GLG CORP LTD — Annual Report 2019

Sep 25, 2019

GLG Corp Ltd Statutory Accounts

GLG Corp Ltd

ACN 116 632 958 Statutory report for the financial year ended 30 June 2019

GLG Corp Ltd Statutory Accounts

Statutory Report for the financial year ended 30 June 2019

ear ended 30 June 2019
	Page
Corporate governance statement		3
Directors’ report		14
Auditor’s independence declaration		28
Independent audit report		29
Directors’ declaration		32
Consolidated Statement of profit or loss and other		33
comprehensive income
Consolidated Statement of financial position		34
Consolidated Statement of changes in equity		35
Consolidated Statement of cash flows		36
Notes to the financial report		37
Additional Australian securities exchange information		81

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GLG Corp Ltd Corporate Governance Statement

Corporate governance statement

GLG Corp (GLG) or (The Company’s) Directors and management are committed to conducting GLG’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 GLG’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 2019, 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 Website (www.ghimli.com).

Principle	ASX Corporate Governance Council Recommendations– 3rd Edition	Comply?
1.	Lay solid foundations for management and oversight
1.1	A listed entity should disclose: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management	Yes The Board has adopted a charter which establishes the role of the Board and its relationship with management. The primary role of the Board is the protection and enhancement of long-term shareholder value. Its responsibility is the overall strategic direction of GLG. 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 checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and (b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director	Yes The Board has a formal Nomination & Remuneration Committee. The Nomination and Remuneration Committee’s functions and powers are formalised in a Charter and is posted on the Website. It is the role of the Nomination & Remuneration Committee to identify suitable candidates to complement the 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 the annual 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
1.3	A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.	Yes Each Director is given a letter upon appointment which outlines the Director’s duties, obligations, remuneration, expected time commitments and notification of the Company’s policies. Similarly

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GLG Corp Ltd Corporate Governance Statement

		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 be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.	Yes The Company Secretary is responsible for co- ordination of all Board business, including 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 which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them; (b) disclose that policy or a summary of it; and (c) disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them, and either: (1) the respective proportions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or (2) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act.	Yes The Company is committed to the principles of employing people with a broad range of experiences, skills and views. All executives, managers and employees are responsible for promoting workforce diversity. The Company has adopted a Diversity Policy which can be viewed on the Website. The Diversity Policy requires the commitment of the Directors and Senior Management to promote the specific objective of diversity and seeks to ensure, to the extent that is practicable and appropriate, that the Company’s director appointment and employee recruitment processes are undertaken with reference to the objectives of the Diversity Policy. The objectives of the Company’s Diversity policy are centred on a wide range of diversity criteria including gender, age, ethnicity and cultural background. The Company discloses the proportion of women on the Board, in senior positions and in the company as a whole. Measurable objectives have been specified and the company has exceeded the objectives since the inception of the policy.
1.6	A listed entity should: (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.	Yes The Directors undertake an annual process to review the performance and effectiveness of the Board, the Board Committees and individual directors. The CEO leads a discussion and provides feedback to individual Directors as necessary.

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GLG Corp Ltd Corporate Governance Statement

1.7	A listed entity should: (a) have and disclose a process for periodically evaluating the performance of its senior executives; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.	Yes The Company’s Chief Executive Officer evaluates the performance of GLG’s senior executives annually. The Nomination and Remuneration Committee reviews the Chief Executive Officer’s performance annually. The Committee also reviews and approves senior management bonuses. Evaluations were undertaken this year.
2.	Structure the board to add value
2.1	The board of a listed entity should: (a) have a nomination committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a nomination committee, 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	Yes The Board has a formal Nomination & Remuneration Committee comprising two independent directors and the CEO. Current members are Grant Hummel (Independent Director and Chairman) Christopher Chong (Lead Independent Director), and Estina Ang (CEO). The Nomination & Remuneration Committee’s functions and powers are formalised in a Charter and is posted on GLG’s website. The number of times that the Nomination & 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.
2.2	A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.	Yes The Company has a skills matrix which is disclosed in the Directors report.
2.3	A listed entity should disclose: (a) the names of the directors considered by the board to be independent directors; (b) if a director has an interest, position, association or relationship of the type described in item 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and (c) the length of service of each director	Yes Currently, the Board comprises four Directors, two independent and two Executives. Christopher Chong (Lead Independent Director), Grant Hummel (Independent Director), Estina Ang (CEO) and Felicia Gan (Chief Marketing Officer). The Board has considered the circumstances of each Director and determined that all Non-Executive Directors were independent as described in item 2.3 of the Recommendations. The Corporations Act 2001, the 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 GLG, 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

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GLG Corp Ltd Corporate Governance Statement

		formally advise the Board of their independent (or other) status each year.
2.4	A majority of the board of a listed entity should be independent directors.	No Currently, the Board comprises two independent Directors and two executive Directors. Christopher Chong (Lead Independent Director), Grant Hummel (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 be an independent director and, in particular, should not be the same person as the CEO of the entity.	No The Chairperson and CEO, Estina Ang Suan Hong, is integral in maintaining the business and 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 inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.	Yes The Company has procedures and policies in place to assist Directors in fulfilling their responsibilities. Each Director, at any time, is able to seek reasonable independent professional 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.
3	Act ethically and responsibly
3.1	A listed entity should: (a) have a code of conduct for its directors, senior executives and employees; and (b) disclose that code or a summary of it	Yes The Board has established a Code of Conduct which articulates acceptable practices for 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: (a) have an audit committee which: (1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and (2) is chaired by an independent director, who is not the chair of the board, and disclose: (3) the charter of the committee; (4) the relevant qualifications and experience of the members of the committee; and (5) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the	Partly The Board has a formal Audit Committee currently comprising two Independent Directors – Christopher Chong and Grant Hummel. The role of the Audit Committee is to advise on financial information prepared for use by the Board or for inclusion in financial statements. The Chairman of the Audit Committee is the Lead Independent Director. The Audit Committee’s functions and powers are formalised in a Charter and is posted on GLG’s website. The number of times that the Audit Committee met throughout the financial year and the individual attendances of the members at those meetings, and the relevant qualifications and experience of the Audit Committee members are disclosed in the Company’s Annual Report and below under ‘Directors Meetings’.

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GLG Corp Ltd Corporate Governance Statement

	external auditor and the rotation of the audit engagement partner.
4.2	The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.	Yes The Directors are committed to the preparation of financial statements that present a balanced and clear assessment of the Company’s financial position and prospects. The Board reviews GLG’s half yearly and annual financial statements. The Board requires that the Chief Executive Officer and the Chief Financial Officer state in writing that GLG’s financial reports present a true and fair view, in all material respects, of the Company’s financial condition 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.
4.3	A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.	Yes Shareholders are encouraged to attend the Company’s Annual General Meeting, with 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 for complying with its continuous disclosure obligations under the Listing Rules; and (b) disclose that policy or a summary of it.	Yes The Company has a documented policy which has established procedures designed to ensure 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 GLG’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 about itself and its governance to investors via its website.	Yes The Board informs shareholders of all major developments affecting GLG’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.
6.2	A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.	Yes The Company communicates with its shareholders and investors by posting information via the ASX or website, and by encouraging attendance and

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GLG Corp Ltd Corporate Governance Statement

		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 ‘Boardroom’, 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 and processes it has in place to facilitate and encourage participation at meetings of security holders.	Yes Shareholders are encouraged to attend the Company’s Annual General Meeting. The AGM 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 option to receive communications from, and send communications to, the entity and its security registry electronically.	Yes Investors are able communicate with the Company electronically via the website. Investors are also able communicate with the Company’s registry electronically by emailing the registry or via the registry’s website.
7.	Recognise and manage risk
7.1	The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework.	Partly The Board is responsible for the management of risk due to the current size of the Board. GLG is committed to embedding risk management practices to support the achievement of business objectives. The Board is responsible for reviewing and overseeing the risk management strategy and for ensuring GLG has an appropriate corporate governance structure. Within that overall strategy, management has designed and implemented a risk management and internal control system to manage material business risks. 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.)

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GLG Corp Ltd Corporate Governance Statement

		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
7.2	The board or a committee of the board should: (a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and (b) disclose, in relation to each reporting period, whether such a review has taken place.	Yes The Board reviews the risk management framework and policies of the Company. The Board has delegated responsibilities to the Management Risk Committee who then provides reports to the Board. The Board is responsible for approving policies on risk assessment and management. The policy is available on the website.
7.3	A listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what role it performs; or (b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.	Yes Management reviews the Company’s business units, organisational structure and accounting controls and processes on a regular basis and reports to the Audit Committee and in turn to the Board; the Board is satisfied that the processes in place to identify the Company’s material business risks are appropriate and that these risks are being effectively managed. GLG’s risk management processes continue to be monitored and reported against. A description of GLG’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 material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.	Yes The Company’s operations are not subject to any significant environmental regulations. 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.
8.	Remunerate fairly and responsibly
8.1	The board of a listed entity should: (a) have a remuneration committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.	Yes The Board has a formal Nomination and Remuneration Committee comprising three members two of whom are independent and the CEO. Current members are Grant Hummel (Independent Director and Chairman), Christopher Chong (Lead Independent Director) and Estina Ang (CEO). The role of the Nomination and Remuneration Committee is to review and make recommendations to the Board on remuneration packages and practices applicable to the Chief Executive Officer, Senior Executives and Directors themselves. This role also includes responsibility for share option schemes, incentive performance packages and retirement and termination entitlements. Remuneration 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

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GLG Corp Ltd Corporate Governance Statement

		are formalised in a Charter and is posted on GLG’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 its policies and practices regarding the remuneration of non- executive directors and the remuneration of executive directors and other senior executives.	Yes, details of the Directors and Key Senior Executives remuneration are set out in the Remuneration Report of the Annual Report. The structure of Non-Executive Directors’ remuneration is distinct 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 remuneration scheme should: (a) have a policy on whether participants are permitted to enter 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.	Yes Currently, the Company does not have an equity based remuneration scheme.

