TIDMTGR
RNS Number : 9837X
Tirupati Graphite PLC
28 December 2023
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.
28 December 2023
Tirupati Graphite plc
('Tirupati' or the 'Company')
Unaudited Half-Yearly Results
Tirupati Graphite plc (TGR.L, TGRHF.OTCQX), the specialist flake
graphite company and supplier of the critical mineral for the
global energy transition, is pleased to announce its Interim
Results for the six months ended 30 September 2023.
The Company is engaged in mining and processing flake graphite,
the only key battery mineral where the supply chain is dependent on
a single nation across the value chain from mining to final
product.
The development of its two projects in Madagascar to a combined
capacity of 30,000 tons per annum ("tpa") was completed at the
start of the reporting period, and the Company was engaged in
ramping up production, creating markets and increasing sales during
the period. The Company also completed the acquisition of Suni
Resources SA ("Suni"), Mozambique to add the construction-initiated
Montepeuz and DFS-ready Balama Central projects in Mozambique to
its portfolio of assets, and further initiated studies for
optimisation of the proposed processing facilities to be built at
these projects using the lean, cost effective, and sustainable
technologies successfully used by the Company at its Madagascar
projects.
Shishir Poddar, Executive Chairman of Tirupati Graphite,
said:
"We feel proud of our achievements in the period under
reporting. In spite of very tight working capital conditions, it is
a testament to the inherent strengths of the Company and the team's
expertise in graphite operations, that we continued our ramp up to
achieve significant year on year increases in production and sales.
During this initial phase we have designed and implemented various
improvements to increase the resilience of the operations, control
costs and reduce emissions.
"The completion of the acquisition of Suni adds two advanced
development projects in the north of Mozambique's renowned graphite
producing region. We are encouraged by the quality of these
projects which underpin our long term growth ambitions. Given the
amount of work and investment in these assets we believe they were
acquired at a very attractive consideration. Given the inbound
interest already received for potential supply, we see the acquired
assets as driving the next key milestones in our corporate journey,
especially given the expected increases in demand for ex-China
graphite and recent policy interventions to fuel supply chain
diversity. Despite which, graphite remains the only key battery
mineral where the supply chain is dependent on a single nation
across the value chain from mining to final product.
"As previously announced, we are exploring a variety of funding
options that will enable us to accelerate the production ramp-up
and growth through 2024 and onwards, having laid a strong
foundation to build a leadership position in this critical
material.
"Discussions are at an advanced stage and we are confident that
the funds will serve to unlock the Company's potential at a time
when graphite consumers are looking to urgently diversify and build
resilience into their supply chains."
Highlights for the six-month period ending on 30 September 2023
("H1FY24")
Operations in Madagascar
-- Production ramp up continued at the Company's two flake
graphite projects in Madagascar, established in modules between
January 2021 to March 2023 to produce:
o 12,000 tpa flake graphite capacity at Vatomina Project
o 18,000 tpa flake graphite capacity at Sahamamy Project
-- Various process improvements made during development to
manage costs and emissions were tested and further improved, gaps
identified, and plans evolved to reach an effective output of
nameplate capacity and enhance the capacity further by 20%.
-- 100 Kw Hydro Power Plant (HPP) commissioned and put in
regular operations at Sahamamy to reduce costs and emissions.
-- Plans and studies completed and regulatory approvals applied
for to add a new 500 Kw HPP at Sahamamy to further lower long term
costs and emissions.
-- Substantial growth achieved in production, marketing and
sales despite working capital limitations, including delayed
receipt of VAT refunds.
Key operating and financial highlights
From Unaudited Consolidated Statement of Comprehensive
Income
Six Months Ending 30 Sep 2023 30 Sep 2022
Cost of Production GBP2,366,299 GBP787,312
-------------------- --------------------
Quantity of Production (MT(1) ) 4,508 MT 1,731 MT
-------------------- --------------------
Cost per MT of Production GBP525/MT GBP454/MT
-------------------- --------------------
Total Sales (MT) 4,785 MT 1,691 MT
-------------------- --------------------
Revenue from Sales GBP3,146,627 GBP1,165,195
-------------------- --------------------
Achieved Basket Price (per MT) US$827/GBP658 MT US$833/GBP689 MT
-------------------- --------------------
Gross Operating Profit GBP780,328 GBP377,883
-------------------- --------------------
Gross Operating Margins (per MT) GBP163/MT GBP223/MT
-------------------- --------------------
Gross Operating Margin on Sales (%) 25% 32%
-------------------- --------------------
Corporate and Administrative Costs GBP1,831,879 GBP1,010,774
-------------------- --------------------
Other Income GBP92,347 -
-------------------- --------------------
Gain on Bargain Purchase GBP9,562,407* -
-------------------- --------------------
EBIDTA GBP 8,693,204 GBP (632,891)
-------------------- --------------------
Depreciation GBP758,862 GBP793,173
-------------------- --------------------
EBIT GBP7,934,342 GBP(1,426,064)
-------------------- --------------------
1. MT = Metric Tonnes *Provisional, subject to Valuation on business combination
-- Revenue from sales increasing by 170% to GBP3,146,627 (H1FY23: GBP1,165,195).
-- Production increasing by 160% to 4,508 tons (H1FY23: 1,731 tons).
-- Gross operating profits increased by 106% YoY to GBP780,328
despite enlarged workforce and establishment costs for enlarged
capacity.
o As production and sales ramp up, the operating margins are
expected to improve with economies of scale and asset
efficiency.
-- A provisional non-cash gain of GBP9,562,407, subject to
independent third-party valuation, on Bargain Purchase resulting
from the acquisition of Suni Resources.
-- Corresponding increase in Corporate and Administrative Costs
limited to 81% at GBP1,831,879 with added subsidiary and capacity
growth (H1FY23: GBP1,010,774).
From Unaudited Consolidated Statement of financial position
As at 30 Sep 2023 31 March
2023
Total non-current assets GBP 28,828,389 GBP14,904,003
--------------- --------------
Net Current Assets GBP4,125,080 GBP3,837,717
--------------- --------------
Total non-current liabilities GBP2,799,604 GBP1,893,580
--------------- --------------
Total Equity GBP30,153,864 GBP16,848,140
--------------- --------------
-- Total non-current assets increased by 93% to GBP 28,828,389
(FY23: GBP14,904,003) reflecting assets added upon acquisition of
Suni.
-- Total equity increased by 79% to GBP30,153,864 (FY23:
GBP16,848,140) reflecting gain on bargain purchase upon acquisition
of Suni.
Mozambique Projects acquisition completed
-- Acquisition of 100% of the equity of Suni Resources SA,
Mozambique, ('Suni") from ASX listed Battery Minerals Limited
("BAT") completed.
-- The Mineral Resource Estimates classified under JORC 2012 at
the projects acquired are as tabulated below:
Mozambique Group Total Mineral Resource
Tonnes TGC Cont. Graphite
Project Deposit Mt % kt
----------- ------- ----------------------
Montepuez Elephant 76.9 7.3 5,620
---------- ----------- ------- ----------------------
Buffalo 42.6 9.5 4,050
--------------------------- ----------- ------- ----------------------
Balama Central Lennox 21.9 10.2 2,230
---------- ----------- ------- ----------------------
Buffalo 11.0 10.2 1,120
--------------------------- ----------- ------- ----------------------
Total 152.5 8.5 12,030
----------- ------- ----------------------
Of which combined Probable Ore Reserves are as below:
Tirupati Graphite Plc Mozambique Group Probable Ore Reserves
Project Mt Grade % TGC Contained Graphite
Mt
--------- ---------------- --------------------------
Balama Central 19.66 11.06 2.17
--------- ---------------- --------------------------
Montepuez 42.19 9.27 3.91
--------- ---------------- --------------------------
Total 61.9 10.1 6.08
--------- ---------------- --------------------------
-- Montepuez project mining license over 3,666.88 hectares valid
up to 22.02.2043 (and further renewable) is license to build to
100,000 tpa flake graphite production in 2 stages of 50,000 tpa
each.
-- BAT initiated construction of 50,000 tpa first module.
Planned and executed investment position as acquired are as
below:
Area BAT forecast Spent to Date Remaining
Total Capex US$ US$ Capex US$
Process Plant and Power 28,129,000 4,160,000 23,969,000
----------------- -------------- -----------
Mining Equipment and Light
vehicles 4,378,000 72,000 4,306,000
----------------- -------------- -----------
Camp Infrastructure and
fit-out 3,108,000 3,108,000 0
----------------- -------------- -----------
Earthworks, Tailings Storage
Facility and Water Storage 3,834,000 3,491,000 343,000
----------------- -------------- -----------
Buildings, offices and
workshops 1,814,000 62,300 1,751,700
----------------- -------------- -----------
Owners costs 4,747,000 1,772,000 2,975,000
----------------- -------------- -----------
Pre-production costs 4,926,000 47,000 4,879,000
----------------- -------------- -----------
Freight 1,672,000 389,000 1,283,000
----------------- -------------- -----------
Total 52,608,000 13,101,300 39,506,000
----------------- -------------- -----------
Notes
1) The plan envisages outsourcing of execution of mining
activities and certain other logistic facilities that significantly
reduced the total investment and the Company believes this is a
reasonable approach for many reasons.
