Final Results

RNS Number : 4088B

Tirupati Graphite PLC

30 September 2022

 

30 September 2022

Tirupati Graphite plc

('Tirupati', 'TG' or the 'Company')

Final Results

Tirupati Graphite plc, the fully integrated, revenue generating, specialist graphite producer and graphene and advanced materials developer, is pleased to announce its Final Results for the year ended 31 March 2022. A copy of the Report and Accounts will be available shortly on the Company's website,  www.tirupatigraphite.co.uk .

Operational and Development Highlights

· The Company continued to focus on fast-track development across its two projects in Madagascar with the target to reach the globally significant 30,000 tons per annum ("tpa") capacity at the earliest.

· The 3,000 tpa pre-existing proof of concept plant continued to operate during the year and the Company commissioned an additional 9,000 tpa plant during the year.

· Construction of an additional 18,000 tpa plant was initiated during the year and substantially progressed.

· Development of new capacities remained the larger part of the Company's activities during the year alongside operation of the pre-existing capacity.

· Summary of the operating results for the year are as detailed in table below

Particulars	Units	FY 2021-22	FY 2020-21	YoY Change
Total Production	MT	2,996	1,718	+74%
Mining & Processing costs	£	935,604	304,975	+207%
Human Resources costs	£	378,671	228,731	+66%
Logistics utilities & plant admin costs	£	308,278	52,784	+484%
(Increase) / Decrease in inventory of inputs	£	(485,357)	(98,407)
Total Costs of Production (Excl. Depreciation)	£	1,137,196	488,083	NA
Cost per MT of Production	£	380	284	+34%
Total Sales Volume	MT	2,662	1,857	+43%
Total Revenues	£	1,645,308	1,123,426	+46%
Average Selling price per MT of Production	US$ / £ per MT	841 / 618	801 / 605	+2%
Gross Profit before Depreciation	£	508,112	635,343	-20%
Gross Margin on Sales	%	31%	57%	-26%

● Total production during the year increased by 74% and Total Sales Volume increased by 43% over the previous year;

● Total Revenues increased by 46% over the previous year;

● Realised Average Selling price per MT of graphite sold increased marginally by 2% in GBP terms and 4% in dollar terms;

● The operating margins for the year dropped during the year due to the following:

o  The larger part of the Company's activities during the year was the development of capacities and related infrastructure at both its projects;

o  The Company is executing the development process internally and using its own earth moving machinery, equipment and other resources also used in operating activities for the development activities which has resulted in not all of such costs being able to be capitalised;

o  Adverse weather conditions resulted in additional expenses on upkeep of existing infrastructure and caused increased operating costs;

o  the Company putting in place required management resources at its projects in anticipation of the future capacity being developed;

With these factors combined, the operating margins for the year fell, however the Company believes that as production increases, the previously achieved operating margins will be achievable.

· The cumulative investments in CAPEX made by the Company at its projects up to 31 March 2022 are as tabulated below:

Sahamamy Project total cumulative investment up to 31 March 2022
Head of CAPEX	Investment (£) Up to 31.03.2020	Investment (£) During 01.04.2020 to 31.03.2021	Investment (£) During 01.04.2021 to 31.03.2022*	Total Investment (£) As at 31.03.2022
Drilling & Earthmoving Equipment	240,357	39,024	1,426,628	1,706,009
Processing Plant	520,634	23,157	483,756	1,027,547
Infra & Admin Assets	23,146	6,776	-	29,922
Exploration Evaluation & Engineering	163,702	103,639	801,567	1,068,908
Total Investment	947,839	172,596	2,711,951	3,832,386
Advances for Capex	-	-	2,592,163	2,592,163
Total	947,839	172,596	5,304,114	6,424,549

Vatomina Project total cumulative investment up to 31 March 2022
Head of CAPEX	Investment (£) Up to 31.03.2020	Investment (£) During 01.04.2020 to 31.03.2021	Investment (£) During 01.04.2021 to 31.03.2022*	Total Investment (£) As at 31.03.2022
Drilling & Earthmoving Equipment	328,178	236,949	443,972	1,009,099
Processing Plant	168,093	475,822	1,890,974	2,534,889
Infra & Admin Assets	69,323	30,995	201,175	301,493
Exploration Evaluation & Engineering**	738,830	331,530	(332,964)	737,396
Total Investment	1,304,424	1,075,296	2,203,157	4,582,877

*This does not include impact of Forex translation

** This is in nature of capital WIP and hence includes expenditures reclassified after completion of respective capital assets.

· Operations and development progressed in spite of headwinds from the impacts on travel and logistics due to the pandemic in the earlier part of the year and adverse weather conditions in the later part.

· The Company has taken appropriate decisions to mitigate these risks in the current quarter and continues to stabilise its operations and complete the developments as planned during the current year.

Snapshot of Consolidated Income Statement

Summary of the Group's consolidated income statement for the year ended 31 March 2022 is as follows:

	2022	2021	YOY Change	Commentary
	GBP	GBP	%
Revenues	1,645,308	1,123,426	46%	Revenues grew by 46% due to increased production and sales
Cost of Sales	(1,137,196)	(488,083)	133%	Cost of Sales grew greater than increased sales mainly due to the impact of adverse weather conditions
Gross Profit (Excl. Dep)	508,112	635,343	-20%	The above resulted in Gross Profit decrease of 20%
Less Administrative Expenses	(1,774,581)	(1,531,581)	16%	Admin expenses increased due to increased corporate expenses, additional hires and fund raise costs
EBITDA	(1,266,469)	(896,238)	41%	The above resulted in EBITDA loss increase of 41%
Less Depreciation	(565,079)	(205,723)	175%	Increased due to additional Capex
EBIT	(1,831,548)	(1,101,961)	66%	Negative EBIT increased by 66%
Less Finance Cost	(140,209)	(147,151)	(5%)	Finance Costs decreased due to conversion of CLNs to equity
EBT	(1,971,757)	(1,249,112)	58%	The above resulted in increase in negative EBT by 58%
Less Taxes	48,271	(27,827)		Impact of deferred tax provisions in Madagascar Subsidiaries
EAT	(1,923,486)	(1,276,939)	51%	EAT loss increased by 51%
Loss per share (Basic)	2.66 pence	2.61 pence	2%	Basic Loss per share increased by 2%
Loss per share (Diluted)	2.66 pence	2.61 pence	2%	Diluted Loss per share increased by 2%

The financial year saw extensive activities to develop capacity at the Company's projects and was also the first full year for the Company as an entity listed on the standard segment of the London Stock Exchange. While cost of sales increased for the reasons discussed above, the administrative expenses increased only marginally. With measures taken by the Company since end of the year for improving productivity and the additional capacities developed coming on stream in the forthcoming quarter, the Company is at a transformative stage.

Highly favourable demand matrix

· The global push for climate action and energy transition are resulting in increased consumption of flake graphite in energy storage lithium-ion batteries used in electric vehicles and other applications.

· Increasing consumption of flake graphite is also reported in applications like fire retardance, thermal management and advanced materials and composites while consumption in conventional applications continue.

· Substantial global dependence for flake graphite on Chinese sources has also created greater interest in the consumer industry for non-Chinese sources.

· The Company is not aware of any other new material production having been established during the year outside China and only a handful of developments other than by the Company are underway in the current year.

Inorganic growth

· On 17 August 2021 the Company entered into a binding acquisition agreement subject to regulatory approvals for the acquisition of the entire issued share capital of Suni Resources SA ("Suni Resources"), from ASX listed Battery Minerals Limited, holding two advanced stage flake graphite projects in Mozambique.

· The projects host c.150 million tons of reserves and resources containing c.12 million tons of flake graphite.

· The parties remain engaged to progress the transaction.

· Subject to completion of the acquisition, the Company intends to develop these projects in due course, the projects providing resource to progress the Company towards its aim of being a flake graphite producer with capacity of c.8% of global demand by 2030, estimated to be no less than 5 million tons of flake graphite by that time.

· To further strengthen its presence and to have additional projects in the country of its current operations, Madagascar, post year end, the Company entered into a conditional agreement to acquire 3 more mining permits in Madagascar covering a total area of 31.25km2 and located in the vicinity of the Company's existing projects.

Downstream and Advanced Materials

· On 10 October 2018, the Company entered into a conditional agreement for the acquisition of the then issued share capital of Tirupati Speciality Graphite Private Limited ("TSG") in a share swap deal as a forward integration prospect with an obligation to provide development capital for TSG's plans.

