REG - Tirupati Graphite - Annual Report & Accounts
15/07/2025 07:00
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RNS Number : 0175R Tirupati Graphite PLC 15 July 2025
15 July 2025
Tirupati Graphite plc
('Tirupati' or the 'Company')
Annual Report & Accounts for the year ended 31 March 2024
Tirupati Graphite plc (TGR.L), the specialist flake graphite company and
supplier of the critical mineral for the global energy transition, announces
its audited annual results and filing of the Annual Report & Financial
Statements for the year ended 31 March 2024 (the "2024 Annual Report"). The
2024 Annual Report will shortly be available at
https://tirupatigraphite.co.uk/ (https://tirupatigraphite.co.uk/) and is being
filed with Companies House today.
Publication of the 2024 Annual Report has been delayed from last year,
originally due to the uncertain financial position and severe liquidity
challenges faced by the Group in 2024, including not being in a position
during 2024 to fund completion of the audit, and uncertainty around the
ability of the Group to continue as a going concern. Fund raising in 2025 has
significantly improved the financial outlook. Following changes in the Board
in late 2024 and early 2025, the former CEO was removed from his position. The
former CEO had previously provided the Company's accounting systems and
financial reporting on an outsourced basis from a private company in India
controlled by him and his daughter (also a former director of the Company).
That entity has denied the Company access to its IT systems and its underlying
accounting records (even though owned by and held on systems licensed to
Tirupati Graphite plc) following the Board changes in January 2025. This has
required the Company to implement new systems and reconstruct its accounting
records, now substantially completed, but which led to the further delay, as
in the last month has the unavailability of the reviewing audit partner for
unforeseen reasons.
Key points for the year ended 30 March 2024:
· Total production was 7,096 metric tonnes ("MT") of flake graphite
from the Group's two projects in Madagascar: Vatomina and Sahamamy;
· Vatomina had intermittent production, due to operational and funding
problems;
· The Sahamamy project was placed in care and maintenance in March
2024;
· Operating loss: £5.1 million (FY23: £2.1 million);
· Completed acquisition of Suni Resources SA ("Suni Resources") as
announced in April 2023, adding two mining concessions in Mozambique.
Business combination accounting for the acquisition resulted in recognition of
a gain of £6.1 million in the income statement;
· Profit before tax: £64 thousand (FY23: £2.4 million loss);
· Loss after tax: £13 thousand (FY23: £2.4 million);
· Subsequent to 31 March 2024, operational and liquidity challenges,
and failure to raise new funds, led to the pausing of production operations
and to further development of the mines. Trading of the Company's shares
though its listing on the LSE was suspended in August 2024.
A fuller description of the challenges which the Company faced in 2024 and the
actions since taken to overcome them are presented under Events Subsequent to
31 March 2024 described below and the Chairman's Statement from the Annual
Report, which is also re-produced below.
Mark Rollins, Executive Chairman of Tirupati Graphite, commented:
"We are pleased to publish the delayed 2024 annual report and accounts. While
the annual report covers a very difficult period for the Company and all its
stakeholders, and the Company was at that time on a path to failing, the
turnaround initiatives in 2025 have now placed it on a much firmer basis to
realise the underlying potential of its assets.
This is a key step in returning to compliance with our listing obligations."
For further information, please visit https://tirupatigraphite.co.uk/ or
contact:
Tirupati Graphite Plc info@tirupati.co.uk
Mark Rollins - Executive Chairman IR@tirupati.co.uk
Alastair Bath - Investor Relations +44 7356 057 265
FTI Consulting (Financial PR) +44 (0) 20 3727 1000
Ben Brewerton / Nick Hennis / Lucy Wigney tirupati@fticonsulting.com
Summary of the Operating Results for the year ended 31 March 2024.
Units FY 2023-24 FY 2022-23 YoY Change
Total Production MT 7,096 4,770 +49%
Total Costs of Production for units sold (Excl. Depreciation) £ 4,389,010 1,531,349 +189%
Cost per MT of Production £ 619 321 +95%
Total Sales Volume MT 7,434 3,982 +87%
Total Revenues £ 4,903,856 2,890,010 +70%
Average Selling price per MT of Production US$ / £ per MT 828 / 660 875 / 726 -9%
Production during the year ended 31 March 2024 increased by 49% and sales
volume increased by 87% over the previous year, although operations became
increasingly intermittent from mid 2024. The realised average selling price
per MT of graphite decreased by 9% in GBP terms and 5% in dollar terms,
reflecting weaker market dynamics. Operating margins decreased significantly,
principally because of:
· lower ore head grade feed into both Vatomina and Sahamamy plants,
due in part to sub-optimal mine development;
· poor performance of plant and equipment due to breakdowns and
interruptions, and lack of spare part availability during the period;
· breakdown of vehicles and inability to operate vehicles at
certain points reduced efficiency of operation and plants; and
· plant capacity being underutilised and not energy efficient,
while fixed costs increased.
See below for corrective actions taken since the changes in Company
leadership.
Summary of the Financial Results for the year ended 31 March 2024
The Group reported a small loss after tax for the year ended 31 March 2024
(FY2024) of £0.01 million, but a pre tax operating loss of £5.1 million.
The operating loss for FY 2024 (2023: £2.1 million loss) resulted from a
combination of the Madagascar mines producing only a small gross margin of
£0.5 million, which was insufficient to cover a depreciation expense for the
assets of £1.5 million, and high administration expenses in the period. The
low margin reflected high unit operating costs as described above.
Administration expenses of £4.1 million at the group level reflected an
unusually high level of legal and professional fees (£0.5 million) partly
associated with the Board representation issues but also the level of salaries
paid to the previous leadership of the Company. They also include the
Madagascar local office and all local labour tax and social security costs, as
well as £0.7 million of Mozambique expenses. The Mozambique costs are
currently all being expensed until full project development commences, and
include site security and subsistence costs.
In terms of non-GAAP KPIs, EBITDA for the year to 31 March 2024 was a loss of
£3.6 million (2023: £0.8 million) as a result of the above factors.
An impairment charge of £0.8 million was taken against the Sahamamy asset in
recognition of production being placed on hold and certain areas of the mine
being unlikely to be developed further. The central facilities at Sahamamy
are, however, expected to be of value for a re-development at Sahamamy focused
on new mine areas where improved ore qualities are expected.
The operating loss was more than offset by a bargain purchase gain recorded on
the acquisition of Suni Resources in Mozambique, which completed on 1 April
2023, of £6.1 million. The Suni acquisition has been accounted for as a
business combination, and the gain (negative goodwill) represents the surplus
of the assessed fair valuation for the net assets acquired over the fair value
of the consideration. The Group re-evaluated the fair valuation of both the
net assets and consideration since the interim results announced in December
2023 under the Company's previous leadership, resulting in a lower bargain
purchase gain than previously indicated.
Interest expense was £0.4 million (2023: £0.25 million); increased finance
costs reflected a full year of interest expense on the loan notes issued in
2022.
The result before tax was at just above breakeven, while a previous deferred
tax asset of £0.1 million was expensed, resulting in a non cash tax charge.
As a result, loss after tax was £13 thousand (2023: £2.4 million loss) and
loss per ordinary share was £0.01 (2023: £2.59 loss per share).
Liquidity and Capital Resources
The principal financial challenge faced by the Group in FY2024 and in the
subsequent period through to 31 December 2024 and the launch of the corporate
re-structuring and re-financing was a lack of funding for working capital and
investment. This was partly due to poor operating performance but also
unsuccessful financing initiatives. As a result, significant arrears of
creditors were built up, while the business was funded significantly through
advance payments for graphite sales which could then not be delivered on
schedule. The resulting liquidity crisis almost led to insolvency, but this
was averted in early 2025 with the successful re-financing and resumption of
production.
During the year to 31 March 2024, the Company had raised gross proceeds of
£1,045,000 by way of a placing in January 2024 of 9,500,000 new ordinary
shares at a placing price of £0.11 per share. The Company also issued 12.1
million new shares as part consideration for the acquisition of Suni Resources
to create a business in Mozambique, along with cash of £1.5 million.
As at 31 March 2024 the Group had cash and cash equivalents of £0.2 million.
Group net assets as at 31 March 2024 were £22.9 million, with net debt at
£2.8 million, but the Group also had creditors for prepaid graphite
deliveries included within trade payables of £2.8 million. Group receivables
of £5.4 million at 31 March 2024 include VAT recoverable of £2.8 million and
bank deposits securing guarantees of licence obligations of £1.8 million,
both of which are not available in the near term to support operations, though
some VAT recoveries have since been achieved.
The auditor's report on the 2024 financial statements is unqualified but
includes reference to material uncertainty around the ability of the Group to
continue as a going concern if it is unable to satisfy the conditions to
convert the 2019 and 2025 Convertible Loan Note to equity, as planned.
Events Subsequent to 31 March 2024
Since 31 December 2024 the Group has been through a re-structuring and
re-financing led by a new Board and management team, including:
1. The resumption of production following earlier suspension:
production in Madagascar was restarted in February 2025 with operations
focused on ramping up production to profitable levels over the course of 2025.
2. Board Changes: as more fully explained in the Chairman's Statement
and Directors' Report, a shareholder group sought changes to the composition
of the Company Board, which were agreed in late 2024. This initiative was
undertaken due to the high risk of financial failure of the Group and poor
governance, in the view of the shareholders. Following the Board changes, the
contract of the former CEO was terminated in February 2025 and new management
installed.
3. Re- financing: in early 2025, the Company has launched a number of
restructuring and financing measures, including raising £4.5 million of new
convertible loan notes ("2025 CLNs"). The 2025 CLNs are convertible at the
option of the holder, and by the Company when the conversion shares can be
admitted to trading. Conversion will be at a share price of 3.75 pence per
ordinary share and can be elected once: (i) the Company has received approval
from shareholders in a general meeting for the issue of the conversion shares;
(ii) listing of the Company's ordinary shares on the LSE is resumed and the
present suspension is lifted; and (iii) approval is received for the required
prospectus for issue of the new conversion shares. Further steps including
re-negotiation of the terms of existing CLNs have been separately announced.
