REG - Emmerson PLC - Audited Results for the year ended 31 Dec 2021
31/05/2022 07:00
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RNS Number : 3125N Emmerson PLC 31 May 2022
Emmerson Plc / Ticker: EML / Index: AIM / Sector: Mining
31 May 2022
Emmerson
("Emmerson" or "the Company")
Audited Results for the year ended 31 December 2021
Emmerson, which is developing the world class Khemisset Potash Project in
Morocco ('Khemisset' or the 'Project'), is pleased to announce its audited
results for the 12 months ended 31 December 2021. The Group's Annual Report,
which includes an unqualified audit report and audited Financial Statements
for the year ended 31 December 2021, will be made available on the Company's
website at www.emmersonplc.com.
HIGHLIGHTS
· Considerable operational, corporate and commercial progress made
towards delivering a "shovel ready" project, and establishing Khemisset as
Africa's first large-scale potash mine
· Significant improvement in potash prices highlights potential upside
to Feasibility Study estimates (including NPV8 of US$1.4 billion)
· Cornerstone investment secured in November 2021 of up to US$46.8
million from strategic investor
· Advancing negotiations with a range of international and Moroccan
institutions on both the debt and equity sides, underscoring the attractive
economics of the Project
· Mining Licence granted in February 2021
· Environmental and Social Impact Assessment completed to IFC
standards, and environmental approval process continuing to progress towards
the final awarding of the permit
· Move to AIM completed in April 2021
· Board strengthened by appointment of James Kelly as Chair, and Rupert
Joy as Non-executive Director, while Jim Wynn was appointed in February 2022
as CFO
· Operational and technical capabilities enhanced through the
appointment of Josh Mitchell as Project Controller, Haitam Ennadif as Project
Engineering Manager and Matt Wilmot as Technical Services Manager.
CHAIRMAN'S STATEMENT
It gives me great pleasure to present the 2021 Annual Report for Emmerson in
my first full year as Chairman.
Just as the world was cautiously beginning to emerge from the restrictions
related to COVID-19, the war in Ukraine has unleashed a fresh set of
challenges, the full impact of which are not yet known but will most likely
affect us all for a considerable period of time.
The humanitarian catastrophe that is unfolding is unquestionably the most
immediate concern and we all wish for a peaceful conclusion as quickly as
possible. The crisis has also brought into sharp focus the fragility of the
global supply chain for some of our most basic commodities, including
hydrocarbons for fuel and energy, and foodstuffs to feed a growing global
population.
The importance of food security has never been clearer, and potash has a key
role to play. Potassium is one of the three key plant macronutrients (along
with nitrogen and phosphorous), making potash a critical raw material for
fertiliser.
Around 40% of global potash production in 2021 came from Russia and Belarus,
and these supplies are likely to be constrained by sanctions of various
natures for some time to come. Against this backdrop, the need to bring new
sources of potash on stream is of paramount importance; arguably more urgent
than the widely recognised challenges around critical metals.
Emmerson's Khemisset Potash Project is well-positioned to help meet this need.
It is a high-margin and low-capex project which has a construction period of
approximately two years. The Feasibility Study completed in 2020 indicated a
JORC Resource of 537 million tonnes at 9.24% K2O, sufficient to supply 735k
tonnes of Muriate of Potash ("MOP") annually for a life of at least 19 years.
The project is situated in Morocco, which is a stable, mining- and
investor-friendly jurisdiction with excellent infrastructure. The site is
approximately 200km from the commercial port of Casablanca, and transportation
is likely to be by truck, using high-quality public highways.
The geographic location of Morocco is also advantageous. Much of the global
potash demand growth is likely to be in the Atlantic corridor between the
Americas and Europe/Africa. Apart from the potash from Russia/Belarus, the
majority of current potash supplies come from central Canada, with long
haulage distances by road and sea, a logistical challenge which is exacerbated
by current high shipping costs.
Morocco is an actor of growing importance in Africa, which has the world's
highest population growth, but yet uses just a small fraction of the
fertiliser per hectare of cultivated land of China, North America, or Europe.
Morocco is already an established phosphate exporter and fertiliser hub, but
currently imports its potash. Khemisset will provide a local source which
would offer security of supply with significantly reduced transport costs.
We made some significant steps towards bringing the Khemisset project into
production during 2021 and have continued to make progress during 2022. In
February 2021, we received our mining permit, and we have completed the work
needed to obtain an environmental permit. We have also undertaken various
geological and engineering works to bring us closer to being shovel-ready, and
we expect to complete these by the end of 2022.
Our financing discussions have also proceeded well. A crucial step in this
matter was securing a cornerstone investment of up to US$46.8 million
primarily from a strategic partner, the Global Sustainable Minerals Pte Ltd
group ("GSM"), a Singapore-domiciled investment vehicle backed by a
significant south-east Asian investor, in November 2021. Since then, we have
received considerable interest from both debt and equity investors,
particularly since the Ukrainian crisis in February, from both international
and Moroccan financiers.
We have had extensive discussions with the Moroccan government and other key
stakeholders, and have been impressed by the high levels of support for the
Khemisset project. We are keen to reciprocate this support by using Moroccan
suppliers, contractors, and financiers wherever possible, and by working with
local partners to optimise the project.
Getting this right is taking a little longer than we originally anticipated,
but it will be worth the time and effort, as the outcome will be a better,
more profitable and more efficient project.
Global potash prices in early May 2022 were around three times the levels of
2020, when the Feasibility Study was completed which indicated a project with
NPV8 of US$1.4 billion. While it is not certain whether prices will remain at
current levels, demand for potash is likely to remain high and supply to be
constrained for the foreseeable future.
There were some changes to the Board in the year. On 27 April 2021, following
the Company's listing on AIM, Mark Connelly retired from the Board, and I took
over his responsibilities as Chairman. On 12 July 2021, Ed McDermott also
stepped down from the Board. The Company owes much to the efforts of both Mark
and Ed during its formative years, and we thank them and wish them the best in
their new endeavours.
I was delighted that we were able to strengthen our Board by appointing Rupert
Joy as a non-executive Director. Rupert is a highly experienced diplomat and
former Ambassador & Head of the EU Delegation to Morocco, and has already
proved invaluable in our discussions with Moroccan authorities.