· The completion of the acquisition of TSG by the Company has remained subject to regulatory approvals and given the shareholdings of the founders in the Company this could only be progressed once the Company obtained a whitewash under the Takeover Code to enable the issue of the consideration shares without triggering a requirement for the founders to make a mandatory bid for the Company.

· The whitewash was approved by independent shareholders of the Company and confirmed by the Takeover Panel in late October 2021.

· Post the whitewash, it has transpired that the in terms of the relevant Indian regulation:

o  the valuation report of 2018 is time expired and for determining the swap ratio a current valuation in accordance with FEMA requirements is necessary (which must be not more than 90 days old at the time of completion of the acquisition);

o  based on an updated valuation, the acquisition can only be considered for approval by the Indian regulators once certain reported matters in relation to the Company as an ODI are ratified.

· In response, the Company is considering a number of alternative options to meet the objective of ensuring that the Company is able to continue with its plans to develop a downstream and advanced materials business. These options include:

o  continued pursuit of regulatory approval for the acquisition of TSG as its preferred option and in doing so, considering any revised valuation for TSG and changes to the terms of the acquisition to reflect this;

o  exploring the possible participation in alternative investment vehicles for investment in TSG as may be permissible with participation of the Company or its shareholders;

o  exploring possible commercial arrangements with TSG.

· During the year the Company continued to engage with TSG and reported the developments made by it on the projects it is pursuing.

· We have been advised by TSG that the progress of its business continues in accordance with its plans although this has been delayed as a result of the need to obtain the capital required for these developments.

· TSG has also advised that they have refrained from raising equity capital from other sources and the equity of TSG remains as it was at the time of the execution of the 2018 acquisition agreement. However, TSG may need to look at alternatives for its capital requirements.

· The Company considers that the technologies and expertise developed by TSG for these processes are unique and environment friendly as compared to those used by others.

· In addition to the discussions on acquisition with TSG, the Company is currently assessing the possibility of setting up downstream and advanced material manufacturing facilities in the UK in conjunction with TSG.

Other Developments

· The Company continues to progress its second phase of exploration activities with an enhanced target of c.10,000 diamond core drilling to be executed and acquired a second drilling rig for the purpose.

· The construction of its maiden 100 kilo watt small hydro power plant which commenced in the year is now nearing completion of commissioning and expected to deliver first power generation over the coming weeks.

· The Company continued to successfully integrate is environment friendly flake graphite processing technologies for its projects in Madagascar generating sand as a by-product which remains in extensive use for its internal developments.

· The Company released its maiden "Sustainability Report" covering its activities in the financial year ended on 31 March 2021 and intends to release its second "Sustainability Report" covering the year under reporting over the next months.

CHAIRMAN'S STATEMENT

As always, I extend a very warm welcome to the new members of our Company and our dedicated, long-term stakeholders. The Company has continued to evolve and expand over the past year, helping to address the increasing demand for graphite, one of the key critical minerals in the energy transition. Amidst this wider market demand, value creation remains core to our culture, and we continue to leverage our extensive graphite expertise and key principles to drive sustainable value across our stakeholder base. We have adopted four key principles of value creation since our inception, which have evolved with us and continue to guide us:

● Value creation for our shareholders:

Through carefully considered and well-crafted business strategies and plans, and adopting a culture of cost effectiveness, hard work, and delivering on targets.

● Value creation for the planet and for future generations:

By developing unique materials which have many 'green' applications and developing technologies and processes to minimise emission and waste generation.

● Value creation for our employees:

By providing opportunities for performance and learning, achieving corporate goals and personal development, to inspire quality delivery on our objectives and values.

● Value creation for the local communities we operate in:

By looking after our employees and their families and providing healthcare, education and recreational facilities and support for local communities, helping bring communities together and improving their general quality of life. 

This year was the first full year since our ordinary shares were admitted to trading on the standard segment of the main market of The London Stock Exchange ("LSE"). While we continued to evolve the development of our projects in Madagascar, we also sharpened our long term aims, targeting production of circa 8% of the global flake graphite market or 400,000 tpa by 2030. Flake Graphite and its derivatives are essential materials in technologies for achieving improved energy efficiency, e-mobility, fire hazard safety, thermal management and evolution of new age materials. We recognise its importance as a material, its market demand expectations, the economics that create a sound business model, and the opportunities it brings to us.

During the year under review, I am pleased to report that considerable progress was made towards achieving our first stage objective of establishing a globally significant flake graphite capacity at our Madagascar operations. Our leadership and team found innovative solutions for substantially insulating our progress and operations to remain robust, despite initial headwinds. A more detailed account is contained in the following sections of the report.

Tirupati Graphite has significant differentiators which provide us the key strengths in our endeavour to create value for our shareholders.

1.  We have a strong track record over our five years of operations. Vatomina was a brownfield project at incipient stage when we acquired it in 2017. When we acquired Sahamamy later that year, it was a primitive and small operation producing 20 tons of flake graphite a month. In December 2020, our equity shares were admitted to trading on the LSE when we were a small 3,000 tpa operation in Sahamamy. Due to the hard work of our workforce over the last two years we are on the cusp of reaching a globally significant capacity of 30,000 tons per annum flake graphite production. We have progressed this in spite of headwinds from the pandemic and materially adverse weather conditions. This comes from the level of commitment of the Company's leadership and operational teams, as well as our deep expertise in graphite.

2.  Since December 2020, we have raised gross proceeds of GBP 16 million, plus a recent small raise through the issue of CLN's to meet the gap funding of c. 1 million GBP to complete the above targets. The quantum of capacity created and other feats like small hydro power plant establishment, project infrastructure development, continued second phase of exploration, extensive additional human resources development for increasing capacities and more as reported by the Company on a regular basis provide a one to one comparable for peer analysis on the Company's ability to derive output at lower investments. This remains our strength with strategic decisions taken by the Company as we adapt to the ecosystem of our projects' locations. This strength creates value for our shareholders and provides a comparable to our peers.

3.  We have demonstrated positive operating margins even from very small operations, and as we grow, we are confident that we will benefit from economies of scale. We are now reaching the stage of further demonstration of these economies of scale and will continue our endeavour to remain a low-cost structure producer.

As the Energy Transition gathers pace, and the demand for graphite increases, we will continue to push ahead with our ambitious goal to be a global leader supplying graphite to 8% of the market. We look forward to updating stakeholders in due course as we make the necessary steps towards this target.

Shishir Poddar

Chair

Consolidated Statement of Comprehensive Income

For the year ended 31 March 2022

	Notes	2022	2021
		£	£
Continuing operations
Revenue	6	1,645,308	1,123,426
Cost of Sales		(1,137,196)	(488,083)
Depreciation of Operating Assets		(482,641)	(146,893)
Gross profit		25,471	488,450
Administrative expenses	7	(1,857,019)	(1,590,411)
Operating loss		(1,831,548)	(1,101,961)
Finance costs	9	(140,209)	(147,151)
Loss before income tax		(1,971,757)	(1,249,112)
Income tax	10	48,271	(27,827)
Loss for the year attributable to owners of the Company		(1,923,486)	(1,276,939)
Other comprehensive income: Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations		(361,662)	(417,693)
Total comprehensive loss for the year attributable to the Group		(2,285,147)	(1,694,632)
Earnings per share attributable to owners of the Company		Pence per share	Pence per share
From continuing operations:
Basic	11	(2.66)	(2.61)
Diluted*	11	(2.66)	(2.61)

*Note: The Dilutive instruments like warrants & CLNs issued by the company are resulting in anti-dilutive effect on EPS. Hence diluted EPS is shown as equal to basic EPS following IFRS requirements.