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GLG Corp Ltd Corporate Governance Statement

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 AngSuan Hong	Executive Chairman and Chief Executive Officer
Christopher ChongMengTak	Lead Independent Director
Grant Hummel	Independent Director
Felicia Gan Peiling	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 14 to 15.

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 (3[rd] 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 20 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 equity-based 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 2019, the proportion of women employed by GLG Corp Ltd was:

• Board of Directors 50%

• Senior Executives 68%

• Total Workforce 66%

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GLG Corp Ltd Corporate Governance Statement

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.

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.

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

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.

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GLG Corp Ltd Directors’ Report

Audit Committee

The Audit Committee reviewed the statement of financial position of the consolidated financial statements of GLG for the financial year ended 30 June 2019, 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:

Key Audit Matters

How the Audit Committee reviewed these matters and what decisions were made

Due to the material balance and potential for overstatement, recoverability of receivables is assessed as a risk.

The Audit Committee assessed and confirmed the following: a) Normal trade receivables in GLG Corp Ltd have been reviewed for recoverability, with respect to aging, trends and current industry practice. Noting that the aging of the receivables do not show any customers having old-aged receivables and that the balances by key customers within the receivables are in line with current trends in business with no recoverability issues. b) The valuation of the GLIT Receivable continues to be an area of focus due to the commercial nature of GLG’s business. The Audit Committee has reviewed management’s extensive assessment of the GLIT receivable to support its recoverability. The receivable balance due from such outsourced manufacturing suppliers has risen for FY2019 due to the increase in the working capital required for their garment manufacturing in Indonesia. With the accessibility of trust receipts available for offset and the amount of available collaterals in place, the receivable is evaluated to be recoverable at the reporting date. The turnover analysis, which showed the average turnover of the receivable is approximately four months with constant turning, appears to support its recoverability at period- end. The Audit Committee has accepted this conclusion.

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.

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GLG Corp Ltd Directors’ Report

Directors’ report

The Directors of GLG Corp Ltd (“GLG” or “the Company”) submit herewith the annual financial report of the consolidated entity for the financial year ended 30 June 2019. 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. Estina Ang Suan Hong is a lady armed with over 35 years of experience in the textile and apparel industry who leads a 12,000 strong workforce spanning the Southeast Asia region. She grew the business from 6 sewing machines as a sub-contractor to a global supplier of quality apparel to major retailers in the USA and throughout Europe.

Ms Estina Ang graduated from Nanyang University in 1974 with a Bachelor of Arts degree and is a member of the Singapore Institute of Directors, Textile and Fashion Singapore. She obtained The Entrepreneur of the Year Awards in 2001 and listed in The 300 List in Singapore Tattler and also spearheaded the business expansion into USA, Mexico, Guatemala and Hong Kong.

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. Prior to cofounding 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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GLG Corp Ltd Director’s Report

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.

Grant Hummel

Grant Hummel was appointed to the Board as an independent director, on 1st December 2018. Mr. Hummel is a member of the Audit Committee and the Chairman of the Nomination and Remuneration Committee of the Board.

Grant has been a partner of a major Australian law firm for over a decade. He has experience with commercial and corporate transactions, with particular expertise in capital raisings, securities law, merger and acquisitions and the ASX Listing Rules. Grant is no stranger to GLG Corp, as he has been involved with the company, being part of the IPO and ASX listing team in 2005.

Grant Hummel holds Bachelor of Science (Honours) and Bachelor of Law (Honours) degrees from the University of Tasmania, Australia. He also has a Graduate Diploma of Applied Finance and Investment from Finsia (now Kaplan).

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.

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GLG Corp Ltd Director’s Report

Board Skills Matrix

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

Name

Christopher Chong Meng Tak

Company Period of directorship ASL Marine Holdings Ltd Ceased 13 Aug 2019 Forise International Ltd Ceased 15 Aug 2019 Emerging Towns & Cities Singapore Ltd (formerly known as Cedar Strategic Ceased 26 Apr 2018 Holdings Ltd) Singapore O&G Ltd Ceased 26 December 2017 Yingli International Real Estate Ltd Ceased 28 April 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.

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GLG Corp Ltd Director’s Report

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.

Directors	Fully Paid Ordinary Shares Number	Share options Number
Estina Ang Suan Hong Felicia Gan Peiling Christopher Chong Meng Tak Grant Hummel	50,116,000 2,222,000 110,001 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 21 to 27.

Share options granted to directors and senior management

During and since the end of the financial year no share options (2018: nil) were granted to the directors as part of their remuneration.

Company Secretary

Mr Alistair Chong was appointed as Company Secretary on the 12[th] December 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 lecturer in these subject areas at the University of Tasmania, and has been tutoring there for nine 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 ending June 2019, the Company consciously improved the mix of its customers by adding new customers in the U.S., despite facing lower volume from existing customers due to the U.S. retail market slowdown and inventory glut. We also saw positive momentum in the production and export of fabric, reaching another all-time record of revenue of US$63 million to support increased demand of knitted fabric from its customers. This new milestone for Maxim in its Malaysia fabric mill reassures the implementation of the company’s vertical-integration and textile manufacturing strategic roadmap when the fabric mill was acquired back in late 2016.

FY2019 also witnessed the Company’s successful completion of the establishment of garment manufacturing factory in Cambodia with a new legal entity called GG Fashion (Cambodia) Co Ltd to own and manage specific assets acquired from its outsourced manufacturing partner, Ghim Li (Cambodia) Pte Ltd and its parent company, GLIT Holdings Pte Ltd. The assets acquired consisted of machinery and equipment, some other fixed assets and intangible assets such as trade name and customer network, employee database and records. With that, GG Fashion (Cambodia) Co Ltd became the first inhouse garment manufacturing factory for the Company in Cambodia by operating in two leased facilities in Phnom Penh.

Towards the end of the fiscal year, FY2019 the Board also made the strategic decision to sell its garment manufacturing factory business in Vietnam, G&G Fashion (Vietnam) Co. Ltd to an external party, Dragon Crowd Garment Inc who will use a combination of cash and loan facilities to finance the acquisition. Despite this change of ownership, the factory in Vietnam will remain as a supplier with its current capacity of 30 production lines to the Company under an outsourcing agreement to support the manufacturing needs of the Company on an ongoing basis.

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GLG Corp Ltd Director’s Report

Review of Operations (cont’d)

Finally, the Company has seen lower profitability in FY2019 arising from continuing losses incurred in the Vietnam factory, as well as start-up losses in the Cambodia factory in its first fiscal year of full production.

Comparison of Consolidated Statement of Profit or Loss and Comprehensive Income for the financial year ended 30 June 2019 with that of 30 June 2018.

GLG’s sales slightly decreased by US$4,897 thousand, or 2.7% from US$180,606 thousand in the previous year to US$175,709 thousand in this financial year. The decline in sales was mainly attributed to continued weakness in our end-customers’ retail apparel market.

However gross margin slightly improved to 15.6% compared to 14% in the previous year due to better garment product mix.

Selling and distribution costs increased by 33% to US$8,315 thousand compared to US$6,252 thousand in the previous year, mainly due to the incurrence of airfreight cost and raw materials deliveries cost by garment factory in Cambodia and Maxim fabric mill to meet the tight delivery dates required from customers.

Administrative expenses increased by 19.4% to US$13,867 thousand compared to US$11,614 thousand in the previous year. This is attributable to an increase in admin headcount in HQ coupled with an increase in costs from consolidation of garment factory in Cambodia.

Finance costs increased by 53% from US$2,077 thousand to US$3,178 thousand in the current year compared to previous year, due to the increase in purchase of raw materials and new machineries investment in Cambodia.

Other expenses decreased by 36.7% from US$2,649 thousand to US$1,675 thousand due to reduction in legal fees and cost avoidance in commitment fees payable to outsourced manufacturers in previous year.

Net profit after tax for GLG was US$455 thousand, which represents a decrease of US$1,940 thousand or 81% compared to the financial year ended 30 June 2018 of US$2,395 thousand. Overall, the decrease mainly due to production losses incurred in Vietnam and Cambodia garment factories.

Comparison of the Consolidated Statement of Financial Position as at 30 June 2019 with that of 30 June 2018.

Trade and other receivables decreased by 2.8% from US$89,455 thousand as at 30 June 2018 to US$86,917 thousand as at 30 June 2019. The decrease was primarily due to prompt settlement of payment from customers.

Property, plant and equipment reduced marginally by 8.1% to US$36,896 thousand as at 30 June 2019 compared to US$40,138 thousand as at 30 June 2018, due to account reclassification of the non-current assets of Vietnam subsidiary to “Assets Held For Sale” in compliance with AASB 5.

Intangible assets increased by 151.8% to US$4,776 thousand as at 30 June 2019 compared to US$1,897 thousand as at 30 June 2018, due to acquisition of specific assts (trade name, customer network and employee database) from outsourced manufacturing supplier, Ghim Li Cambodia Pte Ltd.

Trade and other payables increased by 32.4% to US$49,335 thousand as at 30 June 2019 compared to US$37,249 thousand as at 30 June 2018, resulting from increase in short term financing extended by company director and majority shareholder, Ghim Li Group Pte Ltd.

Current and non-current borrowings decreased by 12.1% from US$80,276 thousand as at 30 June 2018 to US$70,580 thousand as at 30 June 2019, as a result of decrease in export invoice factoring from financial institutions and repayment of bank loans which correspondingly reduced the cash balance of 35.2% from US$8,183 thousand as at 30 June 2018 to US$5,304 thousand as at 30 June 2019.