In February 2021, we announced the appointment of Jim Wynn as Chief Financial
Officer. Jim is an experienced finance professional and chartered accountant
with significant corporate experience, particularly in the African resource
sector, and is also a French-speaker.
There remains much to do in 2022 and in many regards, I expect the pace of
work will only increase from this point forwards. The entire Emmerson team
remains focused on the key objectives of putting in place the approvals and
financing package that will allow us to start construction of the Khemisset
project. The backdrop of the global food security crisis and the strength of
the potash market reinforces our belief in the Khemisset project and our
determination to deliver the project as soon as possible.
James Kelly
Chairman
30 May 2022
CHIEF EXECUTIVE OFFICER'S STATEMENT
There has never been a more important time to bring new sources of potash from
safe, secure jurisdictions into the market, such as Emmerson's Khemisset
project in Morocco.
The Feasibility Study completed in 2020 by Golder Associates underlined the
compelling economics of the project. Recent potash price increases, driven by
the combined impact of the war in Ukraine on top of more long-term factors
such as population growth, land scarcity, and supply security for critical
minerals, suggest even those valuations are understated.
However, Khemisset's role in meeting the potash requirements of the world
should not be measured solely in financial terms. While the priority of the
Emmerson team is getting the Khemisset project into production as efficiently
as possible, we are determined to keep our wider social and environmental
responsibilities at the forefront of our thinking: "doing the right things in
the right way".
Khemisset Project
The Company received a mining permit in January 2021, and proceeded to submit
an Environmental and Social Impact Assessment ("ESIA"), which is currently
awaiting final approval. The Company has addressed all of the ESIA issues
raised by the relevant authorities in a timely manner.
The ESIA approval is the last remaining authorisation step required before
construction can begin. In view of the importance of the project to the
country, the authorities have been careful to ensure that the needs of the
widest possible stakeholder group have been fully taken into consideration.
The Company continues to work proactively with all the relevant parties and
remains confident that the approval will be forthcoming.
In the meantime, we are progressing with a number of workstreams to move the
project forward, which will ensure construction can commence as soon as
approval has been given, and financing has been put in place.
Drilling & Site Exploration
In May 2021, Emmerson commenced an exploration campaign to address areas that
required further de-risking as outlined in the Feasibility Study, to gain
better knowledge of the Khemisset basin, and to further detail geology along
the route of the decline and in the mine infrastructure area from a
constructability perspective. The exploration campaign was split into a
drilling program and a surface geological program.
The drilling program consists of a number of geological drill holes with
additional directionally drilled daughter holes to provide data on lateral
variability, geotechnical drill holes along the decline route, and a deeper
hole for evaluation of the reservoir formation below with all holes logged and
core samples taken for testing purposes.
The surface geological program consists of a large number of shallow holes for
geotechnical characterization to feed into the design of the ancillary
infrastructure and foundation and over 15km of electrical resistivity
tomography surveys for definition of the near surface strata.
The results so far have provided a significant amount of data to feed into the
on-going engineering and design work as well as further confidence in the
project location and the geological and geotechnical conditions. The
exploration campaign is envisaged to be completed within Q3 2022.
Basic Engineering
A request for proposal was issued on 7 May 2021 for basic engineering services
regarding the mineral processing facility. Following a commercial and
technical bid analysis process, Barr Engineering was selected. Barr
Engineering, headquartered in Minneapolis, has extensive experience in potash
mineral processing after providing services to North American clients since
1966.
On 29 November 2021, a basic engineering contract was signed, and engineering
works commenced shortly thereafter. These are currently approximately 40%
complete at the date of this report.
Process modelling, process flow diagrams ("PFD") and piping and
instrumentation diagrams ("P&ID") have been completed, allowing the
electrical, mechanical and structural disciplines to commence their scopes.
The processing facility equipment list has also been completed, allowing Barr
Engineering to approach the market to gather the most up to date costing
information from world leading suppliers of Potash processing equipment. The
basic engineering phase is expected to be complete by September 2022.
A separate request for proposal was issued on 22 October 2021 for basic
engineering services regarding the balance of the Khemisset potash project
scope. Following a commercial and technical bid analysis process, Reminex was
selected. Reminex, a subsidiary of Managem (a major Moroccan mining group),
has extensive experience of scoping, permitting, designing, constructing and
operating underground mines in Morocco and Africa.
On 9 February 2022, a basic engineering contract was signed, and engineering
works started shortly thereafter (now approximately 20% complete). The scope
is being executed via six concurrent packages (mine power supply, mine water
supply, site access, portal and declines, tailing storage facility and mine
site infrastructure). The basic engineering phase is expected to be complete
by October 2022.
Land acquisition
The land acquisition process has commenced with the development of a land
acquisition plan. The first phase of this plan will be to identify the areas
and habitats likely to be affected by the project, to collect socio-economic
data, and to develop a stakeholder engagement strategy.
Phase 2 of the land acquisition plan has also commenced, which will be
completed concurrent with basic engineering, and includes final definition of
the land parcels required, and their acquisition or lease.
Permits
The mining permit awarded in 2021 has a 10-year life. The Company is awaiting
the final environmental permits, as mentioned, while all 20 exploration
permits have been renewed. These permits cover 780km(2), and will enable
exploration works on the project to continue.
In-principle approvals have been provided by the forestry services for
intersections of their domains with regards to the power and water supply
scopes to the mine site, which are being developed as part of basic
engineering.
Other Studies
In February 2022, Novec, a Moroccan engineering consultancy specialising in
infrastructure, was engaged to undertake a traffic and logistics study to
support the basic engineering phase on the site access package, and to satisfy
future anticipated permitting requirements for construction. This scope is
ongoing and progressing on schedule in collaboration with our basic
engineering partner, Reminex.
In April 2022, SLR Consulting, an international environmental and mining
consultancy, was engaged as a technical geological consultant to support
decision-making based on the results from the 2021/22 exploration campaign
from a constructability, mining method and location perspective. Working
collaboratively with our geology team, the drilling contractors and our basic
engineering partners, SLR has started to update the geological model and
propose optimal solutions for project execution.