The accompanying accounting policies and notes are an integral part of these finance

Consolidated and Company Statement of Financial Position

As at 31 March 2022

	Notes	Group		Company
		2022	2021	2022	2021
		£	£	£	£
Non-current assets
Investments in subsidiaries	13	-	-	3,901,023	3,539,448
Property, plant and equipment	14	7,356,121	3,020,142	-	201,725
Deferred tax	24	75,242	21,182	-	-
Deposits		6,806	1,872	-	-
Intangible assets	12	3,571,196	3,682,354	40,970	40,970
Total non-current assets		11,009,365	6,725,550	3,941,993	3,782,143
Current assets
Inventory	16	732,274	461,093	-	212,581
Trade and other receivables	15	4,242,635	1,102,868	13,858,647	5,547,806
Cash and cash equivalents		1,534,023	1,644,189	1,505,410	1,491,454
Total current assets		6,508,932	3,208,150	15,364,057	7,251,841
Current liabilities
Trade and other payables	17	730,869	445,273	315,207	219,780
Borrowings	19	536,000	-	536,000	-
Total current liabilities		1,266,869	445,273	851,207	219,780
Net current assets		5,242,063	2,762,877	14,512,850	7,032,061
Non-current liabilities
Borrowings	19	473,000	1,283,000	473,000	1,283,000
Other payables	17	31,232	23,864	-	-
Total non-current liabilities		504,232	1,306,864	473,000	1,283,000
NET ASSETS		15,747,196	8,181,563	17,981,843	9,531,204
Equity
Share capital	20	2,173,497	1,871,084	2,173,497	1,871,084
Share premium account		19,975,356	10,426,988	19,975,356	10,426,988
Warrant reserve	21	130,557	130,557	130,557	130,557
Foreign exchange reserve		(776,208)	(414,546)	-	-
Retained losses		(5,756,006)	(3,832,520)	(4,297,566)	(2,897,425)
Equity attributable to owners of the Company		15,747,196	8,181,563	17,981,843	9,531,204
TOTAL EQUITY		15,747,196	8,181,563	17,981,843	9,531,204

The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the company statement of comprehensive income.

The loss for the company for the year was £1,400,141 (2021: £1,029,240).

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

The financial statements were approved by the Board of Directors on 30 September 2022 and signed on its behalf by:

Consolidated Statement of Changes in Equity

For the year ended 31 March 2022

	Attributable to the owners of the company
	Share capital	Share premium	Foreign exchange reserve	Share warrants reserve	Retained losses	TOTAL EQUITY
	£	£	£	£	£	£
Balance at 1 April 2020	1,498,132	5,328,518	3,147	-	(2,555,582)	4,274,215
Loss for the period	-	-	-	-	(1,276,938)	(1,276,938)
Other Comprehensive Income: Exchange translation loss on foreign operations	-	-	(417,693)	-	-	(417,693)
Total comprehensive income for the year:	-	-	(417,693)	-	(1,276,938)	(1,694,631)
Transactions with owners
Issue of ordinary shares	372,952	5,098,470	-	-	-	5,471,422
Warrant charge	-	-	-	130,557	-	130,557
Total Transactions with owners, recognized directly in equity:	372,952	5,098,470	-	130,557	-	5,601,979
Balance at 31 March 2021	1,871,084	10,426,988	(414,546)	130,557	(3,832,520)	8,181,563
Loss for the year	-	-	-	-	(1,923,486)	(1,923,486)
Other Comprehensive Income: Exchange translation loss on foreign operations	-	-	(361,662)	-	-	(361,662)
Total comprehensive income for the year:	-	-	(361,662)	-	(1,923,486)	(2,285,148)
Transactions with owners
Shares issued	302,413	9,548,368	-	-	-	9,850,781
Transactions with Equity owners:	302,413	9,548,368	-	-	-	9,850,781
Balance at 31 March 2022	2,173,497	19,975,356	(776,208)	130,557	(5,756,006)	15,747,196

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

Share capital - Represents the nominal value of the issued share capital.

Share premium account - Represents amounts received in excess of the nominal value on the issue of share capital less any costs associated with the issue of shares.

Retained losses - Represents accumulated comprehensive income for the year and prior years excluding translation.

Foreign exchange reserve - Represents exchange differences arising from the translation of the financial statements of foreign subsidiaries and the retranslation of monetary items forming part of the net investment in those subsidiaries.

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

Company Statement of Changes in Equity

For the year ended 31 March 2022

	Attributable to equity shareholders
	Share capital	Share premium	Share warrants reserve	Retained losses	TOTAL EQUITY
	£	£	£	£	£
Balance at 1 April 2020	1,498,132	5,328,518	-	(1,868,185)	4,958,465
Loss for the period	-	-	-	(1,029,240)	(1,029,240)
Total comprehensive income:	-	-	-	(1,029,240)	(1,029,240)
Transactions with owners
Shares issued	372,952	5,098,470	-	-	5,471,422
Warrant charge	-	-	130,557	-	130,557
Total Transactions with owners:	372,952	5,098,470	130,557	-	5,601,979
Balance at 31 March 2021	1,871,084	10,426,988	130,557	(2,897,425)	9,531,204
Loss for the year	-	-	-	(1,400,141)	(1,400,141)
Total comprehensive income:	-	-	-	(1,400,141)	(1,400,141)
Transactions with owners
Shares issued	302,413	9,548,368	-	-	9,850,781
Total Transactions with Equity owners:	302,413	9,548,368	-	-	9,850,781
Balance at 31 March 2022	2,173,497	19,975,356	130,557	(4,297,566)	17,981,843

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.

Consolidated Statement of Cash Flows

For the year ended 31 March 2022

		2022	2021
		£	£
Cash used in operating activities
Loss for the year		(1,923,486)	(1,276,940)
Adjustment for:
Depreciation		565,079	205,723
Convertible loan note costs ("CLN")		-	21,910
Share based payments expense		-	49,627
Finance costs		140,209	147,151
Income tax		(48,271)	27,827
Working capital changes:
Increase in inventories		(271,181)	(310,987)
(Increase)/Decrease in receivables		(547,603)	(693,559)
Increase in payables		285,596	17,402
Increase/(Decrease) in DTA & Other assets		(10,723)	27,827
Net cash used in operating activities		(1,810,380)	(1,783,357)
Cash flows from investing activities:
Purchase of tangible assets		(5,151,562)	(1,245,230)
Advance for Capital Assets		(2,592,163)	(436,631)
Net cash from investing activities		(7,743,725)	(1,681,861)
Cash flows from financing activities*
Proceeds from Shares issued (net of costs)		9,576,781	5,512,352
Proceeds from issue of Convertible loan notes		-	513,000
Cost of issue of Convertible loan notes		-	(21,910)
Finance cost		(140,209)	(147,151)
Increase / (decrease) in Lease & other long-term liability		7,368	(793,524)
Net cash from financing activities		9,443,940	5,062,767
Net increase in cash and cash equivalents		(110,166)	1,597,549
Cash and cash equivalents at beginning of period		1,644,189	46,640
Cash and cash equivalents at end of period		1,534,023	1,644,189

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

*For reconciliation of cash and non-cash items from financing activities refer Note No. 19 (Convertible loan notes) & note 20 (share capital).

Company Statement of Cash Flows

For the year ended 31 March 2022

		2022	2021
		£	£
Loss for the year		(1,400,141)	(1,029,240)
Adjustment for:
Increase in inventories		212,580	(212,580)
Share based payments		-	49,627
CLN issuance cost		-	21,910
Finance costs		140,209	147,151
Working capital changes:
Increase in receivables		(5,718,677)	(2,837,978)
Increase /(decrease) in payables		95,427	(213,576)
Net cash used in operating activities		(6,670,602)	(4,074,686)
Cash flows from investing activities:
Sale of tangible assets		201,725	342,484
(Purchase)/sale of intangible assets		-	112,031
Advance for Capital Assets		(2,592,163)	-
Investment in subsidiaries		(361,575)	-
Net cash from investing activities		(2,752,013)	454,515
Cash flows from financing activities*
Shares issued		9,576,781	5,512,352
Proceeds from issue of convertible loan notes		-	513,000
CLN issue cost		-	(21,910)
(decrease) in long term liabilities		-	(779,621)
Finance costs		(140,209)	(147,151)
Net cash from financing activities		9,436,572	5,076,670
Net increase in cash and cash equivalents		13,956	1,456,499
Cash and cash equivalents brought forward		1,491,454	34,955
Cash and cash equivalents carried forward		1,505,410	1,491,454

*For reconciliation of cash and non-cash items from financing activities refer Note No. 19 (Convertible loan notes) & note 20 (share capital).

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

Notes to the Financial Statements

1.  General information

Tirupati Graphite plc (the "Company") is incorporated in England and Wales, under the Companies Act 2006. The registered office address is given on Company Information page.

The Company is a public company, limited by shares. On 14 December 2021 the ordinary shares of the Company were admitted on the official list of the FCA and to trading on the main market of the London stock exchange through standard listing.

The principal activities of the Company and its subsidiaries (the "Group") and the nature of the Group's operations are set out in the Strategic Report.

