Announcement PDF AVA RISK GROUP LIMITED AND ITS CONTROLLED ENTITIES Appendix 4D AND CONSOLIDATED INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 Lodged with the ASX under Listing Rule 4.2.A.3 ABN: 67 064 089 318 ASX CODE: AVA Registered Office: 10, Hartnett Close, Mulgrave VIC 3170 Australia www.theavagroup.com AVA RISK GROUP LIMITED ABN: 67 064 089 318 Table of Contents ASX APPENDIX 4D Results for announcement to the market Other information 1 1 DIRECTORS' REPORT Directors’ Report 3 Auditor’s Independence Declaration 5 CONSOLIDATED INTERIM FINANCIAL REPORT Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income Interim Consolidated Statement of Financial Position Interim Consolidated Statement of Changes in Equity Interim Consolidated Statement of Cash Flows Notes to the Interim consolidated financial statements 7 8 9 10 Directors’ Declaration Independent auditor’s review report 19 20 6 AVA Risk Group Limited ABN: 67 064 089 318 Details of the reporting period and the previous corresponding period Reporting period Half Year Ended 31 December 2023 Previous Corresponding Periods Half Year Ended Year Ended 31 December 2022 30 June 2023 Results for announcement to the market 2023 31 December $000 2022 31 December $000 552 14,159 13,607 946% (2,109) (2,332) (223) 185% (2,226) (1,021) 1,205 Change % movement Consolidated revenue from operations up 4% (Loss) after tax attributable to shareholders up EBITDA* down Amount of change $000 * Earnings from continuing operations before interest, tax, depreciation and amortisation (unaudited). Dividends and Distributions Current reporting period Amount per share $ 0.0017 Special dividend Record date 6 November 2023 Previous corresponding period Amount per share $ Nil. No dividends proposed Details of dividends/distribution reinvestment plan The Company does not have a dividend reinvestment plan. Page 1 AVA Risk Group Limited ABN: 67 064 089 318 Net tangible assets per security Net tangible asset backing per ordinary security 2023 2023 31 December 30 June cents cents 4.52c 6.03c Details of associates and joint venture entities The Company did not have any associated entities or joint ventures during the period. Other significant information Refer to the Directors' Report for details on other significant matters and information regarding the Consolidated Entity. Commentary on significant features of operating performance Commentary on Results is included in the attached Directors' Report and the accompanying Group Financial Statements. Page 2 Directors' Report The directors present their report together with the interim financial report of the consolidated entity consisting of AVA Risk Group Limited and its controlled entities (the “Company” , “Ava Risk Group” or "Ava") for the half-year ended 31 December 2023 and independent review report thereon. Directors' Names The names of the directors in office at any time during or since the end of the half-year are: Name Period of Directorship D Cronin (Chairman) M Stevens (Non-Executive Director) M McGeever (Non-Executive Director) Mal Maginnis (Executive Director) Appointed 10 April 2018 Appointed 11 March 2015 Appointed 8 August 2018 Appointed 9 January 2023 The directors have been in office since the start of the financial period to the date of this report unless otherwise stated. Review of operations Under the leadership of Mal Maginnis, Ava has continued to pursue its strategy to grow revenue from its market leading technologies by increasing market share and developing new and adjacent applications. During the first half of FY2024 the Company achieved a number of significant milestones on the implementation of its strategy. • Record sales order intake during the first half of the financial year of $19.7 million, growth of 37% on the previous year, underpinned by the investment Ava has made in its technology and commercial capability. • As announced on 9 February 2024, the Company signed a supply agreement with Telstra Group (“Telstra”), Australia’s largest telecommunication provider and owner of Australia’s largest fibre optic network. The agreement was the culmination of extensive collaboration with Telstra during the first half of FY2024, including successful product trials which deployed the Company’s fibre sensing technology to Telstra’s infrastructure. The agreement is a clear demonstration of the adaptability of the Company’s technology to adjacent applications such as telecommunications, which opens significant new markets to Ava. • Growth in sales order intake in the Access segment of 80% on the prior year driven by the completion