Annual Report and
Consolidated Financial
Statements 2018
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
1
Contents
Chairman’s Statement
Company Information
Board of Directors
Directors’ Report
2
6
7
9
Independent Auditors’ Report
17
Consolidated Income
Statement
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Company Statement of
Financial Position
Consolidated Statement
of Cash Flows
Company Statement
of Cash Flows
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Notes to the Consolidated
Financial Statements
22
23
24
25
26
27
28
29
30
2
Chairman’s Statement
These included further excellent drilling
results at Clontibret including the
discovery of an extensive gold zone, an
updated Joint Ore Reserves Committee
(“JORC”) compliant mineral resource of
517,000 ounces gold in the Clontibret
deposit, with an increase in gold grade
of 26% and, post period, an updated
estimated Exploration Target of 8.8Moz
gold for the combined Clontibret, Clay
Lake and Glenish areas in Ireland.
The Clontibret, Clay Lake and Glenish
gold targets are situated in the northeast
of the Company’s licences. Clay Lake is
located 7km northeast of Clontibret and
Glenish 7km southwest of Clontibret. The
targets lie along the Orlock Bridge Fault,
a major geological structure in a terrane
known as the Longford – Down Massif.
Ireland is already well known as an
international zinc province, indeed the
Conroy management were involved in
the discovery and development of the
world class lead/zinc mine at Galmoy in
Co. Kilkenny which led to the revival of
the Irish base metals industry. Now the
gold potential of Ireland, particularly in
its northern half, is becoming increasingly
recognised and, in this, your Company’s
gold discoveries have played a major role.
Exploration licences in Ireland give the
holder the exclusive right to apply for a
mining licence. Ireland is a stable, mining
and business friendly jurisdiction which,
in 2017, came first in the world for policy
perception and fourth in the world for
mining investment in the prestigious
Fraser Index listings.
Your Company, building on its exploration
success, looks forward to mining
development on its extensive (700km2)
and 100% owned licences in Ireland.
2018 Drilling Programme
The recent drilling programme at
Clontibret which commenced in February
2018 led to the discovery, in the first hole
drilled, of additional extensive gold zones,
with wide mineralised intersections
reported and with grades of up to 24g/t
gold. In view of the results the drill
programme was increased from the
original planned 1,000m to over 1,700m.
Further excellent results were reported
(see Table 1) including an extensive gold
zone 30 metres to the south of a historic
antimony mine in the area.
The drilling programme concentrated
on the Tullybuck-Lisglassan area of
Clontibret which measures less than 20
per cent of the overall 1.5km² target area
at Clontibret or less than 5 per cent of
the combined Clontibret, Clay Lake and
Glenish target area.
Gold Targets along the Orlock Bridge Fault
Professor Richard Conroy
Chairman
Dear Shareholder,
I have great pleasure in presenting
your Company’s Annual Report and
Consolidated Financial Statements for
the year ended 31 May 2018.
The year has been a very positive one,
during which the Company has reported
further excellent drilling results and
an updated (JORC compliant) mineral
resource of 517,000 ounces gold in the
Clontibret gold deposit and, post period,
an updated estimated Exploration Target*
of 8.8m ounces gold for the combined
Clontibret, Clay Lake and Glenish gold
target areas.
*
[An Exploration Target is not, and must not be
construed as a mineral resource. It is designed
to provide guidance as to the mineral
exploration potential of the defined area.]
Business Development
Your Company’s business development
strategy of building on its exploration
success and at the same time continuing
to move forward with its planned gold
mine at Clontibret in Co. Monaghan has
resulted in a series of positive results
during the year.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 3
Clontibret/Clay Lake –
Glenish Gold Target Estimates
Of Potential Contained
Ounces Of Gold
The Company has updated its exploration
target to include the Glenish gold target
to the southwest of the Clontibret and
Clay Lake gold targets. This updated
Exploration Target, has been calculated
by Professor Garth Earls using (1) a 5%
drilling success estimate to reflect the
drilling success rate to date in the area,
(2) the level of geological data available,
(3) the understanding of the gold
mineralisation in the area and, (4) using 2
g/t Au, the Clontibret deposit JORC grade,
as the preferred comparator of grade
across all three gold-in-soil anomalies.
The calculations are based on coherent
gold-in-soil anomalies greater than
10ppb Au.
This results in an updated Exploration
Target of 8.8 million ounces of gold to
a depth of 200m, excluding the already
defined 517,000 ounce JORC resource at
Clontibret, within the north-eastern area
of the Company’s licences (see Table 3).
To put this Exploration Target into
worldwide industry perspective, your
Company’s technical staff have drawn
a gold trend comparison between
the Orlock Bridge Fault zone and the
Boulder-Lefroy gold zone in Australia
which is 100km long and has produced
in excess of 85Moz since its discovery
Table 1. Examples of Gold Intersections in 2018 drilling programme
Length
(m)
5.0
3.9
4.0
Gold (g/t)
g/m
6.1
9.2
7.4
30.5
35.9
29.6
Your Company’s licence area, including
the Clontibret/Clay Lake/Glenish area, has
excellent infrastructure. The N2 highway
passes within 2km of the Clontibret-Clay
Lake targets whilst the N54 passes across
the top of the licences. Additionally,
there are two 110kV power lines which
traverse the Orlock Bridge Fault and a
third 110kV line which runs parallel to all
the prospects and is never further than
5km away. The area also has a skilled
local workforce in local accommodation
and long term employment is particularly
important in regional areas.
Your Company, which is fully conscious
of its social and environmental
responsibilities, looks forward to
developing on a sustainable basis, its first
gold mine in the region.
Hole
Number
CDG-18-01
CDG-18-04
From (m)
To (m)
50.0
50.0
55.0
53.9
189.0
CDG-18-07
185.0
Updated Mineral Resource
Estimate For Clontibret
An updated mineral resource for the
Clontibret gold deposit estimate was
prepared by TetraTech Inc (“TetraTech”).
The resource estimate was developed to
JORC Standard and represented a detailed
geological revision on the scoping study
previously undertaken by Tetra Tech in
2011 (see Table 2).
The new resource estimate represents
an increase in gold grade of 26% and
an increase in contained ounces in the
indicated category of 23%.
As part of the study additional
opportunities to increase the size of the
resource were identified. There is strong
geological evidence to suggest that the
gold lodes have a more extensive strike
length than previously interpreted – up to
a least 850m, and mineralisation remains
open in all directions.
This cut-off grade was supported by
using the following:
n A mining cost of US$1.88/t
n Processing costs of US$13.04/t
n G&A costs of US$1.0/t
n A strip ratio of 9.4:1
n Gold recovery: 84%
Resources
Table 2. Updated Clontibret JORC Compliant Resources (July 2017)
Classification
Zone
Cut-off
g/t (Au)
Indicated
Lodes
Stockwork
Indicated Total
Inferred
Lodes
Stockwork
Inferred Total
Total
1
1
1
1
Tonnes Grade (g/
tAu)
2.1
1.2
2.0
2.0
1.2
2.0
2.0
4,460,000
500,000
4,960,000
2,980,000
110,000
3,090,000
8,050,000
Ounces
(Au)
301,000
19,000
320,000
193,000
4,000
197,000
517,000
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 4
Chairman’s Statement continued
Table 3. Conroy Gold Exploration Target for the Clontibret/Clay Lake and Glenish gold-in-soil anomalies in
the Longford – Down Massif (excluding the 517,000 ounce Clontibret deposit). Au grade and potential
contained ounce variations tabulated. 8.8 = preferred contained ounces estimates (millions).
Potential Grade in g/t Au
2.00
26.4
17.6
8.8
4.4
2.50
3.00
3.50
4.00
4.50
5.00
33.1
22.0
11.0
5.5
39.7
26.4
13.2
6.6
46.3
30.9
15.4
7.7
52.9
35.3
17.6
8.8
59.5
39.7
19.8
9.9
66.1
44.1
22.0
11.0
% Drilling
success rate
15
10
5
2.5
1.00
13.2
8.8
4.4
2.2
1.50
19.8
13.2
6.6
3.3
Contained Au (M Oz)
Clontibret – Clay Lake – Glenish Gold Target Estimates Of Potential Contained Ounces Gold
An Exploration Target is a statement or estimate of the exploration potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted as
a range of tonnes and a range of grade (or quality), relates to mineralisation for which there has been insufficient exploration to estimate a Mineral Resource.
The Exploration Target estimated in this report, is an assessment of actual exploration results that define the exploration potential of a mineral occurrence supported
by drilling, trenching, geological mapping, structural interpretation, prospecting, sampling, analyses, and/or nearby geological analogies (e.g. the Clontibret deposit
which has a JORC compliant resource). The potential quantity and grade of the Exploration Target are essentially conceptual in nature.
It must be noted that there are geological interpretations and assumptions made in these estimates and it is inappropriate to apply any economic parameters to the
calculations. The estimates represent an Exploration Target as defined in the JORC guidelines and must not be construed as Resources or Reserves.
Gold Trend Comparison
Mineralisation Along Boulder-Lefroy Shear Zone (c. 100km)
New Celebration
from Hodkiewicz
(2003)
Kalgoorlie
Paddington
151°
139°
Mineralisation Along Boulder-Lefroy Shear Zone (c. 100km)
154°
138°
162°
135°
158°
147°
Slieve Glah
Tullyvin
Glenish
Clontibret
Clay Lake
Rockcorry
OFFSETS ON SINISTRAL STRUCTURES AS MAJOR CONTROLS ON DEPOSITS IN BOTH AREAS
and still has many producing mines.
New discoveries continue to be made
despite the region being explored for
many decades. There are structural
similarities between the Boulder-Lefroy
shear zone and the Orlock Bridge Fault
zone in your Company’s licence area. The
major difference is that the Orlock Bridge
Fault area has much less exploration to
date and there are many known targets
waiting to be drilled.
Further Exploration Potential
In addition to the Clontibret/Clay Lake
and Glenish gold target areas there
is further exploration potential on
the Company’s other licences along
the Orlock Bridge Fault. These targets
include Slieve Glah, a large and very
promising target 40km to the south of
Clontibret, where the Orlock Bridge Fault
undergoes a marked strike-swing. Such
strike-swings can act as focal points for
mineralisation.
Other gold targets in the Longford –
Down Massif include Rockcorry and
Tullyvin which are large gold-in-soil
anomalies along the Orlock Bridge
Fault which remain to be tested. These
targets lie in an area termed the central
structural zone between Slieve Glah and
Clontibret. Other gold-in-soil anomalies
within the licence area along the Orlock
Bridge Fault in the Longford – Down
Massif also remain to be tested.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 5
Clontibret Gold Lode Outcrop
Geotechnical logging of Drill Core
Out in the field – Clontibret
Directors And Staff
I would like to express my deep
appreciation of the support and
dedication of all the directors,
consultants and staff, which despite
all the difficulties, has made possible
the continued progress and success,
which the Company has achieved. I
would like to pay particular tribute to
Dr Karl Keegan, who will not be going
forward for re-election, for his excellent
contribution to the Board.
Future Outlook
Your Company has continued to make
excellent progress in its exploration and
development programme. I look forward
to this continuing on an accelerated basis
as we target a multi-million ounce gold
resource in Ireland and move towards
mine development at Clontibret.
Professor Richard Conroy
Chairman
13 November 2018
Other Targets In Ireland
And Finland
Exploration also continues for gold, zinc
and other metals on the Company’s other
exploration properties in Ireland and also
on your Company’s Finnish exploration
licences. Finland is highly prospective for
gold and, at Kittila in Northern Finland,
hosts Europe’s largest gold mine.
Finance
The loss after taxation for the financial
year ended 31 May 2018 was €745,485
(2017: €431,922) and the net assets
as at 31 May 2018 were €17,874,350
(2017: €16,760,857). During the year,
the Company raised £1,000,000 by way
of a placing and subscription for ordinary
shares in the Company. Warrants taken
up by Managing Director, Ms Maureen
Jones and I, raised a further €166,680
during the year.
During the year the Company cancelled
the admission of its ordinary shares to
trading on ESM. The Company’s ordinary
shares continue to be admitted to trading
on AIM.
On 28 August 2018, the Company raised
£500,000 (€556,545) through a placing
of 3,636,365 ordinary shares of €0.001 in
the capital of the Company (“the Placing
Shares”) at a price of €0.1375 sterling
per Placing Share, being a premium of 20
per cent to the closing mid-market price
on 24 August 2018.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 6
Company Information
Directors
Professor Richard Conroy
Chairman
Maureen T.A. Jones
Managing Director
Professor Garth Earls§
Non-Executive Director
Dr. Karl D. Keegan§
Non-Executive Director
Brendan McMorrow§
Non-Executive Director
§ Member of the Audit Committee
Company Registration
Number
232059
Nominated Adviser (Nomad)
Allenby Capital Limited
5 St. Helen’s Place,
5th Floor,
London, EC3A 6AB, UK
Tel: +44 20 3328 5656
www.allenbycapital.com
Company Secretary and
Registered Office
Maureen T.A. Jones
3300 Lake Drive,
Citywest Business Campus,
Dublin, D24 TD21, Ireland
Broker
Brandon Hill Capital Ltd
1 Tudor Street,
London, EC4Y 0AH, UK
Statutory Audit Firm
Deloitte Ireland LLP
Chartered Accountants and
Statutory Audit Firm
Deloitte & Touche House,
Charlotte Quay,
Limerick, V94 X63C, Ireland
Banker
AIB
1-4 Lower Baggot Street,
Dublin, D02 X342, Ireland
Registrars
Link Registrars Limited
2 Grand Canal Square,
Grand Canal Harbour,
Dublin, D02 A342, Ireland
www.linkassetservices.com
enquiries@linkgroup.ie
Legal Advisers
William Fry Solicitors
2 Grand Canal Square,
Dublin, D02 A342, Ireland
Roschier
Kasarmikatu,
00 130 Helsinki, Finland
Head Office
Conroy Gold and Natural Resources plc
3300 Lake Drive,
Citywest Business Campus,
Dublin, D24 TD21, Ireland
Tel: +353-1-479-6180
For further information visit
the Company’s website at:
www.conroygold.com
or contact:
Lothbury Financial Services
Floor 6, 131 Cannon Street,
London, EC4N 5AX, UK
Tel: +44 20 3290 0707
Hall Communications
1 Northumberland Road,
Dublin, D04 F578,
Ireland
Tel: + 353 1 6609377
London Stock Exchange
AIM Market Symbol: CGNR
Professor Richard Conroy
Chairman
Maureen T.A. Jones
Managing Director
Brendan McMorrow
Non-Executive Director
Dr. Karl D. Keegan
Non-Executive Director
Professor Garth Earls
Non-Executive Director
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 7
Board of Directors
Professor Richard Conroy
Chairman of the Board of
Directors
Professor Richard Conroy is responsible
for leading the Board and ensuring
it operates in an effective manner
whilst promoting communication
with Shareholders. He has over 40
years experience of founding and
growing companies in the natural
resources industry with a track record in
making discoveries of global significance.
