Tlou Energy Limited
ABN 79 136 739 967
Annual Report
and
Consolidated Financial Statements for the year ended 30 June 2020
Tlou Energy Limited – Annual Report 2020
Corporate Directory
ABN
Directors
79 136 739 967
Martin McIver
Anthony Gilby
Gabaake Gabaake
Colm Cloonan
Hugh Swire
Linah Mohohlo
Company Secretary
Solomon Rowland
Administration & Registered Office
Telephone:
Solicitors
Auditors
Bankers
Share register
210 Alice Street
Brisbane
QLD 4000
Australia
+61 7 3012 9793
Delphi Partners
Level 23
307 Queen Street
Brisbane QLD 4000
BDO Audit Pty Ltd
Level 10
12 Creek Street
Brisbane QLD 4000
Westpac Banking Corporation
GPO Box 3433
Sydney NSW 2001
Australian Securities Exchange Ltd (ASX Code: TOU)
AIM Stock Exchange UK (AIM Code: TLOU)
Botswana Stock Exchange (BSE Code: TLOU)
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Tlou Energy Limited – Annual Report 2020
Contents
Chairman’s letter ................................................................................................................................................ 4
Managing Director's Report ............................................................................................................................... 5
Directors' report .................................................................................................................................................. 6
2020 Annual Reserves Statement ................................................................................................................... 20
Auditor’s independence declaration ................................................................................................................. 23
Consolidated Statement of Comprehensive Income........................................................................................ 24
Consolidated Statement of Financial Position ................................................................................................. 25
Consolidated Statement of Changes in Equity ................................................................................................ 26
Consolidated Statement of Cash Flows ........................................................................................................... 27
Notes to the financial statements ..................................................................................................................... 28
Directors' declaration ........................................................................................................................................ 51
Independent Auditor’s Report .......................................................................................................................... 52
Corporate Governance Statement ................................................................................................................... 56
Additional Information ...................................................................................................................................... 68
3
Tlou Energy Limited – Annual Report 2020
Chairman’s letter
Dear Shareholders,
We have made excellent progress towards establishing ourselves as a key power player in Botswana, with sustained
gas flows from the Lesedi 3 and 4 pods achieved in August 2019, approval for an interim 2MW Power Purchase
Agreement with the Botswana Power Corporation (BPC) in April 2020 and receipt of a 15 year 2MW Electricity
Generation Licence from the Botswana Energy Regulatory Authority (BERA) in June 2020. In addition, the Company
remains a preferred bidder for the development of a 10MW Coal Bed Methane (CBM) gas-to-power plant in Botswana.
These were key milestones during the year, as we work towards our goal of becoming a regional power provider in
southern Africa through the development of our CBM assets.
In August 2019, the Company achieved sustained gas flows of approximately 20 thousand cubic feet per day.
Increased sustained gas flow rates are anticipated to take some considerable time, based on the currently available
data. However, it is anticipated that drilling of additional wells in the area will facilitate the dewatering process.
We are privileged to have the support of the forward-thinking government of Botswana, which previously announced
that CBM, a relatively clean source of energy, is to be included as part of the country’s forward plan to combat power
deficiency.
The Company is awaiting a response to its proposal for development of a pilot CBM gas-to-power project in response
to the Request for Proposal (RFP) issued by Botswana’s Ministry of Mineral Resources, Green Technology and
Energy Security (MMGE) for development of CBM power plants. The Company’s response outlining a staged 10MW
development was assessed and the Company was selected as a preferred bidder for this project. This has been an
exceedingly long process and is now being impacted by the ongoing global pandemic. However, the process is at a
later stage and once the proposal is approved, negotiations with the government on a 10MW Power Purchase
Agreement (PPA) can be completed.
While we wait for the 10MW PPA to be finalised, BPC have approved a 2MW interim Power Purchase Agreement.
The interim PPA regulatory approvals have been completed and commercial terms agreed, and we are awaiting a
meeting with BPC to sign the interim PPA. The interim PPA facilitates connection into the power grid and first revenue
for the Company. A pathway to revenue generation is key for the Company and once connected to the power grid,
expansion of the project is expected to be relatively straightforward.
In June 2020 the Company was granted a 15-year power generation licence from BERA for CBM and solar power
generation for sale to BPC at the approved BPC tariff. The licence includes a series of standard conditions.
During the year, the Company commenced the detailed engineering and design of the ~100Km, 66kV overhead
transmission line to connect the Lesedi project to Botswana’s power grid at the town of Serowe. The Environmental
and Social Impact Assessment for the transmission line has been completed, as well as route alignment and
associated surveys.
In July 2020, the Company successfully completed a A$3m entitlement offer. The funds raised will allow the Company
to complete the detailed design of the proposed transmission line and progress development funding options. The
Company is evaluating both debt and equity to fund the construction of the transmission lines and for expansion of
CBM and solar power generation capacity.
This has been a highly active year for Tlou despite the challenges of COVID-19. We look forward to another
successful year ahead. I would like to take this opportunity to thank the Tlou Board, management, field staff and
advisers, and most importantly our shareholders for their continued support during this tough but exciting time for
Tlou.
Yours faithfully,
Martin McIver
Chairman
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Tlou Energy Limited – Annual Report 2020
Managing Director's Report
Dear Shareholders,
The previous year saw considerable progress towards our objective of being a new and cleaner energy producer in
Botswana. Our most recent development pods, Lesedi 3 and 4, flowed continuous gas during the period under review.
However, it became apparent that additional dewatering wells would more than likely be required to speed-up the
dewatering process in order to potentially flow higher rates of gas.
The major achievement of the year was securing an initial 2MW PPA with Botswana Power Corporation which should
serve as the template for expansion noting that at the time of writing, the 10MW PPA process was yet to be
concluded. A Generation Licence for gas and solar was also recently awarded to Tlou.
The onset of COVID-19 saw Tlou significantly reduce costs which included the shutting-in of the Lesedi 3P production
pod as well as staff, consultants and directors taking significant salary cuts. Negotiations continued in relation to
Project Finance post a successful Entitlement Offer in 3Q20. The objectives of the Company remain to secure Project
Finance to connect to the grid, produce first revenue from gas and solar and then to expand.
Notable achievements to date include:
Established the first Independently Certified Gas Reserves in Botswana with enough 2P gas already in place
to complete the currently proposed 10MW power project;
Flowed gas from the Selemo Pilot for approximately 2 years;
Generated electricity from the Selemo Pilot gas for several months;
Awarded the first Mining Licence for CBM gas in the country;
Obtained upstream environmental approval for over 200 production wells, water handling, seismic, gas
gathering pipelines and a gas processing facility;
Successfully acquired the first seismic program in the country specifically targeting CBM gas;
Successfully completed two gas production pods (Lesedi 3 & 4) in 1H19, safely and on budget;
Considerably reduced well cost over time;
Obtained downstream environmental approval for 20MW of gas fired power generation coupled with 20MW of
solar plus a transmission line to connect to the grid;
Secured an initial 2MW PPA with BPC;
Secured a 15-year Generation Licence facilitating generation from both solar and gas;
Numerous wells drilled since Tlou operations commenced adding to a database comprising over 100 wells;
Tlou 100% owns the project covering approximately 9,300Km2, with enormous scope for gas Reserve
expansion;
The Company has built an experienced in-county operational workforce;
Landholder agreements are either in-place or being finalised;
Botswana investors (Pension Funds) are now the largest shareholder group in the Company aligning the
country’s interest with that of the broader shareholder base;
Experienced and diverse board with well established ESG programme.
Yours faithfully,
Anthony (Tony) Gilby
Managing Director
5
Tlou Energy Limited – Annual Report 2020
Directors' report
The Directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the 'consolidated entity' or the ‘Group’) consisting of Tlou Energy Limited (referred to hereafter as the
'Company' or 'parent entity') and the entities it controlled at 30 June 2020.
General Information
Directors
The following persons were directors of Tlou Energy Limited during the whole of the financial year and up to the date
of this report:
Martin McIver
Anthony Gilby
Gabaake Gabaake
Colm Cloonan
Hugh Swire
Linah Mohohlo
Non-Executive Chairman
Managing Director & Chief Executive Officer
Executive Director
Finance Director
Non-Executive Director
Non-Executive Director
Dividends
There were no Dividends recommended or paid during the financial year.
Principal activities
The principal activity of the consolidated entity is to develop assets in Botswana for power generation. This includes
the exploration and evaluation of Coalbed Methane (CBM) natural gas and development of solar power generation.
CBM and solar power can operate as standalone projects or as a hybrid solar and gas solution to provide cleaner
baseload power. No revenue from this activity has been earned to date, as the consolidated entity is still in the
exploration and evaluation or pre-development stage.
Significant changes in the state of affairs
The Company’s field operations remained relatively unaffected during the period by COVID-19, however corporate
and administrative functions were impacted more acutely. Staff worked remotely when possible and followed
enhanced social distancing and health and safety procedures when at the workplace. Access to Botswana by external
staff and consultants was and remains restricted, however the Company has sufficient personnel in-country at present
to meet current field operational requirements. The Company has also reduced expenditure where possible including
very significant salary cuts being taken by staff including all Directors.
There were no other significant changes to the state of affairs of the consolidated entity other than those disclosed in
the financial report and notes thereof.
Review and results of operations
The loss for the year amounted to $12,950,601 (30 June 2019: $3,216,695). The loss for the year is higher than the
previous period due to the impairment of some of the Group’s non-core prospecting licences. The Company has made
progress during the year although at a much slower pace than had been anticipated mainly due to external factors
outside the control of the Company.
Operations
Operations at the Company’s Lesedi power project are continuing. The Lesedi project is the Company’s most
advanced project with plans in place to develop a solar and gas generation facility and connect to the power grid in
Botswana.
The project includes the Lesedi 3 and Lesedi 4 CBM production wells or ‘pods’. These pods have been dewatered
sufficiently to achieve initial sustained gas flow rates. The Lesedi 3 and 4 pods are located in a region where
dewatering operations focused on the Lower Morupule Coal seam is occurring for the first time. As a result further
dewatering is expected to take some time and may require the drilling of additional wells to assist the process and
ideally flow more gas.
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Tlou Energy Limited – Annual Report 2020
The Company has also advanced plans for development of solar power. Solar can be a standalone project or as part
of a hybrid solar/gas project. Both solar and gas can be used together to provide reliable base load power, with solar
generation during daylight hours and gas fired power used when solar is unavailable. This approach could reduce
carbon dioxide emissions compared to Botswana’s existing coal and diesel fired generation.
The Company agreed an interim 2MW CBM Pilot Power Purchase Agreement (PPA) with Botswana Power
Corporation (BPC) which is viewed by the Company as a major step forward. Regulatory approvals have been
completed and the Company is awaiting final signature of the PPA from BPC. The interim PPA facilitates connection
to the power grid and first revenue for the Company. A pathway to revenue generation is key for the Company and
once connected to the grid, expansion of the project is expected to be relatively straightforward.
During the year Tlou also received the formal certificate of its Electricity Generation Licence from Botswana Energy
Regulatory Authority (BERA). The licence has a term of 15 years, is for the generation of 2 MW of CBM gas and solar
power generation at the Lesedi project for sale to BPC at the approved BPC tariff, as well as a series of standard
conditions.
The Lesedi project has been largely de-risked with various regulatory approvals in place that facilitate project
development. The remaining key item is the funding and construction of a transmission line and initial generation assets
to connect the Lesedi project to the BPC power grid. Detailed engineering and design of the transmission line and
associated infrastructure began post year end, and the Company hopes to be in a position to tender construction of this
project in the coming months.
Project finance to develop the Lesedi project is proposed to be split into tranches, the first being transmission line funding
to enable connection to the grid and commence initial generation and thereafter expansion of both gas and solar power
generation capacity. The Company is evaluating both debt and equity funding options or a mix of both.
Impairment
Three of the Group’s non-core prospecting licences, PL 003, PL 035 and PL 037 have not had significant operations
during the reporting period. Following a review of data to hand, it is expected that Tlou will need to conduct further
operations, such as seismic/aeromagnetic surveys and core-hole drilling, in these licence areas to make a more
informed assessment of these licences areas. These are currently no gas reserves or contingent resources booked
over these three licences.
PL 003 is valid until 31 March 2021 and currently the Company plans to apply for renewal of this licence. PL’s 035 &
037 expire on 30 September 2020 and renewal applications have been submitted.
Based on current information, and the likelihood that further work on the ground will yield information that will
supersede some of the existing data, management believe that it is prudent to impair some of the expenditure over
these prospecting licences resulting in the impairment charge of $10,647,734 this period.
Matters subsequent to the end of the financial year
On 15 June 2020 Tlou Energy announced a partially underwritten entitlement offer of up to 75,030,031 new Tlou
ordinary shares at a price of A$0.04 per share (£0.022, BWP0.32) to raise approximately A$3.0 million (approximately
£1.65 million, BWP 24 million). Eligible shareholders could subscribe for one fully paid ordinary share for each six
fully paid ordinary shares held and in addition, participants were granted one unlisted option for every two shares
allotted. These new options have an expiry date of two years from the date of issue and exercisable at any time prior
to expiry at a price of A$0.08 per share.
The offer closed in July 2020 with 63,096,876 shares and 51,548,411 options issued via the offer and a subsequent
placement. In addition, 11,921,978 shares and 5,960,989 options were issued to Directors of the Company under the
offer following shareholder approval at a general meeting held on 14 September 2020. At the date of this report the
Company's share capital comprises 525,199,039 ordinary shares.
There has not been any matter or circumstance, other than that referred to in this report and disclosed in the financial
statements or notes thereto, that has arisen since the end of the period, that has significantly affected, or may
significantly affect, the operations of the consolidated entity, the results of these operations, or the state of affairs of
the consolidated entity in future financial years.
Likely developments, risks and expected results of operations
The Company has drilled development wells in the Lesedi project area which have produced CBM gas. These wells
were designed to achieve enhanced gas flow rates in the area proposed for the Company’s initial project
development. The gas flow rates from these wells are vitally important to assess the viability of the Lesedi project and
7
Tlou Energy Limited – Annual Report 2020
management are confident that commercial gas flows can be achieved. However, at the date of this report the level of
gas that can and will be produced from the project is not yet known.
In addition, the Company plans to develop a solar project either as a standalone project or in conjunction with gas
fired power. This is a new concept for the Company and subject to regulatory approvals. An assessment of a tender
application in relation to a longer term PPA for the sale of power produced from Tlou’s Lesedi Project is yet to be
concluded
No guarantee can be given in relation to the results of the Company’s operations, gas flow rates, success of PPA
negotiations, approvals being granted or the ability to secure funds as required to progress operations.
However, the regional electricity market in southern Africa continues to suffer from chronic shortage of supply, is
heavily reliant on coal fired generation so development of solar and gas-fired power in the region remains an attractive
commercial option. The Company does not anticipate there to be any significant impacts from COVID-19 in future
financial years.
Environmental regulation
The Directors are satisfied that adequate systems are in place for the management of its environmental
responsibilities and compliance with its various licence requirements and regulations. The Directors are not aware of
any breaches of these requirements and to the best of their knowledge, all activities have been undertaken in
compliance with environmental regulations.
8
Tlou Energy Limited – Annual Report 2020
Information on Directors
Martin McIver
Special Responsibilities
MBA
Interest in Shares and options
Non-Executive Chairman
Member of the Audit Committee
Member of the Risk Committee
Chairman of the Nomination & Remuneration Committee
812,102 Ordinary Shares
750,000 Performance Rights
Experience
Martin holds an MBA (International) from the American Graduate School of International Management, a Graduate
Diploma in Applied Finance and Valuations (FINSIA/Kaplan) and a Bachelor of Business (Marketing) from the
Queensland University of Technology.
Martin has over 15 years’ experience as General Manager for mining services companies including bulk and
dangerous goods logistics, and drilling services. Martin was the Executive General Manager of the Mitchell Group, a
vertically integrated coal and coal seam gas company with investments and operations across Australia, Asia and
Africa. Prior to joining the Mitchell Group, Martin was a Director in Mergers and Acquisitions with
PricewaterhouseCoopers.