Financing
In November 2021, we were able to announce that we had secured a strategic
investment of up to US$46.8 million from Singaporean fund GSM and Gold Quay
Capital Pte Ltd ("GQC"). Of this funding, US$6.8 million was received by way
of an equity subscription at a placing price of 6 pence per share, to be used
to complete the basic engineering and design work, undertake additional
resource and geotechnical drilling, and to build out the technical team ahead
of the larger fundraise.
The remaining US$40.0 million will be allotted as part of, and subject to, the
larger fundraise for the Khemisset project at a price of 8.2 pence per share.
Although this funding was structured as a convertible loan, it is more akin to
a commitment to provide a significant portion of the equity needed to build
the mine.
Ongoing discussions with regard to the fundraising for the Khemisset project
have been progressing well.
The Company has received interest from a number of local Moroccan and
international banks, as well as support from Export Credit Agencies, which
have submitted formal Expressions of Interest. Good progress has also been
made towards securing additional strategic equity partners, and we feel
confident that, subject to completing the necessary due diligence and
technical work, a complete financing structure will be announced later in the
year.
Corporate
In April 2021, the Company moved from the Standard segment on the Main Market
of the London Stock Exchange to the AIM market of the London Stock Exchange
("AIM"), which we felt offered greater flexibility, particularly with regard
to fundraising and corporate transactions. Shareholder approval for this
transfer of listing was granted at a general meeting on 25 March 2021, and the
Company's shares were admitted to trading on AIM on 27 April 2021.
In his Chairman's Statement, James mentioned the changes at Board level, but
we have also been adding bench strength to our management and technical teams.
During 2021, we appointed Josh Mitchell as Project Controller, and Haitam
Ennadif as Project Engineering Manager based in Morocco. In 2022, we brought
in Matt Wilmot as Technical Services Manager, and we have a world-class
technical team with first class experience in constructing and operating
underground potash mines.
Graham Clarke
Chief Executive Officer
30 May 2022
For further information, please visit www.emmersonplc.com
(http://www.emmersonplc.com/) , follow us on Twitter (@emmerson_plc), or
contact:
Emmerson Plc +44 (0) 20 7236 1177
Graham Clarke - CEO
Jim Wynn - CFO
Charles Vaughan - Head of IR
Shore Capital (Nominated Adviser and Joint Broker) +44 (0)20 7408 4090
Toby Gibbs / John More
Liberum Capital Limited (Joint Broker) +44 (0)20 3100 2000
Scott Mathieson / Lydia Zychowska
Shard Capital (Joint Broker) +44 (0)20 7186 9927
Damon Heath / Isabella Pierre
St Brides Partners (Financial PR/IR) +44 (0)20 7236 1177
Susie Geliher / Charlotte Page
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
2021 2020
Note US$'000 US$'000
Restated
Continuing Operations
Administrative expenses 3 (2,349) (1,034)
Share-based payment expense 12 (33) (991)
Net foreign exchange (loss)/gain (388) 78
Operating loss (2,770) (1,947)
Finance income - 5
Finance cost (7) -
Loss before tax (2,777) (1,942)
Income tax 5 - -
Loss for the year attributable to equity owners (2,777) (1,942)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Exchange (loss)/gain on translating foreign operations (693) 500
Total comprehensive income attributable to equity owners (3,470) (1,442)
Earnings per share (cents) 6 (0.33) (0.28)
Basic and diluted
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT
31 DECEMBER 2021
2021 2020
Note US$'000 US$'000
Restated
Non-current assets
Intangible assets 7 13,555 11,132
Property, plant and equipment 41 16
Total non-current assets 13,596 11,148
Current assets
Trade and other receivables 8 771 429
Cash and cash equivalents 10,032 1,563
Total current assets 10,803 1,992
Total assets 24,399 13,140
Current liabilities
Trade and other payables 9 (1,835) (681)
Total current liabilities (1,835) (681)
Net assets 22,564 12,459
Shareholders equity attributable to equity owners
Share capital 11 28,774 15,755
Share-based payment reserve 12 2,048 1,499
Reverse acquisition reserve 2,198 2,198
Retained earnings (10,278) (7,508)
Translation reserve (178) 515
Total equity 22,564 12,459
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
US$'000 Share Capital(1) Share-based payment reserve(2) Reverse Acquisition reserve(3) Retained earnings(4) Translation reserve(5) Total equity
Balance as at 1 January 2020 (as restated) 13,631 508 2,198 (5,566) 15 10,786
Loss for the year - - - (1,942) - (1,942)
Other comprehensive income:
Exchange loss on translating foreign operations - - - - 500 500
Total comprehensive income - - - (1,942) 500 (1,442)
Issue of share options and warrants - 991 - - - 991
Issue of shares 2,266 - - - - 2,266
Share issue costs (142) - - - - (142)
Balance as at 1 January 2021 15,755 1,499 2,198 (7,508) 515 12,459
Loss for the year - - - (2,777) - (2,777)
Other comprehensive income:
Exchange loss on translating foreign operations - - - - (693) (693)
Total comprehensive income - - - (2,777) (693) (3,470)
Issue of share options and warrants 90 (104) - - - (14)
Transfer - (7) - 7 - -
Issue of shares and warrants 14,345 660 - - - 15,005
Share issue costs (1,416) - - - - (1,416)
Balance as at 31 December 2021 28,774 2,048 2,198 (10,278) (178) 22,564
Notes
1 The Ordinary Shares issued by the Company have a no par value and all fully 4 The Retained earnings are cumulative earnings since incorporation less any
paid. Further information on share capital is in note 11 to the financial dividends declared.
statements.
2 The share reserve arises on the grant of share options and warrants to 5 The translation reserve comprises translation differences arising from the
Directors and employees under the share option plan. Disclosures of translation of financial statements of the Group's foreign entities into US
share-based payments to Directors and employees is in note 12. dollars.
