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Unaudited Half-Yearly Results

29 Dec 2022 07:00

RNS Number : 1153L
Tirupati Graphite PLC
29 December 2022
 

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this information is considered to be in the public domain.

 

Thursday 29 December 2022

Tirupati Graphite plc

('Tirupati' or the 'Company')

 

Unaudited Half-Yearly Results

 

Tirupati Graphite plc (TGR.L, TGRHF.OTCQX), the specialist flake graphite company, is pleased to announce its Interim Results for the six months ended 30 September 2022. The Company's operations include two primary graphite mining and processing projects in Madagascar being developed in modules with both projects in operation during the reporting period.

 

Highlights for the six-month period ending on 30 September 2022

 

· Operations and development at both Vatomina and Sahamamy projects continued in spite of disruptions caused by exceptionally adverse weather conditions in the period.

· 63% growth in production and 78% in sales were achieved during the period compared to same period of the previous year (year on year 'YoY').

· Construction and Development continued across the two projects with activities focussed on:

Progressing development of Sahamamy 18,000 tpa new mining and processing facilities alongside development of hydro power plant;

Development and operationalisation of first 'pre concentrate' unit at the mine pit head at the Vatomina project and start of construction of the second pre concentrate plant; and

Strengthening of road infrastructure throughout the Company's networks across the two projects measuring c. 50 kilometres ("km").

· Addition in fixed assets for the period amounted to £3,869,417 representing investments made by the Company in the development of the 18,000 tpa plant and Hydro Power project in Sahamamy and investments in the Vatomina plant and infrastructure across the two projects.

· The first pre concentrate plant constructed at Vatomina for substantially eliminating ore transport was commissioned and successfully integrated, paving the way for its adoption in future developments.

· To tide over the lower grade at Vatomina and increasing plant capacity to 12,000 tpa, construction of a second pre concentrate plant was commenced at Vatomina.

· Redevelopment of the 100-kilo watt Sahamamy hydro power plant was completed and trial runs conducted. Integration of the plant with the power supply system awaits certain corrections in the flow system.

· Extensive infrastructure strengthening for the c.50 km internal and inter project connecting roads, bridges and culverts was commenced post the rainy season and has now been completed.

· Key operational and financial highlights for the period are as tabulated below:

 

Six Months Ending

30 Sep 2022

30 Sep 2021

Cost of Production

£787,312

£255,193

Quantity of Production (MT1)

1,731 MT

1,060 MT

Cost per MT of Production

£454/MT

£241/MT

Total Sales (MT)

1,691 MT

950 MT

Total Revenues

£1,165,195

£560,058

Achieved Basket Price (per MT)

US$833/£689 MT

US$819/£590 MT

Gross Profit

£377,883

£304,865

Gross Margins (per MT)

£223/MT

£321/MT

Gross Margin on Sales (%)

32%

54%

Corporate and Administrative Costs

£1,010,774

£1,141,387

EBIDTA

£(632,891)

£(836,522)

Depreciation

£793,173

£172,853

Operating Profit/(Loss)

£(1,426,064)

£(1,009,375)

1. MT = Metric Tonnes

As at

30 Sep 2022

31 March 2022

Selected Balance Sheet items

Cash and cash equivalents

£831,436

£1,534,023

Net Assets

£14,484,371

£15,747,196

 

· The revenue from sales during the period was £1,165,195 an increase of 108% YoY.

· Gross Profit increased YoY from £304,865 to £377,883 representing an increase of 24%.

· The percentage of operating margins reduced from 54% to 32% YoY owing to increased costs with increased capacities but lower capacity utilisation due to adverse weather conditions and continued development activities with conservative capitalisation of costs as per accounting standards and guidelines.

· Administrative expenses reduced by 11% YoY from £1,141,387 to £1,010,774 YoY.

· As an impact of increased operating profits and reduced administrative costs the negative EBIDTA reduced by 24% from £836,522 to £632,891.

· The Company raised a gross sum of £1,862,500 from the issue of convertible loan note with a term of 3 years, convertible to Ordinary Shares of £0.025 each of the Company ("Ordinary Shares") at a price of £0.60.

· The Company continued to progress activities for completion of the acquisition of Suni Resources SA, a Mozambique subsidiary of Battery Minerals first announced through the RNS dated 17 August 2021.

· The completion of the acquisition, which is substantially advanced, will add two globally significant fully permitted Detailed Feasibility Studies completed graphite deposits in Mozambique which will materially increase the Company's JORC compliant mineral resource base by c.152 million tonnes at 8.5% Total Graphitic Carbon ("TGC"). The acquisition will include:

the construction initiated 100,000 tpa (2x50,000 tpa) Montepuez Graphite Project;

the c.58,000 tpa Balama Central Graphite Project; and

provision of medium and small flake graphite resources preferred for the anode of lithium-ion batteries, to complement TG's Madagascan Jumbo and Large flake projects.

 

Post period events & Future Outlook

 

· On 5 December 2022, the Company completed an oversubscribed capital raise of £5,000,000 for funding the completion of acquisition of Suni Resources SA and general working capital through the issue of 14,285,714 Ordinary Shares at an issue price of £0.35 per share.