of product certifications for the Cobalt series locks which has resulted in stocking orders from dormakaba under its global framework agreement. Initial orders from dormakaba North America and Europe were received during the first half and fulfilled by January 2024. Ongoing development and investment in technology remains at the centre of the success of Ava. In the Detect segment, Aura Ai-X, the Company’s latest generation fibre sensing technology, continues to be developed to improve system performance and meet market needs. Since its launch in March 2023, Aura Ai-X has been critical to Ava’s success in key large scale contract awards such as a transport infrastructure project in Australia and a mine site application in Chile which were both won during the first half. Large scale contracts such as these demand a more sophisticated commercial approach and technical support. Page 3 Directors' Report Review of operations (continued) Finalisation of the Cobalt series of locks has been the driver of growth in the Access segment. Certifications were received for these locks during the first half and provided immediate access to dormakaba’s global distribution network. In the Illuminate segment, a new “LoRa” product has been developed which will enable the seamless integration of a number of the Company’s devices in a common solution. It is expected that “LoRa” will be launched in the second half of the year. Financial performance for the first half was subdued, driven by lower than expected revenue, particularly in Q1. Total revenue of $14.2m grew by 4% on the previous year ($13.6 million for HY2023). The subdued revenue performance was driven primarily by lower revenue in Detect (-$0.8 million compared to the prior year) which was offset by improved performance in Access. This has reduced consolidated gross margin as lower margin Access revenue has offset higher margin Detect revenue. Gross margins within each operating segment remain in line with expectations and are expected to improve at a consolidated level as Detect revenue grows. Over the past twelve months the Company has invested significantly in both its technology and commercial capability. The benefit of these investments is reflected in the record sales order intake during the first half year, completion of significant product certifications in Access, and strengthened relationships with key partners such as Telstra and dormakaba. The upfront impact of these investments have adversely impacted EBITDA in the half which recorded a loss of $0.9 million (+$1.3 million for HY2023), including non-recurring costs of $0.3 million. Net loss for the period was $2.3 million (HY2022 was a net loss of $0.2 million) reflecting lower EBITDA. The Company had a cash balance at 31 December 2023 of $1.8 million. Ava is well placed to pursue revenue and earnings growth in the second half of FY2024. There are strong catalysts for growth in each operating segment and the Company has strengthened its relationships with key partners during the first half. Events after the Balance date There has been no matter or circumstance which has arisen since 31 December 2023 that has significantly affected or may significantly affect: a)    the operations subsequent to 31 December 2023, of AVA Risk Group Limited, or b)    the results of those operations, or c)    the state of affairs, subsequent to 31 December 2023, of AVA Risk Group Limited. Rounding of amounts In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts in the directors’ report and in the financial report have been rounded to the nearest one thousand dollars, or in certain cases, to the nearest dollar (where indicated). Auditor’s independence declaration A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 in relation to the review for the half-year is provided with this report. This report is made in accordance with a resolution of directors. David Cronin Chairman 26 February 2024 Page 4 Tel: +61 3 9603 1700 Fax: +61 3 9602 3870 www.bdo.com.au Collins Square, Tower Four Level 18, 727 Collins Street Melbourne VIC 3008 GPO Box 5099 Melbourne VIC 3001 Australia DECLARATION OF INDEPENDENCE BY WAI AW TO THE DIRECTORS OF AVA RISK GROUP LIMITED As lead auditor for the review of AVA Risk Group Limited for the half-year ended 31 December 2023, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and 2. No contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of AVA Risk Group Limited and the entities it controlled during the period. BDO Audit Pty Ltd Wai Aw Director Melbourne, 26 February 2024 BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. AVA