
Oversubscribed placing to raise £10 million by
11,111,111 ordinary shares of £0.025 each at £0.90 per placing
share
21/04/2021
0909W
Vatomina mine opening and commencement of operations of
the mine to stockpile ore
04/05/2021
2908X
Development of Graphene-Aluminium composite by TSG
25/06/2021
1262D
Downstream specialty graphite development update including
increased sales of CarboflameX® and GrafEN 45545™ in Europe
following REACH certification
Allotted additional land
expandable graphite operations
in Patalganga for expansion of
6
29/06/2021
3751D
Primary mining & processing operations update
Planned construction activities for the 100Kw hydro power
plant
11 | Page
Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2022
7
8
06/07/2021
1908E
Marketing MoU with Japanese trading house Hanwa Co., LTD
23/07/2021
2098G
Operations commencement at new graphene & technology
centre by TSG capable of manufacturing up to 1 kg per day of
GO, RGO and Al-Gr Composite
9
17/08/2021
8155I
Proposed strategic acquisition of Mozambique graphite
projects from ASX listed Battery Minerals Limited
10
11
24/08/2021
5270J
Trading Results for the Year Ended 31 March 2021
17/09/2021
2002M
Final results and annual report for the year 1 April 2020 to 31
March 2021
12
30/09/2021
5555N
Battery Minerals'
acquisition
approvals for the acquisition
shareholder approve
facilitating progressing
requisite
the proposed
in-country
13
04/10/2021
8766N
Graphene research collaboration with Monash University,
Australia to develop commercial applications for a range of
graphene products
14
12/10/2021
7204O
Received clearance for cross listing of its ordinary shares for
trading on OTCQX markets
15
14/10/2021
1245P
Live investor event on 28/10/2021 post AGM earlier during the
day
16
28/10/2021
4896Q
AGM Statement
17
18
29/10/2021
6471Q
Inaugural Sustainability Report Published
04/11/2021
2580R
Trading in ordinary shares begins on OTCQX Markets
19
10/11/2021
8439R
Mining licence granted for Balama Central graphite project for
production of 50,000tpa of graphite concentrate
12 | Page
Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2022
20
02/12/2021
2751U
Interim results for the six months ended 30 September 2021
announced
21
22
09/12/2021
1066V
Commercial production commences at Vatomina
20/01/2022
0114Z
Transformational flake graphite processing technology of
column flotation system for use across the Company's
specialty graphite production plants
23
24/01/2022
2912Z
Construction update of the new 18,000 tpa plant at
Sahamamy, new mining equipment landed.
24
22/02/2022
3145C
TGMRC (unit of TSG) develops mineral processing technology
solution for Optiva Resources Limited and receive a success fee
of 5% equity in ORL being 4,578,175 equity shares and an equal
number of transferable warrants with three-year life
25
24/02/2022
6360C
TSG signs an exclusive UK marketing and distribution
agreement with Minralis Limited for CarboflameX® and GrafEN
45545® products
26
31/03/2022
6805G
Update on construction of the 18,000 tpa to plant at
Sahamamy, to enter production in H2 calendar year 2022
Note: TSG is not part of the group for which consolidated financials are being published as at 31 Mar 2022. For the
details of relationship between TG Plc and TSG please refer page 20
Additionally, the Executive Chairman and senior executives of the company held regular interviews with media related
to capital markets, the Company held webinars and Q&A sessions with investors, and reached out extensively to
appraise the markets of its activities.
The year also experienced strong tailwinds for the EV sector and the global agenda of decarbonisation with COP 26
leading to nations around the globe setting net zero targets. With graphite being an important constituent material,
the Company preferred to fast track the development of its projects and undertook a follow-on placing with
institutional and other investors. This successfully closed as an oversubscribed placing at an issue price of 90p per
share in April 2021 and raising gross proceeds of GBP 10 million led by its broker, Optiva Securities Limited.
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 and
otherwise.
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Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2022
The Company was awarded the coveted CFI ‘2022 Global Award for Best Value Creation Strategy’ for a second year in
row, 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 owns and operates the Vatomina and Sahamamy flake graphite projects in Madagascar. Post admission
in December 2020, having raised the capital to add capacities over the ‘proof of concept’ 3,000 tpa plant the company
was then operating, it embarked on the construction of a 9,000 tpa facility at Vatomina, which was completed and
commissioned during the year. The Company also started the construction of the next 18,000 tpa facility at the
Sahamamy project during the year with the target to reach a significant 30,000 tpa flake graphite capacity. Thus, we
remained in the operations and development mode during the year in line with our stated strategy.
The Vatomina 9,000 tpa plant was commissioned in September 2022 and followed debottlenecking and production
ramp up. Sellable products were produced from Q3 FY 2023 though the debottlenecking and streamlining of
operations remained ongoing onto the onset of rains from Q4 FY 2022 onwards causing difficulties in achieving
production volumes.
The year came with its challenges and headwinds, in the first half the impacts related to the severe second wave of
the pandemic, which eased progressively in the second half of the year, followed by unusually challenging weather
conditions. We are happy to report that in spite of the headwinds and challenges, the Company has made steady
progress towards its goals though slower than the company wanted. As a result, although the new facilities at
Vatomina could add only 1020 MT of production during the year as against installed capacity of 4500 tons for the half
year since its commissioning, the performance of operating margins is detailed from the table below
Key Financial operating results from Madagascar Primary Operations for 1 April 2021 to 31 March 2022
Particulars
Units
FY 2021-22
FY 2020-21
YoY Change
Total Production
MT
2,996
Mining & Processing costs
Human Resources costs
Logistics utilities & plant admin costs
(Increase) / Decrease in inventory of
inputs
Total Costs of Production (Excl.
Depreciation)
Cost per MT of Production
Total Sales Volume
Total Revenues
£
£
£
£
£
£
MT
£
Average Selling price per MT of
Production
US$ / £ per
MT
935,604
378,671
308,278
1,718
304,975
228,731
52,784
+74%
+207%
+66%
+484%
(485,357)
(98,407)
1,137,196
488,083
NA
380
2,662
284
1,857
1,645,308
1,123,426
841 / 618
801 / 605
+34%
+43%
+46%
+2%
-20%
-26%
Gross Profit before Depreciation
Gross Margin on Sales
£
%
508,112
635,343
31%
57%
The key factors impacting the operating results can be summarised below:
● Total Production during the year increased by 74% and Total Sales Volume increased by 43% over the
previous year;
● Total Revenues increased by 46% over the previous year;
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Tirupati Graphite plc
Business Review
Annual Report and Financial Statements
period ended 31 March 2022
● Realised Average Selling price per MT of graphite sold increased marginally by 2% in GBP terms and 4% in
dollar terms;
● The operating margins for the year dropped from 57% in the previous year to 31% during the year which can
be attributed to the following:
o As is evident from the table above, substantial increase in costs can be seen in the heads mining &
processing and logistics costs;
o The larger part of the Company’s activities during the year was the development of capacities and
o
o
related infrastructure at both its projects;
It is a pertinent to point out that the Company is executing the development process internally and
using its own earth moving machinery and equipment. This equipment is also used in the mining
activities, and the power is self-generated and used in operations. There are no EPV contractors
engaged;
Following conservatism principle, the Company has capitalized all expenses where a one-to-one direct
relationship with the capital asset newly created could be established. For example, it was not possible
to identify all logistics costs related to development one-to-one;
o The adverse weather conditions also resulted in additional expenses on upkeep of existing
o
infrastructure; and
Furthermore, the Company put in place required management resources at its project in accordance
with the current and under development capacity, as the total output during the year remained low,
the new capacity underwent ramp up, and adverse weather conditions caused headwinds.
With these factors combined, the operating margins for the year fell, and the Company believes that as
production increases, the previously achieved operating margins will be achievable.
Detailed account of the developments across the Sahamamy and Vatomina projects are given below:
1. Sahamamy operations and development:
The 3000 tpa maiden ‘proof of concept plant’ at Sahamamy Project continued to produce sellable graphite during the
year marking its third year in operation. The period has been that of adverse circumstances, coupled with the
challenges of its remote location, being reachable by a boat ride only at the start of the year. The plant continued to
establish the concept for larger scale build up, including technology and cost structure affirmation, the key strengths
developed by the Company.
Time was now ripe for the Company to embark on the next stage of development of the Sahamamy project, which
included the following activities and more:
● development of 18,000 tpa mine and plant module;
● building road connectivity to the project and connecting it to RN2 and the Vatomina project, which required
building c. 14 km of new road with 12 hume pipe culverts up to 5 metres wide and two hume pipe bridges
across perennial water streams, and widening and strengthening of 12 km existing road, rebuilding 7 culverts
with hume pipes and 1 hume pipe bridge of c.20 metres width;
● building three new kilometres of Sahamamy Sahasoa road, Sahasoa being the greenfield new mine area
planned for use for the new plant ore requirements;
● development of various utilities including but not limited to water source, tailing dam, residential and office
spaces, engineering and maintenance facilities etc.;
redevelopment of the old hydropower facilities to a 100 kilowatt new hydropower plant;
●
● detailed studies for the identified second 400 kilowatt hydropower plant; and
●
continuation of the second stage of exploration to enhance the resource base.
In April 2021, the company raised additional equity capital for progressing its developments and from the second half
of the financial year commenced activities for the above developments. The total investments for development of the
Sahamamy project until 31 March 2022 was as under:
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period ended 31 March 2022
Sahamamy Project total cumulative investment up to 31 March 2022
Head of CAPEX
Drilling & Earthmoving
Equipment
Processing Plant
Infra & Admin Assets
Exploration Evaluation &
Engineering
Investment (£)
Investment (£)
Up to
31.03.2020
During
01.04.2020 to
31.03.2021
Investment (£)
During 01.04.2021
Total Investment
(£)
to 31.03.2022*
As at 31.03.2022
240,357
39,024
1,426,628
1,706,009
520,634
23,146
23,157
6,776
483,756
1,027,547
-
29,922
163,702
103,639
801,567
1,068,908
Total Investment
947,839
172,596
2,711,951
3,832,386
Advances for Capex
(See Note no 15 page 83)
-
-
2,592,163
2,592,163
Total
947,839
172,596
5,304,114
6,424,549
*This does not include impact of Forex translation
The development of Sahamamy 18,000 tpa plant is nearing completion, commissioning of the 100KW hydro power
plant is ongoing, all road infrastructure and bridge construction works are substantially completed, and the
Company is on the verge of starting commissioning and production ramp up for the new facilities. It is important
to note that owing to the strategic decision of splitting the preconcentrate part of the processing plant and moving
the preconcentrate to the pit head to eliminate transport of mined ore, the Company implemented this decision
for its Sahamamy project too.
2. Vatomina Operations & Development
At the green field Vatomina project, which has defined JORC (2012) Resources of 18.4Mt @ 4.6% TGC, development
of the first mining and processing facility, upgraded to 9,000tpa from previously planned 6,000tpa, was initiated from
the last quarter of FY 2022. The development was continued during the year and completed in September 2021 and
the build up included, amongst others:
●
site development, construction and installation of the processing plant, utilities and internal
infrastructure;
● opening of mine and its development to mine c.200,000 tons of ore per annum for feed to the plant;
● hiring and training of human resources;
● Development of office, residential and community centre.
The Vatomina mine opened on 21 April 2021, which marked the start of excavation of overburden and first ore mined
for the upcoming 9,000 tpa module at Vatomina. The construction, installation and commissioning with dry and wet
runs of the processing plant was completed by 6 September 2021, and ore feed commenced with a feed rate of 50%
of the rated capacity. Development activities for infrastructure, accommodation and allied facilities were continued
to completion until the close of the year. The total CAPEX in the Vatomina project to date, including exploration,
evaluation, design, engineering construction are as tabulated below:
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period ended 31 March 2022
Vatomina Project total cumulative investment up to 31 March 2022
Head of CAPEX
Investment (£)
Investment (£)
Up to 31.03.2020
During 01.04.2020
to 31.03.2021
Investment (£)
During 01.04.2021
Total Investment
(£)
to 31.03.2022*
As at 31.03.2022
Drilling & Earthmoving
Equipment
Processing Plant
Infra & Admin Assets
Exploration Evaluation &
Engineering**
328,178
236,949
443,972
1,009,099
168,093
69,323
738,830
475,822
30,995
331,530
1,890,974
2,534,889
201,175
(332,964)
301,493
737,396
Total Investment
1,304,424
1,075,296
2,203,157
4,582,877
*This does not include impact of Forex translation
** This in nature of capital WIP and hence includes expenditures reclassified after completion of respective capital
assets.