Martin was appointed Non-Executive Director in September 2010 and is currently the Chief Financial Officer of the
Workpac group. During the past three years Martin has not served as a Director of any other ASX listed companies.
Anthony Gilby
Special Responsibilities
B.Sc. (First Class Honours)
Interest in Shares and options
Managing Director and Chief Executive Officer
Member of the Audit Committee
Member of the Nomination & Remuneration Committee
34,489,580 Ordinary Shares
750,000 Performance Rights
6,249,999 Options
Experience
Tony was appointed Managing Director and Chief Executive Officer in March 2012 and has over 30 years’ experience
in the oil and gas industry. He is a founding director of Tlou Energy Limited.
Tony was awarded a Bachelor of Science (First Class Honours) degree in Geology from the University of Adelaide in
1984, and also won the University Medal in Geology (Tate Memorial Medal). Tony began his career working as a well-
site geologist for Delhi Petroleum in the Cooper Basin. He subsequently joined ESSO Australia. His roles with ESSO
included exploration geology, geophysics, petrophysics and a period of time working in the Exxon Production
Research Centre in Houston studying the seismic application of sequence stratigraphy.
On his return to Australia, he continued to work with ESSO in a New Ventures capacity working on a variety of
projects prior to relocating to Brisbane where he worked for MIM Petroleum and the Louisiana Land and Exploration
Company (LL&E). In 1996, he left LL&E to take on a consulting role as well as the acquisition of prospective
Queensland acreage in a private capacity. This work culminated with the founding of Sunshine Gas Limited where he
remained Managing Director until its sale in late 2008. He is a former Non-Executive director of ASX listed Comet
Ridge Limited.
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Tlou Energy Limited – Annual Report 2020
Gabaake Gabaake M.Sc.
Special Responsibilities
Interest in Shares and options
Executive Director
Member of the Risk Committee
Member of the Nomination & Remuneration Committee
385,999 Ordinary Shares
750,000 Performance Rights
27,571 Options
Experience
Gabaake graduated with a Bachelor of Science degree in Geology from the University of Botswana in 1986 followed
by a Masters degree in groundwater hydrology from the University College of London in 1989.
Gabaake is a Botswana citizen based in Gaborone. He is a former Botswana Government senior public servant
having worked as Permanent Secretary at the Ministry of Minerals, Energy and Water Resources. Prior to that, he
served at the Ministry of Local Government.
Gabaake has served on various private company boards including De Beers Group, Debswana Diamond Company
(Pty) Limited and Diamond Trading Company Botswana. During the past three years, Gabaake has not served as a
Director of any other ASX listed companies.
Colm Cloonan
Special Responsibilities
FCCA
Interest in Shares and options
Finance Director
Member of the Audit Committee
Member of the Nomination & Remuneration Committee
1,931,112 Ordinary Shares
750,000 Performance Rights
375,000 Options
Experience
Colm Cloonan is the Company’s Finance Director. Colm is a Fellow of the Association of Chartered Certified
Accountants (FCCA) with 20 years’ experience in various finance roles.
Colm joined Tlou in 2009 at the early stages of the Company’s activities and has been with the Company through all
phases of its operations and development to date. Colm has worked in Europe and Australia in a range of finance
roles including audit and business services, as well as providing financial and management accounting services to
clients in various industries including power generation in Australia.
Colm studied accountancy at the Galway-Mayo Institute of Technology in Ireland. During the past three years Colm
has not served as a Director of any other ASX listed companies.
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Tlou Energy Limited – Annual Report 2020
Hugh Swire
Special Responsibilities
BA (Hons)
Interest in Shares and options
Non-Executive Director
Chair of the Risk Committee
Member of the Nomination & Remuneration Committee
10,065,921 Ordinary Shares
500,000 Performance Rights
2,750,415 Options
Experience
Hugh started his career working with Mahon China, an established investment management and advisory partnership
based in Beijing. Active in China since 1985, Mahon China have over 3 decades of experience advising foreign
companies with investments and corporate activities in China. Hugh has remained a Partner of the firm and now
supports UK / EU companies from London looking to expand and find partners in China or increasingly support
Chinese companies looking to make investments internationally.
After leaving Mahon China, Hugh spent a decade working for Investment funds and International banks in Hong Kong
and Tokyo where he worked for Nomura as well as in London for JP Morgan where he was Vice President.
Since 2010, Hugh has been focused on supporting fast growing UK companies in the low carbon and technology
sectors by investing growth capital in Water Powered Technologies Ltd, a leading innovator in zero energy water
management systems as well as MWF Ltd, one of the largest suppliers of renewable heat in the UK, which has since
been sold to Aggregated Micro Power Holdings plc. Hugh also helped found a leading technology education company
Black Country Atelier Ltd, which provides specialist training courses to students globally in 3D printing (CAM) digital
electronics and CAD.
Hugh still travels to China after studying Chinese at Oxford University graduating with a BA Hons. During the past
three years Hugh has not served as a Director of any other ASX listed companies.
Linah Mohohlo MA Finance & Investments, BA Economics
Special Responsibilities
Non-Executive Director
Chair of the Audit Committee
Member of the Nomination & Remuneration Committee
500,000 Performance Rights
Interest in Shares and options
Experience
Ms Linah Kelebogile Mohohlo, is the former Governor of the Bank of Botswana, a position she held from 1999 to
2016. Ms Mohohlo joined the Bank of Botswana in 1976, and served in several capacities including Board Secretary,
Deputy Director of Research, Director of the Financial Markets and Deputy Governor, before being appointed
Governor.
Ms Mohohlo was a member of the Commission for Africa and the Africa Progress Panel, a group of ten distinguished
individuals who advocate at the highest levels for equitable and sustainable development in Africa. Along with her
contacts and expertise in the banking and finance sectors, Ms Mohohlo brings to Tlou Energy significant experience
from the mining industry in Botswana having been a board member of both Debswana Diamond Company and
Diamond Trading Company Botswana.
Ms Mohohlo holds a Bachelors Degree in Economics from The George Washington University (Washington DC), a
Masters Degree in Finance and Investments from the University of Exeter (UK) and a Diploma in Accounting and
Business Studies from the University of Botswana.
During the past three years Ms Mohohlo has not served as a Director of any other ASX listed companies.
11
Tlou Energy Limited – Annual Report 2020
Remuneration Report - audited
This report outlines the remuneration arrangements in place for the key management personnel of the consolidated
entity.
Remuneration policy
Ensuring that the level of Director and Executive remuneration is sufficient and reasonable is dealt with by the full
Board. The Remuneration Policy of Tlou Energy Limited has been designed to align the objectives of key
management personnel with shareholder and business objectives. The Board of Tlou Energy Limited believes the
remuneration policy to be appropriate and effective in its ability to attract and retain the best key management
personnel to run and manage the consolidated entity, as well as create shared goals between key management
personnel and shareholders.
The Board's policy for determining the nature and amount of remuneration for the executive Directors and senior
executives of the consolidated entity is as follows:
The remuneration policy is developed by the Board after seeking, if appropriate, professional advice from
independent external consultants.
Executives employed by the consolidated entity receive a base salary (which is based on factors such as
length of service and experience), inclusive of superannuation, fringe benefits, options and performance
incentives where appropriate. Performance incentives are generally only paid once predetermined key
performance indicators have been met.
Executives engaged through professional service entities are paid fees based on an agreed market based
hourly rate for the services provided and may also be entitled to options and performance based incentives.
Performance incentives are generally only paid once predetermined key performance indicators have been
met.
Incentives paid in the form of options or performance rights are intended to align the interests of management,
the Directors and Company with those of the shareholders. In this regard, executives are prohibited from
limiting risk attached to those instruments by use of derivatives or other means.
The Board reviews executive remuneration arrangements annually by reference to the consolidated entity’s
performance, executive performance and comparable information from industry sectors.
Key management personnel including Non-executive Directors located in Australia and employed executives receive
the superannuation guarantee contribution required by the Commonwealth Government, which is currently 9.5% and
do not receive any other retirement benefits. Individuals, however, can chose to sacrifice part of their salary to
increase payments towards superannuation.
Non-Executive Director Remuneration
The Board's policy is to remunerate Non-Executive Directors for time, commitment and responsibilities. The Board
determines payments to the Non-Executive Directors and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice is sought when required.
The maximum aggregate amount of fees that can be paid to Non-Executive Directors is $500,000 per year. This was
approved by shareholders at a general meeting held on 10 July 2012.
Fees for Non-Executive Directors are not linked to the performance of the consolidated entity, however, to align
Directors interests with shareholder interests, where possible the Directors are encouraged to hold shares in the
Company. There is no minimum holding prescribed in the Constitution.
Performance conditions linked to remuneration
The Board provides advice on remuneration and incentive policies and practices and specific recommendations on
remuneration packages and other terms of employment for executive Directors, other senior executives and Non-
Executive Directors. The aim is to ensure that reward for performance is competitive and appropriate for the results
delivered.
Remuneration and the terms and conditions of employment for executive Directors and Company executives are
reviewed annually having regard to performance and relative comparative information and are approved by the Board
12
following independent professional advice, as required. In this respect, consideration is given to normal commercial
rates of remuneration for similar levels of responsibility.
Key management personnel during the financial year ended 30 June 2020
Tlou Energy Limited – Annual Report 2020
Directors
Martin McIver
Anthony Gilby
Gabaake Gabaake
Colm Cloonan
Hugh Swire
Linah Mohohlo
Non-Executive Chairman
Managing Director and Chief Executive Officer
Executive Director
Finance Director
Non-Executive Director
Non-Executive Director
Executives
Solomon Rowland
There were no other key management personnel of the consolidated entity during the financial year ended 30 June
2020.
Company Secretary
Details of remuneration
Details of remuneration of each of the Directors and executives of the consolidated entity during the financial year are
set out in the table below.
Note:
Salaries of Directors and executives have been severely cut following the impact of COVID-19 on operations.
Details of the current cost to the Company of key executives is outlined under ‘Service Agreements’ below. In
addition, fees paid to Non-Executive Directors have been reduced to $1,000 per month.
Benefits and Payments for the year ended 30 June 2020
Short-term
benefits
Post
Employment
benefits
Long
Term
benefits
Salary & Fees
Cash Bonus
Superannuation
Leave Benefits
Total
Directors
M McIver
A Gilby
G Gabaake
C Cloonan
H Swire
L Mohohlo
Total Directors
Executives
S Rowland
Total Executives
Total
$
$
$
$
$
48,000
320,651
106,103
199,609
30,000
30,000
734,363
163,534
163,534
897,897
-
-
-
-
-
-
-
-
-
-
4,560
15,934
10,080
18,963
-
-
-
68,180
2,473
-
-
-
49,537
70,653
52,560
404,765
118,656
218,572
30,000
30,000
854,553
15,536
15,536
65,073
-
-
179,070
179,070
70,653
1,033,623
During the 2020 year, no proportion of the remuneration of any key management personnel was performance based.
No key management personnel received cash bonuses, performance related bonuses, termination benefits or non-
cash benefits during the year.
13
Tlou Energy Limited – Annual Report 2020
Benefits and Payments for the year ended 30 June 2019
Short-term
benefits
Salary &
Fees
Cash
Bonus
Post
Employment
benefits
Superannuation
Long term
benefits
Share based payments
Leave
Benefits
Total Cash
Remuneration
Performance
Rights
Equity
Compensation
Total
$
$
$
$
Directors
M McIver
A Gilby
G Gabaake
C Cloonan
H Swire
L Mohohlo
Total
Directors
48,000
415,082
170,919
257,749
24,000
24,000
939,750
Executives
S Rowland
Total
Executives
Total
182,648
182,648
1,122,398
-
-
-
-
-
-
-
-
-
-
4,560
17,965
12,661
24,479
-
1,119
-
-
10,713
47,041
-
-
$
52,560
433,047
194,293
329,269
24,000
25,119
$
43,150
43,150
43,150
43,150
43,150
43,150
45.1%
9.1%
18.2%
11.6%
64.3%
63.2%
$
95,710
476,197
237,443
372,419
67,150
68,269
60,784
57,754
1,058,288
258,900
1,317,188
17,352
17,352
-
-
200,000
200,000
43,150
43,150
17.7%
78,136
57,754
1,258,288
302,050
243,150
243,150
1,560,338
During the 2019 year, no proportion of the remuneration of any key management personnel was performance based.
No key management personnel received cash bonuses, performance related bonuses, termination benefits or non-
cash benefits during the year.
Service agreements
The following outlines the remuneration and other terms of employment for the following personnel during the
reporting period which are formalised in employment contracts for services.
Anthony Gilby
Term of Agreement:
Termination Benefit:
Termination Notice:
Solomon Rowland
Term of Agreement:
Base Fee:
Termination Benefit:
Termination Notice:
Managing Director and Chief Executive Officer
Mr Gilby's services are provided in a personal capacity. The agreement has no fixed
term. Mr Gilby has waived 75% of his current contracted rate. This amount waived is
not payable by the Company at a future date. After this 75% reduction and taking
account of adjustments for industry standards and CPI the annual cost to the
Company is approximately $153,140.
No termination benefit is payable if terminated for cause.
The Company may give Mr Gilby three months’ notice or pay 1.5 times his contracted
salary in lieu of notice to terminate the Agreement.
Company Secretary
Mr Rowland’s services are provided in a personal capacity. The agreement has no
fixed term.
Mr Rowland has waived 50% of his current contracted rate. This amount waived is
not payable by the Company at a future date. After this 50% reduction and taking
account of adjustments for industry standards and CPI, the annual cost to the
Company is approximately $117,300.
No termination benefit is payable if terminated for cause.
The Company may give the Company Secretary six months’ notice of its intention to
terminate the Agreement.
14
Tlou Energy Limited – Annual Report 2020
Service agreements (continued)
Gabaake Gabaake
Term of Agreement:
Base Fee:
Termination Benefit:
Termination Notice:
Colm Cloonan
Term of Agreement:
Base Fee:
Termination Benefit:
Termination Notice:
Executive Director
Mr Gabaake’s services are provided in a personal capacity. The agreement has no
fixed term.
Mr Gabaake has waived 50% of his current contracted rate. This amount waived is
not payable by the Company at a future date. After this 50% reduction and taking
account of adjustments for industry standards and CPI, the annual cost to the
Company is approximately $79,004.
No termination benefit is payable if terminated for cause.
The Company may give the Executive Director six months’ notice of its intention to
terminate the Agreement.
Finance Director
Mr Cloonan's services are provided in a personal capacity. The agreement has no
fixed term.
Mr Cloonan has waived 50% of his current contracted rate. This amount waived is not
payable by the Company at a future date. After this 50% reduction and taking account
of adjustments for industry standards and CPI, the annual cost to the Company is
approximately $146,949.
No termination benefit is payable if terminated for cause.
The Company may give the Finance Director six months’ notice of its intention to
terminate the Agreement.
Key management personnel shareholdings
The number of ordinary shares in Tlou Energy Limited held by each key management person of the consolidated
entity during the financial year is set out below. These figures do not include any shares issued post year end.
30 June 2020
M McIver
A Gilby
G Gabaake
C Cloonan
H Swire
L Mohohlo
S Rowland
1 On-market purchase
Balance at
beginning of
year
Granted as
remuneration
during the
year
Additions1
Disposals
Balance at date
of resignation /
appointment
Balance at end
of year
812,102
21,701,789
330,857
1,081,112
4,560,092
-
250,000
28,735,952
-
-
-
-
-
-
-
-
-
287,791
-
100,000
-
-
-
387,791
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
812,102
21,989,580
330,857
1,181,112
4,560,092
-
250,000
29,123,743
15
Tlou Energy Limited – Annual Report 2020
Performance rights
Performance Rights are linked to the share price performance of the Company, ensuring alignment with the interests
of the Company's shareholders. The Performance Rights issued to key management personnel are split into Tranches
of 250,000 shares. For the Performance Rights to vest and, therefore, become exercisable by a participant, certain
performance conditions are required to be met as set out below. On vesting, holders of Performance Rights will be
entitled to acquire Tlou Energy Limited ordinary shares at nil cost.
