Annual Report
and Consolidated
Financial Statements
2019
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
1
Contents
Chairman’s Statement
Company Information
Board of Directors
Directors’ Report
2
4
5
7
Independent Auditors’ Report
15
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 and forming part of
the consolidated and company
financial statements
20
21
22
23
24
25
26
27
28
2
Chairman’s Statement
Professor Richard Conroy
Chairman
Dear Shareholder,
I have great pleasure in presenting
the Company’s Annual Report and
Consolidated Financial Statements for
the year ended 31 May 2019.
The year was one of highly
encouraging progress for your Company
as it has accelerated the process of
moving from exploration success
to mining development. This progress
was exemplified by the interest shown
by the many companies who visited
the Company’s booth at the 2019
Prospectors and Developers Association
Conference (“PDAC”) in Toronto in
March. This has been followed up by a
series of site visits and the Company
looks forward to engaging in due
course in a Joint Venture Agreement or
other arrangement to develop the gold
properties it has discovered in Ireland.
Business Development
The Company’s objective has, from its
inception, focused on making a major
economic gold discovery. Successful
exploration can and does take a long
time. The Company has discovered a new
65 kilometre (“Km”) (40 miles) district-
scale gold trend in the Longford-Down
Massif in Ireland. The trend is located
along a major geological structure,
the Orlock Bridge Fault Zone, in the
Longford-Down Massif in Ireland.
A series of potentially multi-million-
ounce gold targets have been discovered
along the new district-scale gold
trend. The Company’s licences cover an
area of over 800Km2, are 100% held
and give the exclusive rights to apply
for a mining lease or licence.
The Company’s first gold mine in
this new gold district in Ireland is
now being planned.
Ireland is a mining friendly country with
an established mining tradition and a
favourable business climate. There is
security of tenure and fiscal framework
and excellent infrastructure and technical
services.
Ireland ranked 1st for mining policy
perception and 4th for its investment
attractiveness by the prestigious Fraser
Institute (2017).
The Irish Minister for Mines, Mr Sean
Canney, attended the 2019 PDAC
Conference and visited the Company’s
booth accompanied by members of his
department. Minister Canney confirmed
the Irish Governments positive attitude
towards mining. The Minister praised the
Irish mineral sector and referred to the
contribution it makes to the economy
and pointed out that “Relying on distant
resources (of minerals) is becoming
untenable”.
Exploration Results
Exploration to date by the Company has
led to the discovery of a new district-
scale gold trend and on part of one
of the gold targets along the trend
(the Clontibret gold deposit) a JORC
Resource of 320,000 ounce gold (“oz Au”)
Indicated and 197,000 oz Au Inferred
(Indicated plus Inferred totalling 517,000
oz Au) has been estimated. The Clontibret
gold deposit is open in all directions and
to depth.
A JORC compliant Exploration Target
of 8.8 million ounces (M oz) Au for the
combined Clay Lake-Clontibret-Glenish
gold targets (excluding the resource of
517,000oz Au at Clontibret) has been
estimated. The Exploration Target lies
along a 17 Km section of the 65 Km gold
trend.*
[*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.]
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc 3
To put the Company’s gold discovery
of a 65Km (40 mile) new district-scale
gold trend along the Orlock Bridge Gold
Zone into perspective, the Company’s
technical staff have drawn a comparison
between the Orlock Bridge Fault Zone
and the Boulder-Lefroy Gold Zone in
Western Australia. The Boulder-Lefroy
Gold Zone is 100 Km long and has
produced over 85 M oz of gold, and new
discoveries continue to be made there.
There are structural similarities between
the Boulder Lefroy Gold Zone and the
Orlock Bridge Fault Zone, in particular,
flexures on what are major structures
are interpreted as controls on deposits
in both areas.
Exploration on the Company’s
licences in the Longford – Down
Massif has continued during the
year with further excellent results.
These results included the discovery
of additional high gold grades at the
Company’s Clontibret gold deposit;
the discovery of a new gold outcrop
between the Clontibret gold deposit
and the Corcaskea gold target,
suggesting continuity between them,
which would indicate significantly
increased gold potential in the area,
and gold in bedrock intersected during
drilling at the Slieve Glah gold target.
An independent review, post year
end, of the structural controls on
the Clontibret Gold Deposit was carried
out by Consultant Structural Geologist,
Dr Francis Murphy, which identified
structural controls for higher gold
grades and thicker gold intersections
in the Clontibret gold deposit area.
The new area of bedrock gold
mineralisation discovered during the
year, lies halfway between the Clontibret
gold deposit and gold mineralisation
intersected in the Corcaskea gold target,
which are over 500 metres (“m”) apart.
Geological interpretation suggests
continuity between the Clontibret
gold deposit, which is open in all
directions, as well as to depth, and the
Corcaskea gold target where significant
gold intersections have been made in
trenches, including 6.5 grams/tonne
(“g/t”) gold over 16.5m and 4.9g/t gold
over 11m. Continuity in mineralisation
between the Clontibret gold deposit and
the Corcaskea gold target would add
further to the potential of the entire
Clontibret area.
During drilling at Clontibret during the
year additional high gold grades were
discovered including 24.4 g/t Au, over
1 m, and 21.6 g/t Au, over 1.2m.
At Slieve Glah, in the southwest of the
Company’s licence area, the Orlock Bridge
Fault Zone undergoes a significant strike-
swing. Gold-in-soil geochemistry at Sieve
Glah has identified four approximately 3
Km long gold targets while drilling during
the year intersected a new gold zone at
Slieve Glah.
The Company holds exploration licences
in Finland, which it considers highly
prospective for gold and base metals.
Exploration on other targets in Ireland
and on the Company’s licences in Finland
for gold and base metals continued.
Finance
The loss after taxation for the financial
year ended 31 May 2019 was €557,569
(2018: €745,485) and the net assets
as at 31 May 2019 were €17,873,326
(2018: €17,874,350). During the year the
Company raised £500,000 (€556,545)
through a placing of ordinary shares
in the Company.
Subsequent to the year-end the
Company raised a total of €350,000
in two separate tranches by way of an
unsecured convertible loan note with
an existing shareholder. Full details were
announced on 15 July and 30 October
2019 and are set out at Note 19 in the
Consolidated Financial Statements.
Directors and Staff
I would like to express my deep
appreciation of the support and
dedication of all the directors,
consultants and staff, which has
made possible the continued
progress and success which the
Company has achieved.
Future Outlook
I look forward to the Company
continuing with its record of success
in exploration and to the successful
development of its first gold mine on
the new district-scale gold trend which
it has discovered in Ireland.
