TIDMTGR
RNS Number : 2751U
Tirupati Graphite PLC
02 December 2021
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement, this information is considered to
be in the public domain.
2 December 2021
Tirupati Graphite plc
('Tirupati' or the 'Company')
Unaudited Half-Yearly Results
Tirupati Graphite plc (TGR.L, TGRHF.OTCQX), the specialist
graphite and graphene company developing sustainable new age
materials, is pleased to announce its Interim Results for the six
months ended 30 September 2021. The Company's operations include
primary graphite mining and processing in Madagascar, and a
specialty graphite, graphene and advanced materials operation in
India.
Growth & Development Highlights
-- Commissioned 9,000 tonnes per annum ("tpa") development at
greenfield Vatomina Project, Madagascar
-- First sales and shipment from Vatomina commenced in October
2021, commercial production expected to be declared in
the current quarter
-- Additional 54,000 tpa in three modules at Vatomina to follow
over a three-year period
-- Primary flake graphite production capacity from Madagascar
currently 12,000 tpa, targeted to reach 84,000 tpa by end
Calendar Year ("CY") 2024
-- Commenced development of second 18,000 tpa plant at Sahamamy, Madagascar
-- Scheduled for completion in Q2 CY 2022
-- Completion to Increase flake graphite capacity to 30,000
tpa during by end of Q2 CY 2022
-- Redevelopment of 100-kilo watt Sahamamy hydropower plant
on track to be commissioned in Q1 CY 2022
-- Acquisition agreement executed to acquire Suni Resources SA,
a Mozambique subsidiary of Battery Minerals subject to conditions
precedent (refer RNS dated 17 August 2021 )
-- to add two world-class graphite deposits in Mozambique
significantly increasing the Company's JORC compliant
mineral resource base by 152 million tonnes at 8.5% Total
Graphitic Carbon ("TGC"):
-- the construction initiated 100,000 tpa (2x50,000 tpa)
Montepuez Graphite Project; and
-- the advanced feasibility mining permitted 50,000 tpa
Balama Central Graphite Project
-- Provides the Company with medium and small flake graphite
resources to complement Madagascan Jumbo and Large flake
projects
-- Land secured for Patalganga, India, speciality graphite
project expansion to 4,800 tpa capacity
-- target commissioning by the end of Q2 CY 2022
-- increased capacity and product range to continue creating
markets in advance of larger speciality graphite projects
coming on-stream
-- Development of first of two 15,000 tpa speciality graphite projects continued with:
-- target completion by end of CY 2022
-- upon completion increases total capacity to 19,800 tpa
-- Stage 1 of Tirupati Graphene and Mintech Research Centre
("TGMRC") commissioned in July 2021 with
-- capability to manufacture Graphene products in kilogram
per day scale
-- capability to manufacture Aluminium Graphene Composite
in kilograms scale for bulk sample supply to application
developers for tests and product trials
-- Established high end ESG credentials by release of inaugural
Sustainability Report complying with GRI standards in October 2021
covering:
-- descriptions of green applications of graphite and graphene
and green technologies and processes developed by the Company
-- Company's approach to ESG and adoption reporting to GRI
standards and UNSD goals
-- Company's environmental activities including 38,000 tons
of waste reduction, >18,500 trees planted and other activities
supporting the Company's plans to achieve net zero emissions
and zero waste
-- details about the Company's "Shakuntalam" programmes which
includes social activities, employment generation and health
and safety initiatives undertaken
-- the Company's governance credentials and statements as
per QCA standards.
Operational and Financial Highlights
-- Completed an oversubscribed placing at a price of GBP0.90 per
ordinary share raise gross proceeds of GBP10 million
-- Strong balance sheet with cash in hand of GBP6.41 million at
period end, insignificant current liabilities and significant
investments already made in projects currently under development
-- The Company's only debt is the pre-IPO issued convertible loan
notes outstanding of GBP1.17 million which are convertible
at the IPO price of GBP0.45 per share
-- Operations of the proof of concept 3,000 tpa Sahamamy flake
graphite and 1,200 Patalganga expandable graphite projects
continued despite limitations caused by the second and third
phases of restrictions owing to the COVID-19 pandemic
-- Sahamamy project continued to demonstrate low cost high margin
performance, key operating metrics in the table below:
Six Months Ending 30 Sep 2021 30 Sep 2020
Cost of Production GBP255,193 GBP212,685
--------------- ----------------------------
Quantity of Production (MT(1) 1,060 MT 716 MT
)
--------------- ----------------------------
Cost per MT of Production GBP241/MT GBP297/MT
--------------- ----------------------------
Total Sales (MT) 950 MT 682 MT
--------------- ----------------------------
Total Revenues GBP560,058 GBP419,402
--------------- ----------------------------
Achieved Basket Price (per US$819/GBP590 US$778/ GBP615
MT) MT MT
--------------- ----------------------------
Gross Profit GBP304,865 GBP206,718
--------------- ----------------------------
Gross Margins (per MT) GBP321/MT GBP303/MT
--------------- ----------------------------
Gross Margin on Sales (%) 54% 49%
--------------- ----------------------------
Corporate and Administrative GBP1,141,387 GBP574,935
Costs
--------------- ----------------------------
EBIDTA GBP(836,522) GBP(368,217)
--------------- ----------------------------
Depreciation GBP172,853 GBP95,858
--------------- ----------------------------
Operating Profit/(Loss) GBP(1,009,375) GBP(464,075)
--------------- ----------------------------
1. MT = Metric Tonnes
As at 30 Sep 2021 31 March 2021
--------------- ----------------------------
Selected Balance Sheet items
Cash and cash equivalents GBP6,412,114 GBP1,644,189
--------------- ----------------------------
Net Assets GBP16,338,981 GBP8,181,563
--------------- ----------------------------
-- Tirupati Speciality Graphite Private Limited ("TSG"), which
houses the Company's specialty graphite, graphene and advanced
materials operation in India, recorded total revenues of c.GBP1.3
million during the period. Consolidation of TSG's financials
shall occur following the completion of acquisition, which
is pending final regulatory approvals in India
Outlook
-- Graphite remains designated as a critical raw material by US
and EU, being a key contributor to the green energy transition
and electrification of mobility.