These consolidated financial statements are presented in pounds sterling since that is the currency of the primary economic environment in which the Group and Company operates. 

2.  Adoption of new and revised International Accounting Standards as adopted by UK (IFRSs)

New standards

The Group and Company have adopted all recognition, measurement, and disclosure requirements of IFRS, including any new and revised standards and Interpretations of IFRS, in effect for annual periods commencing on or after 1 April 2021. The adoption of these standards and amendments did not have any material impact on the financial result of position of the Group and Company.

Standards which are in issue but not yet effective:

At the date of authorisation of these financial statements, the following Standards and Interpretation, which have not yet been applied in these financial statements, were in issue but not yet effective.

Standard or interpretation	Description	Effective date
IAS 1	Amendments - Classification of Liabilities as Current or Non-Current	1 January 2023
IAS 16	Amendments - Property, Plant and Equipment	1 January 2022
IAS 8	Amendments - Definition of Accounting Estimates	1 January 2023
IAS 1	Amendments - Disclosure of Accounting Policies	1 January 2023
IFRS	Annual improvements to IFRS Standards 2018-2020	1 January 2022

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

3.  Significant accounting policies

Basis of preparation

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

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

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

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

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Business Review and Strategic Report Sections. The financial position of the Group and the Company, their cash flows and liquidity positions are contained in the financial statements. The expected evolution of the business and significant post year end events is also described in the business review and strategic reports. In addition, the Annual Report discloses the Group's objectives, policies and processes for managing its business and capital; its financial risk management objectives; details of its financial instruments; and its exposure to credit and liquidity risk.

Since its Initial Public Offering and admission for trading on the standard segment of the London Stock Exchange the company embarked on the planned path of developing significant flake graphite mining and processing capacities across its two projects in Madagascar. During the year under review the company commissioned a 9,000 tpa new facility at its Vatomina projects enhancing its installed capacity from the previous 3,000 tpa to 12,000 tpa. It also initiated extensive infrastructure development across both its projects and initiated development of the next 18,000 tpa facility at its Sahamamy project. To meet its investment and working capital requirements it raised an additional £10,000,000 in equity during April 2021.

During the year under review, while the operations of Sahamamy continued amidst limitations, the debottlenecking of the new Vatomina plant was undertaken in the second half year period, during which the project produced sellable products too. Owing to extreme climatic conditions in respect of constant rainfall, the road infrastructure of both the Vatomina and Sahamamy projects remained challenging. Moreover, the new connecting road to Sahamamy project could not remain constantly operational. In spite of all the limitations, the company recorded total production of 2,996 tons and sales 2,662 tons from across the two projects. The difficulties in logistics remained a challenge and the company decided to split its processing plant in a manner that the transport of ore from mining areas to the processing plant is eliminated and accordingly by mid of August 2022, required relocations have been made and both plants put in operations. The rains having receded by this time too have enabled rebuilding of the roads and as of writing of this report all connectivity have been restored.

As per the company's plans, it started construction for its next 18,000 tpa mining and processing facility at its Sahamamy project which is expected to complete, commission and ramp up production from Q1 2023. Investment required for the development of this has been substantially made. All mine and plant equipment have either arrived at the project sites or have been paid for and under dispatch from origin.

In August 2022, the company engaged with its brokers for raising the gap funding required for completing the development of its projects to 30,000tpa. Additionally, the company also raised funds for the capital commitments for the acquisition of Suni Resources SA, a company incorporated in Mozambique holding two advanced stage flake graphite projects. An amount of £3,000,000 gross has been successfully raised by the company to meet the gap with£1,000,000 budgeted for the investment and working capital requirements for its current requirements and balance after costs for the acquisition.

 On the operations account, for the year under review, the company generated gross Profits of £ 840,060 representing c. 51% of the revenues in spite of the fact that the new Vatomina project was only in the initial stages and operations remained impacted due to climatic conditions, mitigation of which have been effectively implemented for the future by the time of writing of this report. Going forward, as the production from the current 12,000 tpa capacity increases, the company expects to improve the gross margins. The year under review also represented the first full year of operations as a quoted company and with the management team for the expanding capacity of 30,000 tpa having been put in place during the year. Thus, the increased Admin costs for the year under review substantially captures the ongoing costs of the company.  The company therefore believes that, subject to force majeure, from H2 of the current financial year 1 April 2022 to 31 March 2023, the company shall evolve to positive bottom line, has secured its financial needs for its current capacity under creation and operations ongoing, has an ongoing ability to meet its any further capital needs in adverse circumstances and remains financially secured.

Taking in to account the comments above, the Directors have, at the time of approving the financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, given its current cash resources, installed capacities and operations, are expected to add further additional operating cash flows.

Where the Company is unable to meet its investment needs from the internal accruals coupled with its current cash resources and not raise additional funds in the foreseeable future for its investment plans, the Directors would implement delays in investment for additional capacities and / or cost and cash saving measures and continue to generate revenues in order to meet its liabilities as they fall due. Therefore, they continue to adopt the going concern basis of accounting in preparing the financial statements.

Notwithstanding the loss incurred during the year under review, the Directors have prepared and reviewed a cash flow forecast. The forecast contains certain assumptions about the level of future sales and margins achievable. The Directors have considered various future scenarios in their forecasting to enable them to adequately consider whether the Group has adequate resources to continue in operational existence and remain of the view that the company has adequate cash resources, business prospects and access to capital markets to remain a going concern.

Basis of consolidation

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

The Group consists of Tirupati Graphite plc and its wholly owned subsidiaries Tirupati Resources Mauritius, Tirupati Madagascar Ventures and Establissements Rostaing.

In the company financial statements, investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

The consolidated financial statements incorporate those of Tirupati Graphite plc and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 31 March 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances, and unrealised gains on transactions between Group companies are eliminated on consolidation.

Segment reporting

An operating segment is a component of the Group that engages in business activity from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with the Group's other components. All operating segments' operating results, for which discrete financial information is available, are reviewed regularly by the Group's Board to make decisions about resources to be allocated to the segment and assess its performance. The Group reports on a three-segment basis - Holding Companies Expenses, Mining Exploration and Development and Graphite Mining Extraction.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods or services supplied in course of ordinary business, stated net of discounts, returns and value added taxes. The Group recognises revenue in accordance with IFRS 15 at either a point in time or over time, depending on the nature of the goods or services and existence of acceptance clauses.

Revenue from the sale of goods is recognised when delivery has taken place and the performance obligation of delivering the goods has taken place. The performance obligation of products sold are transferred according to the specific delivery terms that have been formally agreed with the customer, generally upon delivery when the bill of lading is signed as evidence that they have accepted the product delivered to them.

Foreign currencies

For the purposes of the consolidated financial statements, the results and financial position of each Group company are presented in pounds sterling, which is the functional currency of the Company. At balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Income and expense items are translated at the average exchange rates for the period.

Taxation

Income tax represents the sum of current tax and deferred tax.

Current tax

Current tax is based on taxable profit or loss for the year. Taxable profit or loss differs from net profit or loss as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

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

Deferred tax

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

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

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised based on tax laws and rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Current tax and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

Assets Under Construction

All expenditure on the construction, installation or completion of infrastructure facilities is capitalised as construction in progress within "Assets Under Construction". Once production starts, all assets included in "Assets Under Construction" will be transferred into "Property, Plant and Equipment". It is at this point that depreciation/amortisation commences over its useful economic life. 

Assets Under Construction are stated at cost. The initial cost comprises transferred Mining Exploration and Evaluation assets, construction costs, infrastructure facilities, any costs directly attributable to bringing the asset into operation, the initial estimate of the rehabilitation obligation, and, for qualifying assets, borrowing costs. Costs are capitalised and categorised as construction in progress.

Property, Plant and Equipment

Property, Plant and Equipment in the course of construction for production, supply or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment loss. Costs includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group's accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Fixtures and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method, on the following bases:

Plant and machinery  10%-25% per annum

Infrastructure and fixtures  10%-25% per annum 

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

An item of Property, Plant and Equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or scrappage of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.