Experience
Professor Richard Conroy has
been involved in natural resources
for many years. He established Trans-
International Oil, which was primarily
involved in Irish offshore oil exploration.
Trans-International Oil initiated the
Deminex Consortium which included
Deminex, Mobil, Amoco and DSM. Trans-
International Oil was merged with Aran
Energy P.L.C. in 1979, which was later
acquired by Statoil.
Professor Richard Conroy founded Conroy
Petroleum and Natural Resources P.L.C.
(“Conroy Petroleum”). Conroy Petroleum
was involved in both onshore and
offshore oil production and exploration
and also in mineral exploration. Conroy
Petroleum, in 1986, made the significant
discovery of the Galmoy zinc deposits
in County Kilkenny later developed as a
major zinc mine. The discovery at Galmoy
led to the revival of the Irish base metal
industry and to Ireland becoming an
international zinc province.
Conroy Petroleum was also a founding
member of the Stoneboy consortium,
which included Sumitomo Metal Mining
Co. Ltd., an exploration Group which
discovered the world class Pogo gold
deposit in Alaska, now in production
as a major gold mine.
Conroy Petroleum acquired
Atlantic Resources P.L.C. in 1992 and
subsequently changed its name to
ARCON International Resources P.L.C.
(“ARCON”). The oil and gas interests
in ARCON were transferred to form
Providence Resources P.L.C. ARCON
was later acquired by Lundin Mining
Corporation.
Professor Richard Conroy was Chairman
and Chief Executive of Conroy Petroleum/
ARCON from 1980 to 1994. He founded
Conroy Gold and Natural Resources P.L.C.
in 1995.
Professor Richard Conroy served in the
Irish Parliament as a Member of the
Senate. He was at various times front
bench spokesman for the Government
party in the Upper House on Energy,
Industry and Commerce, Foreign
Affairs and Northern Ireland.
Professor Richard Conroy is Emeritus
Professor of Physiology in the Royal
College of Surgeons in Ireland. Professor
Richard Conroy’s research included
pioneering work on jet lag, shift working
and decision making in business after
intercontinental flights. He co-authored
the first text book on human circadian
rhythms.
Maureen T.A. Jones
Managing Director
Maureen T.A. Jones oversees all of the
Company’s business and is responsible
for formulating the Company’s objectives
and strategy. She is also the Company
Secretary for the Company.
Experience
Maureen T.A. Jones has over twenty years’
experience at senior level in the natural
resource sector. She has been Managing
Director of Conroy Gold and Natural
Resources P.L.C. since 1998. Maureen
T.A. Jones is also a Director of Karelian
Diamond Resources P.L.C.
Maureen T.A. Jones joined Conroy
Petroleum and Natural Resources P.L.C.
on its foundation in 1980 and was a
Director and member of the Board of
Directors of Conroy Petroleum/ARCON
from 1986 to 1994. Maureen T.A. Jones
has a medical background and specialised
in the radiographic aspects of nuclear
medicine before becoming a manager of
International Medical Corporation in 1977.
Professor Garth Earls
Non-executive Director
Professor Garth Earls provides technical
advice and guidance to the Company in
relation to the exploration and resource
development matters.
Experience
Professor Garth Earls is Consulting
Economic Geologist and Professor in
the Department of Geology, University
College Cork. He has been a Board of
Directors Member and Managing Director
of both AIM and TSX listed companies
and has worked globally on a wide range
of gold and base metal projects. In the
1980s he was part of the team that
discovered the Curraghinalt gold deposit
in Co. Tyrone. Professor Garth Earls is a
former Director of the Geological Survey
of Northern Ireland and former Chairman
of the Geosciences Committee of the
Royal Irish Academy.
Dr. Karl Keegan
Non-executive Director
Dr. Karl Keegan was appointed to the
Board on 28 August 2017. He applies his
extensive capital markets experience to
the affairs of the Company. He retires
from the Board of Directors by rotation
and is not seeking re-election at the
forthcoming Annual General Meeting
of the Company.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 8
Board of Directors continued
Experience
Dr. Karl Keegan has over 20 years’
experience in international finance and
corporate management. Dr. Karl Keegan
has worked for a number of investment
banks including Dresdner Kleinwort
Benson, UBS and Bank of America and
was on the Global Executive Team and
Board Director of Canaccord and Chief
Financial Officer (“CFO”) of Minster
Pharmaceuticals P.L.C. Dr. Karl Keegan
is CEO of the private biotechnology
company, HOX Therapeutics Ltd. Dr. Karl
Keegan has a BSc from University College
Dublin, MPhil and PhD degrees from the
University of Cambridge and a MSc in
Finance from London Business School.
Brendan McMorrow
Non-executive Director
Brendan McMorrow was appointed to
the Board on 28 August 2017. He brings
a broad range of knowledge gained
through holding senior financial roles
in a variety of listed public companies
in the natural resources sector.
Experience
Brendan McMorrow has over 25 years’
experience in a number of public
companies in the oil and gas and base
metals mining sectors listed in London,
Toronto and Dublin where he held senior
executive finance roles. He is currently
Finance Director of Dunraven Resources
P.L.C., an oil and gas exploration and
development company. Prior to that he
was Chief Financial Officer of Circle Oil
P.L.C. from 2005 to 2015, an AIM listed
oil and gas exploration, development and
production company, with operations in
North Africa and the Middle East. He is
a Fellow of the Chartered Association of
Certified Accountants.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 9
Company Secretary
Maureen T.A. Jones was appointed
as Company Secretary on 18 December
2017. James P. Jones resigned as
Company Secretary at that date.
Directors’ Report
The Board of Directors submit their
annual report together with the audited
financial statements of Conroy Gold and
Natural Resources P.L.C. (the “Company”)
and its subsidiaries (“Conroy Gold”,
or the “Group”) for the financial year
ended 31 May 2018.
Principal activities,
business review and
future developments
Information with respect to the Group’s
principal activities and the review of
the business and future developments
as required by Section 327 of the
Companies Act 2014 is contained in the
Chairman’s statement on pages 2 to 5.
The Company is a mineral exploration
and development company whose
objective is to discover and develop
world class ore bodies in order to create
value for its shareholders. The Company’s
strategy is to explore in politically stable
and geographically attractive countries
such as Ireland and Finland.
The challenges facing the Company
in achieving this strategy are world
commodity prices and general economic
activity, ensuring compliance with
governmental and environmental
legislation and meeting work
commitments under exploration
permits and licences sufficient to
maintain the Company’s interest therein.
To accomplish its strategy and manage the
challenges involved, the Company employs
experienced individuals with a track record
of success of discovering world class ore
bodies together with suitably qualified
technical personnel and consultants,
experienced drilling and geophysical and
other contractors and uses accredited
international laboratories and technology
to interpret and assay technical results.
Additionally, the Company ensures as far
as possible to obtain adequate working
capital to carry out its work obligations
and commitments.
By co-ordinating all of the above
this should result in a satisfactory
return and value for shareholders.
Results for the year and state
of affairs at 31 May 2018
The consolidated income statement for
the financial year ended 31 May 2018
and the consolidated statement of
financial position at that date are set
out on pages 22 and 24. The loss for the
financial year amounted to €745,485
(2017: €431,922) and net assets at 31
May 2018 were €17,874,350 (2017:
€16,760,867). No interim or final
dividends or transfers have been or are
recommended by the Board of Directors.
Important events since
the year end
On 28 August 2018, the Company raised
£500,000 (€556,545), through a placing
of 3,636,365 ordinary shares of €0.001 in
the capital of the Company (the “Placing
Shares”) at a price of £0.1375 sterling
per Placing Share, being a premium of
20 percent to the closing mid-market
price on 24 August 2018.
Directors
Dr. Karl Keegan retires from the Board
of Directors by rotation and is not
seeking re-election at the forthcoming
Annual General Meeting of the Company.
Professors Garth Earls retires from the
Board of Directors by rotation and, being
eligible, offers himself for re-election at
the forthcoming Annual General Meeting
of the Company.
Except as disclosed in the tables overleaf,
neither the Directors nor their families
had any beneficial interest in the share
capital of the Company. Apart from
Directors remuneration (detailed in Note
2), loans from Directors (detailed in Note
13) and professional services provided by
Professor Garth Earls (detailed in Note
16 (g)), there have been no contracts
or arrangements entered into during
the financial year ended 31 May 2018
in which a Director of the Company
had a material interest.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 10
Directors’ Report continued
Directors’ shareholdings and other interests
The interests of the Directors and their spouses and minor children in the share capital of the Company, were as follows:
Director
Date of
signing
financial
statements
Warrants
Date of
signing
financial
statements
Ordinary
Shares of
€0.001
each
31 May 2018
31 May 2018
Warrants
Ordinary
Shares of
€0.001
each
1 June 2017
(or date of
appointment
if later)
Warrants
1 June 2017
(or date of
appointment
if later)
Ordinary
Shares of
€0.001
each
Professor Richard Conroy
2,795,521*
349,347
2,795,521*
1,165,563
2,430,657*
1,430,428
Professor Garth Earls
Dr. Karl Keegan
Brendan McMorrow
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Maureen T.A. Jones
329,239
225,069
329,239
225,069
194,104
360,204
* Of the 2,795,521 (2017: 2,430,657) ordinary shares beneficially held by Professor Richard Conroy, 192,942 (2017: 192,942) are held by Conroy P.L.C., a company in
which Professor Richard Conroy has a controlling interest.
Details of warrants, all of which are exercisable currently, are as follows:
Director
Date of
signing
financial
statements
Date of
signing
financial
statements
31 May
2018
31 May
2018
1 June
2017
1 June
2017
Expiry Date
Warrants
Price €
Warrants
Price €
Warrants
Price €
Professor Richard Conroy
–
–
816,216
0.42
1,081,081
0.42 10 November 2018
Professor Richard Conroy
Professor Richard Conroy
228,149
121,198
3.70
228,149
4.33
121,198
3.70
4.33
228,149
3.70 15 November 2020
121,198
4.33 16 November 2022
Maureen T.A. Jones
Maureen T.A. Jones
Maureen T.A. Jones
–
–
–
–
135,135
0.42 10 November 2018
138,398
86,671
3.70
138,398
4.33
86,671
3.70
4.33
138,398
3.70 15 November 2020
86,671
4.33 16 November 2022
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 11
Substantial shareholdings
So far as the Board of Directors are aware, no person or company, other than the shareholders listed below, held 3% or more of
the issued ordinary share capital of the Company.
31 May 2018
31 May 2018
31 May 2017
31 May 2017
Shareholder
Date of
signing
financial
statements
%
Date of
signing
financial
statements
Ordinary
Shares
of €0.001
each
Ordinary
Shares
of €0.001
each
Mr. Patrick O’Sullivan
3,000,000
12.66
3,000,000
Professor Richard Conroy
2,795,521*
11.80
2,795,521*
Mr. Philip Hannigan
Mr. Paul Johnson
1,761,576
1,210,973
7.43
5.11
401,962
1,210,973
%
14.96
13.94
2.00
6.04
Ordinary
Shares
of €0.001
each
3,000,000
2,430,657*
N/a
N/a
%
27.24
22.07
N/a
N/a
*
Of the 2,795,521 (2017: 2,430,657) ordinary shares beneficially held by Professor Richard Conroy, 192,942 (2017: 192,942) are held by Conroy P.L.C., a company in
which Professor Richard Conroy has a controlling interest.
Compliance policy statement
of Conroy Gold and Natural
Resources P.L.C.
The Directors, in accordance with Section
225(2) of the Companies Act 2014,
acknowledge that they are responsible
for securing the Company’s compliance
with certain obligations specified in
that section (‘relevant obligations’). The
Directors confirm that:
n a compliance policy statement
has been drawn up setting out the
Company’s policies that in their
opinion are appropriate with regard to
compliance with relevant obligations;
n appropriate arrangements and
structures have been put in place
that, in their opinion, are designed
to provide reasonable assurance of
compliance in all material respects
with those relevant obligations; and
n a review has been conducted,
during the financial year, of those
arrangements and structures.
n It is the policy of the Group to
review during the course of each
financial year the arrangements and
structures referred to above which
have been implemented with a view
to determining if they provide a
reasonable assurance of compliance
in all material respects with relevant
obligations.
Statement of Directors’
responsibilities in respect of
the annual report and the
consolidated financial
statements
The Directors are responsible for
preparing the Directors’ Report and
the financial statements in accordance
with the Companies Act 2014 and the
applicable regulations. Irish Company law
requires the Directors to prepare financial
statements for each financial year. Under
that law, they have elected to prepare
the consolidated financial statements
in accordance with International
Financial Reporting Standards (“IFRS”)
as adopted by the EU and applicable law
and the Company financial statements
in accordance with Financial Reporting
Standard 101: Reduced Disclosure
Framework (“FRS101”), issued by the
Financial Reporting Council in the UK
and promulgated by the Institute of
Chartered Accountants in Ireland.
Under company law, the Directors
must not approve the Consolidated
and Company financial statements
unless they are satisfied that they
give a true and fair view of the assets,
liabilities and financial position of the
Group and Company and of the Group’s
profit or loss for that financial year and
otherwise comply with the Companies
Act 2014. In preparing these financial
statements, the Directors are required to:
n select suitable accounting policies
for the Group and Company financial
statements and then apply them
consistently;
n make judgements and estimates
that are reasonable and prudent;
n state whether the financial statements
have been prepared in accordance
with the applicable accounting
standards, identify those standards,
and note the effect and the reason
for any material departure from
these standards; and
n prepare the financial statements
on the going concern basis unless
it is inappropriate to presume that
the Group and the Company will
continue in business.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 12
Directors’ Report continued
The Directors are responsible for keeping
adequate accounting records which
disclose with reasonable accuracy at
any time the assets, liabilities, financial
position and profit or loss of the Group
and which enable them to ensure that
the financial statements of the Group are
prepared in accordance with applicable
IFRS, as adopted by the EU and comply
with the provisions of the Companies Act
2014. They have general responsibility for
taking such steps as are reasonably open to
them to safeguard the assets of the Group
and the Company and to prevent and
detect fraud and other irregularities. The
Directors are also responsible for preparing
a Directors’ report that complies with the
requirements of the Companies Act 2014.
The Directors are responsible for the
maintenance and integrity of the
corporate and financial information
included on the Company’s website.
Legislation in the Republic of Ireland
governing the preparation and
dissemination of financial statements
may differ from legislation in other
jurisdictions.
Going concern
The Group and the Company incurred
a loss of €745,485 (2017: €431,922)
for the financial year ended 31 May
2018 and had net current liabilities of
€2,953,825 and €2,607,867 respectively
(2017: €2,636,066 and €2,354,768
respectively) at that date.