3 The Reverse acquisition reserve arose from the reverse takeover in 2018
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
Notes 2021 2020
US$'000 US$'000
Restated
Cash flows from operating activities
Loss before tax (2,777) (1,942)
Adjustments
Foreign exchange (448) (214)
Share-based payment 12 33 991
Depreciation 5 9
Changes in working capital
Increase in trade and other receivables (351) (55)
Increase in trade and other payables 1,182 107
Net cash flows used in operating activities (2,356) (1,104)
Cash flows from investing activities
Exploration expenditure 7 (2,671) (2,313)
Property, plant and equipment (purchase)/disposal (30) 25
Net cash flow used in investing activities (2,701) (2,288)
Cash flows from financing activities
Proceeds from issuing shares and warrants 11 14,958 2,266
Cost of issuing shares 11 (1,416) (142)
Net cash flow generated from financing activities 13,542 2,124
Increase/(decrease) in cash and cash equivalents 8,485 (1,268)
Cash and cash equivalents at beginning of year 1,563 2,745
Foreign exchange on cash and cash equivalents (16) 86
Cash and cash equivalents at end of year 10,032 1,563
Significant non-cash transactions in respect of share issues are disclosed
within note 11.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1. General information
Emmerson PLC (the "Company") is a company incorporated and domiciled in the
Isle of Man, whose shares were admitted to the Standard Listing segment of the
Main market of the London Stock Exchange on 15 February 2017. On 27 April
2021, the Ordinary Shares of the Company were admitted to trading on AIM and
the listing of the Company's ordinary shares on the Official List and their
trading on the Main Market were cancelled.
The principal activity of the Group is the exploration, development and
exploitation of a potash development project in Morocco.
2. Basis of preparation
2.1. General
These financial statements have been prepared in accordance with UK-adopted
International Financial Reporting Standards (IFRS and IFRIC interpretations)
("IFRS") in force at the reporting date, and their interpretations issued by
the International Accounting Standards Board ("IASB"). The financial
statements have been prepared under the historical cost convention except for
the revaluation of certain financial instruments that are measured at fair
value.
2.2. Functional and presentational currency
The financial information of the Group is presented in US dollars. The
functional currency of the Company Emmerson PLC in the period was GB Sterling.
The individual financial statements of each of the Company's wholly owned
subsidiaries are prepared in the currency of the primary economic environment
in which they operate (functional currency).
2.3. Change in Presentation Currency
The Group is presenting its results in US Dollars for the first time having
previously reported in UK Sterling. This change should help to provide a
clearer understanding of the Group's financial position as the future
corporate development activity is likely to be US focused.
In order to satisfy the requirements of IAS 21 with respect to a change in
presentation currency, the statutory financial information as previously
reported in the Group's Annual Reports have been restated from UK Sterling
into US Dollars using the procedures outlined below:
· Assets and liabilities were translated to US Dollars at the
closing rates of exchange at each respective balance sheet date.
· Share capital, share premium and other reserves were translated
at the historic rates prevailing at the dates of transactions.
· Income and expenses were translated to US Dollars at an average
rate at each of the respective reporting years. This has been deemed to be a
reasonable approximation.
· Differences resulting from the retranslation were taken to
reserves.
· All exchange rates used were extracted from the Group's
underlying financial records.
Please see Note 16 for further information on the procedures used to restate
comparative information and the impact on the prior year results, closing
balance sheet and the numerator for earnings per share as originally reported.
A change in presentation currency represents a change in accounting policy
which is accounted for retrospectively.
2.4. Basis of consolidation
The Consolidated Financial Statements comprise the financial statements of the
Company, Moroccan Salts Limited and Moroccan Salts Limited's subsidiaries (the
"MSL Group") following the business combination which took place on 4 June
2018.
Subsidiaries are fully consolidated from the date of acquisition, being the
date on which the Group obtains control. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over
the investee.
Generally, there is a presumption that a majority of voting rights result in
control. To support this presumption and when the Group has less than a
majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an
investee, including:
· The contractual arrangement with the other vote holders of the
investee;
· Rights arising from other contractual arrangements; and
· The Group's voting rights and potential voting rights
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. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the
date that control ceases. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the period are included in the Group
Financial Statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.
All intra-group balances, transactions, income and expenses and profits and
losses resulting from intra-group transactions that are recognised in assets,
are eliminated in full.
All the Group's companies have 31 December as their year-end. Consolidated
financial statements are prepared using uniform accounting policies for like
transactions.
2.5. Going concern
The financial statements have been prepared on a going concern basis. The
Group has not yet earned revenues and is in the pre-construction phase of its
business. The operations of the Group are currently financed from funds raised
from shareholders and strategic investors. In common with many pre-production
entities, the Group will need to raise further funds in order to progress the
Group from the feasibility phase into construction and eventually into
production of revenues.
The Group had cash and cash equivalents of US$5.3 million at 26 May 2022 and
the Directors are of the view this is sufficient to fund the Group's
non-discretionary expenditure and maintain good title to the exploration
licences over the next 12 months from the date of approval of these financial
statements. The Company will continue to work on advancing the Khemisset
project and to commence construction as soon as practicable, however the
timing of these activities will be dependent on availability of funds.
The Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future.
Thus, they continue to adopt the going concern basis of accounting in
preparing the financial statements.
2.6. Changes in accounting policies
Standards, interpretations and amendments to published standards effective
from 1 January 2021
There were no new standards or interpretations effective and adopted for the
first time for the year beginning on or after 1 January 2021 that had a
significant effect on the Group's or Company's financial statements.
Standards, interpretations and amendments to published standards not yet
effective
The Group has not early applied the following new and amendments to IFRSs that
have been issued but are not yet effective:
· Amendments to IAS 1: Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current and Amendments to IAS
1: Classification of Liabilities as Current or Non-current -Deferral of
Effective Date - effective 1 January 2023
· Amendments to IFRS 3: Business Combinations - Reference to the
Conceptual Framework - effective 1 January 2022
· Amendments to IAS 16: Property, Plant and Equipment - effective 1
January 2022
· Amendments to IAS 37: Provisions, Contingent Liabilities and
Contingent Assets - effective 1 January 2022
· Annual Improvements to IFRS Standards 2018-2020 Cycle - 1 January
2022
The Directors anticipate that the application of all new and amendments to
IFRSs will have no material impact on the future results of the Group or
Company in the foreseeable future.
2.7. Segment reporting
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that
are subject to risks and returns that are different from those of segments
operating in other economic environments.
The Directors are of the opinion that the Group is engaged in a single segment
of business being the exploration activity of potash in one geographical area,
being Morocco.
2.8. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
on entity and a financial liability or equity instrument of another.