2) The Company has verified the assets created out of the
amounts spent by BAT prior to its acquisition and believes that
development activities conducted by the spend remain productive and
substantially in order.
-- In terms of studies under JORC 2012 standards, the operating
financial parameters of the planned first 50,000 tpa Montepuez
project are estimated as below:
OPEX for years US$ PA US$/t conc
1 to 10
Mining 5,129,000 102.9
----------- -----------
Processing 5,692,000 114.3
----------- -----------
General and Administrative 2,545,000 30.7
----------- -----------
Logistics 3,082,000 51.1
----------- -----------
Maintenance 1,532,000 61.9
----------- -----------
Total C1 cost 17,980,000 360.9
----------- -----------
Notes:
1) Above table excludes Government Royalties.
2) Above table is based on average blended ore for 50,000 tpa
production rate and ore at an average rate of 500,000tpa at 12% TGC
resulting from targeted mining of high grade ores in the first 10
years.
3) The above is subject to further reviews that the Company
intends to conduct.
-- 1543.08 hectares Mining License Area of Balama Central
project. The project shares its east boundary with the Balama
project of ASX listed Syrah Resources Limited .
-- The 2018 DFS promises compelling economics for the project
Licensed for development to a 58,000 tpa flake graphite facility
with estimated 27 years mine life.
-- Future plans for the project development pathway are under
assessment by the Company as inbound inquiries continue and market
dynamics evolve.
-- The Mozambique projects together lay the foundation for
future growth of the Company's operations, positioning it to
benefit from the growing EV ("Electric Vehicle") sector demand.
Key Market Highlights
-- The Graphite markets remained subdued through substantial
portion of CY23 due to increased synthetic graphite capacity in
China, impacting consumption and prices of natural graphite in
Lithium-ion battery sector and also due to the impacts of the
Energy Crisis on the conventional graphite markets.
-- However, the end of CY23 saw a turn to this situation
specially benefitting ex-China graphite producers.
-- China produced >70% of the total consumption of natural
graphite. Additionally, graphite is the only key battery mineral
where the supply chain is dependent on a single nation across the
value chain from mining to final product for the cell.
-- The Chinese government imposed restrictions on exports of
graphite from China, further highlighting the strategic importance
of ex-China sources.
-- This initial restrictions led to increased graphite prices
from December 2023 onwards, of c.4% as assessed by credible
sources.
-- The lack of clarity on these Chinese export restrictions, the
ability of one nation to control the supply chain of this
classified critical mineral, used not just for the energy
transition but also other applications like steel manufacturing,
has resulted in graphite taking the centre stage in the current
global geopolitical scenario.
-- In December 2023, the USA has issued new guidance that no EVs
manufactured in the USA using Chinese made components will be
eligible for full subsidies under the US$369Bn Inflation Reduction
Act, nor will those EVs that are made by companies with significant
ties to the Chinese government or produced with licensing agreement
with a China based or Beijing-controlled operator qualify.
Impact on Tirupati
-- The Company is one of the handful of significant current
producers of graphite ex-China. The Company has received increased
inquiries from around the world for supplies of its products,
including from OEMs and EV manufacturers. The internal and external
developments together during the period give the Company a first
mover opportunity with the advantage of having a visible track
record of its ability to produce this critical mineral at
substantial and growing scale, a competitive cost levels, and in
accordance with global Sustainability standards.
-- The Company continued to realise basket prices near those
achieved in previous periods in HY23 even in subdued market
conditions.
Future Market Outlook - The Energy Transition
Since the end of the reporting period, recent Graphite export
restrictions announced and implemented in China have resulted in
some price increases for small and fine flake graphite, as have
some prices for traditional sectors using larger flake types due to
improving economic conditions in some jurisdictions. This is
expected to continue as the energy transition continues its
momentum globally and graphite demand is forecast by the likes of
Benchmark Minerals Intelligence to outstrip supply from 2025.
Little additional capacity outside China is currently forecast to
become available to serve the increased demand by that time.
In October, China announced the introduction of export
restrictions on Graphite products from 1 December 2023.
The deficit of graphite is expected to arise from demand coming
a growing number of battery manufacturing plants, or gigafactories,
that are set to finish construction, begin production and therefore
grow the overall demand for the competitively priced critical
minerals such as the natural graphite required for most battery
chemistries. This future demand is expected to provide strong moves
in the pricing of small and fine flake graphite sizes that are most
commonly used for the energy storage and battery sectors. The small
and fine flake sizes make up the majority of the Company's
Mozambique project product baskets.
Electric vehicle uptake continues to grow across the world with
China hitting record monthly EV sales during the period despite the
end of available subsidies there, with EV sales in China growing
29% year on year. Elsewhere, in North America, sales in the period
grew 78% in North American and 34% on average globally, and EVs
look to continue to grow their market share which will continue to
increase demand for critical minerals such as natural graphite.
The push to diversify supply chains to reduce economic
dependence of certain nations is acutely illustrated in the form of
the current Graphite supply chain. China alone dominates the
Natural Graphite industry across its entire value chain, from
mining to advanced processing, retaining >75% of its global
value. The likes of the aforementioned graphite export
restrictions, and more rules and legislation being introduced in
the rest of the world whereby considerations of the provenance of
raw materials are placed front and centre as eligibility criteria
for automotive manufacturers and OEMs to receive sought after
incentives under the likes of the US Inflation Reduction Act and EU
Critical Raw Materials Act to stimulate diversified supply chains
and boost security of supply, is therefore extremely relevant for
natural graphite as there are so few current producers outside
China. The combined factors above are further expected to result in
upward price pressure for graphite and substantial demand specially
for ex-China graphite.
There is also a consensus forming that prices for material
sourced from outside China may attract a premium should the
material conform to the highest international standards of
Sustainability.
The Company's focus has been on gaining ex-China market share in
order to establish its presence and position itself well for the
future forecasted demand that will arise for graphite from these
ex-China markets to supply anode, battery and automotive
manufacturers in these same markets in the years to come.
TG Markets and marketing developments
TG continued to spread its global footprint in developing
markets both for its current and future markets recording a
significant increase in sales to the United States of America while
continuing to grow in Europe and Asia as depicted in the table
below:
USA Europe Asia Total
Half year ended 30 Sep
2023 GBP608,893 GBP432,142 GBP2,105,592 GBP3,146,627
Half year ended 30 Sep GBP398,120 GBP767,075 GBP1,165,195
2022
The current order book and engagements remains sufficient for
the Company to sell its growing production in the immediate term
and the company remains in standby mode to activate increased
business with its existing customers and with those it has achieved
qualification.
The company has also engaged with key players in the ex-China EV
sector, both automakers and manufacturers of EV batteries or anodes
looking to secure their flake graphite needs and is at various
stages of prospective business development with different
companies. These stages include entering into Non-Disclosure
Agreements, General Supply Terms and Conditions Agreements,
providing information about the Company's projects and product
samples for approval. Negotiations on possible offtake agreements
are ongoing though the current subdued markets remain a challenge
to address future price basis and the Company remains conscious in
its approach towards possible future price trends as the markets
turn from oversupply to shortfall. The Company believes that the
geopolitical uncertainties driven policy evolution, progress of
construction of various battery projects and resultant imminent
shortage of ex-China flake graphite products used in the battery
space shall help it secure prudent offtake arrangements on the back
of its successful developments at Madagascar and prospects of the
Mozambique assets and remains well prepared for expeditious
development of additional capacities at appropriate time under
appropriate market arrangements.
To date, the Company has strategically been gaining market share
for itself supplying customers outside of China and all sales have
been made to consumers outside China. The urgency with which
legislation and incentives are evolving in the rest of the world
provide the Company with a significant opportunity to be at the
forefront of natural graphite supply for the global energy
transition. As an advanced, low-cost, ex-China current producer it
is staged to serve markets that are set to grow at speed and scale
in the coming years. As a result, the Company would like to
accelerate its development to further position itself for further
significant business development
Future Outlook and Strategy
In line with evolving markets, the Company remains focussed on
its step-by-step approach to targeting the following
-- Considering an average head grade of c.3% across the two
Madagascar projects, the Company will add two pre-concentrate units
and ramp up production and sales in Madagascar to steady state of
2,000 tons per month in the minimum possible time.
-- Simultaneously, further work will be done to enhance the
effective production and sales rate to 3,000 tons per month by
adding further two PCU's and enhancing Vatomina FCU capacity to
18,000 tpa.
The Company is extensively engaged on various options to meet
the related capital requirements to achieve its targets as it
continues its efforts to ramp up production and sales within its
current resources.