Below are extracts from the Chairman's Statement In the Annual Report and
Financial Statement for the year ended 31 March 2024
I am pleased to present our Annual Report to shareholders for the year ended
31 March 2024. I am able to present a much improved outlook for your Company
following difficult steps taken in the last 12 months to resolve major
challenges which had become increasingly clear to investors during the last
few years.
Major shortcomings in management performance and poor governance practices
resulted in material destruction of shareholder value. Due to an increasingly
precarious liquidity position and in order to reverse the Company's negative
trajectory, shareholders initiated action to change the composition of the
Board in 2024. This action was eventually successful in December 2024. This
led to the appointment of three experienced new directors, the retirement of
one of the existing directors, and subsequently my appointment as Chairman. An
earlier effort by a group of shareholders to restructure the Board in June
2024 had been unsuccessful. The December 2024 changes led to the replacement
of the founder and CEO, and removal of previous conflicts of interest, through
termination of supply and service arrangements with parties connected to
him.
As a reconstituted Board and management we rapidly arranged a strategic
re-financing of the business in order to implement a much-needed turnaround
strategy. This strategy aimed to position the Group onto a more stable footing
to capitalise on the strong market trends in the sector.
The year ended 31 March 2024 had been a challenging year. In Madagascar, the
Group operated its Vatomina graphite project and also its Sahamamy graphite
project for part of the year. It also completed the acquisition of two
graphite projects at the pre-development stage, but of globally significant
scale, in Mozambique. However, challenges were encountered in the form of
large synthetic graphite production capacity increases in China, which
negatively impacted natural graphite prices. The Company was also unable to
adequately meet its working capital requirements during much of the year and
subsequently, to support production growth.
While the operational team in Madagascar succeeded in achieving the highest
annual graphite production from the Madagascar projects to date of 7,096 MTs
in the year under report, lack of funds and inefficient planning across the
projects hindered the Group from realising the potential of its assets.
Efforts to bridge the funding and operational needs of the projects
sufficiently were impeded by poor corporate governance and conflicts of
interest posed by the composition of the former Board and its leadership. This
prevented the Company from accessing the funding necessary to maintain any
momentum or progress through 2023 and 2024.
Subsequent to the 31 March 2024 year end, the Group's projects had to be shut
in due to lack of funding and poor results, and the Group was in severe
financial distress. The Company's listing on the London Stock Exchange was
suspended in August 2024, with the share price then at 6.25 pence per share.
The Company was unable to prepare its consolidated financial statements and
annual report for March 2024 by the filing deadline. Only once the new team
had taken over the audit process, raised additional financing, and
re-constructed the accounting system was it possible to finish this report and
for the auditors to complete their work.
Since the end of the reporting period, the new executive team has successfully
re-started production at the Vatomina project, with sustainable and increasing
volumes. Customer demand has been robust across all product grades, leading to
strong sales and an increasingly diversified customer base. Indeed, production
reached a record level in April 2025 and is on track to exceed breakeven
levels and reach our reported target of 1000 MT per month by the end of July.
Graphite markets have stabilised and have shown signs of a turnaround. Despite
turbulent geopolitical and socio-economic events, industrial markets have been
resilient and global sales of electric vehicles have continued to grow year on
year, with battery and energy storage demand for graphite continuing to grow.
Global policy developments affecting critical minerals has meant that new
regions are developing hubs for consumption of battery raw materials,
including graphite, outside of China as end-users seek to diversify their
supply sources. This presents significant opportunities for the likes of
Tirupati Graphite with its projects across East Africa, to establish itself as
a preferred supplier.
We have received an updated Mineral Resources at the Madagascar mines and have
commissioned a full, updated Competent Persons' Report which will be available
later this year. While the inferred resource numbers, especially at Vatomina,
have reduced since the last numbers reported, in 2020, this is largely
attributable to poor data records and lack of updates to models for several
years under the previous management. With better discipline and mining
practices we would expect to see an improvement in future.
I am pleased to report that the fund-raising initiatives have been successful,
with £4.5 million subscribed for new convertible loan notes which we expect
to be able to convert to equity this year. And we have reached agreement with
holders of existing convertible loan notes for a restructuring of those
liabilities. The £0.9 million of the 2019 Series, which had a final maturity
in December 2024 are being converted to equity, and the £1.9 million of the
2022 Series which are due to mature in July and August 2025, have been
extended by one year. While these steps will result in a substantial number of
new shares being issued including, potentially, from attached warrants, and
dilution for previous shareholders, the alternative for equity and existing
note holders was likely a much greater loss. The Board is grateful for the
backing of many shareholders and the loan note holders for their support of
the re-structuring and the new funds which many have invested. We have also
welcomed some new investors who see great potential for our Company going
forward.
This has been a very difficult time for the Group's employees and suppliers.
Employees at our operations have been remarkably resilient and have been
instrumental in our successful turnaround efforts over the past months. Also,
we are well aware that many of our suppliers were not treated well during the
past few years. Early in its tenure the new Board has taken steps to redress
past issues and put these critical relationships back onto a positive footing.
The Board is grateful for the patience and loyalty of all concerned.
As regards the Board itself - I am committed to ongoing review of its
composition and strengths as our Company grows. We will continue to reinforce
the processes and procedures that underpin our decision making and governance
in line with the development of our business and the expectations of our
stakeholders. We understand that effective governance is essential to good
stewardship of all aspects of our Company and the support of many key
constituencies - not least our shareholders.
Strong governance is also needed to ensure high standards in respect to the
way we interact with the communities in which we operate and our attitude to
environmental and health and safety matters. As a Board we will seek to
promote continuous improvement in these areas across our operations in
Madagascar and Mozambique, and across our industry as a whole.
The Board would like to bring to your attention the annual general meeting of
shareholders which will be asked to approve a number of resolutions which we
consider vitally important for the realisation of our turnaround plan. A
necessary Prospectus for new shares is in progress and will be issued in the
coming weeks. This will permit conversion of the 2019 and 2025 CLN issues to
equity and a significant strengthening of the equity base of the Company. We
urge all shareholders to vote in favour of the resolutions as recommended by
the Board.
The new Board is committed to transparency and clear communications with all
of its stakeholders as it continues seeking to transition the Group towards
becoming a globally significant graphite producer, capitalising on positive
market trends for natural flake graphite and our existing asset base in order
to realise exceptional value for our shareholders.
We firmly believe that the strong foundation that we have been building over
the past months will enable us to meet these goals.
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2024
Notes 2024 2023
£ £
Continuing operations
Revenue 6 4,903,856 2,890,010
Cost of sales 7 (4,389,010) (1,531,349)
Depreciation of operating assets (1,496,616) (1,024,564)
Gross profit (981,770) 334,097
Administrative expenses 9 (4,093,256) (2,440,366)
Operating loss (5,075,026) (2,106,269)
Impairment charge 16 (798,871) -
Gain on bargain purchase 5 6,135,915 -
Finance income - interest 8 204,525 -
Finance costs 11 (402,585) (251,641)
Profit/(loss) before income tax 63,958 (2,357,910)
Income tax expense 12 (77,171) (9,775)
Loss for the year attributable to owners of the Company (13,213) (2,367,685)
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange gain (loss) on translation of foreign operations 1,133,833 (1,381,371)
Total comprehensive income (loss) for the year attributable to the Group 1,120,619 (3,749,056)
Loss per share attributable to owners of the Company Pence per share Pence per share
From continuing operations:
Basic and Diluted (pence) 13 (0.01) (2.59)
The accompanying accounting policies and notes are an integral part of these
financial statements.
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 £3,903,990 (2023:
£1,032,736).
Consolidated and Company Statement of Financial Position
As at 31 March 2024
Notes Group Company
2024 2023 2024 2023
£ £ £ £
Non-current assets
Investments in subsidiaries 15 - - 23,904,078 3,921,348
Property, plant and equipment 16 18,982,921 11,198,437 - -
Deferred tax 26 - 74,046 - -
Deposits 30,487 32,455 - -
Intangible assets 14 3,568,618 3,599,065 - 40,970
Total non-current assets 22,582,026 14,904,003 23,904,078 3,962,318
Current assets
Inventory 18 1,209,925 1,386,558 - -
Trade and other receivables 17 5,380,805 4,755,629 3,636,893 21,213,389
Cash at bank 185,968 289,338 101,589 130,340
Total current assets 6,776,698 6,431,525 3,738,482 21,343,729
Current liabilities
Trade and other payables 19 2,757,704 1,684,808 1,345,176 735,440
Borrowings 21 1,112,830 909,000 909,000 909,000
Equity subscription advance received, allotment due 703,000 - 703,000 -
Total current liabilities 4,573,534 2,593,808 2,957,176 1,644,440
Net current assets 2,203,164 3,837,717 15,326,306 19,699,289
Non-current liabilities
Borrowings 21 1,862,500 1,862,500 1,862,500 1,862,500
Lease liability 19 26,166 31,080 - -
Total non-current liabilities 1,888,666 1,893,580 1,862,500 1,862,500
NET ASSETS 22,896,525 16,848,140 22,822,884 21,799,107
Equity
Share capital 22 3,107,482 2,536,195 3,107,482 2,536,195
Share premium account 28,819,456 24,462,976 28,819,456 24,462,976
Warrant reserve 23 116,065 116,065 116,065 116,065
Foreign exchange reserve (1,023,746) (2,157,579) - -
Retained losses (8,122,731) (8,109,518) (9,220,120) (5,316,129)
Equity attributable to owners of the Company 22,896,525 16,848,140 22,822,884 21,799,107
TOTAL EQUITY 22,896,525 16,848,140 22,822,884 21,799,107
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 11(th)
July, 2025 and signed on its behalf by:
Mark Rollins
Executive Chairman
Company registration number: 10742540
Consolidated Statement of Changes in Equity
For the year ended 31 March 2024
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 2022 2,173,497 19,975,356 (776,208) (5,756,006) 15,747,196
130,557
Loss for the period (2,367,685) (2,367,685)
Other Comprehensive Income: exchange translation loss on foreign operations - - (1,381,371) - - (1,381,371)
Total comprehensive loss for the year: - - (1,381,371) - (2,367,685) (3,749,056)
Transactions with owners:
Shares issued 362,698 4,487,302 4,850,000
Adjustment to Warrant reserve - 319 - (14,492) 14,173 -
Balance at 31 March 2023 2,536,195 24,462,977 (2,157,579) 116,065 (8,109,518) 16,848,140
Loss for the year - - - - (13,213) (13,214)
Other Comprehensive Income: Exchange translation gain on foreign operations - - 1,133,833 - - 1,133,833
Total comprehensive income (loss) for the year: - - 1,133,833 - (13,213) 1,120,619
Transactions with owners:
Shares issued 571,286 4,356,480 - - - 4,927,766
Balance at 31 March 2024 3,107,482 28,819,456 (1,023,746) 116,065 (8,122,731) 22,896,524
The accompanying accounting policies and notes are an integral part of these
financial statements.
