G L G C O R P LT D ANNUAL REPORT 2017

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YARN SOURCING
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DYEING
VERTICAL
INTEGRATION WAREHOUSING
KNITTING & LOGISTICS
FINISHING
INSPECTION &
PACKAGING
PRINTING
SHIPMENT
PREPARATION
WASHING
LAB TEST
R&D
PRODUCT
DESIGN EMBROIDERY
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A GLOBAL TEXTILE & APPAREL SUPPLY CHAIN ENTERPRISE

GHIM LI’S NETWORK

Over 7,000 employees across 6 countries

shipping over 59 million pieces of garments annually

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Factory:
Maxim Malaysia
Factory: Malaysia
Korea Sales/Design Office:
Factory: Cambodia
Seongdong-gu, Seoul, Korea
Established July 2015
Hanoi Outsourcing
Factory
Factory: Vietnam
(HCMC)
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Factory: Indonesia
HQ Sales & Design Office:
Singapore
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* Outsourced Partner
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COMPANY SECRETARY Mr Alistair Chong

REGISTERED OFFICE PRINCIPAL ADMINISTRATION OFFICE L40 100 Miller St 21 Jalan Mesin North Sydney NSW 2060 Singapore 368819 Australia

SHARE REGISTRY

Link Market Services Limited Level 1, 333 Collins Street Melbourne VIC 3000 Australia

Cautionary Statement

Some statements contained in this annual report are not of historical facts but are statements of future expectation with respect to financial conditions, results of operations and business, and related plans and objectives. Such forward-looking statements are based on GLG Corp Ltd’s current views and assumptions including but not limited to, prevailing economic and market conditions and currently available information. These statements involve known and unknown risks and uncertainties that could cause actual results, performance or achievements to differ materially from those in the forward-looking statements. It should be noted that the actual performance or achievements of GLG Corp Ltd may vary significantly from such statements.

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02 Chairman & CEO’s Speech
04 Vision, Mission & Core Values
05 Snapshot of GLG Corp Ltd
06 Highlights of 2017
14 Audit Commitee Report
17 Corporate Governance Statement
34 Director’s Report
49 Auditor’s Independence Declaration
50 Independent Auditor’s Report
55 Consolidated Statement of Profit or Loss and Other Comprehensive Income
56 Consolidated Statement of Financial Position
57 Consolidated Statement of Changes in Equity
58 Consolidated Statement of Cash Flows
59 Notes to the Financial Report
103 Additional Australian Securities Exchange Information
54 Directors’ Declaration

ANNUAL REPORT 2017

GLG CORP LTD

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2
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CHAIRMAN & CEO’S SPEECH

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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Estina Ang Suan Hong
Chairman & CEO
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Dear shareholders, customers, board members, employees and stakeholders,

We are living in a world of change in our retail industry, which is now characterized by disruptive transformation that leads to things made possible by technology. Our customers have seen the power of technology create new ways of serving the consumers through online e-commerce platforms, besides using their existing brick-and-mortar stores model. Also, we see such disruptions creating compelling ways for our customers to focus on saving time and gaining easy access to products and services to serve consumers. Our customers are time-sensitive where there is an imperative need to optimize the supply chain process to achieve speed, meaning sharp reduction in lead times. We are also seeing shifts in our customers’ preferences, from reduction in order quantities to requesting more design/styling and greater flexibility in their procurement practices.

Against this backdrop, in this year’s letter, I want to share with you our strategic focus to drive our company to the next level of excellence, specifically in three areas: SPEED, PRODUCTIVITY & VERTICAL INTEGRATION.

SPEED EMPHASIS

The changes in the industry especially emphasizing on speed have changed the way we work, making us focus on using more digital tools, becoming more productive with efficient internal processes and have more real-time information, supported by advanced analytics. In response, we will employ new technology in creating a digitalized supply chain that will help us to anticipate future requirements. With the use of digital tools that can offer predictive data analytics, we can help our customers to make better decisions and allow us to act with speed to help our customers increase their speed effectiveness and productivity.

In our business, one key area is the design, product development and sampling process for our customers, which consumes a lot of time, but with the use of digital tools like 3D, we will be able to reduce the cycle time and improve the adoption rate much faster, besides eliminating the need for physical samples, wastage and saving costs.

PRODUCTIVITY DRIVE

In our quest to achieve efficiency improvements, we have ambitious plans to improve our factory productivity, via streamlining of internal processes

GLG CORP LTD

ANNUAL REPORT 2017 3

CHAIRMAN & CEO’S SPEECH FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

and restructuring. We have started our efforts to restructure our pre-order processes in Singapore Headquarters (HQ), eliminating duplication of activities between HQ and factories which will help us to be more customer-centric, besides improving cycle time. In the area of post-order activities, we plan to expand our factories’ involvement, correspondingly reduce HQ processes, to achieve higher efficiencies and reduce costs.

Our journey to improve garment production processes has taken us to strategic investment in RFID technology, using smart labels to provide track and trace information to achieve benefits like QC improvement, real-time production capacity planning, waste elimination, etc. At the end of the fiscal year, we added more in-house apparel production capacity by acquiring from our outsourced partner, a factory in Malaysia, which is another landmark in our strategic journey. This acquisition will enhance our manufacturing presence in the region as we continue to transform ourselves from a “Trading Agent” model to become a “OneStop Solutions Provider”.

VERTICAL INTEGRATION PROGRESS

In December 2016, we completed our acquisition of fabric mill (called Maxim) in Malaysia as another milestone in our vertical integration journey, to improve time-to-market and value proposition for our customers. We are delighted with the progress we are making in Maxim, most notably the increase in volume production of the factory to support our in-house needs, resulting in less reliance on external fabric suppliers. As a next step, we are targeting the fabric mill to improve its lead time in production, in addition to stocking up yarn inventory to support shorter lead time demand.

We have allocated more investment capital in the fabric mill, not only for enhancing manufacturing capacity but also to build R&D lab for material innovation in products like “tough cotton” to enhance market penetration. We will continue to invest in this core business with technology, ultimately allowing us to expand our product portfolio which will then include fabric material as one of our end-products besides knitted garments.

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STRATEGY TO WIN
SPEED
PRODUCTIVITY
VERTICAL
INTEGRATION
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CHALLENGES AHEAD

We believe that the road ahead is still going to be tough, as we will continue to face the trend of lowering prices. We will strive to become better at what we do best and constantly innovate to save time and money. Throughout our history, we operate from a strong foundation built with actions aimed at strengthening our core competencies and delivering business results. We will treat our challenges as opportunities for us to change and adapt whilst we continue to implement our strategy to achieve sustainable growth, strong balance sheet and shareholder returns. In this new era of retail, we know that changes of rapid growth in e-commerce and digital capabilities for the consumer, will continue to accelerate further but our efforts will stay focus on emerging as a strong supplier of our products and services to our customers.

Let me conclude by extending my thanks to you all. I am honoured to serve you and confident that we will serve customers more effectively and continue to deliver value through price, quality and speed-tomarket.

Yours truly,

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Estina Ang Chairman & CEO

4 ANNUAL REPORT 2017

GLG CORP LTD

VISION

To be a world-class leader in textiles and apparel, growing strategic alliances with our customers

MISSION

To make our customers more successful by: Focusing on our SPEED of services Ensuring competitive products COSTS Providing high QUALITY products Meeting / exceeding COMPLIANCE standards Maintaining efficient and effective seamless SUPPLY CHAIN MANAGEMENT

CORE VALUES

Diversity and Respect

is our life blood and governs the way we do business and makes our company stronger. Our diverse workforce mirrors different cultures and viewpoints to create a work environment for our people to succeed. We encourage our people to express their thoughts and ideas. We treat each other with dignity.

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CUSTOMER
FOCUS
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DIVERISTY
AND RESPECT
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CUSTOMER
FOCUS
QUALITY AND
EFFICIENCY
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Customer-Focus, where we value our customers as the fundamental reason for us to be in business. We act on our customers' terms by offering quality products and solutions, with the best customer services possible. We look for every opportunity where we can exceed our customers' expectations.

Results Orientation,

Commitment to Quality and Efficiency, where we build on your business to deliver this promise at all time

characterized by our people taking ownership, being accountable for what needs to be done and getting the job done despite obstacles and difficulities

GLG CORP LTD ANNUAL REPORT 2017 5

SNAPSHOT OF GLG CORP LTD

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FABRIC & APPAREL APPAREL SUPPLY MANUFACTURING CHAIN SERVICES SERVICES

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CORPORATE SERVICES

Product Design & Production Business Styling Planning & Control Development Product Fabric R&D & Marketing & Development Manufacturing Merchandising (For Volume Manufacturing) Apparel Sales Manufacturing Material Sourcing Finance Printing Technical Support Human Embroidery Resources & Quality Assurance & General Admin Compliance Wet & Dry Processing Information Warehousing, Technology Logistics & Customs Clearance Corporate Affairs & CSR Direct Shipment From Manufacturing Origin to Final Distribution Center of Customer

6 ANNUAL REPORT 2017

GLG CORP LTD

FINANCIAL HIGHLIGHTS

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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GROSS MARGIN
US$21,471,000
PROFIT BEFORE TAX
REVENUE
US$4,477,000
US$156,041,000
OUR SUPPLY
CHAIN NETWORK
6 COUNTRIES OPERATING
CASH FLOW
EARNINGS
PER SHARE – BASIC 59 MILLION US$1,378,000
US5.66 cents PIECES SHIPPED
OUR PEOPLE AND
OUTSOURCED FACTORY NET TANGIBLE
REPRESENTATIVES PER SHARE
7,000+ US61.05 cents
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GLG CORP LTD ANNUAL REPORT 2017 7

PEOPLE HIGHLIGHTS OF SINGAPORE HQ

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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7%
58%
35%
Executive
Ratio
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[Percentage of Employees in respective Group] Top Management Middle Management Employees

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8%
10%
45%
17% Service
Years
20%
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[Percentage of Employees in respective categories]
0-5 years >16 up to
20 years
>5 up to >20 years
10 years
>10 up to
15 years
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7% 13%
31%
Age 25%
Distribution
24%
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27% 73%
Gender
Mix
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[Percentage of Employees in their Age Group]

<30 years old >51 up to 60 years >30 up to old 40 years old >60 years old >41 up to 50 years old

[Percentage of Employees in their Gender Group] Female

Male

8 ANNUAL REPORT 2017

GLG CORP LTD

OPERATIONAL HIGHLIGHTS

FIRST QUARTER FY2017

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Risk Committee
formed, top 10
Risk Management Prelim Report risks identified
workshop and on FY2016 and annual
policy revised and filed with ASX certification
approved by AC
Statutory
Report FY2016
Commenced execution of filed with ASX
Maxim entities acquisition,
after announcement on 30
June 2016
SECOND QUARTER
FY2017
AGM held in
Sydney including
shareholders
Change of approval for
Maiden First batch of Company Maxim acquisition
shipments to LDP shipments Secretary
new customer arrived in USA
(Gerber)
Completion of
Maxim entities
acquisition
FY2017
Annual Report to
shareholders
September 2016
August 2016
July 2016
December 2016
November 2016
October 2016
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GLG CORP LTD ANNUAL REPORT 2017 9

OPERATIONAL HIGHLIGHTS

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

THIRD QUARTER FY2017

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First Half Financial
Statements
(Appendix 4D) filed
with ASX
ASIC approval of
Deloitte resignation and
appointment of BDO as
new auditor
Maxim Malaysia
signed up for
Walmart's self-testing
Quality program
FOURTH QUARTER
FY2017
Board
Announced approved
the Budget
acquisition of
for FY2018
Walmart Canada garment factory
gave us Supplier in Malaysia (GLM)
Award 2017
Completion
of GLM
acquisition
CFO & CMO
conduct investors’
roadshow in Sydney
March 2017
February 2017
January 2017
June 2017
May 2017
April 2017
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10 ANNUAL REPORT 2017

GLG CORP LTD

GHIM LI FASHION (MALAYSIA) SDN BHD

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

KEY STATISTICS:

§ Established : 1984
§ Product Type: Knitted Wear
§ Total Production Lines: 16
§ 6-day work-week
§ Capacity: 800,000 Units/Month
§ Specialty Styling: Sleepwear, Fashion Knit-Tops, Children’s wear & Polo T-Shirt
§ In-House Print Embroidery & Laundry

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Labis
Mersing
MAP OF JOHOR,
MALAYSIA
Yong Peng
Maxim Textile
Parit Raja Technology
Kota Tinggi
Kulai
Senai
Ghim Li Fashion (M) Sdn. Bhd.
Lot 7962 Batu 22 Johor Bahru
Jalan Air Hitam, Kulai 81000
Malaysia
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KEY STRENGTHS & COMPETITIVE ADVANTAGES

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Close proximity Allows complete Supplements in-house manufacturing to Maxim Fabric Mill Vertical Set- capacity for GLG, on top of investment and Sea Ports for Up: Shorten in Vietnam, giving us the ability to offer inbound & outbound Lead-Time more control and speed-to-market movements solutions to our end-customers

Add depth to the GLG’s knowledge and experience as this factory has been in this business since 1984

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Strong Compliance and Quality Grey Goods Faster Sample Control teams in this factory, as one Preparation Turnaround of its competitive advantage in human & Dyeing capital (management, production and Arrangement operational teams)

Ideal for GLG’s customers who prefers Malaysia as the choice of country of origin (in production)

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AWARDS & ACHIEVEMENT

17 consecutive years as winner of Macy’s 5 Star Vendor award.

Awarded “Vendor of the Year” 2014 (Apparel) by Walmart Canada

GLG CORP LTD ANNUAL REPORT 2017 11

MAXIM FABRIC MILL PROCESS

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DYEING
YARN
SOURCING
KNITTING
FINISHING
INSPECTION &
PACKAGING
PRINTING
DELIVERY
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12 ANNUAL REPORT 2017

GLG CORP LTD

TECHNICAL EXPERTISE & QUALITY ASSURANCE

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TECHNICAL EXPERTISE

§ 3D Pattern for garment fittng
§ Grading of Technical Specification
§ USA trained & Certified Fit Engineer
§ Self Colour Approvals

QUALITY ASSURANCE

§ Achieving the Right Final Product On-time
§ Adherence to Buyers Quality Standards
§ Proactive Quality Assurance
§ Implementation of traffic light system to achieve zero defects

CUSTOMISED DESIGNS & GRAPHIC SUPPORT

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FABRIC R&D AND SOURCING

GLOBAL SOURCING NETWORK OF YARNS AND FABRICS

R & D focus on:

§ Process Improvement
§ Cost Saving
§ Fabric Engineering & Design
§ New Development on finishing
§ Fabric trends and market intelligence

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GLG CORP LTD ANNUAL REPORT 2017 13

KEY FOCUS FABRICATIONS

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§ 60/40 CVC INTERLOCK/ JERSEY
§ 100% COTTON 1X1 RIB
§ 100% COTTON INTERLOCK

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§ 100% COTTON SINGLE JERSEY
§ CTN / SPANDEX JERSEY, PIQUE AND FRENCH TERRY
§ 60/40 – 70/30 CTN POLY FLEECE

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§ PIGMENT PRINT WITH § **COTTON MODAL REACTIVE TOUCH SPANDEX
§ RAYON SPANDEX § POLY RAYON SPANDEX
§ **MODAL SPANDEX

TREND INTELLIGENCE TO CUSTOMER

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WORKING IN PARTNERSHIP IN THE CREATIVE PROCESS

§ Seasonal Design Creation
§ Customized Fabric & Accessories Sourcing
§ Customized Design support
§ Technical Design & Sampling execution
§ Directional graphic designs for print, embroidery & embellishment

MEET GLOBAL COMPLIANCE STANDARDS

As the industry faces heightened customer awareness & expectation, Ghim Li as a responsible supply chain understands the need to adhere strictly to global quality and compliance standards.

Our Suppliers and all our facilities aim to meet or excel in every compliance standards relating to Social Compliance, CTPAT Compliance; and Environment Compliance and are regularly audited by 3rd Party auditors.

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14 ANNUAL REPORT 2017

GLG CORP LTD

AUDIT COMMITEE REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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Christopher Chong
Chairman, Audit Committee &
Lead Independent Director
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Dear Shareholders,

On behalf of the Audit Committee, in the interest of greater shareholder communications, I am pleased to present the Audit Committee Report for the year ended 30 June 2017.

Our Audit Committee is mandated by ASX Listing Rule 12.7. Except where highlighted, it follows the recommendations set out by the ASX Corporate Governance Council on the composition, operation and responsibility of Audit Committees.

AUDIT COMMITTEE MEMBERSHIPS DURING THE YEAR

Shane Hartwig and I were the only members of the Audit Committee (the “Committee”). We are Independent Non-Executive Directors. There are only two of us, as the Board is small given the size,

nature of the business and the need for strict cost control. Whilst there may only be the two of us, Shane and I have significant financial knowledge and Audit Committee experience. Given this, the Board believes that Audit Committee is capable of independently verifying and safeguarding the integrity of the Group’s financial statements.

KEY ACTIVITIES OF THE AUDIT COMMITTEE DURING THE YEAR

We are of the opinion that we operated in accordance with our Charter.

In FY2017, we met formally two times but also had informal telephone calls and exchanged emails on selected issues. I also inspected the new Vietnam factory and Shane inspected the Malaysian factories. I also held private conversations with our Auditors without the presence of management.

GLG CORP LTD ANNUAL REPORT 2017 15

AUDIT COMMITEE REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

The other main areas dealt by the Committee included:

§ Review of the half yearly and full-yearly financial statements of the Group and whether what was being reported was: consistent with the information we had; in line with rules and regulations; and adequate for shareholders.
§ Review of significant items included in the FY2017 financial statement including (but not exclusive to): client sales list; shipping list; stock & inventory movements; receivables and their aging; acquisition of our new subsidiaries; capital expenditure; and actual vs FY2017 budget.
§ Review significant accounting policies, the notes to the accounts and significant judgements applied in the preparation of the financial statements.
§ Review of the FY2018 budget and forward forecast.
§ Review of proposed key management hirings and HR related forecasts.
§ Review and comment on potential investment areas, notably the possible opening of a factory in Cambodia.
§ Review of related party transactions.
§ Approval of the audit plans and strategies received from external auditors.
§ Review report of audit issues, audit report and management letter points by the external auditors.
§ Review of significant operating, financial, social and environmental risks.
§ Review the need for new policies and approved exploration with a view of producing a sustainability report.
§ Review of the Group’s website and approved monies for its revamp to make it more useful and accessible.

THE AUDIT COMMITTEE IS CAPABLE OF INDEPENDENTLY VERIFYING AND SAFEGUARDING THE INTEGRITY OF THE GROUP’S FINANCIAL STATEMENTS.

§ Review of the Annual Report to ensure it is fair, balanced and readable.

ENGAGEMENT OF THE EXTERNAL AUDITOR

The external auditor is engaged to express an opinion on the Group’s financial statements. The auditor’s responsibilities for the audit of the Group’s financial statements are set out on Page 50 of the Independent Auditor’s Report.

The external auditor was selected on an invited tender basis. The Committee and management invited seven audit firms to tender, and shortlisted to three firms for final selection. The Committee and management ensured that all firms invited had access to all the information they requested. The Committee recommended BDO East Coast Partnership (“BDO”) to the Board as the selected auditor on the basis of:

a. their knowledge of the textile and garment industry;
b. their partner/staff strength and reputation in Australia, Singapore and Vietnam; and
c. cost efficiency.