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GLG Corp Ltd Director’s Report

Review of Operations (cont’d)

Comparison of the Consolidated Statement of Cash Flows for the financial year ended 30 June 2019 with that of 30 June 2018.

GLG’s cash from operating activities increased by 97.1% to US$13,418 thousand as at 30 June 2019 compared to US$6,809 thousand as at 30 June 2018. This increase resulted mainly due to prompt settlement from customers, supported by close monitoring of trade receivables.

Net cash used in investing was increased by US$6,237 thousand or 136.5% to US$10,807 thousand as at 30 June 2019 compared to US$4,570 thousand as at 30 June 2018. This was mainly attributable to additions of new plant & machinery, renovation and intangible assets in Cambodia factory to meet the needs of higher production levels.

Net cash used in financing was increased to US$5,490 thousand as at 30 June 2019 compared to US$937 thousand as at 30 June 2018. The increase stemmed from financing the working capital incurred in the factories for fabric and garment production.

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

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 2019, 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 2018, no dividend was declared.

Subsequent events

There has not been any matter or circumstance occurring subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of the consolidated entity in future financial year.

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 entities or the forecast of the likely result of the consoldiated entities activities.

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 (2018: 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.

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GLG Corp Ltd Director’s Report

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 3 Board meetings, 3 Nomination and Remuneration Committee meeting and 3 Audit Committee meetings were held:

	Board of directors	Board of directors	Nomination & remuneration committee	Nomination & remuneration committee	Audit 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 1 3 1 3 1 Grant Hummel 4 3 3 2 3 2 Felicia Gan Peiling 4 4 3 3 3 3

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 28 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.

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GLG Corp Ltd Director’s Report

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 2019. 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

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 (resigned 12 November 2018)

• Grant Hummel as Independent Director (appointed 1 December 2018)

• Felicia Gan Peiling as Deputy Chief Executive 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 Chief Merchandising Officer

• Shawn Fung as Chief Financial Officer and Head of IT & Human Resources

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.

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GLG Corp Ltd Director’s Report

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 2019:

	30 June 2019	30 June 2018	30 June 2017	30 June 2016	30 June 2015
	US$’000	US$’000	US$’000	US$’000	US$’000
Revenue from all
sources	175,709	180,606	156,041	171,435	180,343
Net profit before
tax	1,438	3,806	4,477	6,476	3,865
Net profit after
tax	455	2,395	4,193	4,827	3,148
Share price at
start of year	$0.10	$0.19	$0.15	$0.18	$0.24
Share price at end
of year	$0.09	$0.10	$0.19	$0.15	$0.18
Final Dividend
(unfranked)	-	-	-	-	-
Basic earnings per
share	0.61 cps	3.23 cps	5.66 cps	6.51 cps	4.25 cps
Diluted earnings
per share	0.61 cps	3.23 cps	5.66 cps	6.51 cps	4.25 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.

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GLG Corp Ltd Director’s Report

Remuneration of directors and senior management (cont’d)

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.

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

2019	Short term employment benefits Post- employment benefits super - annuation Other long-term employee benefits Share based payments, options &rights Total
	Salary & fees US$ Salary supplement US$ Non- monetary US$ Other US$ US$ US$ US$ US$
Directors
Estina Ang Suan Hong1	532,281 44,034 - - 6,005 - - 582,320
Christopher Chong Meng Tak	39,395 - - - - - - 39,395
Shane Hartwig2	9,599 - - - - - - 9,599
Grant Hummel3	17,244 - - - - - - 17,244
Felicia Gan Peiling1	160,564 20,549 - - 12,468 - - 193,581
	759,083 64,583 - - 18,473 - - 842,139
Executives
Shawn Fung	182,718 11,742 - - 5,902 - - 200,362
Susan Yong	160,564 11,742 - - 7,505 - - 179,811
	343,282 23,484 - - 13,407 - - 380,173
Total	1,102,365 88,067 - - 31,880 - - 1,222,312

1. 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.

2. Shane Hartwig resigned as Independent Director on 12 November 2018. 3. Grant Hummel appointed as Independent Director on 1 December 2018.

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GLG Corp Ltd Director’s Report

Remuneration of directors and senior management (cont’d)

2018	Short term employment benefits Post- employment benefits super - annuation Other long term employee benefits Share based payments, options &rights Total
	Salary & fees US$ Bonus US$ Non- monetary US$ Other US$ US$ US$ US$ US$
Directors
Estina Ang Suan Hong1	541,063 45,781 - - 6,889 - - 593,733
Christopher Chong Meng Tak	42,685 - - - - - - 42,685
Shane Hartwig	27,939 - - - - - - 27,939
Felicia Gan Peiling1	165,026 56,187 - - 11,758 - - 232,971
	776,713 101,968 - - 18,647 - - 897,328
Executives
Shawn Fung	184,714 15,642 - - 7,454 - - 207,810
Susan Yong	148,316 12,208 - - 8,757 - - 169,281
	333,030 27,850 - - 16,211 - - 377,091
Total	1,109,743 129,818 - - 34,858 - - 1,274,419

1. 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.

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

Directors Estina Ang Suan Hong Christopher Chong Meng Tak Shane Hartwig Grant Hummel Felicia Gan Peiling Executives Shawn Fung Susan Yong	Fixed remuneration	Fixed remuneration	Remuneration linked to performance	Remuneration linked to performance
	2019 92.3% 100% 100% 100% 89.4% 94.1% 93.5%	2018 92.3% 100% 100% - 75.9% 92.5% 92.8%	2019 7.7% - - - 10.6% 5.9% 6.5%	2018 7.7% - - - 24.1% 7.5% 7.2%

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

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GLG Corp Ltd Director’s Report

Salary supplement / Bonuses payment as compensation for the current financial year

Madam Estina Ang Suan Hong was granted a salary supplement on 28 January 2019 of US$44,034 (FY2018: US$45,781) during the financial year ended 30 June 2019. This amount was paid on 28 January 2019 for her stewardship as Chief Executive Officer for the business, as the company did not pay any variable bonus to her.

Ms Felicia Gan Peiling was granted a salary supplement on 28 January 2019 of US$20,549 (FY2018: US$56,187) during the financial year ended 30 June 2019. This amount was paid on 28 January 2019 for her contribution as Chief Marketing Officer including business development for the business, although the company did not pay any variable bonus to her.

Mr Shawn Fung was granted a salary supplement on 28 January 2019 of US$11,742 (FY2018: US$15,642) during the financial year ended 30 June 2019. The amount was paid on 28 January 2019 for his contribution as Chief Financial Officer & Head of HR and IT for the business, although the company did not pay any variable bonus to him.

Ms Susan Yong was granted a salary supplement on 9 February 2019 of US$11,742 (FY2018: US$12,208) during the financial year ended 30 June 2019. The amount was paid on 28 January 2019 for her contribution as Executive Vice President, Sales Operations and Global Sourcing for the business although the company did not pay any variable bonus to her.

Loans to Key Management Personnel

GLG has not provided any loans to key management personnel.

Other transactions with Key Management Personnel in GLG

During the financial year, GLG has obtained a loan from key management personnel amounting to US$3,658 thousand. The amount due to Estina Ang Suan Hong is unsecured, at market interest rates and repayable on demand. The weighted average interest rate at 2.53%.

Key Management Personnel equity holdings

Fully paid ordinary shares of GLG Corp Ltd

		Balance at 1 July No.	Granted as compensation No.	Net other change No.	Balance at resignation date No.	Balance at 30 June No.
2019 Estina Ang Suan Hong (indirect holding through Ghim Li Group) Felicia Gan Peiling Christopher Chong Meng Tak		50,116,000 2,222,000 110,001	- - -	- - -	- - -	50,116,000 2,222,000 110,001
2018 Estina Ang Suan Hong (indirect holding through Ghim Li Group) Felicia Gan Peiling Christopher Chong Meng Tak		50,116,000 2,222,000 110,001	- - -	- - -	- - -	50,116,000 2,222,000 110,001

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GLG Corp Ltd Director’s Report

Key terms of employment contract

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

Position	Keyterm of service agreements	Keyterm of service agreements
Chief Executive Officer	•	Base salary: US$532,281 (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.
Executive Director	•	Base salary: US$160,564 (SG$219,000) 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: 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.

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GLG Corp Ltd Director’s Report

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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Singapore, 25[th] September 2019

27

GLG Corp Ltd Auditor’s Independence Declaration

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28

GLG Corp Ltd Independent Auditor’s Report

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29

GLG Corp Ltd Independent Auditor’s Report

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30

GLG Corp Ltd Independent Auditor’s Report

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31

GLG Corp Ltd Directors’ Declaration

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 Director

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Singapore, 25[th] September 2019

32

GLG Corp Ltd Consolidated statement of profit or loss and other comprehensive income

Consolidated Statement of profit or loss and other comprehensive income for the financial year ended 30 June 2019

Note Revenue 5 Cost of sales Gross profit Other income 5 Distribution expenses Administration expenses 6 Finance costs 7 Other expenses 8 Profit before income tax expense Income tax expense 10(a) Profit for the year Other comprehensive income: Items that will not be reclassified subsequently to profit or loss: Revaluation surplus/ (deficit), on land and building, net of tax Fair value adjustment of reclass PPE to investment property 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	Consolidated
	2019 US$’000 2018 US$’000
	175,709 180,606 (148,267) (155,326)
	27,442 25,280 1,031 1,118 (8,315) (6,252) (13,867) (11,614) (3,178) (2,077) (1,675) (2,649)
	1,438 3,806 (983) (1,411)
	455 2,395 431 834 - 52
	431 886
	886 3,281
	0.61 3.23 0.61 3.23