Company Statement of Changes in Equity
For the year ended 31 March 2024
Attributable to equity shareholders
Share capital Share premium Share warrants reserve Retained losses TOTAL
EQUITY
£ £ £ £ £
Balance at 1 April 2022 2,173,497 19,975,356 (4,297,566) 17,981,843
130,557
Loss for the period - - - (1,032,736) (1,032,736)
Total comprehensive income (loss) - - - (1,032,736) (1,032,736)
Transactions with owners:
Shares issued 362,698 4,487,302 - - 4,850,000
Adjustment to warrant reserve - 319 (14,492) 14,173 -
Balance at 31 March 2023 2,536,195 24,462,976 116,065 (5,316,129) 21,799,107
Loss for the year - - - (3,903,990) (3,903,990)
Total comprehensive loss - - (3,903,990) (3,903,990)
-
Transactions with owners:
Shares issued 571,286 4,356,480 - - 4,927,766
Balance at 31 March 2024 3,107,482 28,819,456 116,065 (9,220,120) 22,822,884
The accompanying accounting policies and notes are an integral part of these
financial statements.
Consolidated Statement of Cash Flows
For the year ended 31 March 2024
Notes 2024 2023
£ £
Cash used in operating activities
Loss for the year (13,213) (2,367,685)
Adjustment for:
Depreciation 16 1,522,873 1,267,227
Impairment 16 798,871 -
Finance income 8 (204,525)
Gain on bargain purchase 5 (6,135,915) -
Convertible loan note issue costs - 93,125
Lease interest - 3,334
Finance costs 11 402,585 251,641
Unrealised forex loss / (gain) - (41,054)
Working capital changes:
(Increase)/decrease in inventories 176,633 (654,284)
(Increase)/decrease in receivables 1,761,650 (1,566,964)
Increase/(decrease) in payables 242,665 861,019
Increase/(decrease) in deferred tax & other assets 79,139 (15,874)
Net cash from (used in) operating activities (1,369,237) (2,169,515)
Cash flows from investing activities:
Purchase of tangible assets (648,839) (2,797,818)
Acquisition of subsidiary 5 (1,453,995) -
Advance for subsidiary acquisition 17 - (2,632,525)
Recovery of advance to seller 1,450,065 -
Net cash from investing activities (652,769) (5,430,343)
Cash flows from financing activities:
Proceeds from shares issued (net of costs) 22 1,187,460 4,750,000
Proceeds from issue of convertible loan notes (net of costs) (see below note) 21 - 1,769,375
Share application money received pending allotment 703,000 -
Finance Income 204,525 -
Short term borrowings raised 203,830 -
Lease repayments (4,914) (10,087)
Finance cost paid (402,585) (168,496)
Net cash from financing activities 1,891,316 6,340,792
Net (decrease) in cash and cash equivalents (130,690) (1,259,066)
Effects of exchange rates on cash and cash equivalents 27,320 14,382
Cash and cash equivalents at beginning of period 289,338 1,534,023
Cash and cash equivalents at end of period 185,968 289,339
The accompanying accounting policies and notes are an integral part of these
financial statements.
Note: Reconciliation of Convertible Loan Notes:
2024 2023
£ £
Opening Balance as on 1(st) April 2,771,500 1,009,000
Issued during the year - 1,862,500
Redeemed/Converted during the year (non-cash item) - (100,000)
Closing Balance as on 31(st) March 2,771,500 2,771,500
2024 2023
£ £
Amount Received from issue - 1,862,500
Issue cost offset against consideration - (93,125)
Net Amount received from issue - 1,769,375
Company Statement of Cash Flows
For the year ended 31 March 2024
2024 2023
£ £
Loss for the year (3,903,990) (1,032,736)
Adjustment for:
Provisions, including advances to subsidiaries 3,129,426 -
Unrealized forex loss / (gain) - 20,675
CLN issuance cost - 93,125
Finance costs 402,585 251,641
Working capital changes:
Increase/(decrease) in receivables (1,584,771) (87,712)
Increase/(decrease) in payables 608,736 319,244
Net cash from (used in) operating activities (1,348,014) (435,763)
Cash flows from investing activities:
Advance towards asset purchase** 1,529,150 (2,632,525)
Loans to Subsidiaries (164,494) (4,634,505)
Investment in subsidiaries (1,533,155) (20,325)
Net cash (used in) investing activities (168,499) (7,287,355)
Cash flows from financing activities*
Shares issued 22 1,187,460 4,750,000
Proceeds from issue of convertible loan notes 21 - 1,769,375
Finance costs (402,585) (168,496)
Share application money received pending allotment 703,000 -
Net cash from financing activities 1,487,875 6,350,879
Net (decrease) in cash and cash equivalents (28,638) (1,372,239)
Effects of exchange rates on cash and cash equivalents (113) (2,831)
Cash and cash equivalents brought forward 130,340 1,505,410
Cash and cash equivalents carried forward 101,589 130,340
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 21 (borrowings) and note 22 (share capital).
**Advance towards asset purchase is for advance paid towards Suni Resources
prior to its acquisition completing.
Note: Reconciliation of Convertible Loan Notes: as per Group Note above
Notes to the Financial Statements
1. General Information
Tirupati Graphite plc (the "Company") is incorporated in England and Wales,
under the Companies Act 2006 and domiciled in the UK. The registered office
address and principal place of business is Eastcastle House 27/28,
Eastcastle Street, London, W1W 8DH, UK.
The Company is a public company, limited by shares. The ordinary shares of the
Company are admitted on the official list of the FCA and to trading on the
main market of the London Stock Exchange through a standard listing.
The principal activities of the Company are as a holding and management
company for its subsidiaries (together, the "Group") which undertake
graphite mining and related activities and it also undertakes marketing,
trading and support activities for the Group. The Company is the parent entity
of the Group.
These consolidated financial statements are presented in pounds sterling which
is considered the currency of the primary economic environment in which the
Company operates, since the Group's activities are predominantly at the
development stage and sterling is the main currency of the Group's financing.
2. Adoption of new and revised UK adopted IAS New Standards
The Group and Company have adopted all recognition, measurement, and
disclosure requirements of IFRS, including any new and revised Standards and
Interpretations of IFRS, in effect for annual periods commencing on or after 1
April 2023. The following IFRS or IFRIC interpretations were effective for the
first time for the financial year beginning 1 April 2023. Their adoption has
not had a material impact on the disclosures or on the amounts reported in
this financial information:
Standards/interpretations Description
IAS 1 amendments and IFRS practice statement 2 Disclosure of accounting policies
- (Making Materiality Judgements)
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors Amendments - Definition of Accounting estimates
IAS 12 Deferred Taxation Amendments - Deferred Tax related to Assets and Liabilities arising from a
Single Transaction
New standards and amendments which are in issue but not yet effective:
At the date of authorisation of these financial statements, the following
Standards and Interpretations were in issue and will be effective for the
first time in the period beginning 1 April 2024. The Group and Company will
adopt these amendments in its next financial statements. These are not
expected to have a material impact on the Group.
Standard or interpretation Description
IAS 1 Presentation of Financial Statements Amendments - Classification of Liabilities as Current or Non-Current
IAS 1 Presentation of Financial Statements Amendment- Non-Current liability with covenants
IFRS 16 Leases Amendments- Liability in a sale and leaseback transaction
IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosure Amendments- Supplier finance arrangements
The Group and Company have not early-adopted any of the above standards and
intend to adopt them when they become effective.
3. Significant Accounting Policies
Basis of Preparation
These consolidated financial statements have been prepared in accordance with
UK-adopted international accounting standards (UK-adopted IAS) and in
accordance with the requirements of the Companies Act 2006.
The financial statements have been prepared on the historical cost basis,
except for certain financial instruments that are measured at amortised cost
at the end of the reporting period. Historical cost is generally based on the
fair value of the consideration given in exchange for goods and services.
The preparation of financial statements in conformity with UK-adopted IAS
requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
financial statements, are disclosed in Note 4.
The principal accounting policies adopted are set out on the following pages.
Going Concern
The financial statements are prepared on a going concern basis of accounting,
which the Board considers reasonable taking account of key factors and
uncertainties described in this Note.
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Strategic
Report. The financial position of the Group and the Company, their cash flows
and liquidity positions are disclosed in the financial statements. The
expected evolution of the business and significant post year end events are
also described in the Strategic Report. 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 liquidity risk.
Since the reporting date, the Group experienced an extended period of
financial distress during which production and therefore revenues were
intermittent and the Group was late in settling various creditors. From
January 2025, a new Board was in place and new financing has been raised, with
amendments agreed to the maturity and terms of existing financing and payment
plans agreed with several larger creditors.