Development costs

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if all of the following conditions have been demonstrated:

● the technical feasibility of completing the intangible asset so that it will be available for use or sale;

● the intention to complete the intangible asset and use or sell it;

● the ability to use or sell the intangible asset;

● how the intangible asset will generate probable future economic benefits;

● the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

● the ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Mining Exploration and Evaluation

Mining Exploration and Evaluation costs are carried forward in respect of areas of interest where the consolidated entity's rights to tenure are current, and where these costs are expected to be recouped through successful development into production from the area of interest or by sale or disposal of the project.  Alternatively, these costs are carried forward while active and significant exploration and evaluation costs being incurred. Intangible assets comprise of exploration costs purchased as part of the acquisition in prior years continuing in relation to the areas of interest and it is too early to make reasonable assessment of the existence or otherwise of economical production from the area of interest.

Costs incurred by the Company on behalf of its subsidiaries and associated with exploration and evaluation activities are capitalised on a project-by-project basis pending commencement of production from the project.  Costs incurred include appropriate technical and administrative expenses but not general overheads. If the exploration and evaluation activities lead to economic production from the project, the related expenditures will be written-off over the estimated life of 10 years (useful economic life) on straight line method.

Impairment reviews are carried out regularly by the Directors of the Company. Where a project is abandoned, or is considered to be of no further commercial value, the related costs will be written off to the Statement of Comprehensive Income. 

The recoverability of these costs is dependent upon the exploration and evaluation activities successfully transitioning into production from the project, the ability of the Group to obtain necessary financing to complete the development of the project and derive future profitable production or proceeds from the sale or disposal of the project. 

Intangible assets (i.e. Exploration and evaluation assets) recorded at fair-value on business combination

Exploration assets which are acquired as part of a business combination are recognised at fair value in accordance with IFRS 3. When a business combination results in the acquisition of an entity whose only significant assets are its exploration asset and/or rights to explore, the Directors consider that the fair value of the exploration assets is equal to the consideration. Any excess of the consideration over the capitalised exploration asset is attributed to the fair value of the exploration asset.

Exploration and evaluation assets are recorded and held at cost

Exploration and evaluation assets are not subject to amortisation, as such at the year-end all intangibles held have an indefinite life, but are assessed annually for impairment. The assessment is carried out by allocating exploration and evaluation assets to cash generating units ('CGU's'), which are based on specific projects or geographical areas. The CGU's are then assessed for impairment using a variety of methods including those specified in IFRS 6. Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Income Statement.

Derecognition of intangible assets

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Investments

Investments in subsidiaries are held at cost less any impairment.

Financial instruments

Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

Initial recognition and measurement

The Group applies IFRS 9 "Financial Instruments" and elected the simplified approach method.

The Group classifies its financial assets in the following categories: loans and receivables and fair value through profit and loss. The classification depends on the nature of the assets and the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition and this designation at every reporting date.

Loans and receivables

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

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

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

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

Cash and cash equivalents

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

Financial assets - impairment

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

Non-financial assets - impairment

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

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

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

Financial liabilities and equity instruments issued by the Group

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issued costs.

Trade payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised costs, using the effective interest rate method.

Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

Borrowings

These financial liabilities are all non-interest bearing (except borrowing made through convertible loan notes) and are initially recognised at amortised costs and include the transaction costs directly related to the issuance. The transaction costs are amortised using the effective interest rate method over the life of the liability.

Financial liabilities at Fair Value Through Profit or Loss ("FVTPL")

Financial liabilities at FVTPL comprise of the Company's convertible loan notes payable. Financial liabilities are classified as at FVTPL when the financial liability is (i) contingent consideration that may be paid by an acquirer as part of a business combination to which IFRS 3 applies, (ii) held for trading, or (iii) it is designated as at FVTPL.

A financial liability is classified as held for trading if:

● it has been incurred principally for the purpose of repurchasing it in the near term; or

● on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or

● it is a derivative that is not designated and effective as a hedging instrument.

A financial liability other than a financial liability held for trading or contingent consideration that may be paid by an acquirer as part of a business combination may be designated as at FVTPL upon initial recognition if:

● such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

● the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

● it forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the 'other gains and losses' line item in the income statement.

Other financial liabilities

Other financial liabilities are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, as set out above, with interest expense recognised on an effective yield basis.

Convertible Loan Notes (CLNs)

Convertible Loan Notes are recorded at their issue price and are carried at their face value. Any interest due on these CLNs is recorded on accrual basis. On conversion/redemption the face value of converted CLNs is reduced from the total carried value. Interest at 12% p.a. is paid semi-annually in June and December.

Share based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and condition of equity settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cancellations or settlements are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

As a result of the increase in share price and the impact of the estimation of share-based payments the Group has now recognised an expense for the outstanding share options and warrants.

4.  Critical accounting estimates and judgements

The preparation of financial statements in conformity with adopted IFRSs requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or action, actual results ultimately may differ from those estimates.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below.

a)    Impairment of assets

The Company is required to test, on an annual basis, whether its non-current assets have suffered any impairment. Determining whether these assets are impaired requires an estimation of the value in use of the cash-generating units to which the assets have been allocated. The value in use calculation requires the Directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate to calculate the present value. Subsequent changes to the cash generating unit allocation or to the timing of cash flows could impact on the carrying value of the respective assets.

Intragroup receivables

The Company assessed the recoverability of intragroup receivables, and it does not require any impairment adjustment in current financial year.

Production assets

The Group is required to perform an impairment review on its production assets. The calculation is most sensitive to the following assumptions:

• Production volumes

• Sales volumes

• Graphite prices

• Operating overheads

• Inventory Estimated production volumes are based on the production capability of the plant and estimated customer demand.

The directors have assessed the value of its production assets. In their opinion there has been no impairment loss to these intangible assets in the period.

Useful economic lives of property, plant and equipment

The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of the assets, taking into account that the assets are not used throughout the whole year due to the seasonality of the locations. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on economic utilisation and the physical condition of the assets. See note 14 for the carrying amount of the property plant and equipment and note 3 for the useful economic lives for each class of assets.

Impairment of intangible assets

Exploration and evaluation costs have a carrying value at 31 March 2022 of £3,571,196 (2021: £3,682,354) Such assets have an indefinite useful life as the Group has a right to renew exploration licences and the asset is only amortised once extraction of the resource commences. Management tests for impairment annually whether exploration projects have future economic value in accordance with the accounting policy stated in Note 3. Each exploration project is subject to an annual review by either a consultant or senior company geologist to determine if the exploration results returned during the period warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long term graphite prices, anticipated resource volumes and supply and demand outlook. In the event that a project does not represent an economic exploration target and results indicate there is no additional upside a decision will be made to discontinue exploration; an impairment charge will then be recognised in the Income Statement.

The directors have assessed the value of its exploration assets. In their opinion there has been no impairment loss to these intangible assets in the period.

Provision for restoration costs

The Company makes good any provision for the cost of rehabilitating the end-of-life production sites and related production facilities at the same time as production. The rehabilitation costs are charged to the Income statement as incurred. As is privy to the Group's environment and sustainability initiatives management take note of the Environment Commitment Book which underlines in-county regulations set out by the Malagasy Government, and the environmental conditions within the mining permit, which covers the Group's obligations towards restauration and rehabilitation. The group has adopted a principle of ongoing rehabilitation activities. The directors do not believe any further provision Is required because the project areas in Madagascar are located within a moderately undulating area and the Company's mine planning takes this into consideration the topographic advantage. In addition, the nature of the deposit and pit design is such that rehabilitation and restoration of mining areas is an ongoing and concurrent activity undertaken by the Group. In line with the requirements of the licence, they have already incurred costs relating to the construction of anti-erosion infrastructures, dam cleaning, wall making, soil restoration and some reforestation of areas.  

Following limited and small-scale production to date, the Group's operations after the year end will significantly increase and management will therefore undertake another detailed analysis of their environmental and restoration obligations following increased activity in line with its second Sustainability Report which shall be formulated against the Global Reporting Initiative (GRI) Index, one of leading industry benchmarks which has been adopted by the Company. The Sustainability Report will provide deeper insights on the various mechanisms and steps taken by the Company to meet their legal obligations and improve the lives of people in some of the most deprived regions and its workplaces, reduce environmental impacts and to have environment friendly operations across the various legs of its business. The Sustainability Report will also highlight the goals and targets set by the Company for the longer-term and the green technologies developed by the Company.  Once this exercise is completed, management will review the findings and assess whether any activities are to be performed in this regard.

5.  Segmental analysis

The Management believes, under IFRS 8 - "Segmental Information", the Group operated in three primary business segments in 2022, being Holding Companies Expenses, Mining Exploration and Development and Graphite Mining Extraction.