-- The global flake graphite market is forecast to grow multiple
times over the decade, by the likes of UBS, World Bank, Roskill,
Benchmark Minerals owing to energy transition and other green
applications.
-- We believe our capacity build timing aligns with the markets.
-- We expect our flake graphite production and sales to exceed
4,000 tons in H2 of the current financial year to 31 March
2022. This is expected to increase to around 20,000 tons for
the year to March 2023 and continuing to rise from then.
-- We remain conservative on capacity utilisation given the global
challenges for movement of men and materials.
-- In addition to the primary flake graphite production, we also
expect the speciality graphite projects to evolve from its
current 1,200 tpa operations to exceed 5,000 tpa for the year
to March 2023 and rising to 15,000 tpa from the following year.
-- We expect commercialisation of at least one of the many bulk
graphene applications we are working on and remain prepared
to install additional capacities as markets are developed.
Shishir Poddar, Executive Chairman of Tirupati Graphite,
said:
"We have continued the strong progress made since our IPO in
December last year investing in and establishing new capacities for
increased production from our low cost, high margin flake graphite
operations in Madagascar, furthering the proof of concept
established with the 3,000 tpa upstream operations and 1,200 tpa
expandable graphite operations established prior to IPO. We have
also continued to develop our sustainable new age materials making
a mark in the world of advanced materials. With two projects having
been commissioned in the period under review and a further three
under investment and development, we will be adding significant
production capacities across our upstream and downstream businesses
from the next financial year onwards, which will be a game changing
transformation for us becoming a globally significant supplier of
primary flake graphite and speciality graphite.
"The significance of our pending acquisition of the Mozambique
graphite projects shouldn't be overlooked. The higher grade
resource with small and medium flake sizes are extensively used
including in the production of spherical graphite for battery
production. This complements in many ways with the predominantly
large and jumbo flakes from our Madagascar graphite projects and
strategically positions us to serve all growth markets for flake
graphite and moving far beyond the medium term development
plan.
"Graphite's importance in helping the world to meet net zero
targets is increasingly recognised and demand is expected to
increase exponentially in the coming years. We are leveraging the
expertise built over generations to establish Tirupati as a world
leader across the entire graphite value chain and in the past six
months we have extensively strengthened our leadership
positioning.
"Graphene and advanced materials using green technologies are
the feather in our cap. Our understanding and belief that our green
technologies for manufacturing graphene and advanced materials are
not only unique but application friendly was strengthened during
the period and we expect the hard work to bear fruits in the not so
distant future."
Enquiries:
Tirupati Graphite Plc admin@tirupatigraphite.co.uk
Puruvi Poddar - Chief of Corporate & Business +44 (0) 20 39849894
Development
Optiva Securities Limited (Broker)
Ben Maitland - Corporate Finance +44 (0) 20 3034 2707
Robert Emmet - Corporate Broking +44 (0) 20 3981 4173
FTI Consulting (Financial PR) +44 (0) 20 3727 1000
Ben Brewerton / Ojasvi G oel / Alessandro tirupati@fticonsulting.com
Rubin / Kelly Smith
https://www.tirupatigraphite.co.uk/
MANAGEMENT'S CONDENSED REPORT
In the nine months since our IPO, the Company has made strong
progress across its business divisions despite the challenges
related to impacts of the COVID-19 pandemic and continues on its
well-defined path to create value for our shareholders and
stakeholders and contributing to a greener world.
Graphite has unparalleled properties and a diversity of
applications such that there is a bit of invisible graphite in
nearly every aspect of our day-to-day life such as in our
smartphones, televisions, cars and many more. Graphene derived from
graphite, can be used in many applications that would help make the
world more sustainable.
Graphite's importance in helping the world to meet net zero
targets is increasingly recognised and demand is expected to
increase significantly in the coming years. The World Bank, among
others, is forecasting graphite output will need to jump by nearly
500 percent by 2050 to support the clean energy transition.
Graphite remains designated as a critical raw material by the US
and the EU, being a key contributor to the green energy transition
and electrification of mobility with limited and concentrated
current sources.
Tirupati is strongly positioned in the space of critical and new
age materials providing it with the opportunity to benefit from the
booming green economy and contribute to the global efforts of
mitigating climate change.
During the period, Tirupati has increased production from its
low cost, high margin mining operations in Madagascar. The Company
has also invested to expand the development pipeline with projects
that will significantly add to production capacity from next year
onwards. As such, it is forecasting significant primary production
growth in the second half and over the coming year with a near-term
target of increasing Madagascan flake graphite capacity to 30,000
tpa by Q2 CY 2022.