The Vatomina plant being a 3X scale up from the Company’s Sahamamy 3,000 tpa plant, the Company faced
initial bottlenecks, because shipping additional requirements increased the time required to complete the
debottlenecking. The Company consistently addressed these issues. Some of the bottlenecks faced and resolved
were:
● Plant processing input water requirements exceeded the arrangements made, thus requiring various
additional arrangements to be made for meeting the water requirements of the plant;
Initial hiccups in the processing plant equipment which were resolved as they emerged;
●
● Optimisation of various technical parameters for each processing stage including sand separation, milling
and flotation equipment, drying and finishing equipment such as varying RPMs, flow rates, loads etc.
While the debottlenecking process continued, the onset of a rainy season resulted in challenging weather
conditions, including multiple cyclones and long duration continuity of rains. The movement of ore from the mining
areas to the processing plant areas, receipt of input materials to the operations, and evacuation of finished
products posed continued difficulties, adversely impacting the output from the new operations. During the period
from start of operations in Vatomina until 31 March 2022 the total saleable production was 1020 tons. Of these,
837 tons were sold and shipped to customers.
During the current financial year, the Company took various decisions to mitigate its projects from such adverse
climatic conditions, the most important being splitting its process flow sheets into preconcentrate and final
concentrate units. The preconcentrate unit eliminates up to 90% of the ore feed into the plant in tailings, and it
was decided to be established at the pit head to avoid transport of ore by vehicles from the mine area to the
processing plant. The slurry output from the pre-concentrate plant was decided to be pumped to the final
concentrate plant for further processing and finishing. The Vatomina preconcentrate plant has now been shifted
at the current operating mine pit head and successfully commissioned, reaching plant desired ore feed
parameters. As the head grade at Vatomina current mining is lower than 3%, the Company is working on opening
further adjoining mine areas to increase head grade and looking at other options to secure output from Vatomina
to planned levels.
By 2024, the Vatomina project is planned to be developed to a total capacity of 63,000 tpa as per the Company’s
stated development plan for the project. The Company aims to undertake further development of capacities at
Vatomina once the operations across the two projects under ongoing developments are streamlined.
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period ended 31 March 2022
3. Other developments across the projects in Madagascar
a. Exploration
The second phase of exploration activities which were initiated in February 2021 continued during the year across
the two projects. The previously owned diamond core drill rig remained deployed in Vatomina during the year.
With progress of core and augur drilling during the year, the total planned core drilling across the two projects was
increased from earlier estimated 5,000 metres to c.10,000 metres in light of new mineralised areas identified.
Considering the increased drilling campaign, the Company preferred to acquire a second drilling machine for
Sahamamy, which was commissioned earlier this year.
Drilling activities remained suspended substantially during the rainy season and were recommenced from August
2022. To date, c. 3,000 metres of core drilling have been completed in the second phase and further progress is being
made in the current dry season.
b. Hydropower and green energy
The redevelopment of the old hydropower plant (‘HPP’) at Sahamamy to an upgraded new 100Kw facility was initiated
during the year. The task came with its challenges, with the two small barrages and the c. 3 km canal leading to the
reservoir, which needed to be rebuilt, being only accessible on foot. The Company relentlessly continued to rebuild
the HPP in spite of all the challenges compounded by the weather conditions, and the reconstruction has been
completed. A power evacuation line of c.800 meters from the turbine house to the processing plant was in the process
of installation as of writing of this report. Once operational, the HPP will save an estimated >100,000 liters of diesel
per annum, currently used in equivalent power generation.
The Company has further initiated detailed studies and related activities for the second 400kw hydropower generation
prospect earlier identified and intends to fast track its development.
4. 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 the topographic advantage. 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 impact 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 communities in its areas 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 2022
5. Snapshot of Consolidated Income Statement
Summary of the Group’s consolidated income statement for the year ended 31 March 2022 is as follows:
2022
2021
YOY Change
Commentary
GBP
GBP
%
Revenues
1,645,308
1,123,426
46%
Revenues grew by 46% due to increased
production and sales
Cost of Sales
(1,137,196)
(488,083)
133%
Cost of Sales grew greater than increased
sales mainly due to affected operations due
to cyclones
Gross Profit (Excl. Dep)
508,112
635,343
-20%
Resulted in Gross Profit decrease of 20%
Less Administrative Expenses
(1,774,581)
(1,531,581)
16%
Admin expenses increased due to increased
corporate expenses, team strength and fund
raise costs
EBITDA
(1,266,469)
(896,238)
41%
Resulted in EBITDA loss increase of 41%
Less Depreciation
(565,079)
(205,723)
175%
Increased due to additional Capex
EBIT
(1,831,548)
(1,101,961)
66%
Negative EBIT increased by 66%
Less Finance Cost
(140,209)
(147,151)
(5%)
Finance Costs decreased due to conversion of
CLNs to equity
EBT
(1,971,757)
(1,249,112)
58%
Resulted in increase in negative EBT by 58%
Less Taxes
48,271
(27,827)
Impact of Deferred
Madagascar Subsidiaries
tax provisions
in
EAT
(1,923,486)
(1,276,939)
51%
EAT loss increased by 51%
Loss per share (Basic)
2.66 pence
2.61 pence
2%
Basic Loss per share increased by 2%
Loss per share (Diluted)
2.66 pence
2.61 pence
2%
Diluted Loss per share increased by 2%
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period ended 31 March 2022
E. TIRUPATI SPECIALITY GRAPHITE PVT TD & DOWNSTREAM PROCESSING
Tirupati Speciality Graphite Pvt Ltd (“TSG”) is a private Indian company promoted by the founders of the Company.
TSG is engaged in downstream processing of flake graphite, development of graphene and advanced materials and
mineral processing technology development.
On 10 October 2018, the Company entered into a conditional agreement for the acquisition of the then issued share
capital of TSG in a share swap deal as a forward integration prospect with an obligation to provide development capital
for TSG’s plans. The share swap ratio under the agreement was determined by a Securities and Exchange Board of
India approved Category 1 merchant baker. The completion of the acquisition of TSG by the Company has remained
subject to regulatory approvals and given the shareholdings of the founders in the Company this could only be
progressed once the Company obtained a whitewash under the Takeover Code to enable the issue of the consideration
shares without triggering a requirement for the founders to make a mandatory bid for the Company. The whitewash
was approved by independent shareholders of the Company and confirmed by the Takeover Panel in late October
2021. Post the whitewash, in terms of the relevant Indian regulation:
●
the valuation report of 2018 is time expired and for determining the swap ratio a current valuation in
accordance with FEMA requirements is necessary (which must be not more than 90 days old at the time of
completion of the acquisition);
● Based on an updated valuation, the acquisition can only be considered for approval by the Indian regulators
once certain reported matters in relation to the Company as an ODI are ratified.
In response, the Company is considering a number of alternative options to meet the objective of ensuring that the
Company is able to continue with its plans to develop a downstream and advanced materials business. These options
include:
●
continued pursuit of regulatory approval for the acquisition of TSG as its preferred option and in doing so,
considering any revised valuation for TSG and changes to the terms of the acquisition to reflect this;
● exploring the possible participation in alternative investment vehicles for investment in TSG as may be
permissible with participation of the Company or its shareholders;
● exploring possible commercial arrangements with TSG.
The Company, TSG and their respective advisors, remain engaged in working through various possibilities. During the
year the Company continued to engage with TSG and reported the developments made by it on the projects it is
pursuing. We have been advised by TSG that the progress of its business continues in accordance with its plans
although this has been delayed as a result of the need to obtain the capital required for these developments. TSG has
also advised us that they have refrained from raising equity capital from other sources and the equity of TSG remains
as it was at the time of the execution of the 2018 acquisition agreement. However, TSG may need to look at
alternatives for its capital requirements.
Downstream processing of graphite that the Company produces in Madagascar is an important value addition and is
a necessity for the advanced applications of the product including in anode materials, flame retardants and thermal
management. The Company considers that the technologies and expertise developed by TSG for these processes are
unique and environment friendly as compared to those used by others. In addition to the discussions on acquisition
with TSG, the Company is currently assessing the possibility of setting up downstream and advanced material
manufacturing facilities in the UK in conjunction with TSG.
F. LONGER TERM TARGETS AND INORGANIC GROWTH OPPORTUNITIES
Flake graphite is a material of importance in the energy transition economy. It is designated as a critical material by
the UK, EU and USA. Demand growth is estimated to quadruple the global consumption over the current decade. The
Company’s current plans and resources are aimed to reach a capacity of 84,000tpa flake graphite production capacity
build by end of 2024, which is estimated to be more or less 6% of the current global demand. With the Company’s
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Annual Report and Financial Statements
period ended 31 March 2022
expertise in setting up and operating flake graphite mining and processing projects, the Company aims to make a
meaningful contribution to the global demand with a target to reach c.8% capacity of global demand as it grows. In
this light, it needs to enhance its resource base and diversity and has thus been on the watch for possible acquisition
of projects and is happy to report the following progress.
a. Proposed acquisition of Suni Resources
On 17 August 2021, the Company announced that it had entered into a binding acquisition agreement subject to
regulatory approvals 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 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, licences, 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.
After the execution of the agreement, the mandatory shareholder approval of Battery Minerals was completed, and
the Mining Licence for the Balama Central project was granted to Suni. The application for approval of the transaction
by the Ministry of Mineral Resources and Energy in Mozambique has been applied for and is being pursued. The
Company has recently raised funds through a Convertible Loan Note issue to meet the cash component of the
acquisition agreement and remains engaged with its brokers Optiva Securities Limited to raise further funds for the
mandatory Bank Guarantee that may be required for progressing the approval by the Ministry of Mineral Resources
and Energy in Mozambique.
The proposed Acquisition is in line with the Company's stated strategy of diversifying its resource base and mitigating
country risk. The two complementary graphite deposits, spread over a combined c.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. Additionally, it would
complement the Company’s existing mix of predominantly jumbo and large flake graphite products from its
Madagascan projects.
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 in
the Montepuez project and 50,000 tpa operations in modules in the Balama Central project. The Company may
consider further enhancing the long term development plans owing to visible and growing market opportunities in
the green economy and in light of the Company’s long term capacity build up targets.
There is, however, no guarantee that the acquisition will complete.
b. Proposed acquisition of additional permits in Madagascar
On 2 September 2022, Tirupati Madagascar Ventures SARL (TMV) entered into agreement to acquire three additional
mining permits in Madagascar, covering a total area of 31.25km2 and located in the vicinity of the Company’s existing
projects in the country. The consideration agreed for the acquisition is a total of MGA 800 million (c.£167,000) to be
paid in cash upon milestones in the process of completing the transfer of the permits to the Company. The transfer
requires approval by the Ministry of Mineral Resources and application thereof is in the process of being made to the
Bureau du Cadastre Minier de Madagascar (BCMM).
Due to the proximity to its existing operations, the Company believes it can progress activities in the acquired projects
in a timely and cost-effective manner alongside its other Madagascan projects. While no JORC 2012 compliant mineral
resource statement is available for the permits, historical geological data and initial ground assessments made by the
company suggest that the new permits could have the potential to add two or three 18,000 tonnes per annum (tpa)
modular facilities for flake graphite production. This could therefore significantly add to the company’s currently
planned 84,000 tpa capacity across the Vatomina and Sahamamy projects.
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period ended 31 March 2022
Under the agreement, TMV retains liberty for conducting studies in the areas during pendency of the process of
transfer of the permits. It is important to note that the process of transfer is the same as was executed by TMV
successfully for the acquisition of the Vatomina project, and the Company’s in-country team is well versed for
progressing the transfer process. There is however no guarantee of if and when the transfer shall complete.
