Kazia Annual Report 2022

63 Kazia Theraputics Limited Annual Report 2022 2022 at a Glance Chairman’s Letter CEO’s Report Key Milestones Pipeline Review ESG Financial Reports Note 20. Reserves Foreign currency translation reserve The reserve is used to recognise exchange differences arising from translation of the financial statements of foreign operations to Australian dollars. Share-based payments reserve The reserve is used to recognise the value of equity benefits provided to employees and executive directors as part of their remuneration, and other parties as part of their compensation for services. Note 21. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Note 22. Financial instruments Financial risk management objectives The consolidated entity’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The consolidated entity uses different methods to measure and manage the different types of risks to which it is exposed. These methods include monitoring the levels of exposure to interest rates and foreign exchange, ageing analysis and monitoring of specific credit allowances to manage credit risk, and, rolling cash flow forecasts to manage liquidity risk. Market risk Foreign currency risk The consolidated entity operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollars (‘USD’). Foreign exchange risk arises from future transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency and net investments in foreign operations. As of 30 June 2022, the consolidated entity did not hold derivative financial instruments in managing its foreign currency, however, the consolidated entity may from time to time enter into hedging arrangements where circumstances are deemed appropriate. The consolidated entity used natural hedging to reduce the foreign currency risk, which involved processing USD payments from cash held in USD. Foreign subsidiaries with a functional currency of Australian Dollars (‘AUD’) have exposure to the local currency of these subsidiaries and any other currency these subsidiaries trade in. The carrying amount of the consolidated entity’s foreign currency denominated financial assets and financial liabilities at the reporting date was as follows: Assets Liabilities 2022 2021 2022 2021 Consolidated $ $ $ $ US dollars 7,275,701 21,072,592 3,071,170 3,447,803 Euros - - 204,886 15,943 7,275,701 21,072,592 3,276,056 3,463,746 The consolidated entity had net assets denominated in foreign currencies of $3,999,645 as at 30 June 2022 (2021: net assets $17,608,845). Our Collaborators

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