Note 18. Reserves (continued) Movements in reserves Movements in each class of reserve during the current and previous financial year are set out below: Financial assets at fair value through other comprehensive income reserve $ Share based payment reserve $ Foreign currency reserve $ Total $ Balance at 1 July 2021 (1,118,350) - (235,486) (1,353,836) Issue of Performance Rights – 636,241 – 636,241 Conversion of performance rights – (636,241) – (636,241) Issue of Options – 1,728,655 – 1,728,655 Conversion of Options – (274,796) – (274,796) Disposal of assets 1,118,350 – – 1,118,350 Foreign Currency Translation Reserve – – (579,033) (579,033) Balance at 30 June 2022 - 1,453,859 (814,519) 639,340 Share Options Exercised – (1,433,127) – (1,433,127) Share Options Expired – (20,732) – (20,732) Performance Rights Issued – 404,684 – 404,684 Foreign Currency Translation Reserve – – 555,567 555,567 Balance at 30 June 2023 - 404,684 (258,952) 145,732 Note 19. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Note 20. Financial instruments Financial risk management objectives The Consolidated Entity’s principal financial instruments comprise cash and short-term deposits, the main purpose of which is to finance the Consolidated Entity’s operations. The Consolidated Entity has various other financial assets and liabilities such as trade receivables and trade payables which arise directly from its operations and, as at 30 June 2023. The main risks arising from the Consolidated Entity’s financial instruments are credit risk, interest rate risk, exchange rate risk and liquidity risk. The Board of Directors has reviewed each of those risks and has determined that, overall, they are not significant in terms of the Consolidated Entity’s current activities. The Consolidated Entity may also enter into derivative financial instruments, principally forward currency contracts. The purpose is to manage the currency risks arising from the Consolidated Entity’s operations. Speculative trading in derivatives is not permitted. There are no derivatives outstanding at 30 June 2023 (2022: $nil). Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 to the consolidated financial statements. Market risk Foreign currency risk Generally, the Consolidated Entity’s main exposure to exchange rate risk relates primarily to trade payables and cash denominated in EUR, arising in relation to its activities in Cuba. Where a payable is significant, EUR may be purchased on incurring the liability or commitment. Notes to the Consolidated Financial Statements for the year ended 30 June 2023 54 Melbana Energy Limited Annual Report 2023
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