The proposed acquisition of these permits aligns with the Company’s strategy to continue to acquire resources so as
to facilitate growth of its primary flake graphite operations to c.8% of global demand by 2030, estimated to be in the
range of 400,000tpa. The Company considers acquiring additional resources in the vicinity of its current projects in
Madagascar as a vital base to facilitate its strategy.
This report was approved by the Board of Directors on 30 September 2022 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
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Strategic Report
Annual Report and Financial Statements
period ended 31 March 2022
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 2022), and forms part of our UK Annual Report and Accounts for the year ended 31 March 2022 (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:
●
●
capital raised in the form of Convertible Loan Notes 2022 of £1,862,500 gross proceeds in August / September
2022;
signed a binding agreement, subject to approval of transfer, for three additional mining permits in
Madagascar covering a total area of 31.25km2 and located in the vicinity of the Company’s existing projects
in the country;
● Commissioned and start re-engineered preconcentrate facilities at Vatomina and adoption of the concept for
the under construction 18,000 tpa facilities in Sahamamy project in Madagascar;
Results for the year ended 31 March 2022
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 53 onwards.
In summary:
● The net interest cost for the Group for the period was £ 140,209
● Administrative expenses from continuing operations excluding depreciation £ 2,182,442
● Group loss after tax from continuing operations was £ 2,331,347
● Basic and diluted loss per share from continuing operations was 3.14 pence & 2.91 pence respectively
● As at 31 March 2022, the Group had cash and cash equivalents of £ 1,534,023
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
Total Net assets
Loss per share
2021-22
£
1,645,308
1,534,023
15,747,196
2.66 p
2020-21
£
1,123,426
1,644,189
8,181,563
2.61 p
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.
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Annual Report and Financial Statements
period ended 31 March 2022
This section specifies that the Directors must act in good faith when promoting the success of the Company and in
doing so, have regard (amongst other things) to:
a)
b)
c)
d)
e)
f)
the likely consequences of any decision in the long term;
the interests of the Company’s employees;
the need to foster the Company’s business relationship with suppliers, customers and others;
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 with a long term target to establish flake graphite mining and processing capacities
of c.8% of the global demand.
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:
•
Fast tracking the development of its Madagascar Primary flake graphite mining & processing projects
At the beginning of the year the company had a modest ‘proof of concept’ 3,000 tpa capacity in operation in
Madagascar and the company initiated the development of the first 9,000 tpa capacity in Vatomina, earlier
upscaled from 6,000tpa plan. The Company further took a strategic decision to commence development of
its optimised 18,000 tpa capacity module at its Sahamamy Project targeting to reach a globally significant
30,000tpa capacity across its two projects in Madagascar.
Tirupati’s modular development approach, coupled with its internal expertise, provided the Company with
flexibility and ability to increase the capacity across the two projects to leverage its demonstrated ability to
operate its primary flake graphite projects at a >50% operating margin and enabling the Company to
capitalise on rising demand and prices for its Madagascan primary flake graphite and thus targeting to reach
a state of being an earning company at an early stage in its corporate journey.
The strategic decision to increase the installed capacity of the company’s projects such that the company can
reach a positive bottom-line 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.
While executing its Stage II exploration program, the company discovered additional mineralised zones across
both its projects and preferred to extend its core drilling program from the earlier planned c.5,000 metres to
c.10,000 metres in coordination with SRK. The company further acquired its second core drilling rig to
complement its owned first drilling rig continuing with the concept of creating in-house capabilities of all core
and ongoing activities. During the year, the company executed c.2500 metres of diamond core drilling, which
if outsourced would have cost the company an estimated >£2.5 million whereas the company performed the
drilling at a fraction of the cost. Moreover, the continued exploration activities are expected to materially
enhance the company’s Mineral Resources, thus enhancing the currently estimated life of mine or capacity
creation plan or both.
Investing in the Stage II Programme at materially lower operating cost 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.
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period ended 31 March 2022
• Development of human capital and community relationships
The company believes that one of the most vital resources to achieve successful implementation of its
business plans, is to develop a set of competent, motivated, dedicated and well trained set of leaders and
workforce. The company has extensively worked on enhancing and developing its human capital on a
continued basis. The company’s leadership team grew by c.5 times of its pre listing levels. Its workforce and
in country team in Madagascar has expanded from the stage of operating a small 3,000tpa facility to a team
executing the construction of additional nine times the capacity, operating four times the capacity and
simultaneously executing projects like development of a hydro power plant, exploration and discovery of
resources, building of infrastructure and performing all that goes into the development of business as the
company is engaged in.
Developing a comprehensive set of human capital executing all development and operational activities in
house and at globally lowest quartile costs 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.
• Continued perseverance for inorganic growth
While the company continues to expand its current projects it is constantly on the watch for new alternatives
to acquire projects and build relationships. As a result it has entered into value accretive agreements for
acquisition of additional primary flake graphite projects to build a portfolio of assets that potentially forms
the base for its longer term capacity build target to 8% of the global demand. The activity of acquisitions
come with multiple challenges in the mining sector including that regulatory framework in target locations,
approval, obligations, learning new cultures and balancing acts in the interest of the company and thus its
shareholders. The company continues to work on inorganic growth to meet its long term targets duly
balancing the interests of the company with other stakeholders.
The company also has at hand the task of progressing the downstream and advanced materials business
through acquisition of or appropriate arrangements with TSG. The primary flake graphite expertise the
company has acquired and developed since its inception through acquisition of the flagship Vatomina project
emanates from its founders and has been the key strength for the company in its operations and
development efforts across its current and prospective primary projects arming the company with its
competitive and strategic advantages. The company remains engaged targeting successful integration on the
downstream and advanced materials space which would complement the company’s primary flake graphite
business.
The continued efforts and perseverance for inorganic growth while remaining engaged in developing the
company’s existing projects 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.
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 its 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.
25 | Page
Tirupati Graphite plc
Strategic Report
Annual Report and Financial Statements
period ended 31 March 2022
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 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.
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.
26 | Page
Tirupati Graphite plc
Strategic Report
Annual Report and Financial Statements
period ended 31 March 2022
Principal risks and uncertainties to the Group
The following table, whilst not an exhaustive list as other risks may arise or existing risks may materially increase in
the future, sets out the risks and uncertainties to the continuing Group.
Issue
Financial
Strategy
Competition risk
Company's
Management
Performance and
Efficiency
Risk/Uncertainty
Mitigation
The Company is near to completion of 30,000
tpa installed capacity and has successfully
mitigated operational bottlenecks for
its
existing 12,000tpa capacity. The company is
fully funded for attaining the current stage
planned capacity to 30,000tpa of primary
capacity
the
debottlenecking of the existing operations is
well placed to continue its operations on an
ongoing basis. Any exigencies can be
and
mitigated
investment deferments.
in Madagascar and with
controls
through
cost
Innovation and R&D continues to be a core
pillar of the Company’s investments and focus
which continuously enhances our process to
ensure higher quality products and a
consistent competitive edge is maintained by
the Company over
its competitors. The
management has a long and deep heritage in
the field and are well connected with the end
users (consumers) and the
intermediary
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 leadership team continues to
be engaged on a constant basis on all affairs
company.
of
Communications are kept to the highest level
of speed and delivery.
business
the
the
of
The Company’s current stage of project
development and implementation has been
funded and under completion which
is
expected to result in operating profits. Any
delay
in achieving earnings may require
funding arrangements and delay further
project development and implementation.
Investor support may be negatively impacted
if there are delays in achieving its strategy’s
intended goals.
threats
There can be potential
from
innovative market players with competitive
products, making them equally or more
beneficial and qualitative than the Group’s
current products. These competitive market
players may bring new age technology
leading to their advantage.
of
level could
During the phases where the Company is
expected by the Board to experience rapid
growth, it is essential to effectively manage
is fully
such growth.
While the Board
implement the Company's
equipped to
project
strategy, mismanagement
operations at any
lead the
business to suffer, which may impact the
Company's performance and profitability.
The
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
its operations and manage the
expand
procedures,
and
information systems effectively.
responsibility
controls,
financial
27 | Page
Tirupati Graphite plc
Strategic Report
Annual Report and Financial Statements
period ended 31 March 2022
Attraction and
retention of key
employees
It is essential for the Group to maintain the
continued service and performance received
from the key officers and employees.
The Company is actively involved in human
resource development and management.
Even
the
though arrangements with
respective employees are in place to secure
their services, retention of these services
cannot be guaranteed.
The loss of the services of any of the key
officers or employees could delay the Group’s
operations.
Further, the ability to attract and hire new
sufficiently skilled employees cannot be
guaranteed.
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
its
reputation may be damaged.
challenges,
Brand,
reputation, and
trust
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.
The company has created a pool of its
leadership team with alternatives and is
constantly engaged in creation of systems to
mitigate individual influence. Continued
talent hunt and alternative key human
resource development and training are
ongoing activities.
Additionally the company is supported by an
additional pool of leaders with TSG remaining
as a standby in case of exigencies.
The Group's processes and policies set out
how it can make the right decisions for its
customers,
suppliers,
colleagues,
communities, and investors.
communication and
It has developed
engagement programmes to
its
internal and external stakeholders and reflect
their needs in its plans.
listen to
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.
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
that was under development has been
implemented across some activities and is in
the process for the rest.
28 | Page
Tirupati Graphite plc
Strategic Report
Annual Report and Financial Statements
period ended 31 March 2022
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
exploration mining,
generally
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
Geopolitical,
Regulatory and
Sovereign Risk
The Prices and demand for the Group’s
products may remain volatile/ uncertain and
influenced by global economic
could be
conditions. Volatility in commodity prices and
demand may adversely affect our earnings,
cash flow and reserves.
The primary flake graphite Projects are
located
in Madagascar. The proposed
acquisition of downstream and technology
Projects are in India and additional primary
projects in Mozambique and are therefore
subject to the risks associated with operating
in a foreign jurisdiction.
Company’s
The
executive
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.
time and
company
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
continued
the passage of
development
its
and
the
management team have better understood
the operational risks and mitigated them as
these surfaced. 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.
The management is mitigating this risk by
pursuing low-cost of production, allowing
profitable supply throughout the commodity
price
the price
volatility/uncertainty by annual contracts
with key buyers.
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 is working on
further adding primary activity at one more
location currently working on a project in
Mozambique.
India is the fastest growing major economy
and is investment seeking and friendly.
The regulatory
provisions
for protecting
interests of the respective jurisdictions.
framework does contain
the national
The Company monitors political development
and will seek to mitigate emerging risks
wherever possible. The Group and its business
divisions monitor regulatory developments on
29 | Page
Tirupati Graphite plc
Strategic Report
Annual Report and Financial Statements
period ended 31 March 2022
Technology
If the Company does not invest enough or
efficiently or invest in the wrong areas, it may
its customer
to deliver
not be able
proposition which
its
could
competitiveness.
impact
Environmental
and Health and
Safety Risk
technologies,
it develops new
the
As
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
laws and
regulations regarding environmental hazards.
local
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
innovation and work
technology and
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
Current UK based annual energy usage and associated annual GHG emissions are reported pursuant to the Companies
and Limited Liability Partnerships Regulations 2018 that came into force 1 April 2019. Energy use and associated GHG
emissions are reported as defined by the operational control approach. The minimum mandatory requirements set
out in the 2018 Regulations requires reporting of UK based energy use and emissions. The Group has a small carbon
footprint in the UK as most of the directors work from home or in shared office space. Additional UK office space is
rented on short term basis as required. As a result the energy usage in UK is below 40,000KWH and therefore
Greenhouse gas emissions, energy consumption and energy efficiency disclosures have not been provided in the
Annual Report.
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.
30 | Page
Tirupati Graphite plc
Strategic Report
Annual Report and Financial Statements
period ended 31 March 2022
Diversity and Inclusion
The company was co-promoted by promoters from India and The United Kingdom, combining the expertise of its
Indian origin founders in the areas of its business and the financial markets expertise of its UK based founders. Over
the years, as the Company established its business in Madagascar, it engaged local citizens from Madagascar in its
operations and development and built a leadership team of Indian and French origin on the ground. The operations
reflect the cultures of three nations in combination, and is extensively contributing to the development of skill sets of
not only its Malagasy employee, but also the community around it. The management and workforce of the company
comprise a mix of gender and nationality. The majority of the workforce and all board members are male. However,
within the limitation of skill sets availability amongst women in relation to the Company’s activity, it still provides
equal opportunities for men and women. The Board is satisfied that the Company gives due regard to cultural and
gender diversity and in the event of additions to its own membership or the membership of the senior management
team or to its workforce it shall consider diversity and inclusion as an important factor.