Risk Group Limited Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income 6 months ended 31 December 2023 31 December 2022 $'000 $'000 Total Expenses 14,159 67 14,226 (5,534) (6,156) (1,046) (189) (619) (357) (690) (12) (1,098) (111) (98) (546) (16,456) 13,607 35 13,642 (4,591) (4,765) (866) (327) (416) (299) (575) 70 (1,093) (89) (49) (619) (13,619) (Loss) Profit before income tax Income tax expense Loss for the period (2,230) (102) (2,332) 23 (246) (223) (105) (105) 573 573 Loss for the period attributable to Equity holders of the parent company (2,332) (223) Total comprehensive loss income for the period attributable to Equity holders of the parent company: (2,437) 350 Note 5 Revenue from contracts with customers Other income Total Revenue and other income Cost of raw materials and consumables used Employee benefit expenses Research and development Advertising and marketing Travel and entertainment Facilities and office Compliance, legal, and administration (Impairment) Reversal of receivables Depreciation and amortisation expenses Finance expense Foreign exchange losses Other expenses Other comprehensive income for the period, net of tax Items that may be reclassified subsequently to profit and loss Exchange differences on translation of foreign operations, net of tax Total other comprehensive (loss) income for the period Earnings per share attributable to ordinary shareholders of AVA Risk Group Limited Cents Basic loss per share Diluted loss per share 8 8 (0.91) (0.91) The above Interim Consolidated Statement Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. Page 6 (0.09) (0.09) AVA Risk Group Limited Interim Consolidated Statement of Financial Position As at 31 December 2023 $'000 As at 30 June 2023 $'000 1,778 8,091 7,954 1,219 19,042 5,517 8,388 7,464 670 22,039 Non-Current Assets Plant and equipment Intangible assets Right of use assets Deferred tax asset Total Non-Current Assets TOTAL ASSETS 935 14,093 931 15 15,974 35,016 1,114 13,584 263 75 15,036 37,075 LIABILITIES Current Liabilities Trade and other payables Contract liabilities Borrowings Lease Liability Provisions Total Current Liabilities 3,234 333 1,849 405 1,172 6,993 2,671 278 1,999 171 1,408 6,527 Non-Current Liabilities Provisions Borrowings Lease liabilities Contract liabilities Deferred tax Liabilities Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS 91 341 547 346 109 1,434 8,427 26,589 59 542 118 429 146 1,294 7,821 29,254 53,830 (26,385) (856) 26,589 53,831 (23,618) (959) 29,254 Note ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventories Prepayments Total Current Assets 6 EQUITY Contributed Equity Accumulated losses Reserves TOTAL EQUITY 7 The above Interim Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. Page 7 AVA Risk Group Limited Interim Consolidated Statement of Changes in Equity At 1 July 2023 Losses for the period Other comprehensive loss Total comprehensive loss for the period Contributed equity Share-based payment Reserve Foreign Exchange Translation Reserve Other Equity Reserves Accumulated Losses Total Equity $’000 $’000 $’000 $’000 $’000 $’000 53,831 - 2,050 - 38 (105) (3,047) - (23,618) (2,332) - 29,254 (2,332) (105) - - (105) - (2,332) (2,437) - - (435) - (435) (1) 208 - - (435) (228) (67) (3,047) (26,385) 26,589 Transactions with owners in their capacity as owners Dividends/distributions (1) Share issue costs 208 Share based payments Total transactions with owners in their capacity as (1) 208 owners Balance at 31 December 53,830 2,258 2023 At 1 July 2022 Losses for the period Other comprehensive income Total comprehensive loss for the period 50,793 - 1,749 - (983) - (3,047) - (22,564) (223) 25,948 (223) - - 573 - - 573 - - 573 - (223) 350 - - - 3,041 (3) 218 - - - 3,256 (410) (3,047) (22,787) 29,554 Transactions with owners in their capacity as owners Dividends/distributions Shares issued as part of the 3,041 acquisition of GJD (3) Share issue costs 218 Share based payments Total transactions with owners in their capacity as 3,038 218 owners Balance at 31 December 53,831 1,967 2022 The above Interim Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. Page 8 AVA Risk Group Limited Interim Consolidated Statement of Cash Flows Note For the half-year ended 31 December 2023 6 months ended 31 December 31 December 2023 2022 $’000 $’000 Cash flow from operating activities Receipts from customers Payments to suppliers and employees Interest received Tax paid Finance costs Lease interest paid Net cash flows used in operating activities 14,602 (15,740) 10 (136) (104) (6) (1,374) 12,332 (14,270) 10 (211) (78) (12) (2,229) Cash