In accordance with Listing Rule 3.16.3, the Group appointed BDO as our auditor with effect from

16 ANNUAL REPORT 2017

GLG CORP LTD

AUDIT COMMITEE REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

16th January 2017. This appointment follows the resignation of Deloitte Touche Tohmatsu (“Deloitte”) and the consent of ASIC (Australian Securities and Investments Commission) to Deloitte’s resignation, in accordance with s329(5) of the Corporations Act 2001. Deloitte has been the auditor of the Group over a period of 11 years since 2005. The Committee had recommended to the Board that there is a need to rotate its auditor after a certain period of time, as part of its Corporate Governance process.

BDO has provided the Committee with the relevant reports and advice throughout the year. BDO confirms that it intends to adhere to a partner rotation policy based on best practices. FY2017 is the current partner’s first year of audit engagement since its appointment.

Since its appointment, BDO was formally assessed by the Committee in conjunction with the senior management team. In making this assessment, the Committee focused on the robustness of the audit and the quality of the delivery of audit services. The Committee is satisfied that the audit is effective and provides an appropriate, independent value-add audit service to the Group’s directors and senior management. The Committee reviewed and is satisfied with the objectivity and independence of BDO.

KEY AUDIT MATTERS

During the year, the Committee reviewed the key areas of management’s estimates and judgment applied for key financial issues. This included the type of business combination to be applied to the acquisition of the two Maxim entities and the valuation of the GLIT Receivables.

With respect to the type of business combination to be applied to the acquisition of Maxim, the Committee: reviewed management’s logic and the auditor’s comments; read the relevant sections of the accountant standards; sought third party advice; and reviewed and approved the proposed disclosures. The Committee agreed that as both acquirer and acquiree were under the common control of the Ghim Li Group Pte Ltd, the pooling of interest methodology should be used. As such

THE COMMITTEE REVIEWED THE KEY AUDIT MATTERS TO PROVIDE COMMENTARIES AND EXPLANATIONS, IN ADDITION TO COMPLEMENTING THE AUDITOR'S AUDIT APPROACH TO THESE MATTERS.

the prior year comparatives of the Maxim entities’ financial statements were restated to reflect the acquisition from the earliest reported period. The Committee reviewed the Key Audit Matters which significantly impact the financial statements to provide commentaries and explanations, in addition to complementing the auditor's audit approach to these matters.

With respect to the GLIT Receivables, the Committee: reviewed the transactional history; reviewed the commercial logic; followed management’s trace of cash flow; and reviewed the quantum of the trust receipts and available guarantees. The Committee agreed with management that the GLIT Receivable was expected due to the commercial nature of the Group’s business. The Committee agreed with management on the quantum of trust receipts and the availability of collateral for the GLIT Receivable.

We thank you for your attention

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Christopher Chong Chairman, Audit Committee & Lead Independent Director

GLG CORP LTD ANNUAL REPORT 2017 17

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

COMPOSITION OF THE BOARD

The composition of the Board is determined in accordance with the following principles and guidelines:

§ the Board should comprise directors with an appropriate range of qualifications and expertise; and
§ the Board shall meet regularly and follow guidelines set down to ensure all directors are made aware of, and have available, all necessary information to participate in an informed discussion of all agenda items.

The Directors in office at the date of this statement are as follows:

Name	Position
Estina Ang Suan Hong	Executive Chairman and Chief Executive Offcer
Christopher Chong Meng Tak	Lead Independent Director
Shane Hartwig	Independent Director
Felicia Gan Peiling	Executive Director

The skills, experience and expertise relevant to the position of director as well as the period of office held by each director are set out in the Directors’ Report on pages 34 to 35.

ESTINA ANG Chairman & CEO Executive Director Member of Nomination & Remuneration Committee

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----- Start of picture text -----

Chairman & CEO
Executive Director
Member of Nomination
& Remuneration
Committee
SHANE HARTWIG
FELICIA GAN Independent Director
Chief Marketing Officer, Chairman of Nomination &
Remuneration Committee
Executive Director
Member of Audit Committee
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CHRISTOPHER CHONG Lead, Independent Director Chairman of Audit Committee Member of Nomination & Remuneration Committee

18 ANNUAL REPORT 2017

GLG CORP LTD

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

BOARD RESPONSIBILITIES

As the Board acts on behalf of the shareholders and is accountable to the shareholders, the Board seeks to identify the expectations of the shareholders as well as other regulatory and ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuring arrangements are in place to adequately manage those risks. The Board, through the Audit Committee, receives reports from management on an on-going basis as to the material risks associated with the company’s operations and the recommended risk mitigation process that they undertake. The Board has established a Code of Conduct which in summary, requires that at all times Directors and employees act with the integrity, objectivity and in compliance with the letter and spirit of the law and company policies. GLG has established a written policy designed to ensure compliance with ASX listing rule disclosure and accountability as senior executive level for compliance.

Under the guidance of the ASX’s Corporate Governance Principles and Recommendations (3rd edition), the Board has established a Nomination and Remuneration Committee and an Audit Committee. The name of members of each committee and their attendance at meetings is contained on page 40 of the Annual Report.

The Nomination and Remuneration Committee has established a policy prohibiting transactions in associated products which limit the economic risk of participating in unvested entitlements under equitybased remuneration scheme.

A copy of the Company’s Code of Conduct, Audit Committee charter, Nomination and Remuneration Committee charter and the terms and conditions of the continuous disclosure and shareholder communication policy is made publically available on the Company’s website.

DIVERSITY

The Company has implemented a Diversity Policy. This policy sets as a target 25% of all Board seats and management positions to be held by women. The Board is also considering other means to encourage diversity. The Company recognises the benefits of a diverse workforce and is committed to providing an environment that encourages diversity. The Board monitors the diversity profile of its workforce. As the Company already has gender diversity as evidenced by the proportion of women reported below, the Board has not set any measurable objectives.

At 30 June 2017, the proportion of women employed by GLG Corp Ltd was:

§ Board of Directors 50%
§ Senior Executives 57%
§ Total Workforce 75%

DEALING IN GLG CORPORATION’S SECURITIES BY DIRECTORS AND EMPLOYEES

Directors, officers and employees of the Company are prohibited from trading in GLG securities apart from the period 15 days commencing the day after GLG announces its half-yearly, preliminary final reports and full year accounts. A full outline of the Company’s securities trading policy has been made available on the Company website.

GLG CORP LTD ANNUAL REPORT 2017 19

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

RISK MANAGEMENT POLICY

Risk is an inherent part of GLG Corp’s business, which operates in a highly competitive market sector. GLG Corp is committed to the management of risk as an integral part of its business, focusing on strategies to minimise risk which are regarded as threats to its achievement of objectives and goals.

The objectives of this policy are to:

§ Outline the company’s approach to risk management;
§ Improve decision-making, accountability and outcomes through the effective use of risk management;
§ Integrate risk management into daily operations of the company and its outsourced business partners;
§ Consider risk appetite in protecting staff and business assets and strategy execution

GLG Corp is committed to managing risk in order to benefit the company and manage the cost of risk. To meet this commitment, risk is every employee’s business. All employees are required to be responsible and accountable for managing risk in so far as reasonably practicable within their area of responsibility.

Sound risk management principles and practices must become part of the normal management strategy for all business units within GLC Corp including its outsourcing business partners.

The management of risk is to be integrated into GLG Corp’s existing planning and operational processes and fully recognised in GLG Corp’s reporting processes.

CORPORATE GOVERNANCE STRUCTURE

20 ANNUAL REPORT 2017

GLG CORP LTD

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

The management of GLG Corp is responsible to the Board of GLG Corp for the following:

§ Approving GLG Corp’s risk management policy and its effective implementation;
§ Endorsement of any changes to the GLG Corp’s risk management framework, including key policies and procedures to reflect new developments;
§ Monitoring compliance with the endorsed risk management framework through management reporting to the Board of GLG Corp in Board meetings; and
§ Delegating authority to staff, where appropriate

The Board regularly reviews business risks applicable to the business and ongoing operations. Additionally, the Board considers risk profiles as part of the annual strategy review and budget planning review. The effectiveness of risk management is unavoidably linked to management competence, commitment and integrity, all of which forms the basis of sound Corporate Governance.

The following table summarised the roles and responsibilities of each level in discharging their duties on risk management:

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Board
Provides policy, oversight and review of risk management
Audit Committee
Overseas regular review of risk management activities
Chief Executive
Drives culture of risk management and accountable for protecting the
Officer
company from unacceptable costs or losses associated with its operations
Risk Committee
Develop and implement systems for effectively managing the risks
that affect the achievement of objectives and operational outcomes.
Continuously improving risk management policy, strategy and
supporting framework
Senior
Management Ensure staff in their business or functional units comply with the risk
management policy and foster a culture where risks can be identified
and escalated
Staff, Business
Partners and Comply with risk management policies and procedures
Contractors
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GLG CORP LTD ANNUAL REPORT 2017 21

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

The following are the specific risk categories included in the risk register and reporting:

§ Customer risks (including their financial conditions, solvency, credit worthiness);
§ Competitor risks;
§ Investment risks;
§ Operational risks;
§ Outsourced partner and contract manufacturing risks;
§ Legal, regulatory and compliance risks (including product liability, legal compliance guideline set by customers);
§ Resources risks (including HR, IT, etc.);
§ Finance risks (including liquidity, trade credit financing, foreign exchange, etc.);
§ Reputation risks; and
§ External factor risks

RISK MANAGEMENT REPORTING

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RISKS COMPONENTS
Strategic AT HIGH-LEVEL
Risks
Management Risk
Committee
Operational Commercial
Risks Risks
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Our Management Risk Assessment is an enabling tool that highlights key risks. and categorize such key risks into the above components.

RISK CATEGORIES UNDER 3 GROUPS

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§ Investment
§ External Factors (e.g. Hazards)
Strategic Risks
§ Customer Business
§ Competitors
Commercial Risks § Reputation
§ Operations
§ Outsourced Partner & Manufacturing
Operational Risks § Legal, Regulatory & Compliance
§ Resources (e.g. Human Resources, Information systems,
Corporate resources, Property or Assets, etc.)
§ Finance
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22 ANNUAL REPORT 2017

GLG CORP LTD

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

GLG CORP’S RISK MANAGEMENT PROCESS

We implement a 5-step process in risk management as follows:

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Evaluation Evaluation and
and Treat-
Treatment of risks
ment Monitoring &
(identify RMA)
Monitoring (routine Reporting
checks by management)
and Reporting;
Prioritization to Analysing and
Top 10
Prioritizing
selected risks Control,
Controlling, Communicate
Communication and Capture
and Knowledge-
Capturing
Key Risks
Identification Review the Risk
context and
Identification of
Specific Key Risks
step step step step step
1 2 3 4 5
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The Management Risk Committee is responsible for reviewing this policy document in conjunction with senior management and staff every year. The outcome of this review process is submitted to the Board for approval. The Management Risk Committee indicates, in its opinion and based on its activities, any significant residual business risks which remain at an unacceptably high level.

Full disclosure of the Company’s policies in relation to risk oversight and management of material business risk are made publicly available on the Company website.

GLG CORP LTD ANNUAL REPORT 2017 23

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

AUDIT COMMITTEE

The Audit Committee reviewed the statement of financial position of the consolidated financial statements of the Group for the financial year ended 30 June 2017, as well as the Independent Auditor’s Report thereon before submitting them to the Board for its approval. The Audit Committee discussed with Management the accounting principles that were applied and also considered the appropriateness of the critical accounting estimates and judgments made in preparing the financial statements.

The following significant matters impacting the financial statements were discussed with Management and the external auditor and were reviewed by the Audit Committee:

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Key Audit Matters How the Audit Committee reviewed these matters and what decisions were made
Acquisition of the The Audit Committee considered the approach and methodology applied to the
Maxim entities business acquisition of the two Maxim entities, including the assessment of the
during the year
contingent consideration which is eliminated on consolidation.
ended 30 June 2017
As both acquirer and acquiree are under the common control of Ghim Li Group
Pte Ltd, the pooling of interest methodology was used. As such, the prior year
comparatives of the Maxim entities financial statements were restated to reflect the
acquisition from the earliest reported period. The Audit Committee and Board of
directors applied judgement to ensure that the excess of the purchase consideration
over the equity acquired was reflected as a merger reserve within equity.
This acquisition, by virtue of its materiality and its accounting complexities under
common control was also an area of focus for the external auditor. The external
auditor has included this item as a key audit matter in its audit report for the
financial year ended 30 June 2017
Valuation of GLIT The Audit Committee assessed the valuation of the GLIT Receivable and evaluated
Receivable in the that the receivable is recoverable at the reporting date, based on assumptions
Balance Sheet as of specifically on the accessibility of trust receipts available for offset, and the amount
30 June 2017 of available guarantees in place.
We considered that this GLIT Receivable is expected due to the commercial nature
of the Group’s business, but will see a decrease, with lesser reliance on GLIT in
the future. The acquisition of Ghim Li Fashion (M) Sdn Bhd by the Group on 30
June 2017 resulted in the decrease in GLIT Receivables by US$5m for the purchase
consideration of this acquisition.
The valuation of GLIT Receivable was also an area of focus for the external auditor.
The external auditor has included this item as a key audit matter in its audit report
for the financial year ended 30 June 2017
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OTHER INFORMATION

The Company’s corporate governance practices and policies in relation to the matters reserved to the board, matters delegated to senior executives and a copy of the board charter are publicly available at the Company’s registered office. The policies have also been posted on the Company’s website.

24 ANNUAL REPORT 2017

GLG CORP LTD

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

GLG Corp (Group) or (The Company’s) Directors and management are committed to conducting the Group’s business in an ethical manner and in accordance with the highest standards of corporate governance. The Company has adopted and substantially complies with the ASX Corporate Governance Principles and Recommendations (Third Edition) (Recommendations) to the extent appropriate to the size and nature of The Group’s operations. The Company has prepared this statement which sets out its corporate governance practices that were in operation for the financial year ended 30 June 2017, identifies any Recommendations that have not been followed, and provides reasons for not following such Recommendations. The Company’s corporate governance policies and charters and policies are all available on the Company’s web site (www.ghimli.com) (Website).

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Principle ASX Corporate Governance Council Comply?
Recommendations – 3 [rd] Edition
1. Lay solid foundations for management
and oversight
1.1 A listed entity should disclose: (a) the respective Yes
roles and responsibilities of its board and
The Board has adopted a charter which establishes
management; the role of the Board and its relationship with
and (b) those matters expressly reserved to the management. The primary role of the Board is
board and those delegated to management the protection and enhancement of long term
shareholder value. Its responsibility is the overall
strategic direction of the Group.
The functions and responsibilities of the Board and
management are consistent with ASX Principle 1. A
copy of the Board Charter is posted on the Website.
1.2 A listed entity should: (a) undertake appropriate Yes
checks before appointing a person, or putting The Board has a formal Nomination & Remuneration
forward to security holders a candidate for Committee. The Nomination and Remuneration
election, as a director;
Committee’s functions and powers are formalised
and (b) provide security holders with all in a Charter and is posted on the Website. It is the
material information in its possession relevant role of the Nomination & Remuneration Committee
to a decision on whether or not to elect or re- to identify suitable candidates to complement the
elect a director existing Board, to undertake appropriate checks
on the candidate; to seek confirmation from the
candidate that he/she will have sufficient time to fulfil
his or her responsibilities as a director; and subject
to the results of such checks and confirmations,
to make recommendations to the Board on their
appointment.
The Company provides information to shareholders
about Directors seeking re-election at general
meeting to enable them to make an informed
decision on whether or not to re-elect the Director,
including their relevant qualifications and experience
and the skills they bring to the Board; details of any
other listed directorships held by the Director in the
preceding 3 years; the term of office already served
by the Director; whether the Director is considered
to be independent; and a recommendation by the
Board in respect of the re-election of the Director
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GLG CORP LTD ANNUAL REPORT 2017 25

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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1.3 A listed entity should have a written agreement Yes
with each director and senior executive setting
Each Director is given a letter upon appointment
out the terms of their appointment.
which outlines the Director’s duties, obligations,
remuneration, expected time commitments and
notification of the Company’s policies. Similarly
senior executives including the CEO and CFO,
have a formal job description and services
agreement describing their term of office, duties,
rights and responsibilities, and entitlements on
termination.
The Company will disclose the material terms
of any employment, service or consultancy
agreement it enters into with its CEO (or
equivalent).
1.4 The company secretary of a listed entity should Yes
be accountable directly to the board, through
The Company Secretary is responsible for co-
the chair, on all matters to do with the proper
ordination of all Board business, including
functioning of the board.
agendas, board papers, minutes, communication
with regulatory bodies, ASX and all statutory
and other filings. The Company Secretary is
accountable to the Board, and all Directors have
access to the Company Secretary. The decision to
appoint or remove the Company Secretary is be
made and/or approved by the Board.
1.5 A listed entity should: (a) have a diversity policy Yes
which includes requirements for the board
The Company is committed to the principles
or a relevant committee of the board to set
of employing people with a broad range of
measurable objectives for achieving gender
experiences, skills and views. All executives,
diversity and to assess annually both the
managers and employees are responsible for
objectives and the entity’s progress in achieving
promoting workforce diversity. The Company
them;
has adopted a Diversity Policy which can be
(b) disclose that policy or a summary of it; and viewed on the Website. The Diversity Policy
(c) disclose as at the end of each reporting requires the commitment of the Directors and
period the measurable objectives for achieving Senior Management to promote the specific
gender diversity set by the board or a relevant objective of diversity and seeks to ensure, to
committee of the board in accordance with the the extent that is practicable and appropriate,
entity’s diversity policy and its progress towards that the Company’s director appointment and
achieving them, and either: employee recruitment processes are undertaken
with reference to the objectives of the Diversity
(1) the respective proportions of men and
Policy. The objectives of the Company’s Diversity
women on the board, in senior executive
policy are centred on a wide range of diversity
positions and across the whole organisation
criteria including gender, age, ethnicity and
(including how the entity has defined “senior
cultural background.
executive” for these purposes);
The Company discloses the proportion of women
or (2) if the entity is a “relevant employer” under
on the Board, in Senior positions and in the
the Workplace Gender Equality Act, the entity’s
company as a whole. Measurable objectives have
most recent “Gender Equality Indicators”, as
been specified and the company has exceeded
defined in and published under that Act.
the objectives since the inception of the policy.
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26 ANNUAL REPORT 2017

GLG CORP LTD

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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1.6 A listed entity should: Yes
(a) have and disclose a process for periodically The Directors undertake an annual process to
evaluating the performance of the board, its review the performance and effectiveness of
committees and individual directors; and the Board, the Board Committees and individual
(b) disclose, in relation to each reporting directors. The CEO leads a discussion and provides
period, whether a performance evaluation feedback to individual Directors as necessary.
was undertaken in the reporting period in
accordance with that process.
1.7 A listed entity should: Yes
(a) have and disclose a process for periodically The Company’s Chief Executive Officer evaluates
evaluating the performance of its senior the performance of the Group’s senior executives
executives; and annually. The Nomination and Remuneration
(b) disclose, in relation to each reporting Committee reviews the Chief Executive Officer’s
period, whether a performance evaluation performance annually. The Committee also
was undertaken in the reporting period in reviews and approves senior management
accordance with that process. bonuses.
Evaluations were undertaken this year.
2. Structure the board to add value
2.1 The board of a listed entity should: Yes
(a) have a nomination committee which: The Board has a formal Nomination &
(1) has at least three members, a majority of Remuneration Committee comprising two
whom are independent directors; and independent directors and the CEO. Current
members are Shane Hartwig (Independent
(2) is chaired by an independent director, and
Director and Chairman) Christopher Chong (Lead
disclose:
Independent Director), and Estina Ang (CEO).
(3) the charter of the committee; The Nomination & Remuneration Committee’s
(4) the members of the committee; and functions and powers are formalised in a
(5) as at the end of each reporting period, the Charter and is posted on the Group’s website.
number of times the committee met throughout The number of times that the Nomination &
the period and the individual attendances of Remuneration Committee met throughout the
the members at those meetings; or financial year and the individual attendances of
the members at those meetings are disclosed in
(b) if it does not have a nomination committee,
the Company’s Annual Report.
disclose that fact and the processes it employs
to address board succession issues and to ensure
that the board has the appropriate balance of
skills, knowledge, experience, independence
and diversity to enable it to discharge its duties
and responsibilities effectively
2.2 A listed entity should have and disclose a Yes
board skills matrix setting out the mix of skills
The Company has a skills matrix which is disclosed
and diversity that the board currently has or is
in the Directors report.
looking to achieve in its membership.
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GLG CORP LTD ANNUAL REPORT 2017 27