Going concern basis
The Group’s business activities, together with the factors likely to affect its future development, performance and
position are discussed throughout the report. The financial position of the Group, its cash flows, liquidity position etc.,
are also discussed above. The report additionally also includes the Group’s objectives, policies and processes to
address risks arising from the Group’s use of financial instruments, in particular its exposure to market, credit and
liquidity risks.
The Group has considerable financial resources together with well-established relationships with many clients and
suppliers across different geographic areas. 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 30 September 2022 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
31 | Page
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2022
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 2022.
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 53 onwards. The key results from the activities of the Company
can be summarised below:
● The flake graphite operations and their further developments in Madagascar continued throughout the
year and yielded a gross profit before depreciation of £508,112 representing a gross margin on Sales
before depreciation of 31%. (2021: £ 635,343 & 57% respectively)
● The Group EBITDA was £ (1,266,469) and Net loss of £ (1,923,486) for the year [2021: EBITDA £ (896,238)
and Net Loss £ (1,276,939) respectively]
● Construction for the uprated 9,000 tpa Vatomina first plant was completed increasing the capacity in
Madagascar operations from 3,000 to 12,000 tpa. Further, construction of 18,000tpa new facilities was
initiated in the Sahamamy project and is expected to complete and achieve production over the next
quarter.
No dividends will be distributed for the period ended 31 March 2022.
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 86,939,832 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
32 | Page
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2022
securities or on voting rights. No person has any special rights of control over the Company’s share capital and
all issued shares are fully paid.
Memorandum and Articles of Association
The Company’s Articles of Association (the Articles) give the Board the power to appoint Directors but require
Directors to retire and submit themselves for election at the first AGM following their appointment.
The Board of Directors may exercise all the powers of the Company subject to the provisions of relevant statutes,
the Company’s Memorandum of Association and the Articles. The Articles, for instance, contain specific
provisions and restrictions regarding the Company’s power to borrow money. Powers relating to the issuing and
buying back of shares are also included in the Articles and such authorities shall be renewed by shareholders
each year at the AGM.
Liability of members limited
The Company is registered as a public limited company and members liability is limited to the extent of their
respective subscription to shares.
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 28
October 2022 to allot shares of Nominal Value of £0.025 each to the extent of aggregate Nominal Value of
£718,398.
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
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
Appointment/resignation
date
26 April 2017
26 April 2017
26 April 2017
31 May 2018
1 August 2020/23 May
2022
Biographical details of the Directors are available on the Company’s website:
https://tirupatigraphite.co.uk/management/
33 | Page
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2022
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.
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 2022 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
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
Mr. Shishir Kumar Poddar and Mr Hemant Kumar Poddar and their family members along with Tirupati Carbons
and Chemicals Pvt Limited hold 32,484,472 shares as at 31 March 2022
Mr. Dennis along with family members & Optiva Securities Ltd hold 5,856,200 shares as at 31 March 2022
Directors’ Remuneration
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 2022, 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 in accordance with contracts. 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 Remuneration and Benefits
The principles and policies guiding the for fixation of remuneration and benefits for the Directors include:
● align remuneration 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.
34 | Page
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2022
Elements for Directors Remuneration and Benefits
Element
Purpose
Operation
Base
Remuneration
Available to Executive Directors only
Directors Fees
Available to all sitting Directors
Bonus
Available to Executive Directors only
Pension
Available to Executive Directors only
Fixed on an annual basis, paid monthly in
arrears or quarterly mid time.
Fixed on an annual basis, paid monthly in
arrears or quarterly mid time.
Applicable for Executive Directors only,
capped to 100% of annual salary based on
growth and progress of the Company and
contribution by the Director.
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.
Share Warrants
Available to Executive Directors based
on performance.
Performance based on growth and value
creation.
Available to Non-Executive Directors as
a special incentive.
Share Warrants shall be considered in any
year based on performance parameters of
the Company in the previous year.
Statement of Implementation
Directors' Remuneration (audited)
Details of Directors’ Remuneration during the year ended 31 March 2022 is as follows:
Mr Shishir Kumar Poddar
Mr Christian G St. John-
Dennis
Mr Hemant Kumar
Poddar
Mr Rajesh Kedia
Mr Lincoln John Moore
TOTAL
Salary and
fees
£
320,000
38,000
Pension
Bonus
£
30,000
-
£
264,000
-
Share based
payments
£
-
-
38,000
-
-
38,000
36,000
470,000
-
-
30,000
-
-
264,000
-
-
-
-
2022 Total
£
614,000
38,000
38,000
38,000
36,000
764,000
35 | Page
Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2022
Details of Directors’ Remuneration during the year ended 31 March 2021 was as follows:
Mr Shishir Kumar Poddar
Mr Christian G St. John-
Dennis
Mr Hemant Kumar
Poddar
Mr Rajesh Kedia
Mr Lincoln John Moore
TOTAL
Salary and
fees
£
240,000
38,000
Pension
Bonus
£
24,000
-
£
198,000
-
Share based
payments
£
20,507
5,470
2021 Total
£
482,507
43,470
38,000
-
-
5,470
43,470
38,000
24,000
378,000
-
-
24,000
-
-
198,000
5,402
-
36,849
43,402
24,000
636,849
No share-based payment was made to the Directors during the year.
Total pension entitlements (audited)
The Company currently does 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.
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 15 September 2022, 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
Number of
Ordinary Shares
29,565,778
4,140,300
4,301,947
4,346,991
Percentage of
issued share capital
34.01
4.76
4.95
5.00
Tirupati Carbons and Chemicals Pvt Limited along with Shishir Kumar Poddar and Hemant Kumar Poddar and
their family members hold 32,484,472 shares representing 37.36 % as at 15 September 2022
Optiva Securities Ltd along with family members of Mr. Dennis hold 5,856,200 shares representing 6.74 % as at
15 September 2022
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulations.
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Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2022
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
Accounting Standards as adopted by UK (IFRSs), and have also chosen to prepare the company financial
statements under International Accounting Standards as adopted by UK (IFRSs). 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 2022, 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
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Tirupati Graphite plc
Directors’ Report
Annual Report and Financial Statements
period ended 31 March 2022
appropriate. There are designated officers responsible for health and safety and issues are reported at
appropriate board or executive team meetings.
The recent years including a part of 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.
Furthermore, the company provides life and health cover to its leadership and management teams and the
workforce is covered under the local Government health scheme for employees. The company maintains a health
centre at both its projects and is well connected to health infrastructure in the location of its operations.
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 30 September 2022 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
38 | Page
Tirupati Graphite plc
Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2022
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 2022.
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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Tirupati Graphite plc
Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2022
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
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Tirupati Graphite plc
Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2022
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 also remain an
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.
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Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2022
Principle Eight: Promote a corporate culture that is based on ethical values and behaviours
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 testament 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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Tirupati Graphite plc
Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2022
● 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.
Five 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*
* Resigned in May 2022
Number of meetings
attended
5
5
5
5
5
% 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 did not meet, there being no necessity to
do so.
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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Tirupati Graphite plc
Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2022
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 consisted of Mr Shishir Kumar Poddar, Mr Lincoln John Moore and Mr.
Rajesh Kedia during the year and post resignation of Mr. Moore, Mr Christian St. John Dennis has been added
co-opted as a member in the committee. 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 formally and continued informal discussions to resolve certain
treatments in relation to share based payments under IFRS. 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 and Mr Rajesh Kedia 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 2021 to 31 March 2022, the Renumeration Committee met twice for conduct of business
of the committee.
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Corporate Governance Report
Annual Report and Financial Statements
period ended 31 March 2022
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
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 2021 to 31 March 2022, 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 30 September 2022 and signed on its behalf by
Mr Shishir Poddar
Executive Chairman and Managing Director
45 | Page
PKF Littlejohn LLP
Independent Auditor’s Report to the Members of
Tirupati Graphite PLC
Opinion
We have audited the financial statements of Tirupati Graphite PLC (the ‘company’) and its subsidiaries (the
‘group’) for the year ended 31 March 2022 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated and Company Statements of Financial Position, the Consolidated and Company
Statements of Changes in Equity, the Consolidated and 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 UK-adopted international accounting standards and as regards
the 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 company’s affairs
as at 31 March 2022 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards;
the company financial statements have been properly prepared in accordance with UK-adopted
international accounting standards (UK IAS) and as applied in accordance with the provisions of the
Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the group and 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 company’s ability to continue to adopt the going concern basis of accounting
included:
consideration of the company’s and group’s objectives, policies and processes in managing its capital
as well as exposure to financial, credit and liquidity risks;
reviewing the cash flow forecasts for the ensuing twelve months from the date of approval of these
group financial statements and assessment thereof;
performing sensitivity analysis on the cash flow forecast prepared by management, and challenging the
assumptions included thereto surrounding the commissioning of the new Sahamamy plant, fund raising
through convertible loan notes and acquisitions;
reviewing the management’s going concern assessment and discussing with management regarding the
future plans and availability of funding; and
reviewing the adequacy and completeness of disclosures in the group financial statements
46 | Page
PKF Littlejohn LLP
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 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.
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. Materiality is used to determine the group financial statement areas that are included within the
scope of our audit and the extent of sample sizes during the audit. No significant changes have come to light
during the course of the audit which required a revision to our group materiality for the group financial
statements as a whole.
Materiality for the group financial statements was set at £242,380 (2021: £140,000). This was calculated based
on 1.5% 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 the key focus of the group is to build assets pertaining to mining 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 significant components of the group ranged from £93,000 (2021: £56,000) to £241,000 (2021:
£139,000) based on 1.5% of gross assets for each component.
Materiality for the company financial statements was set at £241,000 (2021: £139,000). This was calculated on
the same basis as group materiality.
Performance materiality for the group financial statements was set at £169,666 (2021: £98,000) and the
company was set at £168,700 (2021: £97,300), being 70% of materiality for the financial statements as a whole
respectively. The performance materiality for the significant components is calculated on the same basis as group
materiality. In determining performance materiality, we considered the following factors:
our cumulative knowledge of the group and its environment, including industry specific trends;
the change in the level of judgement required in key accounting estimates;
the stability in key management personnel; and
the level of misstatements identified in prior periods
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 £12,119 (2021: £7,000) and for the company a value in
excess of £12,050 (2021: £6,950). We also agreed to report any other audit misstatements below that threshold
that we believe warranted reporting on qualitative grounds.
47 | Page
PKF Littlejohn LLP
Our approach to the audit
Our audit is risk based and is designed to focus our efforts on the areas at greatest risk of material misstatement,
together with areas subject to significant management judgement.
In designing our audit, we determined materiality and assessed the risks of material misstatement in the group
and company financial statements. In particular we looked at areas involving significant accounting estimates
and judgements by the directors and considered future events that are inherently uncertain. This included, but
were not limited to the impairment of the underlying assets. We also addressed the risk of management override
of internal controls, including among other matters consideration of whether there was evidence of bias that
represented a risk of material misstatement due to fraud.
As part of our audit, we assessed all components of the group for their significance in order to determine the
scope of the work to be performed. Each component was assessed as to whether they were significant or not to
the group by either their size or risk. The company and the 2 operating subsidiaries were considered to be
significant due to identified risk and size. Those entities of the group which were considered to be significant
components, being Tirupati Graphite PLC (holding and parent company), 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 was a holding company and trivial to the consolidated financial statements and was
wounded up during the year and therefore group analytical procedures only have been performed in respect of
this entity. Tirupati Graphite PLC is now the holding and parent company for the group.
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
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
Carrying value of groups fixed assets- Note 12 & 14
How our scope addressed this matter
We performed the following procedures:
The group holds fixed assets such as tangible assets
in the form of property, plant and equipment and
intangible assets in the form of exploration and
evaluation costs.
Management is required to assess whether there are
potential indicators of impairment of the group’s
fixed assets at each reporting date and, if potential
indicators of impairment are identified,
management are required to perform a
assessment of the recoverable value of the assets.
full
Given the uncertainty in the future production, sales
profiles and the volatility in costs, there is a risk that
management may not adequately identify
all impairment indicators.