Performance rights held by key management personnel on 30 June 2020 are as set out below:
30 June 2020 Tranche
Issue Date
Opening
Balance
Fair Value
at grant
date
Exercis
ed
Lapsed
Balance at Year
End
Unvested
M McIver
A Gilby
G Gabaake
C Cloonan
H Swire
L Mohohlo
S Rowland
Total
Tranche
(i)
(ii)
(iii)
(i)
(ii)
(iii)
(i)
(ii)
(iii)
(i)
(ii)
(iii)
(i)
(ii)
(iii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(iii)
19-Oct-18
19-Oct-18
31-Jan-17
19-Oct-18
19-Oct-18
31-Jan-17
19-Oct-18
19-Oct-18
31-Jan-17
19-Oct-18
19-Oct-18
31-Jan-17
19-Oct-18
19-Oct-18
19-Oct-18
19-Oct-18
19-Oct-18
19-Oct-18
31-Jan-17
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
21,575
21,575
34,000
21,575
21,575
34,000
21,575
21,575
34,000
21,575
21,575
34,000
21,575
21,575
21,575
21,575
250,000
250,000
250,000
4,750,000
21,575
21,575
34,000
472,050
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
4,750,000
250,000
250,000
250,000
4,750,000
Performance conditions and expiry date
To vest the share price needs to be AUD $0.165 or greater for a period of 10 consecutive
trading days. These performance rights expire on 31/01/2025.
To vest the share price needs to be AUD $0.22 or greater for a period of 10
consecutive trading days. These performance rights expire on 31/01/2025.
To vest the share price needs to be AUD $0.28 or greater for a period of 10 consecutive
trading days. These performance rights expire on 31/01/2024.
Shares issued on exercise of performance rights
Other than as shown in the table above, no other shares were issued on exercise of performance rights up to the date
of this report.
16
Tlou Energy Limited – Annual Report 2020
Relationship between remuneration and Company performance
The factors that are considered to affect shareholder return during the last five years is summarised below:
Share price at end of financial year ($)
Market capitalisation at end of financial year ($M)
Loss for the financial year ($)
Cash spend on exploration programs ($)
2020
0.04
18
(12,950,601)
(1,766,761)
2019
0.115
52
(3,216,695)
(6,942,758)
2018
0.10
35
(2,810,730)
(3,330,951)
2017
0.11
33
(3,165,323)
(1,852,642)
2016
0.07
14
(3,065,583)
(5,783,800)
Director and Key Management Personnel remuneration ($)
1,033,623
1,560,338
1,168,943
964,891
968,640
Given that the remuneration is commercially reasonable, the link between remuneration, Company performance and
shareholder wealth generation is tenuous, particularly in the exploration and development and pre-development stage.
Share prices are subject to market sentiment towards the sector and increases or decreases may occur independently
of executive performance or remuneration.
The Company may issue options or performance rights to provide an incentive for key management personnel which,
it is believed, is in line with industry standards and practice and is also believed to align the interests of key
management personnel with those of the Company’s shareholders.
No remuneration consultants were used in the 2020 financial year.
Other transactions with key management personnel and their related parties
Payment for goods and services:
Office rent paid to The Gilby McKay Alice Street Partnership, a director-related entity of
Anthony Gilby.
2020
$
2019
$
27,500
32,000
Terms and conditions: Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
(End of Remuneration Report)
17
Tlou Energy Limited – Annual Report 2020
Company secretary
Mr Solomon Rowland was appointed Company Secretary on 19 August 2015 and continues in office at the date of this
report. Mr Rowland is a commercial lawyer with over 20 years’ experience in various private, government and in-
house legal roles. Solomon holds a Juris Doctor from the University of Queensland.
Prior to joining Tlou Energy Limited as Legal Counsel in February 2013, Solomon worked for Crown Law representing
various Queensland government departments in a range of legal matters. During his time in government, Solomon
was involved in advising government departments on commercial, corporate governance and policy matters as well as
representing the state in various courts, tribunals and commissions of Inquiry. Solomon brings many years of
experience in commercial, advocacy, administrative and planning and environment law.
Meetings of directors
The number of meetings of the consolidated entity's Board of Directors and committees held during the year ended 30
June 2020, and the number of meetings attended by each Director are listed below. The Nomination & Remuneration
committee comprises the full board.
Board / Nomination &
Remuneration
Committee
Audit Committee
Risk Committee
Attended
2
M McIver
2
A Gilby
-
G Gabaake
2
C Cloonan
-
H Swire
L Mohohlo
2
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
Attended
7
8
6
8
8
7
Attended
4
-
1
-
4
-
Held
2
2
-
2
-
2
Held
8
8
8
8
8
8
Held
4
-
4
-
4
-
Shares under option
Unissued ordinary shares of Tlou Energy Limited under option at the date of this report are as follows:
Grant date
20-Jul-20
Expiry date
20-Jul-22
Exercise
price
$0.08
Number
under option
57,509,400
Issued performance rights at the date of this report are as follows:
Vesting Date
19 October 2018
19 October 2018
31 January 2017
Exercise Price
$0.165
$0.22
$0.28
1/07/2019
2,475,000
2,475,000
2,275,000
7,225,000
Issued
Expired
Exercised
30/06/2020
- - - 2,475,000
- - - 2,475,000
- - - 2,275,000
- - - 7,225,000
Shares issued on the exercise of options
Other than those disclosed in the table above there were no ordinary shares of Tlou Energy Limited issued during the
year ended 30 June 2020 on the exercise of options granted or up to the date of this report.
Indemnity and insurance of officers
The consolidated entity has indemnified the Directors and executives of the consolidated entity for costs incurred, in
their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of
good faith.
During the financial year, the consolidated entity paid a premium in respect of a contract to insure the Directors and
executives of the consolidated entity against a liability to the extent permitted by the Corporations Act 2001. The
contract of insurance prohibits disclosure of the nature of liability and the amount of the premium.
18
Tlou Energy Limited – Annual Report 2020
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Currency and rounding
The financial report is presented in Australian dollars and amounts are rounded to the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 can be
found on page 23.
Auditor
BDO Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or the consolidated entity are important.
The Board of Directors has considered the position and, in accordance with advice received from the Audit
Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of
non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed to ensure they do not impact the impartiality and objectivity of the
auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants.
Details of the amounts paid or payable to the auditor for non-audit services provided during the year are set out below.
Non-audit services - BDO Australia:
Tax consulting and compliance services
Total
2020
$
2019
$
10,700
10,700
8,400
8,400
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the Directors
Anthony Gilby
Director
Brisbane, 18 September 2020
19
Tlou Energy Limited – Annual Report 2020
2020 Annual Reserves Statement
Tlou Energy Limited is pleased to present its Annual Reserves Statement for the period ending 30 June 2020. There
has been no adjustment to the net gas reserves and contingent resources of the Company since the last upgraded
reserves were announced on 20 February 2018. Please refer to the ASX announcement on 20 February 2018 for full
details of the consolidated entity’s gas reserves and contingent resources.
Having conducted a review of its gas reserves and resources position during the reporting period and satisfying itself
that there was no new data that might materially increase the reserves or resources estimates reported during the
reporting period, the Company hereby presents the net gas reserves and contingent resources on a combined basis
as well as for each of its individual tenements as at 30 June 2020:
Location
Project
Karoo
Basin
Botswana
Karoo
Basin
Botswana
Karoo
Basin
Botswana
Total
Lesedi CBM
(all coal seams)
PL001/2004,
ML 2017/18L
Mamba CBM
(Lower Morupule
coal)
PL238/2014 –
PL241/2014
PL003/2004,
PL035/2000,
PL037/2000
Location
Project
Karoo
Basin
Botswana
Karoo
Basin
Botswana
Karoo
Basin
Botswana
Total
Lesedi CBM
(all coal seams)
PL001/2004,
ML 2017/18L
Mamba CBM
(Lower Morupule
coal)
PL238/2014 –
PL241/2014
PL003/2004,
PL035/2000,
PL037/2000
Tlou
Interest
100%
Gas Reserves (BCF)
30/06/2020
1P*
0.34
30/06/2019
1P
0.34
30/06/2020
2P*
25.2
30/06/2019 30/06/2020
2P
25.2
3P
252
30/06/2019
3P
252
100%
0.01
0.01
15.5
15.5
175
175
100%
-
-
-
-
-
-
Tlou
Interest
100%
100%
100%
0.35
0.35
40.7
40.7
427
427
Gas Contingent Resource (BCF)
30/06/2020
1C
4.6
30/06/2019
1C
4.6
30/06/2020
2C**
214
30/06/2019 30/06/2020
2C**
214
3C
3,043
30/06/2019
3C
3,043
-
-
-
-
-
-
-
-
-
-
-
-
4.6
4.6
214
214
3,043
3,043
20
Tlou Energy Limited – Annual Report 2020
ASX Listing Rules Annual Report Requirements
*Listing Rule 5.39.1:
All 1P and 2P petroleum reserves recorded in the table are undeveloped and are attributable to unconventional
gas.
100% of all 1P and 2P petroleum reserves are located in the Karoo Basin in Botswana.
*Listing Rule 5.39.2:
All 1P and 2P petroleum reserves reported are based on unconventional petroleum resources.
Listing Rule 5.39.3:
The table shows the 2P and 3P petroleum reserves as at 30 June 2020 and comparative petroleum reserves
certified at 30 June 2019.
Governance Arrangements and Internal Controls Listing Rule 5.39.5:
Tlou Energy has obtained all its gas reserves and resources reported as at 30 June 2020 from external
independent consultants who are qualified petroleum reserves and resource evaluators as prescribed by the ASX
Listing Rules.
Tlou Energy estimates and reports its petroleum reserves and resources in accordance with the definitions and
guidelines of the Petroleum Resources Management System 2007, published by the Society of Petroleum
Engineers (SPE PRMS).
To ensure the integrity and reliability of data used in the reserves estimation process, the raw data is reviewed by
senior reservoir and geological staff and consultants at Tlou Energy before being provided to the independent
reserve certifiers. Tlou Energy has not and does not currently intend to conduct internal reviews of petroleum
reserves preferring to appoint independent external experts prior to reporting any updated estimates of reserves
or resources so as to ensure an independent and rigorous review of its data.
Tlou Energy reviews and updates its gas reserves and resources position on an annual basis to ensure that if
there is any new data that might affect the reserves or resources estimates of the Company steps can be taken to
ensure that the estimates are adjusted accordingly.
** Listing Rule 5.40.1:
All 2C contingent resources recorded in the table are undeveloped. 100% of the reported 2C contingent
resource is attributable to unconventional gas.
The geographical areas where the 2C contingent resources are located is the Karoo Basin in Botswana.
Listing Rule 5.40.2:
The table shows the 2C and 3C contingent resources as at 30 June 2020 as against the previous year. The
net 2C and 3C contingent resources did not increase from the 2019 year to the 2020 year.
There were no other changes to the 2C and 3C contingent resources since the announcement on 20 February
2018.
Listing Rule 5.44:
The estimates of Reserves and Contingent Resources appearing in the 2020 Annual Reserves Statement for
Tlou Energy Limited and its subsidiaries are based on, and fairly represent, information and supporting
documentation determined by the various qualified petroleum reserves and resource evaluators listed below.
The gas reserves and resource estimates for the Lesedi CBM Project provided in this report were released to
the Market on 20 February 2018 (‘Announcement’). Tlou Energy confirms that it is not aware of any new
information or data that materially affects the information included in the Announcement and that all of the
material assumptions and technical parameters underpinning the estimates in the Announcement continue to
apply and have not materially changed. The gas reserve and resource estimates are based on and fairly
represents, information and supporting documentation and were determined by Dr. Bruce Alan McConachie of
SRK Consulting (Australasia) Pty Ltd, in accordance with Petroleum Resource Management System
guidelines. Dr. McConachie is considered to be a qualified person as defined under the ASX Listing Rule 5.42
and has given his consent to the use of the resource figures in the form and context in which they appear in
this report.
21
Tlou Energy Limited – Annual Report 2020
Notes to Net Reserves and Resources Table:
1) Gas Reserve and Resource numbers have been rounded to the nearest whole number.
2) Gas Resource numbers have been rounded to the nearest tenth for amounts less than 100 BCF, otherwise to the
nearest whole number.
3) Tlou’s Gas Reserves have not been adjusted for fuel or shrinkage and have been calculated at the wellhead
(which is the reference point for the purposes of Listing Rule 5.26.5).
4) Contingent Gas Resources are (100%) Unrisked Gross and are derived from the SRK certification at 31 March
2015 for all coal seams (as previously announced by Tlou on 9 April 2015) with adjustment for the gas volumes
which have now been certified by SRK in the Gas Reserves category.
5) ASX Listing Rule 5.28.2 Statement relating to Prospective Resources:
The estimated quantities of petroleum gas that may potentially be recovered by the application of a future
development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of
discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the
existence of a significant quantity of potentially moveable hydrocarbons.
6) Prospective Gas Resources are (100%) Unrisked Gross and are derived from a report to Tlou from Netherland,
Sewell and Associates Inc (NSAI) dated 16th February 2012 regarding certification for all coal seams located in
the remaining prospecting licences (as previously announced by Tlou in its prospectus dated 20 February 2013).
22
Auditor’s independence declaration
Tlou Energy Limited – Annual Report 2020
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY T R MANN TO THE DIRECTORS OF TLOU ENERGY LIMITED
As lead auditor of Tlou Energy Limited for the year ended 30 June 2020, I declare that, to the best of
my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Tlou Energy Limited and the entities it controlled during the period.
T R Mann
Director
BDO Audit Pty Ltd
Brisbane, 18 September 2020
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
A ustralia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
23
Tlou Energy Limited – Annual Report 2020
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2020
Interest income
Other income
Expenses
Employee benefits expense
Depreciation expense
Impairment - exploration and evaluation assets
Foreign exchange gain/(loss)
Share based payment expense
Professional fees
Corporate expenses
Occupancy costs
Other expenses
LOSS BEFORE INCOME TAX
Income tax
LOSS FOR THE PERIOD
OTHER COMPREHENSIVE INCOME/(LOSS)
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Tax effect
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS)
TOTAL COMPREHENSIVE INCOME/(LOSS)
Earnings per share
Basic loss per share
Diluted loss per share
Consolidated
Note
June 2020
$
June 2019
$
451
68,000
6,933
-
(1,021,320)
(580,713)
(10,647,734)
36,968
(49,881)
(171,767)
-
(50,203)
(903,755)
(13,319,954)
369,353
(1,109,658)
(555,675)
-
119,277
(377,305)
(168,072)
(7,280)
(63,592)
(1,061,323)
(3,216,695)
-
(12,950,601)
(3,216,695)
(3,993,594)
1,355,609
-
-
(3,993,594)
1,355,609
(16,944,195)
(1,861,086)
Cents
(2.9)
(2.9)
Cents
(0.8)
(0.8)
3
8
3
3
3
4
4
5
5
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying
notes.