-- Targeting a total production of 104,000 tpa across its
projects by establishing the next 18,000 tpa module in Madagascar,
and first 50,000 tpa module at Montepuez.
-- Extensive new ex-China battery capacities are expected to
come online by 2025 and inbound inquiries justify the developments
above.
-- Add further capacities in sync with markets remaining flexible on location.
-- The Company has engaged with DFIs ("Development Finance
Institutions") for project finance arrangements for the development
of the larger new capacities.
Enquiries:
Tirupati Graphite Plc
Puruvi Poddar - Chief of Corporate & Business admin@tirupatigraphite.co.uk
Development +44 (0) 20 39849894
Optiva Securities Limited (Joint Broker)
Ben Maitland - Corporate Finance +44 (0) 20 3034 2707
Holly Ritson - Corporate Broking +44 (0) 20 3981 4173
------------------------------
Shard Capital Partners LLP (Joint Broker)
Isabella Pierre - Corporate Broking +44 20 71869927
Damon Heath - Corporate Broking +44 20 7186 9950
------------------------------
FTI Consulting (Financial PR)
Ben Brewerton / Nick Hennis / Lucy Wigney +44 (0) 20 3727 1000
tirupati@fticonsulting.com
------------------------------
MANAGEMENT'S CONDENSED REPORT
The Company remains engaged in its areas of focus, flake
graphite, an important constituent of the energy transition economy
and the largest single component of EV batteries by weight. The
Company continued to focus on ramping up production at its two
projects in Madagascar, and having completed the acquisition of
Suni Resources, it initiated assessments for furthering market
engagement, financing and development of its new projects.
Graphite has a set of unique properties and therefore a
diversity of applicable end-uses, 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 saw the Company's production ramp up
at its newly developed projects, though remained slower than the
company is capable of, primarily an effect of working capital
limitations. At the start of the period, when the Company had
completed its stage 1 development, it was left with c.250,000 cash
to manage its production ramp up for a potential upwards of GBP one
million monthly revenues, operating at a remote location in an
underdeveloped nation, with negligible internal resources for
inputs.
The Company remains engaged with capital markets for arranging
its financing needs. The highlights of the period, provide an
account of various aspects of the reporting period and a detailed
account of the Company's activities was contained in the Directors
Report accompanying the Annual Report FY2023. The Company remains
focussed on ramping up production at the currently established
30,000 tons capacity, achieving profitability, and progressing its
business to make the most of the energy transition.
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
28 December 2023
Unaudited Consolidated Statement of Comprehensive Income
For the half-year ended 30 September 2023
Notes 2023 2022
GBP GBP
Continuing operations
Revenue 5 3,146,627 1,165,195
================================= ====== ================ ============
Other Income* 9,744,754 -
================================= ====== ================ ============
Cost of Sales 6 (2,366,299) (787,312)
Depreciation of Operating
Assets (744,598) (778,202)
Gross profit / (loss) 9,780,484 (400,319)
================================= ====== ================ ============
Administrative expenses 7 (1,846,143) (1,025,745)
Operating gain / (loss) 7,934,342 (1,426,064)
Finance costs 8 (169,012) (58,474)
Gain / (Loss) before
income tax 7,765,330 (1,484,538)
Income tax - -
================================= ====== ================ ============
Gain / (Loss) for the
year attributable to owners
of the Company 7,765,330 (1,484,538)
================================= ====== ================ ============
Other comprehensive income:
Items that may be reclassified
to profit or loss:
================================= ====== ================ ============
Exchange differences on
translation of foreign
operations (283,153) 221,713
================================= ====== ================ ============
Total comprehensive gain
/ (loss) for the year
attributable to the Group 7,482,177 (1,262,825)
================================= ====== ================ ============
Earnings per share attributable Pence per
to owners of the Company Pence per share share
From continuing operations:
Basic and Diluted 9 7.26 (1.71)
The accompanying accounting policies and notes are an integral
part of these finance
*Note:
On 3 April 2023 the Company reported completion and gained
control of Suni Resources SA as at 1 April 2023. The acquisition
has resulted in a Provisional Gain on "Bargain Purchase" of GBP
9,652,407 in terms of International Financial Reporting Standards
3, as adopted by the UK on "Business Combination", subject to
independent third party valuation. The Company intends to undertake
a valuation process with external valuers, and the amount of gain
is subject to its outcome. Please refer note 3 for further detailed
explanation.
Unaudited Consolidated and Company Statement of Financial
Position
As at 30 September 2023
Notes Group Company
===================== ====== ========================== ==========================
March
Sep 2023 March 2023 Sep 2023 2023
===================== ====== ============ ============ ============ ============
GBP GBP GBP GBP
===================== ====== ============ ============ ============ ============
Non-current
assets
===================== ====== ============ ============ ============ ============
Investments
in subsidiaries 11 - - 12,377,420 3,921,348
===================== ====== ============ ============ ============ ============
Property, plant
and equipment 12 25,112,819 11,198,437 - -
===================== ====== ============ ============ ============ ============
Deferred tax 22 72,528 74,046 - -
===================== ====== ============ ============ ============ ============
Deposits 33,341 32,455 - -
===================== ====== ============ ============ ============ ============
Intangible assets 10 3,609,701 3,599,065 40,970 40,970
--------------------- ------ ------------ ------------ ------------ ------------
Total non-current
assets 28,828,389 14,904,003 12,418,390 3,962,318
--------------------- ------ ------------ ------------ ------------ ------------
Current assets
=====================
Inventory 14 1,314,798 1,386,558 - -
=====================
Trade and other
receivables 13 6,032,723 4,755,629 19,721,423 21,213,389
=====================
Cash and cash
equivalents 125,437 289,338 33,093 130,340
=====================
Total current
assets 7,472,958 6,431,525 19,754,516 21,343,729
--------------------- ------ ------------ ------------ ------------ ------------
Current liabilities
=====================
Trade and other
payables 15 3,347,878 1,684,808 1,960,635 735,440
=====================
Borrowings 17 - 909,000 - 909,000
=====================
Total current
liabilities 3,347,878 2,593,808 1,960,635 1,644,440
--------------------- ------ ------------ ------------ ------------ ------------
Net current
assets 4,125,080 3,837,717 17,793,881 19,699,289
--------------------- ------ ------------ ------------ ------------ ------------
Non-current
liabilities
===================== ====== ============ ============ ============ ============
Borrowings 17 2,771,500 1,862,500 2,771,500 1,862,500
===================== ====== ============ ============ ============ ============
Other payables 15 28,104 31,080 - -
===================== ====== ============ ============ ============ ============
Total non-current
liabilities 2,799,604 1,893,580 2,771,500 1,862,500
--------------------- ------ ------------ ------------ ------------ ------------
NET ASSETS 30,153,864 16,848,140 27,440,771 21,799,107
--------------------- ------ ------------ ------------ ------------ ------------
Equity
===================== ====== ============ ============ ============ ============
Share capital 18 2,674,169 2,536,195 2,674,169 2,536,195
===================== ====== ============ ============ ============ ============
Share premium
account 26,705,061 24,462,976 26,705,061 24,462,976
===================== ====== ============ ============ ============ ============
Warrant reserve 19 116,065 116,065 116,065 116,065
===================== ====== ============ ============ ============ ============
Foreign exchange
reserve (2,440,732) (2,157,579) - -
===================== ====== ============ ============ ============ ============
Deferred Equity
Consideration 3,443,489 3,443,489
===================== ====== ============ ============ ============ ============
Retained losses (344,188) (8,109,518) (5,498,013) (5,316,129)
--------------------- ------ ------------ ------------ ------------ ------------
Equity attributable
to owners of
the Company 30,153,864 16,848,140 27,440,771 21,799,107
===================== ====== ============ ============ ============ ============
TOTAL EQUITY 30,153,864 16,848,140 27,440,771 21,799,107
--------------------- ------ ------------ ------------ ------------ ------------
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 GBP 181,883 (2023:
GBP1,032,736).
The accompanying accounting policies and notes are an integral
part of these financial statements.