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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2.3 A listed entity should disclose: Yes
(a) the names of the directors considered by Currently, the Board comprises four Directors, two
the board to be independent directors; (b) if a independent and two Executives. Christopher
director has an interest, position, association or Chong (Lead Independent Director), Shane Hartwig
relationship of the type described in item 2.3 (Independent Director), Estina Ang (CEO) and
but the board is of the opinion that it does not Felicia Gan (Chief Marketing Officer). The Board
compromise the independence of the director, has considered the circumstances of each Director
the nature of the interest, position, association and determined that all Non-Executive Directors
or relationship in question and an explanation were independent as described in item 2.3 of the
of why the board is of that opinion; and Recommendations. The Corporations Act 2001, the
(c) the length of service of each director Company’s Constitution and the Board meeting
process requires Directors to advise the Board of
any interest they have that has the potential to
conflict with the interests of the Group, including
any development that may impact their perceived
or actual independence. If the Board determines
that a Director’s status as an independent Director
has changed, that determination will be disclosed
and explained in a timely manner to the market.
The length of service of each Director is set out
in the Company’s Annual Report. Independent
Directors formally advise the Board of their
independent (or other) status each year.
2.4 A majority of the board of a listed entity should No
be independent directors.
Currently, the Board comprises two independent
Directors and two executive Directors.
Christopher Chong (Lead Independent Director),
Shane Hartwig (Independent Director), Estina
Ang (CEO) and Felicia Gan (Chief Marketing
Officer). The company believes this is an
appropriate mix of skills and experience.
2.5 The chair of the board of a listed entity should No
be an independent director and, in particular,
The Chairperson and CEO, Estina Ang Suan
should not be the same person as the CEO of
Hong, is integral in maintaining the business and
the entity.
important customer and banking relationships.
This is commonplace in Asia and reflects ‘respect’
and economic imperative.
2.6 A listed entity should have a program for Yes
inducting new directors and provide appropriate
The Company has procedures and policies
professional development opportunities for in place to assist Directors in fulfilling their
directors to develop and maintain the skills and
responsibilities. Each Director, at any time, is able
knowledge needed to perform their role as
to seek reasonable independent professional
directors effectively.
advice on any business-related matter at the
expense of the Company. Directors also have
access to adequate internal resources to seek
any information from any officer or employee
of the Company, or to require the attendance
of management at meetings to enable them as
Directors to fulfil their duties.
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28 ANNUAL REPORT 2017

GLG CORP LTD

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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3 Act ethically and responsibly
3.1 A listed entity should: (a) have a code of Yes
conduct for its directors, senior executives and The Board has established a Code of Conduct
employees; and (b) disclose that code or a which articulates acceptable practices for
summary of it
directors, senior executives and employees, to
guide their behaviour and to demonstrate the
commitment of the Company to ethical practices.
4. Safeguard integrity in corporate reporting
4.1 The board of a listed entity should: Partly
(a) have an audit committee which: (1) has at The Board has a formal Audit Committee
least three members, all of whom are non- currently comprising two Independent Directors
executive directors and a majority of whom are – Christopher Chong and Shane Hartwig. The role
independent directors; and of the Audit Committee is to advise on financial
(2) is chaired by an independent director, who is information prepared for use by the Board or for
not the chair of the board, and disclose: inclusion in financial statements. The Chairman
of the Audit Committee is the Lead Independent
(3) the charter of the committee;
Director. The Audit Committee’s functions and
(4) the relevant qualifications and experience of
powers are formalised in a Charter and is posted
the members of the committee; and
on the Group’s website. The number of times
(5) in relation to each reporting period, that the Audit Committee met throughout the
the number of times the committee met financial year and the individual attendances
throughout the period and the individual of the members at those meetings, and the
attendances of the members at those meetings; relevant qualifications and experience of the
or (b) if it does not have an audit committee, Audit Committee members are disclosed in the
disclose that fact and the processes it employs Company’s Annual Report and below under
that independently verify and safeguard the ‘Directors Meetings’.
integrity of its corporate reporting, including
the processes for the appointment and removal
of the external auditor and the rotation of the
audit engagement partner.
4.2 The board of a listed entity should, before it Yes
approves the entity’s financial statements for a The Directors are committed to the preparation
financial period, receive from its CEO and CFO a
of financial statements that present a balanced
declaration that, in their opinion, the financial
and clear assessment of the Company’s financial
records of the entity have been properly
position and prospects. The Board reviews
maintained and that the financial statements
the Group’s half yearly and annual financial
comply with the appropriate accounting statements. The Board requires that the Chief
standards and give a true and fair view of the Executive Officer and the Chief Financial Officer
financial position and performance of the entity
state in writing that the Group’s financial reports
and that the opinion has been formed on the
present a true and fair view, in all material
basis of a sound system of risk management and respects, of the Company’s financial condition
internal control which is operating effectively.
and operational results are in accordance with
relevant accounting standards and that the
opinion has been formed on the basis of a sound
system of risk management and internal control
which is operating effectively.
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GLG CORP LTD ANNUAL REPORT 2017 29

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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4.3 A listed entity that has an AGM should ensure Yes
that its external auditor attends its AGM and
Shareholders are encouraged to attend the
is available to answer questions from security
Company’s Annual General Meeting, with
holders relevant to the audit.
the auditors available via conference call.
Shareholders are given an opportunity to ask
questions of the Company’s auditors regarding
the conduct of the audit and preparation and
content of the auditor’s report.
5. Make timely and balanced disclosure
5.1 A listed entity should: (a) have a written policy Yes
for complying with its continuous disclosure
The Company has a documented policy which
obligations under the Listing Rules; and (b)
has established procedures designed to ensure
disclose that policy or a summary of it.
compliance with ASX Listing Rule continuous
disclosure requirements and to ensure
accountability at a senior management level for
that compliance. The focus of these procedures
is on continuous disclosure of any information
concerning the Company that a reasonable
person would expect to have a material effect
on the price of the Company’s securities and
improving access to information for all investors.
The Chief Executive Officer and the Company
Secretary are responsible for interpreting the
Group’s policy and where necessary informing
the Board. The purpose of the procedures
for identifying information for disclosure is
to ensure timely and accurate information is
provided equally to all shareholders and market
participants.
6. Respect the rights of security holders
6.1 A listed entity should provide information Yes
about itself and its governance to investors via
The Board informs shareholders of all major
its website.
developments affecting the Group’s state
of affairs as follows: 1. Placing all relevant
announcements made to the market, on the
Website after they have been released to ASX; 2.
Publishing all corporate governance policies and
3. Placing the full text of notices of meeting and
explanatory material on the Website.
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30 ANNUAL REPORT 2017

GLG CORP LTD

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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6.2 A listed entity should design and implement an Yes
investor relations program to facilitate effective
The Company communicates with its shareholders
two-way communication with investors.
and investors by posting information via the
ASX or website, and by encouraging attendance
and participation of shareholders at general
meetings. Management and/or Directors may
meet with shareholders from time to time upon
request and respond to any enquiries they may
make. The Share Registry ‘Link Market Services’,
also includes an investor relations program,
which gives all investors access to information
through the market registry
6.3 A listed entity should disclose the policies Yes
and processes it has in place to facilitate and
Shareholders are encouraged to attend the
encourage participation at meetings of security
Company’s Annual General Meeting. The AGM
holders.
is an opportunity for shareholders to hear
the Directors provide updates on Company
performance, ask questions of the Board and vote
on the various resolutions affecting the business.
Shareholders are given an opportunity to ask
questions of the Company’s auditors regarding
the conduct of the audit and preparation and
content of the auditor’s report.
6.4 A listed entity should give security holders the Yes
option to receive communications from, and Investors are able communicate with the
send communications to, the entity and its
Company electronically via the website. Investors
security registry electronically.
are also able communicate with the Company’s
registry electronically by emailing the registry or
via the registry’s website.
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GLG CORP LTD ANNUAL REPORT 2017 31

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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7. Recognise and manage risk
7.1 The board of a listed entity should: (a) have a Partly
committee or committees to oversee risk, each
The Board is responsible for the management of
of which: (1) has at least three members, a risk due to the current size of the Board. GLG
majority of whom are independent directors;
is committed to embedding risk management
and (2) is chaired by an independent director,
practices to support the achievement of business
and disclose: (3) the charter of the committee;
objectives. The Board is responsible for reviewing
(4) the members of the committee; and (5) as at
and overseeing the risk management strategy
the end of each reporting period, the number
and for ensuring GLG has an appropriate
of times the committee met throughout the
corporate governance structure. Within that
period and the individual attendances of the
overall strategy, management has designed and
members at those meetings; or (b) if it does
implemented a risk management and internal
not have a risk committee or committees that
control system to manage material business risks.
satisfy (a) above, disclose that fact and the
processes it employs for overseeing the entity’s
risk management framework. GLG has implemented a 5-step process to
manage risk as follows:
1) Review the Risk context and Identification
of specific key risks
2) Analysing and Prioritizing selected risks
3) Evaluation and Treatment of risks
4) Monitoring and Reporting; and
5) Controlling, Communication and
Knowledge-Capturing
GLG risk categories are:
1) Customer Risks (including their financial
conditions, solvency, credit worthiness,
etc.)
2) Competitor Risks
3) Investment Risks
4) Operational Risks
5) Outsourced Partner and Contract
Manufacturing Risks
6) Legal, Regulatory and Compliance Risks
7) Resources Risks (including HR, IT, etc.)
8) Finance Risks (including liquidity, trade
credit financing, forex, etc.)
9) Reputation Risks
10) External Factors Risks
The Management Risk Committee provides
reports for Board meetings.
The policy is available on the website www.
ghimli.com
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32 ANNUAL REPORT 2017

GLG CORP LTD

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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7.2 The board or a committee of the board should: Yes
(a) review the entity’s risk management The Board reviews the risk management
framework at least annually to satisfy itself that framework and policies of the Company. The
it continues to be sound; and (b) disclose, in Board has delegated responsibilities to the
relation to each reporting period, whether such Management Risk Committee who then provides
a review has taken place. reports to the Board. The Board is responsible
for approving policies on risk assessment and
management.
A review has been untaken this year and a new
policy approved. The policy is available at www.
ghimli.com
7.3 A listed entity should disclose: (a) if it has an Yes
internal audit function, how the function is
Management reviews the Company’s business
structured and what role it performs; or (b) if it
units, organisational structure and accounting
does not have an internal audit function, that
controls and processes on a regular basis and
fact and the processes it employs for evaluating
reports to the Audit Committee and in turn
and continually improving the effectiveness to the Board; the Board is satisfied that the
of its risk management and internal control
processes in place to identify the Company’s
processes. material business risks are appropriate and that
these risks are being effectively managed. The
Group’s risk management processes continue
to be monitored and reported against. A
description of the Group’s risk management
policy and internal compliance and control
systems is available on the Website.
7.4 A listed entity should disclose whether it has any Yes
material exposure to economic, environmental
The Company’s operations are not subject to
and social sustainability risks and, if it does, how any significant environmental regulations.
it manages or intends to manage those risks.
The Directors believe that the Company has
adequate systems in place for the management
of its environmental requirements and are not
aware of any breach of those environmental
requirements.
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GLG CORP LTD ANNUAL REPORT 2017 33

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

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----- Start of picture text -----

8. Remunerate fairly and responsibly
8.1 The board of a listed entity should: Yes
(a) have a remuneration committee which: (1) The Board has a formal Nomination and
has at least three members, a majority of whom Remuneration Committee comprising three
are independent directors; and (2) is chaired by members two of whom are independent
an independent director, and disclose: (3) the and the CEO. Current members are Shane
charter of the committee; (4) the members of Hartwig (Independent Director and Chairman),
the committee; and (5) as at the end of each Christopher Chong (Lead Independent Director)
reporting period, the number of times the and Estina Ang (CEO). The role of the Nomination
committee met throughout the period and the and Remuneration Committee is to review
individual attendances of the members at those and make recommendations to the Board on
meetings; or remuneration packages and practices applicable
(b) if it does not have a remuneration to the Chief Executive Officer, Senior Executives
committee, disclose that fact and the processes and Directors themselves. This role also includes
it employs for setting the level and composition responsibility for share option schemes,
of remuneration for directors and senior incentive performance packages and retirement
executives and ensuring that such remuneration and termination entitlements. Remuneration
is appropriate and not excessive. levels are competitively set to attract the most
qualified and experienced Directors and Senior
Executives. The Nomination and Remuneration
Committee may obtain independent advice on
the appropriateness of remuneration packages.
The Nomination and Remuneration Committee’s
functions and powers are formalised in a
Charter and is posted on the Group’s website.
The number of times that the Nomination and
Remuneration Committee met throughout the
financial year and the individual attendances of
the members at those meetings are disclosed in
the Company’s Annual Report and below under
Directors’ Meetings.
8.2 A listed entity should separately disclose Details of the Directors and Key Senior Executives
its policies and practices regarding the remuneration are set out in the Remuneration
remuneration of non-executive directors and Report of the Annual Report. The structure of
the remuneration of executive directors and Non-Executive Directors’ remuneration is distinct
other senior executives. from that of executives and is further detailed in
the Remuneration Section of the Annual Report.
8.3 A listed entity which has an equity-based Yes
remuneration scheme should: (a) have a policy
Currently, the Company does not have an equity
on whether participants are permitted to enter based remuneration scheme.
into transactions (whether through the use
of derivatives or otherwise) which limit the
economic risk of participating in the scheme;
and (b) disclose that policy or a summary of it.
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34 ANNUAL REPORT 2017

GLG CORP LTD

DIRECTOR’S REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

The Directors of GLG Corp Ltd (“GLG” or “the Company”) submit herewith the annual financial report of the Company for the financial year ended 30 June 2017. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:

INFORMATION ABOUT THE DIRECTORS AND SENIOR MANAGEMENT

The names and particulars of the Directors of the Company during and since the end of the financial year are:

ESTINA ANG SUAN HONG

Founder and Executive Chairman of GLG Corp Ltd and parent company, Ghim Li Group Pte Ltd and a member of its Nomination and Remuneration Committee. Armed with 40 years of experience, Estina Ang has led the company to become a global supplier of quality apparel to major retailers in the U.S and Europe.

She started this business back in 1977 as a sole-proprietor entrepreneur with six sewing machines by operating as an apparel subcontractor in Singapore. In 1983, she incorporated her first limited liability company and expanded her charter by exporting apparel mainly to retailers in the U.S. Recognising the need to stay competitive by achieving higher productivity and low operating costs, she moved garment production offshore by setting up garment factories in countries like Malaysia (1985), Thailand (1987), Brunei (1988) and Mexico (1999). She continued this manufacturing offshoring process with other countries like Guatemala (2001), China (2002), Fiji (2003), Sri Lanka and Indonesia (2005) using Singapore as the operational headquarters. Her next major milestone was achieved when she took this home-grown company, without the manufacturing network, by incorporating GLG Corp Ltd in Australia to go public in late 2005. Since then, this public-listed company has adapted constantly, under her leadership, by offering a wide suite of services ranging from fabric innovation and production (with the acquisition of Maxim fabric mill), product design, garment manufacturing (in Vietnam and Malaysia), technical support, supply chain solutions, etc.

Estina Ang graduated from Nanyang University in Singapore in 1974 with a Bachelor of Arts degree. She is a member of the Singapore Institute of Directors and Textile & Fashion Federation in Singapore. Subsequent to receiving the award as “Entrepreneur of the Year” in 2001, she was listed as one of the Top 300 prestigious Singaporeans by Singapore Tatler in 2016/17.

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FELICIA GAN PEILING

Ms Gan joined the Board on 15 September 2015. Ms Gan joined the Company in 2006 as a legal officer responsible for the legal compliance office. Ms Gan is currently responsible for the overall management of Business Development, Sales & Marketing Teams including Outsourced Manufacturing and Product, Development and Design departments. Ms Gan builds, direct and drives the annual strategic sales and marketing plan and implements marketing strategies to identify and develop new customers and business opportunities on a global scale.

Ms Gan graduated with a Bachelor of Laws (Honours) from University of Nottingham in 2003 and was admitted to the Singapore Bar in May 2005. She is a member of the Singapore Academy of Law and a management committee member of the Textile Apparel Fashion Federation Singapore.

GLG CORP LTD ANNUAL REPORT 2017 35

DIRECTOR’S REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

CHRISTOPHER CHONG MENG TAK

Lead Independent Director, joined the Board on 12 October 2005. Mr Chong is the Chairman of the Audit Committee and member of the Nomination and Remuneration Committee.

Mr Chong is a partner of ACH Investments Pte Ltd, a specialist corporate advisory firm in Singapore, and, an Associate of Shadforths Limited, a leading financial firm in Tasmania, Australia. Prior to co-founding ACH Investments Pte Ltd, Mr Chong was a multi-award winning equity analyst and the Managing Director of HSBC James Capel Securities (Singapore) Pte Ltd, (now known as HSBC Securities (Singapore) Pte Ltd), a member of the Hong Kong Bank Group of companies. Mr Chong is an independent director of several public listed companies. Mr Chong is also a Director and/or advisor to many private companies and many Asian families and the judicial branch of the Singapore government.

Mr Chong has extensive Asia Pacific experience having previously also been an advisor to listed companies on the Exchange of Hong Kong, Jakarta (Indonesia), Kuala Lumpur (Malaysia), Makati (Philippines) and Bangkok (Thailand). Mr Chong is a fellow of the Australia Institute of Company Directors, a fellow of the Singapore Institute of Directors and a Master Stockbroker of the Securities and Derivatives Industry Association of Australia.

Mr Chong has received a B.Sc. (Economics) from the University College of Wales, an MBA from London Business School and is a member of the Institute of Chartered Accountants of Scotland.

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SHANE HARTWIG

Mr Hartwig is a Certified Practicing Accountant and Chartered Company Secretary and holds a Bachelor of Business degree, majoring in Accounting and Taxation from Curtin University of Technology in Western Australia. He was appointed to the Board on 2 December 2014. Mr Hartwig is a member of the Audit Committee and the Chairman of the Nomination and Remuneration Committee.

Mr Hartwig is involved in the areas of initial public offerings, capital raisings, prospectus and information memorandum preparation and project management, company assessments and due diligence reviews, mergers and acquisitions and providing general corporate advice. Mr Hartwig has over 20 years’ experience in the finance industry both nationally and internationally with exposure to both the debt and equity capital markets.

Mr Hartwig was previously the Company Secretary of GLG Corp Ltd until July 2011.