Following the steps implemented in the first five months of 2025, the
remaining material uncertainty to continuing as a going concern is now
considered to be the conversion of the 2019 and 2025 CLNs before their final
maturity dates. These instruments have a final maturity date (as amended) of
31 December 2025. The Company can elect to convert these CLNs to ordinary
shares of the Company, provided that the shares will be able to be admitted to
trading. This is conditional on shareholder resolutions providing authority
for the issue of the conversion shares, the Company's ordinary shares resuming
trading on the LSE, which will require the Company to be become compliant
again with its obligations for filing of accounts, and the approval by the FCA
of a prospectus for the issue of the new shares.
At the date of approval of these financial statements, the Directors consider
that it is reasonable to assume satisfactory outcomes to each of the above
milestones. Were the Company unable to require conversion to equity of the
2019 and 2025 convertible loan notes prior to their 31 December 2025 final
maturity dates, and unable to alternatively meet its cash flow needs from its
current revenue resources, the Company would need to seek further financing.
While the Company has been successful in raising finance in 2025, which
provides confidence in the ability to access capital markets when required,
there is no guarantee that future financing initiatives would be successful.
The Company notes that even though the above assumptions are considered
reasonable, there can be no certainty that the Company would definitely
achieve the milestones described above and not all are within the full control
of the Directors, and the auditors refer to that uncertainty in their audit
report.
Overall, taking into account the comments above, the Directors have a
reasonable expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future. For these
reasons, the Directors continue to adopt the going concern basis in preparing
the financial statements.
Basis of Consolidation
Subsidiaries are all entities over which the Group has effective 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. Acquisitions are accounted for as a
business combination under IFRS 3 when they meet the criteria for recognition
as a business, with inputs and processes capable of creating outputs on a
standalone basis. In a business combination, the acquired assets and
liabilities are initially recorded at fair values based on an assessment of
value in use or market value. Any excess of fair value of the consideration at
the acquisition date over the aggregate fair value of the net assets acquired
represents goodwill, while a negative difference represents a bargain purchase
gain, which is recognised immediately in the income statement.
The Group currently consists of Tirupati Graphite plc and its wholly owned
subsidiaries Tirupati Madagascar Ventures SARL, Establissement Rostaing
SARL, Suni Resources SA, which was acquired on 1 April 2024, and Suni Balam
Central SA which was incorporated on 1 September 2023.
In the Company financial statements, investments in subsidiaries are accounted
for at cost less impairment.
All financial statements are made up to 31 March 2024. Where necessary,
adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used into line with those used by other members of the
group.
All intra-group transactions, balances, and unrealised gains on transactions
between Group companies are eliminated by accounting for resulting foreign
exchange difference in Other Comprehensive Income and foreign exchange reserve
on consolidation.
Segment Reporting
The Group's chief operating decision makers are considered to be the Board and
senior management who have determined that the Group has only one operating
segment, graphite mining extraction activities, and one geographical segment,
Madagascar and Mozambique, as all the activities are closely linked and
monitored as a single segment. Its corporate office in London, UK which
supports these activities is not seen as a separate reporting segment.
Therefore results, assets and liabilities of the operating segment are the
same as presented in the Group's primary statements.
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
the course of ordinary business, stated net of discounts, returns and value
added taxes.
The Group conducts its sale of goods either on a Free on Board (FOB) or Cost
Insurance Freight (CIF) basis, under industry-standard Incoterms. Under these
Incoterms as per Uniform Customs and Practices, the point of transfer of
control and risk for the goods sold to the buyer is when the goods are loaded
on the ship and a bill of lading supplied. Thus, the point of revenue
recognised by the Group is when goods have been duly sealed in containers for
transportation and charge of the containers is transferred to the shipping
line who issue the relevant shipping document as the goods are loaded on the
ship. In respect of sales on a CIF basis, as the obligations to pay for
transportation and insurance are satisfied at the point of loading,
attributable elements of revenue are also recognised on receipt of shipping
documents.
Foreign Currencies
For each entity, the Group determines the functional currency, and items
included in the consolidated financial statements of each entity are recorded
using that functional currency. The Group's financial statements are presented
in Pounds sterling, which is also the Company's functional currency. The
functional currency of the subsidiaries in Madagascar or Mozambique are the
respective local currencies.
Transactions in foreign currencies are translated at the foreign exchange rate
ruling at the date of the transaction. Foreign exchange differences arising on
translation are recognised in profit or loss. For the purpose of
consolidation, the year-end assets and liabilities are converted at closing
rate. All income statement items are converted using average rates for the
year. The difference arising on such is passed through Other Comprehensive
Income and Foreign Exchange Reserves. Translation differences arising on
inter-company loans which form part of the net investment in a subsidiary are
also recorded through Other Comprehensive Income and Foreign Exchange
Reserves.
Taxation
Income tax represents the sum of current tax and deferred tax.
Current tax
Current tax is based on taxable profit or loss for the year. Taxable profit or
loss differs from net profit or loss as reported in the income statement
because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The Group's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet
date.
A provision is recognised for those matters for which the tax determination is
uncertain, but it is considered probable that there will be a future outflow
of funds to a tax authority. The provisions are measured at the best estimate
of the amount expected to become payable. The assessment is based on the
judgement of professionals within the Company supported 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.
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
reporting date.
Property, Plant and Equipment
Property, Plant and Equipment (PP&E) is recognised at cost less
accumulated depreciation and any recognised impairment loss. Cost includes
borrowing costs capitalised for major assets under construction.
Depreciation of these assets commences when the assets are ready for their
intended use and is recognised so as to write off the cost 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:
Processing and power equipment
10% per annum
IT equipment
20-25% per
annum
Furniture and fittings
10-20% per annum
Vehicles and spares
10-30% per annum
Mine developments assets, including infrastructure development are recognised
as a separate category. Depreciation of mine development costs will be on a
unit of production basis once the mines are more fully developed, based on the
proportion that current period production bears to reserves. However, pending
full development and categorisation of reserves, mine development costs
including Infrastructure costs are being depreciated on a straight-line basis
at 10% per annum, which is expected to be a conservative basis for the time
being.
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.
All expenditure on the construction, installation or completion of facilities
is capitalised as construction in progress within "Assets Under Construction".
Once production starts at a project that was under construction, all assets
included in "Assets Under Construction" are transferred into "Property, Plant
and Equipment". It is at this point that depreciation/amortisation commences.
An item of PP&E 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.
Impairment of PP&E
At each balance sheet date, the Group reviews the carrying amounts of its
capitalised PP&E and mine development assets, to determine whether there
is any indication that these assets have suffered an impairment. 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. Assets are assessed for
impairment within Cash-Generating Units which typically comprise individual
concession or licence areas.
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.
Mining Exploration and Evaluation
The Company carries out exploration and evaluation activities to determine if
resources are present and warrant further evaluation expenditure with the
potential to result in an economic development. The amount of expenses
incurred are currently not material in amount and Group currently charges such
costs to the income statement and does not recognise separate assets under
IFRS 6.
Intangible assets
If the Group acquires new concessions and/or rights to explore (other than in
a business combination) any excess of the consideration over the capitalised
assets is treated as intangible exploration asset or mine development asset,
depending on the stage of activity, representing rights under the applicable
concession or licence. Impairment in the value of intangible exploration
assets is assessed at least annually by reference to the resource volumes
evaluated and plans to progress further exploration, evaluation or
development studies. When an applicable exploration and evaluation-stage asset
enters the development stage, the costs are reclassified to mine development
asset and subsequently assessed for impairment along with PP&E, as above.
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 in respect of finished product and mined ore, and on a FIFO basis in
respect of materials and supplies. 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
Initial recognition and measurement
The Group applies IFRS 9 "Financial Instruments" and has elected to apply 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. Financial assets are measured upon initial recognition at fair value
plus transaction costs directly attributable to the acquisition of the
financial assets. The financial assets are subsequently measured at
amortised cost.
Loans and Other Receivables
The principal financial assets of the Group are loans and trade receivables,
which arise principally through the provision of goods and services to
customers but also incorporate other types of contractual monetary assets.
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
included in current assets, except for maturities greater than twelve months
after the balance sheet date, which are classified as non-current assets.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks and other short-term highly liquid investments with maturities of three
months or less. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a component of
cash and cash equivalents in the consolidated cash flow statement.
Financial assets - impairment
The Group assesses on a forward-looking basis the expected credit losses
associated with its instruments carried at amortized cost and FVTPL. The
impairment methodology applied depends on whether there has been a significant
increase in credit risk. For trade receivables, the Group applies the
simplified approach permitted by IFRS 9, which requires expected lifetime
losses to be recognised from initial recognition of the receivables.
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 based on the rate at it
which has secured borrowing and makes certain adjustments to reflect the terms
of the lease and type of the asset leased. The lease liability is measured at
amortised cost using the effective interest method. It is re-measured 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
Financial liabilities are recognised at amortised cost and include the
transaction costs directly related to the issuance. The transaction costs are
amortised using the effective interest rate method over the life of the
liability.
Convertible Loan Notes (CLNs) are recorded at their issue price. Any interest
due on these CLNs is recorded on an accruals basis. On conversion/redemption
the face value of converted CLNs is reduced from the total carried value. For
CLN issues to date, the convertibility offering within the instrument is not
assessed as a separate derivative component in exchange of a lesser coupon as
it has not been considered to be material to the financial statement.
Other financial liabilities
Other financial liabilities are initially measured at fair value, net of
transaction costs. Other financial liabilities are subsequently measured at
amortised cost using the effective interest method, as set out above, with
interest expense recognised on an effective yield basis.
Share based payments
Equity-settled share-based payments are measured at fair value at the date of
grant by reference to the fair value of the equity instruments granted using
the Black-Scholes model. The fair value determined at the grant date is
expensed on a straight-line basis over the vesting period, based on the
estimate of shares that will eventually vest. A corresponding adjustment is
made to equity.