Unaudited Consolidated Statement of Changes in Equity
For the half-year ended 30 September 2023
Attributable to the owners of the company
Share Share Foreign Share Deferred Retained TOTAL
capital premium exchange warrants Equity Losses
reserve reserve consideration
---------- ------------ ------------ ---------- --------------- ------------
EQUITY
---------- ------------ ------------ ---------- --------------- ------------ -------------
GBP GBP GBP GBP GBP GBP GBP
---------- ------------ ------------ ---------- --------------- ------------ -------------
Balance at
1 April 2022 21,73,497 1,99,75,356 (776,208) 1,30,557 - (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 - - 2,21,713 - - - 2,21,713
Total
comprehensive
income for
the year: - - 2,21,713 - - (1,484,538) (1,262,825)
Transactions
with owners
---------- ------------ ------------ ---------- --------------- ------------ -------------
Shares issued
---------- ------------ ------------ ---------- --------------- ------------ -------------
Balance at
30 September
2022 2,173,497 19,975,356 (554,495) 1,30,557 - (7,240,544) 14,484,371
---------- ------------ ------------ ---------- --------------- ------------ -------------
Balance at
1 April 2023 2,536,195 24,462,976 (2,157,579) 116,065 - (8,109,518) 16,848,140
---------- ------------ ------------ ---------- --------------- ------------ -------------
Loss for the
year - - - - - 7,765,330 7,765,330
---------- ------------ ------------ ---------- --------------- ------------ -------------
Other
Comprehensive
Income: Exchange
translation
loss on foreign
operations - - (283,153) - - - (283,153)
---------- ------------ ------------ ---------- --------------- ------------ -------------
Total
comprehensive
income for
the year: - - (283,153) - - (1,887,077) 7,482,177
---------- ------------ ------------ ---------- --------------- ------------ -------------
Transactions
with owners
---------- ------------ ------------ ---------- --------------- ------------ -------------
Shares issued 137,974 2,242,084 - - - - 2,380,058
---------- ------------ ------------ ---------- --------------- ------------ -------------
Other
Transactions - - - - 3,443,489 - 3,443,489
---------- ------------ ------------ ---------- --------------- ------------ -------------
Balance at
30 September
2023 2,674,169 26,705,061 (2,440,732) 1,16,065 3,443,489 (344,188) 30,153,864
---------- ------------ ------------ ---------- --------------- ------------ -------------
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.
Unaudited Company Statement of Changes in Equity
For the half-year ended 30 September 2023
Attributable to equity shareholders
Share capital Share premium Retained Deferred Warrant TOTAL
Losses Equity Reserve
consideration
-------------- -------------- ------------ --------------- ---------
EQUITY
-------------- -------------- ------------ --------------- --------- -----------
GBP GBP GBP GBP GBP GBP
-------------- -------------- ------------ --------------- --------- -----------
Balance
at 1 April
2022 2,173,497 19,975,356 (4,297,866) - 130,557 17,981,543
-------------- -------------- ------------ --------------- --------- -----------
Loss for
the period - - (530,029) - - (530,029)
-------------- -------------- ------------ --------------- --------- -----------
Total comprehensive - - - - - -
income:
-------------- -------------- ------------ --------------- --------- -----------
Transactions
with owners
-------------- -------------- ------------ --------------- --------- -----------
Shares issued - - - - - -
-------------- -------------- ------------ --------------- --------- -----------
Balance
at 30 September
2022 2,173,497 19,975,356 (4,827,895) - 130,557 17,451,514
-------------- -------------- ------------ --------------- --------- -----------
Balance
at 1 April
2023 2,536,195 24,462,976 (5,316,129) - 116,065 21,799,107
-------------- -------------- ------------ --------------- --------- -----------
Loss for
the year - - (181,883) - - (181,883)
-------------- -------------- ------------ --------------- --------- -----------
Total comprehensive
income:
-------------- -------------- ------------ --------------- --------- -----------
Transactions
with owners
-------------- -------------- ------------ --------------- --------- -----------
Shares issued 137,974 2,242,084 - - - 2,380,058
-------------- -------------- ------------ --------------- --------- -----------
Other Transactions - - - 3,443,489 - 3,443,489
-------------- -------------- ------------ --------------- --------- -----------
Balance
at 30 September
2023 2,674,169 26,705,061 (5,498,013) 3,443,489 116,065 27,440,771
-------------- -------------- ------------ --------------- --------- -----------
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.
Unaudited Consolidated Statement of Cash Flows
For the half-year ended 30 September 2023
2023 2022
GBP GBP
------------------------------------ ------------- -----------------
Cash used in operating activities
------------- -----------------
Loss for the year 7,765,330 (1,484,538)
------------- -----------------
Adjustment for:
------------- -----------------
Gain on bargain purchase (9,652,407) -
------------- -----------------
Depreciation 758,862 793,173
------------- -----------------
Finance costs 169,012 58,474
------------- -----------------
Working capital changes:
------------- -----------------
Increase/(decrease) in inventories 71,760 (455,682)
------------- -----------------
Increase/(decrease) in receivables (1,560,247) 1,713,412
------------- -----------------
Increase/(decrease) in payables 1,663,070 500,879
------------- -----------------
Increase /(decrease) in DTA
& Other assets 632 (10,858)
------------- -----------------
Taxes paid - -
------------- -----------------
Net cash from/(used in) operating
activities (783,988) 1,114,860
------------- -----------------
Cash flows from investing
activities:
------------- -----------------
Purchase of tangible assets (14,673,244) (3,626,178)
------------- -----------------
Acquisition of Suni Resources 9,641,771 -
------------- -----------------
Advance for Capital Assets - 2,906
------------- -----------------
Net cash (used in) investing
activities (5,031,473) (3,623,272)
------------- -----------------
Cash flows from financing
activities*
------------- -----------------
Proceeds from Shares issued 2,380,058 -
(net of costs)
------------- -----------------
Proceeds from issue of Convertible
loan notes (net of costs) 1,862,500
------------- -----------------
Deferred equity 3,443,489 -
------------- -----------------
Lease Liability (2,976) 1,799
------------- -----------------
Finance cost (169,012) (58,474)
------------- -----------------
Net cash from financing activities 5,651,560 1,805,825
------------- -----------------
Net ( decrease )/increase
in cash and cash equivalents (163,901) (702,587)
------------- -----------------
Cash and cash equivalents
at beginning of period 289,338 1,534,023
------------- -----------------
Cash and cash equivalents
at end of period 125,437 831,436
------------- -----------------
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).
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 2020 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 Condensed Management 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 UK adopted IAS
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 2022. The following IFRS or IFRIC
interpretations were effective for the first time for the financial
year beginning 1 January 2022. Their adoption has not had any
material impact on the disclosures or on the amounts reported in
this financial information save and except the reporting related to
business combination from acquisition of Suni Resources SA:
Standards/interpretations Description Effective from
IFRS 3 amendments Business Combinations 1 January 2022
---------------------------- ---------------
IAS 16 amendments Property, Plant and 1 January 2022
Equipment
---------------------------- ---------------
IAS 37 amendments Provisions, Contingent 1 January 2022
Liabilities and Contingent
Assets
---------------------------- ---------------
IFRS 9 amendments Annual Improvements 1 January 2022
to IFRS Standards
2018-2020 (fees in
the 10 percent test
for derecognition
of financial liabilities).
---------------------------- ---------------
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 Description Effective
interpretation date
IAS 1 Amendments - Classification of Liabilities 1 January
as Current or Non-current 2023
------------------------------------------- -----------
IAS 8 Amendments - Definition of Accounting 1 January
estimate 2023
------------------------------------------- -----------
IAS 12 Amendments - Deferred Tax related 1 January
to Assets and Liabilities arising 2023
from a Single Transaction
------------------------------------------- -----------
IAS 1 amendments Disclosure of accounting policies 1 January
and IFRS practice 2023
statement 2
------------------------------------------- -----------
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 UK adopted international accounting standard (UK-
adopted IAS) 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
UK-adopted IAS 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 Condensed Management Report. 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 Condensed Management Report. In
addition, the Annual Report for the Financial Year April 2022 to
March 2023 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 has
executed development to reach a capacity of 30,000 tons flake
graphite production by end of the reporting period and is engaged
in ramping up production while selling its produce globally. In the
period the Company continued to produce and sell from the created
facilities and its annual revenues continue to grow. The Company
further reported positive operating gross cash margins throughout
the period and addressed challenges that came on its way
successfully finding solutions as has been reported by the Company
on a continued basis.
For the period under reporting, the Company achieved 170% growth
in revenues and 106% increase in operating gross profits and is
engaged in ramping up production so as to reach a level of
breakeven monthly production and sale that is estimated to be about
1000 to 1200 tons per month as against current levels of 700-800
tons per month and is engaged in raising funds for meeting its
working capital needs as also for further developments.
The Company has an established track record for raising funds
for its development, though it is not guaranteed that the Company
will be able to raise funds successfully in the future. In the
meantime, the Company's current established capacities and
operations provide reasonable basis to assume that the Company can
continue to meet its costs and cash requirements at the
consolidated level with its revenues.
While the Company has been in a stringent cash position during
the period under reporting, the Company continues to produce, sell
and realise sale proceeds within its available resources. The
Company is engaged to explore possible routes to ease its liquidity
position including realising VAT refunds, banking facilities at
subsidiary level and, in the meantime, it continues to manage its
business within the available resources.
Taking in to account the comments above, the Directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future, given
its current resources, installed capacities and operations, and
growing sales and revenues which are expected to add positive
operating cash flows, ability to raise finance for which the
Company can use and leverage for its future growth.
Were the Company unable to meet its cash flow needs from its
current revenue resources, the Company shall not hesitate from
raising any gap funding and the Board believes and has demonstrated
that it has the ability to do so. Therefore, the Company continues
to adopt the going concern basis of accounting in preparing the
financial statements and is of the view that with the development
of the business and creation of capacities over the past few years,
it has attained the status that it shall remain a going concern for
the foreseeable future.