· The construction of the second preconcentrate unit at Vatomina has been completed, the unit commissioned and integrated with the final concentrate unit from third week of December 2022.

· The 18,000 tpa Sahamamy facilities are in the final stages of installation and commissioning with production ramp up expected to be complete by end of January 2023, pushed back from end of December 2022 owing to delays in final set of shipments for the plant.

· Graphite remains designated as a critical raw material by the UK, USA and EU, being a key contributor to the green energy transition and electrification of mobility.

· The global flake graphite market is forecast to grow multiple times over the decade, by the likes of UBS, World Bank, Roskill, Benchmark Minerals owing to energy transition and other green applications.

· According to forecasts from independent sources, with growth in the EV sector, the consumption of flake graphite in mobility is expected to become the largest consuming sector in 2023 leading to a supply gap in 2023.

· The overall strengthening of our operations alongside additional capacity additions has laid the foundations for the Company to be a globally significant ex China source for mineral flake graphite with further growth under its capacity build-up plans.

· The Company will continue to stabilise its operations at the capacity of 30,000 tpa over the next half year.

 

Shishir Poddar, Executive Chairman of Tirupati Graphite, said:

"We are pleased to report increasing production and sales in the period which resulted in a reduction in negative EBIDTA, despite challenging circumstances faced. The rapid action taken to address these challenges with innovative and pragmatic solutions has laid the path for our continued progress.

 

"We are making good progress towards completion of the acquisition of Suni Resources with all key obstacles now addressed. The projects are promising and pave the way for us to extensively engage with the highest growth markets for flake graphite.

"In 2021, the Electric Vehicles market more than doubled to above 6 million passenger cars and the trend continued this year, with the number expected to exceed 10 million. Clean hydrogen is gaining ground in other energy applications and flake graphite is again one of the key ingredients for the fuel cells that generate power using hydrogen. We believe the opportunities are immense and we are one of only two listed companies outside China that has taken a flake graphite project into production.

 

"As we progress further, we will continue to update the markets on our progress towards our goal of building a globally significant flake graphite source."

 

Enquiries: 

Tirupati Graphite Plc

Puruvi Poddar - Chief of Corporate & Business Development

admin@tirupatigraphite.co.uk

+44 (0) 20 39849894

Optiva Securities Limited (Broker)

Ben Maitland - Corporate Finance

Robert Emmet - Corporate Broking

+44 (0) 20 3034 2707

+44 (0) 20 3981 4173

FTI Consulting (Financial PR)

Ben Brewerton / Nick Hennis / Kelly Smith / Karen Muperere

+44 (0) 20 3727 1000

tirupati@fticonsulting.com

 

https://www.tirupatigraphite.co.uk/ 

 

 

 

MANAGEMENT'S CONDENSED REPORT

 

It is now just over two years since we achieved the feat of being a listed entity with eyes on developing the Company's business in the field of flake graphite, a critical mineral which our founders and management specialise in and which is a key constituent to the energy transition economy.

 

Graphite has a set of unique properties thus a diversity of applications including in electric vehicles, smartphones, metal forming, hydrogen power, fire safety and many more. The energy transition economy is fast growing even in the current slowdown and with flake graphite a key material in the transition economy we have the opportunity to grow as we have planned.

 

The period under reporting was a challenging one, in as much as we were engaged in building new capacities while streamlining existing ones in the face of adverse weather conditions that played a destructive role. The Company stood up to the challenges with smart decisions and dedicated efforts of the team to insulate the Company's operation from such conditions in the future.

 

By the end of the period under reporting, we had implemented the split of our process flow sheet with preconcentrate units being established at the mine pithead, which removed 80 - 90% of the waste in the ore and the output being pumped to the final processing unit, it eliminated the burden of transport of Ore from the mine pithead to the processing plant. Prior to implementation of the preconcentrate unit concept, the transport of Ore from the mine pit head to the processing plant was one of the biggest challenges, especially as a result of the adverse weather conditions. This bottleneck would have grown with our capacities. For example, for production of 30,000 tpa would have resulted in requirement for transport of c.2400 tons ore per day. Thus the Company realigned its ongoing development to the 30,000 tons capacity setting up preconcentrate plants at mine pithead.

 

The Company remains engaged with its eyes on the long-term goals and is progressing the proposed acquisition of Suni Resources from Battery Minerals Ltd., which will add the globally significant Montepuez and Balama Central flake graphite projects to the Company's asset portfolio. The projects have more than 10 times contained graphite as per the JORC 2012 resources and reserves as compared to the Madagascan projects // Company, are licensed to build >150,000 tons of flake graphite production and offer the opportunity for us to reach our aim of producing c. 8% of global flake graphite forecast demand by the turn of the decade.