Confirmed the group and the company held
good title to the license area;
Obtained an understanding of the internal
control
operation
surrounding the impairment review of fixed
assets;
environment
in
Reviewed managements considerations of
impairment, including challenging the key
assumptions made;
Assessed the competence and objectivity of
the experts preparing competent persons
report (CPR) and satisfied ourselves that they
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PKF Littlejohn LLP
Further there is risk that the assets capitalised in
respect of the Sahamamy and Vatomina projects are
overstated and depreciation has been understated.
were appropriately qualified to carry out the
reserves estimation;
Reviewed the competent person report
prepared by a third party expert and
challenged the inputs used;
Reviewed the material assets
indicators of impairment; and
for any
Ensured the presentation and disclosures in
the financial statements are sufficient and in
accordance with
IAS 36- Impairment of
assets.
Based on the procedures performed, we found
management’s assessment of the carrying value of
fixed assets to be supported by the underlying models
and the judgements and estimates applied to be
reasonable.
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 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 ap 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the 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.
49 | Page
PKF Littlejohn LLP
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 company, or returns adequate for our audit
have not been received from branches not visited by us; or
the 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 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 company financial statements, the directors are responsible for assessing the group’s
and the 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 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 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 mining sector.
We determined the principal laws and regulations relevant to the group and company in this regard to
be those arising from:
Import, Export and Customs Powers (Defence) Act 1939;
Financial Conduct Authority Rules;
o
o UK Companies Act 2006;
o UK-adopted international accounting standards;
o
London Stock Exchange Listing Requirements;
o Disclosure Guidance and Transparency rules;
o
o Madagascan Company Law;
o Environmental and mining rules in Madagascar;
o Employment laws;
o Anti-Bribery Act;
o Anti Money Laundering Regulations; and
o
Local tax laws and regulations.
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PKF Littlejohn LLP
We designed our audit procedures to ensure the audit team considered whether there were any
indications of non-compliance by the group and company with those laws and regulations. These
procedures included, but were not limited to:
o enquiries of management as well as appointed legal advisors;
o
o
o
o assessment of policies and procedure in:
review of board minutes;
review of legal / regulatory correspondence;
review of the Regulatory News Service (RNS) announcements; and
identifying all applicable laws and regulations relevant;
ensuring compliance with the aforementioned; and
identifying, evaluating, accounting and disclosing such 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 and from revenue recognition, inappropriate application of the going concern
assessment in the financial statements and management bias in determining key accounting estimates
(decommissioning provision and impairment of fixed assets and investments). These 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
challenging the key assumptions and judgements made by management when auditing significant
accounting estimates (see key audit matter and going concern).
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 the audit committee under Companies Act 2006 of the United Kingdom on 26 May 2021
to audit the financial statements for the period ending 31 March 2022 and subsequent financial periods. Our
total uninterrupted period of engagement is 4 years, covering the periods ending 31 March 2018 to 31 March
2022.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the company
and we remain independent of the group and the company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
51 | Page
PKF Littlejohn LLP
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
30 September 2022
15 Westferry Circus
Canary Wharf
London E14 4HD
52 | Page
Tirupati Graphite plc
Consolidated Statement of Comprehensive Income
Annual Report and Financial Statements
period ended 31 March 2022
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2022
Continuing operations
Revenue
Cost of Sales
Depreciation of Operating Assets
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
Earnings per share attributable to owners of the
Company
From continuing operations:
Notes
2022
£
2021
£
6
7
9
1,645,308
1,123,426
(1,137,196)
(488,083)
(482,641)
(146,893)
25,471
488,450
(1,857,019)
(1,590,411)
(1,831,548)
(1,101,961)
(140,209)
(147,151)
(1,971,757)
(1,249,112)
10
48,271
(27,827)
(1,923,486)
(1,276,939)
(361,662)
(417,693)
(2,285,147)
(1,694,632)
Pence per share
Pence per share
Basic
Diluted*
11
11
(2.66)
(2.66)
(2.61)
(2.61)
*Note: The Dilutive instruments like warrants & CLNs issued by the company are resulting in anti-dilutive effect on EPS. Hence
diluted EPS is shown as equal to basic EPS following IFRS requirements.
The accompanying accounting policies and notes are an integral part of these finance
53 | Page
Tirupati Graphite plc
Consolidated and Company Statement of Financial Position
Annual Report and Financial Statements
period ended 31 March 2022
Consolidated and Company Statement of Financial Position
As at 31 March 2022
Notes
Group
Company
2022
£
2021
£
2022
£
2021
£
Non-current assets
Investments in subsidiaries
plant
and
Property,
equipment
Deferred tax
Deposits
13
14
24
-
-
3,901,023
3,539,448
7,356,121
3,020,142
75,242
6,806
21,182
1,872
-
-
-
201,725
-
-
Intangible assets
12
3,571,196
3,682,354
40,970
40,970
Total non-current assets
11,009,365
6,725,550
3,941,993
3,782,143
Current assets
Inventory
Trade and other receivables
16
15
732,274
461,093
-
212,581
4,242,635
1,102,868
13,858,647
5,547,806
Cash and cash equivalents
1,534,023
1,644,189
1,505,410
1,491,454
Total current assets
Current liabilities
6,508,932
3,208,150
15,364,057
7,251,841
Trade and other payables
Borrowings
17
19
730,869
445,273
315,207
219,780
536,000
-
536,000
-
Total current liabilities
1,266,869
445,273
851,207
219,780
Net current assets
5,242,063
2,762,877
14,512,850
7,032,061
Non-current liabilities
Borrowings
Other payables
19
17
473,000
1,283,000
473,000
1,283,000
31,232
23,864
-
-
Total non-current liabilities
504,232
1,306,864
473,000
1,283,000
54 | Page
Tirupati Graphite plc
Consolidated and Company Statement of Financial Position
Annual Report and Financial Statements
period ended 31 March 2022
NET ASSETS
15,747,196
8,181,563
17,981,843
9,531,204
Equity
Share capital
20
2,173,497
1,871,084
2,173,497
1,871,084
Share premium account
19,975,356
10,426,988
19,975,356
10,426,988
Warrant reserve
21
130,557
130,557
130,557
130,557
Foreign exchange reserve
(776,208)
(414,546)
-
-
Retained losses
(5,756,006)
(3,832,520)
(4,297,566)
(2,897,425)
Equity
owners of the Company
attributable
to
15,747,196
8,181,563
17,981,843
9,531,204
TOTAL EQUITY
15,747,196
8,181,563
17,981,843
9,531,204
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present
the company statement of comprehensive income.
The loss for the company for the year was £1,400,141 (2021: £1,029,240).
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 30 September 2022 and signed on its behalf
by:
Mr Shishir Poddar
Executive Chairman and Managing Director
Company registration number: 10742540
55 | Page
Tirupati Graphite plc
Consolidated and Company Statement of Changes in Equity
Annual Report and Financial Statements
period ended 31 March 2022
Consolidated Statement of Changes in Equity
For the year ended 31 March 2022
Attributable to the owners of the company
Share capital
Share
premium
Foreign
exchange
reserve
Share
warrants
reserve
Retained
losses
TOTAL
EQUITY
£
£
£
£
£
£
Balance at 1 April 2020
1,498,132
5,328,518
3,147
Loss for the period
Other Comprehensive
Income: Exchange
translation loss on
foreign operations
comprehensive
Total
income for the year:
Transactions
owners
with
-
-
-
-
-
-
-
(417,693)
(417,693)
Issue of ordinary shares
372,952
5,098,470
Warrant charge
-
-
-
-
-
-
-
-
-
130,557
372,952
5,098,470
-
130,557
(2,555,582)
4,274,215
(1,276,938)
(1,276,938)
-
(417,693)
(1,276,938)
(1,694,631)
-
-
-
5,471,422
130,557
5,601,979
Total Transactions with
owners,
recognized
directly in equity:
Balance at 31 March
2021
Loss for the year
Other Comprehensive
Income: Exchange
translation loss on
foreign operations
comprehensive
Total
income for the year:
1,871,084
10,426,988
(414,546)
130,557
(3,832,520)
8,181,563
-
-
-
-
-
-
(1,923,486)
(1,923,486)
-
-
-
(361,662)
-
(361,662)
(361,662)
(1,923,486)
(2,285,148)
56 | Page
Tirupati Graphite plc
Consolidated and Company Statement of Changes in Equity
Annual Report and Financial Statements
period ended 31 March 2022
Transactions
owners
with
Shares issued
302,413
9,548,368
Transactions
Equity owners:
with
302,413
9,548,368
-
-
-
-
-
-
-
9,850,781
9,850,781
Balance at 31 March
2022
2,173,497
19,975,356
(776,208)
130,557
(5,756,006)
15,747,196
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 losses – Represents accumulated comprehensive income for the year and prior years excluding
translation.
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.
57 | Page
Tirupati Graphite plc
Consolidated and Company Statement of Changes in Equity
Annual Report and Financial Statements
period ended 31 March 2022
Company Statement of Changes in Equity
For the year ended 31 March 2022
Attributable to equity shareholders
Share
capital
Share
premium
Share
warrants
reserve
Retained losses
£
£
£
£
TOTAL
EQUITY
£
Balance at 1 April 2020
1,498,132
5,328,518
Loss for the period
Total comprehensive
income:
Transactions with owners
-
-
-
-
Shares issued
372,952
5,098,470
-
-
-
-
Warrant charge
-
-
130,557
Total Transactions with
owners:
372,952
5,098,470
130,557
(1,868,185)
4,958,465
(1,029,240)
(1,029,240)
(1,029,240)
(1,029,240)
-
-
-
5,471,422
130,557
5,601,979
Balance at 31 March 2021
1,871,084
10,426,988
130,557
(2,897,425)
9,531,204
Loss for the year
Total comprehensive
income:
Transactions with owners
-
-
-
-
Shares issued
302,413
9,548,368
Total Transactions with
Equity owners:
302,413
9,548,368
-
-
-
-
(1,400,141)
(1,400,141)
(1,400,141)
(1,400,141)
-
-
9,850,781
9,850,781
Balance at 31 March 2022
2,173,497
19,975,356
130,557
(4,297,566)
17,981,843
58 | Page
Tirupati Graphite plc
Consolidated and Company Statement of Changes in Equity
Annual Report and Financial Statements
period ended 31 March 2022
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 losses – Represents accumulated comprehensive income for the year and prior years.
Share warrant reserve – Represents reserve for equity component of warrants issued as per IFRS 2 share-based payments.
59 | Page
Tirupati Graphite plc
Consolidated & Company Statement of Cash Flows
Annual Report and Financial Statements
period ended 31 March 2022
Consolidated Statement of Cash Flows
For the year ended 31 March 2022
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 in payables
Increase/(Decrease) in DTA & Other assets
2022
£
2021
£
(1,923,486)
(1,276,940)
565,079
205,723
-
-
140,209
(48,271)
21,910
49,627
147,151
27,827
(271,181)
(310,987)
(547,603)
(693,559)
285,596
(10,723)
17,402
27,827
Net cash used in operating activities
(1,810,380)
(1,783,357)
Cash flows from investing activities:
Purchase of tangible assets
Advance for Capital Assets
(5,151,562)
(1,245,230)
(2,592,163)
(436,631)
Net cash from investing activities
(7,743,725)
(1,681,861)
60 | Page
Tirupati Graphite plc
Consolidated & Company Statement of Cash Flows
Annual Report and Financial Statements
period ended 31 March 2022
Cash flows from financing activities*
Proceeds from Shares issued (net of costs)
9,576,781
5,512,352
Proceeds from issue of Convertible loan notes
Cost of issue of Convertible loan notes
Finance cost
-
-
513,000
(21,910)
(140,209)
(147,151)
Increase / (decrease) in Lease & other long-term liability
7,368
(793,524)
Net cash from financing activities
9,443,940
5,062,767
Net increase in cash and cash equivalents
(110,166)
1,597,549
Cash and cash equivalents at beginning of period
1,644,189
46,640
Cash and cash equivalents at end of period
1,534,023
1,644,189
The accompanying accounting policies and notes are an integral part of these financial statements.