(a) Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, and subsequently
measured at amortised cost, fair value through OCI, or fair value through
profit and loss.
The classification of financial assets at initial recognition that are debt
instruments depends on the financial asset's contractual cash flow
characteristics and the Group's business model for managing them. The Group
initially measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs.
In order for a financial asset to be classified and measured at amortised cost
or fair value through OCI, it needs to give rise to cash flows that are
'solely payments of principal and interest (SPPI)' on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed
at an instrument level.
The Group's business model for managing financial assets refers to how it
manages its financial assets in order to generate cash flows. The business
model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in
four categories:
· Financial assets at amortised cost (debt instruments)
· Financial assets at fair value through OCI with recycling of
cumulative gains and losses (debt instruments)
· Financial assets designated at fair value through OCI with no
recycling of cumulative gains and losses upon derecognition (equity
instruments)
· Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial
assets at amortised cost if both of the following conditions are met:
· The financial asset is held within a business model with the
objective to hold financial assets in order to collect contractual cash flows;
and
· The contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the
effective interest rate (EIR) method and are subject to impairment. Interest
received is recognised as part of finance income in the statement of profit or
loss and other comprehensive income. Gains and losses are recognised in profit
or loss when the asset is derecognised, modified or impaired. The Group's
financial assets at amortised cost include trade receivables (not subject to
provisional pricing) and other receivables.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is primarily derecognised (i.e.,
removed from the Group's consolidated statement of financial position) when:
· The rights to receive cash flows from the asset have expired; or
· The Group has transferred its rights to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a 'pass-through' arrangement;
and either (a) the Group has transferred substantially all the risks and
rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred
control of the asset.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all
debt instruments not held
For trade receivables (not subject to provisional pricing) and other
receivables due in less than 12 months, the Group applies the simplified
approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group
does not track changes in credit risk, but instead, recognises a loss
allowance based on the financial asset's lifetime ECL at each reporting date.
The Group considers a financial asset in default when contractual payments are
90 days past due. However, in certain cases, the Group may also consider a
financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual
amounts in full before taking into account any credit enhancements held by the
Group.
A financial asset is written off when there is no reasonable expectation of
recovering the contractual cash flows and usually occurs when past due for
more than one year and not subject to enforcement activity. At each reporting
date, the Group assesses whether financial assets carried at amortised cost
are credit-impaired. A financial asset is credit-impaired when one or more
events that have a detrimental impact on the estimated future cash flows of
the financial asset have occurred.
(b) Financial liabilities
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate. All financial liabilities are recognised initially at
fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs. The Group's financial liabilities
include trade and other payables and loans.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as
described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial
liabilities held for trading and financial liabilities designated upon initial
recognition as at fair value through profit or loss. Financial liabilities are
classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes derivative
financial instruments entered into by the Group that are not designated as
hedging instruments in hedge relationships as defined by IFRS 9. Separated
embedded derivatives are also classified as held for trading unless they are
designated as effective hedging instruments. Gains or losses on liabilities
held for trading are recognised in the statement of profit or loss and other
comprehensive income.
Loans and borrowings and trade and other payables
After initial recognition, interest-bearing loans and borrowings and trade and
other payables are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in the statement of profit or loss and
other comprehensive income when the liabilities are derecognised, as well as
through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the statement of profit or loss
and other comprehensive income. This category generally applies to trade and
other payables.
Derecognition
A financial liability is derecognised when the associated obligation is
discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in
profit or loss and other comprehensive income.
(c) Financial liabilities
Liabilities within the scope of IFRS 9 are classified as financial liabilities
at fair value through profit and loss or other liabilities, as appropriate.
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires.
Financial liabilities included in trade and other payables are recognised
initially at fair value and subsequently at amortised cost.
2.9. Taxation
Current taxes are based on the results shown in the financial statements and
are calculated according to local tax rules, using tax rates enacted or
substantively enacted by the balance sheet date.
Deferred tax is recognised on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial
statements, determined using tax rates that are expected to apply when the
related deferred tax asset or liability is realised or settled. Deferred tax
assets are recognised only to the extent that it is probable that future
taxable profit will be available against which the temporary differences can
be utilised.
2.10. Intangible assets - exploration and evaluation expenditure
Exploration expenditure comprises all costs which are directly attributable to
the exploration of a project area.
When it has been established that a mineral deposit has development potential,
all costs (direct and applicable overheads) incurred in connection with the
exploration and development of the mineral deposits are capitalised until
either production commences, or the project is not considered economically
viable.
In the event of production commencing, capitalised costs in respect of the
asset are transferred into Tangible Fixed Assets, and are depreciated over the
expected life of the mineral reserves on a unit of production basis. Other
pre-trading expenses are written off as incurred. For the purposes of
impairment testing, intangible assets are allocated to specific projects with
each licence reviewed annually. Where a project is abandoned or is considered
to be of no further interest, the related costs are written off.
Intangible assets are not subject to amortisation and are tested annually for
impairment. The recoverability of all exploration costs, licenses and mineral
resources is dependent on the ability of the Group to obtain necessary
financing to complete the development of reserves and future profitable
production, or proceeds from the disposition thereof.
2.11. Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash
equivalents includes cash on hand and deposits held at call with financial
institutions.
2.12. Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at
the rates of exchange ruling at the Statement of Financial Position date.
Transactions in foreign currencies are translated into sterling at the rate of
exchange ruling at the date of the transaction. Exchange differences are
taken into account in arriving at the operating result.
On consolidation of a foreign operation, assets and liabilities are translated
at the closing rate at the date of the Statement of Financial Position, income
and expenses for each Statement of Comprehensive Income presented are
translated at average exchange rates. All resulting exchange differences
shall be recognised in other comprehensive income and accumulated in equity.
2.13. Share-based payment arrangements
The Group operates equity-settled, share-based compensation plans, under which
the entity receives services from employees as consideration for equity
instruments (options) of the Group. The fair value of employee services
received in exchange for the grant of share options are recognised as an
expense. The total expense to be apportioned over the vesting period is
determined by reference to the fair value of the options granted:
· including any market performance conditions;
· excluding the impact of any service and non-market performance
vesting conditions; and
· including the impact of any non-vesting conditions.
