GLG CORP LTD

ACN 116 632 958

Results for Announcement to the Market Appendix 4D – Half Year Report Given to ASX under Listing Rule 4, 2A

Current Reporting Period - Half Year Ended 31[st] December 2022 Previous Reporting Period - Half Year Ended 31[st] December 2021

Highlight of Results
Appendix 4D Financial Statements for the Half Year ended 31 December 2022

1. Results for announcement to market

Summary financial information for the company for the six months ended 31[st] December 2022. Full financial details are attached to this announcement.

		Consolidated
Summary Information	31 –DEC-22 USD$’000	31 –DEC-21 USD$’000	Inc/(Dec) USD$’000	Inc/(Dec) %
Revenue from Ordinary Activities	69,493	104,704	35,211	(33.6)
(Loss)/Profit after Tax from Ordinary Activities	(138)	3,368	(3,506)	(104.1)
Net (Loss)/Profit after Tax Attributable to Members	(138)	3,368	(3,506)	(104.1)
Basic Earnings – US Cents Per Share	(0.19)	4.55	(4.74)	(104.2)
Diluted Earnings – US Cents Per Share	(0.19)	4.55	(4.74)	(104.2)
Net Tangible Assets – US Cents Per Share	63.66	55.58	8.08	14.5

Dividends

In respect of the financial period ended 31 December 2022, the Directors do not recommend the payment of an interim dividend.

In respect of the financial year ended 30 June 2022, dividend was declared and paid as per table below.

below.
Dividends (Distributions)	As per security – US Cents	Unfranked amount per security-US cents	Record date	Payment date
Interim ordinary unfranked dividend	-	-	-	-
Final ordinary unfranked Dividend	1.50	1.50	29 December 2022	16 January 2023
Total unfranked dividend	1.50	1.50

The financial effect of the final ordinary unfranked dividends was not bought to account in the financial statements for the year ended 30 June 2022 and subsequently recognised in financial period ended 31 December 2022 (“1HY2023”).

Summary commentary on results

Directors Comments:

GLG’s revenue decreased by 33.6% from US$104.7m to US$69.5m during the financial period ended 31 December 2022 (“1HFY2023”). This was mainly attributable to the loss of a major customer and from the impact of COVID-19 environment resulted to delays in delivery on the second half of financial year 2022, thus, buyers had high inventory levels during the half year period and resulted in lower sales orders in the period. In addition, as a result of the delays in delivery, the core program of the two key customers was significantly dropped as those garments could not be sold at the right season. The segment report in Note 2 for Canada and USA shows a consistent movement of the revenue as explained above.

The gross profit margin slightly improved from 21.4% to 21.5% in 1HFY2023 due to better product mix.

Other income increased by US$0.9m from US$0.2m to US$1.1m in 1HFY2023 as compared to the previous corresponding financial period due to gain from renegotiated terms of lease from 5 years to 2 years from ultimate parent entity, Ghim Li Pte Ltd.

Selling and distribution costs decreased by 52.2% from US$11.3m to US$5.4m as compared to the previous corresponding financial period ended 31 December 2021 (“1HFY2022”). This was mainly due to lower duty and freight cost incurred on Land-Duty Paid customers’ orders and decline in global freight rates over the period as a flow on improvement from COVID recovery and stabilisation of global supply chains.

Finance costs increased by 57.1% from US$0.7m to US$1.1m in 1HFY2023 as compared to the previous corresponding financial period. The increase was mainly due to increase in the interest rates on loans. Interest rate increased due to the rate hikes by US Federal Reserve Board.

Other expenses increased by US$3.3m from US$0.6m to US$3.9m in the 1HFY2023 as compared to the previous corresponding financial period. The increase was mainly due to the write off of deposits with an outsourced manufacturer of US$2.0m in relation to the decrease in revenue and thereby reduction of allocated production to the third party manufacturer resulting in the closure of the third party manufacturer and US$1.1m impairment of a claim made against the previous owner of the Group’s Cambodian subsidiary’s assets and the buyer of raw materials for their outstanding tax obligations. During the period ended 31 December 2022, a tax audit was conducted in respect of the Cambodian subsidiary for the period from 2017 to 2019 which resulted in a final notice of assessment of US$0.2m which was paid and disclosed as tax expense. In addition, an amount of US$1.1m was paid in order to finalise and settle the tax audit for tax exposures prior to the Group’s acquisition of the Cambodian subsidiary’s assets. In accordance with the warranty clause under the Sale and Purchase Agreement and Sales Agreement, the amounts incurred were claimable from the seller of the Sales and Purchase Agreement and the buyer of the Sales Agreement. Whilst the amounts are considered able to be claimed from the seller and buyer, they have been impaired in the half year ended 31 December 2022 due to the time that has lapsed and the uncertainty of recovery.