The Company notes that even though the Company has historically
successfully raised capital to meet its capital needs, there is no
certainty that the Company shall be able to raise funds over the
next 12 months to meet its obligations and/or needs if the
situation so requires. Thus the Company may consider other options
at its disposal given extensive base of Assets in its Balance
Sheet.
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 Madagascar Ventures and Etablissements
Rostaing.
In the company financial statements, investments in subsidiaries
are accounted for at cost less impairment.
The consolidated financial statements incorporate those of
Tirupati Graphite plc and all of its subsidiaries (i.e. entities
that the group controls through its power to govern the financial
and operating policies so as to obtain economic benefits).
Subsidiaries acquired during the year are consolidated using the
purchase method. Their results are incorporated from the date that
control passes.
All financial statements are made up to 31 March 2023. 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 by accounting
resulting foreign exchange difference into Other Comprehensive
Income and foreign exchange reserve on consolidation.
Segment Reporting
The Group's chief operating decision makers are considered to be
the Board and senior management who have determined that as the
Group has only Graphite mining extraction activities in one region,
Madagascar as all the activities are closely linked and monitored
as one operating and geographical segment. Thus its Corporate
Office in London, UK and the Company is not seen as a separate
reporting segment. Therefore results, assets and liabilities of the
operating segment are the same as presented in the Group's primary
statements. Previously Company reported segment information,
relating to assets and liabilities of the group's subsidiaries
which the management has reassessed, leading to the conclusion that
such segment reporting is not relevant and hence removed from the
current report.
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.
The Incoterms at which the Company conducts its sale of goods
are Free on Board (FOB) or Cost Insurance Freight (CIF) basis.
Under these incoterms as per Uniform Customs and Practices the
point of transfer of risk and rewards for the goods sold to the
buyer is the port from which the goods are shipped. Thus, the point
of revenue recognised by the Company is the entry of goods duly
stuffed in containers and sealed at which point the charge of goods
are transferred to the prearranged shipping line who issue the
relevant shipping document as the goods are loaded on the ship.
Gain on "Bargain Purchase"
The Company had completed the acquisition of Suni Resources on
1(st) April 2023, for which on consolidation company has recorded
the excess difference between Net assets and purchase consideration
as Gain on "Bargain Purchase" per the standard of IFRS 3 -
"Business Combinations". The detailed working of the same is given
below:
Amount
Particulars GBP
1 Purchase consideration:
Cash paid 1,662,426
Equity issued 2,380,058
Deferred Equity consideration 3,443,489
(A) 7,485,974
2 Net assets of Suni:
Net Equity 5,642,261
Inter-company loans 11,496,120
(B) 17,138,381
Gain on Bargain Purchase
(B-A) 9,652,407
The net assets that the Company has acquired against the net
equity and inter company liabilities are as below:
Deployment of Funds: Amount GBP
Property Plant & Equipment 14,556,013
Trade & Other Receivables 3,481,695
Cash & Cash Equivalents 79,086
Trade & Other Payables (978,413)*
Net Assets 17,138,381
*includes amount owed to the Company paid prior to completion
for creating fixed deposit against bank guarantee
The Company believes that there is no significant impairment in
the assets held by Suni Resources and has provisionally accounted
for the gain on bargain purchase for the unaudited financial
results subject to further verification and valuations.
Foreign Currencies
For each entity, the Group determines the functional currency,
and items included in the consolidated financial statements of each
entity are measured using that functional currency. The Group's
financial statements are prepared and presented in in Pounds
sterling, which is its functional currency.
Foreign Currency Transactions
Transactions in foreign currencies are translated at the foreign
exchange rate ruling at the date of the transaction. Foreign
exchange differences arising on translation are recognised in
profit or loss. The subsidiaries are accounted into Madagascar
local currency i.e., Malagasy Ariary. For the purpose of
consolidation, the year-end assets and liabilities are converted at
closing rate and all income statement items are converted using
average rate for the year. The difference arising on such is passed
through Other Comprehensive Income and Foreign Exchange
Reserves.
Taxation
Income tax represents the sum of current tax and deferred
tax.
Current tax
Current tax is based on taxable profit or loss for the year.
Taxable profit or loss differs from net profit or loss as reported
in the income statement because it excludes items of income or
expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance
sheet date.
A provision is recognised for those matters for which the tax
determination is uncertain, but it is considered probable that
there will be a future outflow of funds to a tax authority. The
provisions are measured at the best estimate of the amount expected
to become payable. The assessment is based on the judgement of tax
professionals within the Company supported by previous experience
in respect of such activities and in certain cases based on
specialist independent tax advice.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit and is accounted for using the
balance sheet liability method.
Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits
will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from the initial recognition of
intangible asset 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.
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
at a project that was under construction, all assets included in
"Assets Under Construction" are transferred into "Property, Plant
and Equipment". It is at this point that depreciation/amortisation
commences over its useful economic life.
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
*It includes mine developments assets, furniture & fixtures
land lease assets, engineering centre and similar assets that are
not included in Plant and Machinery.
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.
Mining Exploration and Evaluation
The Company carries out exploration and evaluation activities
whenever required with the help of company's consultant and in
house geologists to determine if the exploration results returned
during the period warrant further exploration expenditure and have
the potential to result in an economic discovery. The amount of
expenses incurred are towards pumping and manpower which are small
in amounts and company's charges the same to income statement and
does not recognise separate asset under IFRS 6, since company finds
it immaterial to show it as recoverable asset.
Intangible assets recorded at fair-value on business
combination
The Company acquired two entities located in Madagascar which
are its current operating assets. These assets are acquired as part
of a business combination. 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 treated in the form of intangible exploration
asset. The Company sees no reason for any impairment in the value
of such intangible exploration asset and thus carry's the same as
an asset in its financials at present. The Company will continue to
assess this in its future financial statements and if and when
prudent, may consider reclassifying it to mine development
asset.
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.
Trade and Other 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 ("FVTPL") 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 financial assets are
subsequently measured at amortized cost except for assets
recognized at FVTPL.
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 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, 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 based on
the rate at it which has secured borrowing 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 interest bearing and are
initially recognised at amortised costs and include the transaction
costs directly related to the issuance. The transaction costs are
amortised using the effective interest rate method over the life of
the liability.
Convertible Loan Notes are recorded at their issue price. 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. The Company has issued Convertible Loan note during
the year and in past. In reference to the Company's specific
circumstances and financial position, the convertibility offering
within the CLN's document is not assessable as a component in
exchange of a lesser coupon. The Company's policy on the conversion
option provided to the CLN subscribers was in exchange of not
getting to the direct equity placement, with conversion defined at
a premium to the price of the Company's shares at the time of issue
of CLN's thus reducing possible dilution for its existing
shareholders. Thus, the equity component of CLN's is not accounted
for as it is not considered to be material to the financial
statements.
Financial liabilities at Fair Value Through Profit or Loss
("FVTPL")
A financial liability is classified as at FVTPL if it is
classified as held-for-trading, it is a derivative or it is
designated as such on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net gains and losses,
including any interest expense, are recognised in profit or
loss.
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. The Company's Lease Liability is
recorded.
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.
4. Critical Accounting Estimates and Judgements
The preparation of financial statements in conformity with UK
adopted IAS requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities at the date
of the financial statements and the reported amounts of sales and
expenses during the reporting period. Although these estimates are
based on management's best knowledge of the amount, event or
action, actual results ultimately may differ from those
estimates.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial period are discussed below.
a) Impairment of assets
The Company is required to test, on an annual basis, whether its
non-current assets have suffered any impairment. Determining
whether these assets are impaired requires an estimation of the
value in use of the cash-generating units to which the assets have
been allocated. The value in use calculation requires the Directors
to estimate the future cash flows expected to arise from the
cash-generating unit and a suitable discount rate to calculate the
present value. Subsequent changes to the cash generating unit
allocation or to the timing of cash flows could impact on the
carrying value of the respective assets. The Company uses factors
like estimated quantity of production and sales, basket price,
variable cost per ton, fixed costs, discounting rate and working
capital changes to judge the impairment of assets. The company has
done impairment testing taking in consideration for 10 years and
not 5 years as suggested by standard, because company believes it
is in project development stage and it will eventually take that
sufficient time to explore mine resources and get out economic
benefit of it.
Production assets
In accordance with the accounting principles and standards
followed by the Company under the relevant standards, we have
conducted an assessment of our capital assets to determine if there
are any indicators of impairment in the carrying value of capital
assets as at 30 September 2023. We are pleased to report that as of
30 September 2023, there are no indications of impairment for our
capital assets.
Components of capital assets of the Company including
exploration assets, drilling and mining equipment, processing plant
and equipment, Infrastructure and project development etc and form
a significant component of our balance sheet. These play a vital
role in generating current and future economic benefits for the
company. These assets have been valued appropriately, considering
their expected useful lives.