24
Consolidated Statement of Financial Position
as at 30 June 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration and evaluation assets
Other non-current assets
Property, plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liabilities
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Tlou Energy Limited – Annual Report 2020
Consolidated
Note
June 2020
$
June 2019
$
6
8
9
7
10
11
11
12
1,576,471
206,799
87,682
1,870,952
48,163,968
708,908
1,273,953
50,146,829
52,017,781
161,463
236,010
397,473
-
114,000
114,000
511,473
5,204,948
430,351
77,535
5,712,834
60,896,127
770,750
1,867,025
63,533,902
69,246,736
221,404
140,357
361,761
369,353
115,000
484,353
846,114
51,506,308
68,400,622
99,753,504
(5,115,767)
(43,131,429)
99,753,504
(1,172,054)
(30,180,828)
51,506,308
68,400,622
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
25
Tlou Energy Limited – Annual Report 2020
Consolidated Statement of Changes in Equity
for the year ended 30 June 2020
Contributed
Equity
Share
Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
Balance at 1 July 2018
Loss for the period
Other comprehensive income, net of tax
Total comprehensive income
$
90,463,822
$
309,401
$
$
$
(3,214,369)
(26,964,133)
60,594,721
-
-
-
-
-
-
-
(3,216,695)
1,355,609
-
(3,216,695)
1,355,609
1,355,609
(3,216,695)
(1,861,086)
Transactions with owners in their capacity as owners
Share based payments
Shares issued, net of costs
9,289,682
Balance at 30 June 2019
9,289,682
99,753,504
-
377,305
-
377,305
686,706
-
-
-
-
-
-
377,305
9,289,682
9,666,987
(1,858,760)
(30,180,828)
68,400,622
Balance at 1 July 2019
99,753,504
686,706
(1,858,760)
(30,180,828)
68,400,622
Loss for the period
Other comprehensive income, net of tax
Total comprehensive income
Transactions with owners in their capacity as owners
Share based payments
-
-
-
-
-
-
-
-
-
(12,950,601)
(3,993,594)
-
(12,950,601)
(3,993,594)
(3,993,594)
(12,950,601)
(16,944,195)
49,881
49,881
-
-
-
-
49,881
49,881
Balance at 30 June 2020
99,753,504
736,587
(5,852,354)
(43,131,429)
51,506,308
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
26
Consolidated Statement of Cash Flows
for the year ended 30 June 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees (inclusive of GST and VAT)
Interest received
Other receipts
GST and VAT received
NET CASH USED IN OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation assets
Payment for property, plant and equipment
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Share issue costs
NET CASH PROVIDED BY FINANCING ACTIVITIES
Net (decrease)/increase in cash held
Cash at the beginning of the period
Effects of exchange rate changes on cash
Tlou Energy Limited – Annual Report 2020
Consolidated
Note
June 2020
$
June 2019
$
(2,145,102)
451
68,000
365,079
(1,711,572)
(2,749,259)
6,933
-
682,516
(2,059,810)
22
(1,766,761)
(141,173)
(1,907,934)
(6,942,758)
(1,987,503)
(8,930,261)
-
-
-
9,595,592
(305,910)
9,289,682
(3,619,506)
5,204,948
(8,971)
(1,700,389)
7,019,345
(114,008)
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
6
1,576,471
5,204,948
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
27
Tlou Energy Limited – Annual Report 2020
Notes to the financial statements
Note 1.
Significant accounting policies
Introduction
This financial report includes the consolidated financial statements of Tlou Energy Limited (the “Company”) and its
controlled entities (together referred to as the “consolidated entity” or the "group").
The separate financial statements of the parent entity, Tlou Energy Limited, have not been presented within this
financial report as permitted by the Corporations Act 2001. Supplementary information about the parent entity is
disclosed in note 25.
Tlou Energy Limited is a public company, incorporated and domiciled in Australia. Its registered office and principal
place of business is 210 Alice St, Brisbane, QLD 4000, Australia.
The following is a summary of the material and principal accounting policies adopted by the consolidated entity in the
preparation of the financial report. The accounting policies have been consistently applied to all the years presented,
unless otherwise stated.
Operations and principal activities
The principal activity of the consolidated entity is to develop assets in Botswana for power generation. This includes
the exploration and evaluation of Coalbed Methane (CBM) natural gas and development of solar power generation.
CBM and solar power can operate as standalone projects or as a hybrid solar and gas solution to provide cleaner
baseload power. No revenue from this activity has been earned to date, as the consolidated entity is still in the
exploration and evaluation or pre-development stage.
Currency
The financial report is presented in Australian dollars, rounded to the nearest dollar, which is the functional currency of
the parent entity.
Authorisation of financial report
The financial report was authorised for issue on 18 September 2020.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Tlou Energy
Limited is a for-profit entity for the purposes of preparing the financial statements.
Compliance with IFRS
The consolidated financial statements of Tlou Energy Limited also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Historical cost convention
The consolidated financial statements have been prepared on an accruals basis and are based on historical costs.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant
to the financial statements are disclosed in note 2.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in profit or loss.
28
Notes to the financial statements (continued)
Note 1 Significant accounting policies (continued)
Tlou Energy Limited – Annual Report 2020
Going Concern
The consolidated financial statements have been prepared on a going concern basis which contemplates that the
consolidated entity will continue to meet its commitments and can therefore continue normal business activities and
the realisation of assets and settlement of liabilities in the ordinary course of business.
Because of the nature of the operations, exploration or pre-development companies, such as Tlou Energy Limited,
find it necessary on a regular basis to raise additional cash funds for future exploration and development activity and
meet other necessary corporate expenditure. The Company has recently completed a capital raising which is
expected to fund ongoing operations and working capital requirements for the next 12 months. Subject to the results
of these operations the consolidated entity may need to raise additional capital to expand and develop the project
further. Accordingly, the consolidated entity is in the process of investigating various options for the raising of
additional funds which may include but is not limited to an issue of shares or the sale of exploration assets where
increased value has been created through previous exploration activity. The Consolidated Entity does not expect the
COVID-19 pandemic to adversely impact its ability to raise further capital.
At the date of this financial report, none of the above fund-raising options have been concluded and no guarantee can
be given that a successful outcome will eventuate. The directors have concluded that as a result of the current
circumstances there exists a material uncertainty that may cast significant doubt regarding the consolidated entity's
and the Company's ability to continue as a going concern and therefore the consolidated entity and Company may be
unable to realise their assets and discharge their liabilities in the normal course of business. Nevertheless, after taking
into account the current status of the various funding options currently being investigated and making other enquiries
regarding other sources of funding, the directors have a reasonable expectation that the consolidated entity and the
Company will have adequate resources to fund its future operational requirements and for these reasons they
continue to adopt the going concern basis in preparing the financial report.
The financial report does not include adjustments relating to the recoverability or classification of recorded assets
amounts or to the amounts or classification of liabilities that might be necessary should the consolidated entity not be
able to continue as a going concern.
COVID-19 Impacts
The Company’s field operations remained relatively unaffected during the period by COVID-19, however corporate
and administrative functions were impacted more acutely. Staff worked remotely when possible and followed
enhanced social distancing and health and safety procedures when at the workplace. Access to Botswana by external
staff and consultants was and remains restricted, however the Company has sufficient personnel in-country at present
to meet current field operational requirements. The Company has also reduced expenditure where possible including
significant salary cuts being taken by staff including all Directors. Throughout the period, the Company received
$68,000 grant funding from the Australian Taxation Office relating to COVID-19 assistance.
Accounting Policies
Principles of consolidation
(a)
Subsidiaries are all entities (including structured entities) over which the consolidated entity has control. The
consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the
entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They
are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the consolidated entity.
Intercompany transactions, balances and unrealised gains on transactions between consolidated entity companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the consolidated entity.
29
Notes to the financial statements (continued)
Note 1 Significant accounting policies (continued)
Tlou Energy Limited – Annual Report 2020
Income recognition
(b)
Interest
Interest income is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
Other income
Other income is recognised when it is received or when the right to receive payment is established.
Impairment of non-financial assets
(c)
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset
or cash-generating unit to which the asset belongs.
Assets that do not have independent cash flows are grouped together to form a cash-generating unit.
Goods and Services Tax ('GST') and other similar taxes
(d)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the consolidated
statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
Comparative figures
(e)
When required by accounting standards comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
30
Notes to the financial statements (continued)
Note 1 Significant accounting policies (continued)
Tlou Energy Limited – Annual Report 2020
New Accounting Standards and Interpretations
(f)
A number of new or amended standards became applicable for the current reporting period and the group had to
change its accounting policies as a result of adopting AASB 16 Leases. The impact of the adoption of this standard
and the new accounting policies are disclosed below. The other standards did not have any impact on the group’s
accounting policies and did not require retrospective adjustments.
AASB 16 Leases
This standard and its consequential amendments are applicable to annual reporting periods beginning on or after 1
January 2019. This standard replaces the accounting requirements applicable to leases in AASB 117 Leases and related
interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for leases to be
classified as operating or finance leases. This means that for most leases, a right-to-use asset and a liability will be
recognised, with the right-to-use asset being depreciated and the liability being unwound in principal and interest
components over the life of the lease.
Upon adoption of this standard, the Consolidated Entity’s transitioned using the modified retrospective approach, where
the right-of-use asset is recognised at the date of initial application at an amount equal to the lease liability, using the
entity’s current incremental borrowing rate. Comparative figures are not restated. Based on the transition approach
and the entity’s current leasing arrangements, there were no material impacts in the current or future reporting periods
and on foreseeable future transactions.
There are no other standards that are not yet effective and that would be expected to have a material impact on the
entity in the current or future reporting periods and on foreseeable future transactions.
Financial Instruments
(g)
Classification
The group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value (either through OCI, or through profit or loss); and
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows.
Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash
flows are solely payment of principal and interest.
Impairment
The group assesses on a forward-looking basis the expected credit losses associated with its debt instruments
carried at amortised cost. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
For trade receivables, the group applies the simplified approach permitted by AASB 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables
New Standards and Interpretations not yet adopted
(h)
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2020
reporting periods. The consolidated entity has decided against early adoption of these standards. The Consolidated
Entity’s has assessed the impact of these new standards that are not yet effective and determined that they are not
expected to have a material impact on the consolidated entity in the current or future reporting periods and on
foreseeable future transactions.
31
Notes to the financial statements (continued)
Note 2.
Critical accounting judgements, estimates and assumptions
Tlou Energy Limited – Annual Report 2020
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets and liabilities. Management bases its judgements, estimates and assumptions on
historical experience and on other various factors, including expectations of future events, management believes to be
reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Exploration & evaluation assets
The consolidated entity performs regular reviews on each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area of interest. These reviews are based on detailed surveys and
analysis of drilling results performed to reporting date.
Deferred Tax assets
The Company is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant
judgement is required in determining the worldwide provision for income taxes. There are certain transactions and
calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain.
The consolidated entity estimates its tax liabilities based on the consolidated entity’s understanding of the tax law.
Where the final tax outcome of these matters is different from the amounts that were initially recorded, such
differences will impact the current and deferred income tax assets and liabilities in the period in which such
determination is made.
In addition, the consolidated entity has recognised deferred tax assets relating to carried forward tax losses to the
extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority
and the same subsidiary against which the unused tax losses can be utilised. However, utilisation of the tax losses
also depends on the ability of the entity, which is not part of the tax consolidated group, to satisfy certain tests at the
time the losses are recouped. Due to the parent entity acquiring the entity that holds the losses it is expected that the
entity will fail to satisfy the continuity of ownership test and therefore has to rely on the same business test. As at 30
June 2020 the consolidated entity has not received advice that the losses are unavailable, however should this
change in the future the consolidated entity may be required to derecognise these losses.
32
Notes to the financial statements (continued)
Note 3.
Expenses
Tlou Energy Limited – Annual Report 2020
Loss before income tax includes the following specific expenses:
Employee benefits expense
● Defined contribution superannuation expense
● Performance rights
● Other employee benefits expense
Occupancy costs
● Rental expense relating to short-term leases - minimum lease rentals
● Other occupancy costs
Travel and accommodation costs
Other expenses include the following specific items:
●
● Consultants
● Stock exchange, advisory, secretarial fees
●
Insurance
Consolidated
June 2020
$
June 2019
$
60,144
49,881
961,176
1,071,201
69,729
377,305
1,039,929
1,486,963
50,203
-
50,203
166,649
195,356
290,614
75,772
61,219
2,373
63,592
189,090
125,492
357,619
72,783
Note 4.
Income Tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and unused tax losses and under and over provision in prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available
for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent
that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities; and they relate to the same taxable authority on either the same taxable entity or
different taxable entities which intend to settle simultaneously.
33
Notes to the financial statements (continued)
Note 4 Income tax (continued)
Tlou Energy Limited – Annual Report 2020
Loss before income tax
Tax at the domestic tax rates applicable to profits in the country concerned
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Other non-deductible items
Difference in overseas tax rates
Previously unrecognised tax losses used to reduce deferred tax expense
Deferred tax asset not recognised
Income tax benefit
Recognised deferred tax assets
Unused tax losses
Recognised deferred tax liabilities
Assessable temporary differences
Net deferred tax liability recognised
Unrecognised temporary differences and tax losses
Unused tax losses and temporary differences for which no deferred tax asset has been
recognised
Consolidated
June 2020
$
June 2019
$
(13,319,954)
(3,216,695)
(3,995,986)
(884,591)
(208,258)
1,231,271
369,353
2,972,972
369,352
(437,049)
(81,849)
1,403,489
-
5,439,235
5,439,235
9,777,322
9,777,322
5,439,235
5,439,235
10,146,675
10,146,675
-
369,353
40,615,596
36,558,768
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets
have not been recognised in respect of these items because it is not probable that future taxable profit will be
available against which the consolidated entity can utilise these benefits.
Note 5.
Earnings per share
Basic and diluted earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Tlou Energy Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
Consolidated
June 2020
$
June 2019
$
Reconciliation of earnings used in calculating basic and diluted loss per share:
Loss for the year attributable to owners of Tlou Energy Limited
Loss used in the calculation of the basic and dilutive loss per share
(12,950,601)
(12,950,601)
(3,216,695)
(3,216,695)
Weighted average number of ordinary shares used as the denominator
Number used in calculating basic and diluted loss per share
Number
450,180,185
Number
414,964,965
Options and performance rights are considered to be "potential ordinary shares" but were anti-dilutive in nature and
therefore the diluted loss per share is the same as the basic loss per share.
34
Notes to the financial statements (continued)
Note 6.
Cash and Cash Equivalents
Tlou Energy Limited – Annual Report 2020
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value. For the consolidated statement of cash flows
presentation purposes, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings
in current liabilities on the consolidated statement of financial position.
Cash at bank
Consolidated
June 2020
$
June 2019
$
1,576,471
1,576,471
5,204,948
5,204,948
Note 7.
Property, Plant and Equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and
equipment (excluding land) over their expected useful lives as follows:
Plant and equipment
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit
to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to
profit or loss.
3-7 years
Plant and equipment at cost
Accumulated depreciation
Consolidated
June 2020
$
June 2019
$
4,101,326
(2,827,373)
1,273,953
4,334,656
(2,467,631)
1,867,025
Movements in Carrying Amounts
Movement in the carrying amount of plant and equipment between the beginning and the end of the current financial year:
Balance at the beginning of year
Additions
Depreciation
Foreign exchange movements
Carrying amount at the end of year
1,867,025
137,952
(580,713)
(150,311)
1,273,953
440,683
1,963,765
(555,675)
18,252
1,867,025
35
Notes to the financial statements (continued)
Note 8.
Exploration and Evaluation Assets
Tlou Energy Limited – Annual Report 2020
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. Such
expenditures comprise net direct costs and an appropriate portion of related overhead expenditure but do not include
overheads or administration expenditure not having a specific nexus with a particular area of interest. These costs are
only carried forward to the extent that they are expected to be recouped through the successful development of the
area or where activities in the area have not yet reached a stage which permits reasonable assessment of the
existence of economically recoverable reserves and active or significant operations in relation to the area are
continuing.
Accumulated costs in relation to an area no longer considered viable are written off in full in the year the decision is
made. Regular reviews are undertaken on each area of interest to determine the appropriateness of continuing to
carry forward costs in relation to that area of interest.
Following a review of the assets held by the Company, capitalised expenditure across three of the group’s licences,
PL3/2004, PL35/2000 and PL37/2000 have been impaired. Following a review of data to hand, it is expected that Tlou
will need to conduct further operations, such as seismic/aeromagnetic surveys and core-hole drilling, in these licence
areas to make a more informed assessment of these licences areas. These are currently no gas reserves or
contingent resources booked over these three licences. PL3/2004 is valid until 31 March 2021 and currently the
Company plans to apply for renewal of this licence. PL’s 35 & 37/2000 expire on 30 Sept 2020 and renewal
applications have been submitted.