Professor Richard Conroy
Chairman
22 November 2019
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc 4
Company Information
Directors
Professor Richard Conroy
Chairman
Maureen T.A. Jones
Managing Director
Professor Garth Earls§
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 24, 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
Principal Banker
AIB
1-4 Lower Baggot Street,
Dublin 2, D02 X342, Ireland
Registrars
Link Registrars Limited
2 Grand Canal Square,
Grand Canal Harbour,
Dublin 2, D02 A342, Ireland
www.linkassetservices.com
enquiries@linkgroup.ie
Legal Advisers
William Fry Solicitors
2 Grand Canal Square,
Dublin 2, D02 A342, Ireland
Roschier, Attorneys Ltd.
Kaskuskatu 7A
00 130 Helsinki
Finland
Head Office
Conroy Gold and Natural Resources plc
3300 Lake Drive,
Citywest Business Campus,
Dublin 24, 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 4, D04 F578,
Ireland
Tel: + 353 1 6609377
London Stock Exchange
Alternative Investment Market (AIM)
Symbol: CGNR
SEDOL: BZ4W18
ISIN number: IE000BZ4BTZ13
Professor Richard Conroy
Chairman
Maureen T.A. Jones
Managing Director
Professor Garth Earls
Non-Executive Director
Brendan McMorrow
Non-Executive Director
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc 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.
5
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.
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc 6
Board of Directors continued
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. He retires from
the Board of Directors by rotation and is
seeking re-election at the forthcoming
Annual General Meeting of the Company.
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 2019 Conroy Gold and Natural Resources Plc 7
amount of accrued but unpaid interest,
is convertible at the conversion price of
£0.06 per ordinary share. The Lender has
the right to seek conversion at any time
during the term of the convertible loan
note agreement.
There were no other events after the
reporting year requiring adjustment
to or disclosure in, these audited
consolidated financial statements.
Directors
Brendan McMorrow 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. Dr.
Karl D. Keegan retired from the Board
of Directors by rotation on 7 December
2018 and did not seek re-election at that
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 and Brendan
McMorrow (detailed in Note 16 (g)), there
have been no contracts or arrangements
entered into during the financial year
ended 31 May 2019 in which a Director
of the Company had a material interest.
Refer to Note 16 for further details.
Company Secretary
Maureen T.A. Jones served as Company
Secretary throughout the year.
Directors’ Report
The Board of Directors submit
their annual report together with
the audited consolidated financial
statements of Conroy Gold and Natural
Resources P.L.C. (the “Company”) and
its subsidiaries (“Conroy Gold”, or the
“Group”) and the separate financial
statements of the Company for the
financial year ended 31 May 2019.
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 3.
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 2019
The consolidated income statement for
the financial year ended 31 May 2019
and the consolidated statement of
financial position at that date are set
out on pages 20 and 22. The loss for the
financial year amounted to €557,569
(2018: €745,485) and net assets at 31
May 2019 were €17,873,326 (2018:
€17,874,350). No interim or final
dividends or transfers have been or are
recommended by the Board of Directors.
Important events
since the year end
On 15 July 2019, the Company entered
into an unsecured convertible loan note
agreement for an amount of €250,000
with Hard Metal Machine Tools Limited
(the “Lender”). The convertible loan note
agreement has a term of three years
and an interest rate of 5% per annum
which is payable on the redemption or
conversion of the convertible loan note.
The convertible loan note, including
the total amount of accrued but
unpaid interest, is convertible at the
conversion price of £0.07 per ordinary
share. The Lender has the right to seek
conversion at any time during the term
of the convertible loan note agreement.
The Lender is a company 99% owned
by Mr. Philip Hannigan, an existing
shareholder of the Company with a
substantial number of shares held at
31 May 2019 and the date of signing
these financial statements.
On 30 October 2019, the Company
entered into a further unsecured
convertible loan note agreement for
an amount of €100,000 with the Lender.
The convertible loan note agreement
has a term of three years and an interest
rate of 5% per annum which is payable
on the redemption or conversion
of the convertible loan note. The
convertible loan note, including the total
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc 8
Directors’ Report continued
Directors’ shareholdings and other interests
The interests of the Directors and their spouses and 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 2019
31 May 2019
31 May 2018
31 May 2018
Warrants
Ordinary
Shares of
€0.001
each
Warrants
Ordinary
Shares of
€0.001
each
Professor Richard Conroy
2,795,521*
349,347
2,795,521*
349,347
2,795,521*
1,165,563
Maureen T.A. Jones
329,239
225,069
329,239
225,069
329,239
225,069
Professor Garth Earls
Brendan McMorrow
Dr. Karl Keegan (resigned
on 7 December 2018))
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
* Of the 2,795,521 (2018: 2,795,521) ordinary shares beneficially held by Professor Richard Conroy, 192,942 (2018: 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
2019
31 May
2019
31 May
2018
31 May
2018
Expiry Date
Professor Richard Conroy
Professor Richard Conroy
Warrants
228,149
121,198
Price €
Warrants
Price €
Warrants
Price €
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
Professor Richard Conroy
–
–
–
–
816,216
0.42 10 November 2018
Maureen T.A. Jones
Maureen T.A. Jones
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 2019 Conroy Gold and Natural Resources Plc 9
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 2019
31 May 2019
31 May 2018
31 May 2018
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
2,011,577
1,210,973
8.49
5.11
801,962
1,210,973
%
12.66
11.80
3.38
5.11
Ordinary
Shares
of €0.001
each
3,000,000
2,795,521*
401,962
1,210,973
%
14.96
13.94
2.00
6.04
*
Of the 2,795,521 (2018: 2,795,521) ordinary shares beneficially held by Professor Richard Conroy, 192,942 (2018: 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.
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 2019 Conroy Gold and Natural Resources Plc 10
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 €557,569 (2018: €745,485)
for the financial year ended 31 May
2019 and had net current liabilities of
€3,358,234 and €3,009,116 respectively
(2018: €2,953,825 and €2,607,867
respectively) at that date.
The Directors, namely Professor Richard
Conroy, Maureen T.A. Jones, Professor
Garth Earls 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 €2,917,454 (2018:
€2,579,153) for a minimum period of 12
months from the date of approval of the
financial statements, unless the Group
has sufficient funds to repay.
Subsequent to the year-end, the
Company has raised €350,000 through
the issue of two unsecured convertible
loan notes to Hard Metal Machine Tools
Limited (see note 19 for further details).