GLG’s net loss after tax for the half year ended 31 December 2022 amounted to US$0.1m, compared with a profit of US$3.4m in the corresponding financial period. Overall, the decrease in net profit after tax was mainly due to the increased in other expenses and lower revenue generated.

Directors Comments: (cont’d)

As deliveries were significantly impacted by the logistic disruptions, the results in 1HY2023 recorded a much lower seasonal sale. For the second half of FY2023 the visibility of the trading conditions has stabilised as the logistics issues are back to normal and barring any other unforeseen circumstance the indication for 2HY2023 result is expected to reflect some improvement.

Balance Sheet position

Trade and other receivables decreased by 32.5% from US39.7m as at 30 June 2022 to US$26.8m as at 31 December 2022. The decrease was primarily due to lower revenue generated in the last 2 months of the financial period as compared to the same period of the previous year.

Inventory decreased by 38.1% from US$37.8m as at 30 June 2022 to US$23.4m as at 31 December 2022. This was mainly due to decline in customer’s order which resulted in reduction of raw materials and work-in-progress in the factories.

Other financial assets decreased by 37.3% from US$8.9m as at 30 June 2022 to US$5.6m as at 31 December 2022 mainly attributable to writing off of deposits to a third party manufacturer amounted to US$2.0 in relation to the decreased in revenue and thereby reduction of allocated production to the third party manufacturer resulting to the closure of the third party manufacturer and refund of a rental deposits amounting to US$1.3m as a result of renegotiated terms of lease from 5 years to 2 years.

The right-of-use assets decreased by 32.4% from US$11.1m as at 30 June 2022 to US$7.5m as at 31 December 2022 mainly due to a reassessment and resulting to reduction of lease period from ultimate parent entity from 5 years to 2 years.

The intangible assets decreased by 8.8% from US$3.4m as at 30 June 2022 to US$3.1m as at 31 December 2022 mainly due to the amortisation of intangible assets.

Trade and other payables decreased by 33.6% from US$22.6m as at 30 June 2022 to US$15.0m as at 31 December 2022, primarily resulting from decrease in advance purchases of raw materials such as yarn and fabric.

Current and non-current borrowings decreased by 46.4% from US$50.0m as at 30 June 2022 to US$26.8m as at 31 December 2022, the decrease was mainly due to a decrease in trust receipts.

Cash Flow

In 1HFY2023, net cash flow from operating activities increased from net cash used of $8.5m in respect of the 31 December 2021 period to a net cash flow provided of $23.9m in respect of the 31 December 2022 period. This movement was mainly due to lesser payment to suppliers as a result of lower purchases of inventory and lesser advance purchases of yarn in 2022 financial to secure the yarn product and secure the pricing during the COVID compare to corresponding period of 1HFY2022 with high revenue generated that due to pent up customer demand and USA stimulus.

Directors Comments: (cont’d)

Cash Flow (cont’d)

Net cash flows used in investing activities amounted to US$0.4m as compared to previous corresponding financial period of US$0.7m, mainly due to investment in new machineries in fabric factory to increase the productivity and new order requirements.

Net cash used in financing activities was increased from US$0.7m net proceeds in 1HFY2022 to net payment of US$25.3m in 1HFY2023. This increase was mainly due to the net repayment of trust receipts and bank loans amounted to US$23.2m, repayment of lease liability amounted to US$1.1m and partial settlement of borrowing from a related party amounted US$1.0m.

As a result of the above, there was a net decrease of US$1.8m in cash and cash equivalents from 1HFY2022, from a net cash surplus of US$13.8m as at 31 December 2021 to a net cash surplus of US$12.1m as at 31 December 2022.

We believe the balance cash position and forecast cash flow from continuing operations of GLG remains adequate to meet our working capital, capital expenditures, debt servicing and other funding requirements.