Segmentation by continuing businesses

Segment results

	2022	2021
	£	£
Revenue to external customers
Graphite Mining Extraction	1,645,308	1,123,426
(Loss) before income tax
Holding Companies Expenses	(1,400,142)	(1,002,218)
Mining Exploration and Development	-	(239,555)
Graphite Mining Extraction	(571,615)	(14,957)
Net assets/(liabilities)
Holding Company Expenses	19,381,985	9,120,707
Mining Exploration and Development	-	(698,823)
Graphite Mining Extraction	(3,634,789)	(237,415)

Segmentation by geographical area:

	2022	2021
	£	£
Revenue to external customers
UK	1,645,308	1,123,019
Mauritius	-	-
Madagascar	-	407
(Loss) before income tax
UK	(1,400,142)	(1,036,857)
Mauritius	-	785
Madagascar	(571,615)	(220,658)
Net assets
UK	19,381,985	9,534,110
Mauritius	-	159,159
Madagascar	(3,634,789)	(1,508,800)

6.  Revenue from contracts with customers

The Group & the company derives revenue from the transfer of goods at a point in time in the following major product lines and geographical regions:

2022	USA	Europe	Asia	Total
Revenue from external customers	34,000	224,033	1,387,275	1,645,308
Timing of recognition:
At a point in time	34,000	224,033	1,387,275	1,645,308

2021	USA	Europe	Asia	Total
Revenue from external customers	19,565	211,584	892,277	1,123,426
Timing of recognition:
At a point in time	19,565	211,584	892,277	1,123,426

Following customers constituted more than 10% of the revenue, their respective share of revenue is mentioned below:

	2022	2021
	£	£
Customer A	224,033	184,134
Customer B	488,330	239,793
Customer C	287,247	238,602
Customer D	430,429	169,567

Revenues of approximately £1,430,039 (2021: £832,096) are derived from 4 customers who each account for greater than 10% of the group's & company's total revenues.

7.  Expenses by nature

	2022	2021
	£	£
The following items have been included in arriving at operating loss
Depreciation on other assets	565,079	205,723
Net foreign exchange loss	(95,171)	(22,058)
PR/IR Expenses	131,885	119,181
Professional Fees	124,454	55,421
Auditor's remuneration has been included in arriving at operating loss as follows:
Fees payable to the Company's auditor and their associates for the audit of the  Company and consolidated financial statements	45,000	45,000
Fees payable to the Company's auditor and its associates for other services:
Corporate finance services	-	50,000

8.  Employee information

The average monthly number of employees (including Executive Directors) was:

	2022	2021
Number of employees for the year:	290	203
	£	£
Wages & salaries (for the above employees)	1,118,892	930,707
Social security costs	40,485	12,521
Share based payments	-	68,739
	1,159,377	1,011,967

Directors' remuneration and transactions

	2022	2021
	£	£
Directors' remuneration
Emoluments and fees	764,000	634,849
	£	£
Remuneration of the highest paid director:
Emoluments and fees	320,000	240,000
Payment in lieu of retirement benefits	30,000	24,000
Bonus	264,000	198,000
Share based payments	-	20,507

Refer to Directors Remuneration Report for further information in respect of Directors' remuneration.

9.  Finance cost

	2022	2021
	£	£
Interest Expense	140,209	147,151

10.  Income tax

	2022	2021
	£	£
Loss on ordinary activities before tax	(1,971,757)	(1,249,113)
Loss on ordinary activities multiplied by weighted average tax rate	(384,429)	(249,823)
Minimum tax in Madagascar	5,946	-
Tax on disallowed items	157,164	83,475
Tax losses carried forward (deferred tax not recognised)	173,048	194,175
Net tax (credit) )/ charge	(48,271)	27,827

Current tax charge	5,946	-
Deferred tax (credit)/charge	(54,217)	27,827
Net tax (credit)/ charge	(48,271)	27,827

The Group has tax losses available to be carried forward and used against trading profits arising in future periods of £4,371,054 (2021: £2,660,796). A deferred tax asset of £837,841 (2021: £532,159) calculated at a weighted average rate of 20% has not been recognised in respect of the tax losses carried forward on the basis that there is insufficient certainty over the level of future profits to utilise against this amount.

11.  Earnings per share

Basic and diluted

Earnings per share is calculated by dividing the loss attributable to the equity holders of the Company by the weighted average number of Ordinary shares in issue during the period.

	2022	2021
Continuing operations:
Loss attributable to equity holders of the Company (£)	(2,285,147)	(1,694,632)
Weighted average number of ordinary shares in issue	85,876,108	64,883,546
Loss per share (pence)	(2.66)	(2.61)

	2022	2021
Diluted number of ordinary shares in issue	92,494,422	71,357,375

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

12.  Intangible Assets

Group
Cost		£
At 1 April 2020		3,691,243
Additions		-
Forex Change		8,889
At 1 April 2021		3,682,354
Impairment		-
Forex Change		(111,158)
At 31 March 2022		3,571,196

Accumulated amortisation
At 1 April 2020		-
Charge for the year		-
At 1 April 2021		-
Charge for the year		-
At 31 March 2022		-
Net book value
At 1 April 2020		3,691,243
At 1 April 2021		3,682,354
At 31 March 2022		3,571,196

Intangible assets comprise exploration and evaluation costs. Exploration and evaluation assets are all internally generated, except for those acquired at fair value as part of a business combination.

The projects in Madagascar have a current JORC compliant mineral resource of 25.1 million tonnes. Further exploration across the two projects is ongoing. There are no JORC (Joint Ore Reserves Committee) or non-JORC compliant resource estimates available to enable value in use calculations to be prepared. The Directors therefore undertook an assessment of the following areas and circumstances that could indicate the existence of impairment:

· The Group's right to explore in an area has expired, or will expire in the near future without renewal;

· No further exploration or evaluation is planned or budgeted for;

· A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a commercial level of reserves; or

· Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.

Following their assessment, the Directors concluded that no impairment charge was required at 31 March 2022

13.  Investments

Company		Shares in group undertaking
Cost		£
At 1 April 2020		3,539,448
At 1 April 2021		3,539,448
Addition		361,575
At 31 March 2022		3,901,023
Net book value
At 1 April 2020		3,539,448
At 1 April 2021		3,539,448
At 31 March 2022		3,901,023

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

Subsidiaries

Tirupati Resources Mauritius
Registered: C/o Alliance Financial Services Ltd, Level 2, Standard Chartered Tower, Cybercity, Ebene, Republic of Mauritius
Nature of business: Holding and administrative entity
	%
Class of share	Holding
Ordinary shares	100*

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

Tirupati Madagascar Ventures
Registered: Lot II N 95  SB BIS E, Ambatobe, Antananarivo 103, Madagascar
Nature of business:  Graphite mining extraction
	%
Class of share	Holding
Ordinary shares	98*

*indirectly through Tirupati Resources Mauritius. 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 on behalf of the company.

Establissements Rostaing
Registered: Lot II N 95  SB BIS E, Ambatobe, Antananarivo 103, Madagascar
Nature of business:  Graphite mining extraction
	%
Class of share	Holding
Ordinary shares	100*

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

14.  Property, plant and equipment

Group	Plant and Machinery	Infrastructure & Fixtures*	Assets under construction	Total
	£	£	£	£
Cost
At 1 April 2020	1,249,624	116,819	902,532	2,268,975
Additions	735,950	294,976	217,210	1,248,136
At 1 April 2021	1,985,574	411,795	1,119,742	3,517,111
Additions	3,305,123	1,593,029	-	4,898,152
Reclassification	487,713	-	(487,713)	-
At 31 March 2022	5,778,410	2,004,824	632,029	8,415,263
At 1 April 2020	254,361	33,979	-	288,340
Depreciation	146,893	58,830	-	205,723
At 1 April 2021	401,254	92,809	-	494,063
Depreciation	482,641	82,438	-	565,079
At 31 March 2022	883,895	175,247	-	1,059,142
Carrying amount
As at 1 April 2021	1,584,320	318,986	1,116,836	3,020,142
As at 31 March 2022	4,894,515	1,829,577	632,029	7,356,121
Company			Assets under construction £	Total £
Cost			£
At 1 April 2020			544,209	544,209
Additions			(339,578)	(339,578)
At 1 April 2021			204,631	204,631
Transfer to Subsidiary			(204,631)	(204,631)
At 31 March 2022			-	-
At 1 April 2020			-	-
Depreciation			-	-
At 1 April 2021			-	-
Depreciation			-	-
At 31 March 2022			-	-
Carrying amount
As at 1 April 2021			204,631	204,631
As at 31 March 2022			-	-

Note: Infrastructure & fixtures includes mine development assets 2022: £737,396 (2021: Nil) and right of use assets 2022: £ 51,998 (2021: £ 32,432)

15.  Trade and other receivables

	Group		Company
	2022	2021	2022	2021
	£	£	£	£
Trade receivables	532,370	721,534	532,370	566,646
Advance for Capex	2,592,163	-	2,592,163	-
VAT Refunds	942,458	-	12,274	-
Other debtors	106,423	381,334	2,898	87,846
Prepayments	69,220	-	99,221	-
Amounts owed by group undertakings	-	-	10,619,721	4,893,314
	4,242,634	1,102,868	13,858,647	5,547,806

Trade receivables are amounts due from customers for goods sold in the ordinary course of business. They are generally due for settlement within 30 days and therefore are all classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method. All sales of the company are in USD.