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 2019 by the Group
and the Company of €54,241 (2018:
€113,138) 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 30
November 2020. The Board of Directors
notes the potential difficulty for the
Company of raising funds through an
issue of shares, given the current share
price of the Company. As set out in the
Chairman’s statement, the Group and
the Company expects to incur capital
expenditure in 2020, 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 “Code”). The
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 Board has
adopted the QCA Corporate Governance
Code (“QCA Code”), which is derived from
the Code but adapted to the needs of
smaller quoted companies. 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.
Board of Directors
The Board of Directors is made up of
two executive and two non-executive
Directors. Biographies of each of the
Directors are set out on pages 5 and 6.
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 8
occasions from 1 June 2018 to 31 May
2019 and attendance is set out in the
table overleaf. An agenda and supporting
documentation were circulated in
advance of each meeting.
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc 11
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 will be undertaken
annually, after the end of each financial
year but prior to the publication of the
respective annual report and accounts.
The Company had planned to implement
this during the financial year covered by
this Annual Report, but was unable to do
so in time.
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 (or the
number nearest to 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
two-year period.
Board
committee’s proceedings at Board
of Directors meetings if appropriate.
The Board of Directors has a process
whereby each year every Director
may meet the Chairman to review the
conduct of Board of Directors meetings
and the general corporate governance of
the Group. The non-executive Director
(other than Professor Garth Earls) is
regarded as independent and has 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
operates, legal and governance matters
including advice from the Company’s
broker, lawyers and advisors.
Meetings held during the year
8
Professor Richard Conroy
Maureen T.A. Jones
Professor Garth Earls
Brendan McMorrow
Dr. Karl Keegan
(resigned on 7 December 2018)
8/8
8/8
8/8
7/8
4/5
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. 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
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc 12
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. Due to the size
and available resources of the Company,
the Chairman of the Board of Directors
carries out executive functions. 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.
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.
The Company had planned to implement
this during the financial year covered by
this Annual Report, but was unable to do
so in time.
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. The executive Directors are
excused from the meetings to determine
their remuneration. 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 of the two non-executive
Directors and is chaired by Brendan
McMorrow. Attendance at the Audit
Committee meetings is set out below:
Audit
Committee
3
3/3
3/3
2/3
Meetings held during
the year
Brendan McMorrow
Professor Garth Earls
Dr. Karl Keegan (resigned
on 7 December 2018)
The Audit Committee reviews the
accounting principles, policies and
practices adopted, and areas of
management judgement and estimation
during 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 2019 Conroy Gold and Natural Resources Plc 13
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.
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
resources 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.
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.
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc 14
Directors’ Report continued
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, and
news releases on 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 (2018: €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.
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
22 November 2019
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
Independent Auditors’ Report
15
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 2019 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
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 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.
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 €557,569 during the year
ended 31 May 2019 and, as of that date,
the Group and Parent Company had net
current liabilities of €3,358,234 and
€3,009,116 respectively at that date.
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 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;
Summary of our audit approach
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 intangible assets and recoverability
of amounts owed by group companies
n Within this report, any new key audit matters are identified
and any key audit matters which are the same as the
with
prior year identified with
.
Materiality
The materiality that we used in the current year was €536,000
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.
n the related notes 1 to 20, including
Scoping
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”).
Significant
changes in our
approach
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc 16
Independent Auditors’ Report continued
n Obtained an understanding of
management’s plans to enable the
Group and Parent Company to raise the
funds required to meet the expenditure
commitments of the Group and Parent
Company;
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;
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
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
Key audit
matter
description
How the
scope of
our audit
responded
to the
key audit
matter
At 31 May 2019, 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
€21,772,045 and €21,422,925 respectively. At 31 May 2019, the carrying
value of amounts owed by group companies in the Company Statement
of Financial Position amounted to €349,118.
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 in both Ireland and Finland;
n We performed a review of proposed exploration programme in respect
of the Group and the Company’s assets in Ireland and Finland;
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;
n We obtained an understanding of management’s plans to enable the
Group and Parent Company to raise the funds required to meet the
expenditure commitments of the Group and Parent Company; and,
n We also considered the adequacy of the disclosure in the financial
statements.
Key
observations
An 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 2019 Conroy Gold and Natural Resources Plc 17
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.
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 €536,000
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 misstatements,
complexity of the group and parent
company and reliabity of control
environment.
We agreed with the Audit Committee
that we would report to them any
audit differences in excess of €26,800,
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.
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
Net Assets €18M
Net Assets
Materiality
Materiality – €536,000
Audit Committee Reporting
Threshold – €26,800
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.
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
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc 18
Independent Auditors’ Report continued
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.
For listed entities and public interest
entities, the auditor also provides
those charged with governance with a
statement that the auditor has complied
with relevant ethical requirements
regarding independence, including the
Ethical Standard for Auditors (Ireland)
2016, and communicates with them all
relationships and other matters that
may reasonably be thought to bear on
the auditor’s independence, and where
applicable, related safeguards.
Where the auditor is required to report
on key audit matters, from the matters
communicated with those charged with
governance, the auditor determines those
matters that were of most significance in
the audit of the financial statements of
the current period and are therefore the
key audit matters. The auditor describes
these matters in the auditor’s report
unless law or regulation precludes public
disclosure about the matter or when, in
extremely rare circumstances, the auditor
determines that a matter should not be
communicated in the auditor’s report
because the adverse consequences of
doing so would reasonably be expected
to outweigh the public interest benefits
of such communication.
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 2019 Conroy Gold and Natural Resources Plc 19
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
22 November 2019
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc 20
Conroy Gold and Natural Resources P.L.C.
Consolidated income statement
for the financial year ended 31 May 2019
Continuing operations
Operating expenses
Finance income – interest
Loss before taxation
Income tax expense
Loss for the financial year
Loss per share
Basic loss per share
Diluted loss per share
Note
2
3
5
6
6
2019
€
(557,573)
4
(557,569)
-
2018
€
(745,498)
13
(745,485)
-
(557,569)
(745,485)
(€0.0244)
(€0.0244)
(€0.0485)
(€0.0396)
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.
22
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
21
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of comprehensive income
for the financial year ended 31 May 2019
2019
€
2018
€
Loss for the financial year
(557,569)
(745,485)
Income/expense recognised in other comprehensive
income
-
-
Total comprehensive loss for the financial year
(557,569)
(745,485)
The total comprehensive loss 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.