Notes to the financial statements are included on page 37 to 80

33

GLG Corp Ltd Consolidated statement of financial position

Consolidated Statement of financial position as at 30 June 2019

Current assets Cash and cash equivalents Trade and other receivables Inventory Other assets Other financial assets Asset held for sale Total current assets Non-current assets Other assets Other financial assets Investments accounted for using the equity method Intangible assets Property, plant and equipment Total non-current assets Total assets Current liabilities Trade and other payables Borrowings Current tax liabilities Total current liabilities Non-current liabilities Borrowings Deferred tax liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital Revaluation reserves Merger reserves Retained earnings Total equity	Note 28(a) 11 13 16 12 17 16 12 14 18 15 19 20 10(b) 20 10(c) 21 29 29 22	Consolidated
		2019 US$’000 2018 US$’000
		5,304 8,183 86,917 89,455 20,755 19,480 843 1,330 344 344 10,704 -
		124,867 118,792
		- 2,555 6,871 6,871 - - 4,776 1,897 36,896 40,138
		48,543 **51,461 **
		173,410 170,253
		49,335 37,249 63,972 71,722 427 791
		113,734 **109,762 **
		6,608 8,554 1,807 1,562
		8,415 10,116
		122,149 119,878
		51,261 50,375
		10,322 10,322 4,916 4,485 (14,812) (14,812) 50,835 50,380
		51,261 50,375

Notes to the financial statements are included on page 37 to 80

34

GLG Corp Ltd Consolidated statement of changes in equity

Consolidated Statement of changes in equity for the financial year ended 30 June 2019

Consolidated Balance at 1 July 2017 Profit for the year Other comprehensive income for the year Total comprehensive income for the year Balance at 30 June 2018 Balance at 1 July 2018 Profit for the year Other comprehensive income for the year Total comprehensive income for the year Balance at 30 June 2019	Issued Capital Asset Revaluation Reserve US$’000 US$’000	Merger Reserve Retained Earnings Total US$’000 US$’000 US$’000
	10,322 3,599 - - - 886	(14,812) 47,985 47,094 - 2,395 2,395 - - 886
	- 886	- 2,395 **3,281 **
	10,322 4,485	(14,812) 50,380 50,375
	10,322 4,485 - - - 431	(14,812) 50,380 50,375 - 455 455 - - 431
	- **431 **	- 455 886
	10,322 4,916	(14,812) 50,835 51,261

Notes to the financial statements are included on page 37 to 80

35

GLG Corp Ltd Notes to the financial report

Consolidated Statement of cash flows

for the financial year ended 30 June 2019

Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest income Interest and other costs of finance paid Income tax paid Net cash provided by operating activities Cash flows 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 flows from financing activities Net (payment)/ proceeds from borrowings Advance from/ (Payment to) Ghim Li Group Advance from director Payment to outsourced manufacturing suppliers Net cash used in financing activities Net (decrease)/ increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year	Note 28(c) 28(d) 28(a)	Consolidated
		2019 US$’000 2018 US$’000
		186,103 175,001 (168,848) (165,662) 7 10 (2,743) (1,711) (1,101) (829)
		13,418 6,809
		- 29 (7,880) (4,535) (2,927) (64)
		(10,807) (4,570)
		(9,696) 15,574 7,381 (2,296) 3,658 - (6,833) (14,215)
		(5,490) (937)
		(2,879) 1,302 8,183 6,881
		5,304 8,183

Notes to the financial statements are included on page 37 to 80

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GLG Corp Ltd Independent Auditor’s Report

Notes to the financial report

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 GLG. 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 GLG comply with International Financial Reporting Standards (‘IFRS’).

The financial statements were authorised for issue by the Directors on 25[th] September 2019.

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.

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GLG Corp Ltd Independent Auditor’s Report

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

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GLG Corp Ltd Independent Auditor’s Report

2. Significant accounting policies (cont’d)

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.

Standards and Interpretations adopted

AASB 9 Financial Instruments

The Company has adopted AASB 9: Financial Instruments from 1 July 2018. AASB 9 largely retains the existing requirements of AASB 139 for the classification and measurement of financial liabilities, however it eliminates the previously AASB 139 categories for financial assets held to maturity, receivables and available for sales.

As at 30 June 2019, the Company’s financial instruments consist of cash and cash equivalents, trade and other receivables, other assets, other financial assets, trade and other payables and borrowings.

Cash and cash equivalents, trade and other receivables, other assets and other financial assets previously designated as loans and receivables under AASB 139 are now classified as amortised cost under AASB 9. The trade and other payables and borrowings are designated as other financial liabilities, which are also measured at amortised cost.

In addition, there are new impairment requirements for financial assets held at amortised cost which use an ‘expected credit loss’ (‘ECL’) model to recognise an allowance. Impairment is measured using a 12-month ECL method unless the credit risk on a financial asset has increased significantly since recognition in which case the lifetime ECL method is adopted. The Company has adopted a simplified approach for trade receivables with an amount equal to the full expected credit losses to be recognised. The expected loss rates are based on the Company’s movement of balances from one aging category to the next to indicate increase in collection time which is an indicator of the probability of default. These loss rates are then applied to the individual aging categories to calculate an expected credit loss.

As the ECL assessment has resulted in an insignificant adjustment on transition, no additional impairment allowance has been recognised by the Group as at 1 July 2018. Refer to Notes 2(d) and (h) for further details.

AASB 15 Revenue from Contracts with customers

The Company has adopted AASB 15 from 1 July 2018 utilising the modified retrospective approach. Under this method, the cumulative effect of initial application is recognised as an adjustment to the opening balance of retained earnings at 1 July 2018 and comparatives are not restated. In accordance with the transition guidance, AASB 15 has only been applied to contracts which are not complete as at 1 July 2018. There has not been a material impact on the adoption of this standard.

The core principle of the standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduced a new contract-based revenue recognition model with a measurement approach that is based on an allocation of the transaction price.

The Company recognises revenue when it transfers control over a good or service to a customer which is at a point in time.

The Company recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the statement of financial position. Similarly, if the Company satisfies a performance obligation before it receives the consideration, the Company recognises either a contract asset or a receivable in its statement of financial position, depending on whether an objective measure other than the passage of time is required before the consideration is due.

AASB 15 did not have a significant impact on the Group’s accounting. Refer to Note 5 for further details.

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GLG Corp Ltd Independent Auditor’s Report

2. Significant accounting policies (cont’d)

Standards and Interpretations issued not yet effective

AASB 16 Leases

This standard is applicable to annual reporting periods beginning on or after 1 January 2019. When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117: Leases and related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for leases to be classified as operating or finance leases typically. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position, measured at the present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16.

The Company has chosen not to early-adopt AASB 16. However, the Company has conducted an assessment of the impact of this new Standard, as follows.

The company’s non-cancellable operating lease commitments amount to $9.4M as at the reporting date, see note 24 (b). The Company has performed an assessment and has estimated that on 1 July 2019, that the Company expects to recognise the right-of-use assets of approximately $12M and lease liabilities of approximately $12M. Following the adoption of this new Standard, the Company’s EBITDA is expected to increase by approximately $2.1M in FY2020.

For classification within the statement of cash flows, the lease payments shall be separated into both a principal (financing activities) and interest (either operating or financing activities) component. The Company will include the repayment of the principal portion of the lease liabilities in the cash flows from financing activities, thus increasing operating cash flows and decreasing financing cash flows by approximately $1.8M.

AASB 16 will be applied by the Company from its mandatory adoption date of 1 July 2019. The modified retrospective approach will be the Company’s chosen approach, and thus the comparative amounts for the year prior to first adoption will not be restated. The right-of-use assets will be measured at the amount of the lease liability on adoption.

(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.

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GLG Corp Ltd Independent Auditor’s Report

2. Significant accounting policies (cont’d)

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.

(b) Foreign currency

The individual financial statements of each GLG 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, there are no hedging activities undertaken in the current year; 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.

• (d) Financial assets

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

Cash and cash equivalents, trade receivables, other assets and other financial assets are measured at amortised cost using the effective interest method less impairment.

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’.

41

GLG Corp Ltd Notes to the financial report

2. Significant accounting policies (cont’d)

(d) Financial assets (cont’d)

The Company recognises an impairment gain or loss in profit or loss for the amount that the expected credit loss is updated to reflect these changes in credit risk. 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.

The Company 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 GLG neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, GLG recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If GLG retains substantially all the risks and rewards of ownership of a transferred financial asset, GLG 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, GLG 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, GLG 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 GLG 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.

Defined contribution plans

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

42

GLG Corp Ltd Notes to the financial report

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

Trade and other payables and borrowings are initially measured at fair value, net of transaction costs. Trade and other payables and borrowings are subsequently measured at amortised cost using the effective interest method.

• (i) Non-current assets or disposal groups classified as held for sale

Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continued use. They are measured at the lower of their carrying amount and fair value less costs of disposal. For non-current assets or assets of disposal groups to be classified as held for sale, they must be available for immediate sale in their present condition and their sale must be highly probable.

An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of disposal groups to fair value less costs of disposal. A gain is recognised for any subsequent increases in fair value less costs of disposal of a non-current assets and assets of disposal groups, but not in excess of any cumulative impairment loss previously recognised.

Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of assets held for sale continue to be recognised.

Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current assets. The liabilities of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current liabilities.

43

GLG Corp Ltd Notes to the financial report

3. Critical accounting judgements and key sources of estimation uncertainty

In the application of GLG’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 are also key areas of estimates and judgements. Refer to Notes 15 for further details.

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$48,072 thousand (2018: US$57,375 thousand), US$50,230 thousand (2018: US$49,513 thousand) and US$32,993 thousand (2018: US$34,151 thousand) 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.