Exploration and evaluation assets
Movements in exploration and evaluation assets
Balance at the beginning of period
Exploration and evaluation expenditure during the year
Impairment expense
Foreign currency translation
Balance at the end of period
Consolidated
June 2020
$
June 2019
$
48,163,968
48,163,968
60,896,127
60,896,127
60,896,127
1,519,240
(10,647,734)
(3,603,665)
48,163,968
52,861,961
6,554,654
-
1,479,512
60,896,127
The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phase is
dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of
interest.
There is a risk that one or more of the exploration licences will not be extended, or that the terms of the extension are
not favourable to Tlou. This could have an adverse impact on the performance of Tlou. The consolidated entity is not
aware of any reasons why the licences will not be renewed.
Note 9.
Other non-current assets
Inventory and well consumables are valued at lower of cost or net realisable value. Inventory and well consumables
are allocated to exploration and evaluation expenditure when the assets are used in operations.
Inventory and well consumables
Consolidated
June 2020
$
June 2019
$
708,908
708,908
770,750
770,750
36
Notes to the financial statements (continued)
Note 10.
Trade and Other Payables
Tlou Energy Limited – Annual Report 2020
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the
financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Current
Trade payables
Accruals
Other payables
Consolidated
June 2020
$
June 2019
$
87,046
60,323
14,094
161,463
84,799
108,690
27,915
221,404
The carrying values of trade and other payables approximate fair values due to short-term nature of the amounts.
These are non-interest bearing.
Note 11.
Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a
past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be
made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the reporting date, taking into account the risks and uncertainties
surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax
rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance
cost.
Rehabilitation
The provision represents the estimated costs to rehabilitate wells in licences held by the consolidated entity. This
provision has been calculated based on the number of wells which require rehabilitation and the expected costs to
rehabilitate each well, taking into consideration the type of well and its location.
Employee benefits
Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12
months of the reporting date are recognised in current liabilities in respect of employees' services up to the reporting
date and are measured at the amounts expected to be paid when the liabilities are settled.
37
Notes to the financial statements (continued)
Note 11 Provisions (continued)
Tlou Energy Limited – Annual Report 2020
Long service leave
The liability for long service leave is recognised in current and non-current liabilities, depending on the unconditional
right to defer settlement of the liability for at least 12 months after the reporting date. The liability is measured as the
present value of expected future payments to be made in respect of services provided by employees up to the
reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures
and periods of service. Expected future payments are discounted using market yields at the reporting date on national
corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash
outflows.
Employee benefits – Botswana Severance
A provision has been recognised for employee benefits relating to severance pay payable in Botswana.
Severance pay
As per the Botswana Labour a provision is calculated for each Botswana based employee of one day per month of
service, which can be paid out after 60 months or when employment ends. The benefit rises to two days per month
after the first 60 months.
Current
Employee benefits
Employee benefits - Botswana severance
Non-current
Rehabilitation
Movements in rehabilitation provision during the year
Balance at the beginning of the year
Rehabilitation required on wells drilled during the year
Completed during the year
Carrying amount at the end of the year
Consolidated
June 2020
$
125,541
110,469
236,010
June 2019
$
64,248
76,109
140,357
114,000
114,000
115,000
115,000
115,000
2,000
(3,000)
114,000
97,000
18,000
-
115,000
Employee benefits – Botswana Severance
A provision has been recognised for employee benefits relating to severance pay payable in Botswana.
38
Notes to the financial statements (continued)
Note 12.
Contributed equity
Tlou Energy Limited – Annual Report 2020
Issued and paid up capital is recognised at the fair value of the consideration received by the consolidated entity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
Opening balance
Issue of ordinary shares during the year
Share issue costs
Ordinary shares - fully paid
Consolidated
June 2020
Shares
450,180,185
-
-
June 2019
Shares
354,224,275
95,955,910
-
June 2020
$
99,753,504
-
-
450,180,185
450,180,185
99,753,504
June 2019
$
90,463,822
9,595,591
(305,909)
99,753,504
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of, and amounts paid on, the shares held. The fully paid ordinary shares have no par value.
On a show of hands every member present at a meeting, in person or by proxy, shall have one vote and upon a poll,
each share shall have one vote. The Company does not have authorised capital or par value in respect of its issued
shares.
Capital risk management
The capital structure of the consolidated entity consists of equity attributable to equity holders of the parent entity,
comprising issued capital and reserves as disclosed in the Consolidated Statement of Changes in Equity.
When managing capital, management’s objective is to ensure the parent entity continues as a going concern and to
maintain a structure that ensures the lowest cost of capital available and to ensure adequate capital is available for
exploration and evaluation of tenements. In order to maintain or adjust the capital structure, the consolidated entity
may seek to issue new shares. Consistent with other exploration companies, the consolidated entity, including the
parent entity monitors capital on the basis of forecast exploration and development expenditure required to reach a
stage which permits a reasonable assessment of the existence or otherwise of an economically recoverable reserve.
There were no changes in the consolidated entity's approach to capital management during the year.
The consolidated entity is not subject to externally imposed capital requirements.
39
Notes to the financial statements (continued)
Note 13.
Reserves
Tlou Energy Limited – Annual Report 2020
Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of foreign controlled
entities.
The financial report is presented in Australian dollars rounded to the nearest dollar, which is Tlou Energy Limited's
functional and presentation currency.
Foreign operations
The assets and liabilities of foreign operations are translated into functional currency using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into functional currency using the
average exchange rates, which approximate the rate at the date of the transaction, for the period. All resulting foreign
exchange differences are recognised in the foreign currency translation reserve in equity. The foreign currency
reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Share Based Payments Reserve
The share-based payments reserve is used to record the share based payment associated with options granted to
employees and others under equity-settled share based payment arrangements.
Note 14.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares that are provided to employees in exchange
for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the
amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price,
the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with
non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the
employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award,
the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The
amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less
amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the
total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee
and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining
vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
40
Notes to the financial statements (continued)
Note 14 Share based payments (continued)
Tlou Energy Limited – Annual Report 2020
Employee Share Options and Performance Rights
Share Options and Performance Rights may be granted to certain personnel of the Company on terms determined by
the directors or otherwise approved by the Company at a general meeting.
Share options are granted for no consideration. Options and entitlements to the options are vested on a time basis
and/or on specific performance-based criteria such as share price increases or reserves certification. Options granted
as described above carry no dividend or voting rights. When exercisable, each option is convertible to one ordinary
share.
Performance Rights are linked to the share price performance of the Company, ensuring alignment with the interests
of the Company's shareholders. For the Performance Rights that are issued but not yet exercised at the date of this
report to vest and, therefore, become exercisable by a participant, certain performance conditions are required to be
met as set out below. On vesting, holders of Performance Rights will be entitled to acquire Tlou Energy Limited
ordinary shares at nil cost.
Reference
Performance rights outstanding at the date of this report:
Share price
at approval
date
$0.11
$0.11
$0.14
No. of
Performance
Rights
2,475,000
2,475,000
2,275,000
17-Oct-18
17-Oct-18
10-Nov-16
Date of
Approval
(i)
(ii)
(iii)
Exercise Price
$0.165
$0.22
$0.28
(i)
Performance Condition
The closing price of Shares being 50% or more above the price at the date of shareholder approval for a
period of 10 consecutive trading days.
(ii) The closing price of Shares being 100% or more above the price at the date of shareholder approval for a
period of 10 consecutive trading days.
(iii) The closing price of Shares being 100% or more above the price at the date of shareholder approval for a
period of 10 consecutive trading days.
The following table shows the number, movements and exercise price of performance rights for the 2020 year.
Date of Approval
19 October 2018
19 October 2018
31 January 2017
Exercise Price
$0.165
$0.22
$0.28
1/07/2019
2,475,000
2,475,000
2,275,000
7,225,000
Issued
-
-
-
-
Exercised
-
-
-
-
Expired
-
-
-
-
30/06/2020
2,475,000
2,475,000
2,275,000
7,225,000
The following table shows the number, movements and exercise price of performance rights for the 2019 year.
Date of Approval
19 October 2018
19 October 2018
31 January 2017
Exercise Price
$0.165
$0.22
$0.28
1/07/2018
Issued
-
-
2,475,000
2,475,000
2,275,000
2,275,000
-
4,950,000
Exercised
-
-
-
-
Expired
-
-
-
-
30/06/2019
2,475,000
2,475,000
2,275,000
7,225,000
There are no share options outstanding at the end of the 2020 financial year (2019: Nil).
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transaction recognised during the year were as follows:
Performance rights
Consolidated
June 2020
$
June 2019
$
49,881
49,881
377,305
377,305
41
Notes to the financial statements (continued)
Commitments
Note 15.
Tlou Energy Limited – Annual Report 2020
Exploration expenditure:
To maintain an interest in the exploration tenements in which it is involved, the consolidated entity is required to meet
certain conditions imposed by the various statutory authorities granting the exploration tenements or that are imposed
by the joint venture agreements entered into by the consolidated entity. These conditions can include proposed
expenditure commitments. The timing and amount of exploration expenditure obligations of the consolidated entity
may vary significantly from the forecast based on the results of the work performed, which will determine the
prospectivity of the relevant area of interest. The consolidated entity's proposed expenditure obligations, which are
not provided for in the financial statements are as follows:
Minimum expenditure requirements
●
●
not later than 12 months
between 12 months and 5 years
Consolidated
June 2020
$
327,733
231,401
559,134
June 2019
$
251,982
770,913
1,022,895
42
Notes to the financial statements (continued)
Note 16.
Financial instruments
Tlou Energy Limited – Annual Report 2020
Overview
The consolidated entity's principal financial instruments comprise receivables, payables, cash and term deposits. The
main risks arising from the consolidated entity's financial assets are interest rate risk, foreign currency risk, credit risk
and liquidity risk.
This note presents information about the consolidated entity's exposure to each of the above risks, its objectives,
policies and processes for measuring and managing risk. Other than as disclosed, there have been no significant
changes since the previous financial year to the exposure or management of these risks.
The consolidated entity holds the following financial instruments:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Consolidated
June 2020
$
June 2019
$
1,576,471
206,799
1,783,270
5,204,948
430,351
5,635,299
161,463
161,463
221,404
221,404
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk,
price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management
program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the
financial performance of the consolidated entity. The consolidated entity uses different methods to measure different
types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign
exchange and other price risks and ageing analysis for credit risk.
Key risks are monitored and reviewed as circumstances change (e.g. acquisition of new entity or project) and policies
are created or revised as required. The overall objective of the consolidated entity's financial risk management policy
is to support the delivery of the consolidated entity's financial targets whilst protecting future financial security.
Given the nature and size of the business and uncertainty as to the timing and amount of cash inflows and outflows,
the consolidated entity does not enter into derivative transactions to mitigate the financial risks. In addition, the
consolidated entity's policy is that no trading in financial instruments shall be undertaken for the purpose of making
speculative gains. As the consolidated entity's operations change, the Directors will review this policy periodically
going forward.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. The Board reviews and agrees policies for managing the consolidated entity's financial risks as
summarised below. These policies include identification and analysis of the risk exposure of the consolidated entity
and appropriate procedures, controls and risk limits.
Risk management is carried out by senior finance executives (finance) under policies approved by the Board of
Directors. Finance identifies, evaluates and hedges financial risks within the consolidated entity's operating units
where appropriate.
43
Tlou Energy Limited – Annual Report 2020
Notes to the financial statements (continued)
Note 16 Financial instruments (continued)
(a) Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporting date whereby a
future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The
consolidated entity is also exposed to earnings volatility on floating rate instruments.
A forward business cash requirement estimate is made, identifying cash requirements for the following period
(generally up to one year) and interest rate term deposit information is obtained from a variety of banks over a variety
of periods (usually one month up to six-month term deposits) accordingly. The funds to invest are then scheduled in
an optimised fashion to maximise interest returns.
Interest rate sensitivity
A sensitivity of 1% interest rate has been selected as this is considered reasonable given the current market
conditions. A 1% movement in interest rates at the reporting date would have increased (decreased) equity and profit
or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency
rates, remain constant.
Consolidated - 30 June 2020
Cash and cash equivalents
Consolidated - 30 June 2019
Cash and cash equivalents
Profit or loss
Equity
1% increase
$
1% decrease
$
1% increase
$
1% decrease
$
15,765
(15,765)
15,765
(15,765)
50,049
(50,049)
50,049
(50,049)
Interest rate risk on other financial instruments is immaterial.
(b) Liquidity risk
Liquidity risk is the risk that the consolidated entity will not be able to meet its financial obligations as they fall due. The
Board's approach to managing liquidity is to ensure, as far as possible, that the consolidated entity will always have
sufficient liquidity to meet its obligations when due.
Ultimate responsibility for liquidity risk management rests with the Board of Directors. The consolidated entity
manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash
flows and matching the maturity profiles of financial assets and liabilities. This is based on the undiscounted cash
flows of the financial liabilities based on the earliest date on which they are required to be paid. At the end of the
reporting period the consolidated entity held cash of $1,576,471 (2019: $5,204,948).
The following table details the remaining contractual maturity for non-derivative financial liabilities.
Within
Between
Total Contractual
Carrying
Consolidated - 30 June 2020
Trade and other payables
Consolidated - 30 June 2019
Trade and other payables
1 Year
$
161,463
221,404
-
-
1 & 2 years
$
Cash Flows
$
Amount
$
161,463
161,463
221,404
221,404
44
Tlou Energy Limited – Annual Report 2020
Notes to the financial statements (continued)
Note 16 Financial instruments (continued)
(c) Foreign exchange risk
As a result of activities overseas, the consolidated entity's consolidated statement of financial position can be affected
by movements in exchange rates. The consolidated entity also has transactional currency exposures. Such exposures
arise from transactions denominated in currencies other than the functional currency of the relevant entity.
The consolidated entity's exposure to foreign currency risk primarily arises from the consolidated entity's operations
overseas. Foreign exchange risk arises from future commercial transactions and recognised financial assets and
financial liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using
sensitivity analysis and cash flow forecasting.
The consolidated entity currently does not engage in any hedging or derivative transactions to manage foreign
currency risk. The consolidated entity’s policy is to generally convert its local currency to Pula, Rand or US dollars at
the time of transaction. The consolidated entity, has on rare occasions, taken the opportunity to move Australian
dollars into foreign currency (ahead of a planned requirement for those foreign funds) when exchange rate
movements have moved significantly in favour of the Australian dollar, and management considers that the currency
movement is extremely likely to move back in subsequent weeks or months. Therefore, the opportunity has been
taken to lock in currency at a favourable rate to the consolidated entity. This practice is expected to be the exception,
rather than the normal practice.
The consolidated entity’s exposure to foreign currency risk at the reporting date, expressed in Australian dollars, was
as follows:
2020
USD
A$
2020
BWP
A$
2020
ZAR
A$
2020
GBP
A$
2019
USD
A$
2019
BWP
A$
2019
ZAR
A$
2019
GBP
A$
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
28,496
398,224
- 203,872
-
(46,953)
13,649
175,155
27,884
2,878,496
404,063
-
-
-
-
-
-
(108,858)
15,470
1,245,221
-
-
-
-
Net Financial Instruments
28,496
555,143
13,649
175,155
27,884
3,173,701
15,470
1,245,221
Foreign currency rate sensitivity
Based on financial instruments held at 30 June 2020, had the Australian dollar strengthened/weakened by 10% the
consolidated entity’s profit or loss and equity would be impacted as follows:
Profit or loss
Equity
10%
10%
10%
10%
Increase Decrease
Increase Decrease
$
(2,850)
(55,514)
(1,365)
(17,516)
$
2,850
55,514
1,365
17,516
$
(2,850)
(55,514)
(1,365)
(17,516)
$
2,850
55,514
1,365
17,516
(2,788)
(317,370)
(1,547)
(124,522)
2,788
317,370
1,547
124,522
(2,788)
(317,370)
(1,547)
(124,522)
2,788
317,370
1,547
124,522
2020
Dollar (US)
Pula (Botswana)
Rand (South Africa)
Pound (UK)
2019
Dollar (US)
Pula (Botswana)
Rand (South Africa)
Pound (UK)
45
Tlou Energy Limited – Annual Report 2020
Notes to the financial statements (continued)
Note 16 Financial instruments (continued)
(d) Credit risk
Credit risk is the risk of financial loss to the consolidated entity if a customer or counterparty to a financial instrument
fails to meet its contractual obligations. This arises principally from cash and cash equivalents and trade and other
receivables. The consolidated entity’s exposure and the credit ratings of its counterparties are continuously monitored
by the Board of Directors.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as
summarised in the table above.