23
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
22
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of financial position
as at 31 May 2019
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
Related party 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
2019
€
21,772,045
11,347
21,783,392
77,299
106,181
183,480
31 May
2018
€
21,000,286
13,232
21,013,518
233,161
72,298
305,459
21,966,872
21,318,977
23,693
10,504,431
12,727,194
30,617
751,293
(6,163,902)
17,873,326
551,832
551,832
3,541,714
3,541,714
4,093,546
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
Total equity and liabilities
21,966,872
21,318,977
The financial statements were approved by the Board of Directors on 21 November 2019 and authorised for issue on 22
November 2019. 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.
24
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Company statement of financial position
as at 31 May 2019
23
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
Related party 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
2019
€
21,422,925
2
11,347
21,434,274
77,299
455,299
532,598
31 May
2018
€
20,654,326
2
13,232
20,667,560
233,161
418,256
651,417
21,966,872
21,318,977
23,693
10,504,431
12,727,194
30,617
751,293
(6,163,902)
17,873,326
551,832
551,832
3,541,714
3,541,714
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
4,093,546
3,444,627
21,966,872
21,318,977
The loss for the financial year was €557,569 (2018: €745,485).
The financial statements were approved by the Board of Directors on 21 November 2019 and authorised for issue on 22
November 2019. 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.
25
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
24
Conroy Gold and Natural Resources P.L.C.
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of cash flows
for the financial year ended 31 May 2019
Company statement of cash flows
for the financial year ended 31 May 2019
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)/decrease in receivables
Net cash (used in)/provided by operating activities
Cash flows from investing activities
Expenditure on intangible assets
Cash used in investing activities
Cash flows from financing activities
Issue of share capital
Share issue costs
Advances from Karelian Diamond Resources P.L.C.
Payments to Karelian Diamond Resources P.L.C.
Advances from related parties
Repayments to related parties
Net cash provided by financing activities
(Decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
2019
€
2018
€
(557,569)
(745,485)
1,885
-
341,326
(33,883)
(248,241)
(771,759)
(771,759)
556,545
-
89,397
(148,293)
366,489
-
864,138
(155,862)
233,161
77,299
1,884
74,621
665,196
26,682
22,898
(1,042,705)
(1,042,705)
1,534,076
(48,206)
41,832
(202,494)
89,736
(181,680)
1,233,264
213,457
19,704
233,161
Expense recognised in consolidated income statement in respect of equity
Cash flows from operating activities
Loss for the financial year
Adjustments for:
Depreciation
settled share-based payments
Increase in payables
Increase in receivables
Net cash used in operating activities
Cash flows from investing activities
Expenditure on intangible assets
Cash used in investing activities
Cash flows from financing activities
Issue of share capital
Share issue costs
Advances from Karelian Diamond Resources P.L.C.
Payments to Karelian Diamond Resources P.L.C.
Advances from related parties
Repayments to related parties
Net cash provided by financing activities
(Decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
2019
€
2018
€
(557,569)
(745,485)
1,885
-
341,326
(37,043)
(251,401)
(768,599)
(768,599)
556,545
89,397
(148,293)
366,489
-
-
864,138
(155,862)
233,161
77,299
1,884
74,621
665,196
(37,978)
(41,762)
(978,045)
(978,045)
1,534,076
(48,206)
41,832
(202,494)
89,736
(181,680)
1,233,264
213,457
19,704
233,161
The accompanying notes form an integral part of these audited consolidated financial statements.
The accompanying notes form an integral part of these audited consolidated financial statements
26
27
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
25
Conroy Gold and Natural Resources P.L.C.
Company statement of cash flows
for the financial year ended 31 May 2019
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 used in operating activities
Cash flows from investing activities
Expenditure on intangible assets
Cash used in investing activities
Cash flows from financing activities
Issue of share capital
Share issue costs
Advances from Karelian Diamond Resources P.L.C.
Payments to Karelian Diamond Resources P.L.C.
Advances from related parties
Repayments to related parties
Net cash provided by financing activities
(Decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
2019
€
2018
€
(557,569)
(745,485)
1,885
-
341,326
(37,043)
(251,401)
(768,599)
(768,599)
556,545
-
89,397
(148,293)
366,489
-
864,138
(155,862)
233,161
77,299
1,884
74,621
665,196
(37,978)
(41,762)
(978,045)
(978,045)
1,534,076
(48,206)
41,832
(202,494)
89,736
(181,680)
1,233,264
213,457
19,704
233,161
The accompanying notes form an integral part of these audited consolidated financial statements
27
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
26
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of changes in equity
for the financial year ended 31 May 2019
Share capital
Share premium
€
€
Capital
conversion
reserve fund
€
Share- based
payment
reserve
€
Retained
deficit
Total equity
€
€
Balance at 1 June
2018
Share issue (see
Note 14)
Transfer from
share-based
payment reserve to
retained deficit
Loss for the
financial year
Balance at 31 May
2019
Balance at 1 June
2017
Share issue (see
Note 14)
Share issue costs
10,524,488
12,174,285
30,617
995,489
(5,850,529)
17,874,350
3,636
552,909
-
-
-
-
-
-
-
-
-
556,545
(244,196)
244,196
-
-
(557,569)
(557,569)
10,528,124
12,727,194
30,617
751,293
(6,163,902)
17,873,326
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
Share-based
payments
Transfer from
share-based
payment reserve to
retained deficit
Loss for the
financial year
Balance at 31 May
2018
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.
(5,850,529)
10,524,488
12,174,285
(920,570)
(745,485)
995,489
920,570
30,617
-
-
-
-
-
-
-
-
-
(745,485)
17,874,350
373,098
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 comprises of 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.
28
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
27
Conroy Gold and Natural Resources P.L.C.
Company statement of changes in equity
for the financial year ended 31 May 2019
Share capital
Share premium
€
€
Capital
conversion
reserve fund
€
Share- based
payment
reserve
€
Retained
deficit
Total equity
€
€
10,524,488
12,174,285
30,617
995,489
(5,850,529)
17,874,350
3,636
552,909
-
-
-
-
-
-
-
-
-
556,545
(244,196)
244,196
-
-
(557,569)
(557,569)
10,528,124
12,727,194
30,617
751,293
(6,163,902)
17,873,326
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)
Balance at 1 June
2018
Share issue (see
Note 14)
Transfer from
share-based
payment reserve
to retained deficit
Loss for the
financial year
Balance at 31
May 2019
Balance at 1 June
2017
Share issue (see
Note 14)
Share issue costs
-
-
-
373,098
Share-based
payments
Transfer from
share-based
payment reserve
to retained deficit
Loss for the
financial year
Balance at 31
May 2018
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.