44

GLG Corp Ltd Notes to the financial report

4. Segment information (cont'd)

Operating segment information

Consolidated – 30 June 2019 Revenue Sales to external customers Intersegment sales Total revenue Interest received Depreciation EBIT Finance costs Profit before income tax expense Income tax expense Profit after income tax expense Consolidated – 30 June 2018 Revenue Sales to external customers Intersegment sales Total revenue Interest revenue Depreciation EBIT Finance costs Profit before income tax expense Income tax expense Profit after income tax expense	Fabric US$'000 727 62,553	Garments US$'000 174,982 - 174,982 292 1,192 668 Garments US$'000 179,739 - 179,739 299 850 1,357	Intersegment eliminations US$'000 - (62,553)	Total US$'000 175,709 -
	63,280		(62,553)	175,709
	6		(291)	7
	2,116		-	3,308
	3,948		-	4,616 (3,178)
	Fabric US$'000 867 51,400 52,267 9 2,148 4,526		Intersegment eliminations US$'000 - (51,400)
				1,438 (983)
				455
				Total US$'000 180,606 -
			(51,400)	180,606
			(298)	10
			-	2,998
			-	5,883 (2,077)
				3,806 (1,411)
				2,395

45

GLG Corp Ltd Notes to the financial report

4. Segment information (cont'd)

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

Cambodia India Madagascar Malaysia Myanmar	Fabric
	2019 US$’000 2018 US$’000
	336 447 216 89 - 25 175 241 - 65
	727 **867 **

Canada China Europe Japan Singapore USA Cambodia Vietnam Others	Garments 2019 US$’000 2018 US$’000 32,993 34,151 77 179 824 11,837 333 134 177 1 140,239 133,395 195 - 39 42 105 -
	174,982 179,739

46

GLG Corp Ltd Notes to the financial report

5. Revenue

Revenue recognition

Revenue is measured at the 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 control of the goods and the cessation of all involvement in those goods.

Interest income

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

Revenue from the sale of goods Other income Sample income Profit on sale of assets Interest income Insurance compensation Payable written back Fair value adjustment on investment property Other Total other income	Consolidated
	2019 US$’000 2018 US$’000
	175,709 180,606
	68 46 - 32 7 10 500 - 334 289 - 378 122 363
	1,031 1,118
	176,740 181,724

Disaggregation of revenue

Revenue is disaggregated by the country in which the customer is located as this depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See further detail on revenue by location of external customer within Note 4.

6. Administrative expenses

Employee compensation Rental and equipment expenses on operating leases Management fees Insurance Courier Others	Consolidated
	2019 US$’000 2018 US$’000
	9,618 8,281 1,289 1,349 530 127 208 198 499 429 1,723 1,252
	13,867 11,614

47

GLG Corp Ltd Notes to the financial report

7. Finance costs

Finance costs
Interest on loans Interest on obligations under finance leases Bank charges Total interest and bank charges Line of credit charges	Consolidated
	2019 US$’000 2018 US$’000
	765 587 10 7 279 263
	1,054 857 2,124 1,220
	3,178 2,077

8. Other expenses

Commitment fee Legal fee Fire losses Others	Consolidated
	2019 US$’000 2018 US$’000
	- 868 48 291 813 - 814 1,490
	1,675 2,649

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:

Loss on written off property, plant and equipment Loss on written off inventory Gain on sales of property, plant and equipment Net foreign exchange loss Fair value adjustment on investment properties Depreciation of non-current assets Amortisation of non-current assets Operating lease rental expenses: Minimum lease payments Employee benefit expense: Salaries, wages, and bonuses Post-employment benefits: Defined contribution plans Total employee benefit expenses	Consolidated
	2019 US$’000 2018 US$’000
	80 73 751 - - (33) 121 730 - (378) 3,282 2,998 26 20 2,288 1,626
	30,400 18,430 1,405 1,041
	31,805 19,471

48

GLG Corp Ltd Notes to the financial report

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.

There were no franking credits for 2018 nor 2019.

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.

49

GLG Corp Ltd Notes to the financial report

10. Income taxes (cont'd)

(a) Income tax recognised in profit or loss

Tax expense comprises: Current tax expense in respect of the current year Deferred tax expense in respect of the current year (Under)/ over provision of deferred tax in prior financial year Adjustments recognized in the current year in relation to prior years Total tax expense 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: Profit from operations Income tax expense calculated at 30% Effect of expenses that are not deductible in determining taxable profit 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_(a)_ Utilisation of deferred tax assets not recognised previously Under/ (over) provision of deferred tax in prior financial year Other Adjustments recognised in the current year in relation to the current tax of prior years Income tax expense recognised in profit	Consolidated
	2019 US$’000 2018 US$’000
	617 868 260 458 (15) 27 121 58
	983 1,411
	1,438 3,806 431 1,142 311 551 - - (633) (545) 856 613 (32) (305) (60) (139) (15) 27
	858 1,344 4 9
	862 1,353 121 58
	983 1,411

• (a) 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 $1,788,000.

50

GLG Corp Ltd Notes to the financial report

10. Income taxes (cont’d)

(b) Current tax liabilities

Current tax liabilities Income tax payable attributable to entities in the consolidated GLG

	Consolidated	Consolidated
	2019	2018
	US$’000	US$’000
	427	791
	427	791

(c) Deferred tax balances

Deferred tax liabilities arise from the following:

	Consolidated
	Opening balance	Charged to income	Charged to Equity	Acquisitions/ disposals	Exchange differences	Changes in tax rate		Closing balance
2019	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000		US$’000
Temporary differences Property, plant and equipment Unused tax loses and other credits: Nil	1,562 245 - -				- -		1,807
	1,562 245 - -				- -		1,807
	- - - -				- -		-
	- - - -				- -		-
	1,562 245 - -				- -		1,807

Presented in the statement of financial position as follows: Deferred tax liability

1,807

2018	Consolidated	Consolidated	Consolidated	Consolidated
	Opening balance	Charged to income	Charged to Equity	Acquisitions/ disposals	Exchange differences	Changes in tax rate	Closing balance
	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
Temporary differences Property, plant and equipment Unused tax loses and other credits: Nil	1,077 485 - -				- -
							1,562
	1,077 485 - -				- -		1,562
	- - - -				- -
							-
	- - - -				- -		-
	1,077 485 - -				- -		1,562

Presented in the statement of financial position as follows: Deferred tax liability

1,562

51

GLG Corp Ltd Notes to the financial report

11. Trade and other receivables

Trade receivables Trade customers GLIT Holdings Outsourced manufacturing suppliers Joint-venture entity Provision for Doubtful Debts Trade receivables Other receivables Other receivables Provision for Doubtful Debts Other receivables Less: Payable to outsourced manufacturing suppliers Payable to GLIT Holdings Goods and services tax recoverable	2019 US$’000 2018 US$’000
	19,457 29,059 25,949 25,858 36,926 30,102 1,325 1,325 - -
	83,657 86,344 1,941 2,081 - (480)
	1,941 1,601 (121) (39) - -
	85,477 87,906
	1,440 1,549
	86,917 89,455

The average credit period on sales of goods and rendering of services is 75 days. No interest is charged on the trade receivables outstanding balance.

Before accepting any new customers, GLG 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. 94% 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 GLG.

Included in GLG’s trade receivable balance are debtors with a carrying amount of US$1,101 thousand (2018: US$1,235 thousand) which are past due at the reporting date. There has been no significant change in credit quality and all amounts are considered recoverable. GLG does not hold any collateral over these balances.

Age of receivables past due, but not impaired 30 – 60 days 60 – 90 days 90 – 120 days More than 120 days Total Movement in the allowance for trade doubtful debts Balance at the beginning of the year Charge to profit or loss Allowance written off during the year Balance at the end of the year	Consolidated
	2019 US$’000 2018 US$’000
	930 515 143 552 22 1 6 167
	1,101 1,235
	- 613 - - - (613)
	- -

52

GLG Corp Ltd Notes to the financial report

11. Trade and other receivables (cont’d)

Movement in the allowance for non-trade doubtful debts Balance at the beginning of the year Allowance written off during the year Balance at the end of the year	Consolidated
	2019 US$’000 2018 US$’000
	480 480 (480) -
	- 480

In determining the recoverability of trade receivables, GLG 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

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

GLIT Holdings Pte Ltd (GLIT) and its operating subsidiaries provide outsourced manufacturing services to GLG Corp. GLG Corp provides working capital and fabric to GLIT as part of the arrangement. When fabric is acquired by GLIT, GLG Corp issues a letter of credit on their behalf. In order to maximize the discounts available, GLG Corp converts for GLIT the letter of credit it has issued into a Trust Receipt. The Bank will immediately pay the fabric supplier. Once GLIT invoices GLG Corp, a trade payable is recorded. GLG Corp has a legally enforceable right to offset the amount owed by GLIT and settle the balance, if any, with GLIT on a net basis. The offset takes place between 90 days to 120 days depending on the date of maturity of the Trust Receipt.

GLIT Holdings Pte Ltd and its subsidiaries that provide subcontracted manufacturing operations were disposed of by the Ghim Li Group in 2005 as part of a management buy out. GLIT continue to operate as GLG’s outsourced manufacturing partner.

The GLIT Receivables (collectively the receivables from GLIT Holdings and receivables from outsourced manufacturing suppliers) 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 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.

53

GLG Corp Ltd Notes to the financial report

12. Other financial assets

. Other financial assets
Current Other receivables – External party (i) Allowance for ECL Total Current other financial assets Non-current Security deposit Office rental deposit (ii) Disclosed in the financial statements as: Total Non-current other financial assets	Consolidated
	2019 US$’000 2018 US$’000 368 368 (24) (24) 344 344 5,000 5,000 1,871 1,871 6,871 6,871 6,871 6,871

(i) The current trade receivable owed by third party has a provision for non-recovery in FY2019 of US$24 thousand (FY2018: US$24 thousand).

(ii)US$1,871 thousand of rental deposit paid for the 10 years lease rental from Ghim Li Group Pte Ltd (FY2018: US$1,871 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.