GLG Corp Ltd

ACN 116 632 958 Financial report for the half-year ended 31 December 2022

GLG Corp Limited

Financial report for the halfyear ended 31 December 2022

022
	Page
Directors’ report	3
Auditor’s independence declaration	7
Independent review report	8
Directors’ declaration	10
Consolidated statement of profit or loss and other	11
comprehensive income
Consolidated statement of financial position	12
Consolidated statement of changes in equity	13
Consolidated statement of cash flows	14
Notes to the consolidated financial statements	15

GLG Corp Limited Directors’ Report

Directors’ report

The Directors of GLG Corp Ltd (“GLG” or “the Company”) submit herewith the financial report of GLG Corp Ltd and its subsidiaries for the half-year ended 31 December 2022. In order to comply with the provisions of the Corporations Act 2001 , the Directors report as follows:

The names of the directors of the Company during or since the end of the half-year are:

Estina Ang Suan Hong Executive Chairman and Chief Executive Officer Peter Tan Lead Independent Director Grant Hummel Independent Director Por Khay Ti Independent Director (appointed 25 October 2022) Felicia Gan Peiling Chief Executive Officer

Review of operations

GLG’s revenue decreased by 33.6% from US$104.7m to US$69.5m during the financial period ended 31 December 2022 (“1HFY2023”). This was mainly attributable to the impact of COVID-19 environment resulted to delays in delivery on the second half of financial year 2022, thus, buyers had high inventory levels during the half year period and resulted in lower sales orders in the period. In addition, as a result of the delays in delivery, the core program of the two key customers was significantly dropped as those garments could not be sold at the right season. The segment report in Note 2 for Canada and USA shows a consistent movement of the revenue as explained above.

The gross profit margin slightly improved from 21.4% to 21.5% in 1HFY2023 due to better product mix.

GLG Corp Limited Directors’ Report

Directors’ report (cont’d)

Review of operations (cont’d)

Other expenses increased by US$3.3m from US$0.6m to US$3.9m in the 1HFY2023 as compared to the previous corresponding financial period. The increase was mainly due to the write off of deposits with an outsourced manufacturer of US$2.0m in relation to the decrease in revenue and thereby reduction of allocated production to the third party manufacturer resulting in the closure of the third party manufacturer and US$1.1m impairment of a claim made against the previous owner of the Group’s Cambodian subsidiary’s assets and the buyer of raw materials for their outstanding tax obligations. During the period ended 31 December 2022, a tax audit was conducted in respect of the Cambodian subsidiary for the period from 2017 to 2019 which resulted in a final notice of assessment of US$0.2m which was paid and disclosed as tax expenses. In addition, an amount of US$1.1m was paid in order to finalise and settle the tax audit for tax exposures for those years prior to the Group’s acquisition of the Cambodian subsidiary’s assets. In accordance with the warranty clause under the Sale and Purchase Agreement and the Sales Agreement, the amounts incurred during those periods were claimable from the seller of the Sales and Purchase Agreement and the buyer of the Sales Agreement. Whilst the amounts are considered able to be claimed from the seller and buyer, they have been impaired in the half year ended 31 December 2022 due to the time that has lapsed and the uncertainty of recovery.

Balance Sheet Position

The intangible assets decreased by 8.8% from US$3.4m as at 30 June 2022 to US$3.1m as at 31 December 2022 mainly due to the amortisation of intangible assets.

Current and non-current borrowings decreased by 46.4% from US$50.0m as at 30 June 2022 to US$26.8m as at 31 December 2022, the decrease was mainly due to a decrease in trust receipts.

GLG Corp Limited Directors’ Report

Directors’ report (cont’d)

Cash Flow

Dividends

In respect of the financial period ended 31 December 2022, the Directors do not recommend the payment of an interim dividend.

In respect of the financial year ended 30 June 2022, dividend was declared and paid as per table below.

Dividends (Distributions)	As per security – US Cents	Unfranked amount per security-US cents	Record date	Payment date
Interim ordinary unfranked dividend	-	-	-	-
Final ordinary unfranked Dividend	1.50	1.50	29 December 2022	16 January 2023
Total unfranked dividend	1.50	1.50

GLG Corp Limited Directors’ Report

Auditor’s independence declaration

The auditor’s independence declaration is included on page 7 of the half-year report.