(5,850,529)
10,524,488
12,174,285
(920,570)
(745,485)
995,489
920,570
30,617
-
-
-
-
-
-
-
-
-
(745,485)
17,874,350
373,098
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 comprises of 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.
29
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
28
Conroy Gold and Natural Resources P.L.C.
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 2019
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2019 (continued)
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 2019 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, where applicable, 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 22 November 2019.
Going Concern
The Group and the Company incurred a loss of €557,569 (2018: €745,485) for the financial year ended 31 May 2019
and had net current liabilities of €3,358,234 and €3,009,116 respectively (2018: €2,953,825 and €2,607,867
respectively) at that date. The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth
Earls 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 €2,917,454 (2018: €2,579,153) 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 2019 by the Group and the Company of €54,241 (2018: €113,138) within 12 months of the
date of approval of the consolidated financial statements, unless the Group has sufficient funds to repay.
Subsequent to the year-end, the Company has raised €350,000 through the issue of two unsecured convertible loan
notes to Hard Metal Machine Tools Limited (see Note 19 for further details).
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 30 November 2020. The Board of
Directors notes the potential difficulty for the Company of raising funds through an issue of shares, given the current
share price of the Company. As set out in the Chairman’s statement, the Group and the Company expects to incur
capital expenditure in 2020, consistent with its strategy. In reviewing the proposed work programme for exploration
and evaluation of assets and on the basis of the funds raised since the year-end date, 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.
The consolidated financial statements do not include any adjustments to the carrying value and classification of
assets and liabilities that would arise if the Group and the Company were unable to continue as going concern.
1
Accounting policies (continued)
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”).
Recent accounting pronouncements
The following new standards, amendments to standards and interpretations adopted and endorsed by the EU have
been issued to date and are not yet effective for the financial year from 1 June 2018:
Amendments to IFRS 9: Prepayment features with negative compensation – Effective date 1 January 2019
Amendments to IAS 28: Long-term interests in associates and joint ventures – Effective date 1 January 2019
Annual improvements to IFRS Standards 2015-2017 Cycle: Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23 –
Effective date 1 January 2019
Amendments to IAS 19: Plan Amendment, Curtailment or Settlement – Effective date 1 January 2019
IFRIC 23: Uncertainty over income tax treatments – Effective date 1 January 2019
The adoption of the above amendments to standards and interpretations is not expected to have a significant
impact on the consolidated financial statements either due to being not applicable or immaterial.
The following new standard and amendments to standards have been issued by the International Accounting
Standards Board but have not yet been endorsed by the EU, accordingly none of these standards have been applied
in the current year. The Board of Directors are currently assessing whether these standards once endorsed by the
EU will have any impact or a material impact on the consolidated financial statements.
Amendments to references to the Conceptual Framework in IFRS Standards – Effective date 1 January 2020
IFRS 17: Insurance contracts – Effective date 1 January 2021
Amendments to IFRS 3 Business Combinations – Definition of a Business – Effective date 1 January 2020
Amendments to IAS 1 and IAS 8 – Definition of Material – Effective date 1 January 2020
Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest Rate Benchmark Reform – Effective date 1 January 2020
Amendments to IFRS 10 and IAS 28: Sale or contribution of assets between an investor and its associate or
joint 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 impairment.
30
31
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
29
1
Accounting policies (continued)
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”).
Amendments to IFRS 9: Prepayment features with negative compensation – Effective date 1 January 2019
Amendments to IAS 28: Long-term interests in associates and joint ventures – Effective date 1 January 2019
Annual improvements to IFRS Standards 2015-2017 Cycle: Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23 –
Recent accounting pronouncements
The following new standards, amendments to standards and interpretations adopted and endorsed by the EU have
been issued to date and are not yet effective for the financial year from 1 June 2018:
Effective date 1 January 2019
The adoption of the above amendments to standards and interpretations is not expected to have a significant
impact on the consolidated financial statements either due to being not applicable or immaterial.
Amendments to IAS 19: Plan Amendment, Curtailment or Settlement – Effective date 1 January 2019
IFRIC 23: Uncertainty over income tax treatments – Effective date 1 January 2019
The following new standard and amendments to standards have been issued by the International Accounting
Standards Board but have not yet been endorsed by the EU, accordingly none of these standards have been applied
in the current year. The Board of Directors are currently assessing whether these standards once endorsed by the
EU will have any impact or a material impact on the consolidated financial statements.
Amendments to references to the Conceptual Framework in IFRS Standards – Effective date 1 January 2020
IFRS 17: Insurance contracts – Effective date 1 January 2021
Amendments to IFRS 3 Business Combinations – Definition of a Business – Effective date 1 January 2020
Amendments to IAS 1 and IAS 8 – Definition of Material – Effective date 1 January 2020
Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest Rate Benchmark Reform – Effective date 1 January 2020
Amendments to IFRS 10 and IAS 28: Sale or contribution of assets between an investor and its associate or
joint 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 impairment.
31
Annual Report and Consolidated Financial Statements 2019 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 2019 (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:
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.
Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is
neither budgeted nor planned.
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.
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.
32
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
31
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.
(f) 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.
33
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
1 Accounting policies (continued)
(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) Related party loans
The related party 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.
(l) 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.
(m) Impairment – financial assets that are measured at amortised cost
Financial assets that are measured at amortised cost are reviewed for impairment loss at each reporting date. The
Company applies the general approach in accordance with IFRS 9.
The Company measures the loss allowance at an amount equal to the lifetime expected credit losses if the credit
risk has increased significantly since initial recognition. If, at the reporting date, the credit risk has not increased
significantly since initial recognition, the Company shall measure the loss allowance at an amount equal to 12-month
expected credit losses.
The Company’s approach to expected credit losses (“ECL”) reflects a probability-weighted outcome, the time value
of money and reasonable and supportable information that is available without undue cost or effort at the reporting
date about past events, current conditions and forecasts of future economic conditions. Significant financial
difficulties of the counterparty, probability that the counterparty will enter bankruptcy or financial re-organisation
and default in payments are all considered indicators that a loss allowance may be required.
34
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
1
Accounting policies (continued)
(m) Impairment – financial assets that are measured at amortised cost (continued)
If the credit risk increases to the point that it is considered to be credit impaired, interest income will be calculated
based on the gross carrying amount adjusted for the loss allowance. A significant increase in credit risk is defined by
management as any contractual payment which is more than 30 days past due or if the credit rating of the
counterparty deteriorates to below investment grade. Any contractual payment which is more than 30 days past
due is considered credit impaired.
