Notes to Consolidated Financial Statements continued Thousands of Georgian Lari 26. Share-based Payments continued Summary Fair value of the shares granted at the measurement date is determined based on available market quotations. The weighted average fair value of share-based awards at the grant date comprised Georgian Lari 106.90 per share in the year ended 31 December 2018 (31 December 2017: Georgian Lari 89.81 per share, 31 December 2016: Georgian Lari 66.19). The Group’s total share-based payment expenses for the year ended 31 December 2018 comprised GEL 99,335 (31 December 2017: GEL 56,649, 31 December 2016: GEL 45,992) and are included in Salaries and other employee benefits, as Salaries and bonuses. Below is the summary of the share-based payments-related data: 2018 2017 2016 Total number of equity instruments awarded 713,058 670,210 689,951 – Among them, to top management 474,548 464,950 545,500 Weighted average value at grant date, per share (GEL in full amount) 106.90 89.81 66.19 Value at grant date, total (GEL) 76,225 60,194 45,671 Total expense recognised during the year (GEL)* (99,335) (56,649) (45,992) *2018 Expense recognised during the year includes GEL 29,066 recorded in Discontinued operations and GEL 23,650 recorded in Non-recurring expenses. During 2018, BOGG Directors exercised 131,648 shares (2017: 126,000, 2016: 115,000) with fair value of GEL 15,339 (2017: GEL 12,049, 2016: GEL 10,760). Weighted average share price comprised GEL 116.52 per share (2017: GEL 95.63, 2016: GEL 93.57). 27. Risk Management Introduction Risk is inherent in the Group’s activities but it is managed through a process of ongoing identification, measurement and monitoring, subject to risk limits and other controls. This process of risk management is critical to the Group’s continuing profitability and each individual within the Group is accountable for the risk exposures relating to his or her responsibilities. The Group is exposed to credit risk, liquidity risk and market risk, the latter being subdivided into trading and non-trading risks. It is also subject to operational risks. The independent risk control process does not include business risks such as changes in the environment, technology and industry. They are monitored through the Group’s strategic planning process. Risk Management structure Audit Committee The Audit Committee assists the Board in relation to the oversight of the Group’s financial and reporting processes. It monitors the integrity of the financial statements and is responsible for governance around both the Internal Audit function and external auditor, reporting back to the Board. It reviews the effectiveness of the policies, procedures and systems in place related to, among others, operational risks, compliance, IT and Internal Security (including cyber-security) and works closely with the Risk Committee in connection with assessing the effectiveness of the risk management and internal control framework. Risk Committee The Risk Committee assists the Board in relation to the oversight of risk. It reviews the Group’s risk appetite in line with strategy, identifies and monitors risk exposure and the risk management infrastructure, oversees the implementation of strategy to address risk, and in conjunction with the Audit Committee, assesses the strength and effectiveness of the risk management and internal control framework. 254 Annual Report 2018Bank of Georgia Group PLC