VIP Gloves : Appendix 4D Half Year Report and Accounts

VIP Gloves Limited

Appendix 4D

Half-year report

1. Company details

Comments

The loss for the consolidated entity after providing for income tax amounted to $4,815,879 (31 December 2020: profit of $2,253,008). The loss result includes a write-down of stock of $312,934 due to cost of production being higher than net realisable value of stock, recognition of a share-based payment expense of $697,150 relating to the issue of options and performance rights.

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VIP Gloves Limited

Appendix 4D

Half-year report

7. Details of associates and joint venture entities

Not applicable.

only8. Audit qualification or review

Details of audit/review dispute or qualification (if any):

The financial statements were subject to a review by the auditors and the review report is attached as part of the Interim Report.

Kai Fatt Wong

Director

Melbourne

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VIP Gloves Limited Directors' report

31 December 2021

The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of VIP Gloves Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 31 December 2021.

onlyDr Kai Fatt (Joe) Wong - Non-Executive Chairman, Independent Chin Kar Yang - Managing Director

Directors

The following persons were directors of VIP Gloves Ltd during the whole of the financial half-year and up to the date of this report, unless otherwise stated:

Kay Wen Chen - Executive Director

H w Weng Chang - Non-Executive Director, Independent

Peter Yee Ming Ng - Non-Executive Director, Independent

Joanne King - Non-Executive Director, Independent (appointed 17 January 2022)

Ch e Cheong Low - Non-Executive Director, Independent (resigned 23 November 2021)

Principal activities

The principal activity of the Company during the reporting period was the production of nitrile gloves in Malaysia under its wholly owned Malaysian subsidiaries, VIP Glove Sdn Bhd ("VIP Glove") and KLE Products Sdn Bhd ("KLE Products").

The Company has not accumulated any franking account credits. Consequently, the dividend paid was unfranked.

The Company's dividend policy is a dividend payout ratio of between 20% and 40% of earnings before significant items, ubject to the Company's financial position.

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $4,815,879 (31 December 2020: profit of $2,253,008).

The loss result includes a write-down of stock of $312,934 due to cost of production being higher than net realisable value of stock, recognition of a share-based payment expense of $7,181 relating to the issue of options and $635,696 relating to the recognition of performance rights expense.

COVID-19 resulted in the implementation of the Movement Control Order (MCO) in Malaysia since 18 March 2020 to curb the COVID-19 virus under the Prevention and Control of Infectious Diseases Act 1988 and the Police Act 1967. All Forapp opriate steps were taken to protect the health, safety and welfare of all employees, employee families, customers, suppliers, and the broader community. The Company introduced several operational protocols and steps to ensure the safety

and well-being of all parties, as well as maintaining the ongoing operation of our facilities during the COVID-19 pandemic.

The loss has been attributable to the impact of the Covid-19 pandemic on glove production in order to comply with Malaysian Control Orders, increased production costs in particular raw material and natural gas, increased competition and supply of gloves in Malaysia and a decrease and normalising of average selling prices for nitrile gloves in the glove manufacturing sector.

Construction of production Lines 7 and 8 continued through-out the reporting period with completion delayed due to implementation of the MCO. There were no other capital works commenced during the reporting period.

During the reporting period, the Company repaid in excess of $83,149 of interest-bearing debt; and there was no repayment of the deposit received for the sale and leaseback transaction.

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