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on the days past due.

At 31 March 2022	Current	More than 30 days	More than 60 Days	More than 90 days	Total
	£	£	£	£	£
Expected loss rate	0%	0%	0%	80%	0%
Gross trade receivables	532,370	-	-	-	-
Loss allowance	-	-	-	-	-

At 31 March 2021	Current	More than 30 days	More than 60 Days	More than 90 days	Total
	£	£	£	£	£
Expected loss rate	0%	0%	0%	80%	0%
Gross trade receivables	721,534	-	-	-	-
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 31 March 2021 & 31 March 2022.

16.  Inventories

	Group
	2022	2021
Cost and net book value	£	£
Raw materials and consumables	563,923	222,352
Finished and semi-finished goods	168,351	26,160
Goods in Transit	-	212,580
	732,274	461,092

17.  Trade and other payables

Current:

	Group		Company
	2022	2021	2022	2021
	£	£	£	£
Trade payables	548,906	403,361	188,534	146,213
Social security and other taxes	18,817	3,422	-	-
Amounts due from group	-	-	-	35,077
Accruals	163,146	38,490	126,673	38,490
	730,869	445,273	315,207	219,780

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

Non-current:

	Group		Company
	2022	2021	2022	2021
	£	£	£	£
Lease liability	31,232	23,864	-	-
	31,232	23,864	-	-

Lease liability is recognized in accordance with requirements of IFRS 16. It requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments.

Additional disclosure as per IFRS 16 is as follows:

	Group
	2022	2021
	£	£
Addition in lease liability & ROU asset	21,521	-
Interest charged during the year	6,590	3,125
Amortization of Right to use asset (Incl. in Infrastructure & fixtures)	1,955	1,517

18.  Provisions

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

19.  Borrowings

During this financial year the convertible loan note instrument ("CLN") £274k were converted in the equity. In the year ended 31^st March 2022, Interest on the CLN is chargeable at 12%.

	2022	2021
Within one year	536,000	-
Between 2 and 5 years	473,000	1,283,000
	1,009,000	1,283,000

Following table denotes changes in borrowings

	2022	2021
Opening Balance as on 1st April	1,283,000	810,000
Issued during the year	-	513,000
Redeemed/Converted during the year	(274,000)	(40,000)
Closing Balance as on 31st March	1,009,000	1,283,000

The loan notes shall be redeemed by the Company, at any time after the first anniversary of an Initial Public Offering up to the Maturity Date or by the Noteholder or the Company, on the Maturity Date being 3 years from date of issue.

Conversion can be made 15 Business Days after the date of completion of a successful Initial Public Offering to convert all of the Notes outstanding into fully paid Ordinary Shares at a price equal to the price per Share paid by investors participating in the Initial Public Offering.

20.  Share capital

	2022	2022	2021	2021
	Number	£	Number	£
Allotted, called up and fully paid
Ordinary shares of 2.5p each	86,939,832	2,173,497	74,843,323	1,871,084

Shares were issued during the year as follows:

	Cost of issue (£)	Number of shares issued
Shares issued from a placing on 15 April 2021	498,521	11,111,111
Shares issued on conversion of CLNs on 28 July 2021	-	253,333
Shares issued on conversion of CLNs on 29 November 2021	-	355,556
Shares issued from a placing on 04 January 2022	-	376,509
	498,521	12,096,509

21.  Share based payments & warrant reserve

During the first two years after incorporation of the Company, with the consent of its Board and senior management team, the Company adopted a minimal approach to incentives and provided no bonuses to the executive management team or the Board. However, to show the appreciation of the Company, the Board was provided with an annual incentive package in the form of warrants to subscribe for equity shares of the Company at a premium to the prices at which Ordinary Shares have been subscribed when the Company raised equity in the relevant period. The Company has also provided broker warrants to Optiva, on a success basis, for the fundraising activities executed by it prior to Admission. In addition to this, the Company has also issued warrants to some CLN subscribers for funds raised before admission of the Company to the LSE.

All warrants are equity-settled, in accordance with IFRS 2, by award of warrants to acquire ordinary shares or award of ordinary shares. The fair value of these awards has been calculated at the date of grant of the award. The fair value of the warrants granted was calculated using a Black-Scholes model. Changes in the assumptions can affect the fair value estimate of a Black-Scholes model.

Following are the key assumptions used to estimate the fair value of the warrants issued:

a)  Expected Volatility: 20%

b)  Contractual Life of the warrant: 3 years

c)  Risk free interest rate: 0.38% p.a.

Following warrants over ordinary shares have been granted by the Company and are outstanding as on 31 March 2022:

Grant Date	Expiry Date	Exercise Price (£)	Number of warrants exercisable and outstanding
31 December 2017	31 December 2022	0.300	1,000,000
31 December 2018	31 December 2022	0.400	1,520,000
31 March 2019	31 March 2023	0.400	480,000
31 December 2019	31 December 2023	0.400	1,620,000
26 February 2020	26 February 2023	0.675	36,000
31 March 2020	31 March 2023	0.400	960,000
15 June 2020	15 June 2023	0.675	222,222
15 June 2020	15 June 2023	0.900	222,222
30 June 2020	30 June 2023	0.675	22,800
16 July 2020	12 August 2022	0.525	41,143
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			6,630,491

Following table denotes changes warrants outstanding

	2022	2021
Opening Balance as on 1st April	6,784,778	6,492,609
Issued during the year	222,222	792,269
Exercised during the year	(376,509)	(500,100)
Closing Balance as on 31st March	6,630,491	6,784,778

During the year 2022, the warrants were issued to the company's brokers and costs relating to them has been netted from share premium account.

Though the Company had committed to provide these warrants to the parties mentioned in the table below since financial year 2017-18, the warrant instrument under which these warrants are approved was finalized and formally approved by the board in the current financial year the warrant reserve was created first time in the current financial year, as the charge relating to previous periods was immaterial to the Company.

Warrants issued to	Number of warrants outstanding	Warrant reserve £
Brokers	606,047	16,457
Members of the Board & executive management	5,580,000	68,739
CLN Investors	444,444	45,361
Total	6,630,491	130,557

22.  Financial instruments

Financial risk management

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

● Capital risk management

● Market risk

● Credit risk

● Liquidity risk

● Currency risk

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

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

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

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

Capital risk management

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

The capital structure of the Group consists of net debt, which includes loans, cash and cash equivalents, and equity attributable to equity holders of the company, comprising issued capital and retained earnings.

Fair value of financial assets and liabilities for the group

	Valuation,	Book value	Fair value	Book value	Fair value
	Methodology	2022	2022	2021	2021
	and hierarchy	£	£	£	£
Financial assets
Cash and cash equivalents	(a)	1,534,023	1,534,023	1,644,189	1,644,189
Loans and receivables, net of impairment	(a)	4,242,635	4,242,635	1,102,868	1,102,868
Total at amortised cost		5,776,658	5,776,658	2,747,057	2,747,057
Financial liabilities
Trade and other payables	(a)	730,869	730,869	445,273	445,273
Borrowings and provisions	(a)	1,009,000	1,009,000	1,283,000	1,283,000
Lease Liabilities	(a)	31,232	31,232	23,864	23,864
Total at amortised cost		1,771,101	1,771,101	1,752,137	1,752,137

Fair value of financial assets and liabilities for the company

	Valuation,	Book value	Fair value	Book value	Fair value
	Methodology	2022	2022	2021	2021
	and hierarchy	£	£	£	£
Financial assets
Cash and cash equivalents	(a)	1,505,410	1,505,410	1,491,454	1,491,454
Loans and receivables, net of impairment	(a)	13,858,647	13,858,647	5,547,806	5,547,806
Total at amortised cost		15,364,057	15,364,057	7,039,261	7,039,261
Financial liabilities
Trade and other payables	(a)	315,207	315,207	219,780	219,780
Borrowings and provisions	(a)	1,009,000	1,009,000	1,283,000	1,283,000
Total at amortised cost		1,324,207	1,324,207	1,502,780	1,502,780

Valuation, methodology and hierarchy

(a)  The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables and deferred income, and Borrowings are all stated at book value. All have the same fair value due to their short-term nature.

