Condensed Consolidated Statement of Cash Flows for the six month period ended 30 June 2023

Notes to the Condensed Consolidated Financial Statements for the six months ended 30 June 2023

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 Company and its subsidiaries (together "the Group") is the exploration, development and exploitation of a potash development project in Morocco.

2.        Basis of preparation

2.1    General

The Condensed Consolidated Financial Statements have been prepared in accordance with the valuation and recognition principles of UK-adopted International Accounting Standards. The Condensed Consolidated Financial Statements for the six months ended 30 June 2023 are unaudited and have not been reviewed by the Group's auditor, and do not include all of the information required for full annual financial statements.

They should be read in conjunction with the Company's annual financial statements for the year ended 31 December 2022. The principal accounting policies applied in the preparation of the Condensed Consolidated Financial Statements are unchanged from those disclosed in those statements. These policies have been consistently applied to each of the periods presented.

The financial information of the Group is presented in US Dollars, which is also the functional currency of the parent Company and has been prepared under the historical cost convention. 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 it operates (its functional currency).

2.2    Basis of consolidation

The Consolidated Financial Statements comprise the financial statements of the Company, Moroccan Salts Limited, Moroccan Salts Limited's subsidiaries (the "MSL Group") and Khemisset UK Ltd ("KUK").  KUK, a wholly-owned subsidiary of the Company, was incorporated in England and Wales under the Companies Act 2006 on 8 February 2023.

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.

·    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.

2.3    Functional and presentational currency

The financial information of the Group is presented in US Dollars, which is also the functional currency of the parent Company, and has been prepared under the historical cost convention. 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 it operates (its functional currency).

2.4    Going concern

The Group's cash position at the date of this report is US$3.5 million. This amount is sufficient to cover all committed expenditures for the twelve months. Additional expenditures related to the development of the Khemisset Project which are not committed and would not be covered by cash reserves would need to be financed by fundraising in the future, however these expenditures are discretionary, and the Directors are confident that any funds could be raised from existing and new shareholders for such activities, which would be value accretive to shareholders. Accordingly, the Directors have adopted the going concern basis in preparing the Interim Financial Statements.

2.5    Segment reporting and cyclicality

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 consider the Group is engaged in a single segment of business being the exploration activity of potash in one geographical area, being the Khemisset Project in Morocco.

The interim results for the six months ended 30 June 2023 are not necessarily indicative of the results to be expected for the full year ending 31 December 2023. Due to the nature of the entity, the operations are not affected by seasonal variations at this stage.

3.        Administrative fee and other expenses

4.        Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

5.        Intangible assets

The intangible assets consist of capitalised exploration and evaluation expenditure, including the cost of acquiring the mining license and research permits held by the Company's subsidiaries.

6.        Related party transactions

Directors' consultancy fees

Robert Wrixon is a Director of the Company and provided consulting services to the Company. During the period, Robert Wrixon received fees of US$12k (year to 31 December 2022: US$71K). The amount outstanding as at period-end was US$ nil (31 December 2022: US$ nil).

Hayden Locke is a Director of the Company and is a director of Benson Capital Limited, which previously provided consulting services to the Company. During the period, Benson Capital Limited received total fees of US$ nil (year to 31 December 2022: US$95k). The amount outstanding as at period end was US$ nil (31 December 2022: US$9K).

7.        Post-balance sheet events

Moroccan earthquake

On Friday 8 September 2023, a magnitude 6.8 earthquake struck Morocco. The epicentre was located in the High Atlas mountains, approximately 70km south of Marrakech. Emmerson's project and offices are located some distance away, and were not affected directly.