36 ANNUAL REPORT 2017

GLG CORP LTD

DIRECTOR’S REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

BOARD SKILLS MATRIX

Skills	Description	Number of Directors
Strategic and	The ability to defne strategic objectives, constructively	4
commercial acumen	question business plans and implement strategy using
	commercialjudgment.
Financial acumen	Financial knowledge, accounting or related fnancial	3
	management qualifcations and experience
Risk and compliance	An understanding of compliance matters and risk	4
	management, including environmental, technological
	and governance risk
Executive leadership	Experience in senior leadership roles, including on the	1
	boards of other listed companies.
Diversity	The ability to contribute to inclusion and diversity.	4
International/global	Senior leadership experience across a range of	4
	international businesses and exposure to a range of
	political, cultural, regulatory and business environments

DIRECTORSHIPS OF OTHER LISTED COMPANIES

Directorships of other listed companies held by directors in the 3 years immediately before the end of the financial year are as follows:

fnancial year are as follows:
Name	Company	Period of directorship
Christopher Chong Meng Tak	ASL Marine Holdings Ltd	Since 03 January 2006
	Singapore O&G Ltd	Since 14 May 2015
	Emerging Towns & Cities Singapore	Since 24 June 2015
	Ltd (formerly known as Cedar Strategic
	Holdings Ltd)
	Forise International Ltd	Since 19 August 2015
	Lorenzo Ltd	Ceased 7 October 2014
	Koon Holdings Ltd	Ceased 31 December 2016
	Yingli International Real Estate Ltd	Ceased 28 Apr 2017

FORMER PARTNERS OF THE AUDIT FIRM

No officer of the Company has been a partner in an audit firm, or a director of an audit company that is an auditor of the Company during the period or was such a partner or director at a time when the audit firm or the audit company undertook an audit of the Company.

GLG CORP LTD ANNUAL REPORT 2017 37

DIRECTOR’S REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

Directors’ shareholdings

The following table sets out each director’s relevant interest in shares or options in shares or debentures of the Company or a related body corporate as at the date of this report.

	Fully Paid Ordinary Shares	Share options
Directors	Number	Number
Estina Ang Suan Hong	50,116,000	–
Felicia Gan Peiling	2,222,000	–
Christopher Chong Meng Tak	110,001	–
Shane Hartwig	0	–

REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT

Information about the remuneration of directors and senior management is set out in the remuneration report of this directors’ report, on pages 41 to 48.

SHARE OPTIONS GRANTED TO DIRECTORS AND SENIOR MANAGEMENT

During and since the end of the financial year no share options (2016: nil) were granted to the directors as part of their remuneration.

COMPANY SECRETARY

Mr Alistair Chong was appointed as Company Secretary on the 14[th] November 2016. Mr Chong holds a B.Comm and MBA through the University of Tasmania, and a GIA (Cert) with the Governance Institute of Australia. Mr Chong has extensive knowledge in the areas of change management, company HR practices, and organisational change, as he is a current tutor in these subject areas at the University of Tasmania, and has been tutoring there for five years.

PRINCIPAL ACTIVITIES

The consolidated entity’s principal activities in the course of the financial year were being a global supplier of knitwear/apparel and supply chain management operations.

REVIEW OF OPERATIONS

For the current fiscal year in 2017, the Company has seen continued progress in its implementation of the strategic plan to become a vertical–integrated and textile manufacturing, supply chain business from its original state of being just a trading agent. To achieve this goal, in early 2015, the company built its maiden garment factory in Vietnam (which started production in March 2017), and in late 2016 completed the acquisition of a fabric mill in Malaysia. This has enhanced the capability of the Company in providing design, innovation services and producing all kinds of knitted fabric. In June 2017, GLG added its in-house manufacturing capacity by acquiring another garment factory, again in Malaysia.

Besides embarking on non-organic growth, to improve its competitiveness in the market, GLG has differentiated itself with its process innovation of securing self-inspection and lab approval for its endproduct with its key customers. Also, this fiscal year saw the incremental innovation in enhancing its existing product portfolio by selling directly to end-customers on Landed Duty Paid (LDP) basis. This new LDP business represents another step towards adding more value to our customers, using a total supply-chain solutions approach by bringing the final product from door-to-door, i.e. from our fabric mill through to final production in garment factories, and ultimate delivery to the receiving dock of our customers.

38 ANNUAL REPORT 2017

GLG CORP LTD

DIRECTOR’S REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

This entire value chain ranging from product design, process innovation through knitted fabric manufacturing to last-mile delivery of knitted garments to our customers’ doorstep is now embedded into our current financial results ended 30 June 2017.

Comparison of Consolidated Statement of Profit or Loss and Comprehensive Income for the financial year ended 30 June 2017 with that of 30 June 2016.

GLG’s sales decreased by US$14,991 thousand, or 8.8% to US$156,041 thousand compared to sales of US$171,032 thousand in the previous year.

Sales from FOB business decreased by US$25,291 thousand, or 14.8% to US$145,506 thousand compared to US$170,797 thousand in the previous year. The decline in sales was mainly attributed to continued weakness in our end-customers’ retail apparel market. These end-customers have been facing intense competition and losing market share to on-line retailers.

LDP business contributed US$10,115 thousand, or 6.5% to GLG’s sales with gross profit margin of 31%. When GLG increases its LDP business, the sales and gross profit margin will continue to improve. It is worthy to note that LDP revenues include logistics and customs duty cost which are then deducted below the gross profit level.

Gross profit margin for the Textile (Fabric) segment increased to 10.8% compared to 9.0% in the previous year. The increase was largely attributable to improved production efficiency and lower yarn cost.

Despite the higher gross profit margin generated from garment and Textile segment, the group reported only a slight increase in gross profit margin from 13.4% in the previous year to 13.8% for the current year ended 30 June 2017. This was due to lower gross profit margin recorded for FOB business of 9.8% compared to 11.5% in the previous year.

Selling and distribution cost increased by 28.8% to US$3,410 thousand compared to US$2,648 thousand in the previous year. The increase in expenses was mainly due to the customs duties and freight costs incurred on outbound shipments to LDP customer from door-to-door, compared with the mainstream FOB business, where our delivery obligation terminates at the Port of Departure.

Administration expense decreased by 6.2% to US$10,244 thousand compared to US$10,924 thousand in the previous year. This reduction in expenses was achieved through a streamlining of processes and internal restructuring.

Finance cost decreased by 8.4% to US$1,215 thousand compared to US$1,327 thousand in the previous year, as the company did not have to incur financing cost associated with a previous customer for export trade financing.

GLG’s profit after tax decreased by 13.1% to US$4,193 thousand, compared with US$4,827 thousand in the previous year. The reduction in profit after tax was mainly due to lower sales and pre-production costs incurred at the Vietnam garment factory.

Comparison of the Consolidated Statement of Financial Position as at 30 June 2017 with that of 30 June 2016.

Trade and other receivables increased by 13.9% to US$68,534 thousand as at 30 June 2017 compared to US$60,190 thousand as at 30 June 2016. The increase was primarily due to extended credit given to core customers in the current year.

Inventory increased by 6.8% to US$12,515 thousand as at 30 June 2017 compared to US$11,715 thousand as at 30 June 2016, because of an increase in the Maxim’s fabric mill inventory for raw materials and workin-process.

GLG CORP LTD ANNUAL REPORT 2017 39

DIRECTOR’S REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

Non-current other assets increased by 88% to US$2,615 thousand as at 30 June 2017 compared to US$1,391 thousand as at 30 June 2016, the increase was primarily due to the payment of infrastructure costs in Vietnam on an operating lease to an external party for the usage of land.

Property, plant and equipment increased by 29.3% to US$34,047 thousand as at 30 June 2017 compared to US$26,337 thousand as at 30 June 2016, the increase was due to the cost of investment in new machinery for the Vietnam garment factory and Maxim fabric mill. Correspondingly, this led to the current and longterm borrowings increased by 27.2%, to US$64,702 thousand as at 30 June 2017 compared to US$50,866 thousand as at 30 June 2016.

Comparison of the Consolidated Statement of Cash Flows for the financial year ended 30 June 2017 with that of 30 June 2016.

GLG’s cash from operating activities decreased by 57.4% to US$1,378 thousand as at 30 June 2017 compared to US$3,237 thousand as at 30 June 2016. The decrease was due to the decline in lower sales for the financial year.

We believe the cash flows from operations of GLG remains sufficient to meet our working capital requirements, capital expenditures, debt servicing and other funding requirements for the foreseeable future.

CHANGES IN STATE OF AFFAIRS

As the Maxim group was acquired under common control, the prior comparatives were restated to reflect the acquisition from the earliest reported period, being 1 July 2015, in accordance with the pooling of interest method of accounting.

There were no other significant changes in the state of affairs of the consolidated entity during the financial year.

DIVIDENDS

In respect of the financial year ended 30 June 2017, the Directors do not recommend the payment of a final dividend and no interim dividend was paid. In respect of the financial year ended 30 June 2016, no dividend was declared.

SUBSEQUENT EVENTS

There have been no subsequent events after the year ended 30 June 2017 to the date of this report.

FUTURE DEVELOPMENTS

The consolidated entity is expanding fabric suppliers to include fashion novelty and also to increase the amount of work with outsourced factories. The performance depends on many economic and industry factors. In the opinion of the Directors, it is not possible or appropriate to make a prediction on the future course of markets, performance of the Consolidated Entity’s or the forecast of the likely result of the Consoldiated Entity’s activities.

40 ANNUAL REPORT 2017

GLG CORP LTD

DIRECTOR’S REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

ENVIRONMENTAL REGULATION

The consolidated Entity is not subject to any particular or significant environmental regulation.

SHARES UNDER OPTION OR ISSUED ON EXERCISE OF OPTIONS

There are no shares under option or issues on exercise of options during the year (2016: Nil).

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied for leave of court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

The company was not a party to any such proceedings during the year.

INDEMNIFICATION OF OFFICERS AND AUDITORS

During the financial year, the Company paid a premium in respect of a contract insuring the directors of the company (as named above), the company secretary, and all executive officers of the company and of any related body corporate against a liability incurred as such a director, secretary or exectuvie officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

The company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the company or of any related body corporate against a liability incurred as such an officer or auditor.

DIRECTORS’ MEETINGS

The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while they were a director or committee member). During the financial year 4 Board meetings, 3 Nomination and Remuneration Committee meeting and 3 Audit Committee meetings were held:

			Nomination &
			remuneration
	Board of directors		committee	Audit	committee
Directors	Held	Attended	Held Attended	Held	Attended
Estina Ang Suan Hong	4	4	3 3	3	3
Christopher Chong Meng Tak	4	4	3 3	3	3
Shane Hartwig	4	3	3 2	3	2
Felicia Gan Peiling	4	4	3 3	3	3

GLG CORP LTD ANNUAL REPORT 2017 41

DIRECTOR’S REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

Non-audit services

Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 33 of the financial report.

The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another person or firm on the auditor’s behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

The Directors are of the opinion that the services as disclosed in Note 33 to the full financial statements do not compromise the external auditors’ independence, based on advice received from the Audit Committee, for the following reasons:

§ all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor, and
§ none of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration is included on page 49 of this report.

ROUNDING OFF OF AMOUNTS

The company is a company of the kind referred to in ASIC Corporations (Rounding in Financials/Directors’ Reports) Instrument 2016/191 and in accordance with that Corporations Instrument amounts in the directors’ report and the financial statements are rounded off to the nearest thousand dollars, unless otherwise indicated.

REMUNERATION REPORT (AUDITED)

This Remuneration report, which forms part of the Directors’ report, sets out information about the remuneration of GLG’s directors and its senior management for the financial year ended 30 June 2017. The prescribed details for each person covered by this report are detailed below under the following headings:

§ director and senior management details
§ remuneration policy
§ relationship between the remuneration policy and company performance
§ remuneration of directors and senior management.
§ key terms of employment contracts

42 ANNUAL REPORT 2017

GLG CORP LTD

DIRECTOR’S REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

DIRECTOR AND SENIOR MANAGEMENT DETAILS

The following persons acted as directors of the Company during or since the end of the financial year:

§ Estina Ang Suan Hong as Executive Chairman and Chief Executive Officer
§ Christopher Chong Meng Tak as Lead Independent Director
§ Shane Hartwig as Independent Director
§ Felicia Gan Peiling as Chief Marketing Officer

The term ‘senior management’ is used in this remuneration report to refer to the following persons. Except as noted, the named persons held their current position for the whole of the financial year and since the end of the financial year:

§ Susan Yong as Executive Vice President - Operations
§ Cheah Eng Kean as EVP, Marketing & Contract Manufacturing (resigned on 19 September 2016)
§ Shawn Fung as Chief Financial Officer

REMUNERATION POLICY

The remuneration for Key Management Personnel is determined as follows:

§ For the Executive Chairman, Chief Executive Officer, by the Nominations and Remuneration Committee and by the Board and with a view to attract, retain and develop appropriately skilled people. Remuneration is reviewed on an annual basis having regard to personal and corporate performance and relevant comparative information.
§ The remuneration of non-executive directors may not exceed in aggregate in any financial period the amount fixed by the Company at the general meeting. The amount has not changed since the Company listed in 2005.
§ For executives, the Nomination and Remuneration Committee reviews remuneration policies and practices and makes recommendations to the Board regarding their approval. Remuneration is reviewed on an annual basis having regard to personal and corporate performance and relevant comparative information.

GLG CORP LTD ANNUAL REPORT 2017 43

DIRECTOR’S REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

RELATIONSHIP BETWEEN THE REMUNERATION POLICY AND COMPANY PERFORMANCE

The tables below set out summary information about the consolidated entity’s earnings and movements in shareholder wealth for the five years to June 2017:

	30 June 2017	30 June 2016	30 June 2015	30 June 2014	June 2013
	US$’000	US$’000	US$’000	US$’000	US$’000
Revenue from all sources	156,041	171,435	180,343	226,718	230,884
Net proft before tax	4,477	6,476	3,865	4,681	3,592
Net proft after tax	4,193	4,827	3,148	4,038	3,115
Share price at start of year	$0.15	$0.18	$0.24	$0.28	$0.21
Share price at end of year	$0.19	$0.15	$0.18	$0.24	$0.28
Final Dividend (unfranked)	–	–	–	–	–
Basic earnings per share	5.66 cps	6.51 cps	4.25 cps	5.45 cps	4.20 cps
Diluted earnings per share	5.66 cps	6.51 cps	4.25 cps	5.45 cps	4.20 cps

GLG Corp Ltd employees may be entitled to receive a discretionary bonus, as set and agreed by senior management and / or the Nomination and Remuneration Committee. These bonuses are accrued prior to year-end based on the expected bonuses to be paid, however the amounts may not be finalized or paid until a future date that is not necessarily within 12 months of balance sheet date. As a result, there is a difference in timing of the accrual of the bonus and the timing of the payment of the bonus.

Each executive director of the Company has entered into an Executive Service Agreement with Ghim Li Global Pte Ltd, a major subsidiary of GLG. They are not remunerated separately for being a director or executive of the Company or other operating entities. Under their respective terms of engagement, all executives:

§ commenced their terms as an executive of Ghim Li Global Pte Ltd for a 3-year term, and thereafter their engagement automatically continues from year to year, unless their Executive Service Agreement is terminated;
§ are covenanted to not compete against GLG’s operations for a period of 12 months after cessation of employment with GLG;
§ agree that either party may terminate their Executive Service Agreement by giving 3 months written notice. In addition, Ghim Li Global Pte Ltd may without prior notice terminate their Service Agreements under certain conditions, for example, if the executive commits a serious breach of his or her obligations, or is guilty of grave misconduct in the discharge of his or her duties, or becomes bankrupt.

The service agreements contain otherwise standard terms, including with regard to each executive’s duties, GLG owns any intellectual property created by its executives, confidentiality, entitlements to minor benefits in addition to their remuneration, and devoting substantially the whole of their time and attention during business hours to the discharge of their duties.

Each executive director receives a salary per month. They may also be entitled to an annual bonus determined by the Nomination and Remuneration Committee, in its absolute discretion.

44 ANNUAL REPORT 2017

GLG CORP LTD

DIRECTOR’S REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

Each of the key managers have entered into a service agreement with Ghim Li Global Pte Ltd, the general terms of which are not materially different to those of the executive directors described above.

Each key manager receives a salary per month, reviewed by the Chief Executive Officer annually with reference to the progress of GLG. Each may also be entitled to an annual bonus determined by the Chief Executive Officer, reviewed by the Nomination and Remuneration Committee, and approved by the Board taking into account overall management performance and the Company’s profit for the year.

ELEMENTS OF KEY MANAGEMENT PERSONNEL REMUNERATION

Remuneration packages contain the following key elements:

(a) Short-term employment benefits – salaries/fees, bonuses; and
(b) Post-employment benefits

2017		Post- Share employment Other long based benefts term payments, Salary & Non- super - employee options fees Bonus monetary Other annuation benefts & rights Total US$ US$ US$ US$ US$ US$ US$ US$ Short term employment benefts
Directors Estina Ang Suan Hong1 572,759 82,999 – – 6,534 – – 662,292 Christopher Chong Meng Tak 38,566 – – – – – – 38,566 Shane Hartwig 27,091 – – – – – – 27,091 Felicia Gan Peiling1 121,401 19,090 – – 12,059 – – 152,550 759,817 102,089 – – 18,593 – – 880,499 Executives Shawn Fung 145,209 11,758 – – 8,268 – – 165,235 Cheah Eng Kean2 31,463 – – – 1,511 – – 32,974 Susan Yong 140,410 12,450 – – 8,358 – – 161,218 317,082 24,208 – – 18,137 – – 359,427 Total 1,076,899 126,297 – – 36,730 – – 1,239,926	572,759 82,999 – – 6,534 – – 662,292
	38,566 – – – – – – 38,566
	27,091 – – – – – – 27,091
	121,401 19,090 – – 12,059 – – 152,550
	759,817 102,089 – – 18,593 – – 880,499
	145,209 11,758 – – 8,268 – – 165,235
	31,463 – – – 1,511 – – 32,974
	140,410 12,450 – – 8,358 – – 161,218
	317,082 24,208 – – 18,137 – – 359,427

Estina Ang Suan Hong and Felicia Gan Peiling are both Directors and Executives of GLG Corp Ltd. Estina Ang Suan Hong acts as the Chief Executive Officer; Felicia Gan Peiling is Chief Marketing Officer.
Cheah Eng Kean appointed as EVP, Marketing & Contract Manufacturing resigned on 19 September 2016.

GLG CORP LTD ANNUAL REPORT 2017 45

DIRECTOR’S REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

2016		Post- Share employment Other long based benefts term payments, Salary & Non- super - employee options fees Bonus monetary Other annuation benefts & rights Total US$ US$ US$ US$ US$ US$ US$ US$ Short term employment benefts
Directors Estina Ang Suan Hong1 479,445 105,977 – – 4,580 – – 590,002 Christopher Chong Meng Tak 36,465 – – – – – – 36,465 Por Khay Ti2 36,754 – – – 625 – – 37,379 Shane Hartwig 24,724 – – – – – – 24,724 Felicia Gan Peiling3 121,337 17,663 – – 11,080 – – 150,080 698,725 123,640 – – 16,285 – – 838,650 Executives Shawn Fung4 10,988 – – – 565 – – 11,553 Cheah Eng Kean5 38,144 – – – 1,194 – – 39,338 Susan Yong 140,336 12,717 – – 7,615 – – 160,668 Timothy Ngui 113,564 6,217 – – 9,134 – – 128,915 303,032 18,934 – – 18,508 – – 340,474 Total 1,001,757 142,574 – – 34,793 – – 1,179,124	479,445 105,977 – – 4,580 – – 590,002
	36,465 – – – – – – 36,465
	36,754 – – – 625 – – 37,379
	24,724 – – – – – – 24,724
	121,337 17,663 – – 11,080 – – 150,080
	698,725 123,640 – – 16,285 – – 838,650
	10,988 – – – 565 – – 11,553
	38,144 – – – 1,194 – – 39,338
	140,336 12,717 – – 7,615 – – 160,668
	113,564 6,217 – – 9,134 – – 128,915
	303,032 18,934 – – 18,508 – – 340,474

Estina Ang Suan Hong and Felicia Gan Peiling (appointed as an Executive 15 September 2015) are both Directors and Executives of GLG Corp Ltd. Estina Ang Suan Hong acts as the Chief Executive Officer; Felicia Gan Peiling is Chief Marketing Officer.
Por Khay Ti resigned 3 August 2015.
Shawn Fung appointed as Chief Financial Officer on 13 June 2016.
Cheah Eng Kean appointed as EVP, Marketing & Contract Manufacturing on 1 April 2016 (resigned on 19 September 2016).
Timonthy Ngui left the company in September 2016.