flow from investing activities Payment for intangible assets Payment for plant and equipment Purchase of business, net of cash acquired Net cash flows used in investing activities (1,266) (122) (1,388) (959) (324) (5,522) (6,805) Cash flow from financing activities Share issue expense Repayment of borrowings Dividends paid Payment of lease liabilities Net cash flows used in financing activities (1) (177) (435) (181) (794) (3) (340) (24) (152) (519) (3,556) (35) 3,887 296 (9,553) 265 15,226 5,938 Net (decrease) in cash and cash equivalents Net foreign exchange differences on cash Cash and cash equivalents at beginning of period Cash and cash equivalents at end of the period 6 The above Interim Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. Page 9 AVA Risk Group Limited Notes to the Interim Consolidated Financial Statements 31 December 2023 1. Corporate information The consolidated financial statements of AVA Risk Group Limited and its subsidiaries (collectively, the Group) for the half-year ended 31 December 2023 were authorised for issue in accordance with a resolution of the directors on 26 February 2024. AVA Risk Group Limited (the parent) is a limited company incorporated and domiciled in Australia and whose shares are publicly traded. The registered office is located at 10 Hartnett Close, Mulgrave, Victoria 3170, Australia. The Group is principally engaged in sensing and access technology protecting high value assets and critical infrastructure. 2. Basis of preparation and changes to the Group's accounting policies (a) Basis of preparation This interim consolidated half-year financial report has been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting , as appropriate for for-profit entities, and the Corporations Act 2001. This interim consolidated half-year financial report does not include all the notes of the type usually included in an annual financial report. It is recommended that this half-year financial report be read in conjunction with the annual financial report for the year ended 30 June 2023 and any public announcements made by AVA Risk Group Limited during the halfyear in accordance with any continuous disclosure obligations arising under the Corporations Act 2001. The half-year financial report was authorised for issue by the directors as at the date of the directors’ report. (b) Going concern The financial statements have been prepared on a going concern basis which assumes the Group will have sufficient cash to pay its debts as and when they become payable for a period of at least 12 months from the date the financial report was authorised for issue. (c) Rounding amounts In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts in the directors’ report and in the financial report have been rounded to the nearest one thousand dollars, or in certain cases, to the nearest dollar (where indicated). Page 10 AVA Risk Group Limited Notes to the Interim Consolidated Financial Statements 31 December 2023 2. Basis of preparation and changes to the Group's accounting policies (continued) (d) Critical accounting estimates and assumptions The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. (i) Impairment of tangible and intangibles assets The Group determines whether tangible and intangible assets are impaired at least on an annual basis by evaluating whether indicators of impairment exist in relation to the continued use of the asset by the consolidated entity. The Group has three identifiable Cash Generating Units ("CGUs"): • Detect • Access • Illuminate No impairments were recognised for the period (June 2023: nil). (ii) Capitalisation of development costs The capitalisation of development costs required judgement to be applied. Management assesses and exercises judgment on expenditures that meet the definition of development. (iii) Amortisation of intangible assets Judgement is required to assess the useful economic life of intangible assets. Intangible assets, including capitalised development costs that have a finite life are amortised on a systematic basis over the expected life of the asset and cease at the earlier of the date that the asset is classified as held for sale and the date that the asset is derecognised. 