*For reconciliation of cash and non-cash items from financing activities refer Note No. 19 (Convertible loan
notes) & note 20 (share capital).
61 | Page
Tirupati Graphite plc
Consolidated & Company Statement of Cash Flows
Annual Report and Financial Statements
period ended 31 March 2022
Company Statement of Cash Flows
For the year ended 31 March 2022
Loss for the year
Adjustment for:
Increase in inventories
Share based payments
CLN issuance cost
Finance costs
Working capital changes:
Increase in receivables
Increase /(decrease) in payables
2022
£
2021
£
(1,400,141)
(1,029,240)
212,580
(212,580)
-
-
49,627
21,910
140,209
147,151
(5,718,677)
(2,837,978)
95,427
(213,576)
Net cash used in operating activities
(6,670,602)
(4,074,686)
Cash flows from investing activities:
Sale of tangible assets
(Purchase)/sale of intangible assets
Advance for Capital Assets
Investment in subsidiaries
201,725
-
(2,592,163)
(361,575)
342,484
112,031
-
-
Net cash from investing activities
(2,752,013)
454,515
62 | Page
Tirupati Graphite plc
Consolidated & Company Statement of Cash Flows
Annual Report and Financial Statements
period ended 31 March 2022
Cash flows from financing activities*
Shares issued
9,576,781
5,512,352
Proceeds from issue of convertible loan notes
CLN issue cost
(decrease) in long term liabilities
Finance costs
-
-
-
(140,209)
513,000
(21,910)
(779,621)
(147,151)
Net cash from financing activities
9,436,572
5,076,670
Net increase in cash and cash equivalents
13,956
1,456,499
Cash and cash equivalents brought forward
1,491,454
34,955
Cash and cash equivalents carried forward
1,505,410
1,491,454
*For reconciliation of cash and non-cash items from financing activities refer Note No. 19 (Convertible loan
notes) & note 20 (share capital).
The accompanying accounting policies and notes are an integral part of these financial statements.
63 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
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 Accounting Standards as adopted by UK
(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 2021. The adoption of these standards and amendments did not have any material impact on
the financial result of position of the Group and Company.
Standards which are in issue but not yet effective:
At the date of authorisation of these financial statements, the following Standards and Interpretation, which
have not yet been applied in these financial statements, were in issue but not yet effective.
Standard or interpretation
Description
Effective date
IAS 1
IAS 16
IAS 8
IAS 1
IFRS
Amendments – Classification of Liabilities as Current or Non-Current
1 January 2023
Amendments – Property, Plant and Equipment
Amendments – Definition of Accounting Estimates
Amendments – Disclosure of Accounting Policies
Annual improvements to IFRS Standards 2018-2020
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.
64 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
The financial statements have been prepared on the historical cost basis, except for financial instruments that
are measured at the fair values at the end of the reporting period. Historical cost is generally based on the fair
value of the consideration given in exchange for goods and services.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements, are disclosed in Note 4.
The principal accounting policies adopted are set out on the following pages.
Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance
and position are set out in the Business Review and Strategic Report Sections. The financial position of the Group
and the Company, their cash flows and liquidity positions are contained in the financial statements. The expected
evolution of the business and significant post year end events is 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.
Since its Initial Public Offering and admission for trading on the standard segment of the London Stock Exchange
the company embarked on the planned path of developing significant flake graphite mining and processing
capacities across its two projects in Madagascar. During the year under review the company commissioned a
9,000 tpa new facility at its Vatomina projects enhancing its installed capacity from the previous 3,000 tpa to
12,000 tpa. It also initiated extensive infrastructure development across both its projects and initiated
development of the next 18,000 tpa facility at its Sahamamy project. To meet its investment and working capital
requirements it raised an additional £10,000,000 in equity during April 2021.
During the year under review, while the operations of Sahamamy continued amidst limitations, the
debottlenecking of the new Vatomina plant was undertaken in the second half year period, during which the
project produced sellable products too. Owing to extreme climatic conditions in respect of constant rainfall, the
road infrastructure of both the Vatomina and Sahamamy projects remained challenging. Moreover, the new
connecting road to Sahamamy project could not remain constantly operational. In spite of all the limitations, the
company recorded total production of 2,996 tons and sales 2,662 tons from across the two projects. The
difficulties in logistics remained a challenge and the company decided to split its processing plant in a manner
that the transport of ore from mining areas to the processing plant is eliminated and accordingly by mid of August
2022, required relocations have been made and both plants put in operations. The rains having receded by this
time too have enabled rebuilding of the roads and as of writing of this report all connectivity have been restored.
As per the company’s plans, it started construction for its next 18,000 tpa mining and processing facility at its
Sahamamy project which is expected to complete, commission and ramp up production from Q1 2023.
Investment required for the development of this has been substantially made. All mine and plant equipment
have either arrived at the project sites or have been paid for and under dispatch from origin.
In August 2022, the company engaged with its brokers for raising the gap funding required for completing the
development of its projects to 30,000tpa. Additionally, the company also raised funds for the capital
commitments for the acquisition of Suni Resources SA, a company incorporated in Mozambique holding two
advanced stage flake graphite projects. An amount of £3,000,000 gross has been successfully raised by the
company to meet the gap with£1,000,000 budgeted for the investment and working capital requirements for its
current requirements and balance after costs for the acquisition.
65 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
On the operations account, for the year under review, the company generated gross Profits of £ 840,060
representing c. 51% of the revenues in spite of the fact that the new Vatomina project was only in the initial
stages and operations remained impacted due to climatic conditions, mitigation of which have been effectively
implemented for the future by the time of writing of this report. Going forward, as the production from the
current 12,000 tpa capacity increases, the company expects to improve the gross margins. The year under review
also represented the first full year of operations as a quoted company and with the management team for the
expanding capacity of 30,000 tpa having been put in place during the year. Thus, the increased Admin costs for
the year under review substantially captures the ongoing costs of the company. The company therefore believes
that, subject to force majeure, from H2 of the current financial year 1 April 2022 to 31 March 2023, the company
shall evolve to positive bottom line, has secured its financial needs for its current capacity under creation and
operations ongoing, has an ongoing ability to meet its any further capital needs in adverse circumstances and
remains financially secured.
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, are expected to add
further additional operating cash flows.
Where the Company is 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. The forecast contains certain assumptions about the level of future sales and margins
achievable. The Directors have considered various future scenarios in their forecasting to enable them to
adequately consider whether the Group has adequate resources to continue in operational existence and remain
of the view that the company has adequate cash resources, business prospects and access to capital markets to
remain a going concern.
Basis of consolidation
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the Group. They are deconsolidated from the date that control
ceases.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated financial statements from the date the
Group gains control until the date the Group ceases to control the subsidiary.
The Group consists of Tirupati Graphite plc and its wholly owned subsidiaries Tirupati Resources Mauritius,
Tirupati Madagascar Ventures and Establissements Rostaing.
In the 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.
66 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
All financial statements are made up to 31 March 2022. 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 or over
time, depending on the nature of the goods or services and existence of acceptance clauses.
Revenue from the sale of goods is recognised when delivery has taken place and the performance obligation of
delivering the goods has taken place. The performance obligation of products sold are transferred according to
the specific delivery terms that have been formally agreed with the customer, generally upon delivery when the
bill of lading is signed as evidence that they have accepted the product delivered to them.
Foreign currencies
For the purposes of the consolidated financial statements, the results and financial position of each Group
company are presented in pounds sterling, which is the functional currency of the Company. At balance sheet
date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates
prevailing at that date. Income and expense items are translated at the average exchange rates for the period.
Taxation
Income tax represents the sum of current tax and deferred tax.
Current tax
Current tax is based on taxable profit or loss for the year. Taxable profit or loss differs from net profit or loss as
reported in the income statement because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or deductible. The Group's liability for current
tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
A provision is recognised for those matters for which the tax determination is uncertain, but it is considered
probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best
estimate of the amount expected to become payable. The assessment is based on the judgement of tax
professionals within the Company supported by previous experience in respect of such activities and in certain
cases based on specialist independent tax advice.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit and is accounted for using the balance sheet liability method.
67 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
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, borrowing costs.
Costs are capitalised and categorised as construction in progress.
Property, Plant and Equipment
Property, Plant and Equipment in the course of construction for production, supply or administrative purposes,
or for purposes not yet determined, are carried at cost, less any recognised impairment loss. Costs includes
professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group's
accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when
the assets are ready for their intended use.
68 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
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 being
incurred. Intangible assets comprise of exploration costs purchased as part of the acquisition in prior years
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.
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 of 10 years (useful economic life) on straight line method.
69 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
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 (i.e. Exploration and evaluation assets) recorded at fair-value on business combination
Exploration assets which are acquired as part of a business combination are recognised at fair value in accordance
with IFRS 3. When a business combination results in the acquisition of an entity whose only significant assets are
its exploration asset and/or rights to explore, the Directors consider that the fair value of the exploration assets
is equal to the consideration. Any excess of the consideration over the capitalised exploration asset is attributed
to the fair value of the exploration asset.
Exploration and evaluation assets are recorded and held at cost
Exploration and evaluation assets are not subject to amortisation, as such at the year-end all intangibles held
have an indefinite life, but are assessed annually for impairment. The assessment is carried out by allocating
exploration and evaluation assets to cash generating units (‘CGU’s’), which are based on specific projects or
geographical areas. The CGU’s are then assessed for impairment using a variety of methods including those
specified in IFRS 6. Whenever the exploration for and evaluation of mineral resources in cash generating units
does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided
to discontinue such activities of that unit, the associated expenditures are written off to the Income Statement.
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.
70 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
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.
71 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Financial liabilities and equity instruments issued by the Group
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets
of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the
proceeds received, net of direct issued costs.
Trade payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised costs, using the
effective interest rate method.
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to control the use of an identified
asset, the Group uses the definition of a lease in IFRS 16.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of
costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the
end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option.
In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is
determined on the same basis as those of property and equipment. In addition, the right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate
as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing
sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased. The lease
liability is measured at amortised cost using the effective interest method. It is remeasured when there is a
change in future lease payments.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
Borrowings
These financial liabilities are all non-interest bearing (except borrowing made through convertible loan notes)
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.
72 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
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.
Convertible Loan Notes (CLNs)
Convertible Loan Notes are recorded at their issue price and are carried at their face value. Any interest due on
these CLNs is recorded on accrual basis. On conversion/redemption the face value of converted CLNs is reduced
from the total carried value. Interest at 12% p.a. is paid semi-annually in June and December.
Share based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value
of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is
expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually
vest. A corresponding adjustment is made to equity.
When the terms and condition of equity settled share-based payments at the time they were granted are
subsequently modified, the fair value of the share-based payment under the original terms and conditions and
under the modified terms and conditions are both determined at the date of the modification. Any excess of the
modified fair value over the original fair value is recognised over the remaining vesting period in addition to the
grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if
the modified fair value is less than the original fair value.
Cancellations or settlements are treated as an acceleration of vesting and the amount that would have been
recognised over the remaining vesting period is recognised immediately.
As a result of the increase in share price and the impact of the estimation of share-based payments the Group
has now recognised an expense for the outstanding share options and warrants.
73 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
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.
Intragroup receivables
The Company assessed the recoverability of intragroup receivables, and it does not require any impairment
adjustment in current financial year.
Production assets
The Group is required to perform an impairment review on its production assets. The calculation is most sensitive
to the following assumptions:
• Production volumes
• Sales volumes
• Graphite prices
• Operating overheads
• Inventory Estimated production volumes are based on the production capability of the plant and estimated
customer demand.
The directors have assessed the value of its production assets. In their opinion there has been no impairment
loss to these intangible assets in the period.
Useful economic lives of property, plant and equipment
The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful
economic lives and residual values of the assets, taking into account that the assets are not used throughout the
whole year due to the seasonality of the locations. The useful economic lives and residual values are re-assessed
annually. They are amended when necessary to reflect current estimates, based on economic utilisation and the
physical condition of the assets. See note 14 for the carrying amount of the property plant and equipment and
note 3 for the useful economic lives for each class of assets.