When the terms and conditions of equity settled share-based payments at the
time they were granted are subsequently modified, the fair value of the
share-based payment under the original terms and conditions and under the
modified terms and conditions are both determined at the date of the
modification. Any excess of the modified fair value over the original fair
value is recognised over the remaining vesting period in addition to the grant
date fair value of the original share-based payment. The share-based payment
expense is not adjusted if the modified fair value is less than the original
fair value.
Cancellations or settlements are treated as an acceleration of vesting and the
amount that would have been recognised over the remaining vesting period is
recognised immediately.
4. Critical Accounting Estimates and Judgements
The preparation of financial statements in conformity with UK adopted IAS
requires the use of estimates and judgements. These 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.
Estimates
Estimates and assumptions may 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. Key estimates include the
useful economic lives of plant and equipment; the recoverable amount of
assets, including intangible assets in respect of exploration and exploitation
rights; resource volumes and cost to extract resource used in assessments of
impairment and recoverability; and fair values of assets and liabilities used
in business combination accounting.
Estimates and assumptions concern the future; the resulting accounting
estimates will, by definition, therefore seldom equal the 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 described below.
Depreciation and Amortisation
Depreciation and amortisation rates for mine development costs normally depend
on estimates of reserves to be produced. At present, the Group recognises
only Resources and no Reserves at its Madagascar mines. The Group has
therefore adopted a flat 10% annual rate of amortisation for the Mine
Development Assets to date and until Reserves are established as a basis for
depreciation.
Estimates in impairment models
Impairment testing 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 estimates of the future cash flows expected to arise
from the cash-generating unit and a suitable discount rate to calculate the
present value. The cash flow models incorporate estimates of future
production, graphite prices and costs. Estimates of future production are
informed by graphite resources estimates made under JORC 2012 standards,
internally and using external experts. Future graphite prices are management
estimates and depend on produced qualities, demand and supply, innovation and
development of the energy transition globally and geopolitical factors
affecting trade and tariffs, among other factors. Future costs levels may vary
according to the market factors, ore qualities and yields as well as
inflation. Subsequent changes to the quantum or to the timing of cash flows
could impact on the carrying value of the respective assets.
Intangible exploration assets relate to consideration for the licence or
concession on acquisition of the assets. Such assets currently have an
indefinite useful life as the Group has a right to renew exploration licences.
Management tests for impairment annually whether exploration projects have
future economic value in accordance with this accounting policy.
Fair valuations in respect of business combinations
In a business combination, the Group is required to value the consideration
provided and the fair valuation of the assets and liabilities acquired. Asset
valuations will depend on similar estimates and models of future cash
generating potential as described under Recoverability of assets above. In
addition, the Group has had to estimate the likely timing and percentage
recovery of VAT receivables as part of the Suni Resources acquisition.
Judgements
As well as relying on estimates and assumptions, the Directors make judgements
to define appropriate accounting policies and to apply to certain transactions
and evaluations, including when the effective IFRS standards and
interpretations do not specifically deal with the related accounting issues.
Key areas of judgements are described in more detail below.
Business combinations
The determination of whether an acquisition of new licences, assets and
related attributes represents a business combination under IFRS 3 (required to
be accounted for at the fair value of the assets and liabilities acquired) or
a series of asset purchases to be accounted for at the allocated cost of
acquisition of the separable assets plus the liabilities assumed, is a
judgement as to whether the component parts represent an inter-related set of
processes forming a business, or not. The Directors concluded that the
acquisition of Suni Resources SA in April 2023, to create a presence across
two new concession areas in Mozambique, represented a business combination
under IFRS 3. At the time of acquisition, definitive feasibility studies had
been completed by the vendor for the Montepuez project as a basis for the
development consents already obtained, the required processes and facilities
needed for the project and as support for potential project financing. These
will now require updating, but provide a significant contribution towards a
project investment decision.
Impairment of assets
As well as the use of estimates, the process of determining whether there is
an indication of impairment or calculating any impairment requires critical
judgement, including the Group's intention to proceed with future work
programmes, the likelihood of licence or concession renewal or extensions ,
whether sufficient data exists to indicate that the carrying amount of an
asset is unlikely to be recovered in full and the success or otherwise of
future mine development strategies.
Resources
Estimates of reserves and resources under JORC criteria requires the exercise
of technical judgements, including ore volumes, recovery factors, plant
efficiency, all of which may affect estimates of future cash flows.
Receivables
The recoverability of receivables, including VAT recoverable balances and in
the Company accounts, intragroup receivables, has to be assessed at each
reporting date. The recoverability of VAT requires judgement on the extent of
any potential disallowances and or non payment by the relevant authorities
when claims are reviewed, though the Group's experience is that while delay in
payment is common, disallowances are ultimately not material and accordingly
no impairment of the receivables has been recognised.
Provision for restoration costs
The Group undertakes certain work for rehabilitating end-of-life production
sites and related production facilities at the same time as production. To
date, restoration and rehabilitation costs have been charged to income as
incurred. The Group takes note of the regulations set out by the Malagasy
Government and the environmental conditions within the mining permit, which
covers the Group's obligations towards restoration and rehabilitation. The
Directors do not currently consider that any material further asset
retirement provision Is presently required because the project areas in
Madagascar are unlikely to incur a material cost for restoration work for
activities to date. In addition, rehabilitation and restoration of mining
areas is an ongoing activity. In line with the requirements of the licence,
the Group has already incurred costs relating to the construction of
anti-erosion infrastructures, dam cleaning, soil restoration and some
reforestation of areas. Following limited production to date, the Group's
operations are expected to significantly increase in future years and the
Group will therefore undertake annually a more detailed analysis of
environmental and restoration obligations, likely costs and the need for a
provision for restoration costs.
5. Business Combination
On 1 April 2023 the Company completed the acquisition from Battery Minerals
Limited ("BAT") of the entire equity capital of Suni Resources SA ("Suni") a
private company incorporated in Mozambique. The acquisition has been accounted
for as a business combination, as it was considered to qualify as a standalone
business under the criteria set out in IFRS 3.
Suni owns two graphite projects with approval for development and production
being the Montepuez Project with a mining licence over an area of 3,667
hectares and the Balama Central Project, which has a mining licence over 1,543
hectares.
Both projects have licences permitting build out, to an annual production of
100,000 tonnes (in 2 stages of 50,000 tonnes each ) and 58,000 tonnes of flake
graphite, per annum, respectively. At the date of acquisition and to the date
of this Report, both concessions are in force majeure due to security issues
in that part of the country.
Under the terms of the SPA and IP Assignment as amended, the total aggregate
consideration for the acquisition was satisfied as follows:
· The issue of 12,065,500 ordinary shares of the Company in two
tranches as follows:
o 5,518,944 ordinary shares issued at Completion; and
o 6,546,556 ordinary shares issued on the eight month anniversary of
Completion;
· The payment of AUD500,000 (c.£0.27 million) in cash paid by the
Company to BAT on 25 January 2023 pursuant to the IP Assignment.
· Payment of a sum of AUD$2,375,000 (c.£1,260,150) to facilitate the
payment of Capital Gains Tax by BAT in connection with the disposal of Suni;
· Payment of AUD5,428 (£2,932) in cash.
The acquisition included shareholder debt advanced by BAT to Suni Resources
S.A., certain IP in relation to development studies and resource estimates, as
well as the assets of Suni including:
· All infrastructure and assets on the ground at the Montepuez Project
including (i) a 100 person base camp facility, (ii) the developed construction
site for setting up the proposed processing facilities (iii) the
well-constructed tailing dam, and (iv) a mobile crusher unit with capacity
sufficient for the first 50,000 tons.
· Long term VAT receivable balances; and
· Bank deposits pledged for the issue of guarantees in connection
with the projects and obligation of Suni to enter the production phase within
a certain time period.
The purchase consideration, including the shares of the Company valued at the
share price on the acquisition date (i.e. 31 pence per share), and the
evaluated fair valuations of assets and liabilities acquired, are as in the
table below. These amounts reflect certain revisions to provisional estimates
made by the Company.
Particulars Amount GBP
1 Purchase consideration:
Cash paid 1,533,081
Equity issued 3,740,305
(A) 5,273,386
2 Net assets of Suni:
Fair value of concessions and related property plant & equipment 9,498,602
Bank Deposits 1,809,278
VAT receivable (fair value) 858,328
Other receivables 142,420
Cash & Bank 79,086
Payables (978,413)
(B) 11,409,301
Bargain purchase gain 6,135,915
(B-A)
The bargain purchase gain has been recognised in net income in the period.
Net cash Outflow on Suni acquisition:
Particulars Amount GBP
Cash paid 1,533,081
Less: cash acquired (79,086)
Net outflow 1,453,995
6. Revenue from Contracts with Customers
The Group and the Company derive revenue from customers in the following
geographical regions:
2024 USA Europe Asia Total
Revenue from external customers 1,042,251 606,880 3,254,725 4,903,856
At a point in time 1,042,251 606,880 3,254,725 4,903,856
2023 USA Europe Asia Total
Revenue from external customers 40,289 717,786 2,131,935 2,890,010
Timing of recognition: 40,289 717,786 2,131,935 2,890,010
At a point in time
Following customers constituted more than 10% of the revenue, their respective
share of revenue is mentioned below:
2024 2023
£ £
Customer A 1,477,622 895,809
Customer B 791,583 471,867
Customer C 580,494 408,780
Customer D 369,405 339,710
Customer E 329,826 292,414
Revenues of approximately £3,548,930 (2023: £2,408,580) are derived from 5
customers who each account for greater than 10% of the Group's and Company's
total revenues.
7. Cost of Sales
Cost of sales comprises:
2024 2023
£ £
Expenses included in Cost of Sales:
Mining & Processing Costs 3,027,349 1,512,563
Human Resource Costs 340,227 326,783
Logistics, Utilities & Plant Admin Costs 1,009,880 368,061
Decrease / (Increase) in Inventory of Inputs 11,554 (676,058)
4,389,010 1,531,349
8. Finance Income
Finance income comprises interest earned on bank deposits (classified within
receivables) which secure certain guarantees of licence obligations in
Mozambique.