3. Related party transactions The Group purchased consulting services from Pierce Group Asia Pte Ltd a related entity through the Chairman and Non-Executive Director, David Cronin, for $142,500 (HY2023: $142,800). Accounts payable balance at 31 December 2023 totals $17,050 (30 June 2023: $17,270). There have been no other related party transactions other than those between the Company and its subsidiaries during the half-year ended 31 December 2023. Page 11 AVA Risk Group Limited Notes to the Interim Consolidated Financial Statements 31 December 2023 4. Segment information (a) Description of segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments has been identified as the Board of Directors of Ava Risk Group Limited. The Group’s segments were based on three separately identifiable products. The Group operates in Detect, Access, and Illuminate, which are its reportable segments. These divisions offer different products and services and are managed separately because they require different technology and marketing strategies. The Illuminate Segment was acquired on 2 August 2022, refer to Note 6 Business Combination. The following summary describes the operations of each reportable segment: Product type Reportable segment Operations Technology Detect Manufactures and markets ‘smart’ fibre optic sensing systems for security and condition monitoring for a range of applications including perimeters, pipelines, conveyors, power cables and data networks. Access Specialises in the development, manufacture and supply of high security biometric readers, security access control and electronic locking products. Illuminate Specialises in the development and manufacture of illuminators, ANPR cameras and perimeter detectors. (b) Reportable segments 31 December 2023 Detect $’000 Access $’000 Illuminate $’000 Eliminations Consolidated $’000 $’000 Revenue and other income External customers Intersegment revenue Other income Interest Income Segment revenue and other income 7,798 52 6 3,186 3 4 3,175 2 - 7,856 3,193 3,177 - 14,226 EBITDA (686) (71) (320) 56 (1,021) (612) (3) (20) (303) (117) (183) (108) 35 - (1,098) (111) (102) (1,321) (491) (576) 56 (2,332) Depreciation and amortisation Finance costs Income tax Segment operating loss Page 12 - 14,159 57 10 AVA Risk Group Limited Notes to the Interim Consolidated Financial Statements 31 December 2023 (b) Reportable segments (continued) 31 December 2022 Detect $’000 Access $’000 Illuminate $’000 8,618 52 4 1,933 55 2 6 3,056 23 - (107) - 13,607 25 10 8,674 876 1,996 131 3,079 198 (107) - 13,642 1,205 (539) (7) (28) (393) (2) (218) (161) (80) - - (1,093) (89) (246) 302 (482) (43) - (223) Revenue and other income External customers Intersegment revenue Other income Interest Income Segment revenue and other income EBITDA Depreciation and amortisation Finance costs Income tax Segment operating profit (loss) Eliminations Consolidated $’000 $’000 (c) Geographic information Consolidated Australia APAC (excl Australia) Europe India MENA United States of America Rest of world Total external revenue by region (d) 31 December 2023 31 December 2022 $’000 $’000 1,290 1,947 4,452 296 439 4,647 1,088 1,266 1,815 4,780 329 245 3,520 1,652 14,159 13,607 Non-current operating assets Australia United Kingdom Rest of world Total non-current assets by region 31 December 2023 30 June 2023 $’000 $’000 6,862 8,152 945 15,959 6,590 7,698 673 14,961 Non-current assets for this purpose consist of plant and equipment, right-of-use assets, and intangible assets. (e) Reconciliation of non-current assets Non-current operating assets by region Deferred tax assets Total non-current assets 31 December 2023 30 June 2023 $’000 $’000 15,959 15 15,974 Page 13 14,961 75 15,036 AVA Risk Group Limited Notes to the Interim Consolidated Financial Statements 31 December 2023 5. Revenue and other income Consolidated (a) Total other income Total Revenues and other income 11,895 1,712 13,607 10 57 67 10 25 35 67 14,226 35 13,642 12,937 1,222 14,159 11,895 1,712 13,607 Disaggregation of revenue Timing of revenue recognition Goods transferred at a point in time Services transferred over time Total revenue from contracts with customers (d) 12,937 1,222 14,159 Other income Interest received Other income Total other income - continuing operations (c) 31 December 2022 $'000 Revenue from contracts with customers Revenue from sales of goods Revenue from provision of services Total revenue from contracts with customers (b) 31 December 2023 $'000 Performance obligations The Group holds contract liabilities in relation to services including extended warranty, support, commissioning and training which have been invoiced in advance with the services yet to be provided. Page 14 AVA Risk Group Limited Notes to the Interim Consolidated Financial Statements 31 December 2023 6. Cash and short-term deposits Consolidated 31 December 30 June 2023 2023 $'000 $'000 Cash at banks and on hand Short-term deposits Total Cash 1,723 55 1,778 