We regularly monitor various factors that could potentially
affect the value of our capital assets, such as changes in market
conditions, technological advancements, legal or regulatory
changes, and physical damage . An assessment of impairment of
production assets has been carried out by the Company considering
whether the net losses of the Company have impaired its production
assets and whether the net present value of the production assets
is lower than its book value and has come to the conclusion that
there is no impairment in the value of its production assets.
Impairment of intangible assets
The intangible exploration assets of the Company relate to the
excess of consideration paid over the book value as acquired at the
time of acquisition of the assets the Company holds in Madagascar,
which stood at GBP3,609,701 as at 30 September 2023 (31(st) March
2023: GBP3,599,065). 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. The company holds c.33 square
kilometres of flake graphite mining permits for forty years.
Currently the Company has reported mineral resource estimates for
only about 30% of identified mineral bearing zones. The Company
sees no indictors of impairment under IFRS6 as the licences remain
valid and further exploration is planned. The Companies net present
value assessments in relation assets show significant higher
potential as compared to the Book Value of the assets. Hence, the
Company finds no justification for impairment to be charged.
Useful economic lives of property, plant and equipment
The annual depreciation charge for different asset classes under
property, plant and equipment are charged considering the relevant
factors to that asset class. For all asset classes depreciation is
accounted for on the basis of norms set under the local regulations
which is in the range of 10 to 25% depending on the asset type
signifying useful life of 10 years or below. The Company has no
reasons to believe that the useful life of the assets is below
these. Thus, at the year end, Company assessed that there is no
requirement of changing the useful economic life of its assets.
In regard to Mine Development assets which is also a part of
property plant and equipment, this contains expenses relating to
costs incurred for determination of availability of graphite
deposits, ore resources and expenses related to developments of
mining for the purpose of providing raw material to the processing
plants that have been set up by the Company at its projects. The
Company adapted an unconventional path for its development the gist
of which is as below:
a. Alongside continuation of exploration, it evolved a
development path utilising its internal expertise. This path
envisaged modular development of production capacities alongside
continuation of graphite resources estimations made under JORC 2012
standards.
b. In 2019, SRK consulting assessed the first set of activities
performed by the company for the purpose of resource determination
and the CPR defined resources in the projects under Inferred and
Indicated categories.
c. According to conventional approach for development of mining
activities, this CPR was not enough for setting up mining and
processing facilities, but the Company preferred to commence
development of the projects on the back of its own expertise.
d. The development is also staged, and the capacities installed
by the Company to date are more of less 35% of the total that it
intends to install at these projects.
e. Given that the Company initiated production activities it
prudently preferred to account for amortisation of mine development
assets.
f. Since no ore reserves are established by the CPR and ongoing
investments continue in Mine Development arena it is not in
accordance with usual practices that the Company could consider
quantitative amortisation of the costs incurred under the head.
g. The Company therefore preferred to assess what will be the
minimum worst-case life of mine on its operations and this was
assumed as 10 years for worst case scenario.
h. The Company therefore adopted a flat 10% annual rate of
Amortisation for the Mine Development Assets for the past
years.
i. It is important to note that costs under this head will
continue to be incurred till such time that the Company continues
its exploration activities and will ultimately culminate into an
updated Competent Person Report engaged by the Company.
j. At this stage the Company may prudently consider to change
its method of amortisation of the Mine Development assets based on
quantitative considerations if it is so prudent to do.
Intragroup receivables
The Company assessed the recoverability of intragroup
receivables, and it does not require any impairment adjustment in
current financial year. This on the basis that the subsidiaries
have remained in investment mode until end of this year and it is
only now that the opportunity to produce at a annual rate that
leads to profitability of the subsidiaries have been achieved. The
Company shall review this status further at the end of FY24 to
assess further on Intragroup receivables.
b) 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.
c) Recoverability of VAT
The Company has been regularly receiving VAT refunds generally
in 3-6 months of time and believes that the balance standing of GBP
1,496,733 in Trade and other receivables will be recovered in due
course. Hence there is no requirement of writing off such
assets.
d) Going Concern
The financial statements have been prepared on the basis that
the Company remains a going concern. The management's judgement are
based on the Company's current stage of development and estimated
future cash flows from operation and the ability of the Company to
raise funds if the need so be. The auditors have preferred to
include a material uncertainty in relation to going concern in
their audit opinion.
e) Capitalisation of Costs for development
The Company does not employ any Engineering and Construction
contractors for development of its projects and conducts mine and
infrastructure development activities also using its in house
resources including mining equipment fleet and human resources.
During the year the Company executed extensive development
activities across its projects along with operations of the
facilities that were completed. Adopting conservative principles
for capitalisation, the management uses its judgement for
capitalisation of reasonable part of those resources that are used
in development activities.
5. 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:
Half year ended 30 Sep
2023 USA Europe Asia Total
Revenue from external
customers 608,893 432,142 2,105,592 3,146,627
Timing of recognition:
------------------------ -------- -------- ---------- ----------
At a point in time 608,893 432,142 2,105,592 3,146,627
------------------------ -------- -------- ---------- ----------
Half year ended 30 Europe Asia Total
Sep 2022
Revenue from external
customers 398,120 767,075 1,165,195
======== ======== ==========
Timing of recognition:
------------------------ -------- -------- ----------
At a point in time 398,120 767,075 1,165,195
------------------------ -------- -------- ----------
Following customers constituted more than 10% of the revenue,
their respective share of revenue is mentioned below:
Half year Half year
ended ended
30 Sep 30 Sep
2023 2022
GBP GBP
Customer A 821,651 292,414
------------ ---------- ----------
Customer B 492,231 291,275
------------ ---------- ----------
Customer C 404,838 279,629
------------ ---------- ----------
Revenues of approximately GBP 1,718,719 (2022: GBP863,319) are
derived from 3 customers who each account for greater than 10% of
the group's & company's total revenues.
6. Cost of Sales
Half year Half year
ended ended
30 Sep 30 Sep 2022
2023
GBP GBP
Mining & Processing costs 1,747,311 626,902
---------------------------------------------- ---------- -------------
Human Resources costs 355,964 290,280
---------------------------------------------- ---------- -------------
Logistics utilities & plant admin costs 231,399 173,419
---------------------------------------------- ---------- -------------
(Increase) / Decrease in inventory of inputs 31,625 (303,289)
---------------------------------------------- ---------- -------------
Total 2,366,299 787,312
---------------------------------------------- ---------- -------------
7. Expenses by Nature
Half year Half year
ended ended
30 Sep 2023 30 Sep 2022
GBP GBP
The following items have been included
in arriving at operating loss
Depreciation on non-operating assets 14,264 14,971
============================================ ============= =============
Net foreign exchange gain 26,389 35,798
============================================ ============= =============
PR/IR Expenses 37,600 55,777
============================================ ============= =============
Professional Fees 280,272 71,911
============================================ ============= =============
Insurance 15,620 -
============================================ ============= =============
Director Emoluments 243,108 177,242
============================================ ============= =============
Management Salary 265,606 233,083
============================================ ============= =============
Other Admin Expenses:
Corporate Level 217,770 311,352
Subsidiary Level (includes Suni Resources
SA) 745,514 125,611
============================================ ============= =============
8. Finance Cost
Half year Half year
ended ended
30 Sep 30 Sep 2022
2023
GBP GBP
Interest Expense 169,012 58,474
------------------ ---------- -------------
9. 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 Half year
ended ended
30 Sep 30 Sep 2022
2023
Continuing operations:
---------------------------------------------- -------------------- -------------
Gain / (Loss) attributable to equity holders
of the Company (GBP) 7,765,330 (1,484,538)
Weighted average number of ordinary shares
in issue 106,966,712 86,939,832
============================================== ==================== =============
Loss per share (pence) 7.26 (1.71)
---------------------------------------------- -------------------- -------------
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.
10. Intangible Assets
Group
Cost GBP
==========
At 1 April 2023 3,599,065
==========
Impairment -
==========
Forex Change 10,636
----------------------- ----------
At 30 September 2023 3,609,701
----------------------- ----------
Accumulated amortisation
At 1 April 2023 -
==========
Charge for the year -
---------------------------- ----------
At 30 September 2023 -
==========
Net book value
==========
At 1 April 2023 3,599,065
==========
At 30 September 2023 3,609,701
----------------------------- ----------
Intangible assets comprise of excess of purchase consideration
paid in the acquisition of subsidiaries.
The projects in Madagascar have a current JORC compliant mineral
ore resource of 25.1 million tonnes which contains c.4% average
grade of graphite content. Further exploration across the two
projects is ongoing. The company has drilling resources to be
explored and believes that an economic target will be achieved in
future years hence impairment is not recognised. The Directors
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 2023.
