78 2022 ANNUAL REPORT Notes to the CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2022 (cont.) 31 SHARE-BASED PAYMENT ARRANGEMENTS (cont.) Model Inputs PIO Rights (2023 series) LTIP Rights (2024 series) Grant date 10 Dec 2021 10 Dec 2021 Value of the underlying security at grant date $0.28 $0.28 Exercise price nil nil Dividend yield nil nil Risk free rate 0.535% 0.935% Volatility All tranches: 75% All tranches: 75% Performance period (years) 2.00 3.00 Commencement of measurement period 1 July 2021 1 July 2021 Vesting date 30 June 2023 30 June 2024 Remaining performance period (years) 1.55 2.56 Weighted average fair value per right $0.28 $0.236 No. performance rights 11,550,613 18,410,000 Total Valuation $3,234,172 $4,342,919 (b) In accordance with the terms of the Red 5 Rights Plan, performance rights that were issued to key management personnel and senior management have vested following the partial achievement of performance conditions measured over the three years ended 30 June 2022. (c) Performance rights with unmet performance conditions have lapsed, and have been forfeited. Shares issued, Service and Deferred Rights Grant Date Vesting Date Fair Value at Grant Date Granted Exercised Outstanding at 30 June 2022 Service rights issued and vested: Jason Greive (a) 26-Oct-21 30-Jun-22 $75,000 412,088 - 412,088 Service rights issued and vested: John Tasovac (b) 24-Nov-20 30-Jun-21 $26,744 102,861 (102,861) - (a) Service Rights for Mr Greive issued under the Red 5 FY21 Rights Plan. They have a 12 month service test and vested on 1 July 2022 because Mr Greive was still an employee at that date. (b) Service Rights for Mr Tasovac issued under the Red 5 FY20 Rights Plan. They have a 12 month service test and vested on 1 July 2021 because Mr Tasovac was still an employee at that date. Share based payments expense for the shares issued, service and deferred rights was $nil, (2021: $0.124 million). The fair value is based on observable market share price at the date of grant. 32 FINANCIAL RISK MANAGEMENT OVERVIEW This note presents information about the consolidated entity’s exposure to credit, liquidity and market risks, their objectives, policies and processes for measuring and managing risk, and the management of capital. The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Management monitors and manages the financial risks relating to the operations of the consolidated entity through regular reviews of the risks. CREDIT RISK Credit risk is the risk of financial loss to the consolidated entity if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the consolidated entity receivables from customers and investment securities. For the Company it arises from receivables due from subsidiaries. Presently, the consolidated entity undertakes exploration, mining and gold production activities. The Group sells gold to two customers in Australia and has managed its exposure to credit risk by analysing the creditworthiness of the customer.
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