9. Expenses
2024 2023
£ £
The following items have been included in arriving at operating loss:
Depreciation on other assets 26,257 242,663
Net foreign exchange loss /(gain) 271,568 (256,927)
PR/IR Expenses 54,192 118,865
Professional Fees 590,965 223,460
Insurance 45,022 127,617
Director Emoluments 476,066 362,042
Management Salaries 940,581 405,793
Brokerage - 93,125
R&D Exploration Expenses 32,764 82,807
Other Admin Expenses 1,655,842 958,421
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 146,400 82,500
the Company and consolidated financial statements
10. Employee Information
The average monthly number of employees (including Executive Directors) was:
2024 2023
Number of employees for the year: 523 474
£ £
Wages & salaries (for the above employees) 1,165,356 1,088,599
Social security costs 115,453 90,123
1,280,809 1,178,722
Directors' remuneration and transactions
2024 2023
£ £
Directors' remuneration
Emoluments, fees and payment in lieu of pension contributions 473,395 482,042
£ £
Remuneration of the highest paid director (gross of capitalisation):
Emoluments and fees 320,000 320,000
Payment in lieu of retirement benefits 30,000 30,000
Refer to Directors Remuneration Report for further information in respect of
Directors' remuneration.
11. Finance Cost
2024 2023
£ £
Interest Expense 402,585 251,641
12. Income Tax
2024 2023
£ £
Profit (loss) on ordinary activities before tax 63,957 (2,357,910)
At the standard small companies rate of UK corporation tax of 19% (2023: 12,152 (459,792)
weighted average rate of 19.5%)
Minimum tax in Madagascar - 9,775
Expenses not deductible for tax purposes 27,425 47,812
Tax losses carried forward (deferred tax not recognised) 1,084,748 411,980
Unrealised profit eliminated on consolidation 41,499
Book profit on acquisition, not taxable (1,165,824)
Short term timing differences 77,171 -
Net tax (credit)/ charge 77,171 9,775
Analysed as:
Deferred tax (credit)/charge 77,171 -
Current tax charge - 9,775
The Group has tax losses available to be carried forward and used against
profits arising in future periods of £12.1 million (2022: £6.4 million). The
Company has tax losses of £5.7 million (2023: £4.8 million) to carry forward
against future profits. The Directors have not recognised a deferred tax asset
on the losses to date due to the uncertainty of recovery.
Factors that may affect future tax charges:
The UK corporation tax at the standard rate for the year is 19.0% (2023:
19.0%)
On 1 April 2023, the corporation tax rate increased to 25% for companies with
profits of over £250,000. A small profits rate was introduced for companies
with profits of £50,000 or less, who will continue to pay corporation tax at
19%. Companies with profits between £50,000 and £250,000 will pay tax at the
main rate reduced by a marginal relief, providing a gradual increase in the
effective corporation tax rate.
13. 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.
2024 2023
Continuing operations:
Loss attributable to equity holders of the Company (£) (13,213) (2,367,685)
Weighted average number of ordinary shares in issue 110,912,194 91,466,033
Loss per share (pence) (0.01) (2.59)
The dilutive instruments like warrants and convertible loan notes 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.
14. Intangible Assets
Group
Cost £
At 1 April 2022 3,571,196
Forex Change 27,869
At 1 April 2023 3,599,065
Forex Change (30,447)
At 31 March 2024 3,568,618
Accumulated amortisation £
At 1 April 2021 -
Charge for the year -
At 1 April 2022 -
Charge for the year -
At 31 March 2023 -
Net book value £
At 1 April 2022 3,571,196
At 1 April 2023 3,599,065
At 31 March 2024 3,568,618
Intangible assets comprise allocations of purchase consideration to rights
under mining
concessions and licences, including rights to explore.
· Intangible assets were assessed for impairment as at 31 March 2024,
including consideration of potential impairment indicators such as:
· Risk to the Group's right to explore and/or risk of the expiry in the
near future without renewal;
· Absence of planned and budgeted further exploration or evaluation;
· Whether any decision has been taken to discontinue exploration and
evaluation in an area due to the absence of a commercial level of reserves;
and
· Whether sufficient data now 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 2024.
15. Investments
Company Shares in group undertaking
Cost and net book value £
At 1 April 2022 3,901,023
Addition 20,325
At 1 April 2023 3,921,348
Addition (see Note 5) 5,437,731
Reclassification of loans 14,545,000
At 31 March 2024 23,904,078
The Company's investments at the reporting date in the share capital of other
companies include the following:
Subsidiaries
Tirupati Madagascar Ventures
Registered: Lot II N 95 SB BIS E, Ambatobe, Antananarivo 103, Madagascar
Nature of business: Graphite mining extraction
%
Class of share Holding
Ordinary shares
98*
*Balance 1% each is held by Mr. S. Poddar & Mr. H. Poddar 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
95*
* Balance 5% is held by Mr. S. Podar on behalf of the Company.
Suni Resources SA
Registered: Moçambique, Cidade de Maputo, distrito de Kamavota, bairro de
Bairro Sommershield, Av. Julius Nyrere, n.º 4000, Edifício Solar das
Acácias, n.º 5 e 6, Cidade de Maputo
Nature of business: Graphite mining extraction
%
Class of share Holding
Ordinary shares
99.9997
Balance 0.0003% is held by Mr. S. Poddar on behalf of the Company.
16. Property, Plant and Equipment
Group Plant and machinery Mine development assets Assets under construction Total
£ £ £ £
Cost
At 1 April 2022 5,778,410 2,004,824 632,029 8,415,263
Additions 2,758,118 422,381 1,894,605 5,075,104
Reclassification - 2,300,000 (2,300,000) -
At 1 April 2023 8,536,528 4,727,205 226,634 13,490,367
Additions - 648,839 - 648,839
Acquisition of Suni Resources - 1,721,546 7,777,055 9,498,602
Foreign Currency Retranslations (147,298) (81,568) - (228,866)
Reclassification 753,804 (527,170) (226,634) -
At 31 March 2024 9,143,034 6,488,852 7,777,055 23,408,941
Depreciation
At 1 April 2022 883,895 175,247 - 1,059,142
Depreciation expense 990,125 242,663 - 1,232,788
At 1 April 2023 1,874,020 417,910 - 2,291,930
Foreign Currency Retranslations (180,729) (6,925) - (187,654)
Depreciation expense 1,175,399 347,474 - 1,522,873
Impairment 798,871 - - 798,871
At 31 March 2024 3,667,561 758,459 - 4,426,020
Carrying amount
As at 1 April 2023 6,662,508 4,309,295 226,634 11,198,437
As at 31 March 2024 5,475,473 5,703,393 7,777,055 18,982,921
Impairment tests were conducted as at the balance sheet date for each cash
generating unit. The recoverability of each CGU was assessed in relation to
value in use based on discounted cash flow models and the Board's assessment
of future use of component assets. The impairment tests were conducted using a
post tax discount rate of 12% p.a., current market graphite prices and with
future production based on volumes of indicated resource and a part of
inferred resource. For the concessions in Madagascar: (i) the assessment for
Vatomina shows a substantial headroom even under significantly higher discount
rate sensitivity; and (ii) for Sahamamy, at 31 March 2024, a provision of
£798,871 was recognised for impairment of the Sahamamy asset as a result of
mining operations being placed on a care and maintenance basis as at that
date, pending further evaluation of the mine development strategy which is
likely to involve different areas of the concession. Accordingly, certain
assets in respect of the development of the existing mining area were
considered impaired although value is recognised in other existing facilities.
In respect of Mozambique concessions, an NPV based model would show
significantly higher value than the fair values recognised at acquisition in
April 2023, and the Directors concluded that those initial assessments of
value of the pre-development assets were not impaired as a result of any
subsequent events.
17. Trade and Other Receivables
Group Company
2024 2023 2024 2023
£ £ £ £
Trade receivables 335,132 710,600 292,676 710,600
Advance for Capex - 287,039 - 287,039
VAT Receivable 2,557,251 1,058,832 8,885 7,451
Other debtors 2,487,059 50,209 - -
Prepayments 1,362 16,424 - 16,424
Amounts owed by group undertakings - - 3,335,332 17,559,350
Advance for acquisition - to vendor* - 1,529,150 - 1,529,150
Advance to Suni Resources pre acquisition* - 1,103,375 - 1,103,375
5,380,805 4,755,629 3,636,893 21,213,389
*Note: Amount advanced to Battery Minerals Limited in terms of agreements
entered into for payment of capital gains tax by the vendor so as to
facilitate the completion of the acquisition. The amount advanced to Suni was
to secure placement of a bank guarantee.
VAT receivables include £1,698,923 in respect of recoverable Madagascar VAT
and £858,328 in respect of recoverable Mozambique VAT (the latter measured at
fair value at acquisition; face value £ 1,529,997). The full recovery of
these balances may take more than one year, but there is no track record of
material disallowances.
Amount owed by Group Companies for FY 2024 is net of an impairment provision
of £2,801,426 against inter-company receivable from ER, based on an
assessment of the recoverable amount of the loan balances owed by the
subsidiary concerned within a reasonable timeframe.
Trade receivables are amounts due from customers for goods sold in the
ordinary course of business. They are generally due for settlement within
30-60 days and therefore are all classified as current. Trade receivables are
recognised initially at the amount of consideration that is unconditional. The
Group holds the trade receivables with the objective to collect the
contractual cash flows and therefore measures them subsequently at amortised
cost using the effective interest method. All sales of the ompany 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 2024 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 292,676 - - - -
Loss allowance - - - - -
At 31 March 2023 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 710,600 - - - -
Loss allowance - - - - -
Trade receivables are provided for when there is no reasonable expectation of
recovery. Indicators that there is no reasonable expectation of recovery
include, amongst others, the failure of a debtor to engage in a repayment plan
with the Group, and a failure to make contractual payments for a period of
greater than 120 days past due. As explained in Note 22, a related party
receivable balance due from Haritmay Ventures LLP was fully provided against
in 2024. Aside from that balance, there are no significant known risks, and
therefore no provision is made as at 31 March 2024 and 31 March 2023.
