56 INOVIQ Limited (b) Terms and conditions of contributed equity Ordinary shares Ordinary shares have the right to receive dividends as declared, and, in the event of the winding up of the Company, to participate in the proceeds from the sale of surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. (c) Capital management The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain an optimal capital structure, the Group may issue new shares or reduce its capital, subject to the provision of the Company’s Constitution and any relevant regulatory requirements. The capital structure of the Group consists of equity attributed to equity holders as disclosed in the Statement of Financial Position. The Board monitors the need to raise additional equity based on its ongoing review of the Group’s actual and forecast cash flows prepared by management. 16 RESERVES As at 30 June 2022 $ As at 30 June 2021 $ Distribution reserve* (309,421) (309,421) Share based payment reserve 1,458,171 1,511,691 Foreign currency translation reserve (51,766) (22,829) 1,096,984 1,179,441 Foreign currency translation reserve ** Balance at beginning of year (22,829) (62,905) Foreign currency translation (28,937) 40,076 Balance at the end of the year (51,766) (22,829) Share based payment reserve*** Balance at beginning of year 1,511,691 388,734 - Reversal of option expense for forfeited options that had not vested (94,431) (5,465) - Value of vested options that lapsed without being exercised transferred to accumulated losses (154,253) (2,972) - Value of exercised options transferred to accumulated losses (138,918) (21,367) - Fair value (FV) of INOVIQ replacement options that was higher than the FV of the Sienna options they replaced at acquisition date, requiring post-merger service - 48,079 - Fair value (FV) of vested Sienna options for which holders received INOVIQ replacement options that represented pre-merger service and were included in the consideration transferred on business combination - 461,899 - Fair value of options granted 334,082 642,783 Balance at end of year 1,458,171 1,511,691 * The distribution reserve was used to record the accounting to BARD1AG SA shareholders as part of the transaction to acquire BARD1 Life Sciences Limited (now INOVIQ Ltd). ** The foreign currency translation reserve is used to record the translation of the results of non-A$ subsidiaries from their functional currency to the Group’s presentation currency. *** The share based payment reserve is used to record the fair value of equity instruments issued to employees, directors, and contractors. 15 ISSUED CAPITAL (CONTINUED) Notes to the Financial Statements for the year ended 30 June 2022
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