The relative proportions of those elements of remuneration of key management personnel that are linked to performance:

46 ANNUAL REPORT 2017

GLG CORP LTD

DIRECTOR’S REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

Directors	Remuneration linked Fixed remuneration to performance 2017 2016 2017 2016
Estina Ang Suan Hong Christopher Chong Meng Tak Por Khay Ti Shane Hartwig Felicia Gan Peiling Executives Shawn Fung Timothy Ngui Cheah Eng Kean Susan Yong	87.5% 82.0% 12.5% 18.0%
	100% 100% – –
	– 100% – –
	100% 100% – –
	87.5% 88.2% 12.5% 11.8%
	92.9% 100% 7.1% –
	– 95.2% – 4.8%
	100% 100% – –
	92.3% 92.1% 7.7% 7.9%

Note: Fixed remuneration consists of base pay plus other fixed allowances paid to the individual on a regular basis, whilst Performance-linked remuneration refers to variable bonus paid to the individual, dependent on company financial results and individual’s performance.

BONUSES PAYMENT AS COMPENSATION FOR THE CURRENT FINANCIAL YEAR

Cash Bonuses

Estina Ang Suan Hong was granted a cash bonus on 24 January 2017 of US$82,999 (FY2016: US$105,977) during the financial year ended 30 June 2017. The cash bonus was given for her stewardship as Chief Executive Officer on the company’s overall performance. The full amount of the bonus was paid on 25 January 2017.

Felicia Gan Peiling was granted a cash bonus on 24 January 2017 of US$19,090 (FY2016: US$17,663) during the financial year ended 30 June 2017. The cash bonus was given for her contribution as the Chief Marketing Officer for on-going business development and management of Sales, Marketing, Product Design and Development. The full amount of the bonus was paid on 25 January 2017.

Shawn Fung was granted a cash bonus on 24 January 2017 of US$11,758 (FY2016: Not applicable) during the financial year ended 30 June 2017. The cash bonus was given for his contribution as Chief Financial Officer. The full amount of the bonus was paid on 25 January 2017.

Susan Yong was granted a cash bonus on 24 January 2017 of US$12,450 (FY2016: US$12,717) during the financial year ended 30 June 2017. The cash bonus was given for her contribution as Executive Vice President Operations for her achievements in operational efficiencies and overall cost reduction. The full amount of the bonus was paid on 25 January 2017.

LOANS TO KEY MANAGEMENT PERSONNEL

The Group has not provided any loans to key management personnel.

GLG CORP LTD ANNUAL REPORT 2017 47

DIRECTOR’S REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL IN THE GROUP

There have been no other transactions between the Group and key management personnel.

KEY MANAGEMENT PERSONNEL EQUITY HOLDINGS

	Balance at Balance Granted as Net other resignation Balance at 1 July compensation change date at 30 June No. No. No. No. No.
2017 Estina Ang Suan Hong Felicia Gan Peiling Christopher Chong Meng Tak 2016 Estina Ang Suan Hong Christopher Chong Meng Tak	54,560,000 – (4,444,000) – 50,116,000
	– – 2,222,000 – 2,222,000
	160,007 – (50,006) – 110,001
	54,560,000 – – – 54,560,000
	160,007 – – – 160,007

KEY TERMS OF EMPLOYMENT CONTRACT

A summary of the key term of employment are set out below:

Position

Key term of service agreements

Chief Executive Officer

§ Base salary: US$522,759 (SG$726,000) excluding superannuation. The contract for remuneration is in Singapore Dollars.
§ Term: no fixed term
§ Base remuneration: Reviewed annually by the Nomination and Remuneration Committee.
§ Bonus entitlements: Determined annually by the Nomination and Remuneration Committee.
§ Termination notice period: 6 months’ notice or without notice in the event of serious misconduct.
§ Termination payment: in lieu of notice
§ Restraint and confidentiality provisions.

48 ANNUAL REPORT 2017

GLG CORP LTD

DIRECTOR’S REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

Executive Director

§ Base salary: US$121,401 (SG$165,600) excluding superannuation. The contract for remuneration is in Singapore Dollars.
§ Term: no fixed term
§ Base remuneration: Reviewed annually by the Nomination and Remuneration Committee.
§ Bonus entitlements: Determined annually by the Nomination and Remuneration Committee.
§ Termination notice period: 3 months’ notice or without notice in the event of serious misconduct.
§ Termination payment: in lieu of notice
§ Restraint and confidentiality provisions.

Senior Management

§ Base salary: refer to remuneration of directors and senior management for individual’s salary
§ Term: no fixed term
§ Base remuneration: Reviewed annually by the Nomination and Remuneration Committee.
§ Bonus entitlements: Determined annually by the Nomination and Remuneration Committee.
§ Termination notice period: one month’ notice or without notice in the event of serious misconduct.
§ Termination payment: in lieu of notice
§ Restraint and confidentiality provisions.

This concludes the Remuneration Report, which has been audited.

The Directors’ report is signed in accordance with a resolution of the Directors made pursuant to s.298 (2) of the Corporations Act 2001.

On the behalf of the Director

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Estina Ang Suan Hong

Chairman & CEO Singapore, 20 September 2017

GLG CORP LTD ANNUAL REPORT 2017 49

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Tel: +61 2 9251 4100 Level 11, 1 Margaret St Fax: +61 2 9240 9821 Sydney NSW 2000 www.bdo.com.au Australia

DECLARATION OF INDEPENDENCE BY JOHN BRESOLIN TO THE DIRECTORS OF GLG CORP LTD

As lead auditor of GLG Corp Ltd for the year ended 30 June 2017, I declare that, to the best of my knowledge and belief, there have been:

No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of GLG Corp Ltd and the entities it controlled during the year.

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John Bresolin Partner

BDO East Coast Partnership

Sydney, 20 September 2017

BDO East Coast Partnership ABN 83 236 985 726 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 East Coast Partnership 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, other than for the acts or omissions of financial services licensees.

50 ANNUAL REPORT 2017

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Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au

Level 11, 1 Margaret St Sydney NSW 2000 Australia

INDEPENDENT AUDITOR'S REPORT

To the members of GLG Corp Ltd

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of GLG Corp Ltd (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration.

In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001 , including:

(i) Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its financial performance for the year ended on that date; and
(ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

GLG CORP LTD ANNUAL REPORT 2017 51

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Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Accounting for the acquisition of the Maxim Group


*Key audit matter*	*How the matter was addressed in our audit*

As disclosed in note 35, the Group acquired the	To	determine whether the transaction was
Maxim Group during the year ended 30 June	properly accounted for and disclosed in
2017. This transaction is significant to our audit	accordance with accounting standards, our audit
because the material acquisition was one under	procedures included, amongst others, the
common control as both the acquirer and the	following procedures:
acquiree are controlled by Ghim Li Group Pte Ltd (the ultimate parent entity).	•	Agreed that the details of the purchase agreement have been correctly reflected in
Given the complexities associated with		the acquisition accounting entries and
accounting for a transaction under common		assessed the accuracy of the related merger
control, the Group applied judgements to ensure		reserve calculations.
the excess of the purchase consideration over the equity acquired was properly reflected within	•	Ensured comparatives of the Maxim Group within the financial statements and notes
equity as a merger reserve.		were restated to reflect the acquisition from
		the earliest comparatives presented.

Valuation of the GLIT receivable


*Key audit matter*	*How the matter was addressed in our audit*

The valuation of the GLIT receivable as disclosed	To	determine whether the receivable was
in note 11 and 12, is significant to our audit	recoverable at the reporting date, our audit
because as at 30 June 2017 the balance was	procedures included, amongst others, the
$46,309,000, which is material.	following procedures:
The valuation process used by the Group to assess	•	Assessed managements’ evaluation of the
recoverability is judgemental and is based on		recoverability of the receivable and
assumptions, specifically those in relation to trust		considered the accessibility of trust receipts
receipts and amounts of available guarantees.		available for offset against the GLIT
		receivable. We also assessed the rationale
		and suitability of guarantees in place that
		are able to serve as collateral for the
		receivable.

52 ANNUAL REPORT 2017

GLG CORP LTD

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Analysed average turnover of the receivable balance during the year in order to ascertain whether the recoverability of the receivable would occur within a reasonable timeframe.

Other information

The directors are responsible for the other information. The other information comprises the information in the Directors’ Report (excluding the audited Remuneration report section) and the Corporate Governance Report for the year ended 30 June 2017, but does not include the financial report and the auditor’s report thereon, which we obtained prior to the date of this auditor’s report and the Annual Report to Shareholders (including the Chairperson’s/ CEO’s Speech and Financial Highlights, Operational Highlights and People Highlights for the year), which is expected to be made available to us after that date.

Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

GLG CORP LTD ANNUAL REPORT 2017 53

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Auditor’s responsibilities for the audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:

http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf

This description forms part of our auditor’s report.

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2017.

In our opinion, the Remuneration Report of GLG Corp Ltd, for the year ended 30 June 2017, complies with section 300A of the Corporations Act 2001 .

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

BDO East Coast Partnership

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John Bresolin Partner

Sydney, 20 September 2017

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DIRECTORS’ DECLARATION

The Directors declare that:

(a) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;
(b) in the Directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note 2 to the financial statements;
(c) in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with Australian Accounting Standards and giving a true and fair view of the financial position and performance of the consolidated entity; and
(d) the Directors have been given the declarations required by s.295A of the Corporations Act 2001.

Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.

On the behalf of the Board of Directors

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Estina Ang Suan Hong

Chairman & CEO

Singapore, 20 September 2017

GLG CORP LTD ANNUAL REPORT 2017 55

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

Note	Consolidated 2017 2016 US$’000 US$’000
Revenue 5 Cost of sales Gross proft Other income 5 Distribution expenses Administration expenses 6 Finance costs 7 Other expenses 8 Proft before income tax expense Income tax expense 10 Proft for the year Other comprehensive income: Items that will not be reclassifed subsequently to proft or loss: Revaluation defcit, on land and building, net of tax Other comprehensive income, net of tax Total comprehensive income for the year Earnings per share: From continuing operations: Basic (cents per share) 23 Diluted (cents per share) 23	156,041 171,032 (134,570) (148,174)
	21,471 22,858 344 1,295 (3,410) (2,648) (10,244) (10,924) (1,215) (1,327) (2,469) (2,778)
	4,477 6,476 (284) (1,649)
	4,193 4,827 (381) (1,933)
	(381) (1,933)
	3,812 2,894
	5.66 6.51 5.66 6.51

Notes to the Financial Statements are included on pages 59 to 102

56 ANNUAL REPORT 2017

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2017

Note	Consolidated 2017 2016 US$’000 US$’000
Current assets Cash and cash equivalents 28(a) Trade and other receivables 11 Inventory 13 Other assets 16 Other fnancial assets 12 Total current assets Non-current assets Other assets 16 Other fnancial assets 12 Investments accounted for using the equity method 14 Investment property 17 Intangible assets 18 Property, plant and equipment 15 Total non-current assets Total assets Current liabilities Trade and other payables 19 Borrowings 20 Current tax liabilities 10(b) Total current liabilities Non-current liabilities Borrowings 20 Deferred tax liabilities 10(c) Total non-current liabilities Total liabilities Net assets Equity Issued capital 21 Revaluation reserves 29 Merger reserves 29 Retained earnings 22 Total equity	6,881 7,908 68,534 60,190 12,515 11,715 1,725 445 344 344
	89,999 80,602
	2,615 1,391 6,871 7,333 – – 3,762 4,014 1,853 – 34,047 26,337
	49,148 39,075
	139,147 119,677
	25,580 23,097 53,824 41,336 694 1,154
	80,098 65,587
	10,878 9,530 1,077 1,278
	11,955 10,808
	92,053 76,395
	47,094 43,282
	10,322 10,322 3,599 3,980 (14,812) (14,812) 47,985 43,792
	47,094 43,282

Notes to the Financial Statements are included on pages 59 to 102

GLG CORP LTD ANNUAL REPORT 2017 57

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

	Asset Issued Revaluation Merger Retained Capital Reserve Reserve Earnings Total US$’000 US$’000 US$’000 US$’000 US$’000
Consolidated Balance at 1 July 2015 Proft for the year Other comprehensive income for the year Total comprehensive income for the year Balance at 30 June 2016 Balance at 1 July 2016 Proft for the year Other comprehensive income for the year Total comprehensive income for the year Balance at 30 June 2017	10,322 5,913 (14,812) 38,965 40,388 – – – 4,827 4,827 – (1,933) – – (1,933)
	– (1,933) – 4,827 2,894
	10,322 3,980 (14,812) 43,792 43,282
	10,322 3,980 (14,812) 43,792 43,282 – – – 4,193 4,193 – (381) – – (381)
	– (381) – 4,193 3,812
	10,322 3,599 (14,812) 47,985 47,094

Notes to the Financial Statements are included on pages 59 to 102

58 ANNUAL REPORT 2017

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CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

Note	Consolidated 2017 2016 US$’000 US$’000
Cash fows from operating activities Receipts from customers Payments to suppliers and employees Interest income Interest and other costs of fnance paid Income tax paid Net cash provided by operating activities 28(c) Cash fows from investing activities Proceeds from sale of property, plant and equipment Payment for property, plant and equipment Payment for software Net cash used in investing activities Cash fows from fnancing activities Net proceeds from/ (repayment of) borrowings (Advanced to)/ received from related parties (Advanced to)/ received from other parties - GLIT Net cash provided by/(used in) fnancing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the fnancial year Cash and cash equivalents at the end of the fnancial year 28(a)	151,676 175,835 (148,457) (171,024) 15 15 (911) (1,045) (945) (544)
	1,378 3,237
	2 114 (9,223) (6,557) (13) –
	(9,234) (6,443)
	13,734 (8,216) (488) 482 (6,417) 7,905
	6,829 171
	(1,027) (3,035) 7,908 10,943
	6,881 7,908

Notes to the Financial Statements are included on pages 59 to 102

GLG CORP LTD ANNUAL REPORT 2017 59

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

1. GENERAL INFORMATION

GLG Corp Ltd (the Company) is a public company listed on the Australian Securities Exchange (ASX: GLE), incorporated in Australia and operating in Asia.

GLG Corp Ltd.’s registered office and principal place of business are as follows:

Registered office Principal place of business L40 100 Miller St 21 Jalan Mesin, North Sydney NSW 2060 Singapore 368819 Australia

The entity’s principal activities are the global supply of knitwear/apparel and supply chain management operations.

2. SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law. The financial report comprises the consolidated financial statements of the Group. For the purposes of preparing the consolidated financial statement, the company is a for-profit entity.

Accounting Standards include Australian Accounting Standards. Compliance with the Australian Accounting Standards ensures that the financial statements and notes of the Group comply with International Financial Reporting Standards (‘IFRS’).

The financial statements were authorised for issue by the Directors on 20[th] September 2017.

Basis of preparation

The consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in United States dollars, unless otherwise noted.

The consolidated entity satisfies the requirements of ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 issued by the Australian Securities and Investments Commission in relation to rounding of amounts in the directors’ report and the financial statements to the nearest thousand dollars. Amounts have been rounded off in the financial statements in accordance with that Legislative Instrument.

Comparative figures

Comparative figures have been adjusted to conform to changes in presentation for the current financial year as a result of the common control acquisition (Refer to Note 35).

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NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement.

For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

Fair value hierarchy

The following details the consolidated entity’s assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3: Unobservable inputs for the asset or liability

Assets and liabilities measured at fair value include:

§ Freehold and leasehold land and buildings - Level 3 – refer to Note 15 for further details
§ Investment properties - Level 3 – refer to Note 17 for further details
§ Contingent consideration - Level 3 – refer to Note 35 for further details.

Adoption of new and revised Accounting Standards

In the current year, the Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current annual reporting period.

GLG CORP LTD ANNUAL REPORT 2017 61

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Standards and Interpretations issued not yet effective

At the date of authorisation of the financial report, a number of Standards and Interpretations were in issue but not yet effective.

Standard/Interpretation	Effective for annual	Expected to be initially
	reporting periods	applied in the fnancial
	beginning on or after	year ending
AASB 9 Financial Instruments, and the	1 January 2018	30 June 2019
relevant amending standards
AASB 15 ‘Revenue from Contracts with	1 January 2018	30 June 2019
Customers’, AASB 2014-5 ‘Amendments
to Australian Accounting Standards
arising from AASB 15, AASB 2016-8
‘Amendments to Australian Accounting
Standards – Effective date of AASB 15’
AASB 16 Leases	1 January 2019	30 June 2020
AASB 2017-2 ‘Amendments to Australian	1 January 2017	30 June 2018
Accounting Standards – Disclosure
Initiative; Amendments to AASB 107’
AASB 2017-3 ‘Amendments to	1 January 2018	30 June 2019
Australian Accounting Standards –
Clarifcations to AASB 15’

As at the date of the report management are quantifying the impact, if any, on the adoption of the above accounting standards. However, management do note that AASB 16 is expected to impact GLG as the operating leases entered into by the company will be brought onto the statement of financial position as a right to use asset and liability.

(a) Basis of consolidation

The consolidated financial statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity. Control is achieved when the company:

§ has power over the investee;
§ is exposed, or has the rights, to variable returns from its involvement with the investee; and
§ has the ability to use its power to affect its returns.

Total comprehensive income of subsidiaries is attributed to the owners of the Company.

In preparing the consolidated financial statements, all intercompany balances and transactions, and unrealised profits arising within the consolidated entity are eliminated in full.

A list of subsidiaries appears in note 27 to the financial statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.

Refer further to Note 35 in respect of the common control acquisition during the year.

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NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(b) Foreign currency

The individual financial statements of each group entity are presented in its functional currency being the currency of the primary economic environment in which the entity operates. For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in United States dollars, which is the functional currency of GLG Corp Ltd and the presentation currency for the consolidated financial statements. All subsidiaries of GLG Corp Ltd have functional currency of United States dollars.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of each reporting period.

Exchange differences are recognised in profit or loss in the period in which they arise except that:

(i) exchange differences which relate to assets under construction for future productive use, which are included in the cost of those assets where they are regarded as an adjustment to interest costs on foreign currency borrowings;
(ii) exchange differences on transactions entered into in order to hedge certain foreign currency risks; and
(iii) exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned or likely to occur, which form part of the net investment in a foreign operation, and which are recognised in the foreign currency translation reserve and recognised in profit or loss on disposal of the net investment.
(c) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

(i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
(ii) for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified within operating cash flows.

GLG CORP LTD ANNUAL REPORT 2017 63

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(d) Financial assets

Investments are recognised and derecognised on trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs except for those financial assets classified as at fair value through profit or loss which are initially measured at fair value.

Subsequent to initial recognition, investments in subsidiaries are measured at cost less impairment, if any, in the Company’s financial statements. Subsequent to initial recognition, investments in associates are accounted for under the equity method in the consolidated financial statements and the cost method in the Company’s financial statements.