(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 to licence and appraisal
costs 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:
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 28 for further details.
35
Annual Report and Consolidated Financial Statements 2019 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 2019 (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 €21,772,045 (2018: €21,000,286) at 31 May 2019 (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:
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.
36
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
35
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
Auditors remuneration
Depreciation
Share-based payments
2019
€
948,938
(391,365)
557,573
565,744
357,809
23,500
1,885
-
948,938
2018
€
1,555,721
(810,223)
745,498
632,236
529,503
19,000
1,884
373,098
1,555,721
Of the above costs, a total of €391,365 (2018: €810,223) 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
525,134
18,609
22,001
565,744
2019
€
2018
€
585,150
17,503
29,583
632,236
The amount of wages, salaries and related costs capitalised as intangible assets during the financial year was
€351,456 (2018: €436,442).
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
2019
2018
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 €22,001 (2018: €29,583).
37
Annual Report and Consolidated Financial Statements 2019 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 2019 (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:
Professor Richard Conroy
Maureen T.A. Jones
Professor Garth Earls
Brendan McMorrow
Dr. Karl D. Keegan (resigned
on 7 December 2018)
Directors removed 4 August 2017
James P. Jones
Fees
€
22,220
9,523
9,523
9,523
5,555
Salary
€
179,250
114,251
-
-
-
-
56,344
12,346*
305,847
*These payments relate to VHI charges.
Share-based
payment charge
€
-
-
-
-
Pension
contributions
€
-
22,001
-
-
Total
€
201,470
145,775
9,523
9,523
-
-
-
-
5,555
-
22,001
12,346
384,192
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:
Professor Richard Conroy
Maureen T.A. Jones
Professor Garth Earls
Dr. Karl D. Keegan
Brendan McMorrow
Directors removed 4 August 2017
James P. Jones
Louis J. Maguire
Michael E. Power
C. David Wathen
Séamus P. Fitzpatrick
Dr. Sorċa Conroy
Fees
€
22,220
9,523
9,523
7,142
7,142
2,381
2,381
2,381
2,381
2,381
2,381
69,836
Salary
€
185,406
120,407
-
-
-
44,441
-
-
-
-
-
350,254
Share-based
payment charge
€
-
-
-
-
-
Pension
contributions
€
-
22,000
-
-
-
-
-
-
-
-
-
-
7,583
-
-
-
-
-
29,583
Total
€
207,626
151,930
9,523
7,142
7,142
54,405
2,381
2,381
2,381
2,381
2,381
449,673
The total share-based payment charge of €Nil (2018: €373,098) is accounted for as shown below:
Share-based payment charge expensed to consolidated
statement
Share-based payment charge transferred to intangible assets
income
2019
€
-
-
-
2018
€
74,621
298,477
373,098
38
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
37
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 2019 (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:
Audit of financial statements
Auditor’s remuneration - Company
The analysis of the auditor’s remuneration is as follows:
Audit of financial statements
2019
€
1,885
2018
€
1,884
23,500
19,000
20,000
19,000
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
2019
€
2018
€
349,845
420,090
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:
Defined contribution scheme – for 1 Director (2018: 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:
Officer or Director of the Company
Other offices
-
2019
€
22,001
-
2019
€
-
-
-
2018
€
29,583
-
2018
€
-
-
No amounts have been paid to past Directors of the Company or its holding undertakings (2018: €Nil), except the
VHI charges of €12,346 paid by the Company for the former Director of the Company, James P. Jones. 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 (2018: €Nil).
39
Annual Report and Consolidated Financial Statements 2019 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 2019 (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
2019
€
(557,569)
12.5%
(69,696)
-
69,696
-
2018
€
(745,485)
12.5%
(93,186)
-
93,186
-
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.
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
40
2019
€
(557,569)
2018
€
(745,485)
No. of shares
No. of shares
20,056,674
3,636,365
23,693,039
11,013,537
9,043,137
20,056,674
22,875,878
15,379,675
(€0.0244)
(€0.0485)
No. of shares
No. of shares
22,875,878
18,839,251
(€0.0244)
(€0.0396)
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
6 Loss per share (continued)
As at 31 May 2019, Nil options and 788,692 warrants (2018: Nil options and 5,875,178 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
2019
€
-
2
31 May
2018
€
-
2
The registered office of the above non-trading subsidiaries is 3300 Lake Drive, Citywest Business Campus, Dublin 24,
D24 TD21, Ireland.
8
Intangible assets
Exploration and evaluation assets
Group: Cost
At 1 June
Expenditure during the financial year
Licence and appraisal costs
Other operating expenses (Note 2)
At 31 May
Equity settled share-based payments (Note 2)
Company: Cost
At 1 June
Expenditure during the financial year
Licence and appraisal costs
Other operating expenses (Note 2)
At 31 May
Equity settled share-based payments (Note 2)
31 May 2019
€
21,000,286
31 May 2018
€
19,659,104
380,394
391,365
-
21,772,045
530,959
511,746
298,477
21,000,286
31 May 2019
€
20,654,326
31 May 2018
€
19,377,804
377,234
391,365
-
21,422,925
466,299
511,746
298,477
20,654,326
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.
41
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
8
Intangible assets (continued)
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
Licence and appraisal costs
Other operating expenses
At 31 May
Equity settled share-based payments
Group: Finland
Cost
At 1 June
Expenditure during the financial year
Licence and appraisal costs
Other operating expenses
At 31 May
Equity settled share-based payments
Company: Ireland
Cost
At 1 June
Expenditure during the financial year
Licence and appraisal costs
Other operating expenses
At 31 May
Equity settled share-based payments
Company: Finland
Cost
At 1 June
Expenditure during the financial year
Licence and appraisal costs
Other operating expenses
At 31 May
Equity settled share-based payments
42
31 May
2019
€
18,713,795
379,752
332,660
-
19,426,207
31 May
2019
€
2,286,491
642
58,705
-
2,345,838
31 May
2019
€
18,367,835
376,592
332,660
-
19,077,087
31 May
2019
€
2,286,491
642
58,705
-
2,345,838
31 May
2018
€
17,479,745
530,437
434,984
268,629
18,713,795
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
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
9 Property, plant and equipment
In respect of the current financial year:
Group and Company
Cost
At 1 June 2018
Additions
At 31 May 2019
Accumulated depreciation
At 1 June 2018
Charge for the financial year
At 31 May 2019
Motor Vehicles
€
Plant & Office
Equipment
€
17,754
-
17,754
17,754
-
17,754
136,225
-
136,225
122,993
1,885
124,878
Total
€
153,979
-
153,979
140,747
1,885
142,632
Net book value at 31 May 2019
-
11,347
11,347
In respect of the previous 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
43
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
10 Other receivables
Group
Other debtors
Vat receivable
Company
Other debtors
Vat receivable
Amounts owed from Conroy Gold Limited
31 May
2019
€
52,208
53,973
106,181
31 May
2019
€
52,208
53,973
349,118
455,299
31 May
2018
€
48,416
23,882
72,298
31 May
2018
€
48,416
23,882
345,958
418,256
The realisation of amounts owed by Group companies to the Company 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.