 

To meet its business and development goals, the Company raised £1,862,500 through the issue of a convertible loan note with a term of 3 years, convertible to Ordinary Shares at a price of £0.60, during the period. It has further raised a sum of £5,000,000 through the issue of 14,285,714 Ordinary Shares at an issue price of £0.35 per share for funding the completion of acquisition of Suni Resources SA and general working capital. The funding requirements for completion of the acquisition of Suni are fully met and the Company is well placed in its capital requirements. With the operations in Madagascar reaching the critical point we expect the future capacity developments in Madagascar to be built using internal resources and leveraging future earnings.

 

The proposed acquisition of Tirupati Speciality Graphite Private Limited has remained pending, as announced on 11 July 2022 because:

 

· The acquisition requires the approval of the regulators in India under The Foreign Exchange Management Act ("FEMA") since it classifies TG as an Overseas Direct Investment ("ODI"); and

· It has now determined that the independent valuation report used to establish the share swap ratio is no longer valid and a new report will need to be undertaken in terms of FEMA requirements.

 

As such, the timing for obtaining regulatory approval and the consideration for the proposed acquisition continues to remain uncertain. Furthermore, TSG has advised the Company that it needs to explore alternative sources of capital to maintain its development.

 

In response, the Company is considering a number of alternative options to meet the objective of ensuring that TG 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 Proposed Acquisition as its preferred option and in doing so, considering any revised valuation for TSG and changes to the terms of the Proposed Acquisition to reflect this;

· exploring the possible participation in alternative investment vehicles for investment in TSG as may be permissible with participation of TG shareholders; and

· exploring possible commercial arrangements with TSG.

 

The Company, TSG and their respective advisors, remain engaged in working through various possibilities and the Company will update the market on further developments.

 

The highlights of the period and post period significant events have been detailed above. The Company remains focussed on its goals continuing to develop its flake graphite projects in Madagascar to 84,000 tons annual production capacity in the medium term as it stabilises the currently established 30,000 tons capacity and progress its business to make the most of the energy transition economy as the world strives to progress towards a greener world.

 

Your board and management remain aligned with the interests of shareholders with no equity interest sold to date by any member.

Responsibility Statement

We confirm that to the best of our knowledge:

· the Interim Report has been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting, as adopted by the UK; and

· gives a true and fair view of the assets, liabilities, financial position and profit/loss of the Group; and

· the Interim Report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the set of interim financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year.

· the Interim Report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information required on related party transactions.

 

The Interim Report was approved by the Board of Directors and the above responsibility statement was signed on its behalf by:

 

Shishir Poddar

Executive Chairman & Managing Director

27 December 2022

 

 

 

 

 

Unaudited Condensed Consolidated Statement of Comprehensive Income

For the half-year ended 30 September 2022

Notes

 

2022

2021

 

£

£

Continuing operations

 

 

 

Revenue

6

1,165,195

560,058

Cost of Sales

 

(787,312)

(255,193)

Depreciation of Operating Assets

 

(639,079)

(172,853)

Gross profit

 

(261,196)

132,012

Administrative expenses

7

(1,164,868)

(1,141,387)

Operating loss

 

(1,426,064)

(1,009,375)

Finance costs

9

(58,474)

(75,833)

Loss before income tax

 

(1,484,538)

(1,085,208)

Income tax

 

-

(25,943)

Loss for the period attributable to owners of the Company

 

 

(1,484,538)

 

(1,111,151)

Other comprehensive income:

Items that may be reclassified to profit or loss:

 

 

 

Exchange differences on translation of foreign operations

 

221,713

(372,931)

Total comprehensive loss for the period attributable to the Group

 

(1,262,825)

(1,484,082)

Earnings per share attributable to owners of the Company

 

Pence per share

Pence per share

From continuing operations:

 

Basic

11

(1.45)

(1.71)

Diluted*

11

(1.45)

(1.71)

*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 financials

Unaudited Condensed Consolidated and Company Statement of Financial Position

As at 30 September 2022

Notes

Group

Company

 

Sep 2022

Mar 2022

Sep 2022

Mar 2022

 

£

£

£

£

Non-current assets

 

Investments in subsidiaries

13

-

-

3,921,348

3,901,023

Property, plant and equipment

14

10,432,365

7,356,121

268,842

-

Deferred tax

24

84,325

75,242

-

-

Deposits

 

8,581

6,806

-

-

Intangible assets

12

3,546,764

3,571,196

40,970

40,970

Total non-current assets

 

14,072,035

11,009,365

4,231,160

3,941,993

Current assets

 

Inventory

16

1,187,956

732,274

-

-

Trade and other receivables

15

2,529,223

4,242,635

16,113,887

13,858,647

Cash and cash equivalents

 

831,436

1,534,023

638,072

1,505,410

Total current assets

 

4,548,615

6,508,932

16,751,959

15,364,057

Current liabilities

 

Trade and other payables

17

1,231,748

730,869

660,104

315,207

Borrowings

19

909,000

536,000

909,000

536,000

Total current liabilities

 

2,140,748

1,266,869

1,569,104

851,207

 

Net current assets

 

2,407,867

5,242,063

15,182,854

14,512,850

Non-current liabilities

 

 

 

 

 

Borrowings

19

1,962,500

473,000

1,962,500

473,000

Other payables

17

33,031

31,232

-

-

Total non-current liabilities

 