Non-market performance and service conditions are included in assumptions
about the number of options that are expected to vest. The total expense is
recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each reporting
period the Group revises its estimate of the number of options that are
expected to vest.
The Group recognises the impact of the revision of original estimates, if any,
in profit or loss, with a corresponding adjustment to equity.
When options are exercised, the Company issues new shares. The proceeds
received net of any directly attributable transaction costs are credited to
share capital (nominal value) and share premium.
The fair value of goods or services received in exchange for shares is
recognised as an expense and included within administrative expenses.
2.14. Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the group's 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 below:
a) Recoverability of intangible assets
The Group tests annually for impairment or more frequently if there are
indications that the intangible assets might be impaired.
Determining whether the intangible assets are impaired requires an estimation
of the value in use of the cash generating units to which the intangible
assets belong. Where impairment indicators are present, the Group is
required to evaluate the future cash flows expected to arise from the
cash-generating unit and the suitable discount rate in order to calculate the
present value.
The carrying value of Group's exploration and evaluation intangible assets at
31 December 2021 is US$13.6 million (2020: US$11.1 million), which relates to
the Khemisset project.
The Directors therefore undertook an assessment of the following areas and
circumstances that could indicate the existence of impairment:
· The Group's right to explore in an area has expired, or will expire
in the near future without renewal;
· No further exploration or evaluation is planned or budgeted for;
· A decision has been taken by the Board to discontinue exploration and
evaluation in an area due to the absence of a commercial level of reserves; or
· Sufficient data exists to indicate that the book value will not be
fully recovered from future development and production.
The Board has reviewed the project for indicators of impairment, and are
satisfied that the prospects of deriving economic value are likely to be
considerably in excess of the carrying value of the asset in the accounts.
In arriving at this conclusion, the Directors considered the ongoing
commitment to the project, the economic metrics of the project as set out in
the 2020 Feasibility Study, and the increase in potash prices over the last 12
months.
Following their assessment, the Directors concluded that no impairment charge
was necessary for the period ended 31 December 2021.
b) Share-based payments
The Group has made awards of options on its unissued share capital to certain
directors and employees as part of their remuneration package.
The valuation of these options involved making a number of critical estimates
relating to price volatility, future dividend yields, expected life of the
options and interest rates. These assumptions are described in more detail
in note 12.
There was a charge to the Statement of Comprehensive Income during the year in
relation to share based payments of USD$33k (2020: US$991k).
c) Valuation of warrants
The Group issued shares in November 2021 which included warrants to investors.
The fair value assigned to the warrants involved making a number of critical
estimates relating to price volatility, future dividend yields and interest
rates. The valuation of the warrants was US$660k (2020: US$ nil)
d) Going concern
In their assessment of going concern, the Directors have prepared cash flow
forecast showing the Group's non-discretionary expenditure obligations, as
well as discretionary activities. The discretionary activities relate largely
to the project work at Khemisset, which are either uncommitted in nature, or
are the subject of contracts which include clauses allowing the Company to
suspend activities without penalty.
The Group has sufficient cash reserves to cover non-discretionary expenditure
beyond the Going Concern horizon of at least 12 months from the date of this
report, and accordingly the Board believe the Going Concern basis to be
appropriate for the preparation of the 2021 Financial Statements.
3. Expenses by nature
2021 2020
US$'000 US$'000
Project costs 7 20
Directors' fees (note 4) 635 192
Travel and accommodation 59 43
Auditors' remuneration including associates 25 42
Employment costs 455 -
Professional and consultancy fees 1,168 737
Total 2,349 1,034
4. Directors' remuneration
Details of Directors' remuneration during the year are as follows:
2021 2020
US$'000 US$'000
Graham Clarke 401 -
James Kelly 65 -
Rupert Joy 19 -
Edward McDermott 51 46
Hayden Locke 33 31
Mark Connelly 16 46
Robert Wrixon 50 69
Total 635 192
Graham Clarke, Hayden Locke and Robert Wrixon also received fees for
consultancy services which are disclosed within note 14. In addition, the
Directors received share options. Further details on share options are in note
14. Directors' fees which are directly attributable to the exploration of a
project area have been capitalised as intangible assets.
5. Income tax
2021 2020
US$'000 US$'000
Current tax:
Tax - -
Total tax - -
Reconciliation of income
tax
2021 2020
US$'000 US$'000
Loss before tax (2,777) (1,942)
Loss before tax multiplied by domestic tax rates applicable to losses in the (464) (387)
respective countries
Effects of:
Foreign tax attributes (33) (8)
Losses on which no deferred tax is recognised 497 395
Total tax - -
The weighted average applicable tax rate was 16.7% (2020: 19.9%). With effect
from 2018, Emmerson PLC registered for taxation in the United Kingdom, where
the corporation tax rate is 19%. It is also subject to taxation in the Isle of
Man where the corporation tax rate is 0%. Morocco has a 20% tax rate
applicable to mining companies, including Emmerson's Moroccan subsidiaries.
A deferred tax asset has not been recognised in respect of deductible
temporary differences relating to certain losses carried forward at the year
end, as there is insufficient evidence that taxable profits will be available
in the foreseeable future against which the deductible temporary difference
can be utilised.
The unrecognised deferred tax asset for the Group was approximately US$1,456k
(2020: US$983k). The unrecognised deferred tax asset relating to Moroccan tax
losses amounted to approximately US$144k (2020: US$78k).
6. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
2021 2020
Earnings
Loss from continuing operations for the year attributable to the equity (2,777) (1,942)
holders of the Company (US$'000)
Number of shares
Weighted average number of ordinary shares for the purpose of basic and 822,875,086 704,759,944
diluted earnings per share
Basic and diluted loss per share 0.33 cents 0.28 cents
The potential number of shares which could be issued following the exercise of
options and warrants currently outstanding amounts to 179,625,047 (see note
12). Dilutive earnings per share equals basic earnings per share as, due to
the losses incurred, there is no dilutive effect from the existing share
options and warrants.
7. Intangible assets
The intangible assets consist of capitalised exploration and evaluation
expenditure in respect of the Company's potash interests in Morocco (the
Khemisset project).