The Company has also been steadily building its technical and
commercial teams as it expands its production capacity with a view
to hitting its medium-term target in Madagascar of 84,000 tpa
primary flake graphite capacity by end CY 2024 making it a globally
significant supplier. It remains well positioned to maintain and
continue to improve on its already industry low operating margins
as it captures economies of scale benefits across its operations.
As its operating cashflows continue to grow, the Company expects to
be able to substantially fund future capacity developments in
Madagascar utilising its internal resources.
Some significant events that have occurred during the first six
months of the financial year which had an impact on the condensed
set of financial statements were as follows:
-- Proof of concept 3,000 tpa Sahamamy operations continued to
demonstrate low cost high margin performance with key operating
metrics (as disclosed in the earlier table above) underpinned
by:
-- Primary graphite production of 1,060 Metric Tonnes ("MT")
(H1 2020: 716 MT), representing a 48% increase period-on-period
-- Sales of 950 MT generating revenues of GBP560.1K (H1 2020:
GBP419.4k), representing a 33% increase period-on-period
-- Gross profits increasing by 47.5% to GBP304.9k (H1 2020: GBP206.7)
giving an achieved gross margin of 54.4% (H1 2020: 49.3%),
ahead by 5.1 percentage points period-on-period
-- Cost per MT of Production of GBP241/MT (H1 2020: GBP297/MT),
representing a reduction of 19% period-on-period
-- Development of the next 18,000 tpa plant commenced at Sahamamy
which is estimated to be commissioned in Q2 CY 2022 bringing
total production of primary flake graphite from Madagascar
to 30,000 tpa
-- Successful commissioning of Vatomina 9,000 tpa plant in September
2021 with debottlenecking and operational stabilisation ongoing,
first sales and shipment commencing from October 2021
-- Sahamamy 100-kilo watt hydropower plant redevelopment continuing
on track to be commissioned in Q1 2022
-- Second stage exploration programme at both Sahamamy and Vatomina
continued, circa 1620 metre diamond core drilling, 588 Augur
drills with circa 4,700 metre augur drilling and 21 trenches
executed up to 30 September 2021
-- Stage 1 of TGMRC commissioned in July 2021 introducing capability
of manufacturing Graphene Oxide ("GO"), reduced Graphene Oxide
("rGO") and its new Aluminium Graphene Composite ("Al-Gr Composite")
in kilograms (i.e. bulk) scale.
The Company continues to be well positioned to benefit from the
growing markets for flake graphite across applications as we
increase our production capacities.
In its downstream specialty graphite segment under TSG, where
demand growth is forecast to be exponential driven by demand from
EVs, energy storage, flame retardant and other growth sectors, the
Company is also expanding rapidly. With land allocation at
Patalganga, the Company moved to reinstate and fast-track its
Patalganga expansion project to uplift its specialty graphite
production capacity to 4,800 tpa, which is expected to come on
stream in Q3 CY 2022.
Alongside the development at Patalganga, the Company continued
to advance the first of the two larger scale 15,000 tpa plants at
its specialty graphite project, which is due for completion by the
end of 2022. By this time, the Company's specialty graphite
production capacity is expected to reach almost 20,000 tpa and with
the completion of the second 15,000 tpa unit, the total specialty
graphite capacity will be brought up to almost 35,000 tpa by 2024
under the Company's revised MTDP.
In July 2021, the Company opened the first stage of the Tirupati
Graphene and Mintech Research Centre ("TGMRC") which has the
capability to manufacture bulk quantities (i.e. kilograms scale) of
its GO, rGO and its Al-Gr Composite. TGMRC also boasts state of the
art lab facilities for pilot scale manufacture of high purity
graphite and development of mineral processing technology for flake
graphite. This high purity flake is being provided to prospective
customers for testing and trials. We are also working to optimise
the process and cost structure of bulk graphene manufacture as
commercial applications evolve.
We thank shareholders for supporting our oversubscribed placing
in April 2021 which raised gross proceeds of GBP10 million which we
are now utilising to progress the various growth projects as
outlined above.
Along with the items listed in note 8 of the Notes to the
Financial Statements, the principal risks and uncertainties for the
remaining six months of the financial year are as below:
1) Ongoing risks of global pandemic in relation to operations
and developments of the Company's projects;
2) Dependence on the Madagascar Primary Graphite Projects and
any adverse developments affecting the operations and development
of these projects;
3) Dependence on the Tirupati Specialty Graphite Projects and
any adverse developments affecting the operations and development
of these projects;
4) Geopolitical, Regulatory and Sovereign risks in relation to
operations and development in Madagascar and to a lesser extent,
operations and developments in India;
5) Markets, competition, and graphite price risks in respect of
graphite markets as a whole or specific graphite market segments
(i.e. primary graphite and specialty graphite) and with graphene
market developments.
In October 2021, we published our inaugural Sustainability
Report in compliance with GRI Standards, setting out our strong
environmental, social and governance (ESG) business practices and
commitments. We aim to be net zero for Scope 1 and 2 emissions from
our upstream operations by 2030.