74 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Impairment of intangible assets
Exploration and evaluation costs have a carrying value at 31 March 2022 of £3,571,196 (2021: £3,682,354) Such
assets have an indefinite useful life as the Group has a right to renew exploration licences and the asset is only
amortised once extraction of the resource commences. Management tests for impairment annually whether
exploration projects have future economic value in accordance with the accounting policy stated in Note 3. Each
exploration project is subject to an annual review by either a consultant or senior company geologist to
determine if the exploration results returned during the period warrant further exploration expenditure and
have the potential to result in an economic discovery. This review takes into consideration long term graphite
prices, anticipated resource volumes and supply and demand outlook. In the event that a project does not
represent an economic exploration target and results indicate there is no additional upside a decision will be
made to discontinue exploration; an impairment charge will then be recognised in the Income Statement.
The directors have assessed the value of its exploration assets. In their opinion there has been no impairment
loss to these intangible assets in the period.
Provision for restoration costs
The Company makes good any provision for the cost of rehabilitating the end-of-life production sites and related
production facilities at the same time as production. The rehabilitation costs are charged to the Income
statement as incurred. As is privy to the Group’s environment and sustainability initiatives management take
note of the Environment Commitment Book which underlines in-county regulations set out by the Malagasy
Government, and the environmental conditions within the mining permit, which covers the Group’s obligations
towards restauration and rehabilitation. The group has adopted a principle of ongoing rehabilitation activities.
The directors do not believe any further provision Is required because the project areas in Madagascar are
located within a moderately undulating area and the Company’s mine planning takes this into consideration the
topographic advantage. In addition, 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 Group. In line with the
requirements of the licence, they have already incurred costs relating to the construction of anti-erosion
infrastructures, dam cleaning, wall making, soil restoration and some reforestation of areas.
Following limited and small-scale production to date, the Group’s operations after the year end will significantly
increase and management will therefore undertake another detailed analysis of their environmental and
restoration obligations following increased activity in line with its second Sustainability 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 meet their legal obligations and 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. Once
this exercise is completed, management will review the findings and assess whether any activities are to be
performed in this regard.
5. Segmental analysis
The Management believes, under IFRS 8 – “Segmental Information”, the Group operated in three primary
business segments in 2022, being Holding Companies Expenses, Mining Exploration and Development and
Graphite Mining Extraction.
75 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
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
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
2022
£
2021
£
1,645,308
1,123,426
(1,400,142)
(1,002,218)
-
(239,555)
(571,615)
(14,957)
19,381,985
9,120,707
-
(698,823)
(3,634,789)
(237,415)
2022
£
2021
£
1,645,308
1,123,019
-
-
-
407
(1,400,142)
(1,036,857)
-
785
(571,615)
(220,658)
76 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Net assets
UK
Mauritius
Madagascar
19,381,985
9,534,110
-
159,159
(3,634,789)
(1,508,800)
6. Revenue from contracts with customers
The Group & the company derives revenue from the transfer of goods at a point in time in the following major
product lines and geographical regions:
2022
USA
Europe
Asia
Total
Revenue from external customers
34,000
224,033
1,387,275
1,645,308
Timing of recognition:
At a point in time
34,000
224,033
1,387,275
1,645,308
2021
USA
Europe
Asia
Total
Revenue from external customers
19,565
211,584
892,277
1,123,426
Timing of recognition:
At a point in time
19,565
211,584
892,277
1,123,426
Following customers constituted more than 10% of the revenue, their respective share of revenue is mentioned
below:
Customer A
Customer B
Customer C
Customer D
2022
£
2021
£
224,033
184,134
488,330
239,793
287,247
238,602
430,429
169,567
Revenues of approximately £1,430,039 (2021: £832,096) are derived from 4 customers who each account for
greater than 10% of the group’s & company’s total revenues.
77 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
7. Expenses by nature
The following items have been included in arriving at operating loss
Depreciation on other assets
Net foreign exchange loss
PR/IR Expenses
Professional Fees
2022
£
2021
£
565,079
205,723
(95,171)
(22,058)
131,885
119,181
124,454
55,421
Auditor’s remuneration has been included in arriving at operating loss as
follows:
Fees payable to the Company’s auditor and their associates for
the audit of the Company and consolidated financial statements
45,000
45,000
Fees payable to the Company’s auditor and its associates for
other services:
Corporate finance services
-
50,000
8. Employee information
The average monthly number of employees (including Executive Directors) was:
Number of employees for the year:
2022
290
2021
203
£
£
Wages & salaries (for the above employees)
1,118,892
930,707
Social security costs
Share based payments
40,485
-
12,521
68,739
1,159,377
1,011,967
78 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
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
2022
£
2021
£
764,000
634,849
£
£
320,000
240,000
30,000
24,000
264,000
198,000
-
20,507
Refer to Directors Remuneration Report for further information in respect of Directors’ remuneration.
9. Finance cost
2022
£
2021
£
Interest Expense
140,209
147,151
10. Income tax
2022
£
2021
£
Loss on ordinary activities before tax
(1,971,757)
(1,249,113)
Loss on ordinary activities multiplied by weighted average tax rate
(384,429)
(249,823)
Minimum tax in Madagascar
Tax on disallowed items
5,946
-
157,164
83,475
Tax losses carried forward (deferred tax not recognised)
173,048
194,175
Net tax (credit) )/ charge
(48,271)
27,827
79 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Current tax charge
Deferred tax (credit)/charge
Net tax (credit)/ charge
5,946
(54,217)
(48,271)
-
27,827
27,827
The Group has tax losses available to be carried forward and used against trading profits arising in future periods
of £4,371,054 (2021: £2,660,796). A deferred tax asset of £837,841 (2021: £532,159) 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.
2022
2021
Continuing operations:
Loss attributable to equity holders of the Company (£)
(2,285,147)
(1,694,632)
Weighted average number of ordinary shares in issue
85,876,108
64,883,546
Loss per share (pence)
(2.66)
(2.61)
2022
2021
Diluted number of ordinary shares in issue
92,494,422
71,357,375
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 2020
Additions
Forex Change
At 1 April 2021
Impairment
Forex Change
At 31 March 2022
£
3,691,243
-
8,889
3,682,354
-
(111,158)
3,571,196
80 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Accumulated amortisation
At 1 April 2020
Charge for the year
At 1 April 2021
Charge for the year
At 31 March 2022
Net book value
At 1 April 2020
At 1 April 2021
At 31 March 2022
-
-
-
-
-
3,691,243
3,682,354
3,571,196
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.
The projects in Madagascar have a current JORC compliant mineral resource of 25.1 million tonnes. Further
exploration across the two projects is ongoing. There are no JORC (Joint Ore Reserves Committee) or non-JORC
compliant resource estimates available to enable value in use calculations to be prepared. The Directors
therefore undertook an assessment of the following areas and circumstances that could indicate the existence
of impairment:
The Group’s right to explore in an area has expired, or will expire in the near future without renewal;
No further exploration or evaluation is planned or budgeted for;
A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the
absence of a commercial level of reserves; or
Sufficient data exists to indicate that the book value will not be fully recovered from future development
and production.
Following their assessment, the Directors concluded that no impairment charge was required at 31 March 2022
13. Investments
Company
Cost
At 1 April 2020
At 1 April 2021
Addition
At 31 March 2022
Shares in group undertaking
£
3,539,448
3,539,448
361,575
3,901,023
81 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Net book value
At 1 April 2020
At 1 April 2021
At 31 March 2022
3,539,448
3,539,448
3,901,023
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 was liquidated on 28th May 2021 and the shares are transferred to Tirupati Graphite Plc
Tirupati Madagascar Ventures
Registered: Lot II N 95 SB BIS E, Ambatobe, Antananarivo 103, Madagascar
Nature of business: Graphite mining extraction
Class of share
Ordinary shares
%
Holding
100*
%
Holding
98*
*indirectly through Tirupati Resources Mauritius. Tirupati Resources Mauritius was liquidated on 28th May 2021 and the shares have been
transferred to Tirupati Graphite Plc. Balance 1% each is held by Mr. Shishir & Mr. Hemant respectively on behalf of the company.
Establissements Rostaing
Registered: Lot II N 95 SB BIS E, Ambatobe, Antananarivo 103, Madagascar
Nature of business: Graphite mining extraction
Class of share
Ordinary shares
%
Holding
100*
* indirectly by Tirupati Resources Mauritius. Tirupati Resources Mauritius was liquidated on 28th May 2021 and the shares are transferred to
Tirupati Graphite Plc
82 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
14. Property, plant and equipment
Group
Cost
At 1 April 2020
Additions
At 1 April 2021
Additions
Reclassification
Plant and
Machinery
Infrastructure &
Fixtures*
Assets under
construction
£
£
£
Total
£
1,249,624
735,950
1,985,574
116,819
294,976
411,795
902,532
2,268,975
217,210
1,248,136
1,119,742
3,517,111
3,305,123
1,593,029
-
4,898,152
487,713
-
(487,713)
-
At 31 March 2022
5,778,410
2,004,824
632,029
8,415,263
At 1 April 2020
Depreciation
At 1 April 2021
Depreciation
At 31 March 2022
Carrying amount
As at 1 April 2021
254,361
146,893
401,254
482,641
883,895
33,979
58,830
92,809
82,438
175,247
-
288,340
-
-
-
-
205,723
494,063
565,079
1,059,142
1,584,320
318,986
1,116,836
3,020,142
As at 31 March 2022
4,894,515
1,829,577
632,029
7,356,121
Company
Cost
At 1 April 2020
Additions
At 1 April 2021
Assets under
construction
£
£
Total
£
544,209
544,209
(339,578)
(339,578)
204,631
204,631
83 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Transfer to Subsidiary
At 31 March 2022
At 1 April 2020
Depreciation
At 1 April 2021
Depreciation
At 31 March 2022
Carrying amount
As at 1 April 2021
As at 31 March 2022
(204,631)
(204,631)
-
-
-
-
-
-
-
-
-
-
-
-
204,631
204,631
-
-
Note: Infrastructure & fixtures includes mine development assets 2022: £737,396 (2021: Nil) and right of use
assets 2022: £ 51,998 (2021: £ 32,432)
15. Trade and other receivables
Trade receivables
Advance for Capex
VAT Refunds
Other debtors
Prepayments
Amounts owed by group undertakings
Group
Company
2022
2021
2022
2021
£
£
£
£
532,370
721,534
532,370
566,646
2,592,163
942,458
-
-
106,423
381,334
69,220
-
-
-
2,592,163
12,274
2,898
99,221
-
-
87,846
-
10,619,721
4,893,314
4,242,634
1,102,868
13,858,647
5,547,806
Trade receivables are amounts due from customers for goods sold in the ordinary course of business. They are
generally due for settlement within 30 days and therefore are all classified as current. Trade receivables are
recognised initially at the amount of consideration that is unconditional. The Group holds the trade receivables
with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised
cost using the effective interest method. All sales of the company are in USD.
84 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have
been grouped based on the days past due.
At 31 March 2022
Expected loss rate
Gross trade receivables
Loss allowance
At 31 March 2021
Expected loss rate
Gross trade receivables
Loss allowance
Current
More than
30 days
More than
60 Days
More than
90 days
Total
£
0%
532,370
-
£
0%
-
-
£
0%
-
-
£
80%
-
-
Current
More than
30 days
More than
60 Days
More than
90 days
Total
£
0%
721,534
-
£
0%
-
-
£
0%
-
-
£
80%
-
-
£
0%
-
-
£
0%
-
-
Trade receivables are provided for when there is no reasonable expectation of recovery. Indicators that
there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in
a repayment plan with the Group, and a failure to make contractual payments for a period of greater than
120 days past due. There are no significant known risks, and therefore no provision is made as at 31 March
2021 & 31 March 2022.
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:
Group
2022
£
2021
£
563,923
222,352
168,351
26,160
-
212,580
732,274
461,092
Group
Company
2022
£
2021
£
2022
£
2021
£
Trade payables
548,906
403,361
188,534
146,213
Social security and other taxes
18,817
3,422
Amounts due from group
-
-
-
-
-
35,077
85 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Accruals
163,146
38,490
126,673
38,490
730,869
445,273
315,207
219,780
In the Directors’ opinion, the carrying amount of payable is considered a reasonable approximation of fair value.