Other financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’, financial assets, and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period.

Interest income is recognised on an effective interest rate basis for debt instruments other than those financial assets ‘at fair value through profit or loss’.

Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment.

Impairment of fnancial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted.

The carrying amount of financial assets including uncollectible trade receivables is reduced by the impairment loss through the use of an allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized through profit and loss.

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

64 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(d) Financial assets (cont’d)

Derecognition of fnancial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial assets and also recognises collateralised borrowings for the proceeds received.

(e) Impairment of tangible and intangible assets

At the end of each reporting period, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

(f) Employee benefits

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.

Provisions made in respect of short term employee benefits are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of long term employee benefits are measured as the present value of the estimated future cash outflows to be made by the consolidated entity in respect of services provided by employees up to reporting date.

Defned contribution plans

Contributions to defined contribution superannuation plans are expensed when employees have rendered service entitling them to the contributions.

GLG CORP LTD ANNUAL REPORT 2017 65

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(g) Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, and it is probable that the Company will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

(h) Financial instruments issued by the Company

Other fnancial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in note 2, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates. Impairment of receivables and impairment of goodwill are two key areas of estimates and judgements. Refer to Notes 11 and 18 for further details. Additionally, the estimates related to the revaluation of property plant and equipment and investment property are also key areas of estimates and judgements. Refer to Notes 15 and 17 for further details.

66 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

4. SEGMENT INFORMATION

Identification of reportable operating segments

The consolidated entity is organised into two operating segments: fabric and garments. These operating segments are based on the internal reports that are reviewed and used by the Board of Directors in assessing performance and in determining the allocation of resources. There is no aggregation of operating segments and management do not review information by geographic segment nor do they review segment assets or liabilities

Revenues of US$48,736 thousand (2016: US$53,684 thousand), US$48,146 thousand (2016: US$51,810 thousand) and US$31,151 thousand (2016: US$29,106) are derived from three single customers of the Company. Each of these separate revenues amount to more than 10% of the Company’s revenues from external customers.

The directors’ review EBIT (earnings before interest and tax). The accounting policies adopted for internal reporting to the directors are consistent with those adopted in the financial statements.

The information reported to the directors is on at least a monthly basis.

Types of products and services

The principal products and services of each of these operating segments are as follows:

Fabric the manufacture and wholesaling of fabric Garments the manufacturing and wholesaling of garments

Intersegment transactions

Intersegment transactions were made at market rates. The garment retailing operating segment purchases fabric from the fabric manufacturing operating segment. Intersegment transactions are eliminated on consolidation.

Operating segment information

Operating segment information
Consolidated – 30 June 2017	Intersegment Fabric Garments eliminations US$’000 US$’000 US$’000	Total US$’000
Revenue Sales to external customers Intersegment sales Total revenue Interest received Depreciation EBIT Finance costs Proft before income tax expense Income tax expense Proft after income tax expense	420 155,621 – 36,768 – (36,768)	156,041 –
	37,188 155,621 (36,768)	156,041
	9 6 –	15
	1,929 303 –	2,233
	3,008 2,684 –	5,692 (1,215)
		4,477 (284)
		4,193

GLG CORP LTD ANNUAL REPORT 2017 67

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

4. SEGMENT INFORMATION (cont’d)

SEGMENT INFORMATION (cont’d)
Consolidated – 30 June 2016	Intersegment Fabric Garments eliminations US$’000 US$’000 US$’000	Total US$’000
Revenue Sales to external customers Intersegment sales Total revenue Interest received Depreciation EBIT Finance costs Proft before income tax expense Income tax expense Proft after income tax expense	235 170,797 – 35,399 – (35,399)	171,032 –
	37,188 155,621 (36,768)	156,041
	6 9 –	15
	1,882 232 –	2,114
	3,403 4,400 –	7,803 (1,327)
		6,476 (1,649)
		4,827

Revenue attributable to external customers is disclosed below, based on the location of the external customer:

	Fabric 2017 2016 US$’000 US$’000
India Malaysia Singapore Sri Lanka	– 10 137 128 252 97 31 –
	420 235
	Garments 2017 2016 US$’000 US$’000
Canada Europe Japan Singapore United Kingdom USA	31,171 29,110 10,161 11,491 98 44 196 31 – 182 113,995 129,939
	155,621 170,797

68 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

5. REVENUE

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, stock rotation, price protection, rebates and other similar allowances.

Sale of goods

Revenue from the sale of goods is recognised when the goods are delivered to buyers’ forwarders which is taken to be the point in time when the buyers have accepted the goods and the related risks and rewards of ownership.

Rendering of services

Rendering of services is commission income recognised upon completion of services rendered to fabric suppliers and garments manufacturers.

Interest income

Interest income is recognised on a time proportionate basis that takes into account by applying the effective interest rate.

Rental income

Rental income from operating leases is recognised on a straight-line basis over the lease term.

	Consolidated 2017 2016 US$’000 US$’000
Continuing operations Revenue from the sale of goods Other income Rental income Sample income Proft on sale of assets Interest Income Grant Payable written back Productivity and Innovation Credit cash payout Fair value adjustment on investment property Other Total other income	156,041 171,032
	232 254 28 43 – 62 15 15 14 47 – 99 – 180 – 564 55 31
	344 1,295
	156,385 172,327

GLG CORP LTD ANNUAL REPORT 2017 69

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

6. ADMINISTRATIVE EXPENSES

	Consolidated 2017 2016 US$’000 US$’000
Employee compensation Rental and equipment expenses on operating leases Management fees Insurance Courier Others	5,689 6,306 1,349 1,495 1,691 1,792 201 187 321 208 993 936
	10,244 10,924

7. FINANCE COSTS

	Consolidated 2017 2016 US$’000 US$’000
Interest on loans Interest on obligations under fnance leases Bank charges Total interest and bank charges Line of credit charges	522 302 6 6 241 275
	769 583 446 744
	1,215 1,327

8. OTHER EXPENSES

	Consolidated 2017 2016 US$’000 US$’000
Bad and doubtful debts Commitment fee Others	296 2,533 1,081 – 1,092 245
	2,469 2,778

70 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

9. PROFIT FOR THE YEAR BEFORE INCOME TAX EXPENSE

Profit for the year has been arrived at after (crediting)/charging the following gains and losses:

	Consolidated 2017 2016 US$’000 US$’000
Loss / (gain) on disposal of property, plant and equipment Bad and doubtful debts Net foreign exchange loss / (gain) Fair value loss / (gain) on investment properties Depreciation of non-current assets Operating lease rental expenses: Minimum lease payments Employee beneft expense: Post-employment benefts: Defned contribution plans Other employee beneft Total employee beneft expenses	4 (62) 296 2,533 86 (542) 252 (564) 2,233 2,114 1,423 1,641
	594 639 7,902 7,286
	8,496 7,925

10. INCOME TAXES

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax is recognised on temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items. In principle, deferred tax liabilities are recognised for all taxable temporary differences. However, deferred tax liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, branches and interest in joint ventures except where the consolidated entity is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities reflects the tax consequences that would follow from the manner in which the consolidated entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company/consolidated entity intends to settle its current tax assets and liabilities on a net basis.

GLG CORP LTD ANNUAL REPORT 2017 71

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

10. INCOME TAXES (cont’d)

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the Consolidated Statement of profit or loss and other comprehensive income, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, in which case the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where the current or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

(a) Income tax recognised in profit or loss

	Consolidated 2017 2016 US$’000 US$’000
Tax expense comprises: Current tax expense in respect of the current year Deferred tax expense in respect of the current year Under provision of deferred tax in prior fnancial year Adjustments recognised in the current year in relation to prior years Total tax expense	685 674 625 839 (825) 182 (201) (46)
	284 1,649

The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in the financial statements as follows:

Proft from operations Income tax expense calculated at 30% Effect of expenses that are not deductible in determining taxable proft Effect of income not assessble for tax purposes Effect of tax allowance Effect of tax losses not recognised Effects of different tax rates of subsidiaries operating in other jurisdictions_(i)_ Under provision of deferred tax in prior fnancial year Other Adjustments recognised in the current year in relation to the current tax of prior years Income tax expense recognised in proft	4,477 6,476 1,343 1,944 590 613 (65) (219) (119) (118) 14 25 (483) (753) (825) 182
	455 1,674 30 21
	485 1,695 (201) (46)
	284 1,649

(i) The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when compared with the previous reporting period. However, for the purposes of tax reconciliation, certain subsidiaries were operating in Singapore, Malaysia and Hong Kong, in which these entities are taxed at the respective local tax rates.

Unrecognised deferred tax assets in relation to tax losses at year end amounted to approximately $935,000.

72 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

10. INCOME TAXES (cont’d)

(b) Current tax liabilities

	Consolidated 2017 2016 US$’000 US$’000
Current tax liabilities Income tax payable attributable to entities in the consolidated group	694 1,154
	694 1,154

(c) Deferred tax balances

Deferred tax liabilities arise from the following:

2017	Consolidated Opening Charged Charged Acquisitions Exchange Changes Closing balance to income to Equity /disposals differences in tax rate balance US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000	Consolidated Opening Charged Charged Acquisitions Exchange Changes Closing balance to income to Equity /disposals differences in tax rate balance US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Temporary differences Property, plant and equipment 1,278 (201) – – – – 1,077 1,278 (201) – – – – 1,077 Unused tax loses and other credits: Nil – – – – – – – – – – – – – – 1,278 (201) – – – – 1,077 Presented in the statement of fnancial position as follows: Deferred tax liability 1,077 Consolidated Opening Charged Charged Acquisitions Exchange Changes Closing balance to income to Equity /disposals differences in tax rate balance 2016 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000	1,278 (201) – – – –	1,077
	1,278 (201) – – – –	1,077
		–
	– – – – – –	–
		1,077
	fnancial position as follows: 1,077 Consolidated Opening Charged Charged Acquisitions Exchange Changes Closing balance to income to Equity /disposals differences in tax rate balance US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000	1,077
Temporary differences Property, plant and equipment 257 1,021 – – – – 1,278 257 1,021 – – – – 1,278 Unused tax loses and other credits: Nil – – – – – – – – – – – – – – 257 1,021 – – – – 1,278	257 1,021 – – – – 1,278
	257 1,021 – – – – 1,278
	– – – – – – –
	257 1,021 – – – – 1,278

Presented in the statement of financial position as follows:

Deferred tax liability

1,278

GLG CORP LTD ANNUAL REPORT 2017 73

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

11. TRADE AND OTHER RECEIVABLES

	Consolidated 2017 2016 US$’000 US$’000
Trade receivables Third parties Other party- GLIT group Related Parties Other receivables Allowance for doubtful debts Less: Payable to other party – GLIT group Goods and services tax recoverable	24,610 41,309 41,309 42,976 1,325 1,234 20,160 42,976 1,324 878 (613) (2,610)
	67,865 62,728 (7) (2,705)
	67,858 60,023
	676 167
	68,534 60,190

The average credit period on sales of goods and rendering of services is 60 days. No interest is charged on the trade receivables outstanding balance.

Before accepting any new customers, the Group uses an external scoring system to assess the potential customer’s credit quality and defines credit limits by customers. Limits and scoring attributed to customers are reviewed twice a year. 99% of the trade receivables that are neither past due nor impaired have the best credit scoring attributable under the external credit scoring system used by the Group.

Included in the Group’s trade receivable balance are debtors with a carrying amount of US$325 thousand (2016: US$435 thousand) which are past due at the reporting date. There has been no significant change in credit quality and all amounts are considered recoverable. The Group does not hold any collateral over these balances.

74 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

11. TRADE AND OTHER RECEIVABLES (cont’d)

	Consolidated 2017 2016 US$’000 US$’000
Age of receivables past due, but not impaired 60 – 90 days 90 – 120 days More than 120 days Total Movement in the allowance for doubtful debts Balance at the beginning of the year Charge to proft or loss Allowance written off during the year Balance at the end of the year*	88 78 237 45 – 312
	325 435
	2,610 2,351 277 300 (2,274) (41)
	613 2,610

Includes the provision for doubtful debts for Trade Receivables, both current and non-current. The Group has made a full provision of US$613 thousand for one of the customer which filed for Chapter 11 bankruptcy in the United States.

The provision made to one of the buyers who owed an amount for more than 5 years has been written off in this financial year.

In determining the recoverability of trade receivables, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. Credit risk is concentrated with a few significant counterparties.

Provision for impairment of receivables – estimates and judgements

The Group assesses impairment at the end of each reporting period by evaluating the conditions and events specific to the Group that may be indicative of impairment triggers.

The GLIT Receivables carrying value is estimated to be recoverable on the basis that GLIT continues to operate as our outsourced manufacturing partner dedicated to serve the day-to-day needs of GLG Corp. It is assumed that GLIT has sufficient resources, financial and otherwise to support the order fulfilment processes in the factories, with guidance and loadings from GLG Corp. The valuation of GLIT receivable is evaluated to be recoverable based on the assumption specifically on the accessibility of trust receipts available for offset and the amount of available collateral in place. The acquisition of Ghim Li Fashion (M) Sdn Bhd by the Group on 30 June 2017 resulted in the decrease in GLIT Receivable by US$5 million for the purchase consideration of this acquisition.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

GLG CORP LTD ANNUAL REPORT 2017 75

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

12. OTHER FINANCIAL ASSETS

	Consolidated 2017 2016 US$’000 US$’000
Loans carried at amortised cost: Current Loans and receivables – related parties(i) Provision for Non-Repayment Total current other fnancial assets Non-current Other receivables – GLIT group Loans and receivables – related parties(i)(a)(b) Total non-current other fnancial assets	368 368 (24) (24)
	344 344
	5,000 5,000 1,871 2,333
	6,871 7,333

(i) The current trade receivable owed by third party has a provision for non-recovery in FY2017 of US$24 thousand (FY2016: US$24 thousand).
(ii) The loan owed by related parties consist of:
(a) US$1,871 thousand of rental deposit paid for the 10 years lease rental from Ghim Li Group Pte Ltd (2016: US$1,871 thousand).
(b) Terms loan repayable over 10 years at fixed interest rate of 2% p.a. commencing January 2016 was fully settled in FY2017 (2016: US$462 thousand).

13. INVENTORY

Inventories are valued at the lower of cost and net realisable value. Costs, including an appropriate portion of fixed and variable overhead expenses, are assigned to inventory on hand by the method most appropriate to each particular class of inventory, valued on a first in first out basis. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

	Consolidated 2017 2016 US$’000 US$’000
Raw materials Work in progress Goods in transit Consumables Stock lot Finished goods Total	3,393 2,070 2,987 1,001 2,769 1,289 7 11 189 – 3,170 7,344
	12,515 11,715

76 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

			Ownership	interest
	Country of		2017	2016
Name of entity	incorporation	Principal activity	%	%
Jointly controlled entities
JES Apparel LLC	USA	Importer of knitwear products	51	51

Summarised financial information in respect of the Group’s jointly controlled entity is set out below:

	Consolidated 2017 2016 US$’000 US$’000
Financial position: Current assets Current liabilities Net assets Group’s share of jointly controlled entity’s net assets Financial performance: Income Expenses Total loss for investment in joint venture Group’s share of jointly controlled entity’s losses	393 393 (1,879) (1,879)
	(1,486) (1,486)
	(757) (757)
	– – – –
	– –
	– –

The entity ceased business since 2012 and consolidated entity’s share of losses for 2017 and 2016 was nil. The entity’s cumulative unrecognised share of retained losses is US$757 thousand (2016: US$757 thousand).

15. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment held for use in the production or supply of goods or services, or for administrative purposes, are carried in the Statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Assets are pledged as security – refer further to Note 20.

Land and buildings are initially recognized at cost. Freehold land is subsequently carried at the revalued amount less accumulated impairment losses. Buildings and leasehold land are subsequently carried at the revalued amounts less accumulated depreciation and accumulated impairment losses.

Depreciation is provided on property, plant and equipment, including freehold buildings. Depreciation is calculated on a straight line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight line method. The lease period is for 60years, ending 2050. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period. The following estimated useful lives are used in the calculation of depreciation

GLG CORP LTD ANNUAL REPORT 2017 77

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

15. PROPERTY, PLANT AND EQUIPMENT (cont’d)

Building on freehold land	50 years
Leasehold properties	Over term of lease
Plant and machinery	10 years
Furniture, fttings and offce equipment	3-10 years
Motor vehicles	5-10 years

Assets and liabilities measured at fair value include:

§ Freehold and leasehold land and buildings - Level 3

Freehold and leasehold land and buildings of the Company were revalued on 30 June 3017 by One Asia Property Consultants (KL) Sdn. Bhd, an external, independent and registered valuer. The comparison method was adopted in arriving at the market value of the freehold and leasehold land and buildings. In estimating the fair value of the properties, the highest and best use of the properties is their current use. There has been no change to the valuation technique as compared with previous financial year and revaluations are done on an annual basis.

Freehold and leasehold land and buildings at valuation are categorised as Level 3 fair value, which has been generally derived using the sales comparison approach. Sales price of comparable properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input to this valuation approach is price per square foot of comparable properties.

					Relationship of
					unobservable
	Valuation	Unobservable		Weighted	inputs to fair
Description	Approach	inputs	Range of inputs	average	value
Property	Sales	Price per	RM23-46 per square	RM27 per	The higher the
	comparison	square foot	foot for land	square foot for	price per square
			RM30-100 per	land	foot the higher
			square foot for		the fair value
			building	RM76 per
			RM = Malaysian	square foot for
			Ringgit currency	building

Valuation of land and buildings – estimates and judgements

The Group has determined that the revaluation model is more appropriate for reflecting the value of their land and buildings.

