Note 17. Reserves (continued) 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. Foreign currency reserve The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign operations. Share-based payments reserve The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their remuneration, and other parties as part of their compensation for services. Information relating to the Consolidated Entity’s details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set out in the Consolidated Statement of Changes in Equity on page 45. Movements in reserves Movements in each class of reserve during the current and previous financial year are set out below: Share based payment reserve $ Foreign currency reserve $ Total $ Balance at 1 July 2023 404,684 (258,952) 145,732 Performance Rights Issued 977,638 – 977,638 Performance Rights Lapsed (694,620) – (694,620) Foreign Currency Translation Reserve – (873,993) (873,993) Balance at 30 June 2024 687,702 (1,132,945) (445,243) Performance Rights Issued 545,838 – 545,838 Performance Rights Lapsed (396,930) – (396,930) Foreign Currency Translation Reserve – 3,783,082 3,783,082 Balance at 30 June 2025 836,610 2,650,137 3,486,746 Note 18. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Note 19. 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 2025. 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 2025 (2024: $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. Notes to the Consolidated Financial Statements for the year ended 30 June 2025 64 Melbana Energy Limited Annual Report 2025
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