Melbana Energy Limited Annual Report 2022

17 Issued capital (continued) 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 and the Company does not have a limited amount of authorised capital. 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. Share issue costs Incremental costs directly attributable to the issue of new shares or options, including transactional costs and fees payable to relevant service providers, are shown in equity as a deduction, net of tax, from the proceeds. Share buy-back There is no current on-market share buy-back. Shares under options As at 30 June 2021 there were no shares under options issued. During the reporting period 86,899,695 shares were issued due to exercise of listed options. At 30 June 2022, 459,758,321 listed options remained outstanding at an exercise price of $0.035 with an expiry of 10 Sept 2022. Capital risk management The Consolidated Entity’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital. Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents. In order to maintain or adjust the capital structure, the Consolidated Entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Consolidated Entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the Company’s share price at the time of the investment. The Consolidated Entity is not actively pursuing additional investments in the short term as it continues to grow its existing businesses. The Consolidated Entity is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the financial year. The capital risk management policy remains unchanged from the 2021 Annual Report. 18 Reserves 30-June-22 $ 30-June-21 $ Share-based payments reserve 1,453,859 - Foreign Currency Translation (814,519) (235,486) Financial assets at fair value through other comprehensive income reserve - (1,118,350) 639,340 (1,353,836) Financial assets at fair value through other comprehensive income reserve The reserve is used to recognise increments and decrements in the fair value of financial assets at fair value through other comprehensive income. Notes to the Consolidated Financial Statements for the year ended 30 June 2022 40 Melbana Energy Limited Annual Report 2022

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