78 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

15. PROPERTY, PLANT AND EQUIPMENT (cont’d)

	Consolidated 2017 2016 US$’000 US$’000
Land and Buildings Freehold Land at independent valuation 789 842 Building at independent valuation 342 365 Total land and building 1,131 1,207 Carrying amount of all freehold land had it been carried under the cost model 776 796 Leasehold Leasehold improvement At cost 187 163 Accumulated depreciation (48) (31) 139 132 Land at independent valuation 1,783 1,902 Building at independent valuation 7,073 7,545 Total land and building 8,995 9,579 Carrying amount of all freehold land had it been carried under the cost model 6,220 6,436 Plant and Equipment Plant and equipment: At cost 16,892 17,239 Accumulated depreciation (7,164) (6,069) 9,728 11,170 Plant and equipment with net carrying amount were acquired under fnance leases: At cost 143 135 Accumulated depreciation (77) (44) 66 91 Plant and equipment with net carrying amount were acquired under bank borrowings At cost 15,942 5,315 Accumulated depreciation (1,815) (1,025) 14,127 4,290 Total plant and equipment 23,921 15,551 Total property, plant and equipment 34,047 26,337	789 842 342 365
	1,131 1,207
	776 796
	187 163 (48) (31)
	139 132
	1,783 1,902 7,073 7,545
	8,995 9,579
	6,220 6,436
	16,892 17,239 (7,164) (6,069)
	9,728 11,170
	14,127 4,290
	23,921 15,551 34,047 26,337

GLG CORP LTD ANNUAL REPORT 2017 79

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

15. PROPERTY, PLANT AND EQUIPMENT (cont’d)

		Leasehold
	Freehold land	land and		Construction	Plant and		Other	Motor
	and buildings	buildings	Sub-total	in Progress	machinery	Renovation	assets	vehicles	Total
Cost	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
Balance as at
1 July 2015	2,546	11,505	14,051	–	9,209	2,770	4,392	567	30,989
Additions	–	35	35	2,960	2,866	194	346	78	6,479
Disposals	–	–	–	–	(48)	(9)	(381)	(255)	(693)
Revaluation
defcit	(1,339)	(1,930)	(3,269)	–	–	–	–	–	(3,269)
Balance as at
30 June 2016	1,207	9,610	10,817	2,960	12,027	2,955	4,357	390	33,506
Additions	–	24	24	1,626	3,534	3,593	446	–	9,223
Additions
through
acquisition	–	–	–	–	1,017	11	50	25	1,103
Reclassifcation	–	–	–	(2,960)	–	2,960	–	–	–
Disposals	–	–	–	–	–	(1)	(13)	–	(14)
Revaluation
defcit	(76)	(591)	(667)	–	–	–	–	–	(667)
Balance as at
30 June 2017	1,131	9,043	10,174	1,626	16,578	9,518	4,840	415	43,151
Accumulated	depreciation
Balance as at
1 July 2015	172	821	993	–	1,930	1,390	2,176	502	6,991
Depreciation
expense	34	340	374	–	1,050	448	192	50	2,114
Depreciation
on disposals	–	–	–	–	(17)	(9)	(321)	(253)	(600)
Revaluation
defcit	(206)	(1,130)	(1,336)	–	–	–	–	–	(1,336)
Balance as at
30 June 2016	–	31	31	–	2,963	1,829	2,047	299	7,169
Depreciation
expense	8	295	303	–	1,304	418	182	25	2,232
Depreciation
on disposals	–	–	–	–	–	–	(11)	–	(11)
Revaluation
defcit	(8)	(278)	(286)	–	–	–	–	–	(286)
Balance as at
30 June 2017	–	48	48	–	4,267	2,247	2,218	324	9,104
Net book value
As at
30 June 2016	1,207	9,579	10,786	2,960	9,064	1,126	2,310	91	26,337
As at
30 June 2017	1,131	8,995	10,126	1,626	12,311	7,271	2,622	91	34,047

80 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

16. OTHER ASSETS

	Consolidated 2017 2016 US$’000 US$’000
Current Prepayments Non-current Prepayments	1,725 445
	2,615 1,391

17. INVESTMENT PROPERTY

The investment property is located at Lot 7962, Batu 22, Jalan Air Hitam, 81000 Kulai, Johor in Malaysia. It was revalued by One Asia Property Consultants (KL) Sdn. Bhd, an external, independent and registered valuer using the sales comparison method on 30 June 2017, and has been categorised as Level 3 fair value. Revaluations are done on an annual basis. Sales price of comparable properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input to this valuation approach is price per square foot of comparable properties.

The investment property has include those portions of factory and office buildings that are held for longterm rental yields and/or for capital appreciation which are initially recognised at cost and subsequently carried at fair value.

The following table sets out the valuation techniques used to measure fair value within Level 3, including details of the significant unobservable inputs used and the relationship between unobservable inputs and fair value. Changes in fair values are recognised in profit or loss.

					Relationship
					of
					unobservable
	Valuation	Unobservable	Range of	Weighted	inputs to fair
Description	Approach	inputs	inputs	average	value
Investment	Sales	Price per	RM30 to 65 per	RM46 per	The higher
property	comparison	square foot	square foot for	square foot for	the price per
			land	land	square foot,
			RM40 to 100		the higher the
			per square foot	RM73 per	fair value
			for building	square foot for
			RM = Malaysian	building
			Ringgit
			currency

GLG CORP LTD ANNUAL REPORT 2017 81

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

17. INVESTMENT PROPERTY (cont’d)

	Consolidated 2017 2016 US$’000 US$’000
Beginning of fnancial year Fair value (loss) / gain recognised in proft or loss End of fnancial year	4,014 3,450 (252) 564
	3,762 4,014

The following are recognised in profit or loss in respect of investment property.

	Consolidated 2017 2016 US$’000 US$’000
Rental income Direct operating expenses arising from: Investment property that generated rental income	227 219 (8) (9)
	219 210

Valuation of investment properties – estimates and judgements

The Group has determined that the fair value model is more appropriate for reflecting the value of their investment properties.

18. INTANGIBLE ASSETS

	Consolidated 2017 2016 US$’000 US$’000
Software - Cost Accumulated depreciation Net book value Goodwill – Note 36	13 – (1) – 12 – 1,841 –
	1,853 –

Software

Computer software is stated as intangible assets in the statement of financial position and amortised on the straight line method over 3 years.

82 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

18. INTANGIBLE ASSETS (cont’d)

Goodwill – recognition and measurement

All business combinations are accounted for by applying the acquisition method. Goodwill represent the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired and has an indefinite useful life. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is assessed as part of the Ghim Li Fashion (M) Sdn Bhd CGU. Goodwill is not amortised but is subject to impairment testing on an annual basis or whenever there is an indication of impairment.

Goodwill – estimates and judgements

The Group assesses impairment at the end of each reporting period by evaluating the conditions and events specific to the Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions within the CGU. The value in use is based on the cash flow projections for a period of three years. The cash flow projections are based on the FY2018 budget that has been approved by the board with estimated growth rates of 5% for FY19-FY20 with a terminal growth rate of 2.5%. As part of the annual impairment test for goodwill, management assesses the reasonableness of growth rate assumptions by reviewing historical cash flow projections and future growth objectives.

The pre tax discount rate applied to these cash flow projections is 16%. The discount rate has been determined using the weighted average cost of capital which incorporates both the cost of debt and the cost of capital.

The tax rate applied in the valuation model is based on the corporate tax rate in Australia of 30%.

There has been no impairment loss recognised in relation to goodwill.

Management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of the cash generating unit to materially exceed its recoverable amount.

19. TRADE AND OTHER PAYABLES

	Consolidated 2017 2016 US$’000 US$’000
Trade payables(i) Other payables Parent company Accruals – employee remuneration Accruals – construction fees Accruals – rental fair value adjustment Accruals – audit fee Accruals – others	3,236 1,309 4,238 2,115 15,757 16,708 867 663 – 795 536 417 84 161 862 929
	25,580 23,097

(i) The average credit period on purchases of certain goods is 4 months. No interest is charged on the outstanding balance of trade payables. The Group has financial risk management policies in place to ensure that all payables are paid within the credit time frame.

GLG CORP LTD ANNUAL REPORT 2017 83

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

20. BORROWINGS

	Consolidated 2017 2016 US$’000 US$’000
Secured–at amortised cost Current Trust receipts (Gross)(i) (1) Bills payable (Gross)(3) Finance lease liabilities (Note 26) Term Loan(2) Total current borrowings Non-current Finance lease liabilities (Note 26) Term Loan(2) Total non-current borrowings Disclosed in the fnancial statements as: Current borrowings Non-current borrowings	46,768 37,350 2,768 1,679 136 61 4,152 2,246
	53,824 41,336
	38 74 10,840 9,456
	10,878 9,530
	53,824 41,336 10,878 9,530
	64,702 50,866

Summary of borrowing arrangements:

(i) Secured by corporate guarantee from Ghim Li Group Pte Ltd and negative pledge over all assets of Ghim Li Global Pte Ltd.

Banking relationship: The Group is dependent on bank facilities to support the working capital requirement of its operations. Presently, the bank facilities provided to the Group are uncommitted short-term trade financing facilities which are renewable annually by the banks and long-term financing facilities.

At 30 June 2017 GLG Corp Ltd had short term financing facilities available of US$133,603 thousand, longterm financing facilities available of US$23,252 thousand and foreign exchange facility available of US$19,102 thousand. (Short term: US$58,166 thousand was used and US$75,437 thousand was unused. Long-term: US$14,492 thousand was used and US$8,760 thousand was unused. Foreign exchange of US$19,102 thousand was unused). Compared with US$126,943 thousand of short term financing facilities, long-term financing facilities of US$26,880 thousand and forward contract available of US$8,908 thousand at 30 June 2016 (Short term: US$48,517 thousand was used and US$78,426 thousand was unused. Long-term: US$11,703 thousand was used and US$15,177 thousand was unused. Foreign exchange of US$8,908 thousand was unused). GLG believe that it will continue to have the strong support from main bankers for its working capital and capital expenditure requirements.

The facilities used are inclusive of the contingent liabilities as disclosed in note 25.

Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

84 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

20. BORROWINGS (cont’d)

Terms & Conditions of Borrowing Balances:

1) Trust Receipts are denominated in USD, bear weighted average effective interest rate of 2.37% (2016: 1.82%) per annum for a tenure of 4 months and are secured by corporate guarantee from immediate holding company, Ghim Li Group.
2) Term Loan relates to purchase of property, plant and machinery of the Company’s subsidiaries and are secured by a negative pledge of the assets of the Company and corporate guarantee from the immediate holding company, Ghim Li Group. The loan repayment period varies from 8 to 10 years for property and 5 to 6 years for plant and machinery. The weighted average effective interest rate for such loans is 3.58% (2016: 4.40%) per annum.
3) Bills Payable are amounts received from banks for discounting sales invoices billed to customers. Such liabilities are secured by corporate guarantee from immediate holding company, Ghim Li Group with weighted average effective interest rate of 2.37% (2016: 1.82%) per annum.

The weighted average effective interest rates for bank overdrafts, bills payable and trust receipts at the balance date were as follows:

	2017	2016
Term loan	3.58% p.a	4.40% p.a
Trust receipts / Bills payable	2.37%	1.82%
Finance lease liabilities	4.70%p.a.	4.29%p.a.

21. ISSUED CAPITAL

	Consolidated 2017 2016 US$’000 US$’000
74,100,000 (2016: 74,100,000) fully paid ordinary shares	10,322 10,322

Ordinary shares:

Each ordinary share is entitled to one vote when a poll is called; otherwise each member present at a meeting or by proxy has one vote on a show of hands.
Ordinary shares are classified as equity and entitle the holder to participate in dividends and the proceeds on the winding up of the Group in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Group does not have a limited amount of authorised capital.

	Consolidated
	No. 2017 No. 2016 ’000 US$’000 ’000 US$’000
Fully paid ordinary shares Balance at beginning of fnancial year Balance at end of fnancial year	74,100 10,322 74,100 10,322
	74,100 10,322 74,100 10,322

GLG CORP LTD ANNUAL REPORT 2017 85

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

22. RETAINED EARNINGS

	Consolidated 2017 2016 US$’000 US$’000
Balance at beginning of fnancial year Net proft attributable to members of the parent entity Balance at end of fnancial year	43,792 38,965 4,193 4,827
	47,985 43,792

23. EARNINGS PER SHARE

	Consolidated 2017 2016 Cents Cents per share per share
Basic earnings per share: Total basic earnings per share Diluted earnings per share: Total diluted earnings per share	5.66 6.51
	5.66 6.51

Basic earnings per share

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

	Consolidated 2017 2016 US$’000 US$’000
Net proft Earnings used in the calculation of basic EPS	4,193 4,827
	4,193 4,827
	Consolidated 2017 2016 No.’000 No.’000
Weighted average number of ordinary shares for the purposes of basic earnings per share	74,100 74,100

86 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

23. EARNINGS PER SHARE (cont’d)

Diluted earnings per share

The earnings used in the calculation of diluted earnings per share is as follows:

	Consolidated 2017 2016 US$’000 US$’000
Net proft Earnings used in the calculation of diluted EPS	4,193 4,827
	4,193 4,827
	Consolidated 2017 2016 No.’000 No.’000
Weighted average number of ordinary shares used in the calculation of basic EPS	74,100 74,100

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

24. COMMITMENTS FOR EXPENDITURE

a) Capital expenditures

Capital expenditures contracted for at the balance sheet date but not recognised in the financial statements are as follows:

	Consolidated 2017 2016 US$’000 US$’000
Property, plant and equipment Construction of factory Infrastructure usage fee	810 34 – 1,339 – 1,233
	810 2,606

GLG CORP LTD ANNUAL REPORT 2017 87

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

24. COMMITMENTS FOR EXPENDITURE (cont’d)

b) Operating lease commitment – where the consolidated entity is a lessee

The Group leases property under operating leases expiring from one to 44 years. Leases generally provide the Group with a right of renewal, at which time all terms are renegotiated.

The future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as liabilities, are as follows:

	Consolidated 2017 2016 US$’000 US$’000
Not later than one year Longer than 1 year and not longer than 5 years Between one and fve years	1,425 1,328 5,576 5,089 1,632 6,070
	8,633 12,487

c) Operating lease commitment – where the consolidate entity is a lessor

The Group leases out its industrial property to a non-related party under non-cancellable operating leases.

The future minimum lease receivables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as receivables, are as follows:

	Consolidated 2017 2016 US$’000 US$’000
Not later than one year Between one and fve years	– 241 – 120
	– 361

25. CONTINGENT LIABILITIES

	Consolidated 2017 2016 US$’000 US$’000
Guarantees arising from Letters of Credit in force(i) Total	8,130 9,488
	8,130 9,488

(i) A number of contingent liabilities has arisen as a result of the Group’s letter of credit issued by banks for purchase of goods.

88 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

26. LEASES

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Group as lessee

Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal to the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the Statement of Financial Position as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

Finance leased assets are amortised on a straight line basis over the estimated useful life of the asset.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Finance lease liabilities

Leasing arrangement

The Group leases motor vehicles and office equipment under finance leases expiring from one to five years. All the leases involve lease payments of a fixed base amount. No contingent rentals were paid during the year (2016: nil)

during the year (2016: nil)
	Minimum future lease payments Consolidated	Present value of minimum lease payments Consolidated
	2017 2016 US$’000 US$’000	2017 2016 US$’000 US$’000
No later than 1 year Later than 1 year and not later than 5 years Minimum future lease payments Less future fnance charges Present value of minimum lease payments* Included in the fnancial statements as (note 20) Current borrowings Non-current borrowings	140 69 41 80	136 61 38 74
	181 149 (7) (14)	174 135 – –
	174 135	174 135
		136 61 38 74
		174 135

Minimum future lease payments include the aggregate of all lease payments and any guaranteed residual.

GLG CORP LTD ANNUAL REPORT 2017 89

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

27. SUBSIDIARIES

SUBSIDIARIES
		Ownership interest
		2017	2016
Name of subsidiary	Country of incorporation	%	%
Ghim Li Global Pte Ltd	Singapore	100	100
Ghim Li Global International Ltd	Hong Kong	100	100
Escala Fashion Pte. Ltd.	Singapore	100	100
Ghim Li International (S) Pte Ltd	Singapore	100	100
G&G International Pte Ltd(ii)	Singapore	100	100
AES (USA) Inc(iii)	USA	100	–
G&G Fashion (Vietnam) Co., Ltd.	Vietnam	100	100
Maxim Textile Technology Sdn Bhd(ii)	Malaysia	100	100
Maxim Textile Technology Pte Ltd(ii)	Singapore	100	100
Ghim Li Global International (GuangZhou) Ltd	China	100	100
Ghim Li Fashion (M) Sdn Bhd(i)	Malaysia	100	–

(i) This company was acquired on 30 June 2017.

(ii) These companies were acquired on 12 December 2016 through common control acquisition.

(iii) This company incorporated on 7 July 2016.

28. NOTES TO THE CASH FLOW STATEMENT

Cash comprise cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and have a maturity of three months or less at the date of acquisition.

Bank overdrafts are shown within borrowings in current liabilities in the Statement of financial position.

a) Reconciliation of cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the financial year as shown in the cash flow statement is reconciled to the related items in the Statement of financial position as follows:

	Consolidated 2017 2016 US$’000 US$’000
Cash and cash equivalents	6,881 7,908
	6,881 7,908

90 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

27. SUBSIDIARIES (cont’d)

b) Financing facilities

Secured bank loan facilities with various maturity dates and which may be extended by mutual agreement:

	Consolidated 2017 2016 US$’000 US$’000
• amount used • amount unused	72,658 60,220 103,299 102,511
	175,957 162,731

c) Reconciliation of profit for the year to net cash flows from operating activities

	Consolidated	Consolidated
	2017	2016
	US$’000	US$’000
Proft for the year	4,193	4,827
Depreciation and amortisation of non-current assets	2,233	2,114
Bad debts write-off	296	2,533
Fair value adjustment on investment property (Note 17)	252	(564)
Loss / (gain) on disposal of property, plant and equipment	4	(62)
Changes in net assets and liabilities, net of effects from acquisition and disposal of businesses:
(Increase)/decrease in assets:
Inventories	(539)	(7,176)
Trade and other receivables	(4,695)	3,182
Other assets	(2,071)	211
Increase/(decrease) in liabilities:
Trade and other payables	2,366	(2,933)
Current tax	(460)	85
Deferred tax	(201)	1,020
Net cash provided by operating activities	1,378	3,237

GLG CORP LTD ANNUAL REPORT 2017 91

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

29. RESERVES

a) Revaluation reserves

	Consolidated 2017 2016 US$’000 US$’000
Beginning of fnancial year Revaluation defcit arising from property, plant and equipment End of fnancial year	3,980 5,913 (381) (1,933)
	3,599 3,980

The revaluation reserve represents the decrease in the fair value of the freehold and leasehold land and buildings, net of tax.

b) Merger reserves

The merger reserve of US$14,812 thousand is a result of the common control acquisition. Refer to Note 35 for further information.

30. FINANCIAL INSTRUMENTS

a) Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged from 2016.

The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 20 and equity attributable to equity holders of the parent, comprising issued capital and retained earnings as disclosed in notes 21 and 22 respectively.

Operating cash flows are used to maintain and expand the group’s assets, as well as to make the routine outflows of tax and repayment of maturing debt. The Group’s policy is to borrow centrally, using a variety of capital market issues and borrowing facilities, to meet anticipated funding requirements.

92 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

30. FINANCIAL INSTRUMENTS (cont’d)

a) Capital risk management (cont’d)

Gearing ratio

An integral function of the Group’s Board is risk management. The Board reviews the capital structure on a semi-annual basis.

The gearing ratio at year end was as follows:

	Consolidated 2017 2016 US$’000 US$’000
Debt(i) Cash and cash equivalents Net Debt Equity(ii) Net debt to equity ratio	64,702 50,866 (6,881) (7,908)
	57,821 42,958 47,094 43,282 123% 99%

(i) Debt is defined as long-term and short-term borrowings, as detailed in note 20.

(ii) Equity includes all capital, retained earnings and reserves

b) Categories of financial instruments

	Consolidated	Consolidated
	2017	2016
	US$’000	US$’000
Financial assets
Loans and receivables	75,749	67,867
Cash and cash equivalents	6,881	7,908
Financial liabilities
Amortised cost	90,282	73,963

c) Financial risk management objectives

The Group co-ordinates access to domestic and international financial markets, and manages the financial risks relating to the operations of the consolidated entity.

The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The use of financial derivatives is governed by the consolidated entity’s policies approved by the board of directors, which provide written principles on the use of financial derivatives.

The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group minimises its financial risk of changes in foreign currency exchange rate through the natural hedge of matching its revenues and purchases in US dollars and matching of its assets and liabilities in US dollars.

GLG CORP LTD ANNUAL REPORT 2017 93

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

30. FINANCIAL INSTRUMENTS (cont’d)

d) Foreign currency risk management

The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date is as follows:

	Liabilities Assets
	2017 2016 2017 2016 US$’000 US$’000 US$’000 US$’000
Singapore dollars Hong Kong dollars Vietnamese Dong Malaysia Ringgit Australia Dollar	645 791 2,091 917 – – 10 26 703 826 119 1,685 3,221 1,398 1,168 497 77 85 154 103
	4,646 3,100 3,542 3,228

d) Foreign currency sensitivity analysis

The Group is mainly exposed to movements in the value of Singapore dollars and Hong Kong dollars compared to the US dollar.