2021 2020
US$'000 US$'000
Cost:
At the beginning of the year 11,132 8,180
Additions 2,671 2,313
Effects of changes in foreign exchange rates (248) 639
Total 13,555 11,132
Intangible assets are reviewed at each reporting date to determine whether
there is objective evidence of impairment. See note 2.14 detailing the
Company's judgement in this area.
8. Trade and other receivables
2021 2020
US$'000 US$'000
Other receivables 551 398
Prepayments 220 31
Total 771 429
Other receivables include recoverable VAT and other taxes.
9. Trade and other payables
2021 2020
US$'000 US$'000
Other payables 934 227
Accruals 901 454
Total 1,835 681
Trade and other payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business. Accounts payable are
classified as current liabilities if payment is due within one year or less
(or in the normal operating cycle of the business if longer). If not, they are
presented as non-current liabilities. Trade payables are recognised initially
at fair value, and subsequently measured at amortised cost using the effective
interest method. Other payables consist of supplier invoices for
administration expenses. Included within Accruals are engineering costs of
US$700k and bonus accruals of US$112k.
10. Financial instruments
Categories of financial instruments
2021 2020
US$'000 US$'000
Financial assets measured at amortised cost
Other receivables 551 398
Cash and cash equivalents 10,032 1,563
10,583 1,961
Financial liabilities measured at amortised cost
Other payables 934 227
Financial risk management objectives and policies
The Company is exposed through its operations to credit risk and liquidity
risk. In common with all other businesses, the Company is exposed to risks
that arise from its use of financial instruments. This note describes the
Company's objectives, policies and processes for managing those risks and the
methods used to measure them. Further quantitative information in respect of
these risks is presented throughout this financial information.
General objectives, policies and processes
The Directors have overall responsibility for the determination of the
Company's risk management objectives and policies. Further details regarding
these policies are set out below:
Capital management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
The capital structure of the Group consists of issued capital, reserves and
retained earnings. The Directors reviews the capital structure on a
semi-annual basis. As a part of this review, the Directors consider the cost
of capital, the risks associated with each class of capital and overall
capital structure risk management through the new share issues and share
buy-backs as well as the issue of new debt or the redemption of existing debt.
The management's strategy remained unchanged from 2020.
Market price risk
The development and success of any project of the Group will be primarily
dependent on the future price of potash. Potash prices are subject to
significant fluctuation and are affected by a number of factors which are
beyond the control of the Company. Future production from the Khemisset
Project is dependent on potash prices that are adequate to make the project
economic. Potash prices have increases significantly during 2022, and
sanctions on sources from Russia and Belarus suggest supplies are likely to
remain tight for the foreseeable future.
Credit risk
The Company's credit risk arises from cash and cash equivalents with banks and
financial institutions. For banks and financial institutions, only
independently rated parties with minimum rating "A" are accepted.
Liquidity risk
Liquidity risk arises from the Directors' management of working capital. It is
the risk that the Company will encounter difficulty in meeting its financial
obligations as they fall due.
The Directors' policy is to ensure that the Company will always have
sufficient cash to allow it to meet its liabilities when they become due. To
achieve this aim, the Directors seek to maintain a cash balance sufficient to
meet expected requirements.
The Directors have prepared cash flow projections on a monthly basis through
to 30 September 2021. At the end of the period under review, these projections
indicated that the Group is expected to have sufficient liquid resources to
meet its obligations under all reasonably expected circumstances.
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures. Foreign exchange risk arises from
future commercial transactions, recognised monetary assets and liabilities and
net investments in foreign operations. It should be noted that although the
consolidated accounts use US$ as a presentational currency, Emmerson PLC (the
parent company) continued to have GBP as a functional currency in 2021, and
the Group's Moroccan entities have MAD as their functional currency.
Net current assets denominated in US$ and MAD at the year-end amounted to
US$3.98 million and net liability of US$0.35 million respectively.
At 31 December 2021, had the exchange rate between the Sterling and US$
increased or decreased by 5% with all other variables held constant, the
increase or decrease respectively in net assets would amount to approximately
US$272k (2020: US$2k).
At 31 December 2021, had the exchange rate between the Sterling and MAD
increased or decreased by 5% with all other variables held constant, the
increase or decrease respectively in net assets would amount to approximately
US$1k (2020: US$1k).
The Group does not hedge against foreign exchange movements.
11. Share capital
The Ordinary Shares issued by the Company have a no par value and all fully
paid. Each Ordinary Share carries one vote on a poll vote. The Company does
not have a limited amount of authorised capital.
Number of shares US$'000
As at 31 December 2020 726,602,974 15,755
Shares issue for cash 177,470,355 14,536
Shares issued as payment 600,000 47
Less share issue costs - (1,416)
Less fair value of investor warrants issued in year - (660)
Warrants exercised for cash 10,389,333 422
Transfer from warrants reserve - 90
As at 31 December 2021 915,062,662 28,774
12. Share based payments
The following is a summary of the share options and warrants outstanding as at
31 December 2021:
Date of grant Expiry date Vesting date Exercise Price No of Options Share price at grant Risk Free rate Volatility Option Value
08-May-18 07-May-23 08-May-18 £0.0300 7,250,000 £0.0225 1.30% 34% £0.0098
08-May-18 07-May-23 08-Nov-18 £0.0300 7,250,000 £0.0225 1.30% 34% £0.0098
08-May-18 07-May-23 08-May-19 £0.0300 10,750,000 £0.0225 1.30% 34% £0.0098
08-May-18 07-May-23 08-Nov-19 £0.0300 13,250,000 £0.0225 1.30% 34% £0.0098
26-Mar-19 24-Mar-24 26-Mar-20 £0.0350 6,900,000 £0.0400 2.10% 68% £0.0242
07-Aug-19 05-Aug-24 07-Aug-19 £0.0500 1,500,000 £0.0375 2.10% 58% £0.0192
01-Aug-20 31-Jul-25 01-Aug-21 £0.0010 20,333,333 £0.0435 1.10% 71% £0.0219
01-Aug-20 31-Jul-25 01-Aug-22 £0.0010 7,333,333 £0.0435 1.10% 71% £0.0219
01-Aug-20 31-Jul-25 01-Aug-23 £0.0010 3,333,334 £0.0435 1.10% 71% £0.0219
01-Aug-20 31-Jul-25 01-Aug-20 £0.0010 19,000,000 £0.0435 1.10% 71% £0.0219
96,900,000
Date of grant Expiry date Vesting date Exercise Price No of Warrants Share price at grant Risk Free rate Volatility Warrant Value
04-Jun-18 03-Jun-23 04-Jun-18 £0.0300 333,333 £0.0225 1% 34% £0.0089
9-Nov-21 9-Nov-22 9-Nov-21 £0.0830 82,391,714 £0.0565 0.8% 57% £0.0058
82,725,047
Total outstanding at 31 December 2021 179,625,047
During the year 82,391,714 warrants were issued (2020: nil). 5,000,000 share
options expired (2020: nil) and nil were exercised (2020: nil). 333,333
warrants expired (2020: 333,333) and 10,000,000 warrants were exercised (2020:
389,333).