1,995,531

504,232

1,962,500

473,000

 

 

 

 

 

 

NET ASSETS

 

14,484,371

15,747,196

17,451,514

17,981,843

 

Equity

 

Share capital

20

2,173,497

2,173,497

2,173,497

2,173,497

Share premium account

 

19,975,356

19,975,356

19,975,356

19,975,356

Warrant reserve

21

130,557

130,557

130,557

130,557

Foreign exchange reserve

 

(554,495)

(776,208)

-

-

Retained losses

 

(7,240,544)

(5,756,006)

(4,827,895)

(4,297,566)

Equity attributable to owners of the Company

 

 

14,484,371

 

15,747,196

 

17,451,514

 

17,981,843

 

TOTAL EQUITY

 

14,484,371

15,747,196

17,451,514

17,981,843

 

 

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 period was £530,029 (2021: £1,029,240).

 

The accompanying accounting policies and notes are an integral part of these financial statements.

 

 

 

 

Unaudited Condensed Consolidated Statement of Changes in Equity

For the half-year ended 30 September 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 2021

1,871,084

10,426,988

(414,546)

 

130,557

(3,832,520)

8,181,563

Loss for the period

-

-

-

-

(1,111,151)

(1,111,151)

Other Comprehensive Income: Exchange translation loss on foreign operations

-

-

(372,931)

 

-

-

(372,931)

Total comprehensive income for the Period:

-

-

(372,931)

 

-

(1,111,151)

(1,484,082)

Transactions with owners

Issue of ordinary shares

284,111

9,357,389

-

-

-

9,641,500

Total Transactions with owners, recognized directly in equity:

284,111

9,357,389

-

 

 

-

-

9,641,500

 

 

 

 

 

 

 

Balance at 30 September 2021

2,155,195

19,784,377

(787,477)

 

130,557

(4,943,671)

16,338,981

 

 

 

Balance at 1 April 2022

2,173,497

19,975,356

(776,208)

 

130,557

(5,756,006)

15,747,196

Loss for the period

-

-

-

-

(1,484,538)

(1,484,538)

Other Comprehensive Income: Exchange translation loss on foreign operations

-

-

221,713

 

-

-

221,713

Total comprehensive income for the Period:

-

-

221,713

 

-

(1,484,538)

(1,262,825)

Transactions with owners

 

 

 

 

 

 

 

Shares issued

-

-

-

-

-

-

Transactions with Equity owners:

 

-

 

-

-

 

-

-

-

Balance at 30 September 2022

2,173,497

19,975,356

(554,495)

 

130,557

(7,240,544)

14,484,371

 

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 period 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.

 

 

 

 

 

 

Unaudited Condensed Company Statement of Changes in Equity

For the half-year ended 30 September 2022

Attributable to equity shareholders

Share capital

Share premium

Share warrants reserve

Retained losses

TOTAL

EQUITY

£

£

£

£

£

Balance at 1 April 2021

1,871,084

10,426,988

 

130,557

(2,897,425)

9,531,204

Loss for the period

-

-

-

(1,029,240)

(1,029,240)

Total comprehensive income:

-

-

 

-

(1,029,240)

(1,029,240)

Transactions with owners

 

Shares issued

284,111

9,357,389

-

-

9,641,500

Total Transactions with owners:

284,111

9,357,389

 

-

-

9,641,500

Balance at 30 September 2021

2,155,195

19,758,356

 

130,557

(3,926,665)

18,143,464

 

 

Balance at 1 April 2022

2,173,497

19,975,356

 

130,557

(4,297,566)

17,981,843

Loss for the period

-

-

-

(530,029)

(530,029)

Total comprehensive income:

-

-

 

-

(530,029)

(530,029)

Transactions with owners

Shares issued

-

-

-

-

-

Total Transactions with Equity owners:

 

-

 

-

 

-

-

 

-

Balance at 30 September 2022

2,173,497

19,975,356

 

130,557

(4,827,895)

17,451,514

 

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 period and prior years.

Share warrant reserve - Represents reserve for equity component of warrants issued as per IFRS 2 share-based payments.

Unaudited Condensed Consolidated Statement of Cash Flows

For the half-year ended 30 September 2022

 

2022

2021

 

£

£

Cash used in operating activities

 

 

 

Loss for the period

(1,484,538)

(1,111,151)

Adjustment for:

 

Depreciation

 

793,173

172,853

Finance costs

 

58,474

75,833

Income tax

 

-

(25,943)

 

 

Working capital changes:

 

Increase in inventories

 

(455,682)

(4,591)

(Increase)/Decrease in receivables

 

1,713,412

(558,020)

Increase in payables

 

500,879

(268,020)

Increase/(Decrease) in DTA & Other assets

 

(10,858)

2,093

 

 

 

 

Net cash used in operating activities

 

(1,114,860)

(1,716,946)

 

 

Cash flows from investing activities:

 

Purchase of tangible assets

 

(3,626,178)

(968,725)

Advance for Capital Assets

 