The Directors namely Professor Richard
Conroy, Maureen T.A. Jones, Professor
Garth Earls, Dr. Karl Keegan and Brendan
McMorrow, and former Directors,
namely James P. Jones, Séamus P.
FitzPatrick, C. David Wathen, Louis J.
Maguire, Dr. Sorċa Conroy and Michael
E. Power, have confirmed that they
will not seek repayment of amounts
owed to them by the Group and
the Company of €2,579,153 (2017:
€2,161,780) for a minimum period of
12 months from the date of approval
of the financial statements, unless the
Group has sufficient funds to repay.
In addition, Karelian Diamond Resources
P.L.C. has confirmed that it does not
intend to seek repayment of amounts
owed to it at 31 May 2018 by the Group
and the Company of €113,138 (2017:
€273,800) for a minimum period of 12
months from the date of approval of the
financial statements, unless the Group
has sufficient funds to repay.
The Board of Directors have considered
carefully the financial position of the
Group and the Company and in that
context, have prepared and reviewed
cash flow forecasts for the period to
31 October 2019. As set out in the
Chairman’s statement, the Group and
the Company expects to incur material
levels of capital expenditure in 2018
and 2019, consistent with its strategy
as an exploration company. In reviewing
the proposed work programme for
exploration and evaluation assets and on
the basis of the funds received after the
financial year end, the results obtained
from the exploration programme and
the prospects for raising additional
funds as required, the Board of Directors
are satisfied that it is appropriate to
prepare the financial statements on
a going concern basis.
Corporate governance
In July 2018, the Financial
Reporting Council released the 2018
UK Corporate Governance Code and
the Guidance on Board Effectiveness.
The new Code emphasises the
importance of demonstrating, through
reporting, how the governance of
a company contributes to its long-
term sustainable success and achieves
wider objectives. The Company agrees
that good governance contributes to
sustainable success and recognise the
renewed emphasis on business building
trust by forging strong relationships
with key stakeholders. The Company
understands the importance of a
corporate culture that is aligned with
the Company’s purpose and business
strategy, and which promotes integrity
and includes diversity. The Company
conducts its business with integrity,
honesty and fairness and requires its
partners, contractors and suppliers
to meet similar ethical standards.
It is an objective of the Company
that all individuals are aware of
their responsibilities in applying and
maintaining these standards in all their
actions. The Board ensures that support is
available in the form of staff training and
updating its employee handbook such
that staff members understand what is
expected of them.
The Company’s Corporate Governance
Code is available on the Company’s
website www.conroygold.com
The Company is well placed to comply
with the new Code. The Company has
a long-standing practice of enabling
the Board and committees to receive a
broad range of stakeholder information
and views. The Company is reviewing
the new Code to ensure the governance
framework remains aligned with best
practice.
Board of Directors
The Board of Directors is made up of
two executive and three non-executive
Directors. Biographies of each of the
Directors are set out on pages 7 and 8.
The Board of Directors agree a schedule
of regular meetings to be held in each
calendar year and also meets on other
occasions as necessary. Meetings are
usually held at the head office in 3300
Lake Drive, Citywest Business Campus,
Dublin 24, D24 TD21, Ireland. Board of
Directors meetings were held on 25
occasions from 1 June 2017 to 31 May
2018 and attendance is set out in the
table below. An agenda and supporting
documentation was circulated in advance
of each meeting.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 13
operates, legal and governance matters
including advice from the Company’s
broker, lawyers and advisors.
Board performance
The Board through its Chairman will in
the coming year evaluate its ongoing
performance based on the requirements
of the business and corporate
governance standards.
It is envisaged that the review process
will include the use of internal reviews
and periodic external facilitation. The
results of such reviews will be used
to determine whether any alterations
are needed at either a board or senior
management level or whether any
additional training would be beneficial.
It is intended that with effect from the
end of the next financial year, these
evaluations shall be undertaken annually,
after the end of each financial year but
prior to the publication of the respective
annual report and accounts.
Director’s performance will be measured
by way of such matters as:
n Commitment
n Independence
n Relevant experience
n Impartiality
n Specialist knowledge
n Effectiveness on the Board
As set out in the Constitution of the
Company, each year, one third of the
Directors with the exception of the
Chairman and the Managing Director,
retire from the Board of Directors by
rotation. Effectively, therefore, each
such Director will retire by rotation
within a three year period.
Meetings held during the year
25
Board
25/25
25/25
25/25
21/21
21/21
2/2
2/2
2/2
2/2
2/2
2/2
Professor Richard Conroy
Maureen T.A. Jones
Professor Garth Earls
Brendan McMorrow*
Dr. Karl Keegan*
James P. Jones**
Seamus P. FitzPatrick**
Dr. Sorca Conroy**
Michael E. Power**
C. David Wathen**
Louis J. Maguire**
*
**
These Directors were appointed
on 28th August 2017
These Directors were removed
on 4th August 2017
There is an agreed list of matters which
the Board of Directors has formally
reserved to itself for decision, such as
approval of the Group’s commercial
strategy, trading and capital budgets,
financial statements, Board of Directors
membership, major capital expenditure
and risk management policies.
Responsibility for certain matters
is delegated to Board of Directors
committees. Executive Directors spend
as much time on Group matters as is
necessary for the proper performance of
their duties. Non-executive Directors are
expected to spend a minimum of one day
a month on Group activities in addition
to preparation for and attendance at
Board and sub-committee meetings.
There is an agreed procedure for
Directors to take independent legal
advice. This was not required during the
financial year. The Company Secretary is
responsible for ensuring that Board of
Directors procedures are followed, and
all Directors have direct access to the
Company Secretary.
All Directors receive regular reports
and full Board of Directors papers are
sent to each Director in sufficient time
before Board of Directors meetings,
and any further supporting papers and
information are readily available to
all Directors on request. The Board of
Directors papers include the minutes of
all committees of the Board of Directors
which have been held since the previous
Board of Directors meeting, and, the
chairman of each committee is available
to give a report on the committee’s
proceedings at Board of Directors
meetings if appropriate.
The Board of Directors has a process
whereby each year every Director
will meet the Chairman to review the
conduct of Board of Directors meetings
and the general corporate governance of
the Group. The non-executive Directors
(other than Professor Garth Earls) are
regarded as independent and have no
material interest or other relationship
with the Group.
The Board, having fully considered the
corporate needs of the Group is satisfied
that it has an appropriate balance of
experience and skills to carry out its
duties. The Chairman of the Company
oversees this process and reviews the
Board composition to ensure it has
the necessary experience, skills and
capabilities.
The current Non-Executive
directors have a wide range of
financial and technical skills based
on both qualifications and experience
including significant fundraisings,
financial management, technical
expertise and the discovery and bringing
into production of operating mines. Each
board member keeps their skills up to
date through a combination of courses,
continuing professional development
through professional bodies and reading.
The Company Secretary provides
Directors with updates on key
developments relating to the Company,
the sector in which the Company
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 14
Directors’ Report continued
Ethical values and behaviours
The Board of Directors is committed to
high standards of corporate governance
and integrity in all its activities and
operations and promotes a culture of
good ethical values and behaviour.
The Group conducts its business
with integrity, honesty and fairness
and requires its partners, contractors
and suppliers to meet similar ethical
standards. Individual staff members
must ensure that they apply and
maintain these standards in all their
actions.
The Chairman of the Board of
Directors regularly monitors and reviews
the Group’s ethical standards and cultural
environment and where necessary takes
appropriate action to ensure proper
standards are maintained. The Group is
fully committed to complying with all
relevant health, safety and environment
rules and regulations as these apply to its
operations. It is an objective of the Group
that all individuals are aware of their
responsibilities in providing a safe and
secure working environment.
Formal procedures in relation to board
performance will be introduced during
the current financial year.
Board Committees
The Board of Directors has implemented
an effective committee structure to assist
in the discharge of its responsibilities.
Membership of the Audit Committee,
constituted in accordance with section
167 of the Companies Act 2014, is
comprised exclusively of non-executive
Directors. The Company is currently
reconstituting the Executive Committee
and the Remuneration Committee.
It is intended that the Remuneration
Committee will be established in
accordance with the QCA Remuneration
Committee Guide for Small and Mid-Size
Quoted Companies before the publication
of next year’s annual report and
accounts, and following the completion
of the Board evaluation process outlined
earlier.
Remuneration Committee
In the absence of a Remuneration
Committee during the year, the Board
as a whole took on the functions of
the Remuneration Committee. As such,
the Board monitors the performance
of each of the Company’s executive
Directors and senior executives to
ensure they are rewarded fairly for their
contribution to the Group. It also sets the
remuneration and terms and conditions
of appointment for the non-executive
Directors. In determining remuneration
levels, the Board takes into consideration
the practices of other companies of
similar scope and size to ensure that
senior executives and Board members
are properly rewarded and motivated
to perform in the best interests of the
shareholders.
Audit Committee
The Audit Committee’s terms of
reference have been approved by
the Board of Directors. The Audit
Committee, constituted in accordance
with section 167 of the Companies Act
2014, comprises the three non-executive
Directors and is chaired by Brendan
McMorrow. Attendance at the Audit
Committee meetings is set out below:
Meetings held during
the year
Brendan McMorrow
Professor Garth Earls
Dr. Karl Keegan
Audit
Committee
3
3/3
3/3
3/3
The Audit Committee reviews
the accounting principles, policies
and practices adopted, and areas of
management judgement and estimation
in the preparation of the interim
and annual financial statements and
discusses with the Group’s Auditors
the results and scope of the audit. The
external auditors have the opportunity
to meet with the members of the Audit
Committee alone at least once a year.
The Audit Committee advises the
Board of Directors on the appointment
of external auditors and on their
remuneration and discusses the nature
and scope of the audit with the external
auditors. An analysis of the fees payable
to the external audit firm in respect of
audit services during the financial year
is set out in Note 3 to these consolidated
financial statements.
The Audit Committee also undertakes a
review of any non-audit services provided
to the Group; and a discussion with the
auditors of all relationships with the
Group and any other parties that could
affect independence or the perception
of independence.
The Audit Committee is responsible
for monitoring the controls which are
in force to ensure the information
reported to the shareholders is accurate
and complete. The Audit Committee
considers internal control issues and
contributes to the Board of Director’s
review of the effectiveness of the Group’s
internal control and risk management
systems. It also considers the need
for an internal audit function, which
it believes is not primarily required
at present because of the size of the
Group’s operations. The members of the
Audit Committee have agreed to make
themselves available should any member
of staff wish to make representations to
them about the conduct of the affairs of
the Group.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 15
Environmental risk
Environmental and safety legislation
may change in a manner that may
require stricter or additional standards
than those now in effect. These could
result in heightened responsibilities for
the Group and could cause additional
expense, capital expenditures, restrictions
and delays in the activities of the
Group, the extent of which cannot be
predicted. The Group employs staff
experienced in the requirements of
the relevant environmental authorities
and seeks through their experience to
mitigate the risk of non-compliance
with accepted best practice.
Exploration Risk
All drilling to establish productive gold
reserves is inherently speculative and,
therefore, a considerable amount of
professional judgement is involved
in the selection of any prospect for
drilling. In addition, in the event
drilling successfully encounters gold,
unforeseeable operating problems may
arise which render it uneconomic to
exploit such finds. Estimates of potential
resources include substantial proportions
which are undeveloped. These resources
require further capital expenditure in
order to bring them into production.
No guarantee can be given as to the
success of drilling programmes in which
the Group has an interest. The Group
employs highly competent experienced
staff and uses a range of techniques to
minimise risk prior to drilling and utilises
independent experts to assess the results
of exploration activity.
Internal control
The Directors have overall responsibility
for the Group’s system of internal control
to safeguard shareholders’ investments
and the Group assets. They operate
a system of financial controls which
enable the Board of Directors to meet
its responsibilities for the integrity and
accuracy of the Group’s accounting
records. Among the processes applied in
reviewing the effectiveness of the system
of internal controls are the following:
n The Board of Directors establishes
risk policies as appropriate, for
implementation by executive
management;
n All commitments for expenditure
and payments are subject to approval
by personnel designated by the Board
of Directors; and
n Regular management meetings
take place to review financial
and operational activities.
The Board of Directors has considered
the requirement for an internal audit
function. Based on the scale of the
Group’s operations and close involvement
of the Board of Directors, the Directors
have concluded that an internal audit
function is not currently required.
Risks and uncertainties
The Group is subject to a number
of potential risks and uncertainties,
which could have a material impact
on the long-term performance of the
Group and could cause actual results to
differ materially from expectation. The
management of risk is the collective
responsibility of the Board of Directors.
An ongoing process for identifying,
evaluating and managing or mitigating
the principal risks faced by the Group has
been in place throughout the financial
year and has remained in place up to
the approval date of the report and
accounts. The Board intends to keep its
risk control procedures under constant
review, particularly with regard to the
need to embed internal control and risk
management procedures further into
the operations of the business and to
deal with areas of improvement which
come to management’s and the Board’s
attention.
As might be expected in a group of
this size, a key control procedure is the
day-to-day supervision of the business by
the Executive Directors, supported by the
senior managers with responsibility for
key operations. The Board has considered
the impact of the values and culture of
the Group and ensures that, through
staff communication and training, the
Board’s expectations and attitude to risk
and internal control are embedded in the
business. The Board of Directors consider
the following risks to be the principal
risks affecting the business.
General industry risk
The Group’s business may be affected
by the general risks associated with
all companies in the gold exploration
industry. These risks (the list of which
is not exhaustive) include: general
economic activity, the world gold
prices, government and environmental
regulations, permits and licenses,
fluctuating metal prices, the requirement
and ability to raise additional capital
through future financings and price
volatility of publicly traded securities.
As such there is no guarantee that future
market conditions will permit the raising
of the necessary funds by way of issue
of new equity, debt financing or farming
out of interests. To mitigate this risk, the
Board regularly reviews Group cash flow
projections and considers different
sources of funds.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc Disclosure of information
to auditors
So far as each of the Directors in office
at the date of approval of the financial
statements is aware:
n There is no relevant audit information
of which the company’s auditors are
unaware; and
n The Directors have taken all steps that
they ought to have taken as directors
in order to make themselves aware of
any relevant audit information and to
establish that the Company’s auditors
are aware of that information.
This information is given and should
be interpreted in accordance with
the provisions of Section 330 of
the Companies Act 2014.
Auditors
Deloitte Ireland LLP will continue in office
in accordance with Section 383 (2) of the
Companies Act 2014. Shareholders will
be asked to authorise the Directors to
fix their remuneration.
