Nyrada Inc - Annual Report 2021

ACCOUNTING FOR SHARE-BASED PAYMENTS Area of focus How our audit addressed it The Group actively encourages its employees, key management personnel and other contracting parties to be aligned with overall shareholder value through share-based payment arrangements. Its share-based payment arrangements in periods leading up to and for the year ended 30 June 2021 took the form of share options and performance rights. These arrangements have some complexity in their calculation, namely around the following: — The determination of their grant date, which sets the value of the share-based payment arrangement; — Applying a valuation model that is appropriate in the context of the vesting terms of the arrangement, particularly concerning any market and non-market based vesting terms; — Applying inputs into the valuation models, particularly concerning the determination of expected volatility calculations; and — Assessing the appropriateness of the vesting charge of each share-based payment arrangement taken to the profit or loss during the year. This is a key audit matter as vesting charges concerning key management personnel remuneration are recorded in the Remuneration Report, which accompanies these financial statements. For new share-based payment arrangements in the year we performed the following: — Determining the appropriateness of the model applied in valuing the share- based payment arrangement; — Where the arrangement involved a market-based vesting hurdle, assessing the competence and appropriateness of the independent expert contracted by the Group to value the arrangement; and — Assessing the appropriateness of other inputs, including the grant date and ensuring the model captured the key terms and conditions of the share- based payment arrangement. For volatility inputs, we consulted our Corporate Advisory team for their assessment of the appropriateness of the volatility assumption. We also recomputed the vesting charge taken to the profit or loss of share-based payment arrangements, both those granted in the current financial year and for prior periods, reconciled to the share-based payment reserve, and then traced vesting charges of key management personnel beneficiaries to Remuneration Report disclosures. Other Information The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2021, but does not include the financial report and the auditor’s report thereon.