11. Investments
Company Shares in group undertaking
Cost GBP
At 1 April 2023 3,921,348
Addition 8,456,073
At 30 September 2023 12,377,420
----------------------- -----------------------------
Net book value
====================== =============================
At 1 April 2022 3,921,348
----------------------- -----------------------------
At 30 September 2023 12,377,420
----------------------- -----------------------------
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*
------------------------------------------------ ------------------------
*Tirupati Resources Mauritius was liquidated on 28(th) May 2021
and the shares have been transferred to Tirupati Graphite Plc.
Balance 1% each is held by Mr. Shishir & Mr. Hemant
respectively and are beneficial holdings.
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
------------------------------------------------ ------------------------
Suni Resources
Registered: AV JULIUS NYERERE 4000 ED. SOLAR, Mozambique
Nature of business: Graphite mining extraction
%
------------------------------------------------ ------------------------
Class of share Holding
Ordinary shares 100
------------------------------------------------ ------------------------
12. Property, Plant and Equipment
Group Plant and Infrastructure Assets under construction Total
Machinery & Fixtures*
GBP GBP GBP GBP
---------------------- ----------- --------------- -------------------------- -----------
Cost
=========== =============== ========================== ===========
At 1 April 2023 8,536,528 4,727,205 226,634 13,490,367
=========== =============== ========================== ===========
Additions 32,805 - 144,183 176,988
=========== =============== ========================== ===========
Assets acquired
on Suni acquisition - 1,307,637 13,423,442 14,731,079
=========== =============== ========================== ===========
Restatements - (137,915) - (137,915)
=========== =============== ========================== ===========
Reclassification 305,138 65,679 (370,817) -
=========== =============== ========================== ===========
At 30 September
2023 8,874,471 5,962,606 13,423,442 28,260,519
---------------------- ----------- --------------- -------------------------- -----------
At 1 April 2023 1,874,020 417,910 - 2,291,930
=========== =============== ========================== ===========
Assets acquired
on acquisition - 175,083 - 175,083
=========== =============== ========================== ===========
Depreciation 472,729 207,958 - 680,687
=========== =============== ========================== ===========
At 30 September
2023 2,346,749 800,951 - 3,147,700
---------------------- ----------- --------------- -------------------------- -----------
Carrying amount
=========== =============== ========================== ===========
As at 1 April 2023 6,662,508 4,309,295 226,634 11,198,437
---------------------- ----------- --------------- -------------------------- -----------
As at 30 September
2023 6,527,722 5,161,655 13,423,442 25,112,819
---------------------- ----------- --------------- -------------------------- -----------
Note: Infrastructure & fixtures includes mine development
assets Sep 2023: GBP1,448,776 (31 Mar 2023: GBP1,492,474) and right
of use assets Sep 2023: GBP 56,883 (Mar 2023: GBP58,599)
13. Trade and Other Receivables
Group Company
31 31
30 September March 30 September March 2023
2023 2023 2023
GBP GBP GBP GBP
Trade receivables 746,635 710,600 746,635 710,600
Advance for Capex 287,039 287,039 287,039 287,039
VAT Refunds 3,083,972 1,058,832 32,824 7,451
Fixed Deposits 1,876,969
Other debtors 38,108 50,209 32,083 -
Prepayments - 16,424 - 16,424
Amounts owed by group undertakings - - 18,909,881 17,559,350
Advance for Acquisitions* - 2,632,525 - 2,632,525
6,032,722 4,755,629 19,721,443 21,213,389
------------------------------------ ------------- ---------- ------------- ------------
*Note: Amounts advanced to Battery Minerals Limited in terms of
agreements entered into for securing placement of bank guarantee
and payment of capital gains tax so as to facilitate the approval
for completing the acquisition.
Trade receivables are amounts due from customers for goods sold
in the ordinary course of business. They are generally due for
settlement within 30-60 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.
At 30 September 2023 Current More More More Total
than than than
30 days 60 Days 90 days
GBP GBP GBP GBP GBP
-------- --------- --------- --------- ------
Expected loss rate 0% 0% 0% 80% 0%
-------- --------- --------- --------- ------
Gross trade receivables 746,635 - - - -
-------- --------- --------- --------- ------
Loss allowance - - - - -
-------- --------- --------- --------- ------
At 31 March 2023 Current More More More Total
than than than
30 days 60 Days 90 days
GBP GBP GBP GBP GBP
-------- --------- --------- --------- ------
Expected loss rate 0% 0% 0% 80% 0%
-------- --------- --------- --------- ------
Gross trade receivables 710,600 - - - -
-------- --------- --------- --------- ------
Loss allowance - - - - -
-------- --------- --------- --------- ------
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 30 September 2023 & 31 March 2023.
14. Inventories
Group
30 September 31
2023 March 2023
Cost and net book value GBP GBP
Raw materials and consumables 1,120,958 457,997
Finished and semi-finished goods 193,840 928,561
1,314,798 1,386,558
---------------------------------- ------------- ------------
15. Trade and Other Payables
Current:
Group Company
30 31 30 September 31
September March 2023 2023 March 2023
2023
GBP GBP GBP GBP
Trade payables 1,693,879 1,084,991 357,645 243,500
Social security and
other taxes 14,658 48,913 3,797 -
Advance from customers 628,196 - 628,196 -
Accruals 1,064,102 550,994 970,996 491,940
3,347,878 730,869 1,960,635 315,207
------------------------ ----------- ------------ ------------- ------------
In the Directors' opinion, the carrying amount of payable is
considered a reasonable approximation of fair value.
Non-current:
Group Company
30 31 30 September 31
September March 2023 2023 March 2023
2023
GBP GBP GBP GBP
Lease liability 28,104 31,080 - -
----------------- ----------- ------------ ------------- ------------
28,104 31,080 - -
----------------- ----------- ------------ ------------- ------------
The Company has taken land on lease for Vatomina project for 18
years hence, there is no current maturity.
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.
16. Provisions and Commitments
No provisions have existed within the financial year or persist
at year end. As regard the Company's capital commitments, the
ongoing development at its projects are substantially completed and
further developments will be made post further funding
arrangements. The acquisition of Suni Resources are commitments to
be satisfied in equity consideration.
17. Borrowings
The Company has issued two series 2019CLN's and 2022CLN's both
carrying coupon of 12% payable half yearly and convertible at the
holders' option at issue price as defined in the underlying
instrument, key terms thereof being as below:
Term CLN2019 CLN2022
Coupon 12% payable half yearly 12% payable half yearly
------------------------- ------------------------
Maturity 3 years from issue date 3 years from date
(verbally agreed to of issue
extend the maturity
date to 31(st) December
2024 post yearend)
------------------------- ------------------------
Conversion At the holders' option At the holders' option
------------------------- ------------------------
Conversion Price GBP0.45 per ordinary GBP0.60 for year 1
share being the IPO GBP0.75 for year 2
fund raise price per GBP0.90 for year 3
ordinary share
------------------------- ------------------------
30 31
September 2023 March 2023
----------------------- ---------------- ------------
Within one year - 909,000
================ ============
Between 2 and 5 years 2,771,500 1,862,500
----------------------- ---------------- ------------
2,771,500 2,771,500
----------------------- ---------------- ------------
Following table denotes changes in borrowings:
30 31
September March 2023
2023
------------------------------------ ----------- ------------
Opening Balance as on 1(st) April 2,771,500 1,009,000
=========== ============
Issued during the year - 1,862,500
=========== ============
Redeemed/Converted during the year - (100,000)
------------------------------------ ----------- ------------
Closing Balance as on 31(st) March 2,771,500 2,771,500
------------------------------------ ----------- ------------
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.
18. Share Capital
30 September 30 September 31 March 31 March
2023 2023 2023 2023
Number GBP Number GBP
========================= ============= ==================== ============= ====================
Allotted, called up and
fully paid
Ordinary shares of 2.5p
each 1,069,66,712 2,674,169 1,01,447,768 2,536,195
Shares were issued during the year as follows:
Cost of issue Number of shares
(GBP) issued
--------------------------------- --------------- -----------------
Shares issued on acquisition of
Suni Resources
01 April 2023 - 5,518,944
- 5,518,944
------------------------------------------------- -----------------
19. Share based Payments & Warrant Reserve
During the first two years after incorporation of the Company on
20 April 2017, 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. These
represent the current outstanding Warrants in issue.
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 30 September 2023:
Number of warrants
Expiry Date Exercise Price exercisable and
Grant Date (GBP) outstanding
31 December 2017 31 December 2025 0.300 1,000,000
------------------ ----------------- -------------------
31 December 2018 31 December 2025 0.400 1,520,000
------------------ ----------------- -------------------
31 March 2019 31 March 2025 0.400 320,000
------------------ ----------------- -------------------
31 December 2019 31 December 2025 0.400 1,620,000
------------------ ----------------- -------------------
31 March 2020 31 March 2025 0.400 480,000
------------------ ----------------- -------------------
14 December 2020 14 December 2023 0.450 170,329
------------------ ----------------- -------------------
14 December 2020 14 December 2023 0.675 113,553
------------------ ----------------- -------------------
20 April 2021 20 April 2024 1.350 222,222
------------------ ----------------- -------------------
Total 5,44,6104
-------------------
Optiva Securities Limited is eligible for issue of following
share warrants during the year, but these have not yet issued:
Eligibility Expiry Date Exercise Price Eligible number
Date (GBP) of warrants
05 December 05 December
2022 2025 0.350 714,285
================= ==================== ================
08 August 2022 08 August 2025 0.900 103,472
================= ==================== ================
Total 817,757
================
The Company has not accounted for the warrants granted as they
have not been formally issued and the cost of such warrant is not
material.