We are leveraging the expertise built over generations to
establish Tirupati as a world leader across the entire graphite
value chain and in the past six months we have extensively
strengthened our leadership positioning as we seek to evolve as a
global leader.
Your board and management remain aligned with the interests of
shareholders with no equity interest sold to date by any
member.
Responsibility Statement
We confirm that to the best of our knowledge:
-- the Interim Report has been prepared in accordance with International
Accounting Standards 34, Interim Financial Reporting, as adopted
by the EU; and
-- gives a true and fair view of the assets, liabilities, financial
position and profit/loss of the Group; and
-- the Interim Report includes a fair review of the information
required by DTR 4.2.7R of the Disclosure and Transparency Rules,
being an indication of important events that have occurred
during the first six months of the financial year and their
impact on the set of interim financial statements; and a description
of the principal risks and uncertainties for the remaining
six months of the year.
-- the Interim Report includes a fair review of the information
required by DTR 4.2.8R of the Disclosure and Transparency Rules,
being the information required on related party transactions.
The Interim Report was approved by the Board of Directors and
the above responsibility statement was signed on its behalf by:
Shishir Poddar
Executive Chairman & Managing Director
30 November 2021
Unaudited Condensed Consolidated Statement of Comprehensive
Income
For the half-year ended 30 September 2021
Six Months Ending 30 September 2021 2020
GBP GBP
Notes
Continuing operations
Revenue 560,058 419,402
===================================== ====== ============== ============
Cost of Sales (255,193) (212,685)
Gross profit 304,865 206,718
===================================== ====== ============== ============
Administrative expenses 4 (1,314,240) (670,793)
Operating loss (1,009,375) (464,075)
Finance costs (75,833) (28,617)
Loss before income tax (1,085,208) (492,692)
Income tax (25,943) -
===================================== ====== ============== ============
Loss for the period attributable
to owners of the Company (1,111,151) (492,692)
===================================== ====== ============== ============
Other comprehensive income:
Items that may be reclassified
to profit or loss:
===================================== ====== ============== ============
Exchange differences on translation
of foreign operations (372,931) (99,771)
===================================== ====== ============== ============
Total comprehensive loss for
the year attributable to the
Group (1,484,082) (592,464)
===================================== ====== ============== ============
Earnings per share attributable Pence per Pence per
to owners of the Company share share
From continuing operations:
Basic 5 (1.71) (0.98)
Diluted 5 (1.61) (0.94)
The accompanying accounting policies and notes are an integral
part of these financial statements
Unaudited Condensed Consolidated Statement of Financial
Position
As at 30 September 2021
Group
=============================== ====== =============================
30 September
As at 2021 31 March 2021
=============================== ====== ============= ==============
GBP GBP
=============================== ====== ============= ==============
Notes
Non-current assets
=============================== ====== ============= ==============
Property, plant and equipment 3,988,867 3,020,142
=============================== ====== ============= ==============
Deferred tax 17,099 21,182
=============================== ====== ============= ==============
Deposits & Advances 3,862 1,872
=============================== ====== ============= ==============
Intangible assets 4,023,377 3,682,354
------------------------------- ------ ------------- --------------
Total non-current assets 8,033,205 6,725,550
------------------------------- ------ ------------- --------------
Current assets
===============================
Inventory 465,684 461,093
===============================
Trade and other receivables 6 2,835,954 1,102,868
===============================
Cash and cash equivalents 6,412,114 1,644,189
===============================
Total current assets 9,713,753 3,208,150
------------------------------- ------ ------------- --------------
Current liabilities
===============================
Trade and other payables 177,253 445,273
===============================
Total current liabilities 177,253 445,273
------------------------------- ------ ------------- --------------
Net current assets 9,536,499 2,762,877
------------------------------- ------ ------------- --------------
Non-current liabilities
=============================== ====== ============= ==============
Borrowings 7 1,169,000 1,283,000
=============================== ====== ============= ==============
Other payables 61,723 23,864
=============================== ====== ============= ==============
Total non-current liabilities 1,230,723 1,306,864
------------------------------- ------ ------------- --------------
NET ASSETS 16,338,981 8,181,563
------------------------------- ------ ------------- --------------
Equity
=============================== ====== ============= ==============
Share capital 8 2,155,195 1,871,084
=============================== ====== ============= ==============
Share premium account 8 19,784,377 10,426,988
=============================== ====== ============= ==============
Warrant reserve 130,557 130,557
=============================== ====== ============= ==============
Foreign exchange reserve (787,477) (414,546)
=============================== ====== ============= ==============
Retained losses (4,943,671) (3,832,520)
------------------------------- ------ ------------- --------------
Equity attributable to
owners of the Company 16,338,981 8,181,563
=============================== ====== ============= ==============
TOTAL EQUITY 16,338,981 8,181,563
------------------------------- ------ ------------- --------------
Unaudited Consolidated Statement of Changes in Equity
For the half-year ended 30 September 2021
Share capital Share premium Foreign Share Retained TOTAL
exchange warrants losses EQUITY
reserve reserve
GBP GBP GBP GBP GBP GBP
-------------- -------------- ---------- ---------- ------------ ------------
Balance at
1 April 2020 1,498,132 5,328,518 3,147 - (2,555,582) 4,274,215
-------------- -------------- ---------- ---------- ------------ ------------
Total comprehensive
income:
-------------- -------------- ---------- ---------- ------------ ------------
Loss for the
period - - - - (492,692) (492,692)
-------------- -------------- ---------- ---------- ------------ ------------
Forex exchange
loss - - (99,771) - - (99,771)
-------------- -------------- ---------- ---------- ------------ ------------
Transactions
with Equity
owners:
-------------- -------------- ---------- ---------- ------------ ------------
Shares issued 37,396 326,479 - - - 363,875
-------------- -------------- ---------- ---------- ------------ ------------
Balance at
30 September
2020 1,535,528 5,654,997 (96,624) - (3,048,274) 4,045,626
-------------- -------------- ---------- ---------- ------------ ------------
Balance at
1 April 2021 1,871,084 10,426,988 (414,546) 130,557 (3,832,521) 8,181,563
-------------- -------------- ---------- ---------- ------------ ------------
Total comprehensive
income:
-------------- -------------- ---------- ---------- ------------ ------------
Loss for the
period - - - - (1,111,151) (1,111,151)
-------------- -------------- ---------- ---------- ------------ ------------
Forex exchange
loss - - (372,931) - - (372,931)
-------------- -------------- ---------- ---------- ------------ ------------
Transactions
with Equity
owners:
-------------- -------------- ---------- ---------- ------------ ------------
Shares issued 284,111 9,357,389 - - - 9,641,500
-------------- -------------- ---------- ---------- ------------ ------------
Balance at
30 September
2021 2,155,195 19,784,377 (787,477) 130,557 (4,943,671) 16,338,981
-------------- -------------- ---------- ---------- ------------ ------------
The accompanying accounting policies and notes are an integral
part of these financial statements.