On behalf of the Directors:
Professor Richard Conroy
Chairman
Maureen T.A. Jones
Managing Director
16
Directors’ Report continued
Financial Risk
Refer to Note 18 in relation to the use
of financial instruments by the Group,
the financial risk management objectives
of the Group and the Group’s exposure
to interest rate risk, foreign currency risk,
liquidity risk and credit risk. Management
is authorised to achieve best available
rates in respect of each forecast currency
requirement.
Communication
with shareholders
The Group gives high priority to
communication with both shareholders
and all other stakeholder groups. This
is achieved through publications such
as the annual and interim report,
news releases and the Company’s
website www.conroygold.com,
which is regularly updated.
The Company encourages shareholders
to attend the Annual General Meeting
(AGM) to meet, exchange views and
discuss the progress of the Group.
The Directors are available after the
conclusion of the formal business of the
AGM to meet, listen to shareholders and
discuss any relevant matters arising.
Political donations
There were no political donations
during the financial year (2017: €nil).
Accounting records
The Board of Directors are responsible for
ensuring adequate accounting records,
as outlined in Section 281 to 285 of the
Companies Act 2014, are kept by the
Company. The Board of Directors, through
the use of appropriate procedures
and systems and the employment
of competent persons have ensured
that measures are in place to secure
compliance with these requirements.
The accounting records are maintained
at the Company’s business address, 3300
Lake Drive, Citywest Business Campus,
Dublin 24, D24 TD21, Ireland.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
Independent Auditors’ Report
A report on the audit of the financial statements
17
Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(Ireland) (ISAs (Ireland)) and applicable
law. Our responsibilities under those
standards are described below in the
“Auditor’s responsibilities for the audit
of the financial statements” section of
our report.
We are independent of the group and
parent company in accordance with the
ethical requirements that are relevant
to our audit of the financial statements
in Ireland, including the Ethical
Standard issued by the Irish Auditing
and Accounting Supervisory Authority,
as applied to SME listed entities, and
we have fulfilled our other ethical
responsibilities in accordance with
these requirements.
We believe that the audit evidence
we have obtained is sufficient and
appropriate to provide a basis for
our opinion.
Summary of our audit approach
Material uncertainty related
to going concern
We draw your attention to Note 1 in
the financial statements, which indicates
that the Group and Parent Company
incurred a net loss of €745,485 during
the year ended 31 May 2018 and, as
of that date, the Group and Parent
Company had net current liabilities of
€2,953,825 and €2,607,867 respectively.
In response to this, we:
n Obtained an understanding of the
group’s and company’s controls over
the preparation of cash flow forecasts
and approval of the projections
and assumptions used in cash flow
forecasts to support the going
concern assumption and assessed the
design and implementation of these
controls;
n We evaluated management’s plans
and their feasibility by testing the
key assumptions used in the cash
flow forecast provided by agreeing
the inputs to historical run rates,
expenditure commitments and
other supporting documentation;
Key audit matters
The key audit matters that we identified in the current year were:
n Going concern (see material uncertainty related
to going concern section)
n Realisation of exploration and evaluation assets – Group
and Parent Company
n Within this report, any new key audit matters are identified
with u and any key audit matters which are the same as the
prior year identified with u.
The materiality that we used in the current year was €514,000
which was determined on the basis of a percentage of Net Assets.
We identified one significant component, which was the
parent company, Conroy Gold and Natural Resources Plc.
There were no significant changes in our approach.
Materiality
Scoping
Significant
changes in our
approach
Opinion on the financial
statements of Conroy Gold
and Natural Resources Plc
(the ‘company’)
In our opinion the group and parent
company financial statements:
n give a true and fair view of the assets,
liabilities and financial position of the
group and parent company as at 31
May 2018 and of the loss of the group
for the financial year then ended; and
n have been properly prepared in
accordance with the relevant financial
reporting framework and, in particular,
with the requirements of the
Companies Act 2014.
The financial statements we have
audited comprise:
the group financial statements:
n the Consolidated Income Statement;
n the Consolidated Statement
of Comprehensive Income;
n the Consolidated Statement
of Financial Position;
n the Consolidated Statement
of Changes in Equity;
n the Consolidated Statement
of Cash Flows; and
n the related notes 1 to 20, including
a summary of significant accounting
policies as set out in note 1.
the parent company financial statements:
n the Company Statement of Financial
Position;
n the Company Statement of Changes
in Equity;
n the Company Statement of Cash
Flows; and
n the related notes 1 to 20, including
a summary of significant accounting
policies as set out in note 1.
The relevant financial reporting
framework that has been applied in
their preparation is the Companies
Act 2014 and International Financial
Reporting Standards (IFRS) as
adopted by the European Union (“the
relevant financial reporting framework”).
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 18
Independent Auditors’ Report continued
n Inspected confirmations received by
the Group and Parent Company from
the Directors and former Directors
that they will not seek repayment of
amounts owed to them by the Group
and Parent Company within 12 months
of the date of approval of the financial
statements, unless the Group and/or
Parent Company has sufficient funds to
repay;
n Inspected the confirmation received
from Karelian Diamond Resources
Plc that it does not intend to seek
repayment of owed by the Group and
Parent Company within 12 months of
the date of approval of the financial
statements, unless the Group and/or
Parent Company has sufficient funds to
repay;
n Tested the clerical accuracy
of the cash flow forecast model;
n Assessed the adequacy of the
disclosures made in the financial
statements.
As stated in Note 1, these events or
conditions along with other matters
as set forth in Note 1 indicate that a
material uncertainty exists that may cast
significant doubt on Group’s and Parent
Company’s ability to continue as a going
concern. Our opinion is not modified in
respect of this matter.
Key Audit Matters
Key audit matters are those matters
that, in our professional judgment, were
of most significance in our audit of
the financial statements of the current
financial year and include the most
significant assessed risks of material
misstatement (whether or not due to
fraud) we identified, including those
which had the greatest effect on: the
overall audit strategy, the allocation of
resources in the audit; and directing the
efforts of the engagement team. These
matters were addressed in the context
of our audit of the financial statements
as a whole, and in forming our opinion
thereon, and we do not provide a separate
opinion on these matters.
Realisation of Intangible Assets and Recoverability of Amounts
Owed by Group Companies u
Key audit
matter
description
How the
scope of
our audit
responded
to the key
audit matter
At 31 May 2018, the carrying value of Exploration and Evaluation
Assets included in Intangible Assets in the Consolidated Statement
of Financial Position and Company Statement of Financial Position
amounted to €21,000,286 and €20,654,326 respectively. At 31 May
2018, the carrying value of amounts owed by group companies in the
Company Statement of Financial Position amounted to €345,958.
We draw your attention to the disclosures made in Note 1, 8 and 10
to the financial statements concerning the realisation of intangible
assets held and recoverability of amounts owed by group companies.
The realisation of intangible assets by the group and company and the
amounts owed by group companies to the company, is dependent on
the further successful development and ultimate production of the
mineral reserves and the availability of sufficient finance to bring the
reserves to economic maturity and profitability.
The realisation of intangible assets in the Consolidated Statement
of Financial Position and Company Statement of Financial Position
was assessed as a significant risk.
We performed the following procedures:
n We have evaluated management’s procedures for assessing indicators
of impairment of intangible assets;
n We inspected documentation in respect of licences held and
considered and challenged the directors’ assessment of indicators
of impairment in relation to exploration and evaluation assets;
n We performed a review of Board of Directors Meeting Minutes
and press releases issued by the Group in relation to the status
of exploration and evaluation assets;
n We performed a review of budgeted expenditure for the next
12 months; and
n We also considered the adequacy of the disclosure in the financial
statements.
Key
observations
A material uncertainty exists in relation to the ability of the Group and
Company to realise the exploration and evaluation assets capitalised to
intangible assets and in relation to the ability of the Company to realise
amounts owed by group companies.
As noted above, we draw your attention to the disclosures made
in Note 1, 8 and 10 to the financial statements concerning the
realisation of intangible assets and recoverability of amounts owed by
group companies. The realisation of intangible assets by the group and
company and the amounts owed by group companies to the company,
is dependent on the further successful development and ultimate
production of the mineral reserves and the availability of sufficient
finance to bring the reserves to economic maturity and profitability.
The financial statements do not include any adjustments in relation to
these uncertainties and the ultimate outcome cannot, at present, be
determined. Our opinion is not modified in respect of this matter.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 19
Our audit procedures relating to these
matters were designed in the context of
our audit of the financial statements as
a whole, and not to express an opinion
on individual accounts or disclosures.
Our opinion on the financial statements
is not modified with respect to any of
the risks described above, and we do not
express an opinion on these individual
matters.
We agreed with the Audit Committee
that we would report to them any audit
differences in excess of €25,700, as
well as differences below that threshold
which, in our view, warranted reporting
on qualitative grounds. We also report
to the Audit Committee on disclosure
matters that we identified when
assessing the overall presentation of the
financial statements.
An overview of the
scope of our audit
Our Group audit was scoped by obtaining
an understanding of the Group and its
environment and assessing the risks of
material misstatement at the Group level.
Based on that assessment, we focused
our Group audit scope primarily on the
audit work in one significant component,
which was the Parent Company. This
component was subject to a full scope
audit and accounts for 100% of the
Group’s net assets. The remaining non-
significant components were subject
to specified audit procedures where
the extent of our testing was based on
our asssessment of the risks of material
misstatement to the Group Financial
Statements.
Our application of materiality
We define materiality as the magnitude
of misstatement that makes it probable
that the economic decisions of a
reasonably knowledgeable person,
relying on the financial statements,
would be changed or influenced.
We use materiality both in planning
the scope of our audit work and
in evaluating the results of our work.
We determined materiality for the group
and parent company to be €514,000
which is approximately 3% of Net Assets.
We have considered Net Assets to be
the critical component for determining
materiality as we determined the net
asset position to be of most importance
to the principal external users of the
financial statements. We have considered
quantitative and qualitative factors
such as understanding the entity and its
environment, history of mistatetements,
complexity of the group and parent
company and reliabity of control
environment.
Net Assets €17M
Net Assets
Materiality
Materiality – €514,000
Audit Committee Reporting
Threshold – €25,700
Other information
The directors are responsible for the
other information. The other information
comprises the information included in the
annual report, other than the financial
statements and our auditor’s report
thereon. Our opinion on the financial
statements does not cover the other
information and, except to the extent
otherwise explicitly stated in our report,
we do not express any form of assurance
conclusion thereon.
In connection with our audit of the
financial statements, our responsibility
is to read the other information and, in
doing so, consider whether the other
information is materially inconsistent with
the financial statements or our knowledge
obtained in the audit or otherwise appears
to be materially misstated. If we identify
such material inconsistencies or apparent
material misstatements, we are required
to determine whether there is a material
misstatement in the financial statements
or a material misstatement of the other
information. If, based on the work we
have performed, we conclude that there
is a material misstatement of this other
information, we are required to report
that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the Directors’
Report, the directors are responsible
for the preparation of the financial
statements and for being satisfied
that they give a true and fair view and
otherwise comply with the Companies
Act 2014, and for such internal control
as the directors determine is necessary
to enable the preparation of financial
statements that are free from material
misstatement, whether due to fraud or
error.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 20
Independent Auditors’ Report continued
In preparing the financial statements,
the directors are responsible for assessing
the group and parent company’s
ability to continue as a going concern,
disclosing, as applicable, matters related
to going concern and using the going
concern basis of accounting unless
the directors either intend to liquidate
the group and parent company or to
cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities
for the audit of the financial
statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due
to fraud or error, and to issue an
auditor’s report that includes our
opinion. Reasonable assurance is a
high level of assurance, but is not a
guarantee that an audit conducted
in accordance with ISAs (Ireland) will
always detect a material misstatement
when it exists. Misstatements can
arise from fraud or error and are
considered material if, individually or
in the aggregate, they could reasonably
be expected to influence the economic
decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with
ISAs (Ireland), we exercise professional
judgment and maintain professional
scepticism throughout the audit. We also:
n Identify and assess the risks of
material misstatement of the financial
statements, whether due to fraud
or error, design and perform audit
procedures responsive to those risks,
and obtain audit evidence that is
sufficient and appropriate to provide
a basis for our opinion. The risk of not
detecting a material misstatement
resulting from fraud is higher than for
one resulting from error, as fraud may
involve collusion, forgery, intentional
omissions, misrepresentations, or the
override of internal control.
n Obtain an understanding of internal
control relevant to the audit in order
to design audit procedures that are
appropriate in the circumstances, but
not for the purpose of expressing an
opinion on the effectiveness of the
group and parent company’s internal
control.
n Evaluate the appropriateness of
accounting policies used and the
reasonableness of accounting
estimates and related disclosures
made by the directors.
n Conclude on the appropriateness
of the directors’ use of the going
concern basis of accounting and,
based on the audit evidence obtained,
whether a material uncertainty exists
related to events or conditions that
may cast significant doubt on the
group and parent company’s ability
to continue as a going concern. If we
conclude that a material uncertainty
exists, we are required to draw
attention in our auditor’s report to
the related disclosures in the financial
statements or, if such disclosures are
inadequate, to modify our opinion.
Our conclusions are based on the
audit evidence obtained up to the
date of the auditor’s report. However,
future events or conditions may
cause the entity (or where relevant,
the group) to cease to continue as a
going concern.
n Evaluate the overall presentation,
structure and content of the financial
statements, including the disclosures,
and whether the financial statements
represent the underlying transactions
and events in a manner that achieves
fair presentation.
n Obtain sufficient appropriate audit
evidence regarding the financial
information of the business activities
within the group to express an
opinion on the (consolidated) financial
statements. The group auditor
is responsible for the direction,
supervision and performance of
the group audit. The group auditor
remains solely responsible for the
audit opinion.
We communicate with those charged
with governance regarding, among other
matters, the planned scope and timing of
the audit and significant audit findings,
including any significant deficiencies
in internal control that the auditor
identifies during the audit.
This report is made solely to the
company’s members, as a body, in
accordance with Section 391 of the
Companies Act 2014. Our audit work has
been undertaken so that we might state
to the company’s members those matters
we are required to state to them in an
auditor’s report and for no other purpose.
To the fullest extent permitted by law, we
do not accept or assume responsibility
to anyone other than the company and
the company’s members as a body, for
our audit work, for this report, or for the
opinions we have formed.
Report on other legal and
regulatory requirements
Opinion on other matters
prescribed by the Companies
Act 2014
Based solely on the work undertaken in
the course of the audit, we report that:
n We have obtained all the information
and explanations which we consider
necessary for the purposes of our
audit.
n In our opinion the accounting records
of the parent company were sufficient
to permit the financial statements to
be readily and properly audited.
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc 21
n The parent company balance sheet
is in agreement with the accounting
records.
n In our opinion the information given
in the directors’ report is consistent
with the financial statements and the
directors’ report has been prepared in
accordance with the Companies Act
2014.