The weighted average remaining contractual life of the options and warrants at
year-end is 1.8 years.
The options and warrants issued were valued using the Black-Scholes valuation
method and the assumptions used are detailed above. The expected future
volatility has been determined by reference to the historical volatility.
The total share-based payment recognised in the Statement of Changes in Equity
during the year was a US$33k (2020: US$991k), which included credits of US$14k
in respect of cancelled and unvested share options in the year.
The Group operates equity-settled, share-based compensation plans, under which
the entity receives services from Directors and employees as consideration for
equity instruments (options) of the Group.
There were 77,850,000 (2020: 101,900,000) options at the year-end held by
current Directors, employees, and consultants. Vesting of the options is
subject to the option holder providing continuous service during the vesting
period and there are no other performance conditions attached to the options.
Share options Number issued Expiry
Graham Clarke (Director) 17,500,000 5 years
Hayden Locke (Director) 22,000,000 5 years
Robert Wrixon (Director) 11,000,000 5 years
Other employees and consultants 27,350,000 5 years
Total 77,850,000
13. Future rental payments
The commitments arising from operating leases are largely rental payments for
buildings. The future minimum lease payments (payables) under non-cancellable
operating leases are:
2021 2020
US$'000 US$'000
Within one year 20 20
More than one year - -
As at end of year 20 20
14. Related party transactions
Directors' consultancy fees
Hayden Locke is a Director of the Company and is a director of Benson Capital
Limited, which provide consulting services to the Company. During the year,
Benson Capital Limited received total fees of US$244k (2020: US$314k). The
amount outstanding as at year-end is US$ nil (2020: US$114k).
Robert Wrixon is a Director of the Company and also provides consulting
services to the Company. During the year, Robert Wrixon received fees of
US$116k (2020: US$115k). The amount outstanding as at year-end is US$ nil
(2020: US$ nil).
Graham Clarke is a Director of the Company and is a director of GCUK
Consulting Limited, which provide consulting services to the Company. During
the year, GCUK Consulting Limited received total fees of US$99k (2020:
US$232k). The amount outstanding as at year-end is US$ nil (2020: US$ nil).
Details of directors' remuneration during the year are given in note 4.
There are no other related party transactions.
15. Ultimate controlling party
The Directors consider that there is no controlling or ultimate controlling
party of the Company.
16. Change in Presentation Currency
The Directors believe that US dollars are a more appropriate currency in which
to present the Group's consolidated results, on the basis that, along with
most international mining groups, the majority of financing and pricing
discussions and presentations are undertaken in that currency.
Consequently, the Group has opted for the financial results to be presented in
US dollars for the year ended 31 December 2021. The change in presentation
currency has been applied retrospectively.
In re-presenting the Group Financial Statements for the year ended 31 December
2021, the reported information was converted to US dollars from GB£ using the
following procedures:
· Assets and liabilities were translated to US dollars at the
closing rates of exchange at each respective balance sheet date (31 December
2021: GB£1: US$1:3532; 31 December 2020: GB£1:US$1.367).
· Share capital, share premium and other reserves were translated
at the historic rates prevailing at the dates of transactions.
· Income and expenses were translated to US dollars at an average
rate at each of the respective reporting periods. This has been deemed to be a
reasonable approximation (31 December 2021: GB£1: US$1.377; 31 December 2020:
GB£1: US$1.276).
· Differences resulting from the retranslation were taken to
reserves.
To assist shareholders during this change, the impact on the prior period
results, closing balance sheet and the numerator for earnings per share as
originally reported is set out below:
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (REPRESENTED)
As originally reported 2020 Re-presented 2020
Note £'000 US$'000
Continuing Operations
Administrative expenses 3 (810) (1,034)
Share-based payment expense 12 (776) (991)
Net foreign exchange gain/(loss) 61 78
Operating loss (1,525) (1,947)
Finance income 4 5
Finance cost - -
Loss before tax (1,521) (1,942)
Income tax 5 - -
Loss for the year attributable to equity owners (1,521) (1,942)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Exchange gain on translating foreign operations 97 500
Total comprehensive income attributable to equity owners (1,424) (1,442)
Earnings per share - Basic and diluted 6 (0.22 pence) (0.28 cents)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (REPRESENTED)
As originally presented 2020 Re-presented As originally presented 2019 Re-presented
2020 2019
Note £'000 US$'000 £'000 US$'000
Non-current assets
Intangible assets 7 8,142 11,132 6,172 8,180
Property, plant and equipment 12 16 38 50
Total non-current assets 8,154 11,148 6,210 8,230
Current assets
Trade and other receivables 8 314 429 271 359
Cash and cash equivalents 1,143 1,563 2,071 2,746
Total current assets 1,457 1,992 2,342 3,105
Total assets 9,611 13,140 8,552 11,335
Current liabilities
Trade and other payables 9 498 681 414 549
Total current liabilities 498 681 414 549
Net assets 9,113 12,459 8,138 10,786
Shareholders equity attributable to equity owners
Share capital 11 12,030 15,755 10,408 13,631
Share reserve 12 1,163 1,499 386 508
Reverse acquisition reserve 1,651 2,198 1,651 2,198
Retained earnings (5,740) (7,508) (4,219) (5,566)
Translation reserve 9 515 (88) (15)
Total equity 9,113 12,459 8,138 10,786
17. Events after the reporting date
There were no material events that took place after the reporting date.
**ENDS**
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. END FR WPUBGAUPPGBURecent news on Emmerson
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