Credit Risk Exposures
Trade and other receivables
Trade and other receivables comprise primarily of VAT and GST refunds due. Where possible the consolidated entity
trades with recognised, creditworthy third parties. The receivable balances are monitored on an ongoing basis. The
consolidated entity’s exposure to expected credit losses is not significant.
Cash and cash equivalents
The consolidated entity has a significant concentration of credit risk with respect to cash deposits with Westpac
Banking Corporation, First National Bank Botswana and First National Bank South Africa. However, significant cash
deposits are invested across banks to mitigate credit risk exposure to a particular bank. AAA rated banks are used
where possible and non-AAA banks are utilised where commercially attractive returns are available.
Note 17.
Key Management Personnel
Key management personnel comprise directors and other persons having authority and responsibility for planning,
directing and controlling the activities of the consolidated entity.
Key management personnel compensation
The aggregate compensation made to directors and other members of key management personnel of the
consolidated entity is set out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share based payments
Consolidated
June 2020
$
897,897
65,073
70,653
1,033,623
June 2019
$
1,122,398
78,136
57,754
1,258,288
-
1,033,623
302,050
1,560,338
46
Notes to the financial statements (continued)
Note 18.
Auditors' Remuneration
Tlou Energy Limited – Annual Report 2020
During the year the following fees were paid or payable for services provided by the auditor of the consolidated entity:
Consolidated
June 2020
$
June 2019
$
48,375
23,135
10,700
82,210
56,500
32,962
8,400
97,862
Audit services
Auditing or reviewing the financial statements - BDO Australia
Auditing or reviewing the financial statements - BDO Botswana
Non-audit services - BDO Australia
Tax consulting and compliance services
Total
Note 19.
Contingent Liabilities
The Directors are not aware of any contingent liabilities (2019: nil).
Note 20.
Related Party Transactions
Parent entity
The legal parent entity is Tlou Energy Limited.
Subsidiaries
Interests in subsidiaries are set out in note 23.
Transactions with related parties
The following transactions occurred with related parties:
Payment for goods and services:
Office rent paid to The Gilby McKay Alice Street Partnership, a director-related entity of
Anthony Gilby.
Consolidated
2020
$
2019
$
27,750
32,000
47
Notes to the financial statements (continued)
Note 21.
Segment Reporting
Tlou Energy Limited – Annual Report 2020
Reportable Segments
Operating segments are identified on the basis of internal reports that are regularly reviewed by the executive team in
order to allocate resources to the segment and assess its performance.
The Company currently operates in one segment, being the exploration, evaluation and development of Coalbed
Methane resources in Southern Africa.
Segment revenue
As at 30 June 2020 no revenue has been derived from its operations (2019: nil).
Segment assets
Segment non-current assets are allocated to countries based on where the assets are located as outlined below:
Botswana
Australia
Note 22.
Cash Flow Information
June 2020
$
June 2019
$
50,142,417
4,412
50,146,829
63,526,670
7,232
63,533,902
Consolidated
June 2020
$
June 2019
$
Reconciliation of cash flow from operations
Loss for the period
Depreciation
Share-based payments
Impairment charge - exploration and evaluation assets
Net exchange differences
(12,950,601)
572,014
49,881
10,647,734
40,309
Changes in operating assets and liabilities, net of the effects of purchase and disposal of subsidiaries:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in other assets
Increase/(decrease) in trade payables and accruals
Decrease/(increase) in prepayments
Increase/(decrease) in provisions
Increase/(decrease) in deferred tax liability
223,322
(10,214)
289
(9,606)
94,653
(369,353)
(1,711,572)
There were no non-cash investing or financing activities during the year (2019: nil).
(3,216,695)
555,675
377,305
-
161,460
73,149
(64)
9,849
5,347
(25,836)
-
(2,059,810)
48
Notes to the financial statements (continued)
Subsidiaries
Note 23.
Tlou Energy Limited – Annual Report 2020
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 1.
Name of entity
Country of
incorporation
Class of
shares
Tlou Energy Botswana (Proprietary) Ltd
Botswana
Ordinary
Technoleads International Inc
Tlou Energy Exploration (Proprietary) Limited
Sable Energy Holdings (Barbados) Inc
Tlou Energy Resources (Proprietary) Limited
Copia Resources Inc
Tlou Energy Corp Services Botswana (Proprietary)
Limited
Madra Holdings (Barbados) Inc
Tlou Energy Solutions (Proprietary) Limited
Barbados
Botswana
Barbados
Botswana
Barbados
Botswana
Barbados
Botswana
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Equity holding %
June
2020
100
June
2019
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Note 24.
Matters subsequent to the end of the financial year
On 15 June 2020 Tlou Energy announced a partially underwritten entitlement offer of up to 75,030,031 new Offer
Shares at a price of A$0.04 per share (£0.022, BWP0.32) to raise approximately A$3.0 million (approximately £1.65
million, BWP 24 million). Eligible shareholders could subscribe for one fully paid ordinary share for each six fully paid
ordinary shares held and in addition, participants were granted one unlisted option for every two shares allotted.
These new Options will have an expiry date of two years from the date of issue and exercisable at any time prior to
expiry at a price of A$0.08 per share.
The offer closed in July 2020 with 63,096,876 shares and 51,548,411 options issued via the offer and a subsequent
placement. In addition, 11,921,978 shares and 5,960,989 options were issued to Directors of the Company under the
offer following shareholder approval at a general meeting held on 14 September 2020. At the date of this report the
Company's share capital comprises 525,199,039 ordinary shares.
There has not been any matter or circumstance, other than that referred to in this report and disclosed in the financial
statements or notes thereto, that has arisen since the end of the period, that has significantly affected, or may
significantly affect, the operations of the consolidated entity, the results of these operations, or the state of affairs of
the consolidated entity in future financial years.
49
Notes to the financial statements (continued)
Note 25.
Parent entity disclosures
Tlou Energy Limited – Annual Report 2020
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net assets
Contributed equity
Share based payment
Accumulated losses
Total equity
Loss for the period
Total comprehensive income
Parent
June 2020
$
June 2019
$
1,271,818
30,218,163
31,489,981
229,734
229,734
31,260,247
2,425,557
30,220,983
32,646,540
160,683
160,683
32,485,857
99,753,504
736,587
(69,229,844)
31,260,247
99,753,504
686,706
(67,954,353)
32,485,857
1,275,491
1,275,491
11,401,749
11,401,749
Commitments, Contingencies and Guarantees of the Parent Entity
The Parent Entity has no commitments for the acquisition of property, plant and equipment, no contingent assets,
contingent liabilities or guarantees at balance date.
50
Tlou Energy Limited – Annual Report 2020
Directors' declaration
In the Directors' opinion:
the attached financial statements and notes thereto comply with the Corporations Act 2001, the Australian
Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements;
the attached financial statements and notes thereto comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes thereto give a true and fair view of the consolidated entity's
financial position as at 30 June 2020 and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable;
the remuneration report as set out in the directors’ report for the year ended 30 June 2020 comply with section
300A of the Corporations Act 2001; and
The directors have been given the declarations by the chief executive officer and chief financial officer required by
section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5) of the Corporations Act 2001.
On behalf of the Directors
Anthony Gilby
Director
Brisbane
18 September 2020
51
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Tlou Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Tlou Energy Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the financial report,
including a summary of significant accounting policies and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms.
Liability limited by a scheme approved under Professional Standards Legislation.
52
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Carrying value of exploration and evaluation assets
Key audit matter
How the matter was addressed in our audit
Refer to note 8 in the financial report.
The Group carries exploration and evaluation
assets as at 30 June 2020 in relation to the
application of the Group’s accounting policy for
exploration and evaluation assets.
The recoverability of exploration and evaluation
asset is a key audit matter due to:
The significance of the total balance; and
The level of procedures undertaken to
evaluate management’s application of the
requirements of AASB 6 Exploration for and
Evaluation of Mineral Resources (‘AASB 6’) in
light of any indicators of impairment that
may be present.
Our procedures included, but were not limited to
the following:
Obtaining evidence that the Group has valid
rights to explore in the areas represented by
the capitalised exploration and evaluation
expenditure by obtaining supporting
documentation such as license agreements
and also considering whether the Group
maintains the tenements in good standing
Making enquiries of management with
respect to the status of ongoing exploration
programs in the respective areas of interest
and assessing the Group's cashflow budget
for the level of budgeted spend on
exploration projects and held discussions
with directors of the Group as to their
intentions and strategy
Enquiring of management, reviewing ASX
announcements and reviewing directors'
minutes to ensure that the Group had not
decided to discontinue activities in any
applicable areas of interest and to assess
whether there are any other facts or
circumstances that existed to indicate
impairment testing was required.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms.
Liability limited by a scheme approved under Professional Standards Legislation.
53
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2020, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
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 the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group 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 or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards 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 this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms.
Liability limited by a scheme approved under Professional Standards Legislation.
54
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 17 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Tlou Energy Limited, for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
T R Mann
Director
Brisbane, 18 September 2020
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms.
Liability limited by a scheme approved under Professional Standards Legislation.
55
Tlou Energy Limited – Annual Report 2020
Corporate Governance Statement
The Directors (the “Board”) of Tlou Energy Limited (“Tlou Energy” or “the Company”) are committed to the
implementation of the highest standards of corporate governance. In determining what these standards should be, the
Board references guidance and supports, where appropriate, the 4th edition of the Corporate Governance Principles
and Recommendations (“4th Edition Recommendations or ASX Recommendations”) established by the ASX Corporate
Governance Council (the “Council”).
The Company complies with the corporate governance regime of Australia, being its country of incorporation. In addition,
the Directors acknowledge the importance of the guidelines set out in the QCA Guidelines for Smaller Quoted
Companies. They therefore intend to comply with the QCA Guidelines so far as is appropriate having regard to the size
and nature of the Company, and taking into account that it is an Australian company listed on the ASX which complies
with existing ASX corporate governance procedures.
This statement outlines the key aspects of Tlou Energy’s governance framework and practices. The charters, policies
and procedures are reviewed regularly and updated to comply with the law and best practice. This statement contains
specific information and discloses the extent to which the Company intends to or is able to follow the 4th Edition
Recommendations. The charters and policies of the Company can be viewed on Tlou Energy’s website at
www.tlouenergy.com (“website”)
The Council’s recommendations are not prescriptive and, if certain recommendations are not appropriate for the
Company given its circumstances, it may elect not to adopt that particular practice in limited circumstances. The
Company believes that during the reporting period ending 30 June 2020 its practices are taking into account the size
and makeup of the Company is largely consistent with those of the 4th Edition Recommendations and where they do not
follow a recommendation this statement identifies those that have not been followed and details reasons for non-
adherence. Even where there is a deviation from the recommendations the Company continues to review and update
its policies and practices in order that it keeps abreast of the growth of the Company, the broadening of its activities,
current legislation and good practice.
This Corporate Governance statement reports on the main practices of Tlou Energy and is current as at the 17
September 2020 and has been approved by the Board of Directors.
Role of the Board (Lay solid foundations for management and oversight)
The Board is responsible for ensuring that the Company is managed effectively as well as demonstrating leadership
and defining the Company’s strategic objectives. Given the size of the Company and the Board, the Board undertakes
an active role in the management of the Company.
The Board's role and the Company’s Corporate Governance practices are continually being reviewed and updated to
reflect the Company’s circumstances and growth. The Board has adopted a Charter which sets out the responsibilities
of the Board, its structure and governance, responsibility for approving the Company’s statement of values and ensuring
that the code of conduct to underpin the desired culture within the entity, as well as the matters expressly reserved to
the Board and those delegated to management. A copy of the Charter is available on the Company’s website.
The Board is responsible for determining the strategic direction and objectives of the Company and overseeing
management’s implementation of this strategy and the achievements against these.
(ASX Recommendation 1.1)
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Tlou Energy Limited – Annual Report 2020
The Board of Directors
The Board is currently comprised of six (6) Directors. Details of the Directors who held office during the year under
review are namely: -
Name of Director
Martin McIver
Anthony Gilby
Gabaake Gabaake
Colm Cloonan
Hugh Swire
Linah Mohohlo
Board Membership
Non-Executive Chairman
Managing Director
Executive Director
Finance Director
Non-Executive Director
Non-Executive Director
Date of Appointment
16 September 2010
23 April 2009
11 March 2015
11 February 2016
22 June 2017
12 July 2017
The skills, experience and expertise relevant to the position of each Director are set out in the Directors’ Report of this
Annual Report. Prior to the appointment of a person, or putting forward to shareholders a candidate for election, as a
director, the Company undertakes checks which it believes are appropriate to verify a director’s character, experience,
educations, criminal record and bankruptcy history. The Company will ensure that all material information in its
possession relevant to a shareholders decision to elect or re-elect a director is provided to shareholder in the Company’s
Notice of Annual General Meeting.
(ASX Recommendation 1.2)
Each executive director and senior executive of Tlou Energy has an agreement in writing with the Company which sets
out the key terms and conditions of their appointment including their duties, rights and responsibilities. There are also
Letters of Appointment between the Company and all of the non-executive directors. Each of these letters of
appointment are with the director personally to ensure that the director or senior executive is personally accountable to
the listed entity for any breach of the agreement. These agreements contain provisions that amongst other matters
include:
An obligation on the director to disclose the his/her interests and any matters which could affect the director’s
independence;
a requirement to comply with key corporate policies, including the entity’s code of conduct, its anti-bribery and
corruption policy and its trading policy;
the requirement to notify the Company of, or to seek its approval before accepting, any new role that could impact
upon the time commitment expected of the director or give rise to a conflict of interest;
details of the Company’s policy on when directors may seek independent professional advice at the expense of the
entity;
indemnity and insurance arrangements;
ongoing rights of access to corporate information; and
ongoing confidentiality obligations
(ASX Recommendation 1.3)
Company Secretary
The Company Secretary is directly accountable to the Board through the Chairman who the Company Secretary has a
direct line of reporting to. The Company Secretary is responsible for advising the Chairman and the Board to manage
the day to day governance framework of the Company. The responsibilities of the Company Secretary are contained in
the Board Charter a copy of which is available on the Company’s website. The decision to appoint or remove the
Company Secretary must be made or approved by the Board.
(ASX Recommendation 1.4)
Diversity Policy
The Company is committed to creating a fair and inclusive work environment that embraces diversity and recognises its
contribution to the Company’s commercial success. As the Company has a relatively small staff at present the Board
does not believe that any benefit would be obtained setting measurable objectives for achieving gender diversity and
has not done so. Neither is the Company a ‘relevant employer’ under the Workplace Gender Equality Act.
A copy of the Company’s Diversity Policy can be found on the Company’s website. (ASX Recommendation 1.5)
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Tlou Energy Limited – Annual Report 2020
Improvement in Board processes and effectiveness is a continuing objective and the purpose of the annual Board
evaluation is to identify ways to improve performance. The Board has appointed the Chairman, which it believes is the
most suitably qualified to carry out the task, as the person responsible for conducting an annual review of the Board’s
performance.
This process will involve the Chairman circulating to members of the Board a detailed questionnaire on performance
indicators and collating the data from the same before discussing with each member of the Board and reviewing
performance indicators such as time engaged on Company business, so as to assess the effectiveness of processes
structure and contributions made by individual directors.
The Managing Director assesses, annually or as necessary, the performance of all key executives. Both qualitative and
quantitative measures will be used consistent with performance targets set annually by the Managing Director in
consultation with those executives. The Managing Director reports to the Remuneration and Nomination Committee on
their performance and the Remuneration and Nomination Committee will then consider any changes to remuneration
and the establishment of new performance targets.