Share capital - Represents the nominal value of the issued share
capital.
Share premium account - Represents amounts received in excess of
the nominal value on the issue of share capital less any costs
associated with the issue of shares.
Retained earnings - Represents accumulated comprehensive income
for the year and prior periods.
Foreign exchange reserve - Represents exchange differences
arising from the translation of the financial statements of foreign
subsidiaries and the retranslation of monetary items forming part
of the net investment in those subsidiaries.
Share warrant reserve - Represents reserve for equity component
of warrants issued as per IFRS 2 share-based payments.
Unaudited Consolidated Statement of Cash Flows
For the half-year ended 30 September 2021
2021 2020
GBP GBP
------------ ----------
Cash used in operating activities
------------ ----------
Loss for the year (1,111,151) (492,692)
------------ ----------
Adjustment for:
------------ ----------
Depreciation 172,853 95,858
------------ ----------
Finance costs 75,833 28,617
------------ ----------
Income tax (25,943) -
------------ ----------
Working capital changes:
------------ ----------
Increase in inventories (4,591) (60,887)
------------ ----------
(Increase)/Decrease in receivables
- Operational (558,020) 167,697
------------ ----------
(Increase)/Decrease in receivables (1,816,841) -
- Capital Assets
------------ ----------
Decrease in payables (268,020) (14,905)
------------ ----------
Net cash used in operating activities (3,535,880) (276,312)
------------ ----------
Cash flows from investing activities:
------------ ----------
Purchase of tangible assets (968,725) (273,661)
------------ ----------
Increase in other non-current assets 2,093 4,051
------------ ----------
Net advances (219,089) 8,752
------------ ----------
Net cash from investing activities (1,185,721) (260,858)
------------ ----------
Cash flows from financing activities
------------ ----------
Proceeds from Shares issued (net
of costs) 9,641,500 363,875
------------ ----------
Convertible loan notes (redemption)/Issue (114,000) 513,000
------------ ----------
Finance cost (75,833) (28,617)
------------ ----------
Increase / (decrease) in other
longterm liabilities 37,859 (287,857)
------------ ----------
Net cash from financing activities 9,489,526 560,401
------------ ----------
Net increase in cash and cash equivalents 4,767,925 23,230
------------ ----------
Cash and cash equivalents at beginning
of period 1,644,189 46,640
------------ ----------
Cash and cash equivalents at end
of period 6,412,114 69,870
------------ ----------
The accompanying accounting policies and notes are an integral
part of these financial statements.
Notes to the Financial Statements
1. General information
Tirupati Graphite plc (the "Company") is incorporated in England
and Wales, under the Companies Act 2006. The registered office
address is given on Company Information page.
The Company is a public company, limited by shares. On 14
December 2020 the Ordinary Shares of the Company were admitted on
the official list of the FCA and to trading on the main market of
the London stock exchange through standard listing.
The principal activities of the Company and its subsidiaries
(the "Group") and the nature of the Group's operations is
production of flake graphite, a critical material used in diverse
applications. The half year period of the previous year was prior
to admission and in that period, the Company's only operating and
producing asset was a comparatively smaller scale, proof of concept
plant at its Sahamamy project in Madagascar. Alongside its
admission the Company raised equity capital to develop its various
projects under its MTDP. Thus, there was a material change in the
Company's activities during the six month period of the current
year compared to the same period in the previous year. We have
provided brief insights where relevant in the Notes to the
Financial Statement to depict changes in the Company's
activities.
These consolidated financial statements are presented in pounds
sterling since that is the currency of the primary economic
environment in which the Group and Company operates.
