ANNUAL Report June 2025 Notes to the Consolidated Financial Statements 42 (e) Fair Values For financial assets and liabilities, the fair value approximates their carrying value. No financial assets and financial liabilities are readily traded on organised markets in standardised form other than listed investments. The Company has no financial assets, including derivative financial assets and liabilities, where the carrying amount exceeds the net fair values on the reporting date. The Company’s receivables at the reporting date comprise of GST input tax credits refundable by the Australian Taxation Office and other receivables. The balance (if any) of receivables comprises prepayments (if any). The credit risk on the Company's financial assets, which has been recognised on the Statement of Financial Position, is generally the carrying amount. (f) Capital Risk Management The consolidated entity’s objectives when managing capital are to safeguard its ability to continue as a going concern so that it can provide returns for shareholders and benefits for other stakeholders and maintain an optimum capital structure to reduce the cost of capital. Consistently with others in the industry, the consolidated entity monitors capital based on the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as “equity” as shown in the Statement of Financial Position plus net debt. The gearing ratio as at 30 June 2025 was 70% as opposed to 65% at 30 June 2024. The increase in the ratio is predominately due to the Company financing its capital growth initiatives for the Mt Carbine Tungsten Project via debt rather than equity. To maintain or adjust the capital structure, the consolidated entity may adjust the dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current parent entity’s share price at the time of the investment. The consolidated entity continues to evaluate corporate and exploration opportunities within the new economy and critical minerals sector. The consolidated entity is subject to certain financing arrangements and covenants, and meeting these is given priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the financial year. The capital risk management policy remains unchanged from the 30 June 2024 Annual Report. The consolidated entity is not subject to externally imposed capital requirements. 30. SHARE BASED PAYMENTS (a) Expenses arising from share-based payment transactions Total expenses arising from share-based payment transactions recognised during the period were as follows: Expensed FV at Grant Date Expensed / Capitalised in prior years Lapsed / Forfeited Options/ Shares Capitalised 2025 Year IFRS 2 Not yet Expensed Options issued to key management personnel 1,075,661 29,769 - 1,003,907 - 41,985 Options issued to employees/consultants / sophisticated investors 3,277,689 458,493 - 2,310,828 387,661 120,707 Shares issued to for senior financial advisor service fees 33,411 - - 33,411 - - Total share-based payments 4,386,761 488,262 - 3,348,146 387,661 162,692 108 EQ Resources Limited Annual Report 2025 Notes to the Consolidated Financial Statements continued
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