Following table denotes changes warrants outstanding:
30 31
September March 2023
2023
----------------------------------------- ----------- ------------
Opening Balance as on 1(st) April 5,913,348 6,630,491
=========== ============
Issued during the year - -
=========== ============
Exercised during the year - -
----------------------------------------- ----------- ------------
Expired during the year (467,244) (717,143)
----------------------------------------- ----------- ------------
Closing Balance as on 30 September 2023 5,446,104 5,913,348
----------------------------------------- ----------- ------------
In half-year ended 2024, 444,444 warrants issued to CLN
investors and 22,800 to brokers have expired.
20. 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
30 September 30 September 31 March 31 March
Methodology 2023 2023 2023 2023
and hierarchy GBP GBP GBP GBP
========================= =============== ============== ============= ============== ===========
Financial assets
Cash and cash
equivalents (a) 125,437 125,437 289,338 289,338
Loans and receivables,
net of impairment (a) 6,032,723 6,032,723 4,755,629 4,755,629
========================= =============== ============== ============= ============== ===========
Total at amortised
cost 6,158,160 6,158,160 5,044,967 5,044,967
========================================== ============== ============= ============== ===========
Financial liabilities
Trade and other
payables (a) 3,347,878 3,347,878 1,684,808 1,684,808
Borrowings and
provisions (a) 2,771,500 2,771,500 2,771,500 2,771,500
Lease Liabilities (a) 28,104 28,104 31,080 31,080
Total at amortised
cost 6,147,482 6,147,482 4,487,388 4,487,388
------------------------------------------ -------------- ------------- -------------- -----------
Fair value of financial assets and liabilities for the
company
Valuation, Book value Fair value Book value Fair value
30 September 30 September 31 March 31 March
Methodology 2023 2023 2023 2023
and hierarchy GBP GBP GBP GBP
========================= =============== ============== ============= ============== ===================
Financial assets
Cash and cash
equivalents (a) 33,093 33,093 130,340 130,340
Loans and receivables,
net of impairment (a) 19,721,423 19,721,423 21,213,389 21,213,389
========================= =============== ============== ============= ============== ===================
Total at amortised
cost 19,754,516 19,754,516 21,343,729 21,343,729
========================================== ============== ============= ============== ===================
Financial liabilities
Trade and other
payables (a) 1,960,635 1,960,635 735,440 735,440
Borrowings and
provisions (a) 2,771,500 2,771,500 2,771,500 2,771,500
Total at amortised
cost 4,732,135 4,732,135 3,506,940 3,506,940
------------------------------------------ -------------- ------------- -------------- -------------------
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 30 September 2023.
The Group considers its maximum exposure to be:
30 September 31 March
2023 2023
GBP GBP
Financial assets
Cash and cash equivalents 125,437 289,338
Loans and receivables, net of impairment 6,032,723 4,755,629
------------------------------------------ ------------- ----------
6,158,160 5,044,967
------------------------------------------ ------------- ----------
The company considers its maximum exposure to be:
30 September 31 March
2023 2023
GBP GBP
Financial assets
Cash and cash equivalents 33,093 130,340
Loans and receivables, net of impairment 19,721,423 21,213,389
------------------------------------------ ------------- -----------
19,754,516 21,343,729
------------------------------------------ ------------- -----------
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:
6 to 1 to 2 to
Carrying Contractual 6 months 12 2 5
amount cash flows or less months years years
30 September
2023 GBP GBP GBP GBP GBP GBP
Non-derivative
financial liabilities
Trade and other
payables 3,347,878 - 3,347,878
Borrowings 2,771,500 - - - 2,771,500 -
Lease Liability 28,104 - - - - -
31 March 2023
Non-derivative
financial liabilities
Trade and other
payables 1,684,808 - 1,684,808
Borrowings 2,771,500 - - - 2,771,500 -
Lease Liability 31,080 - - - - -
======================== ========== ============ ========== ======= ========== ======
The following are the contractual maturities of financial
liabilities for the company:
6 to 1 to 2 to
Carrying Contractual 6 months 12 2 5
amount cash flows or less months years Years
30 September
2023 GBP GBP GBP GBP GBP GBP
Non-derivative
financial liabilities
Trade and other
payables 1,960,635 - 1,960,635
Borrowings 2,771,500 - - - 2,771,500 -
31 March 2023
Non-derivative
financial liabilities
Trade and other
payables 735,440 - 735,440
Borrowings 2,771,500 - - - 2,771,500 -
------------------------ ---------- ------------ ---------- ------- ---------- ------
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.
USD MZN MGA USD MZN MGA
30 September 30 30 31 March 31 March 31 March
2023 September September 2023 2023 2023
Group 2023 2023
GBP GBP GBP GBP GBP GBP
Cash and cash
equivalents 35,938 23,100 64,263 66,652 - 158,386
Trade & other
receivables 1,065,756 3,492,247 1,485,377 997,639 - 1,101,590
Trade & other
payables (985,842) 16171 (1,403,414) (243,500) - (949,368)
--------------- -------------- ----------- ------------ ---------- ---------- ----------
Net Exposure 115,852 3,531,518 146,226 820,791 - 310,608
--------------- -------------- ----------- ------------ ---------- ---------- ----------
USD USD
30 September 31 March
Company 2023 2023
GBP GBP
Cash and cash equivalents 30,957 66,040
Loans to subsidiaries 15,585,294 15,153,109
Trade & other receivables 7,927,859 6,060,281
Trade & other payables (906,590) (578,315)
--------------------------- -------------- -----------
Net Exposure 22,637,520 20,701,115
--------------------------- -------------- -----------
21. Related Party Transactions
PranaGraf Materials and Technologies Private Limited ("PG")
(Formerly known as Tirupati Speciality Graphite Private Limited) is
an entity incorporated in India. The Company is connected to it in
that both Shishir Poddar and Hemant Poddar were directors and
shareholders of PG during the period.
-- Revenue earned during the period amounted to GBP821,651 (Sep 2022 - GBP 291,275) and;
-- The Company purchased consumables of GBP349,973 (Sep 2022: GBP742,757); and
-- incurred service fees of GBP127,392 (Sep 2022: GBP 138,204)
towards back office services received
-- incurred reimbursement of expenses of GBP32,015 (Sep 2022:
GBP98,009) towards travel and other expenses for the executives of
the Company during the period.
At period end, a net amount GBP180,044 (Sep 2022 - GBP151,377)
was receivable from PG with none overdue.
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 period. At period end, an
amount of GBP287,039 (Sep 2022: GBPNil) was receivable from HV
being advance paid for long lead machinery purchase. During the
period the Company purchased proprietary graphite processing
machinery and spares of GBPNil (Sep 2022: GBP861,368) from HV.
22. Deferred Tax Assets
30 September 31 March
2023 2023
------------------------------------ ------------- ---------
Brought forward DTA 74,076 75,242
============= =========
Created/(reversed) during the year - -
============= =========
Forex (1,548) (1,196)
------------------------------------ ------------- ---------
Carried forward DTA 72,528 74,076
------------------------------------ ------------- ---------
23. Events after the Reporting Period
-- In October the Company held an online presentation for
current and prospective investors on the Investor Meets Company
platform, and held its AGM in London, UK at which, all resolutions
were passed.
-- In October, China announced the introduction of export
restrictions on Graphite products from 1 December 2023.
-- The Company appointed Mr Murat Erden as a new Non-executive Director to the Board in October.
-- The Company appointed Shard Capital as its joint broker in November.
-- The Company issued the Tranche 2 Consideration shares to
Battery Minerals Limited under the terms of its acquisition
agreement.
-- The Company continued discussions with various potential
lenders and it has structured an instrument for raising convertible
debt of up to GBP6,000,000 for meeting its working capital and
investment needs for ramping up production and sales at its
Madagascar projects .
-- The Company continued its work to optimise the studies for
the development of the first 50,000tpa stage of its recently
acquired fully permitted and construction-ready Montepuez project
in Mozambique, and is targeting a further update early in the next
quarter.
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END
IR DBBDDXXDDGXR
(END) Dow Jones Newswires
December 28, 2023 02:00 ET (07:00 GMT)
Tirupati Graphite (LSE:TGR)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Tirupati Graphite (LSE:TGR)
Gráfica de Acción Histórica
De May 2023 a May 2024