18. Inventories
Group
2024 2023
Cost £ £
Raw materials and consumables 824,659 457,997
Finished and semi-finished goods 385,266 928,561
1,209,925 1,386,558
19. Trade and Other Payables
Current:
Group Company
2024 2023 2024 2024
£ £ £ £
Trade payables 2,098,538 1,084,991 852,735 243,500
Social security and other taxes 19,392 48,913 3,365 -
Accruals 639,773 550,904 488,776 491,940
2,757,703 1,684,808 1,345,176 735,440
In the Directors' opinion, the carrying amount of payables is considered a
reasonable approximation of fair value.
Non-current:
Group Company
2024 2023 2024 2023
£ £ £ £
Lease liability 26,166 31,080 - -
The Company has taken land on lease for the Vatomina project for 18 years
hence, there is no current maturity.
20. Provisions
No provisions were recognised as at 31 March 2024 or 2023.
21. Borrowings
The Company has issued two series of convertible loan notes, the 2019 CLNs and
2022 CLNs both carrying coupon of 12% payable half yearly and convertible at
the holders' option at issue price as defined in the underlying instrument,
key terms thereof being as below:
Term CLN2019 CLN2022
Coupon 12% payable half yearly 12% payable half yearly
Maturity 31 December 2024, as amended from original 3 years from issue date per 3 years from date of issue
agreement. Since amended again - see Note 28
See Note 26 regarding amendments agreed subsequent to the year end
Conversion At the holders' option - see Note 28 At the holders' option
Conversion Price £0.45 per ordinary share being the IPO fund raise price per ordinary share £0.60 for year 1
£0.75 for year 2
£0.90 for year 3
See Note 26 regarding amendments agreed to the terms and maturities of the
CLNs since 31 March 2024.
Maturities as at 31 March 2023 (See also Note 26) 2024 2023
Within one year 909,000 909,000
Between 2 and 5 years 1,862,500 1,862,500
2,771,500 2,771,500
The loan notes may be redeemed by the Company at any time up to their
maturity.
The following table shows changes in borrowings. During FY23 the Company
received a conversion notice for £100,000 of 2019 CLNs which were converted
into equity. The Company raised gross proceeds of £1,862,500 under the 2022
CLN in the year ended 31 March 2023 with transaction costs incurred of
£93,125.
2024 2023
Opening Balance as on 1st April 2,771,500 1,009,000
Issued during the year - 1,862,500
Redeemed/Converted during the year - (100,000)
Closing Balance as on 31st March 2,771,500 2,771,500
The loan notes may be redeemed by the Company at any time up to the Maturity.
FY24 consolidated borrowings also include £203,830 of short-term working
capital advance from local banks in Madagascar.
22. Share Capital
2024 2024 2023 2023
Number £ Number £
Allotted, called up and fully paid
Ordinary shares of 2.5p each 124,299,220 3,107,482 101,447,768 2,536,195
Table showing allotments during FY 24:
Particulars Date of Issue Number of Shares Price per share £ Amount £
Suni Acquisition Consideration - 1 19th Apr 2023 2,018,944 0.31 625,873
Suni Acquisition Consideration - 2 19th Apr 2023 3,500,000 0.31 1,085,000
Shares issued in lieu of CLN Interest 01st Dec 2023 1,285,952 0.175 225,042
Suni Acquisition Consideration - 3 18th Dec 2023 6,546,556 0.31 2,029,432
Issue of Shares 17th Jan 2024 9,500,000 0.11 1,045,000
Total 22,851,452 5,010,347
Net proceeds of shares issues were reduced by £82,580 of issue expenses.
23. Options / Warrants over Ordinary Shares
The tables below detail of options or warrants giving the right to subscribe
for new ordinary shares of the Company which have been issued principally to
directors as part of their remuneration package and to brokers, on a success
fee basis, for the fundraising activities. No warrants or options were issued
in the year ended 31 March 2024.
All warrants / options are equity-settled. 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.
The following were the key assumptions used to estimate the fair value of the
options issued in previous years:
1. Expected Volatility: 20%
2. Contractual Life of the warrant: 3 years
3. Risk free interest rate: 0.38% p.a.
The following options over ordinary shares are outstanding at 31 March 2024:
Grant Date Number of warrants exercisable and outstanding
Expiry Date Exercise Price (£)
31 December 2017 31 December 2025 0.30 1,000,000
31 December 2018 31 December 2025 0.40 1,520,000
31 March 2019 31 March 2025 0.40 320,000
31 December 2019 31 December 2025 0.40 1,620,000
31 March 2020 31 March 2025 0.40 480,000
20 April 2021 20 April 2024 1.35 222,222
Optiva Securities Limited was eligible for issue of following share warrants
during FY2023, but these have not yet issued. The Company had not accounted
for these options granted in 2023 as they had not been formally issued and the
cost of such warrant is not material.
Eligibility Date Expiry Date Exercise Price (£) Eligible number of warrants
05 December 2022 05 December 2025 0.350 714,285
08 August 2022 08 August 2025 0.900 103,472
Total 817,757
The following table details changes in the aggregate of options outstanding:
2024 2023
Opening Balance as on 1st April 5,913,348 6,630,491
Expired during the year - (717,143)
Closing Balance as on 31st March 5,913,348 5,913,348
In FY23, 640,000 warrants issued to management executives and 77,143 to
brokers expired.
24. 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 and hierarchy 2024 2024 2023 2023
£ £ £ £
Financial assets
Cash and cash equivalents (a) 185,968 185,968 289,338 289,338
Loans and receivables, net of impairment (a) 5,380,805 4,725,960 4,755,629 4,542,402
Total at amortised cost 5,566,773 4,911,928 5,044,967 4,831,740
Financial liabilities
Trade and other payables (a) 2,757,703 2,757,703 1,684,808 1,684,808
Borrowings (a) 2,975,330 2,975,330 2,771,500 2,771,500
Lease Liabilities (a) 26,166 26,166 31,080 31,080
Total at amortised cost 5,759,199 5,759,199 4,487,388 4,487,388
Fair value of financial assets and liabilities for the Company
Valuation, Methodology and hierarchy Book value Fair value Book value Fair value
2024 2024 2023 2023
£ £ £ £
Financial assets
Cash and cash equivalents (a) 101,589 101,589 130,340 130,340
Loans and receivables, net of impairment (a) 18,181,893 18,181,893 21,213,389 21,213,389
Total at amortised cost 18,283,481 18,283,481 21,343,729 21,343,729
Financial liabilities
Trade and other payables (a) 1,345,176 1,345,176 735,440 735,440
Borrowings (a) 2,771,500 2,771,500 2,771,500 2,771,500
Total at amortised cost 4,116,676 4,116,676 3,506,940 3,506,940
Valuation, methodology and hierarchy
The carrying amounts of cash and cash equivalents, trade and other
receivables, trade and other payables, and Borrowings are all stated at book
value. All have the same fair value due to their short-term nature except VAT
receivables have been discounted at 12% p.a. for 2 years.
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 2024.
The Group considers its maximum exposure to be:
2024 2023
£ £
Financial assets
Cash and cash equivalents 185,968 289,338
Loans and receivables, net of impairment 5,380,805 4,755,629
5,566,773 5,044,967
The Company considers its maximum exposure to be:
2024 2023
£ £
Financial assets
Cash and cash equivalents 101,589 130,340
Loans and receivables, net of impairment 18,181,893 21,213,389
18,283,481 21,343,729
All cash balances are held with an investment grade bank who is our principal
banker. Although the Group has seen no direct evidence of changes to the
credit risk of its counterparties, the current focus on financial liquidity in
all markets has introduced increased financial volatility. The Group continues
to monitor the changes to its counterparties' credit risk.
Liquidity risk
Liquidity risk is the risk the Group will encounter difficulty in meeting its
obligations associated with financial liabilities as they fall due. The Board
is responsible for monitoring and managing liquidity and ensures that the
Group has sufficient liquid resources to meet unforeseen and abnormal
requirements.
Available liquid resources and cash requirements are monitored using detailed
cash flow forecasts. The Directors decision to prepare these accounts on a
going concern basis is based on assumptions which are discussed in the Note 3
above.
Where the Group becomes aware of a situation in which it would exceed its
current available liquid resources, it would apply mitigating actions
potentially involving new financing, working capital management and reduction
of its cost base.
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 2024 Amount cash flows or less months years Years
£ £ £ £ £ £
Non-derivative financial liabilities
Trade and other payables 2,757,703 2,757,703
Borrowings 2,771,500 3,151,888 991,184 2,160,704
Lease Liability 26,166 26,166
31 March 2023
Non-derivative financial liabilities
Trade and other payables 1,684,808 1,684,808
Borrowings 2,771,500 3,485,379 1,100,562 2,384,816
Lease Liability 31,080
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 2024 Amount cash flows or less months Years Years
£ £ £ £ £ £
Non-derivative financial liabilities
Trade and other payables 1,345,176 1,345,176
Borrowings 2,771,500 3,151,888 991,184 2,160,704
31 March 2023
Non-derivative financial liabilities
Trade and other payables 735,440 735,440
Borrowings 2,771,500 3,485,379 1,100,562 2,384,816
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 (MGA) and Mozambican Meticals
(MZN) due to its operating subsidiaries in those countries as some costs are
based in local currency. FX rates as per Xe.com as on 31 March 2024 were as
follows:
MGA to GBP: 5514.13 to 1
MZN to GBP: 80.6399 to 1
USD to GBP: 1.2623 to 1
The Group currently does not hedge 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 USD
2024 2023
Cash and cash equivalents 69,330 66,652
Trade & other receivables 301,561 997,639
Trade & other payables (504,913) (243,500)
Net Exposure in GBP equivalent (134,022) 820,791
Group MGA MGA
2024 2023
Cash and cash equivalents 65,379 158,386
Trade & other receivables 1,738,605 1,101,590
Trade & other payables (1,335,614) (949,368)
Net Exposure in GBP equivalent 468,370 310,608
Group MZN MZN
2024 2023
Cash and cash equivalents 19,000 -
Trade & other receivables 3,340,639 -
Trade & other payables (76,913) -
Net Exposure in GBP equivalent 3,282,726 -
Company USD USD
2024 2023
Cash and cash equivalents 69,330 66,040
Loans to subsidiaries 19,559,920 15,153,109
Trade & other receivables 1,262,775 6,060,281
Trade & other payables (852,736) (578,315)
Net Exposure in GBP equivalent 20,039,289 20,701,115
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.