Raw materials Work in progress Goods in transit Consumables Stock lot Finished goods Total	Consolidated
	2019 US$’000 2018 US$’000
	9,516 5,801 5,463 7,743 1,450 1,743 10 5 1,218 667 3,098 3,521
	20,755 19,480

During the financial year, a fire incident happened at GLG’s Cambodia factory, which resulted in the inventory written off amounted to US$751 thousand.

54

GLG Corp Ltd Notes to the financial report

14. Investments accounted for using the equity method

Name of entity	Country of incorporation		Ownership interest	Ownership interest
		Principal activity	2019	2018 %
			%
Jointly controlled entities JES Apparel LLC USA Importer of knitwear products			51 51

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

Financial position: Current assets Current liabilities Net assets GLG’s share of jointly controlled entity’s net assets Financial performance: Income Expenses Total loss for investment in joint venture GLG’s share of jointly controlled entity’s losses	Consolidated
	2019 US$’000 2018 US$’000
	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 2019 and 2018 was nil. The entity’s cumulative unrecognised share of retained losses is US$757 thousand (2018: US$757 thousand).

55

GLG Corp Ltd Notes to the financial report

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

Building on freehold land 50 years Leasehold properties Over term of lease Plant and machinery 10 years Furniture, fittings and office 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 2019 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.

Description	Valuation Approach	Unobservable inputs	Range of inputs	Weighted average	Relationship of unobservable inputs to fair value
Leasehold Property	Sales comparison	Price per square foot	RM27-56 per square foot for land RM30-100 per square foot for building RM = Malaysian Ringgit currency	RM28 per square foot for land RM75 per square foot for building	The higher the price per square foot the higher the fair value

56

GLG Corp Ltd Notes to the financial report

15. Property, plant and equipment (cont’d)

• Freehold and leasehold land and buildings - Level 3 (cont’d)

Description	Valuation Approach	Unobservable inputs	Range of inputs	Weighted average	Relationship of unobservable inputs to fair value
Freehold property	Sales comparison	Price per square foot	RM37 to 51 per square foot for land RM40 to 100 per square foot for building RM = Malaysian Ringgit currency	RM50 per square foot for land RM73 per square foot for building	The higher the price per square foot, the higher the fair value

57

GLG Corp Ltd Notes to the financial report

15. Property, plant and equipment (cont’d)

Valuation of land and buildings – estimates and judgements

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

Land and Buildings Freehold Land at independent valuation Building at independent valuation Total land and building Carrying amount of all freehold land had it been carried under the cost model Leasehold Leasehold improvement At cost Accumulated depreciation Land at independent valuation Building at independent valuation Reclassification from investment properties Total land and building Carrying amount of all leasehold had it been carried under the cost model Plant and Equipment Plant and equipment: At cost Accumulated depreciation Plant and equipment with net carrying amount were acquired under finance leases: At cost Accumulated depreciation Plant and equipment with net carrying amount were acquired under bank borrowings At cost Accumulated depreciation Total plant and equipment Total property, plant and equipment	Consolidated GLG 2019 2018 US$'000 US$'000 2,849 789 2,477342
	5,326 1,131
	4,353 757
	- 378 - (216)
	- 162
	3,823 1,911 5,862 7,498 - 4,192
	9,685 13,763
	4,916 10,038
	31,358 19,977 (12,741) (8,636)
	18,617 11,341
	322 371 (106) (81)
	216 290
	4,029 16,426 (977) (2,813)
	3,052 13,613
	21,885 25,244 36,896 40,138

58

GLG Corp Ltd Notes to the financial report

15. Property, plant and equipment (cont'd)

						Consolidated	Consolidated
			At Valuation				At Cost
Cost		Freehold land and buildings	Leasehold land and buildings	Sub-total	Construction in Progress	Plant and machinery	Renovation	Other assets	Motor vehicles	Total
		US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
Balance as at 1 July 2017		1,131	9,043	10,174	1,626	16,578	9,518	4,840	415	43,151
Additions		-	44	44	41	3,680	417	745	243	5,170
Reclassification		-	4,192	4,192	-	-	-	-	-	4,192
Disposals		-	-	-	(635)	(672)	-	(22)	-	(1,329)
Transfer		-	-	-	(836)	795	41	-	-	-
Revaluation surplus		-	700	700	-	-	-	-	-	700
Balance as at 30 June 2018		1,131	13,979	15,110	196	20,381	9,976	5,563	658	51,884
Additions		-	-	-	-	6,754	652	466	14	7,886
Reclassification		4,192	(4,424)	(232)	-	232	128	(128)	-	-
Disposals		-	-	-	-	(38)	(89)	(26)	-	(153)
Transfer		-	-	-	(130)	130	-	-	-	-
Classified as held for sale		-	-	-	(66)	(2,235)	(6,592)	(136)	-	(9,029)
Revaluation surplus		3	129	132	-	-	-	-	-	132
Balance as at 30 June 2019		5,326	9,684	15,010	-	25,224	4,075	5,739	672	50,720

59

GLG Corp Ltd Notes to the financial report

15. Property, plant and equipment (cont'd)

					Consolidated	Consolidated
			At Valuation				At Cost
Cost		Freehold land and buildings	Leasehold land and buildings	Sub-total	Construction in Progress	Plant and machinery	Renovation	Other assets	Motor vehicles	Total
		US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
Accumulated depreciation
Balance as at 1 July 2017		-	48	48	-	4,267	2,247	2,218	324	9,104
Depreciation expense		-	302	302	-	1,857	500	297	42	2,998
Depreciation on disposals		-	-	-	-	(208)	-	(14)	-	(222)
Revaluation deficit		-	(134)	(134)	-	-	-	-	-	(134)
Balance as at 30 June 2018		-	216	216	-	5,916	2,747	2,501	366	11,746
Depreciation expense		-	152	152	-	2,187	562	307	74	3,282
Depreciation on disposals		-	-	-	-	(17)	(30)	(26)	-	(73)
Classified as held for sale		-	-	-	-	(398)	(369)	(66)	-	(833)
Reclassification		-	(70)	(70)	-	70	-	-	-	-
Revaluation surplus		-	(298)	(298)	-	-	-	-	-	(298)
Balance as at 30 June 2019		-	-	-	-	7,758	2,910	2,716	440	13,824
Net book value
As at 30 June 2018		1,131	13,763	14,894	196	14,465	7,229	3,062	292	40,138
As at 30 June 2019		5,326	9,684	15,010	-	17,466	1,165	3,023	232	36,896

Other assets comprise of computers, furniture and fittings, hostel and office equipment.

60

GLG Corp Ltd Notes to the financial report

16. Other assets

Current Prepayments Non-current Prepayments	Consolidated
	2019 US$’000 2018 US$’000
	843 1,330
	- 2,555

17. Assets and liabilities classified as held for sale

In July 2019, GLG Corp Ltd (“Group”) announced the signing of a definitive agreement under which its Singapore subsidiary, Ghim Li Global Pte Ltd will sell its Vietnam subsidiary, G&G Fashion (Vietnam) Co. Ltd (“Vietnam”) to Dragon Crowd Garment Inc (“Buyer”). The Buyer will acquire all outstanding shares of Vietnam, excluding certain specified assets and liabilities of the entity, using a combination of US$1.32 million in cash and loan facilities, of short and long-term nature, to settle liabilities of Vietnam.

After the completion of the sale, Vietnam will remain as a supplier to the Group under an outsourcing agreement. There are planned customer orders for Vietnam up until October 2019. Despite this change in ownership, the management and factory operations team will remain the same and the Group will continue to partner with the Buyer and Vietnam through outsourcing agreement as part of our global network of factories.

The assets and liabilities related to Vietnam, were classified as a disposal group held for sale on the consolidated statement of financial position.

Assets and liabilities held for sale

The following major classes of assets and liabilities relating to these operations have been classified as held for sale in the consolidated statement of financial position on 30 June 2019:

	G&G Fashion (Vietnam)
	2019
	US$’000
Plant & Equipment	8,191
Intangible assets	22 2,491
Other assets
Assets held for sale	10,704
Term loan Liabilities held for sale	998
	998

61

GLG Corp Ltd Notes to the financial report

18. Intangible assets

		Consolidated	Consolidated
Cost	Software	Goodwill	Trademark & customers network	Others	Total
	US$’000	US$’000	US$’000	US$’000	US$’000
Balance as at 1 July 2017	13	1,841	-	-	1,854
Additions	64	-	-	-	64
Balance as at 30 June 2018	77	1,841	-	-	1,918
Additions	2	-	2,518	407	2,927
Classified as held for sale	(61)	-	-	-	(61)
Balance as at 30 June 2019	18	1,841	2,518	407	4,784
Accumulated Depreciation
Balance as at 1 July 2017	1	-	-	-	1
Additions	20	-	-	-	20
Balance as at 30 June 2018	21	-	-	-	21
Additions	26	-	-	-	26
Classified as held for sale	(39)	-	-	-	(39)
Balance as at 30 June 2019	8	-	-	-	8
Net book value
As at 30 June 2018	56	1,841	-	-	1,897
As at 30 June 2019	10	1,841	2,518	407	4,776

Software

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

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.

Trademark and customers network

Trademark and customers network are stated as intangible assets in the statement of financial position and amortised on the straight-line method over 10 years.

62

GLG Corp Ltd Notes to the financial report

18. Intangible assets

Goodwill – estimates and judgements

GLG assesses impairment at the end of each reporting period by evaluating the conditions and events specific to GLG 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 FY2020 budget that has been approved by the board with estimated deduction rates of 2% for FY2020, growth rate of 5% for FY2021 and FY2022 with a terminal growth rate of 2%. 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 8.5%. 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 Malaysia of 24%.