2,906

(2,035,930)

 

 

 

 

Net cash from investing activities

 

(3,623,272)

(3,004,655)

 

 

 

 

 

Cash flows from financing activities

 

Proceeds from Shares issued (net of costs)

 

-

9,641,500

Proceeds /(redemption) from issue of Convertible loan notes

 

1,862,500

(114,000)

Finance cost

 

(58,474)

(75,833)

Increase / (decrease) in Lease & other long-term liability

 

1,799

37,859

Net cash from financing activities

 

1,805,825

9,489,526

Net increase in cash and cash equivalents

 

(702,587)

4,767,925

Cash and cash equivalents at beginning of period

 

1,534,023

1,644,189

Cash and cash equivalents at end of period

 

831,436

6,412,114

 

The accompanying accounting policies and notes are an integral part of these financial statements.

 

 

 

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

Amendments - Classification of Liabilities as Current or Non-Current

1 January 2023

IAS 16

Amendments - Property, Plant and Equipment

1 January 2022

IAS 8

Amendments - Definition of Accounting Estimates

1 January 2023

IAS 1

Amendments - Disclosure of Accounting Policies 

1 January 2023

IFRS

Annual improvements to IFRS Standards 2018-2020

1 January 2022

 

The Group and Company have not early adopted any of the above standards and intends to adopt them when they become effective.

3. Significant accounting policies

Basis of preparation

These consolidated financial statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with the requirements of the Companies Act 2006.

The financial statements have been prepared on the historical cost basis, except for financial instruments that are measured at the fair values at the end of the reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 4.

The principal accounting policies adopted are set out on the following pages.

Going concern

The financial position of the Group and the Company, their cash flows and liquidity positions are contained in the financial statements. In December 2022, the Company raised equity capital to meet its financial obligations and working capital requirements.

As at the end of the reporting period, the Company had commissioned and brought in regular operations its first preconcentrate plant at Vatomina to tide over the difficulties it faced during the period owing to adverse weather conditions effecting its internal road network and resulting in lower than expected production and sales. As at writing of this report the second preconcentrate plant at Vatomina has been commissioned and brought in regular operations thus enhancing its capacity at Vatomina to 12,000 tpa annual capacity.

The Company has substantially completed its investment needs for the under construction 18,000 tpa plant at Sahamamy in Madagascar, which is in the final stages of installation, trials and commissioning and expected to be in commercial production in the next quarter.

The Company's current cost structure substantially captures the costs of fixed nature it is expected to incur with enlarged production from the 30,000 tpa capacity it shall have operating from the next quarter. Additional costs for additional production are directly variable costs like power, mining equipment operations, packaging, logistics and similar variable costs. With the additional 18,000 tpa capacity coming on stream and the Vatomina plant uprated to 12,000 tpa capacity in regular operations the Company's revenues are expected to substantially increase with significantly lesser increase in total costs.

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.

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 period 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 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 period are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 30 September 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 period. 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 periods and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

A provision is recognised for those matters for which the tax determination is uncertain, but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. The assessment is based on the judgement of tax professionals within the Company supported by previous experience in respect of such activities and in certain cases based on specialist independent tax advice.

Deferred tax

 

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

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 period

 

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.

 

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 10%-25% per annum

Infrastructure and fixtures 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 periods 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.

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 period-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.

Loans and receivables

Loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market. The principal financial assets of the Company are loans and receivables, which arise principally through the provision of goods and services to customers (e.g. trade receivables) but also incorporate other types of contractual monetary assets. They are included in current assets, except for maturities greater than twelve months after the balance sheet date. These are classified as non-current assets.

The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the Consolidated Statement of Financial Position.

Financial assets are measured upon initial recognition at fair value plus transaction costs directly attributable to the acquisition of the financial assets, except for financial assets measured at fair value through profit or loss in respect of which transaction costs are recorded in profit or loss. Other financial assets are classified into the following specified categories: financial assets as "at fair value through profit and loss" and "loans and receivables". The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. 

The fair value of the liability portion of a convertible bond is determined using a market rate of interest rate for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders' equity, net of income tax effects.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents in the consolidated cash flow statement.

Financial assets - impairment

The Group assesses on a forward-looking basis the expected credit losses associated with its instruments carried at amortized cost and Fair Value Through Profit or Loss ("FVTPL"). The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Non-financial assets - impairment

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets, including Goodwill, to determine whether there is any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Provision is made for any impairment and immediately expensed in the period.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Financial liabilities and equity instruments issued by the Group

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets 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.

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.

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 period.

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 period 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.

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 period 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 and Graphite Mining Extraction.