Matters on which we are
required to report by
exception
Based on the knowledge and
understanding of the group and the
parent company and its environment
obtained in the course of the audit,
we have not identified material
misstatements in the directors’ report.
We have nothing to report in respect of
the provisions in the Companies Act 2014
which require us to report to you if, in
our opinion, the disclosures of directors’
remuneration and transactions specified
by law are not made.
Gerard Casey
For and on behalf of Deloitte Ireland LLP
Chartered Accountants and
Statutory Audit Firm
Deloitte & Touche House,
Charlotte Quay
Limerick
13 November 2018
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
22
Conroy Gold and Natural Resources P.L.C.
Consolidated income statement
for the financial year ended 31 May 2018
Continuing operations
Operating expenses
Finance income – interest
Loss before taxation
Income tax expenses
Loss for the financial year
Loss per share
Basic loss per share
Diluted loss per share
Note
2
3
5
6
6
2018
€
(745,498)
13
(745,485)
-
2017
€
(431,922)
-
(431,922)
-
(745,485)
(431,922)
(€0.0485)
(€0.0396)
(€0.0392)
(€0.0392)
The total loss for the financial year is entirely attributable to equity holders of the Company.
______________________
Professor Richard Conroy
Chairman
_______________________
Maureen T.A. Jones
Managing Director
The accompanying notes form an integral part of these audited consolidated financial statements.
24
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
23
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of comprehensive income
for the financial year ended 31 May 2018
2018
€
2017
€
Loss for the financial year
(745,485)
(431,922)
Income/expense recognised in other comprehensive
income
-
-
Total comprehensive income for the financial year
(745,485)
(431,922)
The total comprehensive income for the financial year is entirely attributable to equity holders of the Company.
The accompanying notes form an integral part of these audited consolidated financial statements.
25
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
24
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of financial position
as at 31 May 2018
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets
Cash and cash equivalents
Other receivables
Total current assets
Total assets
Equity
Capital and reserves
Called up share capital
Called up deferred share capital
Share premium
Capital conversion reserve fund
Share-based payments reserve
Retained deficit
Total equity
Liabilities
Non-current liabilities
Directors’ loans
Total non-current liabilities
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Note
8
9
11
10
14
14
14
14
17
13
12
31 May
2018
€
21,000,286
13,232
21,013,518
233,161
72,298
305,459
31 May
2017
€
19,659,104
15,116
19,674,220
19,704
98,980
118,684
21,318,977
19,792,904
20,057
10,504,431
12,174,285
30,617
995,489
(5,850,529)
17,874,350
185,343
185,343
3,259,284
3,259,284
3,444,627
11,014
10,504,431
10,649,252
30,617
1,542,961
(5,977,408)
16,760,867
277,287
277,287
2,754,750
2,754,750
3,032,037
Total equity and liabilities
21,318,977
19,792,904
The financial statements were approved by the Board of Directors on 13 November 2018 and authorised for issue on 13
November 2018. They are signed on its behalf by:
______________________
Professor Richard Conroy
Chairman
_______________________
Maureen T.A. Jones
Managing Director
The accompanying notes form an integral part of these audited consolidated financial statements.
26
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Company statement of financial position
as at 31 May 2018
25
Assets
Non-current assets
Intangible assets
Investment in subsidiary
Property, plant and equipment
Total non-current assets
Current assets
Cash and cash equivalents
Other receivables
Total current assets
Total assets
Equity
Capital and reserves
Called up share capital
Called up deferred share capital
Share premium
Capital conversion reserve fund
Share-based payments reserve
Retained deficit
Total equity
Liabilities
Non-current liabilities
Directors’ loans
Total non-current liabilities
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Total equity and liabilities
Note
8
7
9
11
10
14
14
14
14
17
13
12
31 May
2018
€
20,654,326
2
13,232
20,667,560
233,161
418,256
651,417
31 May
2017
€
19,377,804
2
15,116
19,392,922
19,704
380,278
399,982
21,318,977
19,792,904
20,057
10,504,431
12,174,285
30,617
995,489
(5,850,529)
17,874,350
185,343
185,343
3,259,284
3,259,284
3,444,627
11,014
10,504,431
10,649,252
30,617
1,542,961
(5,977,408)
16,760,867
277,287
277,287
2,754,750
2,754,750
3,032,037
21,318,977
19,792,904
The loss for the financial year was €745,485 (2017: €431,922).
The financial statements were approved by the Board of Directors on 13 November 2018 and authorised for issue on 13
November 2018. They are signed on its behalf by:
______________________
Professor Richard Conroy
Chairman
_______________________
Maureen T.A. Jones
Managing Director
The accompanying notes form an integral part of these audited consolidated financial statements.
27
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
26
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of cash flows
for the financial year ended 31 May 2018
Cash flows from operating activities
Loss for the financial year
Adjustments for:
Depreciation
Expense recognised in consolidated income statement in respect of equity
settled share-based payments
Increase in payables
Decrease/(increase) in receivables
Net cash provided/(outflow) by operating activities
Cash flows from investing activities
Expenditure on intangible assets
Purchase of property, plant and equipment
Cash used in investing activities
Cash flows from financing activities
Issue of share capital
Share issue costs
(Payments to)/advances from Karelian Diamond Resources P.L.C.
(Repayments of)/ advances from Directors’
Net cash provided by financing activities
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
2018
€
2017
€
(745,485)
(431,922)
1,884
74,621
665,196
26,682
22,898
(1,042,705)
-
(1,042,705)
1,534,076
(48,206)
(160,662)
(91,944)
1,233,264
213,457
19,704
233,161
3,779
15,346
460,066
(60,646)
(13,377)
(898,917)
(2,745)
(901,662)
-
-
105,035
142,000
247,035
(668,004)
687,708
19,704
The accompanying notes form an integral part of these audited consolidated financial statements.
28
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
27
Conroy Gold and Natural Resources P.L.C.
Company statement of cash flows
for the financial year ended 31 May 2018
Cash flows from operating activities
Loss for the financial year
Adjustments for:
Depreciation
Expense recognised in consolidated income statement in respect of equity
settled share-based payments
Increase in payables
Increase in receivables
Net cash outflow from operating activities
Cash flows from investing activities
Expenditure on intangible assets
Purchase of property, plant and equipment
Cash used in investing activities
Cash flows from financing activities
Issue of share capital
Share issue costs
(Payments to)/advances from Karelian Diamond Resources P.L.C.
(Repayments of)/ advances from Directors’
Net cash provided by financing activities
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
2018
€
2017
€
(745,485)
(431,922)
1,884
74,621
665,196
(37,978)
(41,762)
(978,045)
-
(978,045)
1,534,076
(48,206)
(160,662)
(91,944)
1,233,264
213,457
19,704
233,161
3,779
15,346
460,066
(60,746)
(13,477)
(898,817)
(2,745)
(901,562)
-
-
105,035
142,000
247,035
(668,004)
687,708
19,704
The accompanying notes form an integral part of these audited consolidated financial statements
29
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
28
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of changes in equity
for the financial year ended 31 May 2018
Share capital
Share
premium
€
€
Capital
conversion
reserve fund
€
Share- based
payment
reserve
€
Retained
deficit
Total equity
€
€
10,515,445
10,649,252
30,617
1,542,961
(5,977,408)
16,760,867
9,043
-
1,525,033
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(48,206)
1,534,076
(48,206)
373,098
-
373,098
(920,570)
920,570
-
-
(745,485)
(745,485)
10,524,488
12,174,285
30,617
995,489
(5,850,529)
17,874,350
10,515,445
10,649,252
30,617
1,464,030
(5,545,486)
17,113,858
-
-
-
-
-
-
78,931
-
78,931
-
(431,922)
(431,922)
10,515,445
10,649,252
30,617
1,542,961
(5,977,408)
16,760,867
Balance at 1 June
2017
Share issue (see
Note 14)
Share issue costs
Share-based
payments
Transfer from
share-based
payment reserve
to retained
deficit
Loss for the
financial year
Balance at 31
May 2018
Balance at 1 June
2016
Share-based
payments
Loss for the
financial year
Balance at 31
May 2017
Share capital
The share capital comprises of the nominal value share capital issued for cash and non-cash consideration. The share capital also comprises
deferred share capital. The deferred share capital arose through the restructuring of share capital which was approved at Extraordinary General
Meetings held on 26 February 2015 and 14 December 2015. A detailed breakdown of the share capital figure is included in Note 14.
Share premium
The share premium reserve comprises of the excess consideration received in respect of share capital over the nominal value of share issued.
Capital conversion reserve fund
The ordinary shares of the Company were re-nominalised from €0.03174435 each to €0.03 each in 2001 and the amount by which the issued share
capital of the Company was reduced, was transferred to the capital conversion reserve fund.
Share-based payment reserve
The share-based payment reserve compromises the fair value of all share options and warrants which have been charged over the vesting period,
net of amounts relating to share options and warrants forfeited, exercised or lapsed during the year, which are reclassified to retained earnings.
Retained deficit
This reserve represents the accumulated losses absorbed by the Group to the consolidated statement of financial position date.
The accompanying notes form an integral part of these audited consolidated financial statements.
30
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
29
Conroy Gold and Natural Resources P.L.C.
Company statement of changes in equity
for the financial year ended 31 May 2018
Share capital
Share
premium
€
€
Capital
conversion
reserve fund
€
Share- based
payment
reserve
€
Retained
deficit
Total equity
€
€
10,515,445
10,649,252
30,617
1,542,961
(5,977,408)
16,760,867
9,043
1,525,033
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,534,076
(48,206)
(48,206)
373,098
-
373,098
(920,570)
920,570
-
-
(745,485)
(745,485)
10,524,488
12,174,285
30,617
995,489
(5,850,529)
17,874,350
10,515,445
10,649,252
30,617
1,464,030
(5,545,486)
17,113,858
-
-
-
-
-
-
78,931
-
78,931
-
(431,922)
(431,922)
10,515,445
10,649,252
30,617
1,542,961
(5,977,408)
16,760,867
Balance at 1
June 2017
Share issue (see
Note 14)
Share issue
costs
Share-based
payments
Transfer from
share-based
payment
reserve to
retained deficit
Loss for the
financial year
Balance at 31
May 2018
Balance at 1
June 2016
Share-based
payments
Loss for the
financial year
Balance at 31
May 2017
Share capital
The share capital comprises of the nominal value share capital issued for cash and non-cash consideration. The share capital also comprises
deferred share capital. The deferred share capital arose through the restructuring of share capital which was approved at Extraordinary General
Meetings held on 26 February 2015 and 14 December 2015. A detailed breakdown of the share capital figure is included in Note 14.
Share premium
The share premium reserve comprises of the excess consideration received in respect of share capital over the nominal value of share issued.
Capital conversion reserve fund
The ordinary shares of the Company were re-nominalised from €0.03174435 each to €0.03 each in 2001 and the amount by which the issued share
capital of the Company was reduced, was transferred to the capital conversion reserve fund.
Share-based payment reserve
The share-based payment reserve compromises the fair value of all share options and warrants which have been charged over the vesting period,
net of amounts relating to share options and warrants forfeited, exercised or lapsed during the year, which are reclassified to retained earnings.
Retained deficit
This reserve represents the accumulated losses absorbed by the Company to the consolidated statement of financial position date.
The accompanying notes form an integral part of these audited consolidated financial statements.
31
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
30
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018
1
Accounting policies
Reporting entity
Conroy Gold and Natural Resources P.L.C. (the “Company”) is a company domiciled in Ireland. The consolidated
financial statements of the Company for the financial year ended 31 May 2018 comprise the financial statements of
the Company and its subsidiaries (together referred to as the “Group”). The Company is a limited company
incorporated in Ireland under registration number 232059. The registered office is located at 3300 Lake Drive,
Citywest Business Campus, Dublin 24, D24 TD21, Ireland.
Basis of preparation
The consolidated financial statements are presented in Euro (“€”). The € is the functional currency of the Company.
The consolidated financial statements are prepared under the historical cost basis except for derivative financial
instruments which are measured at fair value at each reporting date.
The preparation of consolidated financial statements requires the Board of Directors and management to use
judgements, estimates and assumptions that affect the application of policies and reported amounts of assets,
liabilities, income and expenses. Actual results may differ from those estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised and in any future periods affected. Details of critical judgements are disclosed in the
accounting policies.
The consolidated financial statements were authorised for issue by the Board of Directors on 13 November 2018.
Going Concern
The Group and the Company incurred a loss of €745,485 (2017: €431,922) for the financial year ended 31 May 2018
and had net current liabilities of €2,953,825 and €2,607,867 respectively (2017: €2,636,066 and €2,354,768
respectively) at that date. The Directors namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth
Earls , Dr. Karl Keegan and Brendan McMorrow and former Directors, namely James P. Jones, Séamus P. FitzPatrick,
C. David Wathen, Louis J. Maguire, Dr. Sorċa Conroy and Michael E. Power, have confirmed that they will not seek
repayment of amounts owed to them by the Group and the Company of €2,579,153 (2017: €2,161,780) within 12
months of the date of approval of the financial statements, unless the Group has sufficient funds to repay.
In addition, Karelian Diamond Resources P.L.C. has confirmed that it does not intend to seek repayment of amounts
owed to it at 31 May 2018 by the Group and the Company of €113,138 (2017: €273,800) within 12 months of the
date of approval of the consolidated financial statements, unless the Group has sufficient funds to repay. Amounts
owed from Group companies amounted to €345,958 (2017: €281,300) in the Company statement of financial
position.
The Board of Directors have considered carefully the financial position of the Group and the Company and in that
context, have prepared and reviewed cash flow forecasts for the period to 31 October 2019. As set out in the
Chairman’s statement, the Group and the Company expects to incur material levels of capital expenditure in 2018
and 2019, consistent with its strategy. In reviewing the proposed work programme for exploration and evaluation
of assets and on the basis of the equity raised during past financial years, the funds received after the financial year
end, the results obtained from the exploration programme and the prospects for raising additional funds as
required, the Board of Directors are satisfied that it is appropriate to prepare the financial statements on a going
concern basis.
Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as adopted by the European Union (“EU”). The Company’s financial statements have been
prepared in accordance with Financial Reporting Standard 101: Reduced Disclosure Framework (“FRS101”).
32
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
31
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
1 Accounting policies (continued)
Recent accounting pronouncements
The following are amendments to existing standards and interpretations that are effective for the financial year from
1 June 2017:
(cid:127) Annual improvements to IFRS Standards 2014 - 2016 Cycle: Amendments to IFRS 12
(cid:127) Annual Improvements to IFRS Standards 2014 - 2016 Cycle: Amendments to IFRS 1 and IAS 28
(cid:127) Amendments to IAS 40: Transfers of Investment Property
(cid:127) Amendments to IFRS 2: Classification and measurement of share-based payment transactions
(cid:127) Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127) Clarification to IFRS 15: Revenue from contracts with customers
(cid:127)
(cid:127)
(cid:127)
The adoption of the above amendments did not have a significant impact on the consolidated financial statements.