Significant changes in the state of affairs

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

Rounding off of amounts

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, unless otherwise indicated. Amounts have been rounded off in the directors' report and financial statements in accordance with that Legislative Instrument.

Signed in accordance with a resolution of directors made pursuant to s.306 (3) of the Companies Act 2001 .

On behalf of the Directors

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

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DECLARATION OF INDEPENDENCE BY STEPHEN MAY TO THE DIRECTORS OF GLG CORP LIMITED

As lead auditor for the review of GLG Corp Ltd for the half-year ended 31 December 2022, I declare that, to the best of my knowledge and belief, there have been:

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

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

Stephen May Director

BDO Audit Pty Ltd

Sydney, 28 February 2023

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

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

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INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of GLG Corp Ltd

Report on the Half-Year Financial Report

Conclusion

We have reviewed the half-year financial report of GLG Corp Ltd (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the accompanying half-year financial report of the Group does not comply with the Corporations Act 2001 including:

(i) Giving a true and fair view of the Group’s financial position as at 31 December 2022 and of its financial performance for the half-year ended on that date; and
(ii) Complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Basis for conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity . Our responsibilities are further described in the Auditor’s Responsibilities for the Review of the Financial Report section of our report. We are independent of the Company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to the audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

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

Responsibility of the directors for the financial report

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

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Auditor’s responsibility for the review of the financial report

Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 December 2022 and its financial performance for the half-year ended on that date and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

BDO Audit Pty Ltd

Stephen May Director

Sydney, 28 February 2023

GLG Corp Limited Directors’ Declaration

Directors’ declaration

In the directors' opinion:

the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 31 December 2022 and of its performance for the financial half-year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of directors made pursuant to section 303(5)(a) of the Corporations Act 2001.

On behalf of the Directors

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

Consolidated statement of profit or loss and other comprehensive income for the half-year ended 31 December 2022

Note Continuing Operations Revenue 2 Cost of sales Gross profit Other income Selling and distribution expenses Administration expenses Finance costs Other expenses 3 Profit before income tax expense Income tax expense (Loss)/Profit for the period Other comprehensive income: Total comprehensive income for the period Earnings per share: From continuing operations: Basic (cents per share) Diluted (cents per share)	Consolidated
	Half-year ended
	31 Dec 2022 US$’000 31 Dec 2021 US$’000
	69,493 104,704 (54,562) (82,336)
	14,931 22,368 1,064 232 (5,382) (11,321) (5,267) (5,750) (1,147) (727) (3,947) (556)
	252 4,246 (390) (878)
	(138) 3,368
	- -
	(138) 3,368
	(0.19) 4.55 (0.19) 4.55

Notes to the financial statements are included on pages 15 to 25

GLG Corp Limited Consolidated statement of financial position

Consolidated statement of financial position

as at 31 December 2022

Note Current assets Cash and cash equivalents Trade and other receivables 4 Inventory Other assets Total current assets Non-current assets Other financial assets Trade and other receivables 4 Property, plant and equipment 8 Right-of-use assets Intangible assets 9 Total non-current assets Total assets Current liabilities Trade and other payables 10 Borrowings 5 Lease liabilities Current tax liabilities Total current liabilities Non-current liabilities Borrowings 5 Lease liabilities Deferred tax liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital Revaluation reserves Merger reserves Retained earnings Total equity	Consolidated
	31 Dec 2022 US$’000 30 Jun 2022 US$’000
	12,100 13,893 26,796 39,677 23,370 37,825 1,403 959
	63,669 92,354
	5,560 8,871 2,800 2,000 28,151 29,396 7,498 11,062 3,128 3,361
	47,137 54,690
	110,806 147,044
	15,047 22,642 24,099 46,520 2,163 2,128 316 481
	41,625 71,771
	2,694 3,465 5,802 10,001 2,884 2,756
	11,380 16,222
	53,005 87,993
	57,801 59,051
	10,322 10,322 2,947 2,947 (14,812) (14,812) 59,344 60,594
	57,801 59,051

Notes to the financial statements are included on pages 15 to 25.