Segmentation by continuing businesses

Segment results

Half year ended 30 September 2022

Half year ended 30 September 2021

Year ended 31 March 2022

 

£

£

£

Revenue to external customers

 Graphite Mining Extraction

1,165,195

560,058

1,645,308

 

(Loss) before income tax

Holding Companies Expenses

(604,150)

(729,334)

(1,400,142)

Graphite Mining Extraction

(880,388)

(355,874)

(571,615)

 

Net assets/(liabilities)

 

Holding Company Expenses

12,747,333

17,257,360

19,381,985

Graphite Mining Extraction

1,737,038

(918,379)

(3,634,789)

 

 

Segmentation by geographical area:

Half year ended 30 September 2022

Half year ended 30 September 2021

Year ended 31 March 2022

Revenue to external customers

£

£

£

UK

1,165,195

559,986

1,645,308

Madagascar

-

72

-

 

(Loss) before income tax

 

UK

(604,150)

(1,400,142)

(1,400,142)

Madagascar

(880,388)

(571,615)

(571,615)

 

Net assets

 

UK

12,747,333

19,381,985

19,381,985

Madagascar

1,737,038

(3,634,789)

(3,634,789)

 

 

 

6. Expenses by nature

Half year ended 30 September 2022

Half year ended 30 September 2021

£

£

 

The following items have been included in arriving at operating loss

 

Depreciation on other assets

154,094

-

Net foreign exchange loss

35,798

671

PR/IR Expenses

55,777

70,390

Professional Fees

71,911

52,084

Remuneration of Board & Management

410,325

438,704

 

7. Finance cost

Half year ended 30 September 2022

Half year ended 30 September 2021

£

£

 

Interest Expense

58,474

75,833

 

8. 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.

Half year ended 30 September 2022

Half year ended 30 September 2021

Continuing operations:

 

 

Loss attributable to equity holders of the Company (£)

(1,262,825)

(1,484,082)

Weighted average number of ordinary shares in issue

86,939,832

85,132,285

Loss per share (pence)

(1.45)

(1.71)

 

 

Half year ended 30 September 2022

Half year ended 30 September 2021

Diluted number of ordinary shares in issue

 

 

93,570,323

 

 

92,114,998

 

Given the loss for the period, the diluted earnings per share was the same as basic earnings per share as this would otherwise be dilutive.

9. Intangible Assets

Group

 

Cost

£

At 1 April 2022

3,571,196

Additions

-

Forex Change

 

(24,432)

At 30 September 2022

 

3,546,764

 

 

Accumulated amortisation

 

 

At 1 April 2022

-

Charge for the period

-

At 30 September 2022

 

-

 

Net book value

 

 

At 1 April 2021

3,571,196

At 31 March 2022

 

3,546,764

 

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 30 September 2022

10. Investments

Company

 Shares in group undertaking

Cost

£

At 1 April 2022

3,901,023

Addition

20,325

At 30 September 2022

 

3,921,348

Net book value

At 1 April 2021

3,901,023

At 30 September 2022

 

3,921,348

 

The Company's investments at the Statement of Financial Position date in the share capital of companies include the following:

Subsidiaries

 

Tirupati Madagascar Ventures

 

Registered: Lot II N 95 SB BIS E, Ambatobe, Antananarivo 103, Madagascar

Nature of business: Graphite mining extraction

 %

Class of share

 Holding

Ordinary shares

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

 Holding

Ordinary shares

100*

* indirectly by Tirupati Resources Mauritius. Tirupati Resources Mauritius was liquidated on 28th May 2021 and the shares are transferred to Tirupati Graphite Plc

11. Property, plant and equipment

 Group

Plant and Machinery

Infrastructure & Fixtures*

Assets under construction

Total

£

£

£

£

Cost

At 1 April 2022

5,778,410

2,004,824

632,029

8,415,263

Additions

2,616,413

192,855

1,060,149

3,869,417

At 30 September 2022

8,394,823

2,197,679

1,692,178

12,284,680

At 1 April 2022

883,895

175,247

-

1,059,142

Additions

639,079

154,094

-

793,173

At 30 September 2022

1,522,974

329,341

-

1,852,315

 

Carrying amount

 

As at 1 April 2022

4,894,515

1,829,577

632,029

7,356,121

At 30 September 2022

6,871,849

1,868,338

1,692,178

10,432,365

 

 

 

 

 Company

Assets under construction

£

Total

 

£

Cost

£

At 1 April 2022

-

-

Additions

268,842

268,842

At 30 September 2022

268,842

268,842

At 1 April 2022

-

-

Depreciation

-

-

At 30 September 2022

-

-

Carrying amount

As at 1 April 2022

-

-

As at 31 March 2022

268,842

268,842

 

12. Trade and other receivables

Group

Company

30 September 2022

 

31 March 2022

 

30 September 2022

 

31 March 2022

 

£

£

£

£

Trade receivables

442,150

532,370

442,150

532,370

Advance for Capex

768,772

2,592,163

768,772

2,592,163

VAT Refunds

1,095,326

942,458

16,601

12,274

Other debtors

222,975

106,423

83,126

2,898

Prepayments

-

69,220

-

99,221

Amounts owed by group undertakings

-

-

14,803,238

10,619,721

2,529,223

4,242,634

16,113,887

13,858,647

 

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.

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.

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 3 March 2022 & 30 September 2022.