IFRIC 22: Foreign Currency Transactions and Advance Consideration
IFRS 9: Financial Instruments
IFRS 14: Regulatory Deferral Accounts
IFRS 15: Revenue from contracts with customers (May 2014) including amendments to IFRS15
IFRS 16: Leases
IAS 7: Disclosure initiative
IAS 12: Recognition of deferred tax assets for unrealised losses
The standard endorsed by the EU that is not yet required to be applied but can be early adopted is set out below.
This standard has not been applied in the current period. The Board of Directors are currently assessing whether this
standard will have a material impact on the consolidated financial statements.
(cid:127) Amendments to IFRS 9: Prepayment features with negative compensation – To be applied for annual periods
ending on or after 31 December 2018
The following standards have been issued by the IASB but have not yet been endorsed by the EU, accordingly none
of these standards have been applied in the current period and the Board of Directors are currently assessing
whether these standards will have a material impact on the consolidated financial statements.
(cid:127) Amendments to IAS 28: Long-term interests in associates and joint ventures – Effective date 1 January 2019
(cid:127) Annual improvements to IFRS Standards 2015-2017 Cycle: Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23 –
Effective date 1 January 2019
(cid:127) Amendments to IAS 19: Plan Amendment, Curtailment or Settlement – Effective date 1 January 2019
(cid:127) Amendments to references to the Conceptual Framework in IFRS Standards – Effective date 1 January 2020
(cid:127)
(cid:127)
(cid:127) Amendments to IFRS 10 and IAS 28: Sale or contribution of assets between an investor and its associate or joint
IFRS 17: Insurance contracts – Effective date 1 January 2021
IFRIC 23: Uncertainty over income tax treatments – Effective date 1 January 2019
venture – postponed indefinitely
Basis of consolidation
The consolidated financial statements include the financial statements of Conroy Gold and Natural Resources P.L.C.
and its subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the Group is exposed
to or has the right to variable returns from its involvement with the entity and has the ability to affect those returns
through its control over the entity. In assessing control, potential voting rights that presently are exercisable are
taken into account. The financial statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases. Intra-Group balances, and any unrealised
income and expenses arising from intra-Group transactions are eliminated in preparing the consolidated financial
statements.
The Company recognises investment in subsidiaries at cost less impairments.
33
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
32
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
1 Accounting policies (continued)
(a) Intangible assets
The Company accounts for mineral expenditure in accordance with IFRS 6: Exploration for and Evaluation of Mineral
Resources.
(i) Capitalisation
Certain costs (other than payments to acquire the legal rights to explore) incurred prior to acquiring the rights to
explore are charged directly to the consolidated income statement. Exploration, appraisal and development
expenditure incurred on exploring, and testing exploration prospects are accumulated and capitalised as intangible
exploration and evaluation (“E&E”) assets. E&E capitalised costs include geological and geophysical costs, and other
direct costs of exploration (drilling, trenching, sampling and technical feasibility and commercial viability activities).
In addition, E&E capitalised costs include an allocation from operating expenses, including share-based payments.
All such costs are necessary for exploration and evaluation activities.
E&E capitalised costs are not amortised prior to the conclusion of appraisal activities.
At completion of appraisal activities if technical feasibility is demonstrated and commercial resources are discovered,
then the carrying amount of the relevant E&E asset will be reclassified as a development and production asset, once
the carrying value of the asset has been assessed for impairment. If following completion of appraisal activities in an
area, it is not possible to determine technical feasibility and commercial viability, or if the right to explore expires,
then the costs of such unsuccessful exploration and evaluation is written off to the consolidated income statement
in the period in which the event occurred.
Impairment
(ii)
If facts and circumstances indicate that the carrying value of an E&E asset may exceed its recoverable amount, an
impairment review is performed. The following are considered to be key indicators of impairment in relation to E&E
assets:
(cid:127) The period for which the entity has the right to explore in the specific area has expired or will expire in the near
future, and is not expected to be renewed.
(cid:127) Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is
neither budgeted nor planned.
(cid:127) Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in
the specific area.
(cid:127) Sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development
or by sale.
For E&E assets, where the above indicators exist, an impairment test is carried out. The E&E assets are categorised
into Cash Generating Units (“CGU”). The carrying value of the CGU is compared to its recoverable amount and any
resulting impairment loss is written off to the consolidated income statement. The recoverable amount of the CGU
is assessed as the higher of its fair value, less costs to sell, and its value in use.
(b) Transaction costs
Transaction costs arising on the issue of share capital are accounted for as a deduction from equity against retained
earnings.
34
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
33
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
1 Accounting policies (continued)
(c) Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is provided on a straight line basis to write off the cost less estimated residual value of the assets over
their estimated useful lives as follows:
Motor vehicles
Plant and office equipment
5 years
10 years
(d) Income taxation expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the consolidated
income statement except to the extent that it relates to items recognised directly in other comprehensive income,
in which case it is recognised in the consolidated statement of comprehensive income.
Current tax is the expected tax payable on the taxable income for the financial year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax
assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities on a net basis or their tax assets and liabilities will be settled
simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
(e) Share-based payments
For equity-settled share-based payment transactions (i.e. the granting of share options and share warrants), the
Group measures the services and the corresponding increase in equity at fair value at the measurement date (which
is the grant date) using a recognised valuation methodology for the pricing of financial instruments (Binomial Lattice
Model). Given that the share options, and warrants granted do not vest until the completion of a specified period of
service, the fair value is determined on the basis that the services to be rendered by employees as consideration for
the granting of share options and warrants will be received over the vesting period, which is assessed as the grant
date.
The fair value determined at the grant date of the equity settled share-based payments is expensed on a straight
line basis over the vesting period, based on the Company’s estimate of equity instruments that will eventually vest.
35
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
34
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
1 Accounting policies (continued)
(f) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable.
(g) Trade and other receivables and payables
Trade and other receivables and payables are measured at initial recognition at fair value, and subsequently
measured at amortised cost.
(h) Earnings per share
The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated
by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary
shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to
ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all
potentially dilutive ordinary shares.
(i) Cash and cash equivalents
Cash and cash equivalents consist of cash at bank held by the Group and short-term bank deposits with a maturity
of three months or less. Cash and cash equivalents are held for the purpose of meeting short-term cash
commitments.
(j) Pension costs
The Group provides for pensions for certain employees through a defined contribution pension scheme. The
amounts charged to the consolidated income statement and consolidated statement of financial position is the
contribution payable in that financial year. Any difference between amounts charged and contributions paid to the
pension scheme is included in receivables or payables in the consolidated statement of financial position.
(k) Foreign currencies
Transactions denominated in foreign currencies relating to costs and non-monetary assets are translated into € at
the rates of exchange ruling on the dates on which the transactions occurred. Monetary assets and liabilities
denominated in foreign currencies are translated into € at the rate of exchange ruling at the consolidated statement
of financial position date. The resulting profits or losses are dealt with in the consolidated income statement.
(l) Directors’ loans
The Directors’ loans are initially measured at fair value, net of transaction costs and subsequently measured at
amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The
effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
payments through the expected life of the financial liability, or, where appropriate, a shorter period, to the net
carrying amount of initial recognition.
(m) Ordinary shares
Ordinary shares are classified as equity. Costs directly attributable to issue of ordinary shares and share options are
recognised as a deduction from retained earnings, net of any tax effects.
36
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
35
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
1 Accounting policies (continued)
(n) Critical accounting judgements and key sources of estimation uncertainty
Critical judgements in applying the Group’s accounting policies
The preparation of the consolidated financial statements requires the Board of Directors to make judgements and
estimates and form assumptions that affect the amounts of assets, liabilities, contingent liabilities, revenues and
expenses reported in the consolidated financial statements. On an ongoing basis, the Board of Directors evaluates
its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. The Board
of Directors bases its judgements and estimates on historical experience and on other factors it believes to be
reasonable under the circumstances, the results of which form the basis of the reported amounts that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions and
conditions. In the process of applying the Group’s accounting policies above, the Board of Directors have identified
the judgemental areas that have the most significant impact on the amounts recognised in the consolidated financial
statements (apart from those involving estimations), which are dealt with as follows:
Exploration and evaluation assets
The assessment of whether general administration costs and salary costs are capitalised or expensed involves
judgement. The Board of Directors consider the nature of each cost incurred and whether it is deemed appropriate
to capitalise it within exploration and evaluation assets. Given that the activity of management and the resultant
administration and salary costs are primarily focused on the Group’s gold prospects, the Board of Directors consider
it appropriate to capitalise a portion of such costs. These costs are reviewed on a line by line basis with the resultant
calculation of the amount to be capitalised being specific to the activities of the Company in any given year.
Cash Generating Units (“CGUs”)
As outlined in the Intangible assets accounting policy, the exploration and evaluation assets should be allocated to
CGU’s. The determination of what constitutes a CGU requires judgement.
The carrying value of each CGU is compared to its recoverable amount. The recoverable amount of the CGU is
assessed as the higher of its fair value less costs to sell and its value in use. The determination of value in use requires
the following judgements:
(cid:127)
(cid:127)
(cid:127)
Estimation of future cash flows expected to be derived from the asset.
Expectation about possible variations in the amount or timing of the future cash flows.
The determination of an appropriate discount rate.
Going concern
The preparation of consolidated financial statements requires an assessment on the validity of the going concern
assumption. The validity of the going concern assumption is dependent on the successful further development and
ultimate production of the mineral resources and the availability of sufficient finance to bring the resources to
economic maturity and profitability. The Board of Directors have reviewed the proposed programme for exploration
and evaluation assets, the funds received post year end, the encouraging results from the exploration programme
and the prospects for raising additional funds as required, the Board of Directors are satisfied that it is appropriate
to prepare the financial statements on the going concern basis.
Refer to page 32 for further details.
37
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
36
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
1 Accounting policies (continued)
(n) Critical accounting judgements and key sources of estimation uncertainty (continued)
Key sources of estimation uncertainty
The preparation of the consolidated financial statements requires the Board of Directors to make estimates and
assumptions that affect the amounts reported for assets and liabilities as at the consolidated statement of financial
position date and the amounts reported for revenues and expenses during the financial year. The nature of
estimation means that actual outcomes could differ from those estimates. The key sources of estimation uncertainty
that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below.
Exploration and evaluation assets
The carrying value of exploration and evaluation assets was €21,000,286 (2017: €19,659,104) at 31 May 2018 (Note
8). The Board of Directors carried out an assessment, in accordance with IFRS 6: Exploration for and Evaluation of
Mineral Resources relating to the remaining licence or claim terms, likelihood of renewal, likelihood of further
expenditure, possible discontinuation of activities over specific claims and available data which may suggest that the
recoverable value of an exploration and evaluation asset is less than its carrying amount. Based on this assessment
the Board of Directors is satisfied as to the carrying value of these assets and is satisfied that these are recoverable,
acknowledging however that their recoverability is dependent on future successful exploration efforts.
Employee benefits - Share-based payment transactions
The Company had equity-settled share-based payment arrangements with non-market performance conditions
which fall within the scope of and are accounted for under the provisions of IFRS 2: Share-based Payment.
Accordingly, the grant date fair value of the options under these schemes is recognised as a personnel expense with
a corresponding increase in the “Share-based payment reserve”, within equity, over the vesting period. The
estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration
as to the inputs necessary for the valuation model chosen.
The Company has made estimates as to the volatility of its own shares, the probable life of options granted and the
time of exercise of those options. The model used by the Company is the Binomial Lattice Model. The fair value of
these options is measured using an appropriate option pricing model, taking into account the terms and conditions
upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number
of share options that vest, except where forfeiture is only due to share prices not achieving the threshold for vesting.
Deferred tax
No deferred tax asset has been recognised in respect of tax losses as it is not considered probable that future taxable
profit will be available against which the related temporary differences can be utilised.
(o) Segmental reporting
Operating segment information is presented in the consolidated financial statements in respect of the Group’s
geographical segments which represent the financial basis by which the Group manages its business. The Group has
one class of business, Gold Exploration. The Group has two principal reportable segments as follows:
(cid:127)
(cid:127)
Irish exploration assets: gold exploration assets in Ireland; and
Finnish exploration assets: gold exploration assets in Finland.
Group assets and liabilities include cash resources held by the Group. Corporate expenses include other operational
expenditure incurred by the Group. These are not within the definition of an operating segment. Performance is
measured based on segment result and total asset value as included in the internal management reports that are
reviewed by the Group’s Board of Directors. There are no significant inter segment transactions. Costs that are
directly attributable to Ireland and Finland have been capitalised to exploration and evaluation assets as
appropriate (Note 8). The Group did not earn any revenue in the current or comparative financial year.
38
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
37
2 Operating expenses
(a) Analysis of operating expenses
Operating expenses
Transfer to intangible assets
Operating expenses are analysed as follows:
Wages, salaries and related costs
Other operating expenses
Share-based payments
Auditors remuneration
Depreciation
2018
€
1,555,721
(810,223)
745,498
632,236
529,503
373,098
19,000
1,884
1,555,721
2017
€
863,983
(432,061)
431,922
463,655
300,118
78,931
17,500
3,779
863,983
Of the above costs, a total of €810,223 (2017: €432,061) is capitalised to intangible assets based on a review of the
nature and quantum of the underlying costs.
(b) Wages, salaries and related costs as disclosed above is analysed as follows:
Wages and salaries
Social insurance costs
Retirement benefit costs
Other compensation costs
585,150
17,503
29,583
-
632,236
2018
€
2017
€
390,100
38,555
35,000
-
463,655
Amount of wages, salaries and related costs capitalised as intangible assets during the financial year was €436,442
(2017: €303,133).
The average number of persons employed during the financial year (including executive Directors) by activity was as
follows:
Exploration and evaluation
Corporate management and administration
2018
2017
5
3
8
5
3
8
The Group contributes to an externally funded defined contribution scheme to satisfy the pension arrangements in
respect of certain management personnel.
The total pension cost charged for the financial year was €29,583 (2017: €35,000).