During the reporting period, a review of the Boards performance was carried out by the Chairman.
(ASX Recommendation 1.6)
The Board will assess annually or as necessary the performance of the Chief Executive Officer/Managing Director
benchmarking his performance against the role description in the employment contract and general industry standards
expected of a Managing Director carrying on that role. The Board regularly evaluates management’s performance
against various criteria and requires senior executives to address the Board on execution of strategy and associated
issues. The Chief Executive Officer reviews the performance of the senior executives annually. Theses evaluations take
into account matters such as the achieving of the Company’s objectives and reaching of performance criteria.
An executive management review has been carried out for the current reporting period.
(ASX Recommendation 1.7)
Structure of Board to be Effective and Add Value
The Board comprises three non-executive Directors, including the Chairman, and three executive Directors including
the Managing Director. The names of the Directors of the Company in office at the date of this report or through the year
under review and their qualifications are set out in the section of the Annual Report headed “Directors’ Report”.
The composition and size of the Board is determined so as to provide the Company with a broad base of industry,
business, technical, administrative, financial and corporate skills and experience considered necessary to achieve the
strategic objectives of the Company taking into consideration the size of the Company and the nature of its current
operations.
The Board has established a Remuneration and Nomination Committee which reviews Board membership. This
includes considering what other skills that might be necessary for the Company to reach its strategic objectives. The
Board has 3 independent non-executive directors and therefore satisfy ASX Recommendation 2.1 with the Committee
being constituted by these three directors. A copy of the Remuneration and Nominations Committee Charter is
located on the Company’s website.
The Committee’s members, the number of times that they have met throughout the reporting period and the member’s
attendance at those meetings is recorded in the section of the 2020 Annual Report headed “Directors Report”.
(ASX Recommendation 2.1)
Independence
The Board considers that, fundamentally, the independence of Directors is based on their capacity to put the best
interests of the Company and its shareholders ahead of all other interests, so that Directors are capable of exercising
objective independent judgment.
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Tlou Energy Limited – Annual Report 2020
When evaluating candidates, the Board has regard to the potential for conflicts of interest, whether actual or perceived,
and the extent or materiality of these in the ongoing assessment of director independence. In this regard the Board has
regard to the definition of "independence" in the 4th Edition Recommendations. The Board is of the view that the
existence of one or more of the relationships in the definition will necessarily result in the relevant Director not being
classified as independent, particularly given the criteria outlined above, and that the Company will seek to implement
additional safeguards to ensure independence. An overall review of these considerations is conducted by the Board to
determine whether individual Directors are independent.
Additional policies and practices, such as Directors not being present during discussions or decision making on
matters in which they have or could be seen to potentially have a material conflict of interest, as well as Directors
being excluded from taking part in the appointment of third party service providers where the Director has an interest,
provide further separation and safeguards to independence. The Board has adopted materiality thresholds in relation
to independence, which are contained in the Board Charter and summarised below.
ASX Recommendation 2.4 requires that a majority of the Board to be independent Directors. In addition, ASX
Recommendation 2.5 requires the Chairman of the Company to be independent. The Council defines ‘independence’
as being a non-executive director who is not a member of management and who is free from any business or other
relationship that could materially interfere with or could reasonably be perceived to materially interfere with the
independent exercise of their judgment. Based on this definition, three of the Directors could not be considered
independent by virtue of them being either executives, substantial shareholders of the Company or Directors or
Officers of Companies that are substantial shareholders of the Company.
The Chairman (Martin McIver) if applying the independence criteria in the Principles is considered to be independent.
Martin McIver has previously not been treated as an independent Director as formally he was employed by a Company
that was a substantial shareholder and which was a related party of the former Chairman. Mr McIver left the employ of
that entity in January 2013. Given that effluxion of time, having regard to the materiality of the role and the fact that Mr
McIver meets all of the other criteria to establish independence the Board has (in the absence of Mr McIver) determined
that Mr McIver is independent.
Hugh Swire and Linah Mohohlo, both of whom are non-executive directors are considered to be independent as they
fall within the Council’s definition of ‘independence’ as being a non-executive director who is not a member of
management and who is free from any business or other relationship that could materially interfere with or could
reasonably be perceived to materially interfere with the independent exercise of their judgment.
Notwithstanding that the 4th Edition Recommendations in respect to the composition of the Board are not strictly followed
(being that the majority of the Board should be independent) the Company believes that it has achieved in the last 3
years some significant progress to achieving this objective and given its history and the formation of the Board reflects
certain founding members, it is not practical at this stage to have a majority of independent Directors. Therefore, the
Board takes the view that the interests of the Shareholders are best served with the Board's present composition and
has resolved that the situation will continue to be monitored as the operations of the Company evolve and appoint
appropriately qualified independent Directors as the opportunities and necessity arise.
(ASX Recommendation 2.4)
If a Board vacancy becomes available it will be the responsibility of the Remuneration and Nomination Committee to
identify the skills, experience and diversity that will best complement the Board and will then embark on a process to
identify a candidate who can best meet those criteria. A skills matrix has been developed and adopted by the Board to
help assess the relevant criteria of candidates. The Directors believe the skill base of the current Directors is appropriate
for the Company given its size and stage of development.
(ASX Recommendation 2.2)
Given the size of the Company there is no formal induction process for new Directors nor does it have a formal
professional development program for existing Directors. The Board does not consider that a formal induction program
is necessary given the current size and scope of the Company’s operations.
Rather any new Director will be provided with a personalised induction which will be dependent upon the skills and
experience that any new Director might possess. Any new Director induction will include comprehensive meetings with
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Tlou Energy Limited – Annual Report 2020
senior management and the provision of relevant materials such as all the Company’s policies and procedures as well
as instruction in relation to these.
All Directors are expected to maintain the skills required to effectively discharge their obligations and are encouraged
to undertake continuing professional education such as industry seminars and approved education courses.
(ASX Recommendation 2.6)
Board Charter
The Board operates in accordance with the broad principles set out in its Charter which is regularly reviewed and
updated by the Board. It has also adopted a written Code of Conduct which establishes guidelines for its conduct. The
purpose of the Code is to ensure that Directors and Executives act honestly, responsibly, legally and ethically and in
the best interests of the Company. A copy of the Board Charter can be viewed in the Company’s website.
Conflicts of Interest
In accordance with the Corporations Act 2001 and the Company’s Constitution, Directors must keep the Board advised
on an ongoing basis, of any interest that may lead to a conflict with the interests of the Company. Where the Board
believes that there is a significant or material conflict, the Director concerned shall be excluded from all discussions and
access to Board papers and the like, and shall not be present at any Directors meeting during the consideration or vote
on such a matter.
Independence of Professional Advice
The Board has determined that individual Directors have the right to seek independent professional advice in connection
with any of their duties and obligations as Directors of the Company. Before a Director may obtain that advice at the
Company’s expense, the Director must obtain the approval of the Chairman who will not unreasonably withhold that
consent. If appropriate any advice received will be made available to the full Board. No member of the Board availed
him or herself of this entitlement during the year under review.
Committees
Audit Committee, Risk Committee and Remuneration & Nomination Committee
The Board delegates specific responsibilities to various Board Sub-Committees. The Board has established the
following standing committees:
An Audit Committee, which is responsible for overseeing the external and internal auditing functions of the
Company’s activities;
A Risk Committee, which comprises representatives of the Board and staff to advise and assist the Board in
assessing risk factors associated with the operation of the Company; and
A Remuneration & Nomination Committee, which is responsible for making recommendations to the Board on
recruitment and remuneration packages for executives.
The Board has again this year delegated the specific responsibility of overseeing the Company’s audit obligations to the
Audit Committee. The Audit Committee is currently made up of the following members:
Linah Mohohlo – Independent Chair
Martin McIver – Independent Committee Member
Colm Cloonan – Committee Member
Anthony Gilby – Committee Member
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Tlou Energy Limited – Annual Report 2020
Act Ethically and Responsibly
The Board maintains high standards of ethical conduct and the CEO is responsible for ensuring that high standards of
conduct are maintained by all staff. The Company’s reputation as an ethical business organisation is critical to its
ongoing success. The Board has adopted a Code of Conduct covering the practices necessary to maintain confidence
in the Company’s integrity, the practices necessary to take into account the Company’s legal obligations and reasonable
expectations of its stakeholders, and the responsibility and accountability of individuals for reporting and investigating
reports of unethical practices. It is not a prescriptive set of rules but rather a practical set of principles giving direction
and reflecting the Company’s approach to business conduct.
The Company in recognition of the importance of ethical and responsible decision making has adopted a Corporate
Code of Conduct which sets out ethical standards and a Code of Conduct to which all Directors, and Senior Executives
will adhere whilst conducting their duties. The CEO is responsible for bringing to the attention of the Board any material
breaches of the code.
(ASX Recommendation 3.1)
The Code of Conduct for Director and Senior Executives forms part of this Corporate Code of Conduct. It provides as
follows: -
All Directors and Senior Executives will: -
1. Actively promote the highest standards of ethics and integrity in carrying out their duties for the Company;
2. Disclose any actual or perceived conflicts of interest of a direct or indirect nature of which they become aware
and which they believe could compromise in any way the reputation or performance of the Company;
3. Respect confidentiality of all information of a confidential nature which is acquired in the course of the
Company’s business and not disclose or make improper use of such confidential information to any person
unless specific authorisation is given for disclosure or disclosure is legally mandated;
4. Deal with the Company’s suppliers, contractors, competitors and each other with the highest level of honesty,
fairness and integrity and to observe the rule and spirit of the legal and regulatory environment in which the
Company operates;
5. Report any breach of this code of conduct or other inappropriate or unethical conduct to the appropriate
authority within the Group; and
6. This Code of Conduct is in addition to the Code of Conduct for all employees which has been adopted by the
Board of the Company.
The Company is committed to increasing shareholder value and aims to ensure its shareholders are fully informed as
to the true financial position and performance of the Group through timely and accurate disclosure of information and
risk management practices and exemplary compliance with the continuous disclosure regime. A copy of the Code of
Conduct is available at the Company’s website.
(ASX Recommendation 3.1 and 3.2)
The Company has adopted in compliance of ASX Listing Rule 12.12 a Policy for Trading in Company Securities which
is binding on all Directors, senior management, officers, employees and consultants of the Company. The purpose of
this policy is to provide a brief summary of the law on insider trading and other relevant laws, set out the restrictions on
dealing in the Company’s securities by people who work for or are associated with Company and assist in maintaining
market confidence in the integrity of dealings in Tlou Energy securities. The Policy is posted on the Company’s website
to ensure that there is public confidence and understanding of the Company’s policies governing trading by “potential
insiders”.
All persons covered by the Policy may not deal in the securities of the Company without first seeking and obtaining a
written acknowledgement from the Chairman (or in his absence the Company Secretary) or the Company Secretary (or
in his absence the Managing Director) prior to any trade, at which time they must confirm that they are not in possession
of any unpublished price-sensitive information. The Company Secretary maintains a register of notifications and
acknowledgements given in relation to trading in the Company’s securities. The policy was reviewed during the year to
ensure that it aligns with the requirements of the ASX Listing Rules and the requirements of other regulatory regimes
under which the Company operates (including in respect of its AIM quotation, the AIM Rules for Companies and the
Market Abuse Regulations).
61
The Company has adopted both a Whistleblower Policy and Anti-Bribery and Corruption Policy copies of which are
available on the Company’s website. These provide inter-alia that any material incidents that are reported under it are
referred to the Board for its consideration and if necessary, action.
(ASX Recommendations 3.3 and 3.4)
Tlou Energy Limited – Annual Report 2020
Safeguard the Integrity of Corporate Reports
In accordance with ASX Recommendation 4.1 the Board has had established for all of the financial year under review
an Audit Committee with a Charter that sets out the roles, responsibilities, composition, structure and membership
requirements.
The primary objective of the Committee is to assist the Board to discharge its responsibilities with regard to:
Monitoring the integrity of the financial statements of the Company, reviewing significant financial reporting
judgements;
Reviewing the Company’s internal financial control system;
Monitoring and reviewing the effectiveness of the Company’s internal audit function (if any);
Monitoring and reviewing the external audit function including matters concerning appointment and
remuneration, independence and non-audit services; and
Performing such other functions as assigned by law, the Company’s constitution, or the Board.
Structure of the Audit Committee and Charter
ASX Recommendation 4.1 states that the audit committee should have at least 3 members consisting only of non-
executive directors, a majority of which should be independent with the Chair of the Committee being one of the
independent directors who is not the chair of the Company.
During the reporting period, the Committee appointed by the Board did not comply with this recommendation as it
comprised then and now of two non-executive Directors and two executive Directors, with the chair of the Committee
being an independent Director as prescribed by the ASX Recommendations. Not all of the members of the Audit
Committee were non-executive, but those that were are considered independent.
Colm Cloonan and Anthony Gilby are members of the Committee who are executive directors. At the time of his
appointment to the Committee Mr Gilby was a non-executive director but has since been appointed the Managing
Director.
The Chair of the Committee is Linah Mohohlo who is an independent non-executive director.
Martin McIver who is an independent non-executive director was previously the Chair of the Committee but also Chair
of the Board of Directors. He now sits on the Committee as a member only.
Each member of the Audit Committee has an appropriate knowledge of the Company’s affairs and has the financial and
business expertise to effectively discharge the duties of the Committee. The members of the Audit Committee by virtue
of their professional background experience and personal qualities are well qualified to carry out the functions of the
Audit Committee.
The members of the Committee have direct access to any employee, the auditors and financial and legal advisers
without management present. The Committee meets as often as is required but no less than twice a year.
The Committee Chair is obliged to report any significant issues arising from the Committee Meetings at the next meeting
of the Board and a copy of the minutes of the Audit Committee meetings are provided to the Board.
The Directors report contained in the Company’s annual report to shareholders is to contain a dedicated section that
describes the role of the Audit Committee and what action it has taken.
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Tlou Energy Limited – Annual Report 2020
The role of the Audit Committee is to: -
(a) monitor the integrity of the financial statements of the Company, by reviewing significant financial reporting
(b)
judgements;
review the effectiveness of the Company’s internal financial control system and, unless expressly addressed
by a separate Risk Committee or by the Board itself, risk management systems;
(c) monitor and review the effectiveness of the Company’s internal audit function;
(d) monitor and review the external audit function including matters concerning appointment and remuneration,
independence and non-audit services;
perform such other functions as assigned by law, the Company’s constitution, or the Board;
approve the corporate governance section of the Company’s Annual Report relating to the Committee and
its responsibilities; and
review compliance with legal and regulatory requirements.
(e)
(f)
(g)
The Audit Committee keeps minutes of its meetings and includes them for review at the following Board Meeting. The
Audit Committee members’ attendance at meetings as compared to total meetings held is set out in the Directors’ Report
contained in the Annual Report.
As a matter of practice the Chief Executive Officer and the Chief Financial Officer are required to make declarations in
accordance with section 295A of the Corporations Act that the Company’s financial reports present a true and fair view
in all material respects of the Company’s financial condition and operational results and are in accordance with relevant
accounting standards, and to provide assurance that the declaration is founded on a sound system of risk management
and internal control, and that the system is operating effectively in all material respects.
(ASX Recommendation 4.2)
The external auditors attend the committee meetings at least twice a year and on other occasions where circumstances
warrant as well as being available at the Company’s AGM to answer shareholders questions about the conduct of the
audit and the preparation and content of the audit report.
The only periodic finance-based reports that the Company releases each year are the Full Year and Half Year accounts
along with the quarterly Appendix 5B’s. The half year and full year accounts are audited and signed off by the Company’s
independent external Auditors. While the Appendix 5B’s are prepared internally, they are done so utilising the same
accounting principles and accounts on which the audited half year and full year accounts are prepared and released.
Copies of the Quarterly reports are reviewed by the Auditors as part of the half year and full year audits.
Additionally, the Quarterly reports are circulated to the Board as a whole before their release at which time the Board
as a whole are invited to comment or raise any questions in respect to the same. These reports are released with the
authority of the Board.