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

19. Trade and other payables
Trade payables (i) Other payables Ghim Li Group (ii) Due to director (iii) Accruals – employee remuneration Accruals – deferred rent Accruals – audit fee Accruals – TR interest Accruals – others	Consolidated
	2019 US$’000 2018 US$,000
	15,570 16,028 5,494 4,215 20,843 13,462 3,658 - 2,024 1,649 417 536 117 105 257 216 955 1,038
	49,335 37,249

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

(ii) This payable due to Ghim Li Group (majority shareholder of GLG) is the outstanding amount of US$13,843 thousand owed by GLG for the purchase consideration payable for the acquisition of Maxim entities in December 2016 and additional loan from Ghim Li Group to GLG of US$7,000 thousand as at 30 June 2019. Refer to Note 32 for further details of this loan.

(iii) Refer to Note 32 for further details of this loan

63

GLG Corp Ltd Notes to the financial report

20. Borrowings

. Borrowings
Secured– at amortised cost Current Trust receipts (Gross) (i) Bills payable (Gross) Finance lease liabilities Bank loan Term loan Total Non-current Finance lease liabilities Term loan Disclosed in the financial statements as: Current borrowings Non-current borrowings	Consolidated
	2019 US$’000 2018 US$’000
	49,652 50,802 6,575 38 15,369 39 4,100 1,100 3,607 4,412
	63,972 71,722 117 151 6,491 8,403
	6,608 8,554
	63,972 71,722 6,608 8,554
	70,580 80,276

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: GLG uses bank facilities to support the working capital requirement of its operations. Presently, the bank facilities provided to GLG are uncommitted short term trade financing facilities which are renewable annually by the banks and long term financing facilities.

At 30 June 2019 GLG Corp Ltd had short term financing facilities available of US$133,294 thousand, long-term financing facilities available of US$18,967 thousand and foreign exchange available of US$12,556 thousand. (Short term: US$59,046 thousand was used and US$74,248 thousand was unused. Long-term: US$10,098 thousand was used and US$8,869 thousand was unused. Foreign exchange of US$12,556 thousand was unused). Compared with US$127,652 thousand of short term financing facilities, long-term financing facilities of US$23,538 thousand and forward contract available of US$17,855 thousand at 30 June 2018 (Short term: US$81,068 thousand was used and US$46,584 thousand was unused. Long-term: US$12,815 thousand was used and US$10,723 thousand was unused. Foreign exchange of US$17,855 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.

64

GLG Corp Ltd Notes to the financial report

20. Borrowings (cont’d)

Terms & Conditions of Borrowing Balances:

---

• 1) Trust Receipts are denominated in USD, bear weighted average effective interest rate of 3.84% (2018: 2.66%) per annum for a tenure of 4 months and are secured by corporate guarantee from major shareholder, Ghim Li Group. Trust receipts are a discount form of supplier credit. In commercial terms, they are accounts payable.

• 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 majority shareholder, 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 4.83% per annum (2018: 4.02% 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 major shareholder, Ghim Li Group with weighted average effective interest rate of 3.84% (2018: 2.66%) per annum.

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

	2019	2018
Bank loans	4.24% p.a.	3.94% p.a.
Term loan	4.83%	4.02%
Trust receipts / Bill payable	3.84%	2.66%
Finance lease liabilities	5.55% p.a.	5.31% p.a.

21. Issued capital

74,100,000 (2018: 74,100,000) fully paid ordinary shares	Consolidated
	2019 US$’000 2018 US$’000
	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 GLG in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and GLG does not have a limited amount of authorised capital.

Fully paid ordinary shares Balance at beginning of financial year Balance at end of financial year	Consolidated	Consolidated
	No. ’000 2019 US$’000	No. ’000 2018 US$’000
	74,100 10,322	74,100 10,322
	74,100 10,322	74,100 10,322

65

GLG Corp Ltd Notes to the financial report

22. Retained earnings

Balance at beginning of financial year Net profit attributable to members of the parent entity Balance at end of financial year	Consolidated
	2019 US$’000 2018 US$’000
	50,380 47,985 455 2,395
	50,835 50,380

23. Earnings per share

Basic earnings per share: Total basic earnings per share Diluted earnings per share: Total diluted earnings per share	Consolidated
	2019 Cents per share 2018 Cents per share
	0.61 3.23
	0.61 3.23

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:

Net profit Earnings used in the calculation of basic EPS Weighted average number of ordinary shares for the purposes of basic earnings per share	Consolidated
	2019 US$’000 2018 US$’000
	455 2,395
	455 2,395
	Consolidated
	2019 No.’000 2018 No.’000
	74,100 74,100

Diluted earnings per share

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

Net profit Earnings used in the calculation of diluted EPS Weighted average number of ordinary shares used in the calculation of basic EPS	Consolidated
	2019 US$’000 2018 US$’000
	455 2,395
	455 2,395
	Consolidated
	2019 No.’000 2018 No.’000
	74,100 74,100

66

GLG Corp Ltd Notes to the financial report

23. Earnings per share (cont’d)

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:

Property, plant and equipment Construction of factory	Consolidated
	2019 US$’000 2018 US$’000
	52 268 - -
	52 268

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

GLG leases property under operating leases expiring from one to 44 years. Leases generally provide GLG 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:

t date but not recognised as liabilities, are as follows:
Not later than one year Longer than 1 year and not longer than 5 years Between one and five years	Consolidated
	2019 US$’000 2018 US$’000
	2,529 2,462 5,985 7,932 870 927
	9,384 11,321

67

GLG Corp Ltd Notes to the financial report

25. Contingent liabilities

Continent liabilities
g Guarantees arising from Letters of Credit in force (i) Total	Consolidated
	2019 US$’000 2018 US$’000
	4,313 9,382
	4,313 9,382

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

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.

GLG 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

GLG 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 (2018: nil)

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GLG Corp Ltd Notes to the financial report

26. Leases (con’td)

No later than 1 year Later than 1 year and not later than 5 years More than 5 years Minimum future lease payments Less future finance charges Present value of minimum lease payments* Included in the financial statements as (note 20) Current borrowings Non-current borrowings	Minimum future lease payments Consolidated 2019 US$’000 2018 US$’000	Present value of minimum future lease payments Consolidated 2019 US$’000 2018 US$’000
	44 44 114 138 18 40	38 39 99 113 18 39
	176 222 (21) (32)	155 190 - -
	155 190	155 190
		38 39 117 151
		155 190

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

27. Subsidiaries

Name of subsidiary	Country of incorporation	Ownership interest	Ownership interest
		2019 %	2018 %
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	Singapore	100	100
AES (USA) Inc	USA	100	100
G&G Fashion (Vietnam) Co., Ltd.	Vietnam	100	100
Maxim Textile Technology Sdn Bhd	Malaysia	100	100
Maxim Textile Technology Pte Ltd	Singapore	100	100
Ghim Li Fashion (M) Sdn Bhd	Malaysia	100	100
GG Fashion(Cambodia)Co.,Ltd	Cambodia	100	100

69

GLG Corp Ltd Notes to the financial report

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:

Cash and cash equivalents	Consolidated
	2019 US$’000 2018 US$’000
	5,304 8,183
	5,304 8,183

(b) Financing facilities

Financing facilities Secured bank loan facilities with various maturity dates and which may be extended by mutual agreement: • amount used • amount unused	Consolidated
	2019 US$’000 2018 US$’000
	69,144 93,883 95,673 75,162
	164,817 169,045

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GLG Corp Ltd Notes to the financial report

28. Notes to the cash flow statement (cont’d)

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

Profit for the year Depreciation and amortisation of non-current assets Amortisation of intangible assets Written off on inventories and non-current assets Fair value adjustment on investment property (Note 17) Gain on sales of non-current assets Loss on written off non-current assets Changes in net assets and liabilities, net of effects from acquisition and disposal of businesses: (Increase)/decrease in assets: Inventories Trade and other receivables Other assets Increase/(decrease) in liabilities: Trade and other payables Current tax Deferred tax Net cash provided by operating activities	Consolidated
	2019 US$’000 2018 US$’000
	455 2,395 3,282 2,998 26 20 62 - - (378) - (33) 18 73 (1,275) (6,965) 9,371 (6,302) 551 455 1,047 13,964 (364) 97 245 485
	13,418 6,809

(d) Changes in liabilities arising from financing activities

Proceeds from borrowings Amounts advanced to other parties Repayment related entity borrowings Due to director Total	1 July 2018 Cashflows 30 June 2019 80,276 (9,696) 70,580 (55,921) (6,833) (62,754) 13,462 7,381 20,843 - 3,658 3,658
	36,492 (5,490) 32,327

71

GLG Corp Ltd Notes to the financial report

29. Reserves

Reserves
(a) Revaluation reserves Beginning of financial year Fair value adjustment from property, plant and equipment to investment properties Revaluation gain arising from property, plant and equipment End of financial year	Consolidated
	2019 US$’000 2018 US$’000 4,485 3,599 - 52 431 834
	4,916 4,485

The revaluation reserve represents the increase 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.

30. Financial instruments

(a) Capital risk management

GLG manages its capital to ensure that entities in GLG will be able to continue as a going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. GLG’s overall strategy remains unchanged from 2018.

The capital structure of GLG 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 GLG’s assets, as well as to make the routine outflows of tax and repayment of maturing debt. GLG’s policy is to borrow centrally, using a variety of capital market issues and borrowing facilities, to meet anticipated funding requirements.

Gearing ratio

An integral function of GLG’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:

Debt (i) Cash and cash equivalents Net Debt Equity (ii) Net debt to equity ratio	Consolidated
	2019 US$’000 2018 US$’000
	70,580 80,276 (5,304) (8,183)
	65,276 72,093 51,261 50,375 127% 143%

(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

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GLG Corp Ltd Notes to the financial report

30. Financial Instruments (cont’d) (b) Categories of financial instruments

Financial assets Amortised cost Financial liabilities Amortised cost	Consolidated
	2019 US$’000 2018 US$’000
	99,436 104,853 119,915 117,525

(c) Financial risk management objectives

GLG has not executed any derivatives in the current year, hence the policy listed below are for background information purpose only. If and when such derivatives are used in the future, the objectives is to use them in accordance with a board approved policy. The policy requires GLG co-ordinates access to domestic and international financial markets, and manages the financial risks relating to the operations of the consolidated entity.