GLG Corp Limited Consolidated statement of changes in equity

Consolidated statement of changes in equity for the halfyear ended 31 December 2022

Consolidated Balance as at 1 July 2021 Profit after income tax expense Dividend declared Other comprehensive income for the half-year, net of tax Total comprehensive income for the half- year Balance as at 31 December 2021 Balance as at 1 July 2022 Loss after income tax expense Dividend declared Other comprehensive income for the half-year, net of tax Total comprehensive income for the half- year Balance as at 31 December 2022	Issued Capital Asset Revaluation Reserve Merger Reserve US$’000 US$’000 US$’000	Retained Profits Total US$’000 US$’000
	10,322 3,745 (14,812) - - - - - - - - -	56,151 55,406 3,368 3,368 (741) (741) - -
	- - -	2,627 2,627
	10,322 3,745 (14,812)	58,778 58,033
	10,322 2,947 (14,812) - - - - - - - - -	60,594 59,051 (138) (138) (1,112) (1,112) - -
	- - -	(1,250) (1,250)
	10,322 2,947 (14,812)	59,344 57,801

Notes to the financial statements are included on pages 15 to 25.

GLG Corp Limited Consolidated statement of cash flows

Consolidated statement of cash flows for the half-year ended 31 December 2022

Cash flows from operating activities Receipts from customers Rental deposit refunded Payments to suppliers and employees Proceeds from/ (Payment to) outsourced manufacturing suppliers Interest and other costs of finance paid Interest paid to lease liabilities Interest received Income tax paid Net cash provided by/ (used in) operating activities Cash flows from investing activities Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Net cash used in investing activities Cash flows from financing activities Dividend paid (Repayments to)/ Proceeds from borrowings Repayments of lease liability (Repayment to) / Proceeds from Ghim Li Group Net cash (used in)/ from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the financial period Cash and cash equivalents at the end of the financial period	Consolidated
	Half-year ended
	31 Dec 2022 US$’000 31 Dec 2021 US$’000
	80,325 95,230 1,312 - (57,633) (100,790) 1,595 (1,550) (898) (293) (249) (271) 7 7 (567) (812)
	23,892 (8,479)
	(428) (756) 19 8
	(409) (748)
	- (730) (23,191) 1,330 (1,054) (1,076) (1,031) 1,193
	(25,276) 717
	(1,793) (8,510) 13,893 22,280
	12,100 13,770

Notes to the financial statements are included on pages 15 to 25.

GLG Corp Limited Notes to the consolidated financial statements

Notes to the consolidated financial statements

1. Significant accounting policies

Statement of compliance

The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting . Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting . The half-year report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report.

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 accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the GLG’s 2022 annual financial report for the financial year ended 30 June 2022, except for the impact of the new and revised Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

Comparative figures

Comparative figures have been adjusted to conform to changes in presentation for the current financial year.

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.

GLG Corp Limited Notes to the consolidated financial statements

1. Significant accounting policies (cont’d)

Fair value measurement (cont’d)

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 8 for further details

There were no transfers between levels during the period.

Valuations of land and buildings and investment properties

Freehold and leasehold land and building, along with investment properties have been valued based on similar assets, location and market conditions at fair value on an annual basis.

New accounting standards and interpretations

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half-year.

Any new, revised or amending accounting standards or interpretations that are not yet mandatory have not been early adopted.

2. 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.

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 manufacturing the manufacture and wholesaling of fabric Garment 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.

GLG Corp Limited Notes to the consolidated financial statements

2. Segment information (cont’d)

Operating segment information

	Fabric		Intersegment
	manufacturing	Garment	eliminations	Total
Consolidated – 31 December		US$'000
2022	US$'000		US$'000	US$'000
Revenue Sales to external customers Intersegment sales Total revenue Interest received Depreciation and amortisation Bad and doubtful debts Impaired of claim Impairment of deposits from outsourced manufacturer EBIT Finance costs Loss before income tax expense Income tax expense Loss after income tax expense	295 16,709	69,198 - 69,198 1 (1,825) (30) (1,097) (2,000) 1,819	- (16,709)	69,493 -
	17,004		(16,709)	69,493
	6		-	7
	(1,279)		98	(3,006)
	-		6	(24)
	-		-	(1,097)
	-		-	(2,000)
	(420)		-	1,399
				(1,147)
				252
				(390)
				(138)