(ASX Recommendation 4.3)
Make Timely and Balanced Disclosure
The Company appreciates the considerable importance of communications with Shareholders and the market as a
whole. The Company’s communication strategy requires communication with shareholders and investors in an open
regular and timely manner so that the shareholders and investors have sufficient information to make informed
investment decisions on the operations and results of the Company.
The strategy provides for the use of systems that ensure regular and timely release of information about the Company
to shareholders.
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Tlou Energy Limited – Annual Report 2020
Methods of communication currently employed include:
Shareholder Updates
ASX Announcements
Quarterly Reports
Half Yearly Reports
Annual Reports; and
Shareholder presentations
Continuous Disclosure
The Company is a “disclosing entity” pursuant to section 111AR of the Corporations Act and, as such, complies with the
continuous disclosure requirements of Chapter 3 of the ASX Listing Rules and section 674 of the Corporations Act. In
addition, the Company is subject to disclosure obligations in respect of the other markets to which it is admitted to trading
which includes inter alia the AIM Rules for Companies and the Market Abuse Regulations. Subject to the applicable
exceptions contained in these regulations, the Company is required to disclose to the ASX, BSE and via a regulatory
news service in the United Kingdom any information concerning the Company which is not generally available and which
a reasonable person would expect to have a material effect on the price or value of the Shares.
The Company has adopted an updated Continuous Disclosure Policy in compliance with ASX Recommendation 5.1
and ASX Guidance Note 8: Continuous Disclosure. A copy of the policy can be found on the Company’s website.
Each director, employee and consultant engaged by the Company will be provided with a copy of the policy while
impressing upon them during their induction the importance of the same and its application to them in that role.
The Company Secretary has primary responsibility for discharging the Company's continuous disclosure obligations to
the ASX. All officers and employees must immediately notify the Company Secretary of any material information which
may need to be disclosed under Listing Rule 3.1-3.1B. Where uncertainty arises as to the meeting of continuous
disclosure obligations, the Company Secretary may seek external legal and professional advice.
Under the Company’s policy the Board receives a copy of all material market announcement immediately after they
have been made if not beforehand.
(ASX Recommendation 5.2)
The Officers of the Company are committed to:
Encouraging prompt disclosure of any material information which may need to be disclosed under Listing Rule
3.1-3.1B; and
Promoting an understanding of the importance of the continuous disclosure regime throughout the Company.
The Company uses its website www.tlouenergy.com as its primary communication tool for distribution of the annual
report, market announcements and media disclosures. External communication which may have a material effect on
the price or value of the Company’s securities will not be released unless it has been announced previously to the
ASX, BSE and via a regulatory news service in the United Kingdom. Effective participation by Shareholders is
encouraged at general meetings and procedures have been designed to facilitate this including online voting and the
ability of stakeholders to subscribe to receive copies of announcements and reports that are released by the
Company.
The Policy is also designed to ensure that equality of information among investors is maintained and applies
regardless of whether the presentation contains material new information required to be disclosed under listing rule
3.1 through ensuring that copies of all substantive presentations are released to the Market on the ASX Platform.
(ASX Recommendations 5.1 and 5.3)
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Tlou Energy Limited – Annual Report 2020
Respect the Rights of Security Holders
The Company keeps shareholders and other interested parties informed of performance and major developments via
communications through its website. This includes details of the Governance framework adopted by the Company
including copies of the Corporate Governance Polices and Charters, which is available at:
http://tlouenergy.com/corporate-governance
(ASX Recommendation 6.1)
The Company has a Shareholder Communications and Engagement Policy that outlines the processes followed to
ensure communication with shareholders and the investment community is effective, consistent and adheres to the
principles of continuous disclosure. This is one of the policies available on the Governance page of the Company’s
website.
(ASX Recommendation 6.2)
The policy regarding shareholder communication and engagement sets out the processes the Company has in place to
facilitate and encourage the participation of shareholders and other investors at meetings and to engage with
management. These include encouraging shareholders to attend the AGM and allowing them to vote online if they are
unable to attend the meeting.
(ASX Recommendation 6.3)
The Company considers that communicating with shareholders by electronic means is an efficient way to distribute
information in a timely and convenient manner. Therefore, its website contains a function to allow interested parties to
subscribe to receive electronic notification of public releases and other relevant material concerning the Company and
its activities. Where appropriate and considered by the Board to be substantive, material or contentious, Resolutions at
the Company’s general meeting will be conducted by Poll rather than a show of hands. The Board considers that it is
not necessary, or the cost justified to conduct all resolutions in this manner.
(ASX Recommendations 6.4 and 6.5)
Recognition and Management of Risk
The Board is responsible for the oversight of the Company’s risk management. The responsibility and control of risk
management is overseen by the Managing Director, with matters delegated to the appropriate level of management
within the Company with the Managing Director being responsible for assuring the systems are maintained and complied
with.
The Company has established a Risk Committee that is focused on ensuring that the Company maintains an effective
system of internal control and risk management. The Committee’s structure, roles and responsibilities are detailed in
the Risk Committee Charter.
Flowing from this, the Company has adopted a Risk Management Policy that governs the Company’s approach to
managing financial and non-financial risks.
The members of the Risk Committee are appointed by the Board, two of which are to be Board Members. Company
personnel are required to attend Risk Committee meetings as and when requested.
Specific functions of the Risk Committee are to: -
(a)
(b)
(c)
(d)
review and oversee the Company's risk profiles as developed and reported by management;
identify material business risks and monitor emerging risks and changes in the Company's risk profile;
monitor and review the risk management performance of the Company, including conducting specific
investigations where deemed necessary;
review any legal matters which could significantly impact the Company's risk management and internal
control systems, and any significant compliance and reporting issues, including any recent internal
regulatory compliance reviews and reports;
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Tlou Energy Limited – Annual Report 2020
(f)
(e)
(g)
review the effectiveness of the compliance function at least annually, including the system for monitoring
compliance with laws and regulations and the results of management's investigations and follow-ups
(including disciplinary action) of any fraudulent acts or non-compliance;
be satisfied that all regulatory compliance matters have been considered in the preparation of the
Company's official documents;
review the findings of any examinations by regulatory agencies and oversee all liaison activities with
regulators;
review and discuss media releases, ASX announcements and any other information provided to analysts;
review corporate legal reports of evidence of a material violation of the Corporations Act, the ASX Listing
Rules or breaches of fiduciary duties;
review the Company's insurance strategy, including the coverage and limits of the insurance policies, in
order to, if thought fit, recommend to the Board for approval; and
promote an awareness of a risk based culture in the balance of pursuit of business objectives whilst
managing risks.
(ASX Recommendation 7.1)
(h)
(i)
(k)
(j)
The Risk Committee meets whenever necessary, but no less than three times per year, and keeps minutes of its
meetings which are included for review at the following Board Meeting.
The Company has a qualified Compliance and Risk Manager who has been engaged to oversee the design and
implementation of the risk control programme. The Company’s Risk Management Policy requires the Board, being
guided by the Risk Committee to at least annually undertake a risk review to determine if the existing risk framework is
satisfactory considering the material risks faced by the Company.
The Board with the assistance of the Risk Committee has completed a review of the Company’s risk management
framework during the year under review and determined that the risk management framework that was in place was
satisfactory for the present needs of the Company and that it continues to be sound and that the Company is operating
with due regard to the risk appetite set by the board.
(ASX Recommendation 7.2)
The Company does not have a formal internal audit function. However, it has adopted a number of internal controls
such as identifying key risks in a Risk Register and managing activities within a budget and operational plan.
Management led by the Chief Financial Officer periodically undertakes an internal review of financial systems and
processes and where systems are considered to require improvement these systems are developed. Delegations of
Authority are reviewed annually by the Audit Committee.
The ongoing mitigation and management of financial and operational risks are standing agenda items of the Audit and
Risk Committees. The Chief Executive Officer and the Chair of the Audit Committee are responsible for reporting to the
Board on a regular basis in relation to whether the Company’s material business risks are being managed effectively by
the existing management and internal controls systems.
(ASX Recommendation 7.3)
The Company undertakes gas exploration activities and as such faces inherent risks to its business, including economic,
environmental and social sustainability risks which may materially impact the Company’s ability to create or preserve
value for shareholders over the short, medium or long term. The Board is regularly briefed by management as well as
keeping itself abreast of possible material exposure to risks that the Company may face.
Of core importance to the Company is safety, which it considers a priority not only in respect to its employees and
contractors but also to the community and environment in which it operates. The Company believes that if these matters
are priorities then they will act as drivers for value to shareholders. The Company has in place policies and procedures,
including a risk management framework, to help manage these risks.
(ASX Recommendation 7.4)
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Tlou Energy Limited – Annual Report 2020
Remunerate Fairly and Responsibly
The Board has established a Remuneration & Nomination Committee. There is no separate Remuneration
Committee.
Given the size of the Board, the Directors have previously determined that the non-executive Directors would execute
the functions of a Remuneration & Nomination Committee and have adopted a Remuneration and Nomination Charter.
The Board has agreed that the function of the Remuneration & Nomination Committee will be constituted by a majority
of independent non-executive directors.
The Board does not believe that any advantage would be achieved at this juncture taking into account the size of the
Company and the Board to have a separately constituted Remuneration Committee to carry out this function.
The non-executive members of the Board acting in their capacity as a Committee is tasked with ensuring that the
Company has remuneration policies and practices which enable it to attract and retain Directors and executives who
will best contribute towards achieving positive outcomes for Shareholders.
The Company complies with the guidelines for executive remuneration packages and non-executive Director
Remuneration as recommended in the ASX Recommendations.
The ASX Listing Rules and the Constitution require that the maximum aggregate amount of remuneration to be allocated
among the non-executive Directors be approved by the shareholders in a general meeting. In proposing the maximum
amount of consideration by shareholders, and in determining the allocation, the Remuneration Committee will take into
account the time demands made on Directors and such factors as fees paid to non-executive Directors in comparable
Australian companies. A meeting of shareholders held 10 July 2012 saw a resolution passed approving a pool of no
more than $500,000 for this purpose.
The names of the members of the Remuneration & Nomination Committee and their attendances at the meetings of the
Committee (if held) are set out in the Directors Report which forms a part of the Company’s Annual Report. The
remuneration paid to Directors and senior executives is shown in the Remuneration Report contained in the Directors’
Report, which includes details on the Company’s remuneration policies. There are no termination and retirement benefits
for non-executive Directors other than statutory superannuation entitlements.
(ASX Recommendation 8.1)
The Company’s policies and practices regarding the remuneration of non-executive Directors, executive Directors and
senior executives is set out in the Remuneration & Nominations Committee Charter and in the Remuneration Report
contained in the 2020 Annual Report.
A copy of the Remuneration & Nomination Committee Charter is available on the Company’s website.
(ASX Recommendation 8.2)
The Company has an equity-based remuneration scheme. The Company’s Policy for Trading in the Company’s
Securities does not specifically prohibit Directors entering into transactions or arrangements which would limit the
economic risk of unvested entitlements.
However, all dealings in the Company’s Securities do need to be first approved by the Company.The Securities Trading
Policy is available on the Company’s website.
(ASX Recommendation 8.3)
Approved by the Board
17 September 2020
67
Tlou Energy Limited – Annual Report 2020
Additional Information
1.
Shareholder Information
The shareholder information set out below was applicable as at 16 September 2020 and relates to shares held on the
ASX, AIM and BSE. The figures also include shares to be issued to Directors following shareholder approval at a
General Meeting on 14 September 2020.
2.
Ordinary Share Capital
525,199,039 fully paid ordinary shares.
3.
Number of Equity Holders
Ordinary Share Capital held by 694 shareholders.
4.
Voting Rights
In accordance with the Company's Constitution, for a show of hands, every shareholder present in person or by a
proxy, attorney or representative of a shareholder has one vote and for a poll, every shareholder present in person or
by a proxy, attorney or representative has in respect of fully paid shares, one vote for every share held. No class of
option holder or performance rights holder has a right to vote, however the shares issued upon exercise of options or
performance rights will rank pari passu with the then existing issued fully paid ordinary shares.
5.
Distribution of Shareholdings
Holdings
No. of Holders
Units
% of Issued
Ordinary
Capital
1
1,001
5,001
10,001
50,001
100,001
- 1,000
- 5,000
- 10,000
- 50,000
- 100,000
- maximum
39
35
62
176
84
298
694
6,160
130,077
477,342
4,501,488
5,932,531
514,151,441
525,199,039
0.0%
0.0%
0.1%
0.9%
1.1%
97.9%
100%
6.
Substantial Shareholders
The following information is extracted from the Company’s Register of Substantial Shareholders:
FNB Nominees (Pty) Ltd Re: AG BPOPF Equity
Investor Group – Anthony Gilby
Ordinary
Fully Paid
Shares Held
47,230,769
34,489,580
% of Issued
Ordinary Capital
9.0%
6.6%
68
Tlou Energy Limited – Annual Report 2020
Ordinary Fully
Paid Shares
Held
47,230,769
29,885,615
22,844,138
19,625,713
18,049,343
12,453,399
11,945,799
11,136,364
10,536,847
10,466,251
9,073,151
8,386,707
7,664,978
7,403,972
7,283,055
6,797,934
6,492,666
6,413,386
6,412,795
6,223,341
266,326,223
258,872,816
525,199,039
% of Issued
Ordinary
Capital
8.99%
5.69%
4.35%
3.74%
3.44%
2.37%
2.27%
2.12%
2.01%
1.99%
1.73%
1.60%
1.46%
1.41%
1.39%
1.29%
1.24%
1.22%
1.22%
1.18%
50.71%
49.29%
100%
7.
The 20 Largest Holders of Ordinary Shares
FNB Botswana Nominees (Pty) Ltd Re:AG BPOPF Equity
Hargreaves Lansdown (Nominees) Limited <15942>
Hargreaves Lansdown (Nominees) Limited
Gilby Super Pty Ltd
Interactive Investor Services Nominees Limited
Kabila Investments Pty Limited
Sixth Erra Pty Ltd
Mitchell Group Holdings Pty Ltd
HSDL Nominees Limited
Barclays Direct Investing Nominees Limited
Share Nominees Ltd
Jim Nominees Limited
Citicorp Nominees Pty Limited
Vidacos Nominees Limited
Backes Global Holdings Pty Limited
Mr Christopher John Blamey & Mrs Anne Margaret Blamey
Wealth Nominees Limited
Interactive Investor Services Nominees Limited
HSBC Client Holdings Nominee (UK) Limited <731504>
HSDL Nominees Limited
Total
Balance of register
Grand Total
8.
Restricted Securities
There are no restricted securities at the date of this report.
9.
Interests in Prospecting Licences (PL) and Mining Licence (ML)
As at the date of this Report, Tlou Energy Limited had an interest in the following licences:
Licence
PL 1/2004
PL 3/2004
PL 35/2000
PL 37/2000
PL 237/2014
PL 238/2014
PL 239/2014
PL 240/2014
PL 241/2014
PL 011/2019
ML 2017/18L
Region
Lesedi Project (Botswana)
Lesedi Project (Botswana)
Lesedi Project (Botswana)
Lesedi Project (Botswana)
Mamba Project (Botswana)
Mamba Project (Botswana)
Mamba Project (Botswana)
Mamba Project (Botswana)
Mamba Project (Botswana)
Boomslang Project (Botswana)
Lesedi Project (Botswana)
interest % *
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Operator
Tlou Energy Botswana Pty Ltd
Tlou Energy Botswana Pty Ltd
Tlou Energy Botswana Pty Ltd
Tlou Energy Botswana Pty Ltd
Tlou Energy Botswana Pty Ltd
Tlou Energy Botswana Pty Ltd
Tlou Energy Botswana Pty Ltd
Tlou Energy Botswana Pty Ltd
Tlou Energy Botswana Pty Ltd
Tlou Energy Botswana Pty Ltd
Tlou Energy Botswana Pty Ltd
* The interest shown in each of the licences represents the percentage that Tlou Energy Limited holds in the corporate
holder of the licence.
69