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
2019
€
77,299
77,299
31 May
2019
€
2,043,099
164,675
643,294
79,083
557,322
54,241
3,541,714
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
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.
44
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
43
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 2019 (continued)
12 Trade and other payables (continued)
The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls 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 €2,917,454 (2018: €2,579,153) 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 2019 of €54,241 (2018: €113,138) 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 2019, €89,397 (2018: €41,832) was paid by Karelian Diamond Resources P.L.C to the Company. For
the financial year ended 31 May 2019, the Company incurred costs totalling €148,293 (2018: €202,494) on behalf of
Karelian Diamond Resources P.L.C.
13 Non-current financial liabilities – Group and Company
Related party loans
Opening balance 1 June
Loan advance
Loan repayment
Closing balance 31 May
31 May
2019
€
185,343
366,489
-
551,832
31 May
2018
€
277,287
89,736
(181,680)
185,343
The related party loans amounts relate to monies owed to Professor Richard Conroy amounting to €282,918 (2018:
€135,918), Maureen T.A. Jones amounting to €49,425 (2018: €49,425), Séamus P. Fitzpatrick (former Director)
amounting to €69,489 (2018: €Nil) and Dr. Sorċa Conroy (former Director) amounting to €150,000 (2018: €Nil). The
Directors’ and former Directors’ have confirmed that they will not seek repayment of amounts owed to it by the
Group and Company at 31 May 2019 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
2019
€
11,995,569
6,135,597
4,368,834
22,500,000
31 May
2018
€
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.
45
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
14 Called up share capital and share premium – Group and Company (continued)
Authorised: (continued)
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.
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 (e)
20,056,674
3,636,365
End of financial year
23,693,039
20,057
3,636
23,693
30,617
-
10,504,431
-
12,174,285
552,909
30,617
10,504,431
12,727,194
Issued and fully paid – Prior financial year
Number of
ordinary
shares
11,013,537
700,000
100,000
400,000
7,843,137
Start of financial year
Share issue (a)
Share issue (b)
Share issue (c)
Share issue (d)
End of financial year
20,056,674
Called up
share capital
€
Capital
conversion
reserve fund
€
Called up
deferred share
capital
€
Share premium
€
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
(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 £0.75 for five days or more. The
expiry date for these warrants was 30 June 2019.
46
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
45
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 2019 (continued)
14 Called up share capital and share premium – Group and Company (continued)
Authorised: (continued)
(e) On 24 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 at a price of £0.1375 per share.
(f) At 31 May 2019, warrants over 8,631,830 (2018: 13,718,315) shares exercisable at prices from £0.25 (2018: £0.22)
sterling to €4.33 (2018: €4.33) per share, with various exercisable dates up to 16 November 2022 (2018: 16
November 2022) were outstanding.
(g) The share price at 31 May 2019 was £0.05375 (2018: £0.17500). During the financial year, the price ranged from
£0.05375 to £0.175000 (2018: from £0.13125 to £0.40000).
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 2019, the Group had work commitments of €275,000 (2018: €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,
Maureen T.A. Jones, Séamus P. Fitzpatrick and Dr. Sorċa Conroy are outlined in the Director’s report and in Note 13
of the consolidated financial statements.
(b) For the financial year ended 31 May 2019, the Company incurred costs totalling €148,293 (2018: €202,494) 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
Rent and rates
Other operating expenses
Legal and professional
Travel and subsistence
Exploration costs
2019
€
108,541
27,355
12,397
-
-
-
2018
€
74,482
29,690
31,480
28,388
26,059
12,395
148,293
202,494
(c) At 31 May 2019, the Company owed €54,241 to Karelian Diamond Resources P.L.C. (2018: €113,138). 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 2019, €89,397 (2018: €41,832) 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. €148,293 (2018: €202,494) 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.
47
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
16 Related party transactions (continued)
(d) At 31 May 2019, Conroy Gold Limited owed €349,118 (2018: €345,958) to the Company. The movement in the
balance relates to a payment of expenses for an amount of €3,160 incurred in the name of Conroy Gold Limited by
the Company.
(e) At 31 May 2019, the Company was owed €8,970 (2018: €6,387) by Trans-International Oil Exploration Limited.
Professor Richard Conroy and Maureen T.A. Jones are directors of Trans-International Oil Exploration Limited.
Professor Richard Conroy holds 50.6% of the share capital of this company. A further €15,866 (2018: €15,473) is
owed by Conroy P.L.C., a company in which Professor Richard Conroy has a controlling interest. Amounts totalling
€5,288 (2018: €1,845) were owed by companies in which Professor Richard Conroy and Maureen T.A. Jones hold a
50% interest each. A further €2,891 (2018: €2,891) is owed by Archaean Gold P.L.C., a company in which Professor
Richard Conroy and Maureen T.A. Jones are directors. The amounts owed by the various companies are included
within “Other receivables” in the current and previous financial year’s consolidated statement of financial position
and company’s 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 €44,654 (2018: €57,483) during the financial year for professional
services rendered to the Group. At 31 May 2019, Professor Garth Earls was owed €32,527 (2018: €14,128) in respect
of these services. Brendan McMorrow invoiced the Group for €16,200 (2018: €7,800) during the financial year for
professional services rendered to the Group. At 31 May 2019, Brendan McMorrow was owed €16,200 (2018: €Nil)
in respect of these services.