2. Significant accounting policies
Basis of preparation
The condensed consolidated interim financial statements for the
six months ended 30 September 2021 have been prepared in accordance
with IAS 34 'Interim Financial Reporting' and presented in
sterling. They do not include all of the information required in
annual financial statements in accordance with IFRS, and should be
read in conjunction with the consolidated financial statements for
the year ended 31 March 2021, which have been prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and in accordance
with the requirements of the Companies Act 2006. The report of the
auditors on those financial statements was unqualified.
The financial statements have been prepared under the historical
cost convention, except for the measurement to fair value certain
financial and digital assets and financial instruments.
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates. In preparing these
condensed consolidated interim financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the financial statements for
the year ended 30 March 2021.
Going concern
The financial position of the Group and the Company, their cash
flows and liquidity positions are contained in the financial
statements. In April 2021, the Company raised equity capital to
adequately capitalise its development activities and in September
2021, the Company commissioned a second plant increasing its
installed capacity fourfold from 3,000 tpa to 12,000 tpa. From the
results of the operations, the Company believes that its capacity
has increased to a level at which it shall become profitable as the
new plant is debottlenecked and producing output is being ramped up
to full capacity.
Further, the Company remains adequately funded for its
investment needs for the next capacity expansion under construction
being the second 18,000 tpa plant at Sahamamy in Madagascar, which
is expected to complete and commission in Q2 2022.
Taking in to account the comments above, the Directors have, at
the time of approving the financial statements, a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future, given its current
cash resources, installed capacities and operations which now have
broken the threshold for the Company to meet all its non-investment
cash needs from revenues and additional capacities being built by
the Company for which it remains fully funded and which when
completed, are expected to add further additional operating cash
flows.
ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS
The Group has 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 January 2021. The adoption of these
standards and amendments did not have any material impact on the
financial result of position of the Group.
At the date of authorisation of these financial statements, the
following Standards and Interpretation, which have not yet been
applied in these financial statements, were in issue but not yet
effective:
Standard Description Effective date for annual
or Interpretation accounting period beginning
on or after
------------------ -------------------------------------------- ----------------------------
IAS 1 Amendments - Presentation and Classification 1 January 2023
of Liabilities as Current or Non-current
IAS 16 Amendments - Property, Plant and Equipment 1 January 2022
IAS 37 Provisions, Contingent Liabilities 1 January 2022
and Contingent Assets
IAS 8 Amendments - Definition of Accounting 1 January 2023
Estimates
IAS 1 Amendments - Disclosure of Accounting 1 January 2013
Policies
IFRS 3 Amendments - Business Combinations 1 January 2022
- Conceptual Framework
IFRS Annual Improvements to IFRS Standards 1 January 2022
2018-2020
------------------ -------------------------------------------- ----------------------------
The Group has not early adopted any of the above standards and
intends to adopt them when they become effective.
3. Segmental analysis
The Management believes, under IFRS 8 - "Segmental Information",
the Group operated in three primary business segments in 2021,
being Holding Companies Expenses, Mining Exploration and
Development and Graphite Mining Extraction.
Segmentation by continuing businesses
Segment results
Half year Half year Year ended
ended ended 31 March
30 Sep 2021 30 Sep 2020 2021
GBP GBP GBP
------------------------------------ ------------- ------------- ------------
Revenue to external customers
------------------------------------ ------------- ------------- ------------
Graphite Mining Extraction 560,058 419,402 1,123,426
(Loss) before income tax
------------------------------------ ------------- ------------- ------------
Holding Companies Expenses (729,334) (377,884) (1,002,218)
Mining Exploration and Development - (97,473) (239,555)
Graphite Mining Extraction (355,874) (17,335) (14,957)
Net assets/(liabilities)
------------------------------------ ------------- ------------- ------------
Holding Company Expenses 17,257,360 4,772,742 9,120,707
==================================== ============= ============= ============
Mining Exploration and Development - (494,041) (698,823)
==================================== ============= ============= ============
Graphite Mining Extraction (918,379) (233,075) (237,415)
------------------------------------ ------------- ------------- ------------
Segmentation by geographical area:
Half year Half year Year ended
ended ended 31 March
30 Sep 2021 30 Sep 2020 2021
GBP GBP GBP
------------------------------- ------------- ------------- ------------
Revenue to external customers
------------------------------- ------------- ---------------------------
UK 559,986 419,398 1,123,019
Mauritius - - -
Madagascar 72 4 407
(Loss) before income tax
------------------------------- ------------- ------------- ------------
UK (570,857) (372,376) (1,036,857)
Mauritius (158,477) (5,508) 785
Madagascar (355,874) (114,808) (220,658)
Net assets
------------------------------- ------------- ------------- ------------
UK 17,257,360 3,318,480 9,534,110
Mauritius - - 159,159
=============================== ============= ============= ============
Madagascar (918,379) (727,146) (1,508,800)
------------------------------- ------------- ------------- ------------
4. Expenses by nature
Half year Half year
ended ended
30 Sep 2021 30 Sep 2020
GBP GBP
The following items have been included
in arriving at operating loss
Depreciation (a) 172,853 95,858
======================================== ============= =============
Net foreign exchange loss 671 7,095
======================================== ============= =============
PR/IR Expenses 70,390 52,657
======================================== ============= =============
Professional Fees (b) 52,084 5,600
======================================== ============= =============
Remuneration of Board & Management (c) 438,704 243,992
======================================== ============= =============
Notes:
a) Increase in Depreciation in current year is due to start of
operations in Vatomina Project in Madagascar.
b) Professional Fees includes fees paid to Company's brokers,
lawyers, auditors and other advisors. The new retainer fee
structure was implemented post listing with effect from January
2021.
c) Increase in remuneration to the Bboard and Management is due
to strengthening of the management team post listing in line
with developments of the projects in Madagascar and India.