The following table details the Group’s sensitivity to a 10% increase and decrease in the United States dollar against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where the denomination of the loan is in a currency other than the currency of the lender or the borrower. A positive number indicates an increase in profit or loss where the United States dollars strengthens against the respective currency. For a weakening of the United States dollars against the respective currency there would be an equal and opposite impact on the profit, and the balances below would be negative.

	Singapore Dollars Malaysian Ringgit Vietnamese Dong Other Foreign Currency Impact Impact Impact Impact
	Consolidated Consolidated Consolidated Consolidated 2017 2016 2017 2016 2017 2016 2017 2016 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Proft or loss	289 25 (411) (180) (115) 172 17 8

94 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

30. FINANCIAL INSTRUMENTS (cont’d)

f) Interest rate risk management

The Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings. Hedging activities are evaluated regularly to align with interest rate views and define risk appetite; ensuring optimal hedging strategies are applied, by either positioning the Statement of financial position or protecting interest expense through different interest rate cycles.

The Group’s exposure to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative and non-derivative instruments at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the possible change in interest rates.

At reporting date, if interest rates had been 50 basis points higher or lower and all other variables were held constant, the Group’s:

Net profit would increase by US$77 thousand and decrease by US$70 thousand (2016: increase by US$68 thousand and decrease by US$62 thousand). This is mainly attributable to the Group’s exposure to interest rates on its variable rate borrowings

g) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the Senior Management annually. The Group measures credit risk on a fair value basis.

Trade accounts receivable consist of a number of retail customers located in the United States of America. Ongoing credit evaluation is performed on the financial condition of accounts and, where appropriate, trading within the credit limits or discounting of receivables on non-recourse basis with credit acceptance or insurance in place.

The consolidated entity does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics except to the GLIT receivable as disclosed in Note 11. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the consolidated entity’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

The consolidated entity also faces risks of orders cancellation. This is related to fabric, accessories and manufacturing cost incurred on orders cancelled prior to shipment. The consolidated entity is now exploring credit insurance to cover this risk as well.

GLG CORP LTD ANNUAL REPORT 2017 95

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

30. FINANCIAL INSTRUMENTS (cont’d)

h) Liquidity risk management

The consolidated entity manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Included in note 28(b) is a listing of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk.

Liquidity and interest risk tables

The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities and expected maturity for its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial assets and liabilities based on the earliest date on which the Group can be required to receive/pay. The table includes both interest and principal cash flows.

Consolidated

Consolidated
	Weighted
average effective		Within
	interest rate	1 year	2-5 years	5+ years	Total
	%	$’000	$’000	$’000	$’000
2017
Financial Assets
Non-interest bearing	–	75,759	5,000	1,871	82,630
Financial Liabilities
Non-interest bearing	–	25,580	–	–	25,580
Variable interest rate instruments	2.68	49,927	–	–	49,927
Term loan	3.58	4,246	9,076	2,618	15,940
Bank loan	2.68	501	–	–	501
Finance lease liability	4.70	139	42	–	181
2016
Financial Assets
Interest bearing	2.00	–	–	462	462
Non-interest bearing	–	68,442	5,000	1,871	75,313
Financial Liabilities
Non-interest bearing	–	23,097	–	–	23,097
Variable interest rate instruments	1.82	39,266	–	–	39,266
Term loan	4.40	2,690	6,864	3,811	13,365
Finance lease liability	4.92	69	80	–	149
The variable interest rates were as follows:
			2017		2016
Term loan			3.58% p.a.		4.40% p.a.
Bank loan			2.68%		–
Trust receipts / Bill payables			2.37%		1.82%
Finance lease liabilities			4.70%p.a		4.29%p.a

96 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

30. FINANCIAL INSTRUMENTS (cont’d)

h) Fair value of financial instruments

The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their fair values.

The fair values of financial assets and financial liabilities are determined as follows: the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices.

31. KEY MANAGEMENT PERSONNEL COMPENSATION

The aggregate compensation made to directors and other members of the key management personnel of the Company and the Group is set out below:

	Consolidated 2017 2016 US$ US$
Short-term employee benefts Post-employment benefts	1,203,196 1,144,331 36,730 34,793
	1,239,926 1,179,124

Short-term employee benefits

These amounts include fees and benefits paid to the non-executive Chair and non-executive directors as well as all salary, paid leave benefits, fringe benefits and cash bonuses awarded to executive directors and other KMP.

GLG CORP LTD ANNUAL REPORT 2017 97

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

31. KEY MANAGEMENT PERSONNEL COMPENSATION (cont’d)

Post-employment benefits

These amounts are the current-year’s estimated costs of providing for the Group’s defined benefits scheme post-retirement, superannuation contributions made during the year and post-employment life insurance benefits.

The compensation of each member of the key management personnel of the Group is set out in the remuneration report:

a) Key management personnel compensation policy

Details of key management personnel

The Directors of GLG Corp Ltd during the year were:

§ Estina Ang Suan Hong as Executive Chairman and Chief Executive Officer
§ Christopher Chong Meng Tak as Independent Director
§ Shane Hartwig as Independent Director
§ Felicia Gan Peiling as Director on 15 September 2015 and Chief Marketing Officer

Other key management personnel of GLG Corp Ltd during the year were:

§ Shawn Fung as Chief Financial Officer (appointed 13 June 2016)
§ Susan Yong as Executive Vice President – Operations
§ Cheah Eng Kean as EVP, Marketing & Contract Manufacturing (resigned on 19 September 2016)

No director or senior management person appointed during the period received a payment as part of his or her consideration for agreeing to hold the position.

32. RELATED PARTY TRANSACTIONS

a) Equity interests in subsidiaries

Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 27 to the financial statements

b) Transactions with key management personnel

(i) Key management personnel remuneration

Details of key management personnel remuneration are disclosed in note 31 to the financial statements and the remuneration report.

98 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

32. RELATED PARTY TRANSACTIONS (cont’d)

c) Transactions with other related parties

During the year, group entities entered into the following expenditure transactions with related parties that are not members of the group:

Transaction with Ghim Li Group Pte Ltd (Parent entity) 2017 2016 US$’000 US$’000	Transaction with Ghim Li Group Pte Ltd (Parent entity) 2017 2016 US$’000 US$’000
Rental Loan Interest Financial Guarantee fee	1,201 1,123 5 9 107 111
	1,313 1,243

No amounts were provided for doubtful debts relating to debts due from related parties at reporting date. Amounts receivable from and payable to these related parties are disclosed in note 19 to the financial statements. Loan balances were settled at the end of the year.

d) Parent entities

GLG Corp Ltd’s parent entity is Ghim Li Group Pte Ltd. Ghim Li Group Pte Ltd is incorporated in Singapore.

The parent company Ghim Li Group Pte Ltd has entered into a letter of undertaking dated 27 June 2013 to guarantee the repayment of GLIT and other receivables up to a cap of US$25 million, however based on the share price at the year end this is valued at US$9,645 thousand.

33. REMUNERATION OF AUDITORS

The aggregate compensation made to directors and other members of the key management personnel of the Company and the Group is set out below:

	Consolidated 2017 2016 US$ US$
Auditor of the parent entity Audit and review of the fnancial report Tax services Related Practice of the parent entity auditor Audit or review of the subsidiaries Tax services	55,740 54,032 – 3,526
	55,740 57,558
	98,500 249,550 10,030 14,406
	108,530 263,956

The auditor of GLG Corp Ltd is BDO East Coast Partnership (FY16: Deloitte Touche Tohmatsu).

The related practices are BDO Singapore, BDO Vietnam and BDO HK. (FY16: Deloitte & Touche Singapore, Deloitte & Touche Hong Kong and Deloitte & Touche Vietnam). Cheng & Co was also used in both 2017 and 2016. (FY2017: Audit US$15,523 and Tax Service US$2,330. FY2016: Audit US$10,984 and Tax Service US$2,431).

GLG CORP LTD ANNUAL REPORT 2017 99

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

34. PARENT ENTITY DISCLOSURES

The aggregate compensation made to directors and other members of the key management personnel of the Company and the Group is set out below:

Financial position

Financial position
	Consolidated 2017 2016 US$’000 US$’000
Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Equity Issued capital Accumulated Losses Total equity	154 916 30,000 30,000
	30,154 30,916
	3,392 3,124 184 163
	3,576 3,287
	53,552 53,552 (26,974) (25,923)
	26,578 27,629

Financial performance

Financial performance
	Consolidated 2017 2016 US$’000 US$’000
Loss for the year Other comprehensive income Total comprehensive income	(1,050) (171) – –
	(1,050) (171)

Contingent liabilities

As at 30 June 2017, the parent entity had no contingent liabilities (2016: nil).

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the Group, except for the following:

§ Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
§ Investments in associates are accounted for at cost, less any impairment, in the parent entity.

Contractual commitments

The parent did not have any contractual commitments at the end of the financial year

The above information is presented for the legal parent entity.

100 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

35. COMMON CONTROL ACQUISITION

On 12 December 2016, Ghim Li International (S) Pte Ltd, a subsidiary of GLG Corp Ltd, acquired 100% of the ordinary shares of Maxim Textile Technology Pte Ltd, a company incorporated in Singapore and Maxim Textile Technology Sdn Bhd, a fabric mill in Malaysia for total consideration of US$20 million, which includes contingent consideration of US$7,600 thousand which is eliminated on consolidation. Contingent consideration is based a multiple of excess profit over the next four years and management estimate these targets are achievable. Maxim operates in the fabric division of the consolidated entity.

As both GLG and Maxim entities are under common control of Ghim Li Group Pte Ltd, the pooling of interest method is used.

By executing this acquisition strategy, the Group will have a vertically-integrated textile manufacturing and supply chain business, offering the flexibility to plan for shorter production lead times resulting in speed-to-market advantage to its customers by controlling each step in the value chain.

The acquired business contributed revenues of US$37,188 thousand and profit after tax of US$2,339 thousand to the consolidated entity for the financial year ended 30 June 2017. As the business was acquired under common control, the prior comparatives were restated to reflect the acquisition from the earliest reported period. As such the acquired business contributed revenues of US$35,634 thousand with profit after tax of US$1,907 thousand to the consolidated entity for the year ended 30 June 2016.

Common Control Business Combination Recognition and Measurement

A business combination involving entities under common control is accounted for under the pooling of interest method since the combining businesses are ultimately controlled by the same party, both before and after the business combination. The assets and liabilities of the combining entities are reflected at their carrying amounts and no adjustments are made to reflect fair values at the date of combination. Goodwill is not recognised as a result of the combination. The income statement reflects the results of the combining entities for the full year, irrespective of when the combination took place. Comparatives are also restated as there has been effectively no change in control. Any difference between the consideration paid and the equity acquired is reflected within equity.

When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not re-measured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is re-measured in each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at the acquisition date.

GLG CORP LTD ANNUAL REPORT 2017 101

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

36. BUSINESS COMBINATION

On 30 June 2017, Ghim Li International (S) Pte Ltd, a subsidiary of GLG Corp Ltd, acquired 100% of the ordinary share of Ghim Li Fashion (M) Sdn Bhd, a company incorporated in Malaysia. This is a business which engages in the manufacturing of garments. With this acquisition, GLG will enhance its manufacturing and supply chain business with additional capacity and gives the Group the ability to offer more control and speed-to market solutions to the Groups end customers. The acquired entity did not contribute to any profit from ordinary activities or revenue for the Group’s consolidated results for the year ended 30 June 2017 as the acquisition was on the last day of the year.

The consideration of US$5 million of the acquisition of Ghim Li Fashion (M) Sdn Bhd from GLIT Holdings Pte Ltd was offset against the receivables due to the Group on 30 June 2017.

Had Ghim Li Fashion (M) Sdn Bhd been acquired by the Group as of 1 July 2016, i.e. a year ago, the acquired entity would have contributed Revenue of US$6,268 thousand and Profit after tax of US$261 thousand to the consolidated group for the year ended 30 June 2017.

Transaction costs of US$18 thousand were recognised in respect to this acquisition, and included in the consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2017.

As the acquisition was completed on 30 June 2017, the Group has provisionally accounted for the acquisition in the balance sheet as of 30 June 2017. The final position of the fair value of the assets and liabilities acquired will be accounted for within 12 months in accordance with AASB 3 – Business Combinations.

Details of the acquisition are as follows:

	Fair value
	$’000
Consideration
- Offset against GLIT receivable in Note 11	5,000
Total consideration	5,000
Net identifable assets acquired
- Cash	144
- Trade and other receivables	2,383
- Inventories	260
- Other current assets	433
- Property, plant and equipment	1,103
- Trade and other payables	(1,062)
- Finance lease payable	(102)
Net identifable assets acquired	3,159
Goodwill on acquisition	1,841

102 ANNUAL REPORT 2017

GLG CORP LTD

NOTES TO THE FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

36. BUSINESS COMBINATION (cont’d)

Business Combinations Recognition and Measurement

Business combinations occur where an acquirer obtains control over one or more businesses.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or business under common control. The business combination will be accounted for from the date that control is obtained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognized (subject to certain limited exemptions). The excess of consideration over the fair value of net assets acquired is represented by goodwill.

All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial instrument, are recognised as expenses in profit or loss when incurred. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

37. SUBSEQUENT EVENTS

There has been no subsequent events after the year ended 30 June 2017 to the date of this report.

GLG CORP LTD ANNUAL REPORT 2017 103

ADDITIONAL AUSTRALIAN SECURITIES EXCHANGE INFORMATION

AS AT 15 SEPTEMBER 2017

Holding distribution

Holding distribution
Range	Securities	%	No of Holders	%
100,001 and Over	71,829,601	96.94	19	4.85
10,001 to 100,000	1,392,277	1.88	34	8.67
5,001 to 10,000	194,868	0.26	21	5.36
1,001 to 5,000	678,800	0.92	308	78.57
1 to 1,000	4,454	0.01	10	2.55
Total	74,100,000	100.00	392	100.00
Unmarketable Parcels	7,954	0.01	13	3.32

Voting Rights

The voting rights attached to each class of equity security are as follows:

Ordinary shares

§ Each ordinary share is entitled to one vote when a poll is called; otherwise each member present at a meeting or by proxy has one vote on a show of hands.

Redeemable and convertible preference shares

§ These shares have no voting rights.

Substantial shareholders

The names of the substantial shareholders listed in the GLG Corp Ltd register as at 15 September 2017 were:

Ordinary shareholders	Fully paid ordinary shares Number Percentage
Ghim Li Group Pte Ltd	50,116,000 67.63
	50,116,000 67.63

104 ANNUAL REPORT 2017

GLG CORP LTD

ADDITIONAL AUSTRALIAN SECURITIES EXCHANGE INFORMATION

AS AT 15 SEPTEMBER 2017

Twenty largest holders of quoted equity securities

Top 20 holders – 15 September 2017

Rank	Name No. of shares Percentage
1	Ghim Li Group Pte Ltd 50,116,000 67.63
2	Mr Yin Min Yong 3,504,751 4.73
3	HSBC Custody Nominees (Australia) Limited 3,310,419 4.47
4	Mr Tiong Ang 2,222,000 3.00
4	Ms Peiling Gan 2,222,000 3.00
5	Ms Bee Phong Gan 2,183,297 2.95
6	Mr Yoke Min Pang 2,000,000 2.70
7	Mr Ah Yian Au 1,322,957 1.79
8	BNP Paribas Noms Pty Ltd 1,133,600 1.53
9	Ms MengHui Surina Gan 1,000,000 1.35
10	Gowing Bros Limited 830,903 1.12
11	Mr Gerald Francis Pauley & Mr Michael James Pauley 621,663 0.84
12	Dixson Trust Pty Limited 330,000 0.45
13	Markess Trustee Limited 250,000 0.34
14	Kam Hing Piece Works Ltd 206,010 0.28
15	Mr Ang Leong Aik 200,000 0.27
16	Ms Chean Moy Seng 150,000 0.20
17	Mr Eu Mun Leong 116,000 0.16
18	Mr Christopher Chong & Mrs Heather Chong 110,001 0.15
19	Ms Lim Chai Har 100,000 0.13
19	Mr Seow Teng Peng 100,000 0.13
20	Paromay Ltd 99,999 0.13
	Top 20 72,129,600 97.34
	Total 74,100,000 100.00

OUR PRODUCTS

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Fashionable gym
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AUSTRALIA HEAD OFFICE GLG Corp Ltd (Registered Office) Level 40, Northpoint 100 Miller St North Sydney NSW 2060, Australia

SINGAPORE HEAD OFFICE Ghim Li Global Pte Ltd, 21 Jalan Mesin, Singapore 368819 http://www.glgcorpltd.com

AI assistant

GLG CORP LTD — Annual Report 2017

64991_rns_2017-10-19_6133e8ac-a9de-41cb-b5db-c94ca9af35ca.pdf

G L G C O R P LT D ANNUAL REPORT 2017

GHIM LI’S NETWORK

Over 7,000 employees across 6 countries

SHARE REGISTRY

Cautionary Statement

TABLE OF CONTENTS

CHAIRMAN & CEO’S SPEECH

SPEED EMPHASIS

PRODUCTIVITY DRIVE

VERTICAL INTEGRATION PROGRESS

CHALLENGES AHEAD

VISION

MISSION

CORE VALUES

Diversity and Respect

Results Orientation,

SNAPSHOT OF GLG CORP LTD

FINANCIAL HIGHLIGHTS

PEOPLE HIGHLIGHTS OF SINGAPORE HQ

OPERATIONAL HIGHLIGHTS

OPERATIONAL HIGHLIGHTS

THIRD QUARTER FY2017

GHIM LI FASHION (MALAYSIA) SDN BHD

KEY STATISTICS:

KEY STRENGTHS & COMPETITIVE ADVANTAGES

MAXIM FABRIC MILL PROCESS

TECHNICAL EXPERTISE & QUALITY ASSURANCE

TECHNICAL EXPERTISE

QUALITY ASSURANCE

CUSTOMISED DESIGNS & GRAPHIC SUPPORT

FABRIC R&D AND SOURCING

GLOBAL SOURCING NETWORK OF YARNS AND FABRICS

KEY FOCUS FABRICATIONS

TREND INTELLIGENCE TO CUSTOMER

WORKING IN PARTNERSHIP IN THE CREATIVE PROCESS

MEET GLOBAL COMPLIANCE STANDARDS

AUDIT COMMITEE REPORT

Dear Shareholders,

AUDIT COMMITTEE MEMBERSHIPS DURING THE YEAR

KEY ACTIVITIES OF THE AUDIT COMMITTEE DURING THE YEAR

ENGAGEMENT OF THE EXTERNAL AUDITOR

AUDIT COMMITEE REPORT

KEY AUDIT MATTERS

CORPORATE GOVERNANCE STATEMENT

COMPOSITION OF THE BOARD

The Directors in office at the date of this statement are as follows:

CORPORATE GOVERNANCE STATEMENT

BOARD RESPONSIBILITIES

DIVERSITY

DEALING IN GLG CORPORATION’S SECURITIES BY DIRECTORS AND EMPLOYEES

CORPORATE GOVERNANCE STATEMENT

RISK MANAGEMENT POLICY

CORPORATE GOVERNANCE STRUCTURE

CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE STATEMENT

RISK MANAGEMENT REPORTING

RISK CATEGORIES UNDER 3 GROUPS

CORPORATE GOVERNANCE STATEMENT

GLG CORP’S RISK MANAGEMENT PROCESS

CORPORATE GOVERNANCE STATEMENT

AUDIT COMMITTEE

OTHER INFORMATION

CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE STATEMENT

DIRECTOR’S REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017

INFORMATION ABOUT THE DIRECTORS AND SENIOR MANAGEMENT

ESTINA ANG SUAN HONG

FELICIA GAN PEILING

GLG CORP LTD Annual Report 2017