39
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
38
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
2 Operating expenses (continued)
(b) Wages, salaries and related costs as disclosed above is analysed as follows (continued):
An analysis of remuneration for each Director of the Company in the current financial year (prior to amounts
transferred to intangible assets) is as follows:
Fees
€
22,220
9,523
9,523
7,142
7,142
Share-based
payment charge €
-
-
-
-
-
Professor Richard Conroy
Maureen T.A. Jones
Professor Garth Earls
Dr. Karl Keegan
Brendan McMorrow
Pension
contributions €
-
22,000
-
-
-
Salary
€
185,406
120,407
-
-
-
Total
€
207,626
151,930
9,523
7,142
7,142
Directors removed 4 August 2017
James P. Jones
Louis J. Maguire
Michael E. Power
C. David Wathen
Séamus P. Fitzpatrick
Dr. Sorċa Conroy
2,381
2,381
2,381
2,381
2,381
2,381
69,836
44,441
-
-
-
-
-
350,254
-
-
-
-
-
-
-
7,583
-
-
-
-
-
29,583
54,405
2,381
2,381
2,381
2,381
2,381
449,673
An analysis of remuneration for each Director of the Company in the prior financial year (prior to amounts
transferred to intangible assets) is as follows:
Fees
€
22,220
9,523
4,762
-
-
Share-based
payment charge €
33,655
21,947
-
-
-
Professor Richard Conroy
Maureen T.A. Jones
Professor Garth Earls
Dr. Karl Keegan
Brendan McMorrow
Pension
contributions €
-
22,000
-
-
-
Salary
€
179,889
114,889
-
-
-
Total
€
235,764
168,359
4,762
-
-
Directors removed 4 August 2017
James P. Jones
Louis J. Maguire
Michael E. Power
C. David Wathen
Séamus P. Fitzpatrick
Dr. Sorċa Conroy
9,523
9,523
9,523
9,523
9,523
9,523
93,643
71,765
-
-
-
-
-
366,543
12,876
2,415
1,430
591
419
-
73,333
13,000
-
-
-
-
-
35,000
107,164
11,938
10,953
10,114
9,942
9,523
568,519
The total share-based payment charge of €373,098 (2017: €78,931) is accounted for as shown below:
Share-based payment charge expensed to consolidated
statement
Share-based payment charge transferred to intangible assets
income
2018
€
74,621
298,477
373,098
2017
€
15,346
63,585
78,931
40
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
39
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
3 Loss before taxation
The loss before taxation is arrived at after charging the following items, which are stated at amounts prior to the
transfer to intangible assets:
Depreciation
Auditor’s remuneration - Group
The analysis of the auditor’s remuneration is as follows:
(cid:127)
Audit of financial statements
Auditor’s remuneration - Company
The analysis of the auditor’s remuneration is as follows:
(cid:127)
Audit of financial statements
2018
€
1,884
2017
€
3,779
19,000
17,500
19,000
17,500
No fees were incurred for other assurance, tax advisory or other non-audit services in respect of the current or prior
financial years.
4 Directors’ remuneration
Aggregate emoluments paid to or receivable by Directors in respect of
qualifying services
Aggregate amount of gains by Directors on exercise of share options
during the financial year
Aggregate amount of money or value of other assets including shares,
but excluding share options, paid to or receivable by the Directors under
long term incentive schemes in respect of qualifying services
Aggregate contributions paid, treated as paid, or payable during the
financial year to a retirement benefit scheme in respect of qualifying
services of Directors:
(cid:127)
(cid:127)
Defined contribution scheme – for 2 Directors (2017: 2)
Defined benefit scheme
Compensation paid, or payable, or other termination payments in
respect of loss of office to Directors of the Company in the financial year:
(cid:127)
(cid:127)
Officer or Director of the Company
Other offices
2018
€
2017
€
420,090
460,186
-
-
2018
€
29,583
-
2018
€
-
-
-
73,333
2017
€
35,000
-
2017
€
-
-
No amounts have been paid to past Directors of the Company or its holding undertakings (2017: €nil).
No compensation has been paid for the loss of office or other termination benefit in respect of the loss of office of
Director or other offices (2017: €nil).
41
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
40
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
5
Income tax expense
No taxation charge arose in the current or prior financial year due to losses incurred.
Factors affecting the tax charge for the financial year:
The total tax charge for the financial year is different to the standard rate of Irish corporation tax. This is due to the
following:
Loss on ordinary activities before tax
Irish standard tax rate
Tax credit at the Irish standard rate
Effects of:
Expenses not deductible for tax purposes
Losses carried forward for future utilisation
Tax charge for the financial year
2018
€
(745,485)
12.5%
(93,186)
-
93,186
-
2017
€
(431,922)
12.5%
(53,990)
-
53,990
-
No deferred tax asset has been recognised on accumulated tax losses as it cannot be considered probable that future
taxable profit will be available against which the deferred tax asset can be utilised.
Unutilised losses may be carried forward from the date of the origination of the losses but may only be offset against
taxable profits earned from the same trade.
42
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
41
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year ended
31 May 2018 (continued)
6 Loss per share
Loss for the financial year attributable to equity holder of the
Company
Basic earnings per share
Number of ordinary shares at start of financial year
Number of ordinary shares issued during the financial year
Number of ordinary shares at end of financial year
Weighted average number of ordinary shares for the purposes of
basic earnings per share
Basic loss per ordinary share
Diluted earnings per share
Weighted average number of diluted ordinary shares for the
purposes of diluted earnings per share
Diluted loss per ordinary share
2018
€
2017
€
(745,485)
(431,922)
No. of shares
No. of shares
11,013,537
9,043,137
20,056,674
11,013,537
-
11,013,537
15,379,675
11,013,537
(€0.0485)
(€0.0392)
No. of shares
No. of shares
18,839,251
-
(€0.0396)
(€0.0392)
As at 31 May 2018, 0 options and 5,875,178 warrants (2017 – 10,000 options and 6,275,178 warrants), were excluded
from the computation of the dilutive loss per share as their strike price was greater than the average share price in
the respective years.
7 Subsidiaries
% Owned
Shares in subsidiary companies (Unlisted shares)
at cost:
Conroy Gold Limited
Trans International Mineral Exploration Limited
100%
100%
31 May
2018
€
-
2
31 May
2017
€
-
2
The registered office of the above non-trading subsidiaries is 3300 Lake Drive, Citywest Business Campus, Dublin 24,
D24 TD21, Ireland.
Income statement of Company
In accordance with Section 304 (2) of the Companies Act, 2014 the Company is availing of the exemption from
presenting an individual income statement. The Company’s loss for the financial year determined in accordance with
FRS101 is €745,485 (2017: €431,922).
43
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
42
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
8
Intangible assets
Exploration and evaluation assets
Group: Cost
At 1 June
Expenditure during the financial year
Licence and appraisal costs
(cid:127)
(cid:127) Other operating expenses (Note 2)
(cid:127)
At 31 May
Equity settled share-based payments (Note 2)
Company: Cost
At 1 June
Expenditure during the financial year
Licence and appraisal costs
(cid:127)
(cid:127) Other operating expenses (Note 2)
(cid:127)
At 31 May
Equity settled share-based payments (Note 2)
31 May
2018
€
19,659,104
530,959
511,746
298,477
21,000,286
31 May
2018
€
19,377,804
466,299
511,746
298,477
20,654,326
31 May
2017
€
18,696,602
530,441
368,476
63,585
19,659,104
31 May
2017
€
18,415,402
530,441
368,376
63,585
19,377,804
Exploration and evaluation assets relate to expenditure incurred in the development of mineral exploration
opportunities. These assets are carried at historical cost and have been assessed for impairment in particular with
regard to the requirements of IFRS 6: Exploration for and Evaluation of Mineral Resources relating to remaining
licence or claim terms, likelihood of renewal, likelihood of further expenditure, possible discontinuation of activities
over specific claims and available data which may suggest that the recoverable value of an exploration and
evaluation asset is less than its carrying amount.
The Board of Directors have considered the proposed work programmes for the underlying mineral resources. They
are satisfied that there are no indications of impairment.
The Board of Directors note that the realisation of the intangible assets is dependent on further successful
development and ultimate production of the mineral resources and the availability of sufficient finance to bring the
resources to economic maturity and profitability.
Mineral interests are categorised as follows:
Group: Ireland
Cost
At 1 June
Expenditure during the financial year
(cid:127)
Licence and appraisal costs
(cid:127) Other operating expenses
(cid:127)
At 31 May
Equity settled share-based payments
31 May
2018
€
17,479,745
530,437
434,984
268,629
18,713,795
31 May
2017
€
16,589,803
529,211
303,504
57,227
17,479,745
44
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
43
8
Intangible assets (continued)
Exploration and evaluation assets (continued)
Mineral interests are categorised as follows: (continued)
Group: Finland
Cost
At 1 June
Expenditure during the financial year
(cid:127)
Licence and appraisal costs
(cid:127) Other operating expenses
(cid:127)
At 31 May
Equity settled share-based payments
Company: Ireland
Cost
At 1 June
Expenditure during the financial year
(cid:127)
Licence and appraisal costs
(cid:127) Other operating expenses
(cid:127)
At 31 May
Equity settled share-based payments
Company: Finland
Cost
At 1 June
Expenditure during the financial year
(cid:127)
Licence and appraisal costs
(cid:127) Other operating expenses
(cid:127)
At 31 May
Equity settled share-based payments
31 May
2018
€
2,179,359
522
76,762
29,848
2,286,491
31 May
2018
€
17,198,445
465,777
434,984
268,629
18,367,835
31 May
2018
€
2,179,359
522
76,762
29,848
2,286,491
31 May
2017
€
2,106,799
1,230
64,972
6,358
2,179,359
31 May
2017
€
16,308,603
529,211
303,404
57,227
17,198,445
31 May
2017
€
2,106,799
1,230
64,972
6,358
2,179,359
45
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
44
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
9 Property, plant and equipment
In respect of the current financial year:
Group and Company
Cost
At 1 June 2017
Additions
At 31 May 2018
Accumulated depreciation
At 1 June 2017
Charge for the financial year
At 31 May 2018
Motor Vehicles
€
Plant & Office
Equipment
€
17,754
-
17,754
17,754
-
17,754
136,225
-
136,225
121,109
1,884
122,993
Total
€
153,979
-
153,979
138,863
1,884
140,747
Net book value at 31 May 2018
-
13,232
13,232
In respect of the previous financial year:
Group and Company
Cost
At 1 June 2016
Additions
At 31 May 2017
Accumulated depreciation
At 1 June 2016
Charge for the financial year
At 31 May 2017
Motor Vehicles
€
Plant & Office
Equipment
€
17,754
-
17,754
17,754
-
17,754
133,480
2,745
136,225
117,330
3,779
121,109
Total
€
151,234
2,745
153,979
135,084
3,779
138,863
Net book value at 31 May 2017
-
15,116
15,116
46
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
45
10 Other receivables
Group
Other debtors
Vat receivable
Company
31 May
2018
€
48,416
23,882
72,298
31 May
2018
€
31 May
2017
€
8,205
90,775
98,980
31 May
2017
€
Other debtors
Vat receivable
Amounts owed from Conroy Gold Limited
8,203
90,775
281,300
380,278
The realisation of amounts owed by Group companies is dependent on the further successful development and
ultimate production of the mineral resources and the availability of sufficient finance to bring the resources to
economic maturity and profitability.
48,416
23,882
345,958
418,256
11 Cash and cash equivalents
Group and Company
Cash held in bank accounts
12 Trade and other payables
Group and Company
Amounts falling due within one year
Accrued Directors’ remuneration
Fees and other emoluments
Pension contributions
Accrued former Directors’ remuneration
Fees and other emoluments
Pension contributions
Other creditors and accruals
Amounts owed to Karelian Diamond Resources P.L.C.
31 May
2018
€
233,161
233,161
31 May
2018
€
1,701,755
142,675
655,640
79,083
566,993
113,138
3,259,284
31 May
2017
€
19,704
19,704
31 May
2017
€
1,356,445
121,000
613,160
71,175
319,170
273,800
2,754,750
It is the Group’s practice to agree terms of transactions, including payment terms with suppliers. It is the Group’s
policy that payment is made according to the agreed terms. The carrying value of the trade and other payables
approximates to their fair value.
47
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
46
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
12 Trade and other payables (continued)
The Directors namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls , Dr. Karl Keegan and
Brendan McMorrow and former Directors, namely James P. Jones, Séamus P. FitzPatrick, C. David Wathen, Louis J.
Maguire, Dr. Sorċa Conroy and Michael E. Power, have confirmed that they will not seek repayment of amounts
owed to them by the Group and the Company of €2,579,153 (2017: €2,161,780) for a minimum period of 12 months
from the date of approval of the consolidated financial statements, unless the Group has sufficient funds to repay.
In addition, Karelian Diamond Resources P.L.C. has confirmed that it will not seek repayment of amounts owed to it
by the Group and the Company at 31 May 2018 of €113,138 (2017: €273,800) within 12 months of the date of
approval of the consolidated financial statements, unless the Group has sufficient funds to repay. During the financial
year ended 31 May 2018, €41,832 (2017: €383,845) was paid by Karelian Diamond Resources P.L.C to the Company.
For the financial year ended 31 May 2018, the Company incurred costs totalling €202,494 (2017: €278,810) on behalf
of Karelian Diamond Resources P.L.C.
13 Non-current financial liabilities – Group and Company
Directors’ loans
Opening balance 1 June
Loan advance
Loan repayment
Closing balance 31 May
31 May
2018
€
277,287
89,736
(181,680)
185,343
31 May
2017
€
135,287
142,000
-
277,287
The Directors’ loans amounts relate to monies owed to Professor Richard Conroy amounting to €135,918 (2017:
€232,287), and Maureen T.A. Jones amounting to €49,425 (2017: €45,000). The Directors’ have confirmed that they
will not seek repayment of amounts owed to it by the Group and Company at 31 May 2018 within 12 months of the
date of approval of the consolidated financial statements, unless the Group has sufficient funds to repay. There is
no interest payable in respect of these loans, no security has been attached to these loans and there is no repayment
or maturity terms.
14 Called up share capital and share premium – Group and Company
Authorised:
11,995,569,058 ordinary shares of €0.001 each
306,779,844 deferred shares of €0.02 each
437,320,727 deferred shares of €0.00999 each
31 May
2018
€
11,995,569
6,135,597
4,368,834
22,500,000
31 May
2017
€
11,995,569
6,135,597
4,368,834
22,500,000
Following approval at an Extraordinary General Meeting held on 26 February 2015, the Company reorganised its
share capital by subdividing and reclassifying each issued ordinary share of €0.03 as one ordinary share of €0.01
each and one deferred share of €0.02 each.
Further, following approval at the Annual General Meeting held on 14 December 2015, the Company reorganised
its share capital by subdividing and reclassifying each issued ordinary share of €0.01 as one ordinary share of
€0.00001 each and one deferred share of €0.00999 each and consolidated the reclassified ordinary shares of
€0.00001 each into shares of €0.001 each.
The deferred shares do not entitle the holder to receive a dividend or other distribution. Furthermore, the deferred
shares do not entitle the shareholder to receive notice of or vote at any general meeting of the Company, and do
not entitle the shareholder to any proceeds on a return of capital or winding up of the Company.
48
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
47
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
14 Called up share capital and share premium – Group and Company (continued)
Authorised: (continued)
On 6 November 2017, the Company cancelled the admission of its ordinary shares to trade on the ESM of the Irish
Stock Exchange.
