27 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (f) Foreign currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The functional currency of the parent entity is Australian dollars. The Group contains two foreign subsidiaries, BARD1AG S.A. which is domiciled in Switzerland, and Sienna Cancer Diagnostics INC, which is domiciled in the U.S. This exposes the Group to foreign exchange risk arising from fluctuations of the Australian dollar against the United States Dollar. The exposure to risks is measured using sensitivity analysis and cash flow forecasting. The Group has not formalised a foreign currency risk management policy however, it monitors its foreign currency expenditure in light of exchange rate movements. The Group does not have any further material foreign currency dealings other than the noted currencies. The Group’s exposure to foreign currency risk at the reporting date, expressed in Australian Dollars as follows: As at 30 June 2023 $ As at 30 June 2022 $ Financial assets Cash and cash equivalents 55,229 66,908 Trade and other receivables 49,813 59,379 Total financial assets 105,042 126,287 Financial liabilities Trade and other payables 8,853 321,436 Total financial liabilities 8,853 321,436 The following conversion rates were used at the end of the financial year: USD/AUD: 1.5009 (2022: 1.4504) For all periods presented, the Group did not enter into or hold any foreign exchange derivatives. Given the immaterial exposure, a reasonably possible change in foreign exchange rates would not have a material impact on the financial position or performance of the Group. 28 CONTINGENT ASSET AND LIABILITIES The Group has the following contingent liabilities at 30 June 2023: – Sienna Cancer Diagnostics Limited, a wholly owned subsidiary of INOVIQ Limited, has a contingent liability in the form of milestone payments to Sevident Inc. shareholders, the entity from which Sienna purchased the Molecular Net capture platform technology in April 2019. Sevident Inc. shareholders are entitled to receive up to a value of US$1.5 million in scrip (or cash) upon the realisation of future Molecular Net product revenue milestones. – INOVIQ Limited has contingent liabilities in the form of the milestone payments detailed below, under the SubB2M Technology Licence Agreement with The University of Adelaide: Milestone amount Milestone $50,000 $500,000 in net sales $100,000 $2,000,000 in net sales $400,000 $5,000,000 in net sales $500,000 $20,000,000 in net sales The milestone payments are one off payments on the aggregate of all net sales of all products from the commencement date of the licence agreement and are not payable on a product-by-product or field-by-field basis. The Company is not aware of any other contingent liabilities as at 30 June 2023. Notes to the Financial Statements for the year ended 30 June 2023 66 INOVIQ Limited
RkJQdWJsaXNoZXIy MjE2NDg3