13. Inventories

Group

30 September 2022

31 March 2022

Cost and net book value

£

£

Raw materials and consumables

962,244

563,923

Finished and semi-finished goods

225,712

168,351

1,187,956

732,274

 

 

14. Trade and other payables

Current:

Group

Company

30 September 2022

 

31 March 2022

 

30 September 2022

 

31 March 2022

 

£

£

£

£

Trade payables

990,498

548,906

514,610

188,534

Social security and other taxes

38,841

18,817

-

-

Accruals

202,409

163,146

145,494

126,673

1,231,748

730,869

660,104

315,207

 

In the Directors' opinion, the carrying amount of payable is considered a reasonable approximation of fair value.

Non-current:

Group

Company

30 September 2022

 

31 March 2022

 

30 September 2022

 

31 March 2022

 

£

£

£

£

Lease liability

33,031

31,232

-

-

33,031

31,232

-

-

 

 

15. Provisions

No provisions have existed within the financial year or persist at year end.

16. Borrowings

In the half-year ended 30 September 2022, Interest on the convertible loan note instrument ("CLN") is chargeable at 12%.

30 September 2022

 

31 March 2022

 

Within one year

909,000

536,000

Between 2 and 5 years

1,962,500

473,000

2,871,500

1,009,000

 

 

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.

 

17. Share capital

30 September 2022

30 September 2022

31 March 2022

31 March 2022

Number

£

Number

£

Allotted, called up and fully paid

 

 

Ordinary shares of 2.5p each

86,939,832

2,173,497

86,939,832

2,173,497

 

Shares were issued during the half-year as follows:

Cost of issue (£)

Number of shares issued

-

-

 

18. Financial instruments

Financial risk management

The Group has exposure to the following risks from its use of financial instruments:

 

Capital risk management

Market risk

Credit risk

Liquidity risk

Currency risk

 

This note presents information about the Group's exposure to each of the above risks, the Group's management of capital, and the Group's objectives, policies and procedures for measuring and managing risk.

The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities.

The Group Audit Committee oversees how management monitors compliance with the Group's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders as well as sustaining the future development of the business. In order to maintain or adjust the capital structure, the Group may adjust dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The capital structure of the Group consists of net debt, which includes loans, cash and cash equivalents, and equity attributable to equity holders of the 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

30 September 2022

30 September 2022

31 March 2022

31 March 2022

and hierarchy

£

£

£

£

Financial assets

Cash and cash equivalents

(a)

831,436

831,436

1,534,023

1,534,023

Loans and receivables, net of impairment

(a)

2,529,223

2,529,223

4,242,635

4,242,635

 

 

Total at amortised cost

 

3,360,659

3,360,659

5,776,658

5,776,658

 

 

Financial liabilities

Trade and other payables

(a)

1,231,748

1,231,748

730,869

730,869

Borrowings and provisions

(a)

2,871,500

2,871,500

1,009,000

1,009,000

Lease Liabilities

(a)

33,031

33,031

31,232

31,232

 

 

Total at amortised cost

4,136,279

4,136,279

1,771,101

1,771,101

 

Fair value of financial assets and liabilities for the company

Valuation,

Book value

Fair value

Book value

Fair value

Methodology

30 September 2022

30 September 2022

31 March 2022

31 March 2022

and hierarchy

£

£

£

£

Financial assets

Cash and cash equivalents

(a)

638,072

638,072

1,505,410

1,505,410

Loans and receivables, net of impairment

(a)

16,113,887

16,113,887

13,858,647

13,858,647

 

 

Total at amortised cost

 

16,751,959

16,751,959

15,364,057

15,364,057

 

Financial liabilities

Trade and other payables

(a)

660,104

660,104

315,207

315,207

Borrowings and provisions

(a)

2,871,500

2,871,500

1,009,000

1,009,000

 

 

Total at amortised cost

3,531,604

3,531,604

1,324,207

1,324,207

 

Valuation, methodology and hierarchy

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 30 September 2022.

The Group considers its maximum exposure to be:

30 September 2022

31 March 2022

£

£

 

 

Financial assets

 

 

Cash and cash equivalents

831,436

1,534,023

Loans and receivables, net of impairment

2,529,223

4,242,635

3,360,659

5,776,658

 

The company considers its maximum exposure to be:

30 September 2022

31 March 2022

£

£

 

 

Financial assets

 

 

Cash and cash equivalents

638,072

1,505,410

Loans and receivables, net of impairment

16,113,887

13,858,647

16,751,959

15,364,057

 

All cash balances are held with an investment grade bank who is our principal banker. Although the Group has seen no direct evidence of changes to the credit risk of its counterparties, the current focus on financial liquidity in all markets has introduced increased financial volatility. The Group continues to monitor the changes to its counterparties' credit risk.

Liquidity risk

Liquidity risk is the risk the Group will encounter difficulty in meeting its obligations associated with financial liabilities as they fall due. The Board are jointly responsible for monitoring and managing liquidity and ensures that the Group has sufficient liquid resources to meet unforeseen and abnormal requirements. The current forecast suggests that the Group has sufficient liquid resources.