GLG 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.

GLG’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. GLG 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.

(d) Foreign currency risk management

GLG undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise

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

Singapore dollars Hong Kong dollars Vietnamese Dong Malaysia Ringgit Australia Dollar	Liabilities 2019 US$’000 2018 US$’000 251 181 6 - 117 105 807 993 18 20 1,198 1,299	Assets
		2019 US$’000 2018 US$’000
		28 4 3 - 5 11 192 598 9 16
		237 629

73

GLG Corp Ltd Notes to the financial report

30. Financial Instruments (cont’d)

(e) Foreign currency sensitivity analysis

GLG is mainly exposed to movements in the value of Singapore dollars and Malaysia ringgits compared to the US dollar.

The following table details GLG’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 GLG 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.

Malaysia Ringgit Impact Consolidated 2019 2018 US$’000 US$’000 (615) (396)	Vietnamese Dong Impact Consolidated 2019 2018 US$’000 US$’000 (112) (95)	Other Foreign Currency Impact
		Consolidated
		2019 2018 US$’000 US$’000
		(12) 1

(f) Interest rate risk management

GLG is exposed to interest rate risk as entities in GLG borrow funds at both fixed and floating interest rates. The risk is managed by GLG by maintaining an appropriate mix between fixed and floating rate borrowings. As no hedging activities undertaken in the current year and if such activities are to be considered in the future, they will be evaluated 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.

GLG’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, GLG’s:

Net profit would increase by US$102 thousand and decrease by US$93 thousand (2018: increase by US$106 thousand and decrease by US$96 thousand). This is mainly attributable to GLG’s exposure to interest rates on its variable rate borrowings

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GLG Corp Ltd Notes to the financial report

30. Financial instruments (cont’d)

(g) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to GLG. The Company deals with creditworthy counterparties by reviewing the exposure and credit-ratings of its counterparties to mitigate the risk of financial loss from defaults. Credit exposure is continuously monitored by the payment behaviors of counterparties in relation to the financial strength.

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 GLG 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. There were no derivatives in the current year.

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.

(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 GLG has at its disposal to further reduce liquidity risk.

As business competition dictates, GLG has by choice given extended payment terms to certain core customers with high-volume impact during the current year. Although such practice increases the liquidity risk and cash flow requirement, it is also considered to be an essential element of market penetration and customer retention. The resulting cash flow impact is evaluated with the support of undrawn banking facilities that GLG has arranged to support such business growth.

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GLG Corp Ltd Notes to the financial report

30. Financial instruments (cont’d)

(h) Liquidity risk management (cont’d)

Liquidity and interest risk tables

The following table details that GLG’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 GLG can be required to receive/pay. The table includes both interest and principal cash flows.

Consolidated

	Weighted average effective interest rate	Within 1 year	2-5 year	5+ years	Total
2019 Financial Assets Non-interest bearing - 92,565 5,000 1,871 99,436 Financial Liabilities Non-interest bearing - 49,235 - - 49,235 Trust receipts/ Bills payables 3.84 56,944 - - 56,944 Loan from Ghim Li Group 4.19 7,293 - - 7,293 Loan from Estina Ang Suan Hong 2.53 3,51 - - 3,751 Term loan 4.83 3,708 6,925 498 11,131 Bank loan 4.24 4,187 - - 4,187 Finance lease liability 5.55 44 114 18 176 2018 Financial Assets Non-interest bearing - 97,982 5,000 1,871 104,853 Financial Liabilities Non-interest bearing - 37,249 - - 37,249 Trust receipts/ Bills payable 2.66 66,709 - - 66,709 Term loan 4.02 4,639 8,326 1,343 14,308 Bank loan 3.94 1,107 - - 1,107 Finance lease liability 5.31 45 138 39 222

Each of the above interest bearing financial liabilities had variable interest rates.

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GLG Corp Ltd Notes to the financial report

30. Financial instruments (cont’d)

(i) 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 GLG is set out below:

Short-term employee benefits Post-employment benefits		Consolidated
		2019 US$ 2018 US$ 1,190,432 1,239,561 31,880 34,858
		1,222,312 1,274,419

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.

Post-employment benefits

These amounts are the current-year’s estimated costs of providing for GLG’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 GLG 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 (resigned 12 November 2018)

• Grant Hummel as Independent Director (appointed 1 December 2018)

• Felicia Gan Peiling as Director and Deputy Chief Executive Officer

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

• Shawn Fung as Chief Financial Officer and Head of IT & Human Resources

• Susan Yong as Chief Merchandising Officer

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.

77

GLG Corp Ltd Notes to the financial report

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.

(c) Transactions with other related parties

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

Rental Loan (i), (ii) Utilities Financial Guarantee fee	Transaction with Ghim Li Group Pte Ltd (majority shareholder)	Transaction with Director
	2019 2018 US$’000 US$’000 1,456 1,329 7,000 - 57 46 53 54 8,566 1,429	2019 2018 US$’000 US$’000 - - 3,658 - - - - -
		3,658 -

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.

(i) Amount payable to Ghim Li Group (majority shareholder) of US$7,000 thousand is unsecured, at market interest rate and repayable on demand. The weighted average interest rate at 4.19%

(ii) Amount payable to key management personnel of US$3,658 thousand is unsecured, at market interest rates and repayable on demand. The weighted average interest rate at 2.53%.

(d) Majority shareholder

The majority shareholder of GLG Corp Ltd is Ghim Li Group Pte Ltd. Ghim Li Group Pte Ltd is incorporated in Singapore.

The majority shareholder 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$4,579 thousand.

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GLG Corp Ltd Notes to the financial report

33. Remuneration of auditors

emuneration of auditors
Auditor of the parent entity Audit and review of the financial report Tax services Related Practice of the parent entity auditor Audit or review of the subsidiaries Tax services	Consolidated
	2019 US$ 2018 US$
	60,312 2,802 56,541 3,082
	63,114 59,623
	112,700 97,699 8,000 9,405
	120,700 107,104

The auditor of GLG Corp Ltd is BDO East Coast Partnership.

The related practices are BDO Singapore, BDO Vietnam and BDO Cambodia. Cheng & Co was also used in both 2019 and 2018. (FY2019: Audit US$17,421 and Tax Service US$3,750. FY2018: Audit US$17,864 and Tax Service US$8,844).

34. Parent entity disclosures

Financial position

Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Equity Issued capital Accumulated Losses Total equity	2019 US$’000 2018 US$’000
	47 80 30,000 30,000
	30,047 30,080
	3,553 3,471 241 212
	3,794 3,683
	53,552 53,552 (27,299) (27,155)
	26,253 26,397

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GLG Corp Ltd Additional Australia Securities Exchange Information

34. Parent entity disclosures (cont’d)

Financial performance

Loss for the year Other comprehensive income Total comprehensive income	2019 US$’000 2018 US$’000
	(144) (181) - - (144) (181)

Contingent liabilities

As at 30 June 2019, the parent entity had no contingent liabilities (2018: nil).

Significant accounting policies

The accounting policies of the parent entity are consistent with those of GLG, 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.

35. Subsequent events

There has not been any matter or circumstance occurring subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of the consolidated entity in future financial year.

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GLG Corp Ltd Additional Australia Securities Exchange Information

Additional Australian Securities Exchange information as at 8 August 2019

Holding distribution

Range	Securities	%	No. of holders	%
100,001 andOver	72,141,169	97.36	21	5.48
10,001 to 100,000	1,100,309	1.49	30	7.83
5,001 to 10,000	188,068	0.25	20	5.22
1,001 to5,000	667,800	0.90	304	79.37
1 to 1,000	2,654	0.00	8	2.09
Total	74,100,000	100.00	383	100.00
Unmarketable Parcels	575,954	0.78	293	0.78

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.

Substantial shareholders

The names of the substantial shareholders listed in GLG Corp Ltd register as at 8 August 2019 were:

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

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GLG Corp Ltd Additional Australia Securities Exchange Information

Twenty largest holders of quoted equity securities

Top 20 holders – 8 August 2019

Rank	Name	Shares	%
1	Ghim LiGroupPte Ltd	50,116,000	67.63
2	Mr Yin Min Yong	3,504,751	4.73
3	HSBC CustodyNominees(Australia)Limited	2,820,000	3.81
4	Mr TiongAng	2,222,000	3.00
5	Ms Peiling Gan	2,222,000	3.00
6	Ms Bee Phong Gan	2,183,297	2.95
7	Mr Yoke Min Pang	2,000,000	2.70
8	Mr Ah Yian Au	1,322,957	1.79
9	BNP Paribas Noms PtyLtd	1,133,600	1.53
10	Ms MengHuiSurinaGan	1,000,000	1.35
11	GowingBros Limited	830,903	1.12
12	MrGerald Francis Pauley &Mr MichaelJames Pauley	749,763	1.01
13	Dixson Trust PtyLimited	330,000	0.45
14	Markess Trustee Limited	250,000	0.34
15	Kam HingPiece Works Ltd	206,010	0.28
16	AngLeongAik	200,000	0.27
17	Chean Moy Seng	150,000	0.20
18	Mr RobertJohnCharlesCatto	155,968	0.21
19	Chean Moy Seng	150,000	0.20
20	Eu Mun Leong	116,000	0.16
	Top 20	72,031,168	97.21
	Total	74,100,000	100.00

Company secretary

Mr Alistair Chong

Registered office L40 100 Miller St North Sydney NSW 2060 Australia

Principal administration office 21 Jalan Mesin Singapore 368819

Share registry

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

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