5. Earnings per share
Basic and diluted
Earnings per share is calculated by dividing the loss
attributable to the equity holders of the Company by the weighted
average number of Ordinary Shares in issue during the period.
Half year Half year
ended ended
30 Sep 2021 30 Sep 2020
Continuing operations:
-------------------------------------------- ------------- -------------
Loss attributable to equity holders of
the Company (GBP) (1,484,082) (592,464)
Weighted average number of ordinary shares
in issue 85,132,285 60,499,992
============================================ ============= =============
Loss per share (pence) (1.71) (0.98)
-------------------------------------------- ------------- -------------
30 Sep 2021 30 Sep 2020
Diluted number of ordinary shares in issue 92,114,998 63,298,148
============================================ ============ ============
Given the loss for the year, the diluted earnings per share was
the same as basic earnings per share as this would otherwise be
dilutive.
6. Trade & Other Receivables
30 Sep 2021 31 Mar 2021
------------------------------------ ------------ ------------
Trade Receivables - Operational 1,019,113 1,102,868
Trade Receivables - Capital Assets 1,816,841 -
------------------------------------ ------------ ------------
2,835,954 1,102,868
------------------------------------ ------------ ------------
7. Borrowings
During this period convertible loan notes ("CLN") worth
GBP114,000 were converted into equity. Interest on the outstanding
CLN's is chargeable at 12% per annum.
30 Sep 2021 31 Mar 2021
----------------------- ------------ ------------
Within one year - -
Between 2 and 5 years 1,169,000 1,283,000
----------------------- ------------ ------------
1,169,000 1,283,000
----------------------- ------------ ------------
The CLN's may be redeemed by the Company, at any time after the
first anniversary of the Initial Public Offering ("IPO") up to the
Maturity Date or by the Noteholder or the Company, on the Maturity
Date being the 31 May 2022.
Conversion of the CLN's can be made from 15 Business Days after
the date of completion of the Company's IPO to convert the CLN's
outstanding into fully paid Ordinary Shares at a price equal to the
price per share paid by investors participating in the IPO.
8. Share capital
30 Sep 31 Mar 31 Mar
30 Sep 2021 2021 2021 2021
Number GBP Number GBP
========================= ============ ========== =========== ==========
Allotted, called up and
fully paid
Ordinary shares of 2.5p
each 86,563,323 2,155,195 74,843,323 1,871,084
Shares were issued during the year as follows:
Cost of issue Number of shares
(GBP) issued
--------------------------------- -------------- -----------------
Shares issued from a placing on
15 April 2021 472,500 11,111,111
Shares issued from a placing on
28 July 2021 - 253,333
============== =================
472,500 11,364,444
-------------- -----------------
9. 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 parent, comprising issued capital and
retained earnings.
Fair value of financial assets and liabilities
Valuation, Book value Fair value Book value Fair value
Methodology Sep 2021 Sep 2021 Mar 2021 Mar 2021
and hierarchy GBP GBP GBP GBP
========================= =============== =========== =========== =========== ===========
Financial assets
Cash and cash
equivalents (a) 6,412,114 6,412,114 1,644,189 1,644,189
Loans and receivables,
net of impairment (a) 2,835,954 2,835,954 1,102,868 1,102,868
========================= =============== =========== =========== =========== ===========
Total at amortised
cost 9,248,069 9,248,069 2,747,057 2,747,057
========================================== =========== =========== =========== ===========
Financial liabilities
Trade and other
payables (a) 177,253 177,253 445,273 445,273
Borrowings and
provisions (a) 1,169,000 1,169,000 1,283,000 1,283,000
Lease Liabilities (a) 61,723 61,723 23,864 23,864
Total at amortised
cost 1,407,976 1,407,976 1,752,137 1,752,137
------------------------------------------ ----------- ----------- ----------- -----------
Valuation, methodology and hierarchy
(a) The carrying amounts of cash and cash equivalents, trade and
other receivables, trade and other payables and deferred income,
and Borrowings are all stated at book value. All have the same fair
value due to their short-term nature.
Market risk
Market price risk arises from uncertainty about the future
valuations of financial instruments held in accordance with the
Group's investment objectives. These future valuations are
determined by many factors but include the operational and
financial performance of the underlying investee companies, as well
as market perceptions of the future of the economy and its impact
upon the economic environment in which these companies operate.
Credit risk
Credit risk is the risk that counterparties to financial
instruments do not perform their obligations according to the terms
of the contract or instrument. The Group is exposed to counterparty
credit risk when dealing with its customers and certain financing
activities.
The immediate credit exposure of financial instruments is
represented by those financial instruments that have a net positive
fair value by counterparty at 30 September 2021. The Group
considers its maximum exposure to be:
Sep 2021 Mar 2021
GBP GBP
Financial assets
Cash and cash equivalents 6,412,114 1,644,189
Loans and receivables, net of impairment 2,835,954 1,102,868
------------------------------------------ ---------- ----------
9,248,069 2,747,058
------------------------------------------ ---------- ----------
All cash balances are held with an investment grade bank who is
our principal banker. Although the Group has seen no direct
evidence of changes to the credit risk of its counterparties, the
current focus on financial liquidity in all markets has introduced
increased financial volatility. The Group continues to monitor the
changes to its counterparties' credit risk.