Available liquid resources and cash requirements are monitored using detailed cash flow and profit forecasts these are reviewed at least quarterly, or more often as required. The Directors decision to prepare these accounts on a going concern basis is based on assumptions which are discussed in the going concern note above.

The following are the contractual maturities of financial liabilities for the group:

Carrying

Contractual

6 months

6 to 12

1 to 2

2 to 5

30 September 2022

amount

cash flows

or less

months

years

years

£

£

£

£

£

£

 

 

 

 

 

 

 

Non-derivative financial liabilities

Trade and other payables

1,231,748

-

1,231,748

-

-

-

Borrowings

2,871,500

-

436,000

473,000

-

1,962,500

31 March 2022

 

 

 

 

 

 

Non-derivative financial liabilities

 

 

 

 

 

 

Trade and other payables

730,869

-

730,869

-

-

-

Borrowings

1,009,000

-

116,000

420,000

473,000

-

 

 

The following are the contractual maturities of financial liabilities for the company:

Carrying

Contractual

6 months

6 to 12

1 to 2

2 to 5

30 September 2022

amount

cash flows

or less

months

years

years

£

£

£

£

£

£

 

 

 

 

 

 

 

Non-derivative financial liabilities

Trade and other payables

660,104

-

660,104

-

-

-

Borrowings

2,871,500

-

436,000

473,000

-

1,962,500

31 March 2022

 

 

 

 

 

 

Non-derivative financial liabilities

 

 

 

 

 

 

Trade and other payables

315,207

-

315,207

-

-

-

Borrowings

1,009,000

-

116,000

420,000

473,000

-

 

Cash flow management

The Group produces an annual budget which it updates quarterly with actual results and forecasts for future periods for profit and loss, financial position and cash flows. The Group uses these forecasts to report against and monitor its cash position. If the Group becomes aware of a situation in which it would exceed its current available liquid resources, it would apply mitigating actions involving reduction of its cost base. The Group would also employ working capital management techniques to manage the cash flow in periods of peak usage. 

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

30 September 2022

MGA

30 September 2022

USD

31 March 2022

MGA

31 March 2022

£

£

£

£

 

 

 

 

Cash and cash equivalents

79,387

193,235

19,405

18,550

Trade & other receivables

1,210,922

1,218,575

3,127,431

1,003,709

Trade & other payables

(514,610)

(571,644)

(188,534)

(415,662)

Net Exposure

775,699

840,166

2,958,302

606,597

 

Company

USD

30 September 2022

USD

31 March 2022

£

£

 

 

Cash and cash equivalents

25,251

9,342

Loans to subsidiaries

14,803,238

9,797,683

Trade & other receivables

1,210,922

3,949,469

Trade & other payables

(514,610)

(224,937)

Net Exposure

15,524,801

13,531,557

 

19. Related party transactions

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 directors and shareholders of TSG during the year. At period end, a net amount was receivable of £768,772 (2021 - £221,176), revenue of £291,275 (2021 - £56,610), Specialized machinery purchased of £742,757 (2021: £578,736) 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 period end, Specialized machinery purchased of £861,368 (2021: £160,384)

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 period end, the Company incurred brokerage and consultancy fees, business development fees of £15,000 (2021 - £433,000).

20. Events after the reporting period

In December 2022, the company completed commissioning and integration of its second pre concentrate plant in the Vatomina project enhancing the nameplate capacity of the project to 12,000 tpa flake graphite production. The second preconcentrate unit has been successfully integrated with the existing operations without any significant difficulty and as of writing this report, is in regular production.

 

On 5 December 2022, the company completed an oversubscribed placing of 14,285,714 new ordinary shares of £0.025 in the capital of the Company at a placing price of at a price of £0.35 and raised gross proceeds of £5,000,000 by way of an institutional and private placing. The Company further agreed to vary the terms of its acquisition agreement for Suni Resources SA from Battery Minerals Limited so as to facilitate the payment of Capital Gains Tax by Battery Minerals as assessed by Governmental authorities in Mozambique while maintaining the cost of acquisition to the Company.

 

On 25 November 2022 the Company appointed Mr. Douglas J Wright as a Non-Executive Director on the Board of the Company.

 

 

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END
 
 
IR BSBDDISDDGDI
Date   Source Headline
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11th Jun 20246:20 pmRNSResults of General Meeting
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7th Mar 20247:00 amRNSDirectorate Changes
7th Mar 20247:00 amRNSCorporate Update
29th Feb 20243:37 pmRNSDirectorate Change
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3rd Oct 20237:37 amRNSNotification of major holdings
7th Sep 20234:21 pmRNSInvestor Meetings
21st Aug 20237:00 amRNSUpdate on Tirupati Speciality Graphite
10th Aug 20237:00 amRNSTirupati Receives Prepayments
8th Aug 20237:30 amRNSRestoration - TIRUPATI GRAPHITE PLC
8th Aug 20237:00 amRNSQ1 FY24 Update
7th Aug 20232:41 pmRNSRestoration of Listing
3rd Aug 20237:00 amRNSFinal Results FY23
1st Aug 20237:30 amRNSSuspension - TIRUPATI GRAPHITE PLC

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