Market risk

Market price risk arises from uncertainty about the future valuations of financial instruments held in accordance with the Group's investment objectives.  These future valuations are determined by many factors but include the operational and financial performance of the underlying investee companies, as well as market perceptions of the future of the economy and its impact upon the economic environment in which these companies operate. 

Credit risk

Credit risk is the risk that counterparties to financial instruments do not perform their obligations according to the terms of the contract or instrument. The Group is exposed to counterparty credit risk when dealing with its customers and certain financing activities.

The immediate credit exposure of financial instruments is represented by those financial instruments that have a net positive fair value by counterparty at 31 March 2022.

The Group considers its maximum exposure to be:

	2022	2021
	£	£
Financial assets
Cash and cash equivalents	1,534,023	1,644,189
Loans and receivables, net of impairment	4,242,635	1,102,868
	5,776,658	2,747,057

The company considers its maximum exposure to be:

	2022	2021
	£	£
Financial assets
Cash and cash equivalents	1,505,410	1,491,454
Loans and receivables, net of impairment	13,858,647	5,547,806
	15,364,057	7,039,261

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

Liquidity risk

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

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

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

	Carrying	Contractual	6 months	6 to 12	1 to 2	2 to 5
31 March 2022	amount	cash flows	or less	months	years	years
	£	£	£	£	£	£
Non-derivative financial liabilities
Trade and other payables	730,869	-	730,869	-	-	-
Borrowings	1,009,000	-	116,000	420,000	473,000	-
31 March 2021
Non-derivative financial liabilities
Trade and other payables	445,273	-	445,273	-	-	-
Borrowings	1,283,000	-	-	-	-	1,283,000

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

	Carrying	Contractual	6 months	6 to 12	1 to 2	2 to 5
31 March 2022	amount	cash flows	or less	months	years	years
	£	£	£	£	£	£
Non-derivative financial liabilities
Trade and other payables	315,207	-	315,207	-	-	-
Borrowings	1,009,000	-	116,000	420,000	473,000	-
31 March 2021
Non-derivative financial liabilities
Trade and other payables	219,780	-	219,780	-	-	-
Borrowings	1,283,000	-	-	-	-	1,283,000

Cash flow management

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

Currency risk

The Group operates internationally and is exposed to foreign exchange risk. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the functional currency of the relevant Group entity. The Group's primary currency exposure is to US Dollar, which is the currency of all intra-group transactions as well as denomination of selling price of the products. The group also has some exposure to Malagasy ariary due to its operating subsidiaries in Madagascar.

Considering the natural hedge available the Group currently doesn't hedge the currency risk. The Group's and Company's exposure to foreign currency risk at the end of the reporting period is summarised below. All amounts are presented in GBP equivalent.

Group	USD 2022	MGA 2022	USD 2021	MGA 2021
	£	£	£	£
Cash and cash equivalents	19,405	18,550	90,236	66,118
Trade & other receivables	3,127,431	1,003,709	522,400	489,622
Trade & other payables	(188,534)	(415,662)	(151,353)	(301,816)
Net Exposure	2,958,302	606,597	461,283	253,924

Company	USD 2022	USD 2021
	£	£
Cash and cash equivalents	9,342	3,619
Loans to subsidiaries	9,797,683	4,893,314
Trade & other receivables	3,949,469	522,400
Trade & other payables	(224,937)	(151,353)
Net Exposure	13,531,557	5,267,980

Sensitivity Analysis

As shown in the table above, the Group is primarily exposed to changes in the GBP:USD & GBP:MGA exchange rates. The table below shows the impact in GBP on pre-tax profit and loss of a 10% increase/ decrease in the GBP to USD exchange rate, holding all other variables constant. Also shown is the impact of a 10% increase/decrease in the GBP to MGA exchange rate, being the other primary currency exposure.

2022	Group	Company
	£	£
GBP:USD exchange rate increases by 10%	295,830	1,353,156
GBP:USD exchange rate decreases by 10%	(295,830)	(1,353,156)

GBP:MGA exchange rate increases by 10%	60,660	-
GBP:MGA exchange rate decreases by 10%	(60,660)	-

2021	Group	Company
	£	£
GBP:USD exchange rate increases by 10%	532	53,071
GBP:USD exchange rate decreases by 10%	(592)	(64,864)

GBP:MGA exchange rate increases by 10%	(51,402)	-
GBP:MGA exchange rate decreases by 10%	57,183	-

23.  Related party transactions

Tirupati Carbons and Chemical Pvt Limited (TCCPL) is an entity incorporated in India. The Company is connected to TCCPL in that both Shishir Poddar and Hemant Poddar were both directors and shareholders of TCCPL during the year. At year end, included within debtors was an amount of Nil (2021: Nil) and revenue recorded for the year of Nil (2021: £46,090), Specialized machinery purchased of £24,822 (2021: £295,122) from TCCPL.

Tirupati Speciality Graphite Private Limited (TSG) is an entity incorporated in India. The Company is connected to TSG in that both Shishir Poddar and Hemant Poddar were both directors and shareholders of TSG during the year. At year end, a net amount was receivable of £1,567,693 (2021 - £250,656), revenue of £287,247 (2021 - £238,602) , Specialized machinery purchased of £1,484,087 (2021: £833,741) from TSG.

Haritmay Ventures LLP (HV) is an entity incorporated in India and engaged in manufacturing proprietary tailor-made flake graphite processing machinery and equipment which the Company uses in its projects. The Company is connected to HV in that Shishir Poddar is partner and shareholder of HV during the year. At year end, a net amount was receivable of £230,624 (2020 - £72,552). Specialized machinery purchased of £494,471 (2021: Nil)

Optiva Securities Limited is an entity incorporated in the United Kingdom. The Company is a stock brokerage firm connected to the Company being the sole broker of the Company and Christian Gabriel St.John-Dennis one of the directors of the Company and holding a position with Optiva Securities Limited during the year. At year end, the Company incurred brokerage and consultancy fees, business development fees of £440,000 (2021 - £378,402) and brokerage and consultancy fees prepaid of £ 6,250 (2021 - Nil)

24.  Deferred Tax Assets

	2022	2021
Brought forward DTA	21,182	49,422
Created/(reversed)  during the year	54,217	(27,827)
Forex	(157)	(413)
Carried forward DTA	75,242	21,182

25.  Events after the reporting period

In August/September 2022, the Company completed capital raise in the form of Convertible Loan Notes 2022 of £1,862,500 gross proceeds with institutional and other investors. The net proceeds will primarily be used to expedite and accelerate the Company's modular MTDP.

In August/September 2022, the company completed commissioning and start re-engineered preconcentrate facilities at Vatomina and adoption of the concept for the under construction 18,000 tpa facilities in Sahamamy project in Madagascar.

In August/September 2022, the company signed a binding agreement, subject to approval of transfer, for three additional mining permits in Madagascar covering a total area of 31.25km² and located in the vicinity of the Company's existing projects in the country; The consideration agreed for the acquisition is a total of MGA 800 million (c.£167,000) to be paid in cash upon milestones in the process of completing the transfer of the permits to the Company.

ENDS

For further information, please visit https://www.tirupatigraphite.co.uk/ or contact:

Tirupati Graphite Plc Puruvi Poddar - Chief of Corporate & Business Development	[e-mail] [phone]
Optiva Securities Limited (Broker) Ben Maitland - Corporate Finance Robert Emmet - Corporate Broking	[phone] [phone]
FTI Consulting (Financial PR) Ben Brewerton / Nick Hennis / Kelly Smith	[phone] [e-mail]

 

END

 

 

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