	Fabric	Garment	Corporates	Intersegment eliminations	Total
31 December
2022	US$'000	US$'000	US$'000	US$’000	US$’000
Assets	38,220	128,586	113,497	(169,497)	110,806
Liabilities	(16,472)	(73,673)	(23,302)	60,442	(53,005)

GLG Corp Limited Notes to the consolidated financial statements

2. Segment information (cont’d)

Operating segment information

	Fabric		Intersegment
	manufacturing	Garment	eliminations	Total
Consolidated – 31 December			US$'000
2021	US$'000	US$'000		US$'000
Revenue Sales to external customers Intersegment sales Total revenue Interest received Depreciation and amortisation EBIT Finance costs Profit before income tax expense Income tax expense Profit after income tax expense	183 36,702	104,521 -	- (36,702) (36,702) - 117 -	104,704 -
	36,885	104,521		104,704
	5	2		7
	(1,224)	(1,946)		(3,053)
	2,015	2,958		4,973
				(727)
				4,246
				(878)
				3,368

30 June 2022	Fabric US$'000	Garment US$'000	Corporates US$'000	Intersegment eliminations US$’000	Total US$’000
Assets	45,480	155,905	107,104	(161,445)	147,044
Liabilities	(22,929)	(99,765)	(17,672)	52,373	(87,993)

GLG Corp Limited Notes to the consolidated financial statements

2. Segment information (cont’d)

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

India Malaysia Cambodia Canada Europe Malaysia Others Singapore USA	Fabric
	31 December 2022 US$’000 31 December 2021 US$’000
	249 121 46 62
	295 183
	Garments
	31 December 2022 US$’000 31 December 2021 US$’000
	481 254 11,353 21,160 455 178 294 13 84 24 67 68 56,464 82,824
	69,198 104,521

Disaggregation of revenue

Revenue is disaggregated by the country in which the customer is located as this depicts how the nature, amount, and timing and uncertainty of our revenue and cash flows as affected by economic factors.

3. Other expenses

	31 December 2022	31 December 2021
	US$’000	US$’000

Bad and doubtful debts	24	-
Impairment of deposits from outsourced manufacturer	2,000	-
Loss on disposal of fixed assets	1	6
Impaired of claim(i)	1,097	-
General expenses	308	-
Other	517	550
	3,947	556

(i) During the period ended 31 December 2022, a tax audit was conducted in respect of the Cambodian subsidiary for the period from 2017 to 2019 which resulted in a final notice of assessment of US$0.2m which was paid and disclosed as tax expenses. In addition, an amount of US$1.1m was paid in order to finalise and settle the tax audit for tax exposures for those years prior to the Group’s acquisition of the Cambodian subsidiary’s assets. In accordance with the warranty clause under the Sale and Purchase Agreement and the Sales Agreement, the amounts incurred during those periods were claimable from the seller of the Sales and Purchase Agreement and the buyer of the Sales Agreement. Whilst the amounts are considered able to be claimed from the seller and buyer, they have been impaired in the half year ended 31 December 2022 due to the time that has lapsed and the uncertainty of recovery.

GLG Corp Limited Notes to the consolidated financial statements

4. Trade and other receivables

Trade receivables are net trade receivables. The reconciliation between gross and net receivables is set out below:

As at	31 December 2022	30 June 2022
	US$’000	US$’000
Current
Trade receivables
Trade customers	11,220	21,250
GLIT Holdings(i)	1,209	1,029
Outsourced manufacturingsuppliers	12,533	15,352
Trade receivables	24,962	37,631

Other receivables
Other receivables	1,520	1,954
Goods and services tax recoverable	525	547
Other receivables	2,045	2,501

Less:
Payable to outsourced manufacturingsuppliers	(211)	(455)
	26,796	39,677

Non-current
GLIT Holdings(i)	2,800	2,000

Total Trade and other receivables	29,596	41,677

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 internal system to assess the potential customer’s credit quality and defines credit limits by customers. Limits and scoring attributed to customers are reviewed twice a year. 99.9% 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.

(i) Receivable from GLIT Holdings that are expected to be settled in the next 12 months by netting off from the logistic revenue charged by GLIT Holdings is classified as current, whilst the remaining balance that are expected to be settled in more than a year is classified as non-current.