Issued and fully paid – Current financial year
Number of
ordinary
shares
Called up
share capital
€
Capital
conversion
reserve fund
€
Called up
deferred share
capital
€
Share premium
€
Start of financial year
Share issue (a)
Share issue (b)
Share issue (c)
Share issue (d)
11,013,537
700,000
100,000
400,000
7,843,137
End of financial year
20,056,674
11,014
700
100
400
7,843
20,057
30,617
-
-
-
-
10,504,431
-
-
-
-
10,649,252
209,300
29,900
166,280
1,119,553
30,617
10,504,431
12,174,285
Issued and fully paid – Prior financial year
Number of
ordinary
shares
Called up
share capital
€
Capital
conversion
reserve fund
€
Called up
deferred share
capital
€
Share premium
€
Start of financial year
11,013,537
End of financial year
11,013,537
11,014
11,014
30,617
10,504,431
10,649,252
30,617
10,504,431
10,649,252
(a) On 29 September 2017, 700,000 ordinary shares of €0.001 each were issued at €0.30 resulting in a premium of
€0.299 per share.
(b) On 4 October 2017, 100,000 ordinary shares of €0.001 each were issued at €0.30 resulting in a premium of €0.299
per share.
(c) On 4 October 2017, 400,000 ordinary shares of €0.001 each were issued in response to two directors exercising
warrants with an exercise price of £0.37 sterling per share. This resulted in a premium of €0.4157 per share.
(d) On 21 December 2017, 7,843,137 ordinary shares (“Subscription share”) of €0.001 each were issued at £0.1275
sterling, resulting in a premium of €0.143 per share. Each Subscription Share has an attaching warrant to subscribe
for a further new ordinary share at £0.22 sterling (“Warrants”), with warrant accelerator available to the Company
should the volume weighted average Ordinary Share price of the Company exceed £0.75p for five days or more. The
expiry date for these warrants is 30 June 2019.
(e) At 31 May 2018, warrants over 13,718,315 shares exercisable at prices from £0.22 sterling to €4.33 per share,
with various exercisable dates up to 16 November 2022 were outstanding. At 31 May 2017, warrants over 6,275,178
shares exercisable at prices from £0.37 sterling to €4.33 per share, with various exercisable dates up to 16 November
2022 were outstanding.
(f) At 31 May 2018, there were no outstanding options. At 31 May 2017, 10,000 options were outstanding
exercisable at prices ranging from €4.80 to €6.25. These options expired on 14 January 2018.
(g) The share price at 31 May 2018 was 17.500p sterling (2017: 13.625p sterling). During the financial year, the price
ranged from 13.125p to 40.000p sterling (2017: 12.000p to 44.000p).
49
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
48
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
15 Commitments and contingencies
Exploration and evaluation activities
The Group has received prospecting licences under the Republic of Ireland Mineral Development Acts 1940 to 1995
for areas in Monaghan and Cavan. It has also received licences in Northern Ireland for areas in Armagh in accordance
with the Mineral Development Act (Northern Ireland) 1969.
At 31 May 2018, the Group had work commitments of €440,000 for the forthcoming financial year, in respect of
prospecting licences held.
16 Related party transactions
(a) Details as to shareholders and Directors loans and share capital transactions with Professor Richard Conroy and
Maureen T.A. Jones are outlined in the Director’s report and in Note 13 of the consolidated financial statements.
(b) For the financial year ended 31 May 2018, the Company incurred costs totalling €202,494 (2017: €278,810) on
behalf of Karelian Diamond Resources P.L.C., which has certain common shareholders and Directors. These costs
were recharged to Karelian Diamond Resources P.L.C.
These costs are analysed as follows:
Office salaries
Other operating expenses
Rent and rates
Legal and professional
Travel and subsistence
Exploration costs
2018
€
74,482
31,480
29,690
28,388
26,059
12,395
2017
€
46,343
47,196
31,793
24,672
41,313
87,493
202,494
278,810
(c) At 31 May 2018, the Company owed €113,138 to Karelian Diamond Resources P.L.C. (2017: €273,800). Amounts
owed to Karelian Diamond Resources P.L.C. are included within “Trade and other payables” in the current and
previous financial year statements. During the financial year ended 31 May 2018, €41,832 (2017: €383,845) was
paid by Karelian Diamond Resources P.L.C. to the Company. During the financial year ended the Company charged
Karelian Diamond Resources P.L.C. €202,494 (2017: €278,810) in respect of the allocation of certain costs as detailed
in Note 16(b). Karelian Diamond Resources P.L.C. has confirmed that it will not seek repayment of amounts owed
to it by the Group and the Company within 12 months of the date of approval of the consolidated financial
statements, unless the Group has sufficient funds to repay.
(d) At 31 May 2018, Conroy Gold Limited owed €345,958 (2017: €281,300) to the Company. The movement in the
balance relates to an advance of €64,658 received from the Company.
(e) At 31 May 2018, various companies in which Professor Richard Conroy has a material interest owed €26,596 to
the Company (2017: €5,000). The largest balance owed to the Company is from Conroy P.L.C. which was €15,473 at
31 May 2018 (2017: €5,000). The amounts owed by the various companies is included within “Other receivables” in
the current and previous financial year consolidated statement of financial position and company statement of
financial position.
(f) Details of key management compensation which comprises Directors’ remuneration is outlined in Note 2 to the
consolidated financial statements.
(g) Professor Garth Earls invoiced the Group for €57,483 (2017: €50,155) during the financial year for professional
services rendered to the Group. At 31 May 2018, Professor Garth Earls was owed €14,128 (2017: €37,304) in respect
of these services. Brendan McMorrow invoiced the Group for €7,800 (2017: €nil) during the financial year for
professional services rendered to the Group. At 31 May 2018, Brendan McMorrow was owed €nil (2017: €nil) in
respect of these services.
50
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
49
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
17 Share-based payments
The Company has an equity-settled share-based payment arrangement with non-market performance conditions.
Options granted generally had a vesting period of ten years. Details of the share options outstanding during the
financial year are as follows:
At 1 June
Lapsed during the financial year
(Note 14)
At 31 May
2018
No. of share
options
10,000
(10,000)
-
2018
Weighted
average
exercise price €
5.530
5.530
-
2017
No. of share
options
10,000
-
10,000
2017
Weighted
average exercise
price €
5.530
-
5.530
Warrants granted generally have a vesting period of two years. Warrants granted during the financial year vest
immediately. Details of the warrants outstanding during the financial year are as follows:
At 1 June
Exercised during the financial year
(Note 14)
Granted during the financial year
(Note 14)
At 31 May
2018
No. of share
warrants
6,275,178
(400,000)
7,843,137
13,718,315
2018
Weighted
average exercise
price €
0.920
2017
No. of share
warrants
6,275,178
2017
Weighted
average exercise
price €
0.920
0.417
0.250
0.545
-
-
6,275,178
-
-
0.920
The Company estimated the fair value of stock options and warrants awards using the Binomial Lattice Model. The
determination of the fair value of share-based payment awards on the date of grant using the Binomial Lattice
Model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables.
These variables include the expected term of the awards, the expected stock price volatility over the term of the
awards, the risk-free interest rate associated with the expected term of the awards and the expected dividends.
The Company’s Binomial Lattice Model included the following weighted average assumptions for the Company’s
employee stock option and warrants:
2018
Stock options
2018
Stock warrants
2017
Stock options
2017
Stock warrants
Dividend yield
Expected volatility
Risk free interest rate
Expected life (in years)
0%
90%
0.4%
2
This calculation results in a share-based payment reserves payment of €373,098 (2017: €78,931). Amounts relating
to share options and warrants which lapsed during the year and which are reclassified to retained earnings were
€920,570 (2017: €nil).
0%
90%
0.4%
2
0%
90%
0.4%
10
N/a
N/a
N/a
N/a
51
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
50
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
18 Financial instruments
Financial risk management objectives, policies and processes
The Group has exposure to the following risks from its use of financial instruments:
(a)
Interest rate risk;
(b) Foreign currency risk;
(c) Liquidity risk; and
(d) Credit 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 framework in relation to the risks faced.
(a) Interest rate risk
The Group currently finances its operations through shareholders’ funds. Short term cash funds are invested, if
appropriate, in short term interest bearing bank deposits. The Group did not enter into any hedging transactions
with respect to interest rate risk.
The interest rate profile of these interest bearing financial instruments was as follows:
Variable rate instruments:
Financial assets – cash and cash equivalents
31 May
2018
€
233,161
233,161
31 May
2017
€
19,704
19,704
Cash flow sensitivity analysis for variable rate instruments
An increase of 100 basis points (‘bps’) in interest rates at 31 May 2018 and 31 May 2017 would have decreased the
reported loss by €2,332 (2017: €197). A decrease of 100 basis points would have had an equal and opposite effect.
This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
(b) Foreign currency risk
The Group is exposed to currency risk on purchases, loans and bank deposits that are denominated in a currency
other than the functional currency of the entities of the Group.
It is Group policy to ensure that foreign currency risk is managed wherever possible by matching foreign currency
income and expenditure. During the financial years ended 31 May 2018 and 31 May 2017, the Group did not utilise
foreign currency forward contracts or other derivatives to manage foreign currency risk.
52
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
51
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
18 Financial instruments (continued)
Financial risk management objectives, policies and processes (continued)
(b) Foreign currency risk (continued)
The Group’s foreign currency risk exposure in respect of the principal foreign currencies in which the Group operates
was as follows at 31 May 2018:
Other debtors
Cash and cash equivalents
Trade and other payables
Directors’ loans
Total exposure
Sterling exposure
denominated in €
-
103,289
(87,660)
-
15,629
Not at risk €
48,416
129,872
(3,163,375)
(185,343)
(3,170,430)
Total
€
48,416
233,161
(3,251,035)
(185,343)
(3,154,801)
The Group’s foreign currency risk exposure in respect of the principal foreign currencies in which the Group operates
was as follows at 31 May 2017:
Other debtors
Cash and cash equivalents
Trade and other payables
Directors’ loans
Total exposure
Sterling exposure
denominated in €
-
4,012
(72,675)
-
(68,663)
Not at risk €
8,205
15,692
(2,682,075)
(277,287)
(2,935,465)
Total
€
8,205
19,704
(2,754,750)
(277,287)
(3,004,128)
The following are the significant exchange rates that applied against €1 during the financial year:
Average rate
2018
Average rate
2017
Spot rate
31 May
2018
Spot rate
31 May
2017
GBP
0.886
0.852
0.875
0.874
Sensitivity analysis
A 10% strengthening of € against Sterling, based on outstanding financial assets and liabilities at 31 May 2018 would
have increased the reported loss by €1,563 (2017: decreased the reported loss by €6,866) as a consequence of the
retranslation of foreign currency denominated financial assets and liabilities at those dates. A weakening of 10% of
the € against Sterling would have had an equal and opposite effect. It is assumed that all other variables, especially
interest rates, remain constant in the analysis.
53
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
52
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
18 Financial instruments (continued)
Financial risk management objectives, policies and processes (continued)
(c) Liquidity risk
Liquidity is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and adverse conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
The Group manages liquidity risk by regularly monitoring cash flow projections. The nature of the Group’s
exploration and appraisal activities can result in significant differences between expected and actual cash flows.
Contractual maturities of financial liabilities as at 31 May 2018 were as follows:
Item
Trade and other
payables
Carrying
amount €
Contractual
cash flows €
6 months or
less €
6 -12
months €
1-2 years
€
2-5 years
€
3,444,627
3,444,627
3,259,284*
-
185,343
-
Contractual maturities of financial liabilities as at 31 May 2017 were as follows:
Item
Trade and other
payables
Carrying
amount €
Contractual
cash flows €
6 months or
less €
6 -12
months €
1-2 years
€
2-5 years
€
3,032,037
3,032,037
2,754,750*
-
277,287
-
*The Directors namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls , Dr. Karl Keegan and
Brendan McMorrow and former Directors, namely James P. Jones, Séamus P. FitzPatrick, C. David Wathen, Louis J.
Maguire, Dr. Sorċa Conroy and Michael E. Power, have confirmed that they will not seek repayment of amounts
owed to them by the Group and the Company of €2,579,153 (2017: €2,161,780) within 12 months of the date of
approval of the financial statements, unless the Group has sufficient funds to repay.
*In addition, Karelian Diamond Resources P.L.C. has confirmed that it will not seek repayment of amounts owed to
it by the Group and the Company at 31 May 2018 of €113,138 (2017: €273,800) within 12 months of the date of
approval of the consolidated financial statements, unless the Group has sufficient funds to repay.
The Directors’ loan amounts relate to monies owed to Professor Richard Conroy amounting to €135,918 (2017:
€232,287), and Maureen T.A. Jones amounting to €49,425 (2017: €45,000).
The Group had cash and cash equivalents of €233,161 at 31 May 2018 (2017: €19,704).
(d) Credit risk
Credit risk is the risk of financial loss to the Group if a cash deposit is not recovered. Group deposits are placed only
with banks with appropriate credit ratings.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk at 31 May 2018 and 31 May 2017 was:
Cash and cash equivalents
Other debtors
54
31 May
2018
€
233,161
48,416
281,577
31 May
2017
€
19,704
8,205
27,909
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc
53
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the financial year
ended 31 May 2018 (continued)
18 Financial instruments (continued)
Financial risk management objectives, policies and processes (continued)
(d) Credit risk (continued)
The Group’s cash and cash equivalents are held at AIB Bank which has a credit rating of “BBB-” as determined by
Fitch, and Bank of Ireland which a credit rating of “BBB“ as determined by Fitch.
(e) Fair values versus carrying amounts
Due to the short-term nature of all of the Group’s financial assets and liabilities at 31 May 2018 and 31 May 2017,
the fair value equals the carrying amount in each case.
(f) Capital management
The Group has historically funded its activities through share issues and placings. The Group’s capital structure is
kept under review by the Board of Directors and it is committed to capital discipline and continues to maintain
flexibility for future growth.
19 Post balance sheet events
On 28 August 2018, the Company raised £500,000 (€556,545), through a placing of 3,636,365 ordinary shares of
€0.001 in the capital of the Company (the “Placing Shares”) at a price of £0.1375 sterling per Placing Share, being a
premium of 20 percent to the closing mid-market price on 24 August 2018.
20 Approval of the audited consolidated financial statements for the financial year ended 31 May 2018
These audited consolidated financial statements were approved by the Board of Directors on 13 November 2018. A
copy of the audited consolidated financial statements will be available on the Company’s website
www.conroygold.com and will be available from the Company’s registered office at 3300 Lake Drive, Citywest
Business Campus, Dublin 24, D24 TD21, Ireland.
55
Annual Report and Consolidated Financial Statements 2018 Conroy Gold and Natural Resources Plc