2024 Group Company
£ £
GBP:USD exchange rate increases by 10% 386,693 33,315
GBP:USD exchange rate decreases by 10% (386,693) (33,315)
GBP:MGA exchange rate increases by 10% 319,467 -
GBP:MGA exchange rate decreases by 10% (353,617) -
2023 Group Company
£ £
GBP:USD exchange rate increases by 10% 82,079 2,070,112
GBP:USD exchange rate decreases by 10% (82,079) (2,070,112)
GBP:MGA exchange rate increases by 10% 31,068 -
GBP:MGA exchange rate decreases by 10% (31,068) -
25. Related Party Transactions
PranaGraf Materials and Technologies Private Limited ("Pranagraf", formerly
known as Tirupati Speciality Graphite Private Limited) is an entity
incorporated in India. Pranagraf was previously connected to the Company in
that both Shishir Poddar and Hemant Poddar were directors and shareholders of
Pranagraf during the periods covered by this Report and Mr S Poddar was
formerly the Group's CEO. Pranagraf was formerly used by Mr S Poddar as a
channel for provision of services and materials to the Group. Mr S Poddar has
denied access to the Group to its previous accounting systems and data which
were controlled by Praragraf. At 31 March 2024, the Company owed certain
amounts to Pranagraf (included within creditors) in respect of purchased
capital goods and consumables and fees for services supposedly provided by
Pranagraf. The precise amounts owing as at 31 March 2024 but more particularly
in respect of subsequent periods are disputed, and/or require further
investigation as to the validity of charges invoiced, including further
assessment of whether certain services were actually performed or were
provided at inflated prices. Of the amounts claimed by Pranagraf,
approximately £0.1 million was a balance (which is provided for) as at 31
March 2024. Pranagraf notes that the total of invoices and claims in respect
of the year ended 31 March 2024 was approximately £0.8 million and total
payments to Pranagraf in the year were approximately £0.8 million.
Haritmay Ventures LLP (HV) is an entity incorporated in India and engaged in
manufacturing graphite processing machinery and equipment which the Group has
used in its projects. The Company was formerly connected to HV in that Shishir
Poddar is a shareholder of HV. At 31 March 2024, a net amount of £287,039
(2023: £287,039) was receivable from HV. In view of the uncertainty around
recovery of that amount, the receivable balance has been fully provided
against.
Optiva Securities Limited is a United Kingdom stock brokerage firm that has
provided broking services to the Company. Optiva is connected to the Company
as Mr Christian St.John-Dennis was one of the directors of the Company for
part of the year and also holds a position with Optiva Securities Limited. For
the year ended 31 March 2024, Optiva were paid £100,430 in respect of
retainers, fees for renegotiation of CLN terms and equity placing commissions.
26. Deferred Tax Assets
2024 2023
Brought forward DTA 74,076 75,242
Transferred to profit & loss during the year (74,076) -
Forex - (1,196)
Carried forward DTA - 74,076
27. Capital Commitments
There were no significant capital commitments as at 31 March 2024 or 2023.
28. Events after the Reporting Period
Since 31 March 2024 the Group has experienced a period of financial distress
and a re-structuring and re-financing including the following actions and
events:
1. Suspension & resumption of production: during calendar year 2024
production from the Group's mines in Madagascar was intermittent due to lack
of funding for operating costs and operational issues. Production was resumed
in February 2025 following the change in leadership of the Company.
2. Suspension of Listing: the Company's shares were suspended from trading
on the London Stock Exchange in August 2024. It is anticipated that the
listing will be restored and share trading will resume once the Company is in
compliance with its continuing obligations for disclosure, which is
principally conditional on bringing up to date the filing of financial
statements, which have been delayed for reasons explained elsewhere in this
Report.
3. Board Changes: as more fully explained in the Chairman's Statement and
Directors' Report, a shareholder group requisitioned a general meeting and
successfully petitioned for changes to the composition of the Company Board in
late 2024. This initiative was undertaken due to the high risk of financial
failure of the Group and poor governance, in the view of the shareholders.
Following the Board changes, the contract of the former CEO was terminated in
February 2025 and new management installed.
4. Accounting systems: the Group lost access to its accounting and most
data systems in early 2025 following the termination of the CEO, as he
withheld administrative rights to the systems and support from previous
outsourced service provider companies in India controlled by him. The Company
has had to implement a new accounting system in early 2025, which is now
largely completed. The Company initiated legal actions to force the handover
of the administrative rights to its systems, and while the Company has
reserved its rights, any such action would likely take time to yield results,
if pursued.
5. Late filing of accounts: as a result of the financial distress of the
Company in 2024 and then the loss of access to accounting systems in early
2025, the Company has been late in filing its financial statements for the
year ended 31 March 2024 with the relevant regulator, Companies House.
6. Equity issues: in May 2024, 5,209,090 ordinary shares of the Company
with nominal value of £0.025 each were issued to various directors and
executives in lieu of salary. In January 2025, 9,053,110 ordinary shares of
the Company of nominal value of £0.025 each were issued to certain directors
in lieu of salary.
7. The Company received, on 27 May 2025, notice of application for pre
litigation mediation filed at the behest of Pranagraf Material &
Technologies Pvt. Ltd seeking resolution of payment of certain invoices and
claims for services and reimbursements - see Note 25, Related Parties. The
Company has responded noting that the application is not in accordance with
the governing law and jurisdiction requirements of the service agreement
concerned.
8. Re-financing: in 2025, the Company has launched a number of
restructuring and financing measures:
1. The Company has received subscriptions for £4.5 million of new
convertible loan notes ("2025 CLNs"). The 2025 CLNs are convertible at the
option of the holder and by the Company, when the conversion shares can be
admitted to trading. Conversion will be at a share price of 3.75 pence per
ordinary share and can be elected once: (i) the Company has received approval
from shareholders in a general meeting for the issue of the conversion shares;
(ii) listing of the Company's ordinary shares on the LSE is resumed and the
present suspension is lifted, which requires filing of the 31 March 2024
annual report and audited financial statements, as well as the 30 September
2024 half year accounts; and (iii) approval is received for the required
prospectus for issue of the new conversion shares. The 2025 CLNs carry no
coupon unless the prospectus is not approved by 31 July 2025, in which case
interest of 12% per annum from the issue date would apply, which the Company
may elect to pay in the form of additional shares. The 2025 Notes have a final
maturity date of 31 December 2025 in the event that conversion has not
occurred. On conversion, noteholders will receive one warrant to subscribe for
an ordinary share in the Company at 3.75 pence per share for each conversion
share received. In the event that the Company's share price exceeds a
threshold of 11.25 pence per share for a defined period in 2025, warrant
holders who elect to exercise their warrants within a 30 day period will
receive a further warrant, on a 1 for 2 basis, to subscribe for ordinary
shares at 15 pence per share.
2. The Company has received approval from the required majority of the
holders of its 2019 issue of CLNs to amend the terms to require conversion of
those Notes to ordinary shares, at a conversion price of 3.75 pence per
ordinary share, subject to similar conditions as for the conversion of the
2025 CLNs. The final maturity date of the 2019 CLNs was amended to 31
December 2025 and interest increased to 16% per annum, which the Company may
elect to pay in the form of ordinary shares.
3. The Company has received approval from the required majority of the
holders of its 2022 issue of CLNs to amend the terms to extend the final
maturity date of the 2022 CLNs to 26 July 2026 and interest increased to 16%
per annum for the period to 26 July 2025, which the Company may elect to pay
in the form of ordinary shares, and to 15% per annum (in cash) thereafter.
4. The Company reached agreement with certain creditors to settle amounts
owing according to various individual payment plans. Not all such creditors
have formal payment plans agreed with the Group, and in respect of certain
creditors payments are continuing to be made to spread settlements over an
extended period without any such formal agreement in place.
ENDS
About Tirupati Graphite Plc
Tirupati Graphite is a specialist graphite producer and a supplier of the
critical mineral for a decarbonised economy and the energy transition, with
leading low development capital and operating costs. The Company places a
special emphasis on green applications including renewable energy, e-mobility,
energy storage and thermal management, and is committed to ensuring its
operations are sustainable.
The Group's operations include primary mining and processing in Madagascar
where the Group operates two key projects, Sahamamy and Vatomina with a
combined installed final production nameplate capacity of 30,000tpa, subject
to minor capex additions. The Madagascar operations produce high-quality flake
graphite concentrate with up to 97% purity and selling to customers
globally.
The Group also holds two advanced stage, world class, natural graphite
projects in Mozambique. Work has already commenced to optimise the economics
for development of the Montepuez graphite project, which is permitted for
100,000tpa production. A table of the Group's projects is provided below:
Country Project Stage
Madagascar Sahamamy Production paused: 18,000 tpa final production plant nameplate capacity
Madagascar Vatomina In current production ramp-up to 18,000 tpa capacity by December 2025.
Mozambique Montepuez 100,000 tpa permitted, construction-initiated
Mozambique Balama Central 58,000 tpa permitted, [PT@ partyially permitted? Apparently still needs
environmental consnet etc]
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