GLG Corp Limited Notes to the consolidated financial statements

5. Borrowings

As at	31 December 2022	30 June 2022
	US$’000	US$’000
Current
Trust receipts (Gross) (i)	21,484	44,551
Bills payable (Gross)	843	-
Finance lease liabilities	37	52
Bank Loan (ii)	1,016	899
Term Loan	719	1,018
Total current borrowings	24,099	46,520

Non-current
Finance lease liabilities	28	34
Bank Loan (ii)	1,775	2,116
Term Loan	891	1,315
Total non-current borrowings	2,694	3,465

Disclosed in the financial statements as:
Current borrowings	24,099	46,520
Non-current borrowings	2,694	3,465
Total borrowings	26,793	49,985

(i) Secured by a negative pledge over all assets of Ghim Li Global Pte Ltd and Maxim Textile Technology Sdn Bhd. Refer to Terms and conditions of borrowing Balance for details.

(ii) The bank loan, denominated in Singapore dollar was carried at fixed rate and was repayable over 5 years in 60 instalments from November 2021 to October 2025.

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.

Below are the details of available facilities from banks for the respective financial period/ year end. 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 6.

31 December 2022	Used US$’000 Unused US$’000 Total US$’000
Short term Long term Foreign exchange Total	28,579 58,892 87,471 1,728 837 2,565 - 18,304 18,304
	30,307 78,033 108,340

30 June 2022	Used US$’000 Unused US$’000 Total US$’000
Short term Long term Foreign exchange Total	52,787 38,277 91,064 2,333 348 2,681 - 18,317 18,317
	55,120 56,942 112,062

GLG Corp Limited Notes to the consolidated financial statements

5. Borrowing (Cont’d)

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

Terms & Conditions of Borrowing Balances:

1) Trust Receipts are denominated in USD bear weighted average effective interest rate of 6.2% (2022: 2.5%) per annum for a tenure of 4 months. 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. 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 5.0% per annum (2022: 4.4% per annum).

3) Bills Payable are amounts received from banks for discounting sales invoices billed to customers, with weighted average effective interest rate of 5.9% (2022: 4.5%) per annum.

6. Contingent Liabilities

Guarantees arising from letters of credit in force (i) Total	31 December 2022 30 June 2022 US$’000 US$’000 2,042 5,184
	2,042 5,184

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

7. 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.

8. Non-current assets – property, plant and machinery

Assets 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 2022 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.

GLG Corp Limited Notes to the consolidated financial statements

8. Non-current assets – property, plant and equipment (cont’d)

		At Valuation	At Valuation		At Cost	At Cost	At Cost
Cost	Freehold land and buildings	Leasehold land and buildings	Sub-total	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
Balance as at 1 July 2022	4,995	9,081	14,076	29,029	4,546	2,669	720	51,040
Additions	-	-	-	310	44	74	-	428
Disposal	-	-	-	(647)	(11)	(37)	(23)	(718)
Cost as at 31 December 2022	4,995	9,081	14,076	28,692	4,579	2,706	697	50,750
Accumulated depreciation
Balance as at 1 July 2022	-	-	-	14,881	3,947	2,172	644	21,644
Depreciation expenses	-	-	-	1,368	167	88	31	1,654
Disposal	-	-	-	(628)	(11)	(37)	(23)	(699)
Accumulated depreciation as at 31 December 2022	-	-	-	15,621	4,103	2,223	652	22,599
Net book value
As at 30 June 2022	4,995	9,081	14,076	14,148	599	497	76	29,396
As at 31 December 2022	4,995	9,081	14,076	13,071	476	483	45	28,151

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

GLG Corp Limited Notes to the consolidated financial statements

9. Intangible Assets

	Consolidated	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 2022	2,153	1,841	2,518	407	6,919
Additions	-	-	-	-	-
Balance as at 31 December 2022	2,153	1,841	2,518	407	6,919
Accumulated Amortisation
Balance as at 1 July 2022	554	1,841	756	407	3,558
Amortisation	107	-	126	-	233
Impairment	-	-	-	-	-
Balance as at 31 December 2022	661	1,841	882	407	3,791

Net book value
As at 30 June 2022	1,599	-	1,762	-	3,361
As at 31 December 2022	1,492	-	1,636	-	3,128

Software

Computer software is stated as intangible assets in the statement of financial position and amortised on the straight-line method over 3 -10 years.