5,462 55 5,517 Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. For the purpose of the statement of cash flows, cash and cash equivalents comprise the following: 31 December 2023 $'000 Cash at banks and on hand Short-term deposits Bank overdrafts Cash and cash equivalents 1,723 55 (1,482) 296 30 June 2023 $'000 5,462 55 (1,630) 3,887 Bank overdrafts Bank overdrafts relate to existing banking facilities for working capital. At 31 December 2023, the Group had available $1,097,000 (June 2023 $1,037,000) of undrawn committed facilities. Cash balance held in Trust The cash balance at 31 December 2023 includes an amount of $280,000 (June 2023 $264,000) which is restricted by the Share Registry in trust of outstanding dividend payments. 7. Contributed equity Consolidated 31 December 30 June 2023 2023 $'000 $'000 (a) Ordinary shares Ordinary share capital, issued and fully paid 53,830 53,830 (b) Movement in ordinary shares on issue Number of shares At 1 July 2023 Share issue: On exercise of Performance Share Rights Share issue costs At 31 December 2023 53,831 53,831 $'000 255,414,634 53,831 388,149 255,802,783 (1) 53,830 (c) Dividends During the half- year ended 31 December 2023, the Group declared and paid a special dividend of $0.0017 per share. Page 15 AVA Risk Group Limited Notes to the Interim Consolidated Financial Statements 31 December 2023 8. Earnings per Share The following reflects the income used in the basic and diluted loss per share computations: Loss used in calculating earnings per share for basic and diluted Net loss after tax 31 December 2023 $'000 31 December 2022 $'000 (2,332) (2,332) Total (a) Weighted average number of shares Weighted average number of ordinary shares used as the denominator in calculating basic loss per share (223) (223) 31 December 2023 Number 31 December 2022 Number 255,674,104 254,508,593 4,128,188 2,751,341 259,802,292 257,259,934 31 December 2023 Cents 31 December 2022 Cents Adjustments for calculation of loss per share Dilutive share options / performance rights Weighted average number of ordinary shares adjusted for the effect of dilution used as the denominator in calculating diluted loss per share (b) Earnings per share Basic loss per share Diluted loss per share (0.91) (0.91) (0.09) (0.09) Since reporting date there have been no transactions involving ordinary shares or potential ordinary shares that would significantly change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the date of completion of these financial statements. 9. Commitments At 31 December 2023, the Group had commitments of $272,000 relating to the purchase of Fibre Optic cable with its main supplier (30 June 2023 $244,000). Page 16 AVA Risk Group Limited Notes to the Interim Consolidated Financial Statements 31 December 2023 10. Share-based payments (a) Expense arising from equity-settled share-based payment transactions 31 December 2023 31 December 2022 $'000 $'000 Performance Shares (b) 208 218 Number of PSRs WAEP 2,812,876 3,304,603 (388,149) 26,693 5,756,023 $nil $nil $nil $nil $nil Performance Share Rights (PSRs) i. Outstanding Performance Share Rights - Half Year ended 31 December 2023 Outstanding 1 July 2023 Granted during the period Exercised during the period Forfeited and other movement during the period Outstanding 31 December 2023 ii. HY 2023 Grants During the half year ended 31 December 2023, the Company granted 3,304,603 performance rights as part of remuneration to senior executives. The fair value of the PSRs was based on the Black-Scholes model and Monte Carlo Simulation pricing model. The PSRs have a nil exercise price. The vesting conditions of the performance rights are based on Share price performance and Service Condition. Page 17 AVA Risk Group Limited Notes to the Interim Consolidated Financial Statements 31 December 2023 11. Fair value of financial instruments The carrying amounts and estimated fair values of the Group's financial instruments recognised in the interim financial statements and notes to the interim financial report are materially the same. 12. Subsequent events There has been no matter or circumstance which has arisen since 31 December 2023 that has significantly affected or may significantly affect: a) b) c) the operations subsequent to 31 December 2023, of AVA Risk Group Limited, or the results of those operations, or the state of affairs, subsequent to 31 December 2023, of AVA Risk Group Limited. Page 18 Directors' Declaration In the Directors’ opinion: (a) The directors declare that the interim financial report and notes set out on pages 3 to 18 are in accordance wi