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
2019
No. of share
options
-
-
-
2019
Weighted
average
exercise price €
-
-
-
2018
No. of share
options
10,000
(10,000)
-
2018
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
Lapsed during the financial year
(Note 14)
Exercised during the financial year
(Note 14)
Granted during the financial year
(Note 14)
At 31 May
2019
No. of share
warrants
13,718,315
2019
Weighted
average exercise
price €
0.552
2018
No. of share
warrants
6,275,178
2018
Weighted
average exercise
price €
0.920
(5,086,485)
0.417
-
-
-
(400,000)
-
8,631,830
-
0.620
7,843,137
13,718,315
-
0.417
0.250
0.552
48
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
47
17 Share-based payments (continued)
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:
Dividend yield
Expected volatility
Risk free interest rate
Expected life (in years)
2019
Stock options
N/a
N/a
N/a
N/a
2019
Stock warrants
0%
90%
0.4%
2
2018
Stock options
N/a
N/a
N/a
N/a
2018
Stock warrants
0%
90%
0.4%
2
This calculation results in a share-based payment reserves payment of €Nil (2018: €373,098). Amounts relating to
share options and warrants which lapsed during the year and which are reclassified to retained earnings were
€244,196 (2018: €920,570).
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
49
31 May
2019
€
77,299
77,299
31 May
2018
€
233,161
233,161
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
18 Financial instruments (continued)
Financial risk management objectives, policies and processes (continued)
(a) Interest rate risk (continued)
Cash flow sensitivity analysis for variable rate instruments
An increase of 100 basis points (‘bps’) in interest rates at 31 May 2019 and 31 May 2018 would have decreased the
reported loss by €773 (2018: €2,332). 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 2019 and 31 May 2018, the Group did not utilise
foreign currency forward contracts or other derivatives to manage foreign currency risk.
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 2019:
Other debtors
Cash and cash equivalents
Trade and other payables
Related party loans
Total exposure
Sterling exposure
denominated in €
-
11,099
(139,047)
-
(127,948)
Not at risk
€
52,208
66,200
(3,394,203)
(551,832)
(3,827,627)
Total
€
52,208
77,299
(3,533,250)
(551,832)
(3,955,575)
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
Related party 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 following are the significant exchange rates that applied against €1 during the financial year:
Average rate
2019
Average rate
2018
Spot rate
31 May
2019
Spot rate
31 May
2018
GBP
0.881
0.886
0.887
0.875
Sensitivity analysis
A 10% strengthening of Euro against Sterling, based on outstanding financial assets and liabilities at 31 May 2019
would have decreased the reported loss by €12,795 (2018: increased the reported loss by €1,563) as a consequence
of the retranslation of foreign currency denominated financial assets and liabilities at those dates. A weakening of
10% of the Euro 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.
50
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
49
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 2019 were as follows:
Item
Trade and other payables
(including related party
loans)
Carrying
amount €
Contractual
cash flows €
6 months or
less €
6 -12
months €
1-2 years
€
2-5 years
€
4,093,547
4,093,547
3,541,714*
-
551,832
-
Contractual maturities of financial liabilities as at 31 May 2018 were as follows:
Item
Trade and other payables
(including related party
loans)
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
-
*The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls 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 €2,917,454 (2018: €2,579,153) 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 2019 of €54,241 (2018: €113,138) within 12 months of the date of
approval of the consolidated financial statements, unless the Group has sufficient funds to repay.
*The amount of €557,322 (2018: €566,993) relates to other trade payables.
The related party loans amounts relate to monies owed to Professor Richard Conroy amounting to €282,918 (2018:
€135,918), Maureen T.A. Jones amounting to €49,425 (2018: €49,425), Séamus P. Fitzpatrick (former Director)
amounting to €69,489 (2018: €Nil) and Dr. Sorċa Conroy (former Director) amounting to €150,000 (2018: €Nil).
The Group had cash and cash equivalents of €77,299 at 31 May 2019 (2018: €233,161).
(d) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing
to discharge on obligation.
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.
51
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
18 Financial instruments (continued)
Financial risk management objectives, policies and processes (continued)
(d) Credit risk (continued)
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk at 31 May 2019 and 31 May 2018 was:
Cash and cash equivalents
Other debtors
31 May
2019
€
77,299
52,208
129,507
31 May
2018
€
233,161
48,416
281,577
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.
Expected credit loss
The Group measures credit risk and expected credit losses on financial assets measured at amortised cost using
probability of default, exposure at default and loss given default. Management consider both historical analysis and
forward-looking information in determining any expected credit loss. At 31 May 2019 and 2018, all cash is accessible
on demand and held with counterparties with a credit rating of BBB- or higher. Management consider the
probability of default to be close to zero as these instruments have a low risk of default and the counterparties have
a strong capacity to meet their contractual obligations in the near term.
The amount receivable from Conroy Gold Limited which relates mainly to the cash advances and payment of
expenses incurred in the name of Conroy Gold Limited, is a receivable at the Company level but not at the Group
level therefore is not subject to expected credit losses at the Group level. See Note 10 for further details.
As a result of the above, no loss allowance has been recognised based on 12-month expected credit losses as any
such impairment would be wholly insignificant to the Company.
(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 2019 and 31 May 2018,
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 15 July 2019, the Company entered into an unsecured convertible loan note agreement for an amount of
€250,000 with Hard Metal Machine Tools Limited (the “Lender”). The convertible loan note agreement has a term
of three years and an interest of 5% per annum which is payable on the redemption or conversion of the convertible
loan note. The convertible loan note, including the total amount of accrued but unpaid interest, is convertible at the
conversion price of £0.07 per ordinary share. The Lender has the right to seek conversion at any time during the
term of the convertible loan note agreement. The Lender is a company 99% owned by Mr. Philip Hannigan, an
existing shareholder of the Company with a substantial number of shares held at 31 May 2019 and the date of
signing these financial statements (please refer to the Directors’ report for further details).
52
Annual Report and Consolidated Financial Statements 2019 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 2019 (continued)
19 Post balance sheet events (continued)
On 30 October 2019, the Company entered into further unsecured convertible loan note agreement for an amount
of €100,000 with the Lender. The convertible loan note agreement has a term of three years and an interest of 5%
per annum which is payable on the redemption or conversion of the convertible loan note. The convertible loan
note, including the total amount of accrued but unpaid interest, is convertible at the conversion price of £0.06 per
ordinary share. The Lender has the right to seek conversion at any time during the term of the convertible loan note
agreement.
There were no other events after the reporting year requiring adjustment to or disclosure in, these audited
consolidated financial statements.
20 Approval of the audited consolidated financial statements for the financial year ended 31 May 2019
These audited consolidated financial statements were approved by the Board of Directors on 21 November 2019. A
copy of the audited consolidated financial statements will be available on the Company’s website
www.conroygoldandnaturalresources.com and will be available from the Company’s registered office at 3300 Lake
Drive, Citywest Business Campus, Dublin 24, D24 TD21, Ireland.
53
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc
52
Notes
Annual Report and Consolidated Financial Statements 2019 Conroy Gold and Natural Resources Plc