Non-current:
Lease liability
Group
Company
2022
£
2021
£
2022
£
2021
£
31,232
23,864
31,232
23,864
-
-
-
-
Lease liability is recognized in accordance with requirements of IFRS 16. It requires a lessee to recognise assets
and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A
lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a
lease liability representing its obligation to make lease payments.
Additional disclosure as per IFRS 16 is as follows:
Group
2022
£
21,521
6,590
1,955
2021
£
-
3,125
1,517
Addition in lease liability & ROU asset
Interest charged during the year
Amortization of Right to use asset (Incl. in Infrastructure & fixtures)
18. Provisions
No provisions have existed within the financial year or persist at year end.
19. Borrowings
During this financial year the convertible loan note instrument (“CLN”) £274k were converted in the equity. In
the year ended 31st March 2022, Interest on the CLN is chargeable at 12%.
Within one year
Between 2 and 5 years
Following table denotes changes in borrowings
2022
536,000
2021
-
473,000
1,283,000
1,009,000
1,283,000
86 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Opening Balance as on 1st April
Issued during the year
Redeemed/Converted during the year
Closing Balance as on 31st March
2022
2021
1,283,000
810,000
-
513,000
(274,000)
(40,000)
1,009,000
1,283,000
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 3 years from
date of issue.
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
2022
2022
2021
2021
Number
£
Number
£
Allotted, called up and fully paid
Ordinary shares of 2.5p each
86,939,832
2,173,497
74,843,323
1,871,084
Shares were issued during the year as follows:
Cost of issue (£)
Number of shares issued
Shares issued from a placing on 15 April 2021
498,521
11,111,111
Shares issued on conversion of CLNs on 28 July 2021
Shares issued on conversion of CLNs on 29 November 2021
Shares issued from a placing on 04 January 2022
-
-
-
253,333
355,556
376,509
498,521
12,096,509
87 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
21. Share based payments & warrant reserve
During the first two years after incorporation of the Company, with the consent of its Board and senior
management team, the Company adopted a minimal approach to incentives and provided no bonuses to the
executive management team or the Board. However, to show the appreciation of the Company, the Board was
provided with an annual incentive package in the form of warrants to subscribe for equity shares of the Company
at a premium to the prices at which Ordinary Shares have been subscribed when the Company raised equity in
the relevant period. The Company has also provided broker warrants to Optiva, on a success basis, for the
fundraising activities executed by it prior to Admission. In addition to this, the Company has also issued warrants
to some CLN subscribers for funds raised before admission of the Company to the LSE.
All warrants are equity-settled, in accordance with IFRS 2, by award of warrants to acquire ordinary shares or
award of ordinary shares. The fair value of these awards has been calculated at the date of grant of the award.
The fair value of the warrants granted was calculated using a Black-Scholes model. Changes in the assumptions
can affect the fair value estimate of a Black-Scholes model.
Following are the key assumptions used to estimate the fair value of the warrants issued:
a) Expected Volatility: 20%
b) Contractual Life of the warrant: 3 years
c) Risk free interest rate: 0.38% p.a.
Following warrants over ordinary shares have been granted by the Company and are outstanding as on 31 March
2022:
Grant Date
Expiry Date
Exercise Price (£)
Number of warrants
exercisable and
outstanding
31 December 2017
31 December 2022
31 December 2018
31 December 2022
31 March 2019
31 March 2023
31 December 2019
31 December 2023
26 February 2020
26 February 2023
31 March 2020
31 March 2023
15 June 2020
15 June 2023
15 June 2020
15 June 2023
30 June 2020
30 June 2023
16 July 2020
12 August 2022
14 December 2020
14 December 2023
14 December 2020
14 December 2023
20 April 2021
20 April 2024
0.300
0.400
0.400
0.400
0.675
0.400
0.675
0.900
0.675
0.525
0.450
0.675
1.350
1,000,000
1,520,000
480,000
1,620,000
36,000
960,000
222,222
222,222
22,800
41,143
170,329
113,553
222,222
Total
6,630,491
88 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Following table denotes changes warrants outstanding
Opening Balance as on 1st April
Issued during the year
Exercised during the year
Closing Balance as on 31st March
2022
2021
6,784,778
6,492,609
222,222
792,269
(376,509)
(500,100)
6,630,491
6,784,778
During the year 2022, the warrants were issued to the company’s brokers and costs relating to them has been
netted from share premium account.
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
606,047
5,580,000
444,444
Warrant
reserve
£
16,457
68,739
45,361
6,630,491
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
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.
89 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
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 company, comprising issued capital and retained earnings.
Fair value of financial assets and liabilities for the group
Valuation,
Book value
Fair value
Book value
Fair value
Methodology
2022
and hierarchy
£
2022
£
2021
2021
£
£
Financial assets
Cash
equivalents
and
cash
Loans and receivables,
net of impairment
(a)
(a)
1,534,023
1,534,023
1,644,189
1,644,189
4,242,635
4,242,635
1,102,868
1,102,868
Total at amortised cost
5,776,658
5,776,658
2,747,057
2,747,057
Financial liabilities
Trade and other payables
Borrowings
provisions
and
Lease Liabilities
(a)
(a)
(a)
730,869
730,869
445,273
445,273
1,009,000
1,009,000
1,283,000
1,283,000
31,232
31,232
23,864
23,864
Total at amortised cost
1,771,101
1,771,101
1,752,137
1,752,137
90 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Fair value of financial assets and liabilities for the company
Valuation,
Book value
Fair value
Book value
Fair value
Methodology
2022
and hierarchy
£
2022
£
2021
2021
£
£
Financial assets
Cash
equivalents
and
cash
Loans and receivables,
net of impairment
(a)
(a)
1,505,410
1,505,410
1,491,454
1,491,454
13,858,647
13,858,647
5,547,806
5,547,806
Total at amortised cost
15,364,057
15,364,057
7,039,261
7,039,261
Financial liabilities
Trade and other payables
Borrowings
provisions
and
(a)
(a)
315,207
315,207
219,780
219,780
1,009,000
1,009,000
1,283,000
1,283,000
Total at amortised cost
1,324,207
1,324,207
1,502,780
1,502,780
Valuation, methodology and hierarchy
(a) The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables
and deferred income, and Borrowings are all stated at book value. All have the same fair value due to their
short-term nature.
Market risk
Market price risk arises from uncertainty about the future valuations of financial instruments held in accordance
with the Group's investment objectives. These future valuations are determined by many factors but include the
operational and financial performance of the underlying investee companies, as well as market perceptions of
the future of the economy and its impact upon the economic environment in which these companies operate.
Credit risk
Credit risk is the risk that counterparties to financial instruments do not perform their obligations according to
the terms of the contract or instrument. The Group is exposed to counterparty credit risk when dealing with its
customers and certain financing activities.
The immediate credit exposure of financial instruments is represented by those financial instruments that have
a net positive fair value by counterparty at 31 March 2022.
The Group considers its maximum exposure to be:
2022
2021
91 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Financial assets
Cash and cash equivalents
Loans and receivables, net of impairment
The company considers its maximum exposure to be:
Financial assets
Cash and cash equivalents
£
£
1,534,023
1,644,189
4,242,635
1,102,868
5,776,658
2,747,057
2022
£
2021
£
1,505,410
1,491,454
Loans and receivables, net of impairment
13,858,647
5,547,806
15,364,057
7,039,261
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.
92 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
The following are the contractual maturities of financial liabilities for the group:
Carrying
Contractual
6 months
6 to 12
amount
cash flows
or less
months
31 March 2022
£
£
£
£
1 to 2
years
£
2 to 5
years
£
Non–derivative
financial
liabilities
Trade and other
payables
730,869
Borrowings
1,009,000
31 March 2021
Non–derivative
financial
liabilities
Trade and other
payables
445,273
Borrowings
1,283,000
-
-
-
-
730,869
-
-
-
116,000
420,000
473,000
-
445,273
-
-
-
-
-
-
1,283,000
The following are the contractual maturities of financial liabilities for the company:
Carrying
Contractual
6 months
6 to 12
amount
cash flows
or less
months
31 March 2022
£
£
£
£
1 to 2
years
£
2 to 5
years
£
Non–derivative
financial
liabilities
Trade and other
payables
315,207
Borrowings
1,009,000
31 March 2021
Non–derivative
financial
liabilities
Trade and other
payables
219,780
Borrowings
1,283,000
-
-
-
-
315,207
-
-
-
116,000
420,000
473,000
-
219,780
-
-
-
-
-
-
1,283,000
93 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
Cash flow management
The Group produces an annual budget which it updates quarterly with actual results and forecasts for future
periods for profit and loss, financial position and cash flows. The Group uses these forecasts to report against
and monitor its cash position. If the Group becomes aware of a situation in which it would exceed its current
available liquid resources, it would apply mitigating actions involving reduction of its cost base. The Group would
also employ working capital management techniques to manage the cash flow in periods of peak usage.
Currency risk
The Group operates internationally and is exposed to foreign exchange risk. Foreign exchange risk arises from
future commercial transactions and recognised assets and liabilities denominated in a currency that is not the
functional currency of the relevant Group entity. The Group’s primary currency exposure is to US Dollar, which
is the currency of all intra-group transactions as well as denomination of selling price of the products. The group
also has some exposure to Malagasy ariary due to its operating subsidiaries in Madagascar.
Considering the natural hedge available the Group currently doesn’t hedge the currency risk. The Group’s and
Company’s exposure to foreign currency risk at the end of the reporting period is summarised below. All amounts
are presented in GBP equivalent.
Group
USD
2022
£
MGA
2022
£
USD
2021
£
MGA
2021
£
Cash and cash equivalents
19,405
18,550
90,236
66,118
Trade & other receivables
3,127,431
1,003,709
522,400
489,622
Trade & other payables
(188,534)
(415,662)
(151,353)
(301,816)
Net Exposure
2,958,302
606,597
461,283
253,924
Company
Cash and cash equivalents
Loans to subsidiaries
Trade & other receivables
Trade & other payables
Net Exposure
Sensitivity Analysis
USD
2022
£
USD
2021
£
9,342
3,619
9,797,683
4,893,314
3,949,469
522,400
(224,937)
(151,353)
13,531,557
5,267,980
94 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
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.
2022
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%
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%
23. Related party transactions
Group
Company
£
£
295,830
1,353,156
(295,830)
(1,353,156)
60,660
(60,660)
-
-
Group
Company
£
£
532
(592)
53,071
(64,864)
(51,402)
57,183
-
-
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 (2021: Nil) and revenue recorded for the
year of Nil (2021: £46,090), Specialized machinery purchased of £24,822 (2021: £295,122) 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 £1,567,693 (2021 - £250,656), revenue of £287,247 (2021 -
£238,602) , Specialized machinery purchased of £1,484,087 (2021: £833,741) 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 £230,624 (2020 - £72,552). Specialized machinery purchased of £494,471 (2021: Nil)
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 £440,000 (2021 -
£378,402) and brokerage and consultancy fees prepaid of £ 6,250 (2021 – Nil)
95 | Page
Tirupati Graphite plc
Notes to the Financial Statements
Annual Report and Financial Statements
period ended 31 March 2022
24. Deferred Tax Assets
Brought forward DTA
Created/(reversed) during the year
Forex
Carried forward DTA
2022
21,182
54,217
(157)
2021
49,422
(27,827)
(413)
75,242
21,182
25. Events after the reporting period
In August/September 2022, the Company completed capital raise in the form of Convertible Loan Notes 2022 of
£1,862,500 gross proceeds with institutional and other investors. The net proceeds will primarily be used to
expedite and accelerate the Company's modular MTDP.
In August/September 2022, the company completed commissioning and start re-engineered preconcentrate
facilities at Vatomina and adoption of the concept for the under construction 18,000 tpa facilities in Sahamamy
project in Madagascar.
In August/September 2022, the company signed a binding agreement, subject to approval of transfer, for three
additional mining permits in Madagascar covering a total area of 31.25km2 and located in the vicinity of the
Company’s existing projects in the country; The consideration agreed for the acquisition is a total of MGA 800
million (c.£167,000) to be paid in cash upon milestones in the process of completing the transfer of the permits
to the Company.
96 | Page