Liquidity risk
Liquidity risk is the risk the Group will encounter difficulty
in meeting its obligations associated with financial liabilities as
they fall due. The Board are jointly responsible for monitoring and
managing liquidity and ensures that the Group has sufficient liquid
resources to meet unforeseen and abnormal requirements. The current
forecast suggests that the Group has sufficient liquid
resources.
Available liquid resources and cash requirements are monitored
using detailed cash flow and profit forecasts these are reviewed at
least quarterly, or more often as required. The Directors decision
to prepare these accounts on a going concern basis is based on
assumptions which are discussed in the going concern note
above.
The following are the contractual maturities of financial
liabilities:
Carrying Contractual 6 months 6 to 12 1 to 2 2 to 5
amount cash flows or less months years years
30 September
2021 GBP GBP GBP GBP GBP GBP
Non-derivative
financial
liabilities
Trade and
other payables 177,253 - 177,253 - - -
Borrowings 1,169,000 - - - - 1,169,000
Cash flow management
The Group produces an annual budget which it updates quarterly
with actual results and forecasts for future periods for profit and
loss, financial position and cash flows. The Group uses these
forecasts to report against and monitor its cash position. If the
Group becomes aware of a situation in which it would exceed its
current available liquid resources, it would apply mitigating
actions involving reduction of its cost base. The Group employs
working capital management techniques to manage the cash flow in
periods of peak usage.
Currency risk
The Group operates internationally and is exposed to foreign
exchange risk. Foreign exchange risk arises from future commercial
transactions and recognised assets and liabilities denominated in a
currency that is not the functional currency of the relevant Group
entity. The Group's primary currency exposure is to US Dollar,
which is the currency of all intra-group transactions as well as
denomination of selling price of the products. The Group also has
some exposure to Malagasy ariary due to its operating subsidiaries
in Madagascar.
Considering the natural hedge available the Group currently
doesn't hedge the currency risk. The Group's and Company's exposure
to foreign currency risk at the end of the reporting period is
summarised below. All amounts are presented in GBP equivalent.
USD MGA USD MGA
Group Sep 2021 Sep 2021 Mar 2021 Mar 2021
GBP GBP GBP GBP
Cash and cash equivalents 173,790 62,370 90,236 66,118
Trade & other receivables 432,759 560,729 522,400 489,622
Trade & other payables (29,741) (147,291) (151,353) (301,816)
--------------------------- ---------- ---------- ---------- ----------
Net Exposure 576,808 475,808 461,283 253,924
--------------------------- ---------- ---------- ---------- ----------
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.
Sep 2021 Group
GBP
GBP:USD exchange rate increases by 10% 7,458
GBP:USD exchange rate decreases by 10% (8,234)
GBP:MGA exchange rate increases by 10% 31,870
GBP:MGA exchange rate decreases by 10% (35,258)
Sep 2020 Group
GBP
GBP:USD exchange rate increases by 10% 268
GBP:USD exchange rate decreases by 10% (293)
GBP:MGA exchange rate increases by 10% 20,615
GBP:MGA exchange rate decreases by 10% (22,888)
10. Related party transactions
Tirupati Carbons and Chemical Pvt Limited (TCCPL) is an entity
incorporated in India. The Company is connected to TCCPL in that
both Shishir Poddar and Hemant Poddar were both directors and
shareholders of TCCPL during the year. At half-year end, included
within debtors was an amount of Nil (Mar 2021: Nil) and revenue
recorded for the period of Nil (Mar 2021: Nil) from TCCPL.
Tirupati Speciality Graphite Private Limited (TSG) is an entity
incorporated in India. The Company is connected to TSG in that both
Shishir Poddar and Hemant Poddar were both directors and
shareholders of TSG during the year. At half year end, a net amount
was receivable of GBP1,092,904 (Mar 2021 - GBP250,656) and revenue
of GBP56,610 (Mar 2021 - GBP238,602) from TSG.
Haritmay Ventures LLP (HV) is an entity incorporated in India
and engaged in manufacturing proprietary tailor-made flake graphite
processing machinery and equipment which the Company uses in its
projects. The Company is connected to HV in that Shishir Poddar is
partner and shareholder of HV during the year. At year end, a net
amount was receivable of GBP355,822 (Mar 2021 - GBP72,552) and
revenue of Nil (Mar 2021 - Nil) from HV.
Optiva Securities Limited is an entity incorporated in the
United Kingdom. The Company is a stock brokerage firm connected to
the Company being the sole broker of the Company and Christian
Gabriel St.John-Dennis one of the directors of the Company and
holding a position with Optiva Securities Limited during the year.
At year end, the Company incurred brokerage and consultancy fees,
business development fees of GBP440,500 (Mar 2021- GBP378,402).
11. Events after the reporting period
On 4(th) November 2021 the Ordinary Shares of the Company
commenced cross-trading on the OTCQX(R) Best Market ("OTCQX") in
the United States ("U.S."), under the ticker symbol "TGRHF".
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END
IR BLBDDSDGDGBB
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