Goodwill – recognition and measurement

All business combinations are accounted for by applying the acquisition method. Goodwill represents 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.

GLG Corp Limited Notes to the consolidated financial statements

10. Trade and other payables

0. Trade and other payables
As at	31 December 2022	30 June 2022
	US$’000	US$’000
Trade payables (i)	4,753	11,458
Other payables	2,875	2,299
Ghim Li Group (ii)	2,351	3,380
Accruals–employee remuneration	1,729	1,810
Accruals–late shipment claim (iii)	2,766	2,766
Accruals–audit fee	95	134
Accruals–trust receipts interest	188	158
Accruals-others	290	637
Total Trade and other payables	15,047	22,642

(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) Current payable due to Ghim Li Group Pte Ltd of US$2.4m comprises of $2.3m owing by Ghim Li Global Pte Ltd, $0.1m owing by Maxim MY and Cambodia.

(iii) Malaysia and Cambodia government took the necessary tight control due to Covid-19 pandemic and locked down the non-essential businesses. These restrictions had resulted in delayed shipments to buyers, also port congestion and lack of containers had badly affected the supply chain, there are potential claims from those buyers for those late deliveries and an accrual has been recognised to reflect these contractual obligations.

11. Related party transactions

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 Utilities	Transaction with Ghim Li Group Pte Ltd (majority shareholder) Transaction with ESTA
	31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021 US$’000 US$’000 US$’000 US$’000 728 728 14 15 29 20 - - 757 748 14 15

No amounts were provided for doubtful debts relating to debts due from related parties at reporting date.

Amounts payable to these related parties are disclosed in note 10 to the financial statements.

12. Events after the reporting period

No matter or circumstance has arisen since 31 December 2022 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

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GLG CORP LTD — Interim / Quarterly Report 2023

64991_rns_2023-02-27_1acc651f-e7fd-4842-81f1-4113d8f92ffd.pdf

GLG Corp Ltd

1. Results for announcement to market

Dividends

Summary commentary on results

Directors Comments:

Directors Comments: (cont’d)

Balance Sheet position

Cash Flow

Directors Comments: (cont’d)

Cash Flow (cont’d)

GLG Corp Ltd

Financial report for the halfyear ended 31 December 2022

Directors’ report

Review of operations

Review of operations

Directors’ report (cont’d)

Review of operations (cont’d)

Balance Sheet Position

Directors’ report (cont’d)

Cash Flow

Dividends

Auditor’s independence declaration

Significant changes in the state of affairs

Rounding off of amounts

DECLARATION OF INDEPENDENCE BY STEPHEN MAY TO THE DIRECTORS OF GLG CORP LIMITED

INDEPENDENT AUDITOR’S REVIEW REPORT

Report on the Half-Year Financial Report

Conclusion

Basis for conclusion

Responsibility of the directors for the financial report

Auditor’s responsibility for the review of the financial report

BDO Audit Pty Ltd

Directors’ declaration

Consolidated statement of profit or loss and other comprehensive income for the half-year ended 31 December 2022

Consolidated statement of financial position

as at 31 December 2022

Consolidated statement of changes in equity for the halfyear ended 31 December 2022

Consolidated statement of cash flows for the half-year ended 31 December 2022

Notes to the consolidated financial statements

1. Significant accounting policies

Statement of compliance

Basis of preparation

Comparative figures

Fair value measurement

1. Significant accounting policies (cont’d)

Fair value measurement (cont’d)

Fair value hierarchy

Valuations of land and buildings and investment properties

New accounting standards and interpretations

2. Segment information

Identification of reportable operating segments

2. Segment information (cont’d)

2. Segment information (cont’d)

Operating segment information

2. Segment information (cont’d)

3. Other expenses

4. Trade and other receivables

5. Borrowings

5. Borrowing (Cont’d)

6. Contingent Liabilities

7. Subsequent Events

8. Non-current assets – property, plant and machinery

8. Non-current assets – property, plant and equipment (cont’d)

9. Intangible Assets

Software

Goodwill – recognition and measurement

Trademark and customers network

11. Related party transactions

Transactions with other related parties

12. Events after the reporting period

